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SEC may approve MTN listing application this week …listing is by introduction

Inside FG offers 2 savings bonds for subscription in May at higher rates P. 4

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L-R: Seyi Soetan, coverage executive, Rand Merchant Bank Nigeria; Vaibhav Rastogi, CFO Nigeria, African Industries; Amit Uburani, country marketing manager, Relchem Limited, and Tosin Olatunji, head, trade sales, corporates, Rand Merchant Bank Nigeria, at the GTR West African Trade Conference sponsored by Rand Merchant Bank in Lagos.

Iheanyi Nwachukwu

he Securities and Exchange Commission (SEC) has confirmed that it is in receipt of an application from MTN requesting for registration of the telecommunication company’s existing securities. BusinessDay learnt that if the documentation submitted by MTN at SEC is complete, the regulator should be able to grant approval for this application within 24-48 hours. “Their application is presently receiving attention,” SEC said on Monday. MTN’s application is for listing by introduction, which is one of the routes through which companies can come to the market. The other route is by Initial Public Offering (IPO). Continues on page 34

fgn bonds

Treasury bills

$5.2bn power sector financing stalls on FG’s inability to meet conditions N ISAAC ANYAOGU

igeria is unable to access $5.2 billion financing from the World Bank and its development partners two years after the funding was proposed because the

country has been unable to meet conditions relating to corporate governance and creating better market conditions for the power sector, BusinessDay has learnt. The Federal Government in 2017 decided to reform the power sector in an ambitious power sector recovery plan it

agreed with the World Bank, International Finance Corporation and the African Development Bank (AfDB) that would establish a contract-based electricity market and raise distribution to 4,777 MW by 2019. The plan, however, careens towards failure as obligations have been unmet.

“The World Bank has not been able to release these funds because Nigeria has not met the conditions,” said Ayodele Oni, energy lawyer and partner at Bloomfield Law firm. The biggest snag in accessing Continues on page 34

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news Rising cost of Nigeria’s debt starts to unsettle investors

Akinwunmi Ambode (r), governor, Lagos State, receiving the State Shares Certificate of the Odu’a Investment Company Limited from Tajudeen Bello, board director and representative of the chairman, during a courtesy visit by the Board of Directors of the company in Lagos, yesterday.

Africa’s biggest economy seeks more tax revenues as debt-servicing eats up big portion of receipts Jonathan Wheatley, FT

rom the potholed and often barely-paved streets of cities to the precarious and accident-prone highways of Nigeria’s interior, foreign investors visiting Nigeria are reminded repeatedly of the country’s urgent need for capital. Many of them continue to be willing lenders, despite the signs that their money may not always have been put to the most productive use. Increasingly, however, analysts are raising questions over the proceeds of bond sales — and whether the public finances of the biggest economy in Africa, according to the IMF, are as sustainable as they appear. “They have borrowed quite a bit, but where is the money being spent?” asks Andrew Roche, managing partner of Finexem, a Paris-based financial consulting firm. He worries that the government has been using borrowed cash to patch up holes in budgets, rather than investing in infrastructure or industry, or in efforts to diversify the economy from a heavy dependence on oil. In a world of cheap and

abundant money, Nigeria has been among the big beneficiaries of a global hunt for yield. The country sold its sixth eurobond last November, raising $2.9bn in maturities of seven, 12 and 30 years in an issue that was more than three times oversubscribed. Demand is strong in local markets, too. On April 25, the government raised 100bn naira ($326m at the official rate) in an auction that included a debut 30-year local currency bond that was four times oversubscribed. Yet, Mr Roche says, some investors may have overlooked some worrying metrics. In a presentation to investors in Washington last month, Zainab Ahmed, finance minister, stressed that Nigeria’s government debt, while it has risen in recent years, was still equal to just 19 per cent of gross domestic product in 2018. That is well below the average for emerging markets of just under 50 per cent of GDP, according to the Institute of International Finance. But the same presentation shows that the amount spent on servicing govern-

Continues on page 34

FG offers 2 savings bonds for subscription in May at higher rates OLUWASEGUN OLAKOYENIKAN

he Federal Government of Nigeria has offered for subscription two savings bonds for the month of May with higher interest rates compared with those issued in the previous two months. The debt instruments comprising two-year and three-year savings bonds would be offered at 11.745 percent and 12.745 percent, respectively. These correspondingly represent higher rates compared with 11.276 percent and 12.276 percent issued in April, and 11.62 percent and 12.62 percent in March. The Debt Management Office (DMO), which is offering the bonds on behalf of the Federal Government, said it started receiving applications for the bond subscription on Monday, May 6 and the window is expected to close on Friday, May 10, 2019 with settlement date of May 15. According to the debt office, the two-year and threeyear tenors would have quarterly coupon payment dates of August 15, November 15,

February 15 and May 15, with maturing dates of May 15, 2021 and 2022, respectively. The DMO assured that the bonds are backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of the country. It also guaranteed a bullet repayment of the principal on the maturity date. The bonds are offered at N1,000 per unit subject to a minimum subscription of N5,000 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million. The FGN Savings Bonds are targeted at encouraging low-income earners to save and earn more interests than the regular bank savings. The bonds are issued to assist the government finance its budget deficit, as well as help in promoting savings culture and enhancing financial inclusion in the country as income earned from the bonds is exempted from taxes. The DMO advised interested investors to contact the stockbroking firms appointed as distribution agents by the DMO on its website. www.businessday.ng

Nigeria’s creative industry gets a boost as CBN opens access to N533m CIFI fund HOPE MOSES-ASHIKE & ENDURANCE OKAFOR

espite is coming the way of operators in Nigeria’screativeindustry as the Central Bank of Nigeria (CBN) on Monday released the Creative Industry Financing Initiative (CIFI), calling on youths into creative business to go to their bank of choice to access funds up to N533 million at 9 percent interest rate. The CIFI, which is part of efforts to boost job creation

in Nigeria, particularly among the youths, was developed by the CBN in collaboration with the Bankers’ Committee. The initiative, targeted at providing funds for the creative art industry, according to the apex bank, comes in four pillars – fashion, information technology, movie, and music. “Interested applicants in the creative industry are hereby advised to submit applications to their banks for approval and disbursement,” the CBN said on its website on Monday.

Through the notification seen by BusinessDay, the lender is inviting Nigerians who have business in fashion, ICT, movie production, movie distribution, music and software engineering student to apply for loans which at a maximum of 9 percent interest per year. “You can get a loan of up to: (a) N3 million for software engineering student; (b) N30 million for movie production business; (c) N500 million for movie distribution business; (d) cover your rental/service

fees for fashion and information technology business; (e) cover your training fees, equipment fees, and rental/ service fees for music business,” the apex bank said. Interested persons are to prepare their business plan or statement on how much they want for their business. Herbert Wigwe, group managing director/CEO, Access Bank plc, had told journalists after the Bankers’ Commit-

Continues on page 34

Dangote has invested more in Nigerian universities than any individual – FG ISAAC ANYAOGU

he Federal Government has revealed that the N1.2 billion hostel donated by the Aliko Dangote Foundation to Ahmadu Bello University, Zaria is the single largest donation by an individual in the history of universities in Nigeria. Abubakar Adamu Rasheed, executive secretary, National Universities Commission (NUC), who represented President Muhammadu Buhari at the commissioning of the Aliko Dangote Hall, extended the Federal Government’s appreciation to the president of the Dangote Group. “You have done what no other Nigerian has done since 1948 when the first university was founded. This is the single largest intervention by any individual in any university in this country in the 70-year history of our university. So, I congratulate Alhaji Aliko Dangote,” he said. A visibly elated governor

of Kaduna State, Nasir Ahmad el-Rufai, who is also an alumnus of the university, hailed Dangote for the giant project. He described Dangote’s generosity as unprecedented, especially his support for education. Speaking, Ibrahim Garba, vice chancellor of the university, said Dangote would forever remain dear to Ahmadu Bello University. “The student population of ABU is over 50,000, made up of about 35,000 undergraduates and about 15,000 postgraduates. Every year, 11,500 undergraduates and about 6,000 postgraduates are admitted while about 6,000 undergraduates and 3,000 postgraduates respectively graduate. In any one academic year, we are only able to accommodate about 13,000 students on our two campuses,” Garba said. “We are happy that Dangote has fulfilled the pledge he made in 2016 to build 10 blocks of hostels for Ahmadu

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Bello University’s students to improve their living condition. We may accommodate six students per room. This will certainly go a long way in ameliorating the accommodation scarcity bedevilling the university,” he said. He thanked Dangote for his intervention, as well as members of the Aliko Dangote Foundation and the entire Dangote family. “This is unprecedented for us. We can’t ask for anything more except if he thinks of anything he wants to add on his own volition,” Garba said. Dangote, who also bagged an Honorary Doctorate Degree, said about his motivation, “If there are two things that I am passionate about, they are education and entrepreneurship. I believe they go hand-in-hand.” He said it was this philosophy that led to the creation of the Dangote Academy in 2010 where about 1,000 graduates have been absorbed after their training. @Businessdayng

He said he hopes students who stay in the Aliko Dangote Hall will follow his entrepreneurial footsteps and become future Aliko Dangote. “When I came here as a guest speaker in 2016, the vice-chancellor told me that they have needs for accommodation; in fact, the last accommodation they had was 37 years ago as at then,” he said. “It is not good for us to leave a university like this without accommodation. Really, our intention was to accommodate the female students, not boys. However, I still plead with the vice-chancellor to leave it for the female folk,” he added. MuhammadAminuSambo, director, physical planning and municipalservicesoftheuniversity, said, “This is a big relief because the university has limited accommodation in relation to the numbers of students admitted every year. Accommodation is one of our nightmares.”

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comment Nigerians deserve a better deal from state governors comment is free

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STRATEGY & POLICY

MA JOHNSON

t was George Orwell who theorized that the further a society drifts from the truth, the more it will hate those who speak it. But speaking the truth to power, according to Richard N. Haas, is a form of loyalty to the country. That many Nigerians still remain loyal to our country isn’t in doubt. That is why we speak. Nigerians must look into the mirror and speak the truth to ourselves. We must continue to tell those in authority the truth. Otherwise, if we leave the country to the politicians in government alone, we’re done for. Anyone who says that the country and its 200 million people are doing well doesn’t speak the truth. Politics is local. Indeed all politics is local. As citizens of Nigeria we must find a decent way of engaging our state governors, legislators and those who serve in our local government areas. They must be accountable to the people who elected them into office to serve. They can’t assume position of authority with all state resources only to display a nonchalant attitude in office. The nation has socio-economic challenges today mainly because those elected to serve in governments are not accountable. Both the rich and poor are afraid because of kidnappers. We are afraid of those jobless Nigerians who are blood thirsty. Yet, those in government only tell us the problems without articulating a workable strategy. The workable strategy is in improving the economy, not use of guns

only. Only those in government can improve the economy. We deserve to have the best from those elected to serve us. Many Nigerians have lost confidence in most of our elected and appointed leaders at the state level. It’s not time to discuss the ineptitude of those who are serving at the federal level. Anyway, very soon those who served at the federal level as ministers will be swept away by “Buhari’s tsunami.” Most of them didn’t help their principal. Let’s concentrate on our states and those who chose to lead. We didn’t beg them to be our governors; they chose to be. Unless there is a deliberate effort on the part of those who chose to lead at state and local government levels to develop their states, most citizens will continually be in poverty. The governors and governors-elect must work hard to earn the trust of the people that elected them into office. The entire country is waiting for May 29, 2019, when state governors and governors-elect will be sworn in. They must be close to the people as they govern their states by adopting the bottom-up approach to leadership. Nigerians deserve a better deal from democracy and by extension, from our state governors. In the past 20 years of democracy in Nigeria, not much has been achieved in terms of infrastructure and quality of life of many Nigerians at state level. The task of building a nation requires a generation of committed leaders to be in charge of the affairs of the country. A country of 200 million people cannot only have one man of integrity in the government. So, I ask: Where are other Nigerians of integrity? They’re out of politics because most of them cannot afford the cost of buying nomination forms coupled with intrigues and mischief at the political party level. A pity, you may say. On the minimum wage, thank goodness that President Buhari has signed into law that the minimum wage of N30,000 be paid to workers. To improve the working life of those Nigerians at the bottom of the society, it’s not just

enough to make laws. Those in the government must ensure that they enforce the laws. There is no doubt that increasing minimum wage will boost the pay of many workers. It’s incumbent on state governors to pay the minimum wage to their workers. Our governors must pay salaries and pensions of workers and retirees. But how will they pay when it is alleged that 14 governors, their deputies and 434 lawmakers are to go home with N2.06 billion for poor performance in office in 8 years. It is sad to read in the newspaper about an oil-rich state in the Niger Delta where pension for life bill was passed by the state house of assembly within four hours. But for the state governor who rejected the bill, may be it would have become a law. Leadership is about strategy and character. But when those elected to serve as either governors or state legislators do not have appropriate strategy to govern and develop their states and local governments, they should please, not lose their character. Some of these states cannot boast of good roads, quality education and healthcare facilities. Some states don’t have portable drinking water in the 21st Century. One begins to wonder how these states will be developed even when their internally generated revenue is not impressive. Most citizens do not pay tax because they don’t trust those elected to into public office that taxes collected will be used judiciously. Still most Nigerians look up to their governors and local government chairpersons to help alleviate their sufferings. What a contradiction? Our governors and their local government counterparts should treat those citizens who voted them into office the same way they would like to be treated. Any increase in the minimum wage is a step in the right direction. It doesn’t in any way reflect a “living wage” for Nigerians who are going through hard times. In 2011, when the minimum wage was N18,000, the cost of one litre of fuel then was N87/ltr. At that time inflation was about 10.5 percent, according to the National Bureau of Statistics (NBS).

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The poor in our society have no hope for now. Those elected to serve us have a lot of work to do to ensure that the inequality in the society is bridged

The implication was that the minimum wage could only procure about 207 liters of fuel at that time. At N145/ltr of fuel, and and an inflation rate of 11. 3 percent, the minimum wage of N30,000 can still purchase only 207 liters of fuel in 2019. Surely, it is doubtful if the increase in minimum wage would be remotely impactful. Many of the workers on minimum wage should not dream of having a roof over their heads. That means almost 20 million people that are homeless should not aspire to have a home of their own. So until wages start keeping up with inflation, an increase of 60 percent in minimum wage may not mean much in Nigeria where the cost of living is high. What I am saying in effect is that the increase in minimum wage is hardly sufficient to scratch the surface of economic challenges workers face in the country. The real value of the minimum wage can hardly afford an average worker the basic necessities of life in line with the first level of Abraham Maslow’s hierarchy of needs namely food, shelter, and clothing. How can those Nigerians who are still wishing to be on the first level of Maslow’s hierarchy of needs achieve self-actualization? We have a society where there is a wide trough between the rich and the poor. The poor in our society have no hope for now. Those elected to serve us have a lot of work to do to ensure that the inequality in the society is bridged. We need to transform our states, and this requires a deliberate action on the part of all the state governors and the citizens of Nigeria. Most importantly, our state governors should demonstrate capacity to create, renew and increase wealth of the people who voted them into office on a continuous basis. The coast of poverty across 36 states is expanding at an alarming rate. This calls for meaningful economic reforms throughout all the states of Nigeria. Thank you. Johnson is an author and a retired naval engineer who has passion for African development and good governance

Rethinking human resource management practice

Jude Adigwe

xcept for some companies (structured, unstructured and semi-structured) who practise top-notch human resource management (HRM), many are still caught up in basic administrative duties trapped in human resource (HR) departments. Granted the human resource management profession in Nigeria is an evolving one but that is no excuse to operate at the basic level that some HR departments in organizations are voluntarily or involuntarily trapped in. The idea of basking in basic administrative duties does not trumpet the strengths of the profession. There is need to step up and operate at an optimal level in a manner that shows that HR departments are profit centers and not simply cost centers like many employers think. To proceed, we need to rethink a few current approaches and practices in HRM, some sort of re-engineering, if you will. For starters, we need to look at this approach of merging HRM and administrative job functions. I perfectly understand the cost-effective narrative around this blend nevertheless it is important to view this from another perspective.

Anyone who has juggled HRM and administrative functions can attest to how time demanding the latter is -- admin-related requests come in by the truckload and this could be a huge distraction to discharging HRM duties which are more technical and strategic. So what is the way forward? Unpack these admin duties, retain few in the HR departments (if you must), spread out the rest by embedding them in user-friendly HR software applications that employees can operate. Really, we need to reduce manual admin work (the paper works particularly) that consume time and focus more on critical and strategic duties. Automate attendance and punctuality records keeping. Let a software manage employee records -- employees should do more of the inputs while we (HR professionals) double-check with our administrative access for compliance and accuracy etc. This same thinking should be applied to leave management and performance management. As regards performance management, there is need to tread carefully hence I would zero in on it later for more clarity. That been said, the bottomline is to free up our tables for more strategic and robust functions. We need to rethink the recruitment process. The fire brigade approach adopted by some organizations (especially those organizations where CEOs terminate employments of staff in the speed of light without the HR departments having a replacement plan) is ineffective. Due to the frenzy of trying to fill up vacant positions some things are left unattended to. Why not create and nurture a talent pipeline from within and outside the organization? Why not have a solid succession plan arrangement in place? These proactive approaches help you bend www.businessday.ng

your energy towards critical and more strategic areas that require your attention. Furthermore, it is paramount to note that recruitment functions could also be shared with line managers by soliciting for referrals and tasking them with some headhunting activities. To the best of my knowledge, there is no rule that says the whole gamut of recruitment must be executed by HR departments. Collaboration is key and strategic in being effective in organizational matters. Also, we need to rethink how performance management is carried out. Interestingly, this, to a large extent, is handled by line managers hence HR duties in this regard are more streamlined. A basic approach to rethinking performance management will mean moving away from manual methods (for those still caught in that mould) and embracing an automated approach that is user-friendly yet robust. Furthermore, HR departments will need to focus more on provision of proper guidance to line managers on performance management, governance of performance data as well as preparation and presentation of performance data reports to management in ways that show clear business implications -- there should also be handy practical solutions on ways to address challenges thrown up by reports. As HR professionals, we must begin to dismiss the idea of monopolizing the entire performance management exercise and partner with line managers as earlier identified. From the foregoing, it is obvious that Human Resource Management should tilt more towards strategic functions as it ought to be. The perception that HR departments are nothing but cost centres is reinforced because the strategic thrust of HRM is lost in the thick of daily activities that

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do not measure up as strategic in the reckoning of management boards or employers. We need to change this narrative. As mentioned in my article HRM: Thinking beyond micro issues, we need to pay more attention to global, national, industrial and organizational issues and align relevant information (financial, economic, people-related insights et cetera) with operations within our occupational and departmental space. As HRM professionals, it is non-negotiable that we constantly (or periodically) generate people-related analytics with clear-cut business implications and recommendations on ways forward. We need to be more strategic -- we must keep our eyes on the big picture. All the points raised so far point to the fact that HR departments should busy themselves more with re-engineering of work processes in their respective organizations. Some work processes in organizations regardless of how convenient are simply not optimal hence the need for re-engineering (i.e.the process of changing and/or improving the way a firm works, the way job functions are carried out etc.). Furthermore, we (HR professionals) must begin to push for a democratization of the workplace -- let voices across board count. Staff just like management should have a chance in shaping the course and writing the stories of their organizations. This is empowerment. While we aim and work towards these ideals, let us remember to retain our human touch -- the profession will always require that. Adigwe is a certified Human Resource Management (HRM) professional and an Industrial-Organizational Psychologist. He offers consultancy services on OB and HRM issues. More details can be found on his website:

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In Conversation: Adesola Adeduntan, CEO, First Bank (1) Rafiq Raji

desola Adeduntan, CEO of one of sub-Saharan Africa’s oldest and largest private sector banking groups, reviews the dominant trends of the sector in Nigeria and the wider West African region and discusses the relationship between the banking industry and the increasing number of telcos which are providing alternative financial services. Interview by Rafiq Raji. What are the notable banking industry trends in Nigeria and wider West African region you’ve observed over the past year? Within the past year, banks across Nigeria and West Africa have made good progress towards being more customer-centric. There is a greater emphasis on putting the customers at the heart of business decisions and actions. Significant number of Nigerian and West African banks have been deliber-

ate in accelerating the implementation of their digital transformation agenda. This trend is supporting the drive towards turning banks’ operations into more agile, strategically focused and technologically-driven organizations. There is increased focus on leveraging artificial intelligence and robotics to drive improved customer experience as well as internal operational efficiency. Many of the banks are making strategic investments in data and analytics as data has been tagged ‘the new oil’. Overall, we have observed an increase in the deployment of digital banking platforms, artificial intelligence, robotics and analytics capabilities. We have seen many banks setting up digital and innovation laboratories as a means of institutionalizing new ways of working and serving customers. As the industry and its ecosystems continue to evolve, Nigerian and West African banks are embracing innovation to achieve institutional agility. Banking industry players are also collaborating with key partners within the broader ecosystems to curate lifestyle banking solutions for various customer segments from wealth management to a bouquet of digital retail products that will improve financial inclusion. As these transformations continue to shape the way that banks transact, numerous

trends will continue to emerge within the banking sector. With respect to revenue generation and profitability, we have witnessed a significant drop in the rate of return on government securities in Nigeria and other West African economies over the last one year. For instance, we have seen Nigerian treasury bill rate drop from about 19% to below 13% over the last 12 months. In other West African economies such as Sierra Leone, Gambia, Ghana, etc, we have seen rates drop from over 20% to as low as single digital. This trend has made it imperative for Nigerian and West African banks to refocus their business strategies towards growing risk assets portfolio by funding quality wholesale transactions and aggressively driving consumer lending. How do you see the banking industry evolving over the next year or so; in Nigeria, Ghana and broader West African region? Over the next year, we envisage an upsurge in fully digitized bank operations that target digital customer segments with increased collaborations with FinTech. The overall outcome will be increased emphasis on innovative banking products from micro-lending on mobile platforms to enhanced retail banking offerings for the mass market leveraging social media platforms. Generally, the goal

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Within the past year, banks across Nigeria and West Africa have made good progress towards being more customer-centric

would be to ensure that the users of financial products can carry out self-service banking services across several platforms. Additionally, with improved use of analytics and customer relationship management tools; the industry will experience a shift from generic banking products to customized products that directly address specific customers’ needs. For Nigerian, Ghanaian, and wider West African customers, I see a future where the industry players will reinvent traditional banking and the way services are offered to customers. A future where customers can acquire over 80 percent of banking products online, have access to automated credit, peer to peer lending, one stop shop for small and medium scale businesses and other banking product innovations driven by technology. I also see a future, in Nigerian and other West African banks, where there will be increased focus on deploying and leveraging omni-channel capabilities to improve overall customer experience. • Interview was first published in the first quarter 2019 issue of African Banker magazine “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Civil servant as contractor and politician diatribe: My argument

Tunji Olaopa

ne good thing about exemplary people and ideas is that they enable us to generate further ideas or shed more light on current situations and circumstances. At the recent inaugural annual memorial lecture and posthumous birthday celebration in honor of the first head of service of the old Mid-West region, Chief Joseph EnaifogheImoukhuede, I was hit with an insight that derived from a combination of factual observation from my deep immersion in the public service and theoretical insights from the historical emergence of the public service over time. It was just so appropriate that it is the admirable and excellent memories of someone of the caliber of Pa Imoukhuede that would generate further thoughts about the state and future of the public service in Nigeria. This was a system he dedicated his entire life to serving and transforming. From 1938 when he joined the public service, Imoukhuede had no other passion or dedication. Unfortunately, the public service system Imoukhuede and the other administrative pioneers built had gone into disrepute and dysfunction. It is no longer something that they would recognize if they were still alive. Through celebrating these exemplars of professionalism, we thereby seek to keep reminding ourselves of the debt of reform that we owe them. From Simeon Adebo to Joseph Imoukhuede, we have people who saw Nigeria and the public service differently from the way we see them to-

day. We have administrators and public servants who operated according to different rules and perceptions that would be strange to those of us who are now called upon to carry on the task of administering Nigeria. We had deeply patriotic individuals who took Nigeria seriously enough to compromise their own immediate base desires for the greater glory of a nation caught in the grip of ethnicity and religious disunity. As a collective, these pioneering administrators who all supervised what we now regard as the glorious era of the public service in Nigeria stand in judgment against the present generation and what we have turned the public service into. At the heart of their indictment is a conceptual and historical question: who is a public servant? This pungent question becomes necessary because of the current distortion of what public service means, and how this had corrupted not only how service delivery ought to be done, but inevitably undermined the empowerment of Nigerians that ought to be the top objective of democratic governance in Nigeria. Nigeria’s current dilemma is how to resuscitate the efficiency of its public servants through a rejigging of the capacity readiness to facilitate performance and productivity. One reason why these have been compromised is that public servants in Nigeria today, and unlike the administrative forebears, now have divided attention defined by their administrative responsibility and the urgency of making a livelihood. In other words, public service commitment have been intruded by more subjective aspirations that most often than not undermine administrative responsibilities. This conflict of interest issue is a grave danger to the efficiency of the system, and the understanding of the significance of the public service to democratic governance. What do we expect of efficiency and productivity when public servants are now more concerned about the politics of their ambition and the juicy contracts they might be able to get from government business than the service their profession demands they render to the public? Once personal interests begin to

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clash with public responsibility, then the public service is essentially compromised. I identify two sources to this debilitation of the concept of public service in Nigeria. One is historical, and it can be traced to the civil service purge of 1975 when the military carried out a massive retrenchment of public servants in an attempt to reform the workforce and performance of the public service. This was, in all honesty, a right-headed policy move that however became wrong-headed with implementation. Many public servants, and many more especially who were deeply committed to the fundamental essence of public service and were real patriots to Nigeria, were traumatized personally and professionally. Government ought to have suspected the unintended consequence of such a policy to right size the public service—public servants were now forced to weigh their commitment to the system with their more existential aspirations. And when the system fails to intervene to assure public officials about its commitment to their lives and future, then they will be forced to attend to them by themselves. And that was the unintended lesson that the government sent to the public servants since 1975. As a consequence, all the revered public service ethos and vocational essence flew out of the window! With a new culture of public service enthroned, a new generation of ‘public managers’ who can see rent-seeking and ethnic power play as the dominant scriptof public service in Nigeria, concocted the game plan that inexorably distorted the workforce composition in favour of contractors and politicians in disguise. The proportion of the workforce in this mold may be in the minority at first, but today, they constitute a significant number and are perhaps in charge. A second factor that compounds the first is Nigeria’s unemployment crisis that has messed terribly with the already compromised gatekeeping task of the civil service commission. With the encroachment of bureaucratic corruption and the totality of what we now call the Nigerian factor, it became possible for just anyone who has failed to get desired employment to

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turn to government work, especially the public service. and everyone knows the perception of slackness that attends working with the government. The dereliction of duty that comes with this lackadaisical attitude to work moderated by smartness or being streetwise and remote control by godfathers is directly proportional to the lowering efficiency of the public service. So, we end up with all sorts of people who get into the public service with all sorts of “qualifications” and documents and “competences”. Public offices are thus transformed into a part of the clientelist network of prebendal rent-seekers who poach on the normlessness that the structural adjustment programmes of the 1980s inserted into the weakened public institutions in Nigeria. The question of who a public servant is carries the burden of the historical struggle to forge an institution that would carry the weight of government and governance. From Weber’s theoretical fabrication to the British administrative tradition, the idea of the public service has been defined around the concept of a vocation characterized by public-spiritedness. Weber gave us the understanding of a noble profession that is akin to a priesthood, a calling defined by spirituality of service that takes the idea of a supreme being serious as a means of achieving integrity and human relationship with others in the workplace. As a noble and spiritual calling, the vocation of public service demands honor, integrity and a selfless dedication that is founded on deferred gratification of those base desires that move ordinary humans. The Levites in the Scriptures had to defer their lots for the greater glory of Israel! Thus, for a public servant who understands, public values are more important than private interests.

Note: the rest of this article continues in the online edition of Business Day @https://businessday.ng Prof. Tunji Olaopa, retired Federal Permanent Secretary & Professor of Public Administration. tolaopa2003@gmail.com, tolaopa@isgpp.com.ng

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Tuesday 07 May 2019

BUSINESS DAY

EDITORIAL Publisher/CEO

Frank Aigbogun editor Patrick Atuanya DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Chuks Oluigbo EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, STRATEGY, INNOVATION & PARTNERSHIPS Oghenevwoke Ighure GENERAL MANAGER, ADVERT Adeola Ajewole ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai CIRCULATION MANAGER John Okpaire DIGITAL SALES MANAGER Linda Ochugbua

Growth of digital businesses in Nigeria

o m e w e e ks a g o , Jumai listed on the New York Stock Exchange to positive reviews. Of course, it was the first African-focused technology firm to list on the New York Stock Exchange. It also made history as the first African unicorn, i.e the first African start-up with a value of $1 billion and above. Although Jumia operates in 14 African countries with70 percent of its business from Nigeria, some sceptics have questioned the Africanness of the company. This is because, besides being founded by two Europeans, it was filed as a German company on the NYSE, has its headquarters in Germany, its technology centre in Portugal and top management offices in Dubai. This, according to some critics, rules out Jumai as an African start-up because it is not legally African. Regardless, with the many challenges facing African

countries, the ubiquity of mobile phones and the potential to harness technology to solve some of these problems means that there is a huge space for African technology start-ups to play in and grow global brands. One such truly Nigerian technological company that had redefined the payment system in Nigeria is Interswitch Nigeria Ltd, a company conceptualised and founded by Nigerians to revolutionalise the payment space in Nigeria and Africa. It is currently the foremost and leading payment, transaction switching and processing company in Africa. At a time when sceptism about the viability and readiness of the Nigerian market to embrace electronic payment was quite high, and global brands such as Visa and MasterCard refused to come to Nigeria, and when previous attempts and initiatives at entrenching electronic payment in Nigeria had failed, the company, pioneered by young and enterpris-

ing Nigerians, bullishly rode against the storm and began to systematically change the landscape and attitude towards electronic payments such that by 2005 – just two years after it began operation - the company had issued out over 32 million payment cards and had become the leading revenue, tax and bills collector on its platform to a host of government agencies, utilities and corporate organisations country-wide and even internationally. Currently, Nigerians consumers and businesses make more than 300 million digital transactions a month across a suite of Interswitch-enabled channels. Crucially too, Interswitch is reported to be planning a global listing — which could value the company at as much as $1 billion, making it Africa’s next unicorn or Africa’s first unicorn for sceptics who refuse to recognise Jumia as truly African. Although there are many promising start-ups in fintech,

education, power and agriculture in Nigeria, there is room and need for many more of such digitally-driven innovations to help solve some of Nigeria and Africa’s intractable problems. Thankfully, African startup s have starte d enjoying greater funding. According to some figures, African tech start-ups reached a record $1.2 billion in 2018, double the previous year. However, this is still a fraction of that of other regions, say of Southeast Asia that attracted more than $10 billion in 2018. It is sad that the Nigerian Stock Exchange is no longer a choice for listing for companies seeking to attract investments. Years of lack of IPOs and the disastrous performance of stocks over the years have not gone unnoticed. Urgent and genuine reforms are needed to improve Nigeria’s business environment to allow Nigerian start-ups grow into pan-African businesses from capital raised in Nigeria and from Nigerians.

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Tuesday 07 May 2019

BUSINESS DAY

Media business Q2 not showing promising signs for marketing communication industry Stories by Daniel Obi Media Business Editor

ast two years, till first quarter of 2019 has been difficult for Nigeria’s marketing communication industry. Simply put, it has really been tough for the industry that generates communication strategies and approaches engaged to improve the growth of companies that employ millions of Nigerians and contribute enormously to GDP. There has been general slow pace of business as companies who rely on the performance of the economy reduced their brand communication activities due to elections and overall impact of economic challenges. Second quarter which has gone half way is also not showing positive signs for the N150 billion integrated marketing communication industry as full scale brand activities are yet to peak up. Feeling in the industry is that unless dramatic things happen to bolster the economy, such as full implementation of 2019 budget of N8.9 trillion, support for infrastructure, improvement in electricity supply, security, support for agriculture, massive support for SMEs and improvement in non-oil export, many sectors including the marketing communication indus-

Indigo PR clinches multi-million Naira NB account

ntegrated Indigo Limited, one of Nigeria’s full service Public Relations and Event Management Consultancy firm has clinched multi-million Naira Nigerian Breweries, NB corporate PR account. A source told BusinessDay that the six years old company competed against three other PR companies for the brief. The source said the tenure of the account is yearly but subject to renewal based on satisfactory performance to NB. This will be, perhaps the first time, Indigo established by a group of ‘fresh thinkers’ to provide creative insights and spot-on ideas as communication

solutions to help clients to constantly win and sustain stakeholders’ goodwill will be handling alcohol brand on a long term tenure. Indigo run by experienced public relations practitioner, Bolaji Abimbola will be executing its first public assignment today as NB holds its pre-annual general meeting in Lagos. The firm recently won the ‘West Africa’s Best in Class Public Relations and Communication Service Company of the Year 2019’ award category at the 2018 West Africa Brands Excellence Awards held at the prestigious Sheraton Hotel and Suites on Thursday, February 28, 2019 in Lagos.

Indomie brand deepens Fans Club, opens excitement store for children

try will continue to face headaches. This will also have reverberating effect on employment rate. Highlights of the 2019 budget include: capital expenditure of N2.094 trillion and recurrent expenditure of N4.055 trillion. Looking at agriculture sector that supposed to be the backbone of the nation, Mike Nzeagwu, a communication expert, expressed displeasure at frequent killing of farmers in certain parts of Nigeria, an unfortunate development that has put clog in that promise. He said if budgets such as that of 2019 are fully implemented, it will give real sector fillip to function well and improve the operators’

capacity and when this happens, both employment and other sectors such as marketing communication will thrive. According to other stakeholders, months ahead do not appear to be bright for the agencies as their clients are still hard hit by unfavourable environment. Many of them suspended product promotions and brand campaigns because of harsh environment. The tough situation, according analysts really calls for new survival thinking among the agencies. This includes mergers and acquisitions, diversification and creation of new businesses and relocation of offices to better but low rent areas.

n bid to continuously create excitement for children, owners of Indomie brand from Dufil Prima Foods have opened an excitement store for children in Ikeja Shopping Mall, Lagos. The concept is to further the brand’s Fan Club which has been in existence for 10 years. The store allows children to meet and interact with their Indomitable supermodel heroes. “We want the children to have excitement in this store. In the store, they can interact with the Indomitable characters in their T-shirts, sun glasses and wristwatches. It is an engaging opportunity for the children because what they want is what we are giving them and they are proud to have it, says Fate Joshua, Indomie Fan Club coordinator, nationwide. The store, she said is not a profit

making one and when the children come to the store they are given opportunity to spin and win wonderful items. Many children to accompanied their parents for shopping were attracted to the store. Fate said the Ikeja store is the first one as Indomie plans for more stores with the aim to be closer to children in all their locations.

Switzerland’s Bovet Watch brands enter Nigerian market

igeria growing middle and upper class with exclusive taste have closer opportunity to experience and adorn the iconic Bovet brand of watches as Polo Limited;

the foremost Luxury goods company in West Africa with over 25 years of track record in providing luxury products has signed agreement with Bovet to bring the watches to Nigerian audience.

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Out of the array of Bovet’s watches that will immediately create traction among the very rich Nigerian audience is Récital 22 Grand Récital which is a wonderful craftsmanship. This unusual and rare piece has single decorative cold enameling element that is probably most strongly identified with Bovet. The centerpiece of the watch, according to reports by those closer to the brand, is a hemisphere representing the Earth as seen from above the North Pole. “There are many, many layers of enamel that have been applied to the hemisphere in order to achieve a wonderful kind of translucent effect in which the clouds literally seem to float above the oceans and continents”. The experts say this particular wristwatch is in a class of, what are called, astronomical complications. “These are timepieces that show, often, the relative position of the stars to an observer standing on Earth, or, in this case, the relative position of the sun and the moon relative to an observer standing on Earth. So the centerpiece is this revolving hand-painted depiction of the upper hemisphere, the northern

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hemisphere of the Earth”. Placed just below it, in the six o’clock position, is, what’s called, a tourbillon. “We can see the tourbillon rotating as we look at the watch, and the position that it’s in is identical to the position that the sun would be in, relative to the Earth. So it kind of stands in for, the tourbillon stands in for the sun in this wristwatch”, says a report. Rotating around the Earth is a spherical depiction of the moon divided into a sunlit hemisphere and a dark hemisphere. And you can read the phase of the moon from the position of this little hemisphere as it rotates around the Earth. “The back of the watch is also loaded with information. It’s what’s called the perpetual calendar. Now, a perpetual calendar is a mechanical watch which knows the difference between a leap year and a nonleap year, and which also advances the date correctly at the end of each month, whether it’s a 30-day month or a 31-day month”. Further report said the relative rarity of the watches and the amount of handwork that goes into finishing the movement, the case, and other aspects of the watch all @Businessdayng

adds up to a tremendous, amount of real old-school craftsmanship, which simply doesn’t come cheap. At this level of watchmaking, you’re really talking about something that’s designed to appeal to someone with extremely specific tastes. The highly complex timepiece houses a mechanical movement made of nearly 50 individual components, each meticulously hand polished and finished. With a unique case shape that resembles writing desks of yesteryear, the Recital 22 Grand Recital watch offers a real-time view of three key heavenly bodies. A patented double-sided one-minute flying tourbillon cage at 6:00 represents the sun. This complicated tourbillon rotates once every 60 seconds and so Bovet has chosen to affix the seconds hand the carriage wheel to indicate the seconds. The Bovet Recital 22 Grand Recital holds a remarkable five patents. Conceived of by Bovet 1822 founder Pascal Raffy and brought to life by his team of watchmakers in Switzerland, the watch is a Tellurium Orrery – a working planetarium that brings the Earth, moon and sun to the wrist.

Tuesday 07 May 2019

BUSINESS DAY

Branding

Democratizing data will deepen broadband penetration in Nigeria – MD Vodacom Business Total communications solutions provider, Vodacom Business Nigeria recently received recognitions at the 10th Beacon of ICT awards. In this interview, Managing Director, Wale Odeyemi speaks on the brand’s contributions to the development of the country’s ICT industry and other issues. Excerpts Could you take us through the contributions and offerings of Vodacom Business Nigeria in the country’s ICT space? odacom Business is an ICT company in Nigeria. We offer total communications solutions (TCS) to enterprises large, medium and small. The driving idea is to help build businesses that shape the growth of the Nigerian society. Vodacom Business drives societal transformation and it is very clear in our vision statement- we want to be a digital company that empowers a connected society. A connected society is a society where no individual is excluded from opportunities. We believe that everyone has value within the society. Wherever you live, whatever formal/ economic strata that you belong to, you should be empowered to contribute to the society. As an example, we have a solution where we help to turn a subsistence farmer into a commercial farmer. If you have a plot of land in your village for instance, we can map that plot of land using geospatial technology. We can identify the kind of crops that will do well on the land and give you access to finance by providing an identity for the business. We can give you access to information and teach you precision farming techniques on the best range of farming approaches that you should use. We can give you access to market using the same solutions to sell your farm produce all over the world using our IoT solutions. The brains behind Beacon of ICT awards have found Vodacom Business Nigeria worthy of some special awards. How would you describe the import of these awards to your brand? To start with, Vodacom is on upward drive to be a beacon and champion for societal transformation. These set of awards actually crystallizes the efforts we have been making over the last couple of years. Beyond that, we believe that Nigeria is a country with enormous growth potentials. We believe that technology plays a significant role in fertilizing economic growth both from an inclusion perspective as well as expansion in becoming a country that is globally competitive. Can we have the names of the awards? First, the lead of the pack is the award for the hall of fame for being the enterprise solutions provider of the year for the 9th consecutive time which really is an award that recognizes our efforts over the last couple of years. This honour is very, very big because it gives us presence in the circle of elites in the industry. Also, we got the Internet of Things

Wale Odeyemi

(IoT) solutions provider of the year which we have also won four times in a row. This commendation is very key to us. IoT is one of the ways that we have adopted to drive digital transformation as well as impact society from top to bottom. That’s quite significant to us. The third is the enterprise broadband service provider of the year. Broadband is key to fertilizing economic growth. When you look at figures from the ITU for instance, you will find that 10% growth in broadband penetration can directly lead to as much as a 1.35% growth in GDP in developing countries like Nigeria. How do you address security while providing services to businesses? That is a very interesting question. Security is deep and critical to how we do business. We ensure that security is inherently built in each of the mediums that we deploy to serve our customers. We offer security in two forms; first we secure the customer as part of offering unified threat management solutions. As an example, we can help them with security consulting services, penetration testing, and vulnerability assessments. These services are some of the multiple professional services that we also render over and above just giving you connectivity. But within our network, the core of our network is actually connected to Vodacom’s Cyber Intelligence Centre which is the most mature in www.businessday.ng

Africa at the moment. The security landscape changes on a daily basis. It might interest you to know that our Cyber Intelligence Centre actually mitigates well over 400,000 attacks on a daily basis. That shows you the kind of focus that security has and we are well aware of that. This offering differentiates us from some of our competitors. Tech experts within and outside the country have raised concerns in terms of readiness and supporting tech start-ups who will actually

“

We exist because of our customers. There is a saying in sports that you’re only as good as your last victory. We understand that customers’ preferences are changing on a daily basis

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drive the embrace of IoT. Are you considering training start-ups to drive this? Supporting SMEs is dear to us. From a training point of view, we have been able to adopt digital transformation in the context of Internet of Things. We adopt a 360’ approach; both vertical and lateral. From the vertical point of view, we start from the bottom up. We believe that we need to catch them young. When you take a look at secondary schools as an example, we offer some CSR initiatives where we facilitate robotics competition programmes, We assemble some of the schools in the society including elite and public schools because we believe to spread these required skills to transform the society, you need to start picking them from the foundation. We teach them tech skills and robotics design that they become comfortable with these things. You know when you talk about tech start-ups, you are no longer talking about mature people starting their own companies. Contrastingly, we have young people who are in their teens who are actually doing a lot with technology and winning awards globally at the moment. We believe that the bottom-up approach is effective. From a top-down approach, we also work with the regulators. Vodacom Business is doing well with sustainability as a strategy for business growth. What’s the brand doing to keep the momentum? When you talk about sustainability, you can examine this from a triple bottom-line approach – the people, the profit and the planet. Vodacom Business ensures that the technology we bring to bear addresses these critical areas. For instance there would be issues if you are operating in a society and you are degrading the society in the process. That’s not a sustainable environment for you and your business. We strongly believe in creating shared value in the society through social engagement and social innovation. We equally re-appropriate existing core capabilities, existing strengths and we use them to address society’s biggest problems. We believe businesses that are sustainable financially but aren’t addressing society’s biggest problems will find themselves in an atmosphere of chaos eventually. How is Vodacom addressing customer expectations? We exist because of our customers. There is a saying in sports that you’re only as good as your last victory. We understand that customers’ preferences are changing on a daily basis. There are a lot of disruptions in the life of customers. Responding to these changes and disruptions is firmly positioned in our DNA to improve the fortunes of clients’ @Businessdayng

businesses and winning in their industries. From an expectation point of view, we have a net promoter score index where we measure the pulse of our customers. We examine their feedbacks carefully across all the touchpoints where they consume our services and deliver value to the society. Broadband penetration in Nigeria recently moved from 29% to 33%. What are you doing to scale up broadband penetration? The rate at which broadband penetration is increasing demands cooperation from regulators and players. In fact, the last time we spoke with industry players and regulators, the ambition over the next five years is to take broadband penetration to 70 % which is the target of the new national broadband plan. However, we believe that we can exceed this target with the right technologies. At Vodacom, we are investing in the right technology. We actually envision Nigeria becoming a gigabyte society. This is a society where the speed of connection exceeds one gigabyte. What we call broadband today is actually around 2 megabyte speed; it might interest you to know that we have customers who are already consuming well over a gigabit of data. The question one would ask is what kind of traffic is generating so much bandwidth hunger. One of the things that our total communications solutions offering does is it gives Nigerians more reasons to consume data. The idea of growing data in Nigeria actually starts with having the right reasons to consume data. We believe that over time there would be a need to democratize data in Nigeria. In fact, we also accept that somewhere along the line there would also be a need to demonetize data and rather focus on the reasons why data is being consumed. Some government policies are unfavorable for business growth. What do you think government should do to help businesses grow in Nigeria? One of the measures that government should adopt is to collaborate at the state and federal levels. There are issues around multiple taxations that are limiting businesses. There are certain policies that are more of barriers than enablers. As a major player in the ICT industry we are constantly in dialogue with regulators giving advises, offering collaborations and helping to provide knowledge around what should be done differently. As I have stated earlier, we are moving towards a gigabit society. We believe that it is important to have a listening regulator. It is also important to create an environment for constant collaboration and dialogue to enable business growth in the country.

Tuesday 07 May 2019

BUSINESS DAY

COMPANIES & MARKETS

MDXi recognized as Best Tier III data centre of the year, wins award at the beacon of ICT awards

COMPANY NEWS ANALYSIS INSIGHT

Pg. 16

Dangote Flour investors shun fundamentals, reacts to acquisition plans by Olam …share price hit all-time high as investors gain N35bn DAVID IBIDAPO

hunning performance, investors in Dangote flour has consistently mounted buy pressure on the company’s stock which have seen stock price maintain an 11-day upward spree on the Nigerian stock exchange (NSE) market. This saw share price of the company rally to its all-time high as at the close of trading on Thursday with share price closing at N18.95. However, investors took advantage of higher prices in form of capital gain as sell off, pressured down price to N17.10 as at the end of trading on Friday. This is despite a declining performance in the company’s bottom line as shown in its recently released Q1 2019 result. According to financials

released by Dangote flour on the NSE for the period

ended Q1 2019, numbers show a loss after tax of N2.89

billion from a profit of N1.58 billion recorded in Q1 2018. Analysts believe the reaction is on the back of information towards the acquisition of Nigeria’s third largest miller by market capacity, by Olam a Singaporean company. Gbolahan Ologunro, “investors’ interest in the stock is due to the offer by Olam to acquire the outstanding shares of Dangote flour.” The acquisition by Olam will possibly increase resultant company’s market share to a potential 43 percent overtaking flour mill of Nigeria (FMN) with a market share of 32 percent according. Analysis of company’s financials show that the decline by 283 percent in Dangote flour’s bottom line was a resultant effect of a sharp decline by 13 percent in revenue and growth by 6 percent in cost of sales, pulling down significantly gross

profit by 99 percent to N51.8 million in Q1 2019. Since the acquisition of Tiger branded consumer goods plc by Dangote flour in 2016, data collated have shown a year on year average decline in revenue by 11 percent in the first quarters in the last 3 years. Meanwhile, cost of sales during the last 3 years has increase at an average rate of 2 percent, but grew the most in 2019 at 6 percent. Also, during the stated period, Dangote flour has recorded consistent decline in its bottom line at an average of 161 percent. Dangote Flour Mills has been recording double digit growth in earnings since 2016— a year after Aliko Dangote repurchased it from South Africa food giants, Tiger Brand Limited. However, recorded its first full year loss in 2018 after it posted a loss of N1.15 billion, from a profit of

N15.13 billion the previous year depicting a tough and unpredictable macroeconomic environment However, analysts say Africa’s richest man Aliko Dangote is selling the subsidiary because he wants to exit an industry he cannot have market leadership, and not because the company is underperforming or under serious financial threat. “If you are selling a business within the space of seven years, it then means you want to exit. It is obvious they do not want to be part of a business they do not have market leadership,” said Ifedayo Olowoporoku, consumer goods research analyst at Vetiva Management Ltd. Since the announcement of receipt of binding offer released by Dangote flour on the exchange, investors have seen their wealth grow by N35.25 billion to N94 billion as at the close of trading on Tuesday.

Nigeria-China Trade-fair to promote production capacity through technical partnerships

he Nigeria-China Trade-fair expected to attract over 250 manufacturing firm’s origin from China across sector will promote production capacity and technical relationships between the two countries. The event slated to hold between 16th to 18th May at Eko Convention Centre, Victoria Island, Lagos will see exhibition of over 200,000 products, while there will also be a formal launch of an SKD, an electronic gadget manufacturing firm. The 2019 Edition of the China Homelife is organized by Meorient international Exhibition with Technical local support from Elan Expo, The National Export Processing Zonal Authority, NEPZA, JIJI.NG, AlabaInternational Amalgamated Traders Association, Balogun Agrofood Assocciation-OkeArin, Building and Construction Dealers Association in Nigeria. Nigeria’s largest B2B exhibition showcases products from various sectors including furniture, appliances, leather goods, cosmetic, sporting goods, Auto-parts, Electricals and Electronics, Agriculture and Food Equipment, Tex-

tile and Garment The exhibition offers customers a chance to purchase the best Chinese products at competitive prices. The Major highlight is the planned introduction of an SKD manufacturing of an electronic gadget which will be unveiled at the event. This means that the Nigeria-China Tradefair is tilted towards promoting the production capacity of Nigeria through Technical Partnerships. The beauty of this is that we are reducing total reliance on importation, the cost of importation, the time it takes to fly to china, the fees our business men and women pay to agents, we are also cutting the time it takes to seek a supplier, and most importantly, we are creating jobs for the highly skilled and creative Nigerian populace. Most impor tantly is the focus on mechanized equipment for large scale farming such as the, multi grain shelling thresher machine, palm-oil press Machine, Potato Harvesting machine, Potato seed planting machine. Also in the packaging industry, machines such as WashingFilling Capping Machine, plastic injection-Molding machine and lots more will be showcased.

The Nigeria-China Trade-fair is also geared at supporting the E-commerce system. Nigeria, according to a Research and Markets survey, is the top market in the West African region where business to consumer (B2C) ecommerce sales doubled between 2015 and 2017 with further projected annual growth rates of over 20 percent through 2021. Simultaneously, Nigeria is expected to surpass these figures over the next few years. Nigeria is at its threshold in improving the ecommerce infrastructure as well as in deepening the internet connectivity. China is leading the world with more than 40 percent of the world’s ecommerce transactions which accounted for just 1 percent of transactions a decade ago according to a McKinsey report in 2017. Digital technology platform innovators created a hotbed for a thriving ecommerce ecosystem. This industry while having progressed locally, has also moved into international markets. While ecommerce has been growing in the West African Region, it is on the threshold of achieving larger numbers. This is attributed to the calculated efforts to improve infrastructure

as well as the deepening of internet connectivity. Building ecommerce includes several service requirements to form a complete environment for the digital sales model. In 2018, The China Commercial Consular to Nigeria, Hongliang Gao, put the present value of trade between Nigeria and China at $7.2 billion, making China the third largest trading partner with Nigeria.

However, with the increased interest in investments and trade between both countries, the value is expected to surpass Nigeria’s trade with India, which is presently the country’s highest trading partner. Gao stated that the Chinese government was committed to a sustainable mutually beneficiary relationship with Nigeria. Gao said, “Nigeria is Africa’s first population country

and the largest economy. It is rich in natural resources, fertile land and huge market potential. In recent years, the friendship between China and Nigeria have been further strengthened, high-level exchanges have become closer, political mutual trust has deepened, bilateral economic and trade cooperation have achieved fruitful results, and the scale of trade has continued to expand.”

L-R: Carlos Figueredo, founder/CEO, Open Vector; Sola Fanawopo, MD/CEO, eMaginationsPR; Ade Shonubi, deputy governor, Central Bank of Nigeria [CBN]; Yele Okeremi, chairman, Lagos Fintech Week; Femi Williams, MD/CEO, Chams, and Emmanuel Obinne, pre-sales consultant, Middle East and Africa, BPC, at the Open Banking Master Class of the Lagos Fintech Week in Lagos.

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: David Ogar

Tuesday 07 May 2019

BUSINESS DAY

COMPANIES&MARKETS

Business Event

MDXi recognized as Best Tier III data centre of the year, wins award at the beacon of ICT awards SEGUN ADAMS

est Africa’s leading data centre provider offering colocation, interconnection and cloud services, MDXi (a MainOne company) received the Best Tier III Data Center of The Year award at the 2019 Beacon of ICT Awards. MDXi beat Rack Center and 21st Century to emerge as Best Data Centre of the Year at the award ceremony organized by Nigeria Communications Week, which held at Eko Hotel & Suites, Lagos. In a statement from MDXi, The General Manager Mr. Gbenga Adebiji “receiving the best Data Centre of The Year award is truly an honor. It means a great deal to us

that MDXi continues to be recognized for its innovation and leadership in the ICT industry, as we make strategic investments to enhance our infrastructure and extend our capabilities and reach across West Africa.” MDXi’s parent company, MainOne was also awarded “Best Internet Delivery Company of The Year” in recognition of the company’s consistent efforts in extending broadband connectivity across West Africa. The Beacon of ICT Award, which began in 2009, celebrates and recognizes enormous contributions and achievements made by service providers and individuals in the Nigerian ICT sector and seeks to reward excellence in the industry. MainOne is West Africa’s leading connectivity and data

centre solutions provider for businesses with global scale ambitions. MainOne’s world class infrastructure includes a private 7000km submarine cable system from Europe running down the coast of West Africa, a next generation IP NGN network and a growing regional and metro terrestrial fiber optics network. We operate the largest Tier III certified data centre in West Africa with international standard certifications. Our network is connected to internet exchange points across the globe enabling seamless low latency connectivity. Our cost effective and innovative solutions are developed such that businesses that partner with us are fully empowered to meet the needs of today’s market and prepare them for tomorrow’s growth

L-R: Faith Josua, national coordinator, Indomie Fan Club (IFC); Errit Devries, indomitable merchandise customer; Karishma Rustagi, head, IFC; Joel Joshua, Merchandise customer, and Folasade Oluwafemi, manager of special project, Dufil Prima Foods Plc, at the launch of the Indomitable Merchandise Store at Ikeja City Mall in Lagos.

Xpress payments wins big at Nigeria Fintech awards SEGUN ADAMS

ne of the emerging forces in the Fintech space in Nigeria, Xpress Payment Solutions Ltd, has once again added to its growing reputation by emerging best institution in two esteemed categories at the prestigious Nigeria Fintech Awards. Xpress Payments beat other nominees in its category, taking away the prize for the Fintech Startup of the year given to the Fintech institution that has disrupted the financial services sector with new and innovative services, as well as Female Fintech leader of the year which was duly won by the outstanding Oluwatoyin Albert, Group Head, Switching and Terminal Services, for her contributions to the advancement of the fintech sector. Both awards further lend credence to Xpress Payments’ already growing reputation as a credible Payment Solutions Provider in the fintech space, a statement by the

company’s MD/CEO, Oluwadare Owolabi, on Thursday said. The Nigerian FinTech Awards is the most prestigious recognition of excellence for the entire financial technology industry in Nigeria. The awards, which is part of activities of the Lagos Fintech Week 2019, is intended to celebrate the achievements of dynamic people and businesses in the fintech sector as well as recognize the best innovations created by the best innovators and entrepreneurs that live and work in Nigeria. Receiving the awards at a colorful and well attended event, Oluwatoyin Albert appreciated the organizers for the recognition, noting that Xpress Payments’ dedication to hard work and emphasis on quality and customer needs are being acknowledged. According to Albert, the awards confirm the organization’sstrong management and un-matched commitment to service excellence. In her words, “This award is a

testament to our firm resolve in continuing to deploy customercentric innovations by using cutting edge technology for consumer satisfactionandexperience.Thisrecognition will further spur us to do more in meeting the needs of our customers with unparalleled services.” Xpress Payment Solutions Limited is a wholly owned Nigerian company which was incorporated in 2016 as a Private Company Limited by Shares. The company has an Authorized Share Capital base of N5 billion issued and fully paid up. Xpress Payment specializes in the design, implementation and provision of platforms for Electronic Payments, Collections, Bills Payment and Funds Disbursement. As a shared infrastructure,Xpress Payments provides payment services around transaction switching and processing. The organization also serves as a licensed Payment Terminal Service Provider to deploy and manage Point of Sale Terminals.

L-R: Olaoye Samuel, branch chairman, NURTW Ojota; Folake Odegbami, head, safety health and environment, Lafarge Africa; Olalekan Morakinyo, deputy corp commander and head of operations, Federal Road Safety Corps FRSC, Lagos State; Omotola Oyebanjo, head, corporate communications, Lafarge Africa, and Umai Bamaiyi, unit commander, Federal Road Safety Corps (FRSC) Ojota, at a Health and Safety sensitization programme organised by Lafarge Africa recently for Motorists in Lagos.

Premium Pension pays N174 billion to pensioners since inception

remium Pension L imited, one of Nigeria`s leading pension administrators, has paid the sum of N174 billion to retirees under it pension management since the company was established about fourteen (14) years ago. In the same vein, the company has also disclosed that it is paying an average of N68 million monthly as pension benefits to 17,000 clients that subscribed to the various retirement products it is offering in Nigerian Pension Market. Umar Sanda Mairami, chief executive officer of the company, made this disclosure, during a corporate event organized by the company to celebrate excellence and reward some of its outstanding clients held in the commercial city of Kano. Umar said comparatively, the company has continue

to record impressive performance within the Nigerian pension Market, polling the highest returns in value in all the categories of pension products it is offering in the market. “We are glad to be here today in the commercial city of Kano celebrating excellence and rewarding our clients, who we in premium Pension usually refer to as our members, because of the high value that we attached to them. “We refer to them as members because it is through their patronage and support that we have been able to grow our Asset Under-Management (AUM) to over N630 billion marks, and we are still doing everything in place to increase it. “We have been able to record this height as a result of the individual as well as the group contributions of all the staff, management, and memwww.businessday.ng

bers of board overseeing the operations of the company, over the years. “It is through the commitment and contributions displayed by the Premium Pension team that the company was able to attain the status of being the first PFA win the ISO/IEC 27001, and also the ISO 9001 in Quality Management System” he stated. The CEO assured clients that the company will continue to serve them better by safeguarding their pension contributions, in addition to ensuring that their benefits are paid promptly, and as when due. The highlight of the ceremony was the presentation of clients of the company drawn from the public sector (Federal and States) as well as the private sector, and individuals that made the highest contributions, and being very loyal to the company products.

L-R: Christopher Waithaka, senior brand manager, feminine care category, WECA; Kemi Saliu, head of marketing, WECA; Raffaella De Medici, manufacturing operations director, EMEA, and Balaji Koushik, GBA director, West Africa, all of Kimberly Clark at the official launch of Kotex® range of sanitary pads and tampons into the Nigerian Market in Lagos.

L-R: Olubusayo Adeniyi, MD, EAC Trustees: Toyin Sanni, group chief executive, Emerging Africa Capital: Ikemefuna Mordi, lead partner, Dessarrolar Real Estate Solutions, at the signing ceremony of the partnership between EAC Trustees Limited and Desarrollar.

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Tuesday 07 May 2019

BUSINESS DAY

Investments

ENERGY INTELLIGENCE OIL

GAS

PETROCHEMICALS

Market Insight Companies Commodity Tracker Policy

POWER

MARKET

OPEC’s emerging hurdles forewarn Nigeria of oil market future uncertainties STEPHEN ONYEKWELU

PEC’s recent supply cuts had sent oil prices to a five year high of over $70 dollars per barrel with the American Bank Merrill Lynch projecting prices will probably hit the $100 p/b mark by the three months ending December, 2019. This was a remarkable feat in terms of its compliance rate of over 80 percent and success at stabilising the oil market and shoring up prices. But OPEC’s influence may be waning. In December 2016, the 14-nation Organisation of Petroleum Exporting Countries made a Declaration of Cooperation after a joint ministerial meeting with 11 non-OPEC members, including Russia (OPEC+) to initially cut oil supply by 1.80 million barrels a day, in order to suck out glut. This was reduced to 1.20 million barrels of per day in December 2018. Similarly, in May 2017 another joint Ministerial meeting extended the voluntary production adjustment for another nine months starting July 1, 2017. In November the OPEC+ agreed to keep the production cuts for the entirety of 2018. However, the plot of the story is changing in 2019; with both OPEC and non-OPEC member countries getting paranoid and reassessing benefits accruing from the Declaration. Russia is reconsidering her commitments to the deal. Nigeria needs to pay more

attention at this point too. Three factors currently threaten sustainability of the 58-year-old oil cartel. First, Donald Trump, president of the United States of America ended oil import waivers May 01, which were granted to some countries to enable them buy crude oil from Iran, despite Washington’s sanction on the OPEC founding member nation. This has sent oil prices to their highest since November. This has not sat so well with Tehran and the oil minister has resurrected questions about possible collapse of the organisation. “Those who use oil as a weapon against two founding members of OPEC are disturbing the unity of OPEC and creating the death and collapse of

OPEC and the responsibility for that with them” Bijan Zanganeh, Iran’s oil minister said on Thursday in response to Trump’s administrations latest sanction moves. The U.S. has demanded that buyers of Iranian oil stop purchases by May 1 or face sanctions, ending six months of waivers that had allowed Iran’s eight biggest customers, most them in Asia, to import limited volumes. Secondly, bidding wars between Chevron Corp and Occidental Petroleum Corp in the Permian Basin, U.S.A is changing the shale oil landscape - providing shale producers and production with new, larger economies of scale, which will lead to bigger volumes of shale oil flowing into the market and

pushing down prices. This move, the OPEC will have little control over. Occidental Petroleum Corp April 24, offered $38 billion for Anadarko Petroleum Corp, a bid that topped the $33 billion offer by Chevron Corp. As of year-end 2018, Anadarko Petroleum Corp, an independent Exploration and Production company had 1.47 billion barrels-equivalent of proved reserves. Analysts have said they expect further industry consolidation. Small oil producers revolutionalised the sector through advances in horizontal drilling and fracking, but their stock prices have languished with investors pressing higher returns. The Permian produces about 4 million barrels per day and is expected to

hit 5.4 million bpd by 2023, according to consultancy firm, HIS Markit, more than the total production of any OPEC country other than Saudi Arabia. A third although remote factor threatening OPEC’s future is the No OPEC (NOOPEC) bill in the U.S.A. The bill seeks to open OPEC to antitrust lawsuits. The legislation would change U.S. antitrust law to revoke the sovereign immunity that has long protected OPEC members from U.S. lawsuits. President Trump’s administration looks determined to increase oil flow and willing to explore every option. “Spoke to Saudi Arabia and others about increasing oil flow. All are in agreement” he said on his Twitter handle, April 26. OPEC’s share of world crude oil reserves as of 2017 was 1.214 trillion barrels, representing 81.89 percent. Non-OPEC oil reserves hold the remaining 18.11 percent, which is 268.56 billion barrels. Nigeria contributes 3.10 percent to the OPEC basket. However strong a position the Organisation looks in terms of crude reverses it is past time for Nigeria to start exploring alternative uses for its oil, especially in areas where there are no immediate substitutes for oil such as the petrochemicals. A pathway Saudi Arabia has taken with its recent acquisition of the largest petrochemical company in the Middle-East, SABIC, a global leader in diversified chemicals headquartered in Riyadh.

INVESTMENT

Seplat’s Q1 2019 PAT buoyed after reversal of tax fortunes …revenue and output wanes DIPO OLADEHINDE

nvestors and shareholders will be puzzled on how Nigeria’s top indigenous exploration and production company, Seplat was still able to record better Profit After Tax (PAT) despite decrease in revenue and production. According to the financials presented to the Nigerian Stock Exchange (NSE), in Q1 2019 PAT grew N10billion from N6.2billion, while tax rebate stood at N4billion, all of which was derived from the crude oil business segment, as against the N11.7billion expense of prior Q1. Revenue dropped from N55.236bn in Q1 2018 to N48.941bn, representing a decrease of 11.4percent which reflected the lower oil production and oil price realization of $61.7/bbl compare to $65.78/bbl in Q1 2018 while crude oil sales recorded a loss of N996million, compare to a profit of N452million in the corresponding period last Quarter. “In our view, the decline in oil production may be slightly connected to Nigeria’s compliance to the OPEC production cut deal, which, according to the Minister of State for Petroleum, was kick-started in February 2019,” analysts at CSL Stockbrokers, a wholly owned subsidiary of FCMB Group Plc & a member of The Nigerian Stock Exchange said. Analysts at CSL Stockbrokers also believed that oil price is yet to fully recover from the impact of the supply glut that saw crude oil price crash by 38

percent to $52.2 between October and December 2018. A breakdown of the numbers showed that crude oil sales dropped to N36.132billion from N43.138billion; while gas sales revenue was flat at N12.809billion from N12.098billion. By geographical markets, crude oil sales in Nigeria amounted to N3.665billionn, while gas sales stood at N12.809billion; while crude oil and gas sales in Switzerland contributed N32.132billion and N12.809billion respectively. “This lack of full recovery likely explains the lower realized oil price reported in SEPLAT’s Q1’19 numbers,” CSL Stockbrokers said. Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) margin which is a more precise measurement of profitability plunged to 35.1 in first quarter of 2019 from 64.5percent in corresponding period last year due to $15.8 million over lift revaluation loss compared to $8.6 million under-lift revaluation gain in first quarter 2018 and another $7 million unrealized loss on derivatives and $5.2 million cost of hedging. “The over-lift revaluation loss mirrored the change in the market value of the shortfall between crude oil lifted and crude oil sold during the period,” analysts at CSL Stockbrokers said. Free Cash Flow to Equity (FCFE) surged to $63.3 million in first quarter 2019 thanks to gains from the application of SEPLAT’s huge capital allowance www.businessday.ng

used to offset tax charges—implying no significant pass through to cash balance and improved working capital management. SEPLAT’s strong working capital position is mostly evidenced by its negative cash conversion cycle in Q1‘19, which suggests that it likely generates revenue before it pays suppliers. “This pattern is likely to subsist in coming quarters,” analysts at CSL Stockbrokers said. Cost of sales dropped by 10.73percent to N23.955billion from N26.833billion; the bulk of which was the N8.252billion royalties, which dropped from N9.758billion; followed by the N7billion depletion, depreciation and amortization, which also fell from N9.7billion. In Q1 2019, crude handling fees remained at N4.459billion, slightly lower than N4.5billion recorded in the corre-

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sponding quarter; just as operations and maintenance expenses climbed from N2.217billion to the N3.5billion. Gross profit, therefore, slipped 12.03percent from N28.4billion to the N24.9billion. Other income was negative at N5.billion, representing 2.628percent drop from N2.628billion income in the first quarter of 2018; just as general and administrative expenses climbed 47.58percent up from N4.2billion to N6.2billion. Fair value movement in contingent consideration grew by 116.94percent to N3.7billion, compared to the previous first quarter’s N1.7billion; just as operating profit slipped to N9.9billion, down from 61.07percent from N25.6billion. Adeoluwa Eweja, oil and gas analyst at Afrinvest securities limited still expects a lot from Seplat this year because they have the best risk mitigation strategists, technical experts, geologists @Businessdayng

who were former ex shell and ex British Petroleum (BP) people with international expertise like Roger Brown (Chief Financial Officer) who can sail the ship rightly. Finance income, being interest income on bank deposits, jumped by 98.86percent from N437million in Q1 2018 to N869million in Q1 2019; finance charges dropped by 39.48percent from N8billion to N4.8billlion, driven mainly by the N4.5billion interest on bank loans, down from N7.35billion. Profit before tax, therefore, suffered 66.88percent slide to N5.9billion, compared to N17.9billion in the preceding Q1 while Net profit represented Earnings Per Share of N17.03, compared to N10.68. Going forward, management is optimistic that ongoing CAPEX on drilling, ramped up in second half of 2018, would have a positive impact on crude volumes and revenue in second half of 2019. Therefore, the company retains FY’19 guidance of $200 million in capex, between 24,000 to 27,000 bopd in liquid production, and 146 to 164 MMscfd in gas production. Recall, Seplat entered into crude price hedge contracts at an average premium price of $1.3/bbl on 4 million barrels in December 2018, which remained unexecuted at strike price of $50/bbl to $55/bbl. The cost of this contract also weighed on EBITDA margin. Excluding the overlift revaluation and fair value losses, EBITDA margin would have declined by only 4.3ppts YoY.

Tuesday 07 May 2019

BUSINESS DAY

ENERGY INTELLIGENCE Why all eyes will be on NNPC’s 2019 DSDP deal DIPO OLADEHINDE

ith uncertainty surrounding elections period over and 2018 extension contracts scheduled to end next month, all eyes will be on Nigerian National Petroleum Corporation (NNPC) who announced 132 firms had bided for the right to swap the nation’s crude oil. The tender first issued in March, will see stakeholders keep an eagle eye on the one year contracts, dubbed Direct sale, Direct purchase (DSDP) which NNPC introduced to replace its controversial swap contracts is considered quite lucrative, hence the keen interest in those who win the contracts. Each of the eventually successful companies will be allocated some of the 445,000 barrels per day of Nigeria’s crude oil originally meant for domestic refining. The crude oil is being allocated because Nigeria is unable to locally refine such volume. Even though the DSDP contracts are considered more transparent than the swap contracts which it replaced, sources are still questioning the mode of selection of the winners as some complain that the winners were selected by senior government officials in the Presidency. Luqman Agboola head of energy at Sofidam capital Limited said a number of factors will be playing out this time, including a

Nigeria content law, which gives an indigenous company an upper edge when competing with an international firm because its believe the local firm is incurring more cost in terms of cost of funding, capacity and infrastructure to grow. “The government is beginning to get smart and has realized they will rather deal with Nigeria players who will keep its mouth shut after dealings rather than foreigners that will one day go and confess to giving or collecting something at Transparency international or Foreign courts,” Agboola told BusinessDay. Also a report titled Securing Fair Value from Nigeria’s DSDP Con-

tracts from Natural Resource Governance Institute (NRGI) admitted NNPC has jettisoned many of the worst features of the costly oil-forproduct swaps of the Jonathan era in its first round of DSDP deals. “Management put in place a more professional contract that is more balanced and less susceptible to abuse. The improved terms and management of the 2016 contracts are among the most concrete signs of improved oil sector governance under President Muhammadu Buhari,” NRGI said. However, NRGI ask NNPC to consider additional, important reforms such as publish a summary of key terms for DSDP contracts,

commit to publishing future commodity sales contracts, including all DSDP contracts and adopts the Argus Eurobob oxy benchmark for pricing gasoline delivered under the 2017 contracts. “Develop stronger anti-corruption due diligence systems for vetting bidders as part of the selection process, commit to collecting and disclosing beneficial ownership data in future DSDP and other contract awards, publicly explain the process for allocating oil among new contract holders and publish per-cargo oil sales data on a regular basis in 2017, to show which contract holders are receiving oil,” said Aaron Sayne, a senior governance

officer at the Natural Resource Governance Institute. At the 2019 DSDP bid opening ceremony in Abuja, NNPC’s Managing Director, Maikanti Baru, noted that since the introduction of the scheme in 2016, 29.5 million metric tons (39.6 billion litres) of petroleum products had been supplied on the platform, representing over 90 per cent of the national requirement. “The scheme prides itself with a competitive pricing framework (lower than the PPPRA benchmark), which over the years has ensured a significant reduction in product demurrage cost in the range of 84 per cent and cost saving of about $2.2 billion (N673.2 billion),” Baru said. The DSDP scheme was introduced in 2016 to replace the erstwhile 2015 crude oil Offshore Processing arrangement (OPA) contracts after they were found to be mired in corruption. Last year, NNPC awarded 50 companies with contracts to buy Nigerian crude, with more than half being firms indigenous to Nigeria, spurring speculations it’s meant to win political points in view of 2019 general elections. Of the 50 companies, 32 were local companies, doubling the number of awards to Nigerian firms compared to 2017. NNPC awards the oil purchase contracts annually, but the deals last year were for one and the half years not one year, this is partly because 2019 is an election year.

OPEC is facing an existential crisis

lobal oil market fundamentals are looking particularly bullish, from the OPEC+ production cuts, to the constraints of exports in Nigeria and the U.S. sanctions on Iran and Venezuelan. While oil price volatility has increased thanks to financial analysts putting an emphasis on Trump’s apparent Twitter agreements with OPEC leaders, market fundamentals are still very bullish. Until the global market realizes that U.S. oil storage reports are not the be all and end all for oil prices, volatility will remain. There is a new threat looming though as OPEC+ prepares to meet at its June 25-26th Ministerial Meeting in Vienna. The internal cohesion of OPEC is being called into question at present, as several major member countries are facing not only external sanctions but threats of a total internal implosion of their

respective regimes. The removal of U.S. waivers for leading oil importers of Iranian oil and gas is putting the Tehran regime under severe pressure. While Trump’s target of reducing Iranian production to zero is unrealistic, the impact of the sanctions is undeniable. No new oil contracts have been reported between Iran and its main clients, China and India, since the sanctions. It seems that the fear of indirect sanctions by the U.S. is already having its desired result, Iran’s hydrocarbon exports have been hit hard and seem to have no response. Reports about Iran having trouble to pay not only its own bills, but also its proxies in Lebanon, Syria and Iraq, also show that the regime is struggling. At the same time, Iran’s staunchest supporter in OPEC, Venezuela appears to be on the brink. Confronted by U.S. sanctions and increased political support from Arab

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and European countries for opposition leader Guaido, Venezuela is a facing an economic meltdown as its hydrocarbon sectors come to a standstill. In recent days the situation here has worsened as the opposition, supported by parts of the Venezuelan armed forces and security services, has openly started a rebellion to remove current president Maduro. The latter remains in power, but mainly due to Russian, Chinese and Turkish support. Iran’s Latin American partner is heading for a possible civil conflict of unknown proportions. Based on these two key OPEC producers, at least on paper, OPEC’s internal structure is fragmenting. The Saudi-led OPEC+ production cut strategy is still in place, but it is partly successful due to the negative repercussions of the sanctions on Iran and Venezuela. The high level

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of compliance with the agreement (128%) is based on the loss of these particular volumes. At the same time, Saudi Arabia, UAE and Russia, are sticking to their roles, cutting as needed. Optimism about Iraq is based on uncertain assumptions, while Libya’s overall situation is highly volatilie. To top up OPEC’s internal issues, Africa’s main oil producer Nigeria reports that it is not even able to sell some of its cargoes. Nigerian sources stated on May 2 that around 20 Nigerian oil cargoes are not sold, even after severe price cuts. Nigeria has already reduced its selling prices of a basket of May-loading crude oil grades, mainly as buyers were not showing an interest in contracts for cargoes offered at and above a premium of $2 compared to dated Brent. At present, Nigeria’s major grades, including Bonny Light and

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Qua Iboe, Forcados and Escravos, saw a decrease of around 20 to 25 cents compared with April. At the same time, Nigeria has been hit by several force majeurs, such as that declared by oil major Shell on exports of Nigeria’s major Bonny Light stream after the closure of one of two export pipelines, while Amenam, operated by Total, is also under force majeure. The main reason for this is not a lack of demand from China or India, but from European clients. In the coming weeks, as analysts focus on production figures, storage volumes and demand, OPEC will be focusing on defusing pressure to increase production, while at the same time the Saudi-led faction will likely confront the Tehran-Venezuela (and possibly Iraqi) axis. Iran has openly threatened to undermine OPEC’s stability if no support can be gathered before the June meeting.

Tuesday 07 May 2019

BUSINESS DAY

OFFGRID BUSINESS

POLICY

Study identifies 5 fiscal incentives to aid FG’s clean energy targets the asset is first put to use. Investment allowance does not reduce the capital allowance claimable on the asset but is an uplift on the cost of the asset, and results in 110% tax depreciation deduction on the cost of the asset. The report therefore recommends an increase from 10% to 25% for qualifying capital expenditure. “This will mean that the capital allowance claimable on qualifying renewable energy power assets will be 125%, with 25% claimable in the year the asset is first put to use.”

ISAAC ANYAOGU

new study commissioned by All On, an off-grid energy impact investment firm seeded by Shell, and carried by leading professional services firm, PwC Nigeria has identified five strategic fiscal incentives that if applied to all categories of clean energy producers and off-grid developers in Nigeria, could assist the Federal Government meet its target of 30% renewable energy sourcing by 2030. While some of these incentives have been used to encourage the development of other sectors in Nigeria such as the gas sector, the report, titled Strategic Fiscal Incentives to Unlock the Off-Grid Clean Energy Sector in Nigeria: Opportunities & Recommendations,’ proposed alterations to their implementation and comes complete with a strategy to make it work. Import duty Exemptions The report recommends complete import duty exemption on the importation of machinery and equipment for use in the generation of off-grid power using renewable energy sources. Apart from items already in the Customs Schedule, it calls for inclusion of PV panels for power generation, Control systems for PV panels and renewable energy powered generators working with direct cur-

rent, control systems for PV panels and renewable energy powered generators working with direct current, hydroelectric generators 5 Static DC to alternating current (AC) converters for PV systems. Others are Inverter batteries, DC electronic equipment for use with PV panels, wind and hydro generators, materials used in building equipment for renewable energy use, measuring instruments related to renewable energy variables, such as: temperature gauges, pressure gauges, solar radiation meters etc. and smart meters. VAT Exemption The report called for VAT exemption on importation of equipment and spare parts for use in renewable energy generation, services rendered

in relation to the development and deployment of off-grid technologies and manufacturing, importation, sale or development of renewable energy technologies/equipment. Pioneer Status Incentives The Industrial Development (Income Tax Relief ) Act (“IDITRA”) provides income tax incentives to qualifying industries and products for a three year period, which can be extended for an additional one or two years upon fulfilment of certain requirements. The incentives provided under the IDITRA are income tax relief, tax losses, capital allowances and tax free dividend. Currently, independent power production utilizing gas, coal or renewable energy sources and manu-

facturers of solar energy powered equipment and gadgets are on the approved list of pioneer products/ industries. However, the length of the pioneer incentive remains unfavorable to off-grid power investors because it typically takes more than five years to have returns on investment in this sector. So it is proposing an extension in the duration of the incentives. “We propose 10 years for clean energy investors in line with the Renewable Energy Master Plan 2012,” the report said. Investment allowance The Companies Income Tax Act grants 10% investment allowance on qualifying capital expenditure. Investment allowance is calculated from the year of assessment in which

Accelerated Capital Allowance Under Nigerian law, depreciation is disallowed in income tax computations. The law provides for capital allowances in place of accounting depreciation. For instance, under the CITA, plant for agricultural production attract 95% (accelerated) capital allowance in the first year. While under the PITA, ranching and plantation assets attract 30% capital allowance. It recommends that 90% accelerated capital allowance be granted to qualifying entities and individual on their eligible clean energy generation equipment. The initial 90% will be claimable within the first year of operation while 10% will be granted in the second year. This will mean that the capital allowance is claimed almost completely in the first year of purchasing the equipment.

INSIGHT

Does Texas ranchers’ attitude to GM’s EV pickups mirror real problem? STEPHEN ONYEKWELU

eneral Motors, America’s biggest automaker is wading into the electrical vehicles market with eyes on the pickup market but Texan ranchers who comprise the world’s single largest market for diesel pickups say they want more horsepower than current EV pickups provide. GM completes a quartet constituting of Ford, Tesla and Rivian, a Detroit based start-up that have added an all-electric pickup to its portfolio, CNBC reported. “But Detroit’s Big Three and their challengers may have a hard time persuading the ranchers, roughnecks and handymen who make up a lot of their core clientele to trade in their diesel duallys for a battery-powered 4X4 pickup” the report said. Mary Barra, GM chief executive officer, has not offered any details about the pickup, but said GM “will not cede our leadership” in the pickup segment, leading to widespread speculation about what GM is developing and when it will come to market. Electric vehicles, in general, have been slow to catch on with American car buyers. While sales of all plug-

based vehicles, including all-electric and plug-in hybrid models, jumped from 195,226 in 2017 to 360,353 last year, according to industry data, this was still less than 2 percent of the overall new vehicle market. And pure battery-electric vehicles alone generated barely half of that total. This is a significant challenge presented to automakers who want to produce pickup electrical vehicles. A large chunk of the EV market is currently made up of Tesla’s Model3 sedan. “I wouldn’t buy one at all. It wouldn’t make sense for me. It sounds like a playboy’s truck, instead of a work truck,” said Frank Helvey, who raises cattle and is active in the livestock auction community near Pearsall, Texas. If Texan ranchers’ attitude mirrors the horsepower needs of the nature of work for which pickups are built the world over, then automakers aiming at this market segment will have to return to the strategy boardroom. Jeff Williams, another Texas rancher, said the technology interests him, “especially if they can make an electric that has the same power and range as a one-ton diesel.” But he remains skeptical of Rivian’s claims and the promises made by other au-

tomakers that their electric pickups will offer capabilities matching their gas and diesel models. But manufacturers hope to stimulate growth with the addition of new products as diverse as the Audi e-tron SUV, the Porsche Taycan sports car and the Jaguar I-Pace crossover that was named World Car of the Year at the New York International Auto Show last month.

ANALYSTS: Isaac Anyaogu (Team Lead), Stephen Onyekwelu, Dipo Oladehinde

The two critical challenges are range and charging. And out Williams’ part of Texas State there are few public chargers, especially the high-speed ones needed for ranchers who haul large livestock to market from rural areas. Sam Abuelsamid, a senior automotive tech analyst with Navigant Research said the most critical question, is “whether there’s a market for

an all-electric truck.” Rivian, the start-up’s R1T will make “close to” 800 horsepower, RJ Scaringe, the company’s boss said in Los Angeles recently, enough to hit 60 mph in 3 seconds. Its roughly 1,000 pound-feet of torque will let it haul a trailer of up to 11,000 pounds, and it is expected to get up to 400 miles on a 180 kilowatt-hour battery pack.

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email: isaac.anyaogu@businessdayonline.com, stephen.onyekwelu@businessdayonline.com, oladehinde.oladipo@businessdayonline.com

Tuesday 07 May 2019

BUSINESS DAY

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Stakeholders canvass strategic varsity, industry collaboration to stem unemployment Stories by KELECHI EWUZIE

or Nigeria as Africa’s largest economy to overcome her growing unemployment challenges in the foreseeable future, industry experts have called for a pragmatic collaboration between universities and industry in Nigeria’s education system. They insist universities need to be able to leverage on the huge expertise available in the industry to train undergraduates, stressing that by so doing, the country can create opportunities that will in turn reduce production of half baked graduates and improve job creators. Chief executives and human resources experts are advocating for a connection between theory and practice in the approach to teaching and learning using the business simulation method to gain needed global knowledge, adding that this approach will help undergraduates in the ever competitive world of employment. They observe that it is quite evident that in today’s fiercely competitive market, only those who can back their academic grades with some work experience usually discover the best breaks. Richard Obire, founder of African institute of Business Simulations (AIBS) opines that there is the need to help students connect theory to practice which is lacking and has created a huge gap in Nigeria educational system. Obire observe that approaching teaching and learning using a business simulation facility is one of the process required to enable students both under graduate and post graduates actually connect the theory that they learn in different areas to practice. “We have to use innovative tools and creative thinking both for teaching and for learning and simulation gives you that opportunity and offer students and lecturers a new way of teaching that is practical and if you can’t connect theory and practice, then you don’t have empowerment skill after spending four to six years going through a university courses why do you do that after you come out you are not ready for industry”. He said.

L-R: Attahiru Jega, pro-chancellor/chairman, governing council, Plateau State University, Bokkos; Fidelia Osime, organisation/human resources director, Lafarge Africa; Suleiman Elias Bogoro, executive secretary, TETFUND; Laoye Jaiyeola, CEO, Nigerian Economic Summit Group (NESG); Sonny Echnono, permanent secretary ministry of education, and Doyin Salami, economist/member of faculty, Lagos Business School (LBS), during the NESG/NUC policy dialogue, with the theme “interactive Session on the Rapid Revitalization of Higher Education in Nigeria” in Lagos. Pic by Olawale Amoo

He further noted that investing in simulation facilities projects across universities will impact on the national economy because with this, students are going to be industry ready meaning that employers are going to find out that they need to spend less to get new graduates off the ground running. Because they will be ready to add value from the first day they get into the job. The method of teaching and learning in most Nigeria universities are such that cannot help the student compete on a global scale says Obi Ezeude, chief executive officer, Beloxxi industries limited. He observes that business simulation is a new method of teaching and learning that is obtainable is business schools all over

the world. According to him, “I feel that investing in Business simulation laboratory in universities is a cutting edge project that is good and needful because the students can benefit when they use the lab to understand how business decisions are taken abroad”. Ezeude further said that what this means to the economy and students that will use it is that each student that passes through such programme will have first class knowledge of what obtains outside Nigeria. In his words, “It brings the students up to international standard such that if they go and tomorrow and they are employed, they would have had a firsthand knowledge of how business works, they would have seen

the tools businesses use in making their decisions, they would have benefited of at least seeing real live how thing are done elsewhere in the world”. “This project is the first step in trying to reintegrate Nigeria students into the real world. To give them an idea of what it is like to work after graduating from school. At the end of the day, Nigeria will benefit by having real human capital development out of the university as oppose to graduate that come out without any functional knowledge” he said. If Nigeria must attain the Vision 2020 national economic projection, concerted efforts must be made to improve the human capacity competence of Nigerian graduates.

‘Nigeria requires conscious investment in mathematics education to stay competitive’

ndustry experts have opined that conscious investment in Mathematics education which is the bedrock of science and technology can truly make Nigeria competitive as the giant of Africa. They observed that no nation can truly develop without a conscious investment and effort in Science and Innovation, and Mathematics is the bedrock of these two, adding that everything revolves around Mathematics. Abiodun Ayodeji, marketing manager, Promasidor Nigeria Limited, sponsor of Cowbellpedia Secondary Schools Mathematics TV Quiz Show said with Mathematics education, Nigeria can truly become the giant of Africa since modern development, technology and even commerce revolves around Mathematics.

Ayodeji said that the objective of Cowbellpedia which is a brand asset of Cowbell Milk is to provide a platform to reward excellence in the subject area of Mathematics irrespective of economic and social strata. This he said was in line with the essence of the brand which is to provide affordable quality nutrition to every Nigerian Child. According to him, “Cowbellpedia has 3 major legs: Cowbellpedia Secondary Schools TV Quiz Show; Cowbellpedia Radio Maths Class and Cowbellpedia Mobile App that can be downloaded on Google Play store on android devices and App Store on Apple devices. He disclosed that student enrolment has been increasing on a yearly basis and in 2019 a total of 56,073 students sat for Stage One

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examination of the competition. This marks a 34 per cent increase over the 41,730 students who took part in the examination last year, when the registration format became strictly online. Ayodeji acknowledged that this is a record entry in the history of the competition, adding that the brand’s top and bottom line has also moved in sympathy with this direction. The competition he said, has also witnessed progressive increase in participation in the last four years, during which period 195,474 students had featured in the Stage One examinations. Ayodeji equally maintained that the Cowbellpedia initiative has met its objectives of awakening the consciousness and interest in Mathematics amongst Junior and senior sec-

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ondary school students in Nigeria; improving students’ performance in Mathematics Pan Nigeria, and creating a credible platform for identifying outstanding students and encouraging excellence in the subject area. He stressed that over the last 21 years, the Nigerian child have gained a lot from the Cowbellpedia initiative. He also stated that, in celebrating the 20th relationship between Cowbell and Mathematics, last year, Promasidor added some new dimensions to the Cowbellpedia initiative. “We have also increased significantly the total prize money in the last 5 years, the prize money is now 2 million naira for the winner in each category and there are other cash prizes reward at each stage of the competition for students and teachers” Ayodeji said.

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Tuesday 07 May 2019

BUSINESS DAY

EDUCATION The Evolving Approach to 21st Century Upbringing Who we are is directly linked to our environments.

OYIN EGBEYEMI

e are products of our environments; our families, our schools, our friends and anywhere we spend a significant amount of time with people. As such, statements like “An apple does not fall far from its tree” and “Show me your friends, and I will tell you who you are” are not farfetched. The behaviour that human beings exhibit is a reflection of the way we are brought up. When adults of today say one or two things

about the way they were brought up, we should ponder over these stories they tell about their strict grandmothers, loving fathers, protective siblings, abusive relatives, absent parents, bullies, authoritarian schools etc, and understand how their influences form these people’s characters. People are born with personality, but character is learned (of course with the exception of those who have inherent psychological personality issues). Adults therefore need to understand that children are impressionable and while they are young (especially in their formative years), it is important to ensure that the right approach to raising them is taken. In past generations in Nigeria, the parent and community’s (teachers, churches etc) method of upbringing was pretty much authoritarian. Adults from about age 45 and above today were brought up in what they would describe as very strict traditional households, where as children, they were only allowed to speak to adults when spoken to, and sometimes discipline involved physical measures or other means which, today could be viewed as extreme, dramatic or even incriminating.

The products of this generation seem to have turned out okay in their lives and careers in general or at least on the surface. However, as a result of the negative sentiments from their upbringing, when many members of this generation started to breed their own offspring, they desired a different approach, which would be less impersonal and more lenient. There are various approaches of bringing up children, and psychologists have classified this into four categories. Authoritarian: demanding of children but not responsive to their needs; Authoritative: demanding of children and responsive to their needs; Permissive: not demanding of children but responsive to their needs; and, Neglectful: as the word literally describes, neither demanding nor responsive. Leniency here ranges from authoritative to neglectful, and we should always question the extent to which our approach is because it eventually has a direct impact on children’s character. Parents, educators and other adults who come into contact with children also have to be smart to tailor their techniques to their children, as children have different

personalities and some require a little more discipline or authority than others. This is important because if we do not quite get it right, there are certain negative traits that children will begin to exhibit and these might follow them into adulthood. Some of these include a sense of entitlement, impatience, lack of respect and lack of independence, etc. This matter of bringing up children in today is however far more complex than it appears on the surface. With global consumerism trends, wealth becoming more of a materialistic venture than a dignified status, the influence of the West, reduced amount of time parents get to spend with their children due to longer working hours, women spending more time at work and hours spent in traffic in cities like Lagos, it really is tough these days. However, in order to ensure that our children are sufficiently equipped to survive as effective adults, we need to put in their right effort towards their upbringing. Oyin Egbeyemi is an executive administrator at The Foreshore School, Ikoyi, Lagos.

Kwara Govt wants educators to leverage Old students move to rescue Alma global approach to Nigerian education mater from extinction SIKIRAT SHEHU, Ilorin

ztaz Abdullahi-Alikinla, the Kwara Commissioner for Tertiary Education, Science and Technology, has charged heads of higher institutions in the country to be proactive in line with global best practices. Abdullahi-Alikinla gave this charge in Ilorin in a message to a forum, tagged: “Score Card” commemorating one year in office of the seventh provost of the state college of education, Ilorin, Yusuf Abdulraheem. The commissioner, who was represented by Oguntunde David, director, Continuing Education in the ministry said heads of tertiary institutions should embark on activities that would give their institutions international recognition. He described a situation where the products of some tertiary institutions in the

country could not compete favorably with their counterparts in other parts of the world as unfortunate. The commissioner lauded the current provost of the college for what he described as remarkable achievements recorded in the school within a year of assumption of office. A former lecturer in the college, Shehu Salman in his remark, urged the provost to curb plagiarism among the academic staff of the college. He, however, called for proper functioning of the academic board of the college to guarantee the credibility of the results issued by the institution. Mary Alarape, who was also a former lecturer in the college, advised staff of the college to shun negative tendencies that could deter development in the college. Abdulraheem said the event was organised to welcome more innovations that could assist the college in realising its mandate.

L-R: Blessing Omosebi, Uchechukwu Fredricks, Ebuka Ughamadu, Sarah Onabanjo, Emmanuel Anyanwu, all of Caro Favoured College - 2018 winners of the JA Africa Company of the Year during a Media Parley to announce activities for JAN’s 20th anniversary recently. www.businessday.ng

etermined to rescue their alma mater from extinction, Old Students of Uturu Secondary School in Isuikwuato Local Government Area of Abia State, have resolved to revamp and rehabilitate the school through provision of necessary facilities. The old students under the auspices of Uturu Secondary School, Old Students Association (USS OSA) unanimously agreed to revamp, rehabilitate and bring back to life, the lost glory of USS. They urged every person that passed through the college to contribute immensely towards the realisation of saving the school from extinction. The USS OSA resolved in the meeting held at the school premises to give scholarships to only surviving three students in school and first 50 students to register by September 2019 as part of its drive to attract numbers and restore the college’s past glory. In the meeting which was a beehive of activities, they also agreed to provide adequate security through perimeter fencing and hiring of security men for the protection of students and staff as well as property of the school. According to a communique issued at the end of meeting signed by Francis Agu, the USS OSA resolved to give automatic scholarship to the three existing students of USS and the first 50 to register in the school by September, 2019. The old students further agreed to get quality teachers and National Youth Service Corp NYSC members that would be motivated through welfare packages and provision of accommodation. They also resolved to provide improved academic environment for the benefits of the students and the town. “We shall provide good security mechanism through the fencing of the school and provision of standard entrance and exit gates to regulate and contend with

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trespassers “We shall institute a monitoring system to ensure sustainability of the intervention programme and to ensure that students and teachers are academically engaged in order to produce result”, they said. However, during the meeting OSA instituted interim executive headed by Aloy Okezie as chairman, Francis Uchenna Agu as Secretary, Ogele Chukwuma as Assistant Secretary, Ifeanyi Lebechi as director of finance, Boniface Chilaka as director of Welfare, Titus Eleweke as director of publicity, Kelechi Onyebueke as director of logistics and Anthonia Gold Uremgba as treasurer. Other highlights of the occasion include donations by various individuals and sets. At the meeting members observed with great concern of the challenges that have led to the total drop of students in school. Which include, increase in school fees, presence of the Methodist School, insecurity, none payment of teachers’ salaries by government, incessant strikes by teachers resulting in withdrawal of students by parents and fear of not being able to pass Senior School Certificate Examinations SSCE among other things. Speaking shortly after the meeting, Aloy Okozie called USS OSA members to rally round the executive to restore the past glory of the college that gave them much in life. According to him, the college has produced who is who in the country and around the world and there is no how it could be allowed to go extinct due some extraneous activities. He commended the zeal shown by OSA towards revamping of USS which has presently only three students a school that had over 5000 Students during his time. “We will address all the challenges facing the college because we all benefited from it. This is payback time which nobody should back out,” he said.

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Tuesday 07 May 2019

BUSINESS DAY

property&lifestyle Housing

Investment, residential opportunity opens as Houston EB5 broaches $500m mixed-use property CHUKA UROKO

or yield-seeking investors interested in moving cash offshore, an investment window has just opened at a $500-million high-end, multi-use development comprising the luxury brand Thompson Hotel, The Residences at The Allen, and a lifestyle pavilion that will include an exclusive fitness club, two signature restaurants, and luxury retail space. Known as The Allen, the mixed-use luxury development is located along the most scenic drive in the heart of Houston, Texas in the US. The landmark development, which is overlooking Buffalo Bayou Park, will stand as a crossroad between downtown, the Galleria-Uptown area, Midtown and the Texas Medical Center, offering the best of the city and outdoor lifestyle. 3Invest, one of Nigeria’s frontline real estate firms, is the project’s partner in West Africa. The company, which announced this investment opportunity at the weekend, has already extended partnership with Houston EB5 to raise capital for The Allen. Houston EB5, a subsidiary of DC Partners (an awardwinning real estate developer), is an approved Regional Center by the United States Citizenship and Immigration Services

since 2010. It provides foreign investors the opportunity to obtain Permanent Residency (Green Card) in the United States through a qualified real estate investment. “Because of our success in Nigeria with previous Houston EB5 projects, we are now looking to grow our partnership with Houston EB5 by expanding our investor-reach into Ghana where we are certain many investors would like to take advantage of these immigrant investment opportunities for their families.” Ruth Obih, 3Invest’s CEO, assured. Obih noted that with more than 30 years of real estate experience, Houston EB5 works to develop high-quality residential high-rise, mid-rise, mixeduse and suburban projects. The company gives opportunity to foreign nationals to receive Permanent Residency ‘Green Card’ for themselves and their immediate family through a qualified real estate investment. RobertoContreras,President/ CEO Houston EB5, affirmed, stressingthat“HoustonEB5hasa provensuccessrateofGreenCard approvals and return of capital to all its investors; we consistently deliver world-class investment projects and demonstrate longtermfinancialstrength,aswehelp investors achieve their business and residency goals.” Acho Azuike, Houston EB5’s MD/COO, assured that The Allen would be a truly landmark project that will be

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redefining luxury living, working and playing at the middle meeting point between the central business district and the Galleria in Houston. Azuike explained that, as the fourth largest city in the United States, Houston is the nation’s demographic future with more than 145 languages spoken and consistently ranked as the most diverse city in the US. Houston is home to the second most Fortune 1000 companies in the country, second only to New York City.

International trade directly or indirectly supports one-third of all jobs in the Houston metropolitan area and the city counts the largest Nigerian population outside of Nigeria, making it home to the largest Nigerian communityintheUS.Thisguarantees quick capital appreciation and high rental yield for investors in The Allen. The promoters assure that Houston EB5 investors would share in the project’s profits and receive an Annual Preferred Return in addition to the

full return of their initial investment. Moreover, Houston EB5 offers its investors a simple and safe exit through the sale or refinance of the project. Houston EB5 provides a highly personalized and boutique-like experience to its investors during the EB-5 visa process. Obtaining a Green Card through the EB-5 visa programme allows investors to enjoy similar benefits as US citizens, excluding the right to vote and run for government office.

Construction

CIDG research on informal economy seeks insights into artisans’ competitiveness in construction industry AMAKA ANAGOR-EWUZIE

orried by the dearth of well trained and qualified indigenous artisansinNigeria’sconstruction industry, the Construction Industry Development Research Group (CIDG) of the Faculty of Environmental Sciences, University of Lagos, embarked

on a research titled ‘Informal Economy and Competitiveness of Artisans in the Nigerian Construction Industry’. The research, which is to be funded by the Kaiser Foundation for Social Development, has Iniobong Beauty John as lead researcher and Julius Olajide Faremi as colead. Expectation is that the

Fund sees hope in cooperative housing for increased homeownership

outcome of the research will enable CIDG to train Nigerian artisans participating in the informal sector of the construction industry on becoming construtrepreneurs, certified as eligible to do good business in the built environment. Artisans occupy a strategic position in the construction industry as they are trained

L-R: Akinkunmi Ajibola, Kudirat Zakarriyah; Soyebi Samson; Julius Faremi, Iniobong John, Mike Adebamowo; Chinyere Ezeoffia, Olumide Adnuga, and Oluranti Ajayi, during the workshop organised by the CIDG of the faculty of Environmental Sciences, University of Lagos, held in UNILAG recently. www.businessday.ng

to translate the architectural, structural, mechanical and electrical designs into reality. Therefore, a building or infrastructure plan is only as good as the artisan who is able to translate designs into reality. Speaking with BusinessDay during the CIDG artisans workshop held at the University of Lagos recently, Iniobong John, who doubles as a lecturer in the Department of Quantity Surveying, said that the research was prompted by clients’ complaints on the difficulties in finding qualified artisans capable of delivering quality services in the construction industry. The research, according to her, focuses on examining the challenges limiting artisans in Nigeria’s construction industry, bearing in mind the existence of aging population of indigenous artisans and the influx of artisans at various skill levels from neighbouring sub-Saharan African countries who compete with indigenous artisans. “CIDG’s research aims at investigating why indigenous artisans have been operating

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mostly in the informal sector and their level of competitiveness. The University of Lagos signed MoU with Kaiser Foundation for Social Development to enable it give back to the society through scholarship for undergraduate students studying construction-related courses, training of undergraduates on soft skills and giving internship opportunities to UNILAG students and funding CIDG research,’’ John explained. In conducting the research, she said, CIDG found that there was capital flight in millions of Naira from Nigeria to neighbouring West African countries every weekend made possible by foreign artisans who operate in the informal sector and do not pay tax. ‘’The study adopted the qualitative research approach to provide deep insight into the artisans segment of the construction industry. Interviews and focus group discussions have been used to unravel artisans’ experiences, understand how competitive they are and to know how to improve on their competitiveness,” she added. @Businessdayng

he Family Home Fund (FHF) says there is hope and huge potential in cooperative housing to increase homeownership level in Nigeria, pointing out that cooperatives, in an organised sector, can be transformational enablers of affordable housing delivery particularly to low and middle income earners. Cooperative housing seeks to deliver housing by getting people together as cooperators, pool resources together and fund housing developments, thus reducing the burden of individual financing of housing development and increasing affordability. Femi Adewole, managing director of FHF pointed out in Abuja recently that Nigeria has lessons to learn from other countries on co-operative housing. “Nigeria can replicate what other housing cooperatives in other parts of the world are doing,” said Adewole who spoke at a workshop organised by Nigeria Integrated Social Housing (NISH) in collaboration with FHF in Abuja. He cited the Urban Housing Cooperative in India which owns about 4.5 million homes between them over the last 10 years, stressing that Nigeria must make the cooperatives very strong vehicles for reliable and affordable housing delivery in the country. Adewole noted that there were about 2,600 housing cooperatives in Pakistan which have, since inception in 1972, produced about 27 million homes with strong membership, adding that there were 5,700 housing cooperatives in Zimbabwe with significant number of members as women who are responsible for almost 80 per cent of housing delivery in that country. The managing director assured that, as a social housing programme initiated by the federal government to provide inexpensive mortgages for lowincomeindividualsandfamilies across the country, the FHF was poised to boost the cooperative housing market in Nigeria. Under the FHF scheme, whichisdomiciledinthefederal ministryoffinance,civilservants who earn salary of 30,000 and above can have access to mortgages to own a home. The fund is a special purpose vehicle for financial institutions primarily setuptofacilitatetheproduction of about 500, 000 homes and to create over 1.5 million jobs. “The fund is very new but has been running effectively in the past nine months. It has four pillars of funds to achieve home ownership, namely Affordable Housing Fund, Home Loans Assistance Funds, Rental Housing Fund and Land and Infrastructure Fund”,Adewole disclosed.

Tuesday 07 May 2019

BUSINESS DAY

property&lifestyle Mortgage Market

PMB operators explain why NMRC’s N18bn refinancing is less impactful

… high interest rate, unaffordable properties top reasons Endurance Okafor

ince Nigeria Mortgage Refinancing Company (NMRC) announced in December 2018 that it refinanced mortgages to the tune of N18 billion, stakeholders in the industry have been raising questions on how many mortgages were financed with the funds. Concerns have also been raised that the impact of that N18 billion is not being felt in the housing or mortgage sector, more as liquidity issues which define the mortgage market in Nigeria still persist, raising further question as to where the money has gone to. Thelongawaitedexplanation was given to BusinessDay at the weekendwhenaboardmember oftherefinancingcompany,who askednottobenamed,responded via a phone call. “NMRC has refinanced 1,045 loans so far with the N18 billion they raised between 2015 and 2018,” the board member said. This implies that the company refinanced 1,045 loans presented to it by its member-

banks. “As at December 2018, NMRC had disbursed N18 billion to member-banks for the mortgages they brought to us for refinancing,” affirmed Abel Owotemu, ED/chief financial officer at NMRC. Kehinde Ogundimu, NMRC’s CEO, had also disclosed, in statement in December last year, that NMRC refinanced mortgage loans totalling N18 billion as at December 2018. The private sector-driven mortgage company, which started with the mandate to develop the country’s primary and secondary markets issued bonds has raised a total of N19 billion from the capital market to refinance mortgage loans that are provided by mortgage and commercial banks that it partners with. It raised N8 billion in July 2015 and N11 billion in June 2018. Ogundimu explained that it was in line with the company’s mandate to promote affordable home ownership in the country by leveraging funding from the capital market to deepen liquidity in the primary and secondary mortgage markets. However,somestakeholders

in the real estate sectors have raised suspicion over the announcement of the refinanced mortgages by NMRC, requesting that the refinancing company discloses the names and beneficiaries of the loans if actually it disbursed what it claimed. “We have been refinanced by NMRC but the funds really grew in 2018,”Aderemi Apatira, Head Corporate Communications and Brand, Infinity Trust Mortgage Bank Plc confirmed to BusinessDay. AdeniyiAkinlusi,presidentof MortgageBankersAssociationof Nigeria(MBAN)andCEO,Trustbond Mortgage Bank, affirmed thatNMRChadbeenrefinancing primary mortgage banks. “I am aware they are refinancing primary mortgage banks but the total amount that has been used for refinancing so far, I do not know,” Akinlusi said. WhenBusinessDayaskedthe MBAN president if the primary mortgage banks were using the finance from NMRC since he is a CEOofaprimarymortgagebank, he replied, “yes we are. We are creating mortgages.” On how NMRC’s efforts

Time to invest, buy homes as Eden Heights offers luxury apartments CHUKA UROKO

espite the lull in the real estate sector in Nigeria, the housing market still experiences occasional exciting moments with developers, confident in the economy and the market with its compelling demographics, put products on the market Recently, Design Union, a leading real estate development and lifestyle group, entered the market with two state-of-the-art luxury properties, Eden Heights and Ilupeju Gardens, adding to its real estate projects portfolio in Nigeria. The properties were unveiled in January 2019 to business leaders, property developers, investors, the media and real estate professionals, thus offering fresh residential and investment opportunities. Eden Heights is a high-rise development comprising 1, 2, 3, 4, and 5 bedroom apartments on 15 floors. Each apartment comprises well appointed ensuite bedrooms with top-notch facilities, floor to ceiling windows, modern fitted kitchens, spectacular views, swimming pool, lawn tennis court, spa, fitness centre etc. These luxury apartments and penthouses cater to the city’s middle-class and expatriate population. Nestled at the hub of Victoria Island, it features the exclusive capital club, Ehima cave spa and royal residences with premium hotel rooms and

Godwin Emefiele, CBN governor

Kehinde Ogundimu, NMRC CEO

Adeniyi Akinlusi, MBAN president

at refinancing primary mortgage banks can be more impactful, Akinlusi said development of more affordable houses and low interest rate on mortgages were vital. “The high interest rate on mortgages is one issue, and we are in engagement with the CBN as they intend to come up with an initiative to make interest on mortgage more affordable with target to enable the young and first time home buyers to acquire homes. “Mostofthehousesavailable are unaffordable; what we have is more of supply-led market strategy; developers construct houses without considering affordability of the market they

are developing for; that is why you have a lot of houses unsold inmosthighbrowareasinLagos, the market is now correcting as it is becoming a demand-led market”,he noted. Mortgages are loans, meaning that they come with interest rates. Typical mortgage interest rates in Nigeria range between 7-10 percent for the Federal Mortgage Bank of Nigeria’s National Housing Fund (NHF) and between 15-25 percent for commercial mortgage institutions. Aside from the interest payable, the potential buyer must alsohave a certainpercentage of the total amount needed for the purchase readily available; this

amount is known as equity and rangesbetween30-50percentof the total cost of the property for which mortgage is sought. So, in Nigeria, if you take a mortgage loan of N25million at 15 percent per annum, interest rate payable is N37.9million in interest only over the 15-year period. This is more than the principal itself. The trick here is that at 15 percent interest rate, it takes a lender approximately 7years to recover the N25million it lent out. It is about 6 years if the interest rate is 20percent. With that sort of interest rate, industry experts question if anyone can honestly afford a mortgage on a steady salary?

Professional Practice

How technology is reshaping estate agency practice, property investment CHUKA UROKO

world-class private meeting rooms for top level executives and business owners. Ilupeju Gardens, a small and intimate estate of mid-rise apartments and maisonettes currently being developed in partnership with the Lagos State Development Property Corporation (LSDPC), sits in the vibrant Lagos mainland and caters to residents in the bustling Oshodi/Ilupeju axis, particularly the Indian and Lebanese expatriate community. The ambitious project offers auniquetechnologyfeaturethat intersects between real estate and climate safety, deploying www.businessday.ng

planted Neem trees in the environs with a filtering capacity of up to 1000 residents annually. With these two additions to its pipe of property development projects, Design Union continues to demonstrate its market leadership and commitment to bridging the gap in the supply and demand value chain in the real estate sector. Building on an investment track record and portfolio size of over $60 million, the organisation champions a new wave of excellence and innovation in property development designed to scale up user experience and attract foreign global capital in Africa.

radually but steadily, the disruptive impact and influence of technology is gaining traction in the estate agency practice, property investment and the real estate sector as a whole with significant positive results in terms of making transactions and processes easier and faster. As a way of doing things faster, better and quicker, technology is making today’s reality of global economy/ village possible and its disruptive capacity is such that there is so much the world can do today by just getting the right tech apps In the business of buying, selling or leasing property known as estate agency, technology is reshaping almost every aspect of it including searching, inspection and transactional activities—buying and selling. “Though Nigeria is still playing catch-up, it is doing very well, especially among the millennials,” noted Emeka Eleh, former president, Nigerian Institution of Estate Surveyors and Valuers (NIESV), who spoke at a one-day conference in Lagos recently. The annual conference, third in the series, organised by the Association of Estate Agents in Nigeria (AEAN) had as theme, ‘Technology:

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The Key to Reshaping Estate Agency, Property Development and Investment’ with speakers drawn from professional practice and estate development sectors. “From ‘To Let’ boards, estate agency has migrated to online marketing with varied online market tools which include Whatsapp, Facebook, Twitter, instagram,etc. Again, property inspection is now done in very convenient, easy and fast way through visual tours and reality using 3D image technology,” Eleh said, adding, “Property technology (proptech) and Google Map can do virtually everything.” Technology is used today in property development and investment. It is used in actual building process beginning with designing involving 3D Designs which, Eleh noted, ensures more efficient project management and process. Technology is also being applied in procurement systems, logistics and supply chain management; material testing, contract management and in better planning and execution of estate projects. In property investment, technology provides data that makes decision-making faster and easier; it reduces uncertainties in decision making process just as it reduces time and process involved in sourcing investment capital as nego@Businessdayng

tiations and transaction could be done easily online. Over all, technology has changed the real estate sector for the better, bringing convenience, lower cost, wider market, micro sales and easier transaction to the table. The implication is that practitioners in the estate agency practice have to up their game to keep up with the changing times in their market. This has become necessary because, though some people still believe that estate agents are invaluable, their role is shrinking, according to Tunde Layemi, co-founder of Templetons Realty, who spoke on ‘The Role of Technology/Real Estate’ at the conference. Earlier in his address, Kola Akomolade, chairman of the occasion, had noted that social media platforms like facebook, instagram, telegram, twitter and youtube have increased further the opportunity for practitioners to meet with their clients all over the world if they so desired. He noted that, in the US, statistics showed that 43 percent of property buyers start the process of looking for property to buy online; 92 percent of buyers use the internet while 91 percent of real estate agents use social media, meaning that Nigerian practitioners have no more time to wait for.

Tuesday 07 May 2019

BUSINESS DAY

LEGALPERSPECTIVES With Odunayo Oyasiji

A time to keep, and a time to automate IKECHUKWU NWAKANMA of Perchstone & Graeys

order security and international trade are two sides of a coin that constantly present significant concern – due to the inherent risk and benefit traditionally associated with both endeavours. The UK has chosen BREXIT to retake control of its borders, immigration and trade autonomy. The longest government shutdown in American history was connected to protecting America’s borders from smuggling, illegal immigration and loss of government revenue from the Mexican border. In the Middle East, Dubai Customs recently launched “iDeclare” – a smart app which enables passengers into Dubai declare their belongings, if needed, in only 5 minutes, rather than 45 minutes which was the average required time prior to the innovation. The revenue generated by this innovation is better imagined. In Nigeria, the Customs Service (NCS) is second only to the oil sector, in revenue generation for the Federal Government, generating over NGN 2.3 trillion in the last 2 years. But the NCS is far from attaining peak revenue generation, and this portends both opportunities and risk. Opportunities to leverage private sector partnerships through a PPP arrangement, to finance the full automation of its operations, and the risk of being overtaken by ‘sister’ countries

in Africa that have completely moved away from the manual operations of import and export surveillance to a full or semi automation of their customs operation, making them theinternational trade destinations in Africa. In 2016 the Malawian Revenue Authority introduced ICT innovations to its customs service which enables it to link the operations of its customs with road traffic development and the Malawi Police Services to improve efficiencies and speed up clearance of motor vehicles. Several years ago, Dubai’s customs service launched an automated project (Mirsal 2) that deploys technology to enhance customs operations and ensure more effective border management. Like these countries, Nigeria copes with

an evolving environment of international trade in the 21st century. But unlike them, Nigeria has failed to innovate and thus even with seemingly impressive annual revenue generation, much more can and should be received in revenue by the most populous black nation in the world. According to a report byallAfrica published on July 18, 2017, the Nigerian Senate Committee Chairman on Custom, Excise and Tariffs was quoted to have reported that over NGN 4.35 trillion worth of goods are smuggled into the country each year. The World Bank also disclosed recently that a staggering sum of NGN 750 Billion ($5 Billion) worth of assorted goods are smuggled into Nigeria through Nigeria’s border with Benin Republic every year.

The principle of Pacta Sunt Servanda in commercial transactions

LOCUS CLASSICUS

Dunlop Pneumatic Tyre Co vs. Selfridge Ltd (1915) AC 79 P

acta Sunt Servanda means ‘agreements must be kept’. Therefore, it deals with sanctity of contract. Whatever we agree upon must be followed by parties. Contractual obligations must be respected. It must be noted that parties have the freedom to contract and agree as they wish. The only exception is that they cannot contract to commit crime or illegalities. The freedom is limited to acting within the ambit of the law. Therefore, if parties agrees on anything and reduce

n this case, the plaintiff had an agreement with a dealer that he shouldn’t sell their product below a certain price. They also made the dealer promise to extract this same promise from other people they sold to. The dealer subsequently sold to the defendant and made him promise not to sell below the ascertained price. They even agreed that for every good sold below the ascertained price, 5 pounds would be paid to the plaintiff. However, the defendant sold below the price and also didn’t pay the 5 pounds. Thus, the plaintiff sued to enforce the agreement between the dealer and the defendant. The court held that the even though the defendant breached the agreement between it and the dealer, the plaintiff was

Something must be done. The Nigerian government has made strides in enhancing the ease of doing business. When the NCS introduced ASYCUDA++ and the Nigerian Integrated Customs Information System (NICIS) into its operations in 2017, annual revenues skyrocketed by almost 500 billion Naira. ASYCUDA++ is a software developed in the early 80’s following the United Nations Conference on Trade and Development (UNCTAD) to automate the operations of customs. Currently, about 80 countries use this software. A PPP partnership would however enable the deployment of cutting-edge ICT tools in Nigeria’s customs operations. Some of the automation tools that can be invested in, include infrared/ultraviolet tracking

it into writing then the terms agreed upon automatically becomes binding on the parties. In a situation where there is dispute between the parties the court’s duty is to interpret the terms agreed upon. It is not the duty of court to introduce new terms or read unnecessary meanings into the terms of the contract. The court in interpreting the terms often adopts the literal rule of interpretation of law i.e. giving the wordings of the contract its ordinary meanings.

not a party to the contract and it did not furnish consideration for the promise. Hence, there was no privity of contract between them. www.businessday.ng

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devices capable of detecting cargos or goods on land and water ways (to tackle smuggling and bring more revenue into government coffers); x-ray scanners for scanning cargos and goods (strengthening security); electronic clearance of goods using technologies such as block-chain (enhancing speed and efficiency); and technology that enables goods to be accessed and excise duties paid directly to the government, even without the physical presence of the importer at the ports and borders (enabling the fight against corruption). One can therefore see the need to completely automate the operations of the NCS, to reap the full benefits of international trade and block leakage of revenue suffered in the hands of smugglers which comes at a time of great financial need in the country. With a badly eroded security infrastructure and a diminished status in the eyes of the global community due to a ravaged economy, Nigeria has much to prove if she is to continue to enjoy the attraction of foreign investors. The government’s 2017 Economic Recovery and Growth Plan (ERGP) has demonstrated a policy resolve to build an economy that is less dependent on the oil sector, and to leverage other initiatives through the benefits of Science and Technology Innovation (STI). It is time that resolve is matched by action, innovation and new private sector partnerships.

Difference between originating summons and writ of summons

hey are both means of commencing a civil action in court. Originating summons is mostly used in a situation where the matter boils down to the interpretation of law and it is not likely to be a contentious matter. In essence, you are presenting a provision of the law to a court and relating it to some facts and then asking the court for the interpretation of the provision as it applies to the facts presented. This process is usually faster than the process under writs of summons. Writ of summons on the other hand is used when a matter is contentious and there is need to go through the process of trial. In this situation witnesses are called and parties tend to file and reply to many processes. Since business disputes are mostly contentious matters, lawyers tend to use writ of summons when instituting an action bothering on business transactions.

Tuesday 07 May 2019

BUSINESS DAY

BDTECH

In association with

E-mail: jumoke.akiyode@businessdayonline.com

Could a tech-enabled GIG economy unlock solutions to Nigeria’s employment deficit? Bina Idonije, Guest writer

8.8 percent. That is the official unemployment rate in Nigeria as of 2017 according to the National Bureau of Statistics. Anecdotal data off the street have long contested the accuracy and methodology of deriving the country’s unemployment numbers. Be that as it may, what cannot be contested is the fact that unemployment and underemployment contribute massively to the country’s socioeconomic challenges. Across the world, a new type of labour force is emerging. They are termed “gig workers”; a derivative categorization for persons who make a living from the “gig economy” ecosystem. At a macro level, the gig economy, refers to work carried out outside the ambit of what is considered traditional employment, i.e. the equivalent of an 8- 5 job in Nigeria. It is mainly characterized by the following key attributes: i) shortterm economic arrangement between the worker and the client; ii) Compensation is tied to specific tasks or projects, as opposed to a regular salary, and; iii) significant autonomy on the part of the worker. Taking these characteristics into consideration, it would seem disingenuous to postulate that this is an emerging labour force, as indeed, these characteristics are reflective of how work has been carried out in the informal labour sector since time immemorial. So, you may ask, what then is all this fuss about a workforce which already existed prior to being attributed a fancy name like “gig work force”?

L R: Tonia Shoyele; director general, Abuja chamber of commerce and industry (ACCI), Abubakar Al-Mujtaba; 1st deputy president, Abuja chamber of commerce and Industry, Felicia Onwuegbuchulam; director, consumer affairs burea, Nigerian Communications Commission (NCC), Ismail Adedigba; deputy director, consumer affairs bureau, NCC, during the courtesy visit by the Abuja Chamber of commerce and industry, to the NCC headquarters in Abuja recently.

The game-changing factor is Technology. Digital platforms are creating online marketplaces that efficiently connect providers of services with buyers of those services, in ways that have the potential to exponentially propel economies. McKinseyestimates that online talent platforms could improve global GDP by 2% by the year 2025, or put financially, add $2.7 trillion to global GDP. Global platforms that are already proving the ‘hype’ about the gig economy include: Uber, Deliveroo, Upwork, TaskRabbit and Catalant. These platforms provide services ranging from transport, to food delivery, to professional services. Pretty much anyone can

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sign up to render their services, determine their own working hours, and earn money while being their own boss. Here in Africa, there are digital market places such as South Africa’s getTOD (an innovative mobile application offering ondemand services for electricians, plumbers, handy-men, tied to the clients locality); Kenya’s Mr. Green Africa (a waste recycling venture that leverages technology to empower waste pickers to earn a living); and Nigeria’s Jumia J-Force (independent sales consultants and logistics officials who help to bridge the internet access and e-commerce gap by bringing the online shopping experience offline to those without access).

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The ubiquity of mobile devices amongst Nigerians makes technology-enabled marketplaces an even more attractive venture. Picture a courier delivery services platform, where freelancers can sign up to deliver packages around their neighborhood on the back of their own transportation arrangements and get paid a portion of the delivery fees. Such a service will likely provide cheaper rates and faster delivery times as compared to traditional courier, given the factors of scale and proximity. Imagine a platform that provides you as a client with a repository of artisans such as painters and carpenters in your vicinity, gives you an upfront view of their potential fees, and shows how

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well or poorly other users of their services have rated them, to assist you in making an informed choice. Imagine also, the improved reach such a digital marketplace would afford those artisans, who, today, mostly rely on word of mouth of their relatively small circles, to get ‘gigs’. Think of this arrangement as the “organized informal sector”. In the midst of this optimism, one must reckon that for the average Nigerian, internet access remains a significant hurdle to meaningfully participate in a digital marketplace, and for start-ups, the incessant malaise of insufficient broadband persists. Nigerian digital platforms may want to consider the opportunities that lurk in leveraging sms/text messaging as an alternative tool in cognisance of the aforementioned connectivity constraints. Laudable contributions from the likes of Google Nigeria in looking to provide access to free wifi connection in over 200 locations in the country are welcome developments in this regards. The Gig economy, even in advanced countries, is still at nascent stages. Researchers and Scholars predict that the forthcoming decades will see the gig economy take a more dominant spot in global labour markets. The informal labour sector in Nigeria is overflowing with untapped opportunities to create a cohesive digital marketplace for artisans, masons, hair braiders, makeup artists and the likes. Bina Idonije is GE’s legal counsel responsible for the full spectrum of Labour & Employment matters in Sub- Sahara Africa.

Tuesday 07 May 2019

BUSINESS DAY

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

Dell simplifies hybrid cloud environment with new infrastructure solution Stories by JUMOKE AKIYODE-LAWANSON

ell Technologies has unveiled a new set of cloud i n f r a s t r u cture solutions to make hybrid cloud environments simpler to deploy and manage. Combining the power of VMware and Dell EMC infrastructure, Dell Technologies Cloud is said to remove cloud complexity by offering consistent infrastructure and operations for IT resources, across public and private clouds and the edge, regardless of location. According to IDC, more than 70 percent of companies are using multiple cloud environments, and the largest data center challenge most companies face is developing a successful multi-cloud strategy. Operating in multiple clouds has caused organisations to onboard many management consoles and disparate processes, which stifles innovation and adds complexity. The hybrid cloud approach is therefore thought to be an ideal solution, as it offers a familiar management in-

terface that extends across clouds for a simplified overall experience. With VMware research finding that 83 percent of cloud adopters are seeking consistent infrastructure and operations from the data center to the cloud, the Dell Technologies Cloud is designed specifically to address this challenge. According to Jeff Clarke, vice chairman of products and operations, Dell Technologies; “For many organisations, the increasingly diverse cloud land-

scape is resulting in an enormous amount of IT complexity, and no one is more qualified or capable to help customers solve this challenge than Dell Technologies.” “Cloud is not a destination; it’s an operating model. With Dell Technologies Cloud and joint engineering between Dell EMC and VMware, we are offering a unified hybrid cloud experience. This provides consistent infrastructure and operations at every location the cloud resides—

from on-premises data centers to public clouds and the emerging edge— allowing our customers to have greater control of their multi-cloud journey,” Clarke said. The Dell Technologies Cloud portfolio consists of the new Dell Technologies Cloud platforms and the new Data Center-as-aService offering, VMware Cloud on Dell EMC. These enable a flexible range of IT and management options with tight integration and a single vendor experience

rise in cybercrime and reliance on the digital world would see a huge demand for a cybersecurity workforce, which is expected to rise over the next few years. Therefore, it has become important to organise the Naija Cyber Security Conference, which brings skilled cyber security experts within the Nigerian cyber security domain, in a bid to raise awareness, network and ultimately present lasting solutions to cyber attacks, data breaches and financial losses to business organisations and government. “For us, the most important thing is how government can develop and harness cyber security talents. That’s our priority. We have a lot of talented people in Nigeria, but these talents are not really being harnessed to contribute to National economy,” Akinyele said. Asked to be specific on what industry enthusiasts www.businessday.ng

like him are doing to develop and harness such talents, Akinyele disclosed that Naija Sec Con has an objective to establish a hub where students from across Nigeria can come for internships and get nurtured by experts, who will place them on the right track. According to him; With the hub, the skills acquired will be utilised properly and not for fraudulent activities. Speaking on social engineering and its importance, Favour Femi-Oyewole, chief information security officer (CISO), Access Bank, described social engineering as the fastest growing area in cybercrime. According to her, social engineering, which targets people with the right information and manipulates them when done right, has staggering returns on investment. She explained that social engineering is carried out by breaking the normal security process by using the trust relation-

vices and consumption options from Dell, Inc., “The Dell Technologies Cloud complements this core technology with a broad set of value-added services, such as security, data protection and lifecycle management. It helps ensure success through consulting, infrastructure deployment, management, support and education services while offering public cloud-like consumption of IT infrastructure,” the company said in a news release.

Layer3 wins Best Cloud Solutions Provider award

Experts urge youths to develop skills in cyber security yber security experts and enthusiasts have urged the youth population in Nigeria to develop and harness cyber security talents; as such development is believed to soon turn into a revenue spinner for the country, especially at a time when securing the cyberspace has become critical in today’s digital era. Technology industry analysts and stakeholders who made the call at this year’s NaijaSecCon 2019 Cybersecurity Conference in Lagos on Friday, noted that with the increase in the prevalence of cybercrime attacks on business organisations, government infrastructures and individuals, the demands for cyber security skills is now on the rise. Rotimi Akinyemi, lead convener of NaijaSecCon 2019Cybersecurity Conference, who spoke to Journalists on the sideline of the Conference, said that the

for purchasing, deployment, services and financing. According to Dell Technologies, its Cloud service gives customers more control with the operational hub of their hybrid clouds, on premises, with consistent cloud infrastructure across all cloud types and a broad set of more than 4,200 VMware Cloud Provider Program providers and hyperscalers. This hybrid cloud approach is delivered through a powerful integration of hardware, software, ser-

ship between people, adding that it often consists of many steps and it is not a one way process. The 2019 edition of the NaijaSecCon was programed into four sessions. They are; Lockpick Village, where enthusiasts and tinkers alike are served to the chills of how lockpicking works and Cyber Security Career Village, where cyber enthusiasts, IT Security pros, and those who would love to create a career within the space gather. Others are Technical Conference with more than 10 industry experts unravelling and advising on applicable threats within the space and Live Hacking Contest for students of tertiary institutions playing around on capturing hidden flags all through the event. The team from Federal University of Technology, Akure won the first prize in the #NaijaSecCon19CTF challenge.

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ayer3, an indigenous provider of network and IT solutions, emerged winner of the keenly contested Cloud Based Solution Provider awards at the 2019 Beacon of ICT lecture / award series held in Lagos recently. This is the second consecutive time that the robust IT company is being recognised as the best cloud solutions provider in Nigeria. Beacon of ICT Distinguished Lecture/Awards, currently in its 10th edition is widely regarded as the most prestigious annual event available in the ICT industry in Nigeria.The lecture series is aimed at charting the way forward for the country’s ICT sector while the award ceremony rewards best practices and recognizes outstanding contributions to the growth of the sector. The theme for the 2019 edition was “Telcos and Banks Partnership to Drive Financial Inclusion.” It examined efforts to empower Nigerians to boost financial growth and development. @Businessdayng

Commenting on the awards, Stephen Agogo, head business development and strategy at Layer3 said; “Layer3 Cloud is a fully automated Infrastructure–as–a-Service (IaaS) platform that has aided entrepreneurs, start-ups, businesses and organisations of all types and sizes to remotely and virtually build, manage, store and deploy diverse enterprise solutions all without the financial outlay on hardware, maintenance and replacements, retaining the ability to manage their resources themselves and most importantly giving them speed to market.” “Layer3 Cloud is the most robust and secure cloud platform available in the country and runs out of top tier data canters in Abuja and Lagos,” he added. During the award ceremony, Oyaje Idoko, CEO of Layer3 was inducted into the BoICT Hall of Fame as a recognition of his contribution to the ICT sector in Nigeria. Idoko was one of six other industry stalwarts that received the prestigious recognition and induction.

Tuesday 07 May 2019

BUSINESS DAY

Markets + Finance

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

Seplat’s profit hits five year high as leverage improves BALA AUGIE

ason Bourne has never been this happy in his entire life as he crossed his legs while sitting in a mahogany chair at his office in the commercial area of Marina, Lagos. The 41 year old investor had wagered that Seplat Development Corporation Company Plc would record two consecutive stellar performances, and it turned out to be so. Bourne is among hundreds of shareholders of the upstream oil and gas giant whose earnings will be magnified due to the companys consistent earning growth, strong working capital position, and a solid balance sheet. Also, the continued uptick in global crude price since last year- thanks to OPEC and allies output cutmeans the company’s future is bright. Seplathas continued to deleverage its balance sheet so as to reduce financial risk and pave the way for future bond issuances. Its robust operating cash position means it can pay dividend, pay money owed to financial institution, and fund future expansion plans. Financial Performance for Q1 For the first three months through March 2019, Seplat’s profit after tax increased by 59.55 percent to N10.02 billion from N6.28 billion the previous year; the N10.02 billion figure is the highest profit in 5 years since

Austin Avuru, CEO, Seplat Petroleum Development Company

the company surmounted the headwinds brought on by disruption of gas pipeline at Forcados in 2016. The growth at the bottom-line (profit) was largely driven by an income tax credit of N4.06 billion in the period under review, The company’s operating profit can cover its interest expense at times interest coverage ratio stood at 2.04 times in March 2019, outstripping the 1.50 times globally accepted benchmark. Its deleveraging strategies have yielded fruit as total debt its balance sheet has reduced, further adding impetus to the bottom line since interest expense other-

wise known as finance costs has been curtailed. Interest bearing loans and borrowing declined by 23.34 percent to N104.89 billion from N136.83 billion the previous year; a cursory look at the chart shows total borrowing has been ebbing since 2015. Debt to equity ratio fell to 20.88 percent in the period under review from 27.86 percent the previous year; this means there has been a reduction in the level of debt in the capital structure. The upstream oil and gas giant has repaid $100 million on the four-year RCF bringing balance drawn to zero while retaining significant headroom in the capital structure to fund growth initiatives Seplat is targeting output of 49,000 to 52,000 barrels of oil equivalent a day this year and “will probably start seeing a gradual increase in production’’ from next year on sustained expenditure and stability in the delta, The company, meanwhile, will more than double capital spending to $200

million this year from 2018 as it seeks to take advantage of “relative stability’’ in the Niger Delta region. “Our operations have continued to perform in line with expectation, with the phasing of our 2019 work programme such that the production uplift will be felt throughout the second half of the year as we step up drilling activities to focus on capturing the numerous high margin and short-cycle cash return opportunities within our current portfolio,” said Austin Avuru, , Seplat’s Chief Executive Officer. Seplat has turned each Naira invested in sales into higher profit as net profit margin increased to 20.97 percent in March 2019 from 11.37 percent as at March 2018. Net operating cash from operating activities were up 73.54 percent to N24.40 billion in the period under review as against N14.06 billion the previous year; this means the company is not beleaguered by liquidity issues while it can meet its obligations as at when due. The company is paying less for each unit of free cash flow as free cash flow yield now stands at 7.03 per share as at Friday, 2019. “The next phase of growth for our gas business is now gathering pace following FID for the ANOH project, with government’s first tranche of equity investment received. We have continued to deleverage the balance sheet and self-fund investments into the existing portfolio from operational cash flow, while retaining the financial flexibility and available resources that will enable Seplat to capitalise on what we expect to be an increasingly busy pipeline of inorganic growth opportunities that fit our acquisition criteria.” Avuru. Seplat and NNPC to Raise $700 Million for Gas Plant Seplat and Nigeria National Petroleum Corporation (NNPC) have agreed

to raise $700 million for a joint gas project scheduled to start production next year as the government steps up plans to reduce the country’s reliance on oil. The project, known as Assa North-Ohaji South, is one of seven to boost gas production and infrastructure development in the West African nation, the continent’s biggest producer of crude. ANOH Gas Processing Co., which is owned by Seplat and the Nigerian Gas Co., a unit of the Nigerian National Petroleum Corp., will develop, build and operate the plant in southeastern Imo State. Seplat and Nigerian Gas

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will provide 60 percent of the funds as equity, while ANOH will source the balance as debt. The plant, which will process wet gas from the unitized upstream fields at OML 53 and OML 21, has an initial capacity of 300 million standard cubic feet per day. It’s scheduled to begin production by the last quarter of 2020 and the first supply is targeted in 2021, Avuru said. Nigeria’s government is encouraging investments in gas infrastructure to improve supplies to power companies and diversify the economy away from oil, which currently accounts for the bulk of revenue.

Tuesday 07 May 2019

BUSINESS DAY

INTERVIEW

How Nigerians can leverage US EB-5 Programme to drive investment opportunities â&#x20AC;&#x201C; Ryan Daniel Ryan is the Managing Director, Emerging Markets Africa, for Atlantic America Partners, based in Tapa Florida, USA. In this interview with IFEOMA OKEKE, he speaks on how the recently launched US EB-5 Programme will drive investment opportunities. Can you tell us about your organisation and your key focus in the investment space? y name is Daniel, the Managing Director, Emerging Markets Africa, for Atlantic America Partners which is based in Tapa Florida, USA. We are also part of a 45-year old investment banking firm known as CEA worldwide and we have been involved in transactions over those 45 years of over 40 billion dollars in equity transactions. We got involved in EB5 programme which is employment based fifth version (EB5) programme. It is a job creation programme; it is not a lottery, but an investment programme. The law was written 28 years ago, at the set amount of 500,000 dollars for each investor from any country around the world that wants to come to America for a variety of reasons. They may want to come to expand their business, educate their children, or simply because they want to live in America. The beauty is that our programme has a 10-year track record, and 100percent approval of the applicants have gone through this process and received green cards and there are few companies in America that do what we do and can say that. The other thing that makes us unique is that we invest the 500,000 dollars in brand new high quality trophy commercial real estate investments and because we have a team that has been doing this for a long period of time, we form joint ventures with property developers, the highest quality in the country. We act as the money merchants; we act as the trustees because our specialty is money and financial management. We develop these joint ventures and projects of high quality, so that when they are built, we have to show each investor that $500,000 has created at least 10 jobs in America. We generally exceed the 10 jobs per investor, by 130 percent- 150 percent. The most recent project that is currently under construction looks like we will probably be at 180 percent over what is required for job creation, so we are experienced at what we do because of that we have success of 10-year track record. We have been involved in 30 projects, helped 600 families and invested over $300 EB5 capitals and it is all in America. It is not in Africa and the jobs are created in America.

Why have you chosen to leverage the opportunities in Africa and Nigeria and how do you intend to leverage the growth potentials in this market? The reason why we feel Lagos is a good area is because the economy is growing and as the largest population in Africa, it gives us that population base to begin with, and from that population, you have the highest amount of wealthy people of the continent. So that is one of the reasons why we are here. We are here to look for people that want to come to America to invest in these projects we are building that create jobs. They can then move to America get their money back and they can take that money and come back to Nigeria, invest in the companies that are still involved with here in Nigeria.

How long will it take for the investors to get their 500,000 dollars

Daniel Ryan

back? The total process from application to the temporary green card is between 14-18 months, but what we tell people is to plan on two years in order to play safe. After that, there is a waiting period of two and half years and then you get a permanent card application in place, so that gives you five and half years. There is another six months waiting period for that to be approved. Once that is approved, we have a sunset clause in our document and that is a six-year period after the start of the application. Six years thereafter, we will liquidate or sell the property and portfolio. When the applicants have received all the approvals, they get their 500,000 dollars back, during those years; they get a return of two percent interest on the 500,000 dollars which is equal the 10,000 dollars yearly. So if it takes six years, they will get 60,000 dollars in interest that is 560,000 dollars plus they will get a percentage of their capital gains, and then we will liquate or sell the portfolio. Can you explain the relationship between EB5 and Atlantic America Partners? We are what you can call a regional centre and EB5 is the law. We are the EB5 that works with the federal government and acts as a money manager for investors to utilise this programme that is a federal law, so we are a private entity, we are not www.businessday.ng

affiliated with the government. But we work within the confines of the government laws, we work in conjunction with the government programmes, but we also have the applicants hire a grade A Immigration lawyer that does the legal paper work with the US government known as the USCIS and they do all the legal paper works and we handle all the money. By the way, in each quarter, we provide our investors a quarterly newsletter, we tell the status of the construction company and what jobs have created, what issues we are having each year we provide them an audited financial statement by a CPA or ACCA firm. We keep our investors fully informed and transparent because we are an investment banking firm. By law, we have to be transparent and our job is to make sure that investorsâ&#x20AC;&#x2122; money is held in trust. How long have you been in existence and what challenges have you faced so far in attracting the right investors? We have been in existence for 45 years as the holding company, CEA worldwide. APP, which is Atlantic America Partners, was formed 10 years ago. The challenges we run into in this programme are that people that want to come to America to invest in this programme struggle with creating and coordinating their assets so they can actually sell

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property in certain markets. For instance, in South Africa which is one of the market we started with, there is a land right issue going on. It is called the procreation without compensation. It is a big problem in South Africa, so we have a lot of clients in South Africa that have signed with us to go through the process, and they are in the process of trying to sell some of their real estate property, but because this law is coming into place, there is a fear that they donâ&#x20AC;&#x2122;t know what the new constitution might be. The challenge is that the people that have money are coordinating the money into a package of money so that they can document it, because it has to be documented legally to show that they have source of funds in a bank account, mutual funds or equity in home. So sometimes it is difficult and some people have a lot of money, but they have to have paper track record to show where they money is. So that can be challenge. Where do see yourself in the next 10 years? I hope we expand our companies to countries throughout Africa. As I mentioned, I lived in Malawi for 12 years, and not many people have 500,000dollars in their homes. But I would like to help the people in those countries little by little become wealthy and those that want to come into America. @Businessdayng

Implicitly, what you are saying is that the investment is on the longterm. So what are the strategies you have put in place to drive it on the long term? The fact is that they want to put money into our investment fund and expand what is in their business. So, if they are in manufacturing company here and they want to expand into America, live in America, educate their children. They can have their corporate head office in Lagos and may be two or three offices in America; they can expand our economic global market place, economic development which then helps your country because they are going to be coming back and forth to Nigeria and will expand more into Nigeria and obviously this is the biggest issue. People help family members with income derived from America. When the money is returned from our EB5 programme, they can then now take their 500,000 dollars to expand their businesses in Nigeria. In the investment, are there any forms of risks that the investor is likely to face in the process? The risk involved is economic risk, real estate is risk. Anytime you build something, if the economy goes down, the value of real estate also goes down. So yes, there is risk because it is real estate; so that is primary risk. But we have a tenyear track record and return of 100 percent approval and 100 percent of our projects have done normal. The economic risk is that when the economy is good the capital gains will be higher; when the economy is average the capital gains will be average, the basic 500,000 dollars is not affected one way or the other when we liquidate the property.

Tuesday 07 May 2019

BUSINESS DAY

Government Enterprise & Empowerment Program

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Osinbajo launches phase 2 of TraderMoni, MarketMoni in Anambra

he Muhammadu Buhari-led administration remains dedicated to lifting more Nigerians out of poverty through interest and collateral free loans, hence, the second phase of the TraderMoni and MarketMoni project has been launched. Started in 2016, the loans are targeted at small scale traders and artisans, giving them access to much needed loans that can grow their businesses and transform the local economy. This was why on Friday, May 3rd 2019, Vice President, Prof. Yemi Osinbajo visited two markets in Anambra state— Ochanja Market, Onitsha and Eke Awka, Awka— to assess the impact of the schemes and formally flag-off the second phase of the loan disbursements there. The Vice President, on his arrival, took a walk round the Eke Awka market—a large cluster market with traders selling different items including foodstuffs, clothing and other local products—engaging new and existing beneficiaries of the scheme, getting firsthand impact stories of the loans on their businesses. He encouraged them to repay the loans in order to access more loans for business expansion. Immediately after his tour, he proceeded to the popular Ochanja market to engage with more traders.

Vice President, Yemi Osinbajo engages with traders in Eke Awka.

Just before the Vice President left the Ochanja market in Onitsha, he stopped by at ‘one-card repayment’ kiosk, to interact with the agent there and find out the response to the option of card repayment. It’s important to note that the Bank of Industry (BoI) recently rolled-out the voucher-based loan repayment recharge cards for TraderMoni and MarketMoni loans, to enhance the repayment flexibility. The card repayment provides an option for beneficiaries to pay back their loans in cases where commercial banks may not be close by or easily accessible. After his departure, the activation team responsible for enumeration and cash disbursements continued enumerating more traders for the scheme.

Vice President, Yemi Osinbajo engages with traders in Eke Awka

Through the Government Enterprise and Empowerment Programme (GEEP), the administration seeks to boost local economies by enumerating and empowering key players with loans. While Tradermoni is targeted at individual petty traders through loans starting at N10,000, MarketMoni is aimed at traders who access grants from N50,000 through their trading associations. In the first phase of loan disbursements, Anambra state had close to 30,000 direct beneficiaries for the TraderMoni loan and more than 4,000 beneficiaries received the MarketMoni loan. The second phase is targeted at reaching new and existing beneficiaries; new beneficiaries will access the basic opening loan while existing beneficiaries will receive the next stage of the loan after they have repaid their first loan. With the successful launch, it is expected more petty traders and small business owners will become beneficiaries of the interest free government loans. New beneficiaries are committed to using

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the loans to boost their businesses so that they can repay the loans on time and access more. “I heard about the TraderMoni loans and was quite excited about it, so I decided to apply for it so I can get the loan and add to my business. I have received it now, and making plans to properly add it to my business. I’m grateful to the government for this initiative. I promise to refund so I can get a higher loan value,” says Chidinma Eze, a delighted trader that sells garri in Eke Awka, and a first-time TraderMoni beneficiary.

VP, Yemi Osinbajo interacts with a ‘One-card Repayment Voucher’ Agent in Ochanja Market.

Many traders were largely encouraged by the ease of access to the loans. All the beneficiaries need to do to access the loans is to get registered by accredited agents in their markets, supplying their correct information including their phone number, which serves as the “wallet”. The information goes through a process for verification, and upon approval, their “wallets” are then credited with the loan facility – for TraderMoni, N10,000 and for

MarketMoni, N50,000. They can choose to cash out at the bank or from registered agents. MarketMoni loan beneficiaries are also repaying their loans. Donatus Ngwu, a welder and panel beater by training who has a poultry farm, received the N50,000 MarketMoni loan in the first phase. Ngwu used the loans to upgrade his poultry in order to increase yield. He has almost completed his repayments. “I’m currently repaying the loan, which is almost complete. I look forward to completing the loan and get the another. I’ll encourage the government to keep doing more of this, so they can empower more people to grow their businesses,” Ngwu says. According to Mr. Bertrand Onyekachi, one the agents in the state, the scheme has been largely beneficial to many people since it commenced in 2016, giving the traders more financial powers to upgrade their business operations. He cited an example of a trader, a graduate who sells second hand shoes, and has now been able to acquire a shop for her business with the MarketMoni loan, successfully repaid, and now expecting the next. He acknowledged some challenges with loan repayments but is positive about the recent trends of traders being encouraged to repay and get another loan.

Nnana Henry, a TraderMoni beneficiary sells cosmetic products in Ochanja Market, Onitsha.

Chidinma Eze, a TraderMoni Beneficiary in Eke Awka.

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The continuation of the Government Enterprise and Empowerment Program, through the Bank of Industry (BoI), is a testament to the current administration’s commitment to reaching out to the masses in the lower class with direct government support, in order to further enlarge the economy.

@Businessdayng

Tuesday 07 May 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Monday 06 May 2019

Top Gainers/Losers as at Monday 06 May 2019 LOSERS

GAINERS

Closing

Change

MOBIL

N177

N175

-2

CCNN

N15.85

N15.3

-0.55

0.65

GUARANTY

N33.45

N33

-0.45

VOLUME (Numbers)

N2.43

0.22

IKEJAHOTEL

N1.75

N1.6

-0.15

VALUE (N billion)

N2.58

0.06

UAC-PROP

N1.68

N1.53

-0.15

Opening

Closing

Change

DANGCEM

N180

N181

BETAGLAS

N56

N57

DANGFLOUR

N17.1

N17.75

NEM

N2.21

UCAP

N2.52

Company

ASI (Points)

Opening

Company

DEALS (Numbers)

MARKET CAP (N Trn)

29,196.87 3,814.00 271,075,938.00 1.389 10.973

Mobil, CCNN, GTBank, others cause NSE’s negative start ...investors lose N5bn Stories by Iheanyi Nwachukwu

he Nigerian stock market started this week on a negative note, spurred by record dip by stocks like Mobil Oil Nigeria Plc, Cement Company of Northern Nigeria Plc, GTBank Plc, UAC Properties Plc, and Ikeja Hotel Plc. Equity investors at the Nigerian Stock Exchange (NSE) lost about N5billion at the close of trading session on Monday May 6, 2019. The All Share Index (ASI) was down by 0.05percent from preceding trading day high of 29,212points to 29,196.87 points on Monday. The value of listed equities decreased

from N10.979trillion to N10.973trillion. In 3,814 deals, stock investors exchanged 271,075,938 units valued at N1.389billion. “We foresee market activity returning to normal levels (N3.1billion, 30-day average) as activity resumes in the United Kingdom on Tuesday. Amidst this, we expect the bourse to trade sideways with a mildly positive bias

in Tuesday session”, equity research analysts at Vetiva said. Mobil Oil Nigeria Plc recorded the highest dip after its share price moved down from N177 to N175, losing N2 or 1.13percent. Cement Company of Northern Nigeria Plc followed after its share price dropped from N15.85 to N15.3, losing 55kobo or 3.47percent. GTBank Plc

Chief Executive Officer, said: “Our operations have continued to perform in line with expectation, with the phasing of our 2019 work programme such that the production uplift will be felt throughout the second half of the year as we step up drilling activities to focus on capturing the numerous high margin and short-cycle cash return opportunities within our current portfolio. “The next phase of growth for our gas business is now gathering pace following FID

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for the ANOH project, with governments first tranche of equity investment received. We have continued to deleverage the balance sheet and self-fund investments into the existing portfolio from operational cash flow, while retaining the financial flexibility and available resources that will enable Seplat to capitalise on what we expect to be an increasingly busy pipeline of inorganic growth opportunities that fit our acquisition criteria.” Production uptime in Q1

FTSE 100 Index 7,380.64GBP +29.33+0.40% S&P 500 Index 2,919.44USD -26.20-0.89% Generic 1st ‘DM’ Future 26,252.00USD -247.00-0.93%

Deutsche Boerse AG German Stock Index DAX 12,286.88EUR -125.87-1.01% Nikkei 225 22,258.73JPY -48.85-0.22% Shanghai Stock Exchange Composite Index 2,906.46CNY -171.88-5.58%

NSE sets to “eRace” cancer at 2019 NSE Corporate Challenge

he Nigerian Stock Exchange (NSE) has said that the 6th edition of its Corporate Challenge will hold on Saturday, July 6, 2019, at the Muri-Okunola Park, Adeyemo Alakija Street, Victoria Island, Lagos. Instituted in 2014, the NSE Corporate Challenge is a one-d ay competitive and fun-filled 5 kilometres walk, jog and run event, designed to create awareness on the early detection and raise funds to support the fight against cancer in Nigeria. The day’s activities will also include dance, aerobics, music and entertainment. Winners in the various race categories will be recognized at the medal presentation ceremony. This year’s event will bring together participants from listed and non-listed companies, dealing member firms, government institutions and other noncommercial organizations; as well as celebrities and other notable Nigerians to

support the fight against cancer. Interested participants are encouraged to register online at www. nse-eracecancer.com. Globally, cancer has become a major source of morbidity and mortality. Data from the World Health Organization (WHO) shows that 9.6 million people died from cancer in 2018, 70% of which occur in low- and middleincome countries. In Nigeria, an estimated 116,000 new cases of cancer and 41,000 cancer-related deaths were recorded in 2018. Speaking about the event, Bola Adeeko, Head of Shared Services Division of The Exchange, said, “In the past five years, NSE has taken a leadership position in raising cancer awareness and increasing advocacy, leveraging its access to a vast network of employees and clients of listed companies, dealing member firms, wellmeaning individuals and other stakeholders.

was down from N33.45 to N33, losing 45kobo or 1.35percent. UAC Properties Plc lost 15kobo or 8.93percent, from N1.68 to N1.53; while Ikeja Hotel was down from N1.75 to N1.6, losing 15kobo or 8.57percent. Dangote Cement Plc stock price advancers most by N1, from N180 to N181, adding N1 or 0.56percent; Beta Glass Plc followed after its share price garnered N1, from N56 to N57, up by 1.79percent. Also, the share price of Dangote Flourmills Plc moved up from N17.1 to N17.75, adding 65kobo or 3.80percent; while NEM Insurance Plc was also up from N2.21 to N2.43, adding 22kobo or 9.95percent. United Capital Plc gained 6kobo, from N2.52 to N2.58, adding 2.38percent.

VFD Group appoints Adewumi as Executive Director, Finance

stood at 85percent; reconciliation losses are yet to be finalised but are expected to remain at levels consistent with prior periods; Full year 2019 production guidance maintained at 49,000 to 55,000 boepd on a working interest basis, comprising 24,000 to 27,000 bopd liquids and 146 to 164 MMscfd (25,000 to 28,000 boepd) gas production. - Sequencing of the 2019 work programme means the corresponding production uplift will be realised progressively throughout H2; 2019 capex guidance maintained at US$200 million (excluding investment in the ANOH joint venture). Revenue of $160 million and gross profit of $81 million represents a 51percent gross profit margin (unchanged year-on-year); Revenue reflects the lower oil production and oil price realisation of $61.7/bbl (2018: $65.78/bbl).

he Board of Directors of VFD Group Plc (VFD Group) has appointed Mobolaji Adewumi as an Executive Director, Finance of VFD Group Plc. The appointment is subject to the approval of shareholders at the next Annual General Meeting (AGM). Mobolaji holds a B.Sc. in Management and Accounting from the Obafemi Awolowo University, Ile Ife and an MBA specialising in Finance from the Judge Business School, University of Cambridge. He is a member of the Association of Chartered Certified Accountants (ACCA) with over ten years post-qualification experience. VFD Group Plc is a Financial Services focused proprietary investment company that creates value by working within Nigeria’s informal financial sector to create innovative products and solutions that are accessible to everyday Nigeri-

Seplat drives Q1 finance costs down by 38%

eplat Petroleum Development Company Plc has released its interim management statement and consolidated interim financial results for the three months ended March 31, 2019. The first-quarter (Q1) results showed positive impact of the 2018 debt refinancing and subsequent deleveraging, which resulted in a 38 percent year-on-year (yoy) reduction in finance costs to $16 million (2018: $26 million). Net profit stood at $33 million after adjusting for a tax credit of $13 million. Seplat Petroleum is a leading Nigerian independent oil and gas company listed on both the Nigerian Stock Exchange and London Stock Exchange. Information contained within this release is un-audited and is subject to further review. Commenting on the results Austin Avuru, Seplat’s

Global market indicators

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Mobolaji Adewumi, executive director, Finance, VFD Group Plc

ans and entrepreneurs. Prior to joining VFD Group Plc, Mobolaji worked with the Managing Director of First Bank of Nigeria Limited. Prior to that, he was the Special Adviser to the Managing Director of ASO Savings and Loans Plc while doubling as Head of Strategy. Mobolaji has deep financial services experience and expertise, having worked with regional and global leaders in the financial services sector, such as the United Bank for Africa and KPMG Nigeria.

Tuesday 07 May 2019

BUSINESS DAY

NEWS Lagos’ entrance to Oodu’a Group courageous - chairman ... as Ambode says integration critical to Nigeria’s wellbeing JOSHUA BASSEY

he Oodu’a Investment Company Limited says the entrance of Lagos into the group is courageous and will engender a positive impact on the socio-economic development and advancement of the South West region due the state’s commercial viability, uncommon resilience and resourcefulness. Tajudeen Bello, a director in the Group, made the observation during a courtesy visit to the Lagos State governor, Akinwunmi Ambode, at the Lagos House, Ikeja, on Monday. Lagos joined the Oodua Group in 2018 to bring the number of the states inthegrouptosix.TheoriginalstatesincludeOyo,Osun,Ogun,EkitiandOndo. According to Bello, who spoke on behalf of the chairman of the Group, Lagos’s decision to join was critical towards further actualising of the goals of the Group. Bello lauded Ambode for seeing through the Lagos State membership ofOodu’awiththeepochmakingsigning of the share purchase agreement in March 2018, saying it was indeed a soothing reunion with Lagos joining forces with the other five states, which would have significant economic benefits for the region in the long run. “We will like to put in on record the overwhelming support and ex-

citementofYorubasacrosstheLength and breadth of Nigeria and indeed in the Diaspora on that landmark event within the cherished concept of regional economic development and integration last witnessed during the hay days of Western region. “It is our cherished desire and commitment in Oodu’a Investment that this membership will unleash a geometric impact on the socioeconomic development of our geopolitical zone as a result of mutual benefits arising from the synergy of the ebullience of the commercial enterprise of Lagos and the uncommon resilience and resourcefulness that the Yoruba hinterland is reputed for since immemorial,” he said. The Oodu’a chief added that the group would continue to explore collaborative opportunities including the Lagos State embedded power supply act structured to guarantee 24-hour power supply for the state, rice mill at Imota as well as other investment opportunities in the state. Bello, who presented the state’s shares certificate to the governor, said the group was confident that the six states in the region which make up the investment company will leverage on its comparative advantages and work together for the betterment and development of the entire region and its people. Ambode said that the desire to

see the total economic integration of the South West region propelled his administration to join the group, saying that it would be a win-win situation for not just every state in the zone but also the nation at large. “My belief in the total economic integration of the south west arising from our vision of the South Western Governors Forum that there is a need for all of us to come together as a regional force to be able to help each other in the areas of our comparative advantages was what drove me to make sure that we become partners in the Oodua Investment Group and I am happy we were able to do it with the support of the state executive council, we are happy also that we would be bringing in part of our own competences and expertise to grow this investment group. “We are very proud that it is the only regional investment group that is existing in this country right now and because of that I am very happy that I was able to do this at least to lay down the foundation and the framework thatwouldallowthebiggereconomic integration to take place even with the kind of infrastructure that we have tried to put in place also, we believe strongly that in the overall interest of thecountry,thereisneedforaregional interplay of competences so that the nation can grow its GDP, while we can also grow our own region,” he said.

Money supply weak to drive growth momentum – MPC members HOPE MOSES-ASHIKE

igeria’s money supply was seen to be constraining the growth momentum in the economy as Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), says the current performance of monetary aggregates have been unsatisfactory. According to Emefiele, both the broad and narrow money aggregates, M2 and M1 performed below their benchmark in February 2019. Specifically, M2 contracted by 1.98 percent over the preceding December 2018, and about 14.47 percentage points below the 2019 growth benchmark of 12.99 percent. Similarly, M1 declined by 6.16 percent compared with the provisional growth benchmark of 17.08 percent. Credit to private sector grew by 6.41 percent, year-to-date, compared to the provisional benchmark of 9.41 percent. Similarly, aggregate

credit to the domestic economy grew by 10.64 percent as against its provisional benchmark of 11.82 percent. Other members of the Monetary Policy Committee (MPC) also corroborated with the CBN governor on this. Isa-Dutse, Mahmoud, MPC member said, “It is noteworthy that most of the key monetary aggregates underperformed relative to the provisional benchmarks.” In February 2019, M3 grew by 4.31 percent - well below the benchmark of 14.47 percent, while M2 and Net Foreign Assets (NFA) contracted by 1.98 percent and 7.47 percent relative to benchmark figures of 12.99 percent and 18.66 percent, respectively. These statistics indicate that monetary policy has been quite restrictive and that money supply may be constraining the growth momentum in the economy. Thus, there is a need to review the current monetary policy stance to promote growth.

In his personal statement, Obadan, Mike Idiah, another MPC member, said developments in monetary aggregates suggest scope to expand money supply to drive economicgrowth.Broadmoneysupply (M2) declined by 1.98 percent in February 2019 below the level at endDecember, 2018. The annualized growth of M2 stood at -11.91 percent compared to the 2019 provisional benchmark of 12.99 percent. On the other hand, annualized growth of broad money aggregate (M3) at 25.88 percent was, however, above the 2019 provisional benchmark of 14.47 percent. Although M3 grew largely because of increase in CBN bills, the M2 component contracted in January and February 2019, respectively, reflecting tight monetary policy stance of the Bank. “Overall, money supply still remains weak to drive the growth momentum in the economy,” he said.

CYCDI partners CITC to drive SDG projects Anthony Nlebem

igeria’s Creative Youth Community Development Initiative (CYCDI), winner of the United Nation’s Sustainable Development Goals (SDG) Action Award in 2018, has entered into partnership with CITC Global Consulting, a Lagos-based strategic management outfit, to drive SDG projects globally. Foluke Michael, CEO/project director of CYCDI, while signing the memorandum of understanding (MoU) in Lagos, said the partnership with CITC was born out of a desire to deepen the impact of the SDG goals in Nigeria and other countries. “Our new partner, CITC, comes with a high pedigree in strategic management and implementation and as the current Innovator Award winner of the UN SDGs, we have entered into this partnership to find more innovative ways of deploying solutions to global problems,” she said.

CYCDI’s ‘Solution17’ project, one of the vehicles being used to deliver simultaneously on the 17 SDG goals, has been praised as one of the best delivery systems for the project globally. Tayo Orekoya, managing consultant of CITC, said his firm had created strategic solutions for leading local and international organisations in Nigeria, and was committed to extending one of the unique competencies of the firm to exploring and delivering solutions to global problems. “Each of the 17 SDG goals is critical to the realisation of political, social and economic goals of a decent nation and for most countries in sub-Saharan Africa; what is needed is a strategic integration of these goals into their current and future plans which our firm would be helping to give life to. “Both CITC and CYCDI have credible performance records, and with this fusion of purpose, the partnership will explore all options www.businessday.ng

for a common strategy for execution of this project under the aegis of ‘Solution 17,’ which will birth more solutions that other countries will adopt in coming days,” Orekoya said at the event. Already, India and Switzerland have indicated interest and sought permission to run the award winning ‘Solution 17’ model that earned Foluke Michael and the CYCDI group the UN SDGs Action Innovation Award in Germany in 2018. CYDI, along with 17 students from 17 schools, embarked on a global campaign in 2018 to raise drug prevention awareness amongst youth and vulnerable adults through school awareness and creative programme. The project, which is supported by the European Union and United Nations Office on Drugs and Crime produced the short sensitisation movie, TRAPPED and Solution17 Booklet, currently being circulated across educational institutions, to ignite creativity among the youth. https://www.facebook.com/businessdayng

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Tuesday 7 May 2019

BUSINESS DAY

NEWS

May 29: Buhari will torment corrupt people, fight insecurity - Boss Mustapha Innocent Odoh, Abuja

head of the May 29 inauguration of President Muhammadu Buhari’s second term in office, the Secretary to the Government of the Federation (SGF), Boss Mustapha has assured Nigerians home and abroad that the government of President Buhari will intensify his war against corruption to stop unpatriotic Nigerians from stealing from the nation’s treasury. The SGF said this while delivering his keynote address during a victory celebration dinner of the All Progressives Congress (APC) in the United Kingdom at the weekend delivered on behalf of the SGF by Abdulrahman Balogun, adding that the President would also tackle insecurity in the country. The SFG, who thanked the APC UK for their immense contribution

to the re-election of President Buhari, assured, “The three fundamental areas will continue - security, economic revival and fighting corruption - but there will be some other definite deliverables. “As stated in the Next Level manual, our campaign contract with Nigerians did confirm that the new administration of President MuhammaduBuhariwillintensifyitseffortsin Security, Restructuring the Economy andFightingCorruption.Wehavelaid down the foundation in the last four years and we are committed to seeing matters to the end. We will strive to strengthen our unity and inclusiveness so that no section or group will feel left behind or left out.” The anti-corruption war will be intensified, he said, adding that the government will build on the successes of Economic and Financial Crimes Commission (EFCC) and the

Independent Corrupt Practices and other Related Offenses Commission (ICPC). “Non-patriotic Nigerians with itchy fingers, past and present, will continue to fall in trouble, and probity and accountability will remain the order of the day. Honesty remains the best policy,” he said. Education will be refocused, with the curriculum tweaked to place more emphasis on Science, Technology, Engineering, Arts and Maths. These, he believes, will surely launch Nigeria into a new realm, positioning her with the developed world in the not too distant future. “Health care will come under focus, with the intention of building a healthy populace who can hold their own in different areas of Endeavour. “Infrastructure development will continue. Roads, rail, bridges, housing, and many others. The country is already one massive construction

site, and this will continue to further unlock economic development, and improve the quality of life,” he said. He said further that the second term of Buhari’s Government will be more inclusive, stressing that the boundless talents of Nigerians both within and outside the country will be harnessed for national development. He added that more women, youths and Nigerians in the Diaspora would be brought on board. The SGF pointed out that poverty reduction would be a deliberate and crucial policy. He said the Social Investment Program, already described as the largest and most successful in Africa, would be strengthened with the introduction of Monibank for traders and artisans, while an Entrepreneurs Bank would also be established to take care of small and medium scale enterprises.

EAC Trustee partners top firms to improve real estate solutions ISRAEL ODUBOLA

AC Trustees Limited is partnering Desarrollar Limited, a lifestyle and real estate solutions company in Lagos, Nigeria, to improve real estate services and solutions. The partnership, which was signed recently in Lagos, will support the unveiling of Nigeria’s most secure and institutionalised real estate trust consortium aimed at safeguarding the financial investments of Nigerians and Africans living abroad and in Nigeria. According to Olubusayo Adeniyi, managing director, EAC Trustees, the trust framework includes Nigeria’s leading Trustees, legal firms and real estate firms, which will work towards

Branch announces 1m loan disbursed since launching App 2yrs ago

L-R: Ambrose Oruche, director, media and corporate communications, MAN; Zacharie Sohou, representing the minister of higher education and scientific research, BP348, Cotonou, Littoral Benin; Ogbonnaya Onu, minister of science and technology, and Gloria Elemo, director-general, Federal Industrial Research Oshodi (FIIRO) at the 5th High - Level Industry-Scince-Government Dialogue on Atlantic Interactions in Lagos.

Aluko & Oyebode dismisses allegations, clarifies advisory role with industry, trade, investment ministry

igeria’s largest full service law firm, Aluko & Oyebode, has rejected as defamatory and false the allegations being circulated on certain media platforms in relation to its role in the establishment of Nigeria SEZ Investment Company Limited, a special purpose public-private partnership entity initiated by the Federal Ministry of Industry, Trade and Investment. In a press statement released in Lagos at the weekend, the firm dismissed the allegations and questioned the motivation and intent of those promoting them. The firm said “a deliberate attempt is being made to take a routine enquiry into the actions of a client of the firm and associate it with unfounded and contrived allegations designed to damage the firm and its chairman’s reputation”. It acknowledged that “as part of an on-going investigation, the firm has been asked to provide certain information

and documentation to the relevant government agencies in its role as legal counsel to the ministry including the role that the firm played in the establishment of the Nigeria SEZ Investment Company Limited as a special purpose public-private partnership entity”. Aluko & Oyebode also revealed that it has willingly provided all the relevant information and documentation to the relevant agencies of government to assist them in their investigation of its strictly professional role in the incorporation of the company. “No employee or representative of the firm has been arrested or detained, neither has any of the employee or representative of the firm been engaged in or been accused of any wrongdoing,” it said. The firm, however, described the money laundering claims in certain media reports as disingenuous considering that “at no time whatsoever has any money laundering alwww.businessday.ng

legation been made against its chairman, any of its partners or AO Secretarial Services Limited by the authorities concerned”. The firm said it reserves the right to defend its reputation and seek redress through all legal avenues against the perpetrators of the allegations. The statement disclosed that Aluko & Oyebode was engaged by the Ministry of Industry, Trade and Investment on June 5, 2018 to support the legal processes for the establishment of the company and for AO Secretarial Services Ltd to act as the company secretary to the newly-formed company following its incorporation. The firm said in the statement, “It is also providing legal advice to the ministry on potential investments into the company and on the legal structures for projects which the company intends to invest in and execute”. It further clarified its role as interim nominee shareholder in the company, saying, “At incep-

tion, the scope of legal services included acting as a nominee shareholder in the company ahead of the completion of the investment agreements with third party institutional investors and international development finance institutions, which include African Export-Import Bank, Nigerian Social Investment Authority and Bank of Industry.” The firm, however, assured concerned stakeholders that the company has been subjected to due diligence processes by some of the world’s leading development finance institutions who require adherence to the highest possible ethical and governance standards. It added that at every stage of its engagement, it has ensured that its services have been discharged in accordance with the highest professional and ethical standards and in full compliance with the Nigerian law and global best practice for the establishment of public private partnerships.

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ensuring and providing real estate solutions. Adeniyi said, “EAC Trustees will work with Desarrollar and its partners to create an institutionalised safe-haven to protect Nigerians and Africans in the Diaspora and those living on the African continent from fraud, deception and, sometimes, misplaced dependence on dishonest family-based relationships, through delivering full, seamless and stress-free lifestyle solutions to the Nigerian and African communities both at home and abroad.” Desarrollar applies a premium standard of excellence to its residential development, commercial development and real estate acquisition services in Nigeria, the US and the UK, he said.

igerians deserve access to high quality financial services. But in reality, too many people are excluded. For its second anniversary, Branch International reflects on its journey to provide financial services to millions of Nigerians. Financial inclusion is one of the biggest and most important topics in the Nigerian financial system. Despite the huge population of the country, transparent financial services still haven’t penetrated deep into the country. For many people, it is still extremely difficult to access capital for crucial business and personal needs. According to the UK’s Enhancing Financial Innovation and Access (EFinA), 34.9 million Nigerians above the age of 18 have been financially excluded. Particularly, this group includes vibrant individuals operating in the informal economy - from Iya Tobi, who

operates that fast growing canteen on the street, to Engineer Chidi, your go-to man for all generator repairs, to even Sanusi who supplies you with fresh tomatoes and yam. We all depend heavily on these informal operators and the services they offer. So, why shouldn’t they have access to better financial services, particularly credit to grow their businesses? That ’s where B ran ch comes in. Branch is a leading instant loan app that uses data science to dramatically increase access to financial services for millions of Nigerians. It provides quick loans that help people achieve their business and personal needs. But more importantly, it helps to provide loans that are crucial for the growth of small businesses. With just a smartphone, customers can borrow between N1,000 and N200,000 without going through any stress.

Edo-BEST: 75% of primary schools now use digital teaching tools

do State governor, Godwin Obaseki, says 75 percent of schools in Edo State now deploy digital teaching tools under the Edo Basic Education Sector Transformation (Edo-BEST) programme, a new pedagogy that prioritises a more pragmatic 21st Century approach to teaching and learning in Edo schools. He said despite competing demands for limited resources, his administration would ensure that available funds were used to provide functional basic education to Edo children. The governor disclosed this while inspecting primary schools under the Edo-BEST programme on the first day of resumption of academic activities in Benin City, the Edo State capital. “75 percent of our schools @Businessdayng

are under Edo-BEST and we have 25 per cent to go. We have ordered 25,000 seats for our pupils, which is under production. The school furniture is being constructed at the Benin Technical College now Government Science and Technical College (GSTC) and others will come from the Edo Production Centre. All the furniture is being made locally here in the state,” he said. He said, “All Edo-BEST schools have books and it is not cheap but quite expensive. Each child in the programme costs money. Our schools are now well organised and the level of participation of our pupils is high. I am impressed that the training we have given to our teachers and administrators is yielding results.”

Tuesday 07 May 2019

BUSINESS DAY

OPINION

Nigeria’s economic axis of evil

OGHO OKITI

n 2002, the “axis of evil” became a very popular lexicon after the US President George W. Bush described Iran, Iraq and North Korea as such for state sponsor of terrorism and for seeking nuclear weapons. David Frum, the President’s speechwriter who the phrase was attributed to later wrote in his book that he wanted the shortest possible phrase that fulfills the case for removing the regime of Saddam Hussein in Iraq. In Nigeria, our problems are not so esoteric and complex, but the potential for damage and destruction is as powerful. Indeed, earlier in the year, I had characterised Nigeria’s current level of unemployment, the number of children out of school and the level of poverty as three parameters with the potential to stifle Nigeria’s economic growth potential and to slow the economy for another two decades in the absence of significant and serious set of economic reforms. It is worth reiterating where we are in relation to the latest data on these parameters. First, since the Brookings report of June 2018, it is now common

knowledge that Nigeria overtook India to become the country with the largest population of people living in extreme poverty. The report claims that Nigeria has 87 million people in extreme poverty category and that this number is increasing by 6 people every minute. The report concluded that the rise in Nigeria’s poverty is driven by three parameters – low economic growth, high inequality, and population growth. Second, also in 2018, the National Bureau of Statistics (NBS) released the latest available report on Nigeria’s unemployment. The report showed two staggering conclusions. One is that unemployment increased from 18.8% in Q3 2017 to 23.1% in Q3 2018, up by 5 percentage points just in a year. The second is that the labour force expanded by about 15 million in three years between 2015 and 2018. For instance, the labour force increased from 75.9 million in Q3 2015 to 90.5 million in Q3 2018. Third, the 2018 Demographic Health Survey (DHS) by the United Nations Children Fund (UNICEF) and the Nigerian government report also show that the population of out of school children in Nigeria has risen from 10.5 million to 13.2 million. This is happening in a country where the government spends as much as N1.5 trillion Naira on fuel subsidies but merely about 6% of its annual budget on education. There are many underlining economic and social implications of these data, and it will be helpful to mention some. It means there are millions of Nigerians that are idle. As an unemployed adult or out of school child, millions are not occupied by work or education. As the

Are we in a civil war? PROPHYLAXIS

AYULI JEMIDE

unch Newspapers on the 1st of May 2019 reported that the acting Inspector-General of Police, Alhaji Mohammed Adamu, said 1,071 persons lost their lives in crimerelated cases across the country in the first quarter of 2019. In this same period 685 people were kidnapped. Yemi Kale, Nigeria’s statistician general in a tweet on the back of this news summed it up when he tweeted: ‘’This will be 8 people kidnapped and 12 people killed every day. If this data is correct and properly reported then it’s more serious than I thought’’. Like Yemi Kale, many of us do not realize that the state of insecurity in Nigeria today is more serious than we think. I urge you to think about some related facts when you think about this. Firstly, all over the world security agencies always understate casualties to the public. So, if the Inspector General says 1071 deaths, pluck a number from the sky and add to that figure to get a near approximate. Secondly, note that crime in Nigeria is largely unreported, so the Inspector General’s data is based on the number of cases reported to the police. Thirdly, we are not sure the Inspector General stats includes the Boko

Haram related deaths or the 260 people reported by Reuters to have lost their lives during the 2019 elections – campaign stampedes, election violence, extra judicial killings and the like. Let us assume the figures quoted by the Inspector General of Police are near correct, the question then that I ask is whether these figures do not put Nigeria in a civil war situation? It will be interesting to compare this 1071 deaths in 3 months with death statistics for actual civil wars and see where the numbers take us. The civil war that comes readily to our minds would be the Nigerian civil war, but I will avoid using that as an example because from all indications for whatever reasons there are no government official statistics on the total civil war casualties and this is just not a good time in Nigeria’s history to reel out any statistics from the civil war. A civil war that readily comes to mind is Syria.The Syrian Observatory of Human Rights (SOHR) reports that around 20,000 people were killed in Syria in 2018 in the eighth year of its ongoing civil war between the government of President Bashar Assad and rebel and jihadi fighters. SOHR reports that of these casualties 6,500 of them were civilians. Let us benchmark with the 6500 civilian casualties in year 2018, let us do some more comparative Arithmetic: 6500 people per year will be 1625 people in 3 months as compared to Nigeria 1071 civilians in 3 months. Are we not in a civil war? I surely think so. Another characteristic of a civil war situation is when citizens ability to move freely from one place to the other is impeded. Today many interstate high ways are death traps because armed militia have www.businessday.ng

old parlance will say, “the idle hand is a devil’s workshop”. No one should be surprised, therefore, that the too many idle hands that we did not engage, are engaging themselves in the battle for survival as beggars, kidnappers, armed robbers, terrorists, etc. Another implication is that these millions are not engaged in production. By this, it means that significant numbers of Nigerians are not contributing to Nigeria’s prosperity and growth. However, this does not mean that their existence is growth neutral. They are at the same time dragging Nigeria’s growth down as they only share in the growth through consumption, but also because their existence and activity is potentially growth negative for the country. The third implication is that they are desperate. The millions of Nigerians that are idle and unemployed, and thus in the thick of Nigeria’s survival game, are desperate. They are desperate to live and survive. Consequently, because of the poor quality of their lives, they do not regard other lives also. Because their lives mean nothing to them, they see other lives as nothing also. From this underline notion, it is not surprising that we have seen escalation of terrorism, kidnapping, armed robbery in the last few years that poverty is worsening and unemployment rising. The final implication I want to share with you, but by no means the exhaustive list of implications, is that millions of majority of Nigerians are dependent on fewer number of us. While it is natural for us to want and seek independence, especially financial independence, it is difficult when one

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It will be interesting to compare this 1071 deaths in 3 months with death statistics for actual civil wars and see where the numbers take us

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‘

And as we have started to see, even those perpetuating the situation through awful or non-existent economic policies are not immune. Is there anyone still safe?

is weak. And very few things make one weaker than when there is no job and no means of income. Consequently, millions of Nigerians in this situation rely on others for their survival. Unfortunately, in the absence of what they consider as adequate support, survival can sometimes mean armed robbery, kidnapping and terrorism. Now, I am not suggesting that unemployment leads to terrorism or armed robbery, nor suggesting that this is a viable way to survive in the absence of job. However, every society and community is dynamic. By virtue of being unemployed, out of school, and without necessary support, many millions naturally tend towards the edges and fringes of the society. In these edges of the society, the normal rules of society do not apply. The name of the game here is kill or be killed. In conclusion, every country has its own edges of the society. But they are generally few when compared to the entire population of the country. But in Nigeria, the numbers are growing, and the situation increasingly desperate. In Nigeria today, they are no longer found in the edges of the society, they are found in the mainstream. In Nigeria, it’s truly becoming the case of dog eats dog, kill or be killed. And as we have started to see, even those perpetuating the situation through awful or non-existent economic policies are not immune. Is there anyone still safe? I thank you. Dr. Okiti is the president, Time Economics Ltd @ Dr_Okiti 081.7153.0058

taken over the highways. The Kaduna Abuja highway has been in the news recently for all the ‘’good’’ reasons. The UBEC Chairman and his daughter were kidnapped along Kaduna Abuja road and his driver was killed. As you well know for every VIP that is reported to have been kidnapped there are 20 incidences of ordinary citizens that are unreported. The train from Abuja to Kaduna has now become the preferred mode of travel even for VIP’s and since the VIP’s started travelling on the train I have read reports that the train is now escorted by helicopter for additional security. In a recent report, the Governor of Kaduna State has appealed to the Chief of Air Staff to approve the deployment of NAF Special Forces to the Abuja-Kaduna road to participate in the new Joint security operations aimed at confronting the prevalence of banditry and kidnapping that has bedeviled the road for the last two years. The East West Road linking Port Harcourt to Warri and then to Western Nigeria is another jungle of a road. I have read reports that the Civil Liberties Organisation (CLO) and the National Union of Road Transport Workers’ Union (NURTW) have recently sent a protest letter to President Muhammad Buhari over alleged killings by suspected kidnappers along the EastWest road between Bayelsa and Rivers States. Recent happenings on the East West highway (in the last two weeks) reveal that two police men were allegedly killed and Shell workers they were escorting kidnapped. The National Union of Road Transport workers also claim that three of their members have been killed on this road in the month @Businessdayng

of April 2019. My opinion is that combating crime is extremely important, but preventing crime is more efficacious. Prevention is less expensive because it avoids the trauma of the crime for the victims and requires less combat and fire power. From a resource standpoint in Nigeria how many of our 371,800 police officers can be reasonably deployed to deal with 685 kidnappings in 3 months? Note that if this number is extrapolated it could mean that by end of 2019, we could be dealing with about 2500 kidnappings. I think that kidnapping in Nigeria is not a crime of passion but a trade and means of livelihood. It has proven to be so lucrative that people from all walks of life are involved – investors, herdsmen, graduates, cults, communities, working class Nigerians and even policemen. Even armed robbers have diversified their trade - if they find nothing on you, they will take you with them for ransom. We cannot run away from the fact that kidnapping is a result of current socioeconomic imbalances which should addressed as a preventative mechanism. There is a definite correlation between the rate of kidnappings and Nigeria’s rate of poverty, unemployment, underemployment, inflation, drug prevalence, youth restiveness and more. If these problems persist kidnapping will continue to be a viable trade which will overpower police weaponry and resources. Ayuli Jemide is Founder and Lead Partner of Detail Commercial Solicitors. An entrepreneur, public speaker and writer. Email: AJ@ayulijemide.org Twitter: @JemideAyuli

Tuesday 07 May 2019

BUSINESS DAY

news $5.2bn power sector financing... Continued from page 1

the loan is the inability to

make the power market thrive through a cost-reflective tariff. “The funds are loans and for Nigeria to be able to repay, the country must demonstrate it has the market that can recover the money. This it has failed to do,” Oni said. According to the power sector plan, Nigeria would carry out tariff review at least three times to up to 50 percent between 2017 and 2021. The review would address accumulated deficit attributed to sculpting of the retail tariffs under Multi-Year Tariff Order (MYTO) 2015, such that DisCos are required to under-recover

now by charging less than the cost-reflective tariff and are allowed to recover in the future. But this soon became the norm. The situation was worsened by high inflation rates and exchange rate instability. The shortfalls were dimensioned to tariff arising from pricing power below cost of production, volumetric shock in energy supplied and the costs of interest on non-financed shortfalls through retail tariff sculpting. This led to a shortfall of N458 billion due to DisCos from customers. The market shortfall is due to non-payment of actual market operator and Nigerian Bulk Electricity Trading Company (NBET)’s in-

voices by the DisCos creating a shortfall of N473 billion due from DisCos to the market. In view of this, the Federal Government agreed to review tariffs and conduct legal review of sector contracts including Performance Agreements, Vesting Contracts and PPAs to facilitate hitch-free contract activation. It also agreed through the Bureau of Public Enterprise (BPE)/National Electricity Regulatory Commission (NERC) to review DisCo investment/performance improvement plans. Two years later, these shortfalls have risen to over N1.4 trillion, according to industry analysts, which has seen lenders become more circumspect lending to Nigeria. BusinessDay contacted

the minster of Power, Works and Housing through Hakeem Bello, his special assistant, but there was no response as at the time of filing in this report. Nigeria was also obligated by the agreement to set up proper corporate governance structures including appointing boards to head agencies like NBET, Transmission Company of Nigeria (TCN), National Liabilities Managing Company (NELCOM), Niger Delta Power Holding Company (NDPHC), Rural Electrification Agency (REA) and BPE and appoint BPE professional directors on DisCo boards. Some of these board members are yet to be appointed. The Federal Government was also obligated to ensure DisCos’ performance and

implementation of credible business continuity plans, establish data-driven processes for decision making across the sector and put measures in place to guarantee a minimum of 4,000 MWH/H of average daily energy. It has only ensured a continuity plan for DisCos. The plan to develop and implement a robust loss reduction plan in metering led to the creation of the Meter Asset Provider regulation, but Nigeria lags on ensuring MDAs’ debts are fully paid and implementing payment mechanism for future bills. There is still no FX policy for the sector and electricity contracts are not still effective. Nigeria was supposed to have raised $2.5 billion support from the World Bank, of which

$1.0 billion will go towards a performance-based loan to enable NBET to pay 100 percent of its wholesale invoices in full and on time with an additional $2.7 billion (IFC investment and MIGA support) for private investment. The AfDB proposed $3 billion to $4 billion of support to Nigeria (which could also spread to other sectors). The Federal Government would push for at least $1 billion of this to go into supporting the NBET/ MO funding shortfall. It will raise another $2.1 billion from the sale of NIPPs including Geregu, Calabar, Omotosho and Ihovbor, which could be sold for their bid prices provided the government put in place the requisite payment guarantees similar to Azura Edo IPP.

SEC may approve MTN listing... Continued from page 1

When a company comes to the Exchange by way of an introduction, its shares can only be traded if existing shareholders sell, whereas in the case of an IPO, the company is bound to offer a certain amount of its shares for sale through a public offer for sale. Mary Uduk, acting director-general of SEC, acknowledged to BusinessDay on Monday that the Commission had received an application from MTN for the registration of “its existing shares”, but said this does not amount to an offer to create new shares. “MTN is seeking to come to the market by way of an introduction and has asked SEC for an approval to register its existing shares,” Uduk told BusinessDay. “This is not a complicated process at all and if the documentation submitted by MTN is complete, SEC should be able to grant approval for this application within 24-48 hours,” she said. BusinessDay had exclusively reported that Nigerians eager to buy into the muchtalked-about success of the telecommunications giant via an IPO would have to wait still further as the application

now being considered by SEC is not for IPO. It is expected that when MTN gets SEC’s approval within 48 hours, it will proceed to also get all necessary approval from the Nigerian Stock Exchange (NSE) for the listing by introduction. While listing activity on the NSE remained relatively low, the coming to Custom Street market by MTN Nigeria to trade its shares will help give investors options for sector rotation and reduce volatility associated with a single name dragging down the entire market. The company’s listing on the Exchange will create a new telecoms asset class for investors and provide an opportunity for a wider group of Nigerians to participate in its investment story. The business sustained its growth trajectory in the financial year ended December 31, 2018, building on the positive momentum from the previous years to achieve an annual service revenue growth that exceeds inflation (from 11.2 percent annual service revenue growth in 2017 to 17.2 percent in 2018), the first time in the last three years of recovery. This is complemented by effective cost containment,

Rising cost of Nigeria’s debt starts to unsettle... Continued from page 4

ment debt, while it has fallen as a share of the government’s gross revenue collection, has risen to an alarming twothirds of revenues retained by the central government after it has distributed funds to the states, as mandated by Nigeria’s federal system. Thatisapotfromwhichdebt

repayments — and all other federal spending — must be made. Ravi Bhatia, a sovereign analyst at S&P Global Ratings, says the problem is best understood the other way round. “The issue is not so much that interest payments are high,” he says. “The main problem is that federalrevenuesasashareofGDP

Nigeria’s creative industry gets a boost... Continued from page 4

tee meeting last month that some advertorials would be out in the market for eligible people who want to participate in each of fashion, information technology, movie, and music. Wigwe said it was a big initiative that would lead to employment of about 300,000 youths in five years time, as well as lead to a significant accumulation of

foreign exchange and savings. Onhowtoaccesstheseloans, the CBN in the notification on its websiteinstructedthatinterested persons should go to any bank of their choice to get the funds. The apex bank said that the period for repayment of the loan was a maximum of three years for Software Engineering student loan, a maximum of 10 years for movie producwww.businessday.ng

L-R: Alex Osunde, chairman, board of trustees, The Bridge Club; Adam Nuhu, MD, FCMB/member; Nasir El-Rufai, governor, Kaduna State; Abdulhakeem Mustapha, president of the club, and Waheed Olagunju, former acting MD, Bank of Industry, at an evening with the governor of Kaduna State in Lagos, at the weekend. Pic by Pius Okeosisi

with reduction in the annual growth of expenses from 27 percent in 2017 to 8.8 percent in 2018 (excluding one-off costs linked to the Central Bank of Nigeria dispute). Highlights of the results show service revenue increased by 17.2 percent; data revenue increased by 39.3 percent; digital revenue decreased by 58.1 percent; and Fintech revenue

increased by 32.7 percent. Also, earnings before interest, tax, depreciation and amortisation (EBITDA), which is a measure of the company’s operating performance, grew by 30.8 percent to N453.1 billion (excluding CBN payment); and EBITDA margin increased by 4.5 percentage points to 43.6 percent (also excluding CBN payment).

Mobile subscribers increased by 6 million to 58 million. “We are now even better positioned to ensure that everyone can access the benefits of a modern connected life. We are excited to have been given the privilege to continue playing a role in facilitating this, and are grateful to our customers, our people, our partners and our regulator for making

this possible,” Ferdi Moolman, CEO, MTN Nigeria, said. Considering the profitable nature of MTN Nigeria business, the availability of its shares on the NSE when listed will no doubt depend on the willingness of existing shareholders to relinquish.

are just very low. They are literally reliant on oil and little else.” Indeed, IMF data show that Nigeria’s general government revenues were equal to just 5.7 per cent of GDP last year, far below the average of 22 per cent of GDP for the other 44 sub-Saharan countries for which the IMF collects data. Ms Ahmed stressed in her April presentation that revenue generation was her priority. She also recognised

that last year, actual revenues fell short of the budget target by almost 30 per cent. “Peer comparisons of our ability to convert GDP to revenue for capital and social investment . . . show that we have a lot to do,” she said. In its latest report on Nigeria published last month, the IMF also emphasised the need for “revenue-based consolidation” to lower the ratio of interest payments to revenue and said

“non-oil revenue mobilisation” should be the top priority in “an urgent reform package”. Yet big questions remain about how that might be done. One of the government’s stated priorities is to raise more revenue through value added tax, which generates the equivalent of just 0.8 per cent of GDP according to Ms Ahmed’s figures, compared with 7 per cent of GDP in South Africa and 6.6 per cent

in neighbouring Benin. Raising the rate of VAT, however, has met resistance. “The economy is suffering, so to slap on another tax will not be very popular,” says Mr Bhatia at S&P. “Hence the reluctance in pushing it through. Essentially, [President Muhammadu] Buhari is not a big reformer — he’s a slow-moving, cautious reformer, if at all.”

tion and distribution, and a maximum of 10 years each for fashion, information technology (IT) and music. Most recent data from the National Bureau of Statistics (NBS) show that Nigeria’s unemployment rate ballooned to a nine-year high of 23.1 percent in the third quarter of 2018. Meanwhile, the number of people in Nigeria has now climbed to 201 million in 2019, figures compiled from the State

of World Population Report released by the United Nations PopulationFund(UNFPA)show. According to the data by UNFPA, a UN organisation that focuses on population activities around the world, more than half of Nigeria’s total population falls in the working age bracket. Africa’s most populous nation has 54 percent of its total population within the age bracket 15-64 years old, spurred

by the 2.6 percent average annualgrowthrate the countryhas reported in the last nine years. “Nigeria has a dynamic economy and a large population expected to double in the next two decades,” UNFPA said. The recent data by UNFPA are in line with the projections of an earlier report in 2017 by the UN Department of Economic and Social Affairs which projected that Nigeria will overtake US and become

world’s third most populous country by the year 2050. “Unemployment rate will not reduce when the country is producing more than it can feed. It would require about 6-8 percent or more in GDP growth for there to be a decline in the continuous rise of unemployment in the country,” Bismarck Rewane, managing director/CEO of Lagos-based Financial Derivatives Company, said.

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•Continues online at www.businessday.ng

Tuesday 07 May 2019

BUSINESS DAY

news Oil well explosion: Chevron encourages stakeholders to embrace dialogue Francis Sadhere, Warri

ollowing the recent fire incident that rocked one ofitsoilwellinOndoState, Chevron Nigeria Limited, operator of the Nigerian National Petroleum Corporation joint venture, has called on all stakeholders to embrace dialogue and respect the rule of law in resolving perceived grievances. The fire incident, which Chevron confirmed occurred on April 18, 2019, took place at the NNPC/ CNL JV’s Ojumole Well 1 in Ondo State. According to a statement by Esimaje Brikinn, general manager, Policy, Government and Public Affairs, Chevron, contrary to reports, does not have any oil well called Ikpalakpala-bou in its assets in the Western Niger Delta. He said the Joint Investigation Visit to the site of the incident on Saturday, April 20, 2019, by a team made up of regulatory agencies, communitystakeholders(includ-

ing representatives of Tsekelewu community) and CNL, determined that the fire was caused by unidentified third-parties who interfered with the facility. Because Chevron places the highest priority on the health and safety of its workforce, the community around its operations and protection of its assets and the environment, they are currently working with contractors to safely put out the fire as quickly as possible, Brikinns said. “There are independent, accredited environmental consultants monitoring the environment andourpostincidentactivitieswill be consistent with the relevant environmental laws, regulations and guidelines. “We continue to conduct our operations safely, reliably and efficiently,withutmostconsideration for protection of people and the environment,” Brikinns said. CNL takes any threat to its operations seriously and will inform the relevant law enforcement agencies of such threats, he said.

NDDC felicitates with Niger Delta, Muslims on Ramadan … as APC urges Muslims to pray for Nigeria, resist divisive agents Innocent Odoh & James Kwen, Abuja

iger Delta Development Commission (NDDC) has felicitated with Muslims in the Niger Delta and Nigeria in general on the commencement of this year’s Ramadan fast, wishing them Ramadan Kareem. A statement issued on Monday by the acting managing director of the NDDC, Nelson Brambaifa, noted, “It is with great joy and delight that the commission greets Muslim brothers and sisters across the Niger Delta and Nigeria and wish them well during this period of Ramadan. “The spiritual purpose of this fasting is the surrender, submission to a higher authority, which is the creator, Allah. As we commence this fasting and prayers to the Almighty Allah for the next one month, which shall culminate into a great Sallah celebra-

tion, our Muslim brothers and sisters are to pray for the peace and overall development of our great Country.” He also urged the Muslims to pray for Nigerian leaders as a priority beginning with President Muhammadu Buhari and others. He urged them to seize this holy opportunity to proclaim the goodness of Allah upon The Niger Delta and Nigeria as the people of Nigeria begin a journey for a new Nigeria to the Next Level come May 29, 2019. “Thus they should see this as an opportunity to renew commitment to Allah,” he said. He assured Muslims of the love and support of the NDDC as always during this period and beyond trusting God that the bond of peace and unity of Nigeria will grow from strength to strength and glory to glory.

“On behalf of the people of the Niger Delta, the management and Staff of the Niger Delta Development Commission NDDC I wish you the best and the grace of Allah to keep you strong,” the statement added. Meanwhile, the ruling All Progressives Congress (APC) has urged Muslim Ummah to pray for Nigeria and resist divisive agents. APC advised that in observance of this year’s Ramadan fasting, the Muslim Ummah should use the Holy Month to pray for the peace, security and development of our dear country, Nigeria. Lanre Issa-Onilu, APC national publicity secretary in a message of identification with Nigerian Muslims, said, “Ramadan is a time of spiritual reflection, improvement, sacrifice and increased devotion and worship. “We implore Muslim Ummah

to follow and apply the teachings of Islam in our relationship with our neighbours- Muslims and nonMuslims. We should remember and cater for the less privileged in our midst, stay humble and abstain from all bad deeds. “It is our inalienable right as humans to safely go about our daily activities and to live in peaceful coexistence with our neighbours. Hence, in our places of worship, educational institutions, sociopolitical gatherings, markets, social media and all other public spaces, we must resist divisive agents and their equally divisive messages and actions. “We must report to relevant authorities agents of destruction who disguise as ethnic or religious champions to achieve their diabolic, selfish and heinous agenda by exploiting our perceived differences.

Aiteo shut down 150,000 NCTL over spillage OLUSOLA BELLO

gain, less than 24 hours after starting up the Nembe Creek Trunk Line (NCTL) from repairs of identified leak points occasioned by activities of oil thieves, two new leak points have been reported along the line near Awoba Riser Manifold. According to Aiteo, the major operator of the 150,000 barrels per day line, its emergency response process was immediately activated and containment boom deployed to limit oil spread on bodies of water while efforts to identify cause of incident/repair have been initiated. Consequently, all injectors have been advised in accordance with NCTL shutdown procedure to shut-in production into the NCTL immediately. Appropriate Oil Leakage/ Spillage Notification Report will follow shortly to DPR/ NOSDRA. The company about two weeks ago had declared a force majeure on the 150,000 barrels per day Nembe Creek Trunk Line because of an outbreak of fire. The fire outbreak was discovered by the company’s surveillance team comprising the JTF, FSS around NCTL RoW near Awoba. This led to the activation of Operations Emergency Response team immediately, and following its urgent intervention and containment action, it was constrained to shut in injection as well as other related operations into the NCTL. In accordance with standard procedure, other injectors were asked to do the same. The NCTL has, hitherto, enjoyed smooth operations preceding this incident, bringing up suspicion that the fire may have occurred through an illegitimate, third-party

breach of the functionality of the pipeline. The company stated further that relevant investigations were continuing while further information about the remote cause of the leakage would be communicated to the stakeholders. A Joint Investigation Visit (JIV) comprising security and regulatory agencies, community representatives and Aiteo personnel will be constituted and deployed to the site where fire broke out to attend to the necessary incident formalities. This is coming following confirmation by the Joint Task Force (JTF) that the fire was caused by sabotage of the pipeline at Awoba, Rivers State. JTF, it was claimed, has also identified some culprits and is set to take necessary action. Aiteo said it was working on further site preparation and mobilisation of specialised equipment to the swamps for further remedial action to facilitate a quick return to full functionality. The company had declared a force majeure on the 150,000 barrels per day NCTL because of the fire. Mathew Ndianaabasi, spokesman for Aiteo, announced the shutdown of the facility in a statement on Monday pending the tracing and fixing of the additional leaks on the line. Also, the Commander of the JTFin the Niger Delta, Akinjide Akinrinade, a rear admiral, while inspecting the vandalised line stated that six suspected vandals that breached the line on April 21 died in the fire that followed the explosion. Ndianaabasi said oil spill response team had been deployed to the leakage area at Awoba in Rivers to contain the oil discharged into the environment. www.businessday.ng

L-R: Qasim Elegbede, brand and marketing director, Startimes Nigeria; David Zhang, CEO, and Eric Wang, general manager, during the first CEO media breakfast meeting in Lagos, yesterday. Pic by Olawale Amoo.

Wike to dethrone monarchs of communities of kidnappers, cultists … to withdraw amenities from ravaged areas Ignatius Chukwu

overnor Nyesom Wike of Rivers State has read the riot act to traditional rulers, their youths and community leaders of kidnap and cultinvested communities in the state, threatening to dethrone their traditional rulers and dissolve their community and youth councils. The governor also declared that such communities with prevalence of insecurity, cultism and kidnapping would no longer enjoy state government patronage. Addressing a special security meeting at Government House, Port Harcourt, on Monday, Governor Wike said the state government would dethrone traditional rulers in communities where cultism and kidnapping were

encouraged. The security meeting had in attendance the Rivers State Commissioner of Police, Usman Belel; state director of Department of State Services, Tosin Ajayi; commander SOG 115, Nigerian Air Force (an Air Commander, E.O. E Ebiowei); commander NNS Pathfinder (a Commodore, SJ Bura), and state commander of Nigerian Security and Civil Defence Corps (ML Haruna). There was no mention of the Brigade Commander of the 6 Division of the Nigerian Army who had been at loggerheads with the state governor over the March 9 election. Also in attendance were local council chairmen, traditional rulers, CDC chairmen, and all youth leaders in the state. The governor said: “All those Local Government Ar-

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eas where there is no serious cases of cultism and kidnapping, the State Government will give them more projects and attention. But Local Government Areas where cultism and kidnapping have become entrenched, the State Government will depart. “For communities where cultism and kidnapping are encouraged, their traditional rulers will be deposed. We will not allow crisis in our communities. If you don’t want to take the war to them, we will take the war to you.” The governor noted that all youth groups found to be involved in cultism would be dissolved by the state government. He noted that under the current dispensation, the government and people of Rivers State would take their fate in their hands by collectively addressing the security challeng@Businessdayng

es. He urged all stakeholders to work with security agencies to fight insecurity. “Enough is enough. Nobody arrested by security agencies for cultism will see the light of the day. If you say, we will not sleep, you also will not sleep. Every logistic has been provided for security agencies to tackle the insecurity,” he said. He warned that any top government official caught in the process of trying to work for the release of arrested suspected cultist and kidnapper will face the full weight of the law. The governor directed council chairmen to work with their respective traditional rulers, Community Development Committees and youth leaders to advance the course of peace. He also directed council chairmen to clear bushes along the East-West Road and other major highways of the state.

Tuesday 07 May 2019

BUSINESS DAY

POLITICS & POLICY

Ondo 2020: No automatic ticket for Akeredolu if he joins our party - PDP YOMI AYELESO, Akure

h e P e o p l e ’s Democratic Party (PDP) has revealed that Governor Oluwarotimi Akeredolu of Ondo State would not enjoy any special privileges if he decides to join the party. Following the reported suspension of Akeredolu by the National Working Committee (NWC) of the APC, there were media reports that the governor might join the PDP to contest the 2020 governorship election in the state. H o w e v e r, t h e P D P ’s South West Publicity Secretary, Ayo Fadaka in a statement on Monday described Akeredolu’s defection as a rumour, adding that the party would not allow itself

to be taken over by any individual or group. Fa d a k a u r g e d p a r t y members to disregard the defection rumour and continue to promote the party ahead of next year’s poll. “We however, wish to state most unequivocally that the PDP in Ondo State remains cohesive, solid and vibrant through dint of hard work and commitment of leaders and members of the party and as such is not primed to be taken over by anyone, irrespective of his status. “We also declare that anyone who wishes to join our party will also be welcome into our ranks provided such a person or group recognises the fact that no special privileges will be accorded him/them upon joining. Thus, should

Governor Rotimi Akeredolu desires to join our party today, he will be welcome as a fresh member with no special privileges of any kind,” Fadaka said. “It is common knowledge that gubernatorial election holds in Ondo State next year and prominent members are already getting prepared to take a shot at becoming the Party’s flag bearer, the Party shall at the fullness of time organise a primary election to pick whoever will become our candidate in that election. It is important to again underscore the fact the Party will maintain the tradition of picking its candidate through a free and fair primary election that will be rancor-free. “In conclusion, the hoopla surrounding Ak-

Oluwarotimi Akeredolu

Ondo Assembly pledges legislative Crisis in Kogi as party rival guns down youth leader the university town for wounds of various degree. backing for N30,000 minimum wage Victoria Nnakaike, Lokoja over hours. Some residents of the YOMI AYELESO, Akure

he Speaker of the Ondo State House of Assembly, Bamidele Oleyeloogun has assured of giving the state government the necessary legislative support to enable it pay the new minimum wage in the state. The Speaker gave the assurance in an interview with journalists. Governor Oluwarotimi Akeredolu of Ondo State had said the state would pay the N30,000 new minimum wage in line with the law and that the welfare of workers was paramount to his administration for optimal productivity from

workers to be achieved. Oleyelogun, who described Akeredolu as a worker-friendly governor, said he was a man of his words that fulfils his promises. He explained that the House would support him with enabling laws that would help his administration to pay the minimum wage to civil servants. “He is a man of action that will tell you what to do and he will do it. “We are ready to support with all enabling laws that will help him to pay minimum salary and take care of the welfare of workers. The welfare of workers which is paramount to him is also paramount to the lawmakers,” he said.

arely six months to Kogi State gove r n o rs h i p e le ction two party rival groups have engaged themselves in a fierce gun duel that claimed the life of one Ismaila Yakubu Agba, a youth leader of All Progressives Congress (APC) in Anyigba, Dekina Local Government Area. Although the cause of the exchange of gun fire which led to the death of the youth leader is yet to be established, it was gathered that the unidentified trigger-happy gun men started shooting around 10am, bringing the town’s activities to a standstill, as pandemonium took

BusinessDay gathered that the late APC youth leader, Agba, who is the head of the east district cashew producers of the revenue drive department of Kogi State government and chairman of Anyigba -Lagos loading point in the town met his untimely death during exchange of gun fire at Agwudoko area of the city. A reliable source equally disclosed that the militant group, suspected to be from rival leading political parties in the town stormed the enclave of the other party over a yet-to-disclosed reasons which turned out to be a free-for-all-fight, leading to many receiving bullet

eredolu’s desire to join our Party remains a rumor and currently not an issue within our Party,” the PDP said. In a swift reaction, the All Progressives Congress (APC) in the state described the report as wicked lie, urging the people to disregard it. Alex Kalejaye, the party’s spokesman said Akeredolu has no plan to defect from the party, saying: “He hails from the bedrock of progressives in the state, and has always been a progressive.” According to Kalejaye, Akeredolu has invested heavily to build the APC in the state and that the opposition is only out to distract the governor from his development drives across the state.

town also said that reason behind the latest exchange of gun fire between the suspected rival political parties may not be unconnected with the November 2 election where both sides are said to be doing rehearsal in the battle of supremacy that lies ahead. “We were indoors for hours to avoid incident of stray bullets. Though the police command moved in when they got winds of the incident, at a point, we don’t even know who was in charge, as the guns continue to boom unabated,” said one of them. When the Kogi State Police Public Relation officer,

(PPRO), Williams Aya, was contacted, he confirmed the incident, saying that only one person (Ismaila Yakubu Agba) died, and one Alhassan Idoko received injury from the said attack. William Aya also added that it was not a political attack but a case of a culpable homicide perpetrated by unidentified gunmen which the command is already on their trail. The PPRO further said the police authority were drafted to the scene, shortly after the brother of the slain person reported the matter to the police command in the town, adding that normalcy has returned to the area, as police waded in to salvage the issue

ous at the election petition tribunal, charging Nigerians to support the President. “There is nothing anybody can do now than to support Buhari; we have to support him, the man won the election and we are confident we will also win at the tribunal,” Ajomale said. On the areas the President should give priority to in his second term, Ajomale, advised President Buhari to intensify the anti-graft war, give security the needed

attention, while revamping the economy. “The President should fight corruption more so that they would not continue to steal our money. Security; we are not safe; there is the need for more attention on that. “The economy, creating jobs, but even if you are to create jobs which the government cannot do alone, the enabling environment has to be there for others,” Ajomale added.

Buhari, APC not scared of opposition - Ajomale …Says President only concerned about fulfilling campaign promises Iniobong Iwok

enry Ajomale, immediate past chairman of the ruling All Progressives Congress (APC) Chairmen’s Forum, has said that President Muhammadu Buhari and the party were not afraid of opposition to his administration but will rather focus on delivering on his campaign promises to Nigerians. President Buhari recently

won a second term in office, defeating Atiku Abubakar, who was his closest rival and candidate of the main opposition, the People’s Democratic Party (PDP). Buhari secured 56 percent of the votes, compared to Atiku’s 41 percent. Atiku and the PDP have, however, disputed the result of the presidential election and currently challenging the election result at the tribunal. Some leaders of the pan-Yoruba socio-political www.businessday.ng

group, Afenifere, recently threatened not to recognise a government led by Buhari after the expiration of his first term on May 29. But speaking in an interview with BusinessDay, Monday, Ajomale, who is the immediate past chairman of the APC in Lagos State, said that there was nothing the opposition could do but to support the Buhari administration in the next four years because he was voted overwhelm-

ingly by Nigerians. According to him, “We are not bothered about what they are doing and saying. Whether you want it or not there is nothing you can do about it, but to support Buhari because he was voted for by majority of Nigerians and the focus now is to deliver the campaign promises to Nigerians.” The APC chieftain further stated that the party was confident that President Buhari will equally emerge victori-

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Tuesday 07 May 2019

BUSINESS DAY

news CBN targets 300,000 tons of cotton production by 2020 ... restates forex restriction to 43 items ... to blacklist textile smugglers HOPE MOSES-ASHIKE overnor, Central Bank of Nigeria (CBN), Godwin Emefiele, has flagged off the distribution of cotton seeds and other inputs to over 100,000 cotton farmers in Katsina State for the 2019 farming season, with the aim of reviving Nigeria’s cotton, textiles and garments sector and improving cotton production from 80,000 tons produced in 2018 to over 300,000 tons by 2020.

Emefiele, who was supported at the national flag off of distribution of cotton seeds/ inputs to farmers for the 2019 planting season in Katsina on Monday, May 6, 2019, by the governors of Katsina State, Bello Masari and Kano State, Abdullahi Ganduje, as well as the Minister of Agriculture Rural Development, Audu Ogbeh, also reiterated that the foreign exchange restriction on finished textiles and other 42 items remained in force.

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Prior to the flag off, he noted that the CBN had identified insufficient cotton seeds as one of the major challenges facing cotton farmers, hence the bank sought to change the narrative on the cotton and textile industry in Nigeria through the distribution of high yielding cotton seeds to farmers. According to Emefiele, the provision of seedlings to more than 100,000 farmers cultivating over 200,000 hectares of farmland, along with extensive

training on proper farming techniques, will boost production of high grade cotton lint at much improved yields of up to 4 tons per hectare, from the current cultivation rates of less than 1 ton per hectare. He said the move would also reduce the amount spent by Nigeria on imported textiles and ready-made clothing estimated at about $4 billion annually. He also disclosed that the package included fertilizer, pesticides and knapsack sprayers,

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adding that the National Cotton Association of Nigeria would ensure compliance of its members with the stipulated terms for the support that would be provided to farmers. He further disclosed that the choice of Katsina was based on the immense potential of the state as the leading cotton producer in Nigeria. He also noted that the bank was committed to the revamp of the cotton and textiles industry, given its immense potential

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to Nigeria’s growth objectives as well as the bank’s efforts at creating jobs for a large number of Nigerians. In his remarks, the Katsina State governor, Aminu Bello Masari, said the Federal Government initiative to promote cotton production under the Anchor Borrowers’ Programme of the CBN was a welcome development as such would support the textile industry in the country by encouraging local production.

Tuesday 7 May 2019

BUSINESS DAY

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Tuesday 7 May 2019

BUSINESS DAY

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Tuesday 07 May 2019

BUSINESS DAY

NEWS

SO&U Group unveils new campaign to drive awareness on blood donation DANIEL OBI

ecent statistics from Nigerian government reveal that Nigeria has deficit of 1.7 million units of blood out of 1.8 million required annually to attend to blood transfusion needs. This drastic shortage ordinarily has led to death of many people in need of blood transfusion such as pregnant women, sickle cell patients, accident victims and children. As analysts say, the reality is that the country does not have enough blood being donated to address this urgent need. Faced with this challenge, the SO&U Group, which comprises of SO&U, Soulcomms, Maximedia Global, Lucid Audio Visual and Vyrus Digital, has launched a new initiative, tagged “Give Love, Give Blood” to drive awareness and encourage more people to voluntarily donate blood to the nation’s blood banks. The campaign’s objective is to also address the blood shortage challenge by encouraging staff members to first donate blood voluntarily and drive a yearlong campaign aimed at getting 1,000 pints of blood donated to the blood bank. The World Health Organisation projects that if the nation can get 1 percent of its population to donate blood voluntarily at least once a year, the country’s emergency blood needs would be met. “Currently, 60 percent of available blood is paid for, while 30 percent comes from family and friends of emergency victims and only 10 percent comes from voluntary donors,” a statement from SO&U said. Speaking on the initiative, Anthony Ekun, executive creative director, SO&U Group, stated, “As a communications group, we always look to positively impacting on our society through selfless and worthy causes especially through the Give love initiative which commenced over a year ago. “The give love, give blood initiative is one engaged by the SO&U group in donating to the Lagos state blood bank which has saved so many lives over the years whilst also using the medium to encourage residents within the state, partners, friends and Nigerians to be selfless in their actions towards saving lives in the blood donation drive within their locale.” Also speaking on the initiative, Kemi Evbota, senior group head, Human Interest and Admin, stated, “We were intimated about the challenges faced by individuals who are in need of blood transfusion due to poor support to the blood bank donation during our last visit to the general hospital Ikeja in supporting families in offsetting their bills at the previous give love initiative. “This year’s initiative is aimed at tackling this challenge through a collaborative effort by the SO&U Group staff members whilst appealing to other corporate institutions to follow suit through awareness or donations in tackling this deficiency which could save millions of lives in the country.”

Poverty, community disintegration, others impede Child Rights Act in Nigeria - experts Cynthia Egboboh, Abuja

hild protection experts on Monday said poverty, community disintegration, family dysfunction and child vulnerability are critical factors impeding the realisation of the Child Rights Act in Nigeria. Sharon Oladiji, child protection specialist, UNICEF, speaking at a media dialogue on the Convention on the Rights of the Child (CRC) held in Lagos, said lack of access to the developmental need of the children was detrimental to the rights of the Nigerian child, adding that poverty and com-

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munity disintegration, family dysfunction as well child vulnerability had made most children victims of several forms of violence, rendering the Child Rights Act impossible in Nigeria. She said, “We must promote all opportunities that will help sound development in children. Lack of access to developmental need is detrimental to the rights of children. “The child rights covers every aspect of their lives, these rights include survival rights, developmental rights, participation rights and protection rights.” Oladiji, speaking further, said

investing in a child was paramount for Nigeria and Africa as a whole to realise the right of the burgeoning child population, adding that a healthy development of a child was crucial to the future well being of any nation. “Special attention is required for Nigeria, which is the country with the largest increase in absolute numbers of both birth and child population. It is time we acknowledge our shared responsibility and address this issue,” she said. Olumide Osanyipeju, director, Child Rights Information Bureau, Federal Ministry of Information, said, “The United Nations Conven-

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tion on the Rights of the Child is a human right treaty, which sets out the civil, political, economic, social, health and cultural rights of children in Nigeria,” adding that the need to uphold the realisation of the rights of children could never be over emphasised. “I commend UNICEF for their contributions; unyielding support and partnership with the Federal Government of Nigeria and for the consistent effort being made to ensure that the rights and wellbeing of Nigerian children are protected and upheld. In the same vein, i appreciate also, the states that have domesticated the Child Rights Acts

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(CRA) in their states, and working in the best interest of Nigerian children,” Osanyipeju said. Speaking further, Osanyipeju stressed that a comprehensive statement on children’s right, which is binding under international law, became necessary with reports of grave injustice suffered by children ranging from high infant mortality, deficient health care, as well as limited opportunities for basic education, adding that alarming accounts of children are being abused and exploited as prostitutes or in harmful jobs. Children in prison or in other difficult circumstances.

Tuesday 07 May 2019

BUSINESS DAY

news MTN Nigeria appoints Mohammed Rufai as new CTO Jumoke Akiyode-Lawanson

ohammed Rufai has been appointed as MTN Nigeria’s chief technical officer (CTO) and will be responsible for defining the company’s technology strategy roadmap in terms of designing and planning all aspects of the business’ network operations and overseeing continued implementation of aggressive network rollout schedules. Rufai, whose appointment took effect May 1, 2019, is also responsible for the development and maintenance of technology infrastructure, as well as policy formulation and review. The CTO brings with him almost two decades of experience in information and communication technology and telecommunications. He holds a Bachelor of Technology degree in Computer Science from Abubakar Tafawa Balewa University, Bauchi as well as certifications from the General Management Programme at Cranfield University, the Global Advance Programme at Duke Corporate Education, India and the Senior Management Program at the Lagos Business School. Prior to this appointment, Rufai worked with MTN Group where he was the general manager responsible for technol-

ogy in the South East Africa and Ghana region. He has had a lengthy, storied career within the MTN group. Rufai joined MTN Nigeria in 2002 as an RF/BTS Support Engineer in Kano. By 2009, he had risen to the rank of general manager. He ledasuccessionofhighperforming teams in network operations, access, planning and optimisation till late 2015, when he was appointed CTO for MTN Ghana. While in Ghana, Rufai drove an expansion in network capacity that supported tremendous growth. Duringtheperiod,voicetrafficmore than doubled, while data usage increased over 900%. He was twice adjudged ‘CTO of the Year’ at the Ghana IT and Telecoms Awards (GITTA). Rufai also led the license acquisition and implementation of a new LTE network for which his team received the Engineering Excellence Award from Ghana Institution of Engineering (GhIE). Commenting on the appointment, Mazen Mroue, chief operating officer, MTN Nigeria, said, “We are excited to welcome Mohammed home from his excursion across the continent. From the beginning, he has demonstrated professionalism in all engagements, and a drive to improve processes and outcomes continuously. His extensive experience and leadership will serve us well.”

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Xpress Payments MD canvasses Obaseki’s high approval rating threatens dissenting groups in Edo democratisation of finance at eelers from the Edo the primaries by any other Fintech Summit State chapter of the All candidate will be completely SEGUN ADAMS

anaging director of Xpress Payments, O l u w a d a re O w olabi, has suggested ways to ensure financial democratisation in Nigeria. He spoke at the African Fintech Summit 2019 held in Washington, where array of technological and business experts were also present. The second edition of The African Fintech Summit (AFTS) saw business experts engaging in riveting and insightful discourse on Financial Inclusion and the future of financial technology in Africa. Owolabi, who spoke on the theme, ‘Democratisation of Financial Services,’ stated that there was a need in the financial sector, and called for “fundamental and wholesale changes in the financial service experiences of users and customers in Africa.” According to Owolabi, the change will “promote the existence of financial inclusion programmes as well as increase accessibility to

credits and finances.” On how to enable Democratisation of Finance in Nigeria, he outlined the need for technological orientation, security and trust, digitisation as well as native innovations that were relatable to customers. Other key personalities at the summit included: Jim Ovia of Zenith Bank, who gave the opening address; Worku Gachou, managing director for Africa at OPIC; Olugbenga Agboola, cofounder/CEO of Flutterwave; Bunmi Akinyemiju, CEO of Venture Garden Group among a host of others. “AFTS is a global initiative founded on the idea that Fintech can unleash unprecedented economic firepower in Africa and encourages collaboration between ecosystem stakeholders,” organisers of the programme said. The event, which had its maiden edition in Lagos last year, was attended by tech and finance leaders, policy makers and investors from across Africa and the United States.

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Progressives Congress (APC) have revealed that a few individuals within the party are severely threatened by the governor’s high approval ratings ahead of the party primaries and the 2020 governorship elections in the state. It was learnt that a local research group engaged by the group placed the governor’s popularity among the ordinary electorate at between 80 and 90 percent in a recent poll, leading to severe crisis within this group and the consequent early barrage of attacks in the media with the hope that they can drive down Obaseki’s acceptance level before the primaries. A s o u rc e w i t h i n t h i s group that claimed the governor neglected them and focused on development projects, who pleaded anonymity, says the thinking among the group of politicians is that if Obaseki is allowed to focus on governance till November when his administration will be three years in office, any move to challenge him in

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unsuccessful. “We have to put pressure on him now and distract him in any way possible because if he continues to build so many roads and other infrastructure and do all these things, we will be unable to shake him off and the hunger some of us political leaders are suffering will continue. We are fighting for our own survival,” the source says. He adds that the group was taken by surprise that the governor is so popular among the people, noting, “You know he does not make noise, so we assumed that people did not know much of what he was doing but the research we commissioned opened our eyes and so we must fight him from now to force the people to hate him.” Recall that pockets of media publications have been sponsored to punctuate the governor’s chances as the APC’s candidate in the 2020 gubernatorial elections, released by a few politicians in the party, with the allegation that the governor was alienating politicians and eroding the party’s fortunes.

Tuesday 07 May 2019

BUSINESS DAY

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Tuesday 07 May 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Donald Trump’s latest China tariff threat is just bluster The US president has a long history of failing to follow through on his warnings EDWARD LUCE

S president Donald Trump has said that trade wars are easy to win. Reality is usually far messier. The chances are that he was bluffing when he threatened on Sunday to escalate tariffs on Chinese imports this coming Friday — two days after a 100-strong Chinese delegation was due to arrive in Washington for what was billed as the closing phase of a US-China trade deal. Now the Chinese may not come at all, or arrive in smaller numbers. Few countries, let alone emerging global powers, like to negotiate under duress. China will have to weigh the risk of losing face if it shows up against the spectre of a dramatic escalation in the US-China trade war if it does not. Mr Trump, on the other hand, has shown that he will readily swap a stance of “maximum pressure” for a Taylor Swift-style “Love Story” as caprice demands. Just ask North Korea’s Kim Jong Un. Their relationship went from mutual threats of fire and fury to an exchange of teenageesque romantic letters before they had even met. Yet the North Korea situation is now almost back to square one.

The differences between the US and China are almost as insoluble. Mr Trump wants China to dismantle its Made in China 2025 policy that seeks to have the country catch up with the west in 10 different areas by 2025 and dominate artificial intelligence by 2030. This is not merely an economic goal. It is President Xi Jinping’s signature national security strategy for China’s emergence as a global power. It is thought that Mr Trump’s latest Tw itter outburst was prompted by China’s move to water down its promises to cut subsidies to its state-owned enterprises. Beijing may still be promising to purchase vast amounts of soyabeans and other US commodities to reduce the bilateral trade deficit, but the real prize is to alter China’s strategic course. Mr Trump has two reasons to keep the pressure on China to the maximum. First, US growth is relatively strong and the equity market is doing well. That gives him greater leeway to threaten a trade war without killing America’s animal spirits. Had US growth slowed in the first quarter, as many were predicting, Mr Trump’s ire would be directed at Jay Powell, the chairman of the US Federal Reserve. But the drop last Friday of US joblessness to a 49-year low,

Roger Ng faces money laundering and bribery charges relating to state fund

or mer G oldman Sachs banker Roger Ng has been extradited from Malaysia to the US to face charges relating to the 1MDB scandal, according to his lawyer. Mr Ng, a Malaysian citizen, has been charged in the US and Malaysia for his alleged role in a vast $2.7bn money laundering and bribery scandal at 1MDB, Malaysia’s state development fund. “Roger waived extradition in February and has agreed to come to the US to face the US indictment,” said Marc Agnifilo, Mr Ng’s lawyer, on Monday. “I expect that he and I will appear in court this afternoon.” US prosecutors have accused Mr Ng of helping Tim Leissner, his former boss at Goldman, to siphon off billions of dollars from $6.5bn of bond offerings by 1MDB to pay bribes to Malaysian officials. About half of the bond proceeds were siphoned off to Malaysian officials and spent on Van Gogh paintings and Beverly Hills mansions, as well as helping to fund The Wolf of Wall Street movie, according to US prosecutors. Mr Leissner, a former Goldman partner, has pleaded guilty to federal charges that he participated in the fraud and is awaiting sentencing. In an indictment unsealed in New York in November, Mr Ng was accused alongside Jho Low — a Malaysian citizen who al-

legedly masterminded the fraud — of three counts of conspiring to launder money and violate US foreign bribery laws. Mr Ng has not commented on the US charges against him but pleaded not guilty to charges in Malaysia. Mr Low — who is still at large — has maintained his innocence. “Roger Ng was temporarily surrendered to the US on 3 May 2019 and shall be returned to Malaysia to face our charges as soon as the proceedings in the US are concluded,” said Malaysia’s attorneygeneral in a statement. Goldman acted as the sole bookrunner on the bond offerings in 2012 and 2013 and earned about $600m from the deals — an unusually high amount. Last month, the Financial Times reported that US justice department staff had recommended that a settlement with Goldman Sachs over its role in the multibillion-dollar corruption scandal should include a guilty plea at the parent company level — the toughest penalty it can bring. The bank also faces criminal charges in Malaysia. However, Goldman has denied wrongdoing and has cast Mr Leissner as a rogue employee that went to great lengths to deceive the bank. A spokesperson for Goldman said it “denied any wrongdoing” and that it had been lied to by “certain members of the former Malaysian government and 1MDB”. www.businessday.ng

and an annualised growth rate of 3.2 per cent in the first quarter, gave Mr Trump the confidence to step up the game of bluff with China. Second, Mr Trump has staked his reputation on eliminating the trade deficit with China. Most economists consider that goal to be unattainable — and undesirable. Moreover, Mr Trump’s claim that China picks up the tab for the tariffs on its imports is far-fetched.

Those costs are borne by US consumers. Either way, Mr Trump has boxed himself into a corner. He has promised something he cannot force China to deliver. That is without mentioning the nearimpossibility of persuading Mr Xi to abandon his Made in China 2025 drive. So what will happen next? China has two and half years of watching Mr Trump make extrava-

gant threats that he fails to follow through. Mr Kim is exhibit A. Simply by agreeing to meet Mr Trump, North Korea’s leader transformed his rhetoric. Recent history suggests that all Mr Xi needs to do is make a few grand promises but keep the details hazy. That — and a pledge to seal the deal in Mar-a-Lago — should be enough to mollify Mr Trump.

Wall Street opens sharply lower after Trump trade threat

Malaysia extradites ex-Goldman banker to US over 1MDB scandal DAVID CROW AND LAURA NOONAN

US follows global equities lower after investors wrongfooted by China tariff warning MAMTA BADKAR, ROBIN WIGGLESWORTH AND TOM MITCHELL

all Street tumbled at the open, joining the global sell-off in equities triggered by US president Donald Trump’s threat to raise tariffs on all Chinese imports to 25 per cent this week. The S&P 500 fell 1.5 per cent to 2,903.81, while the Dow Jones Industrial Average dropped by a similar margin to 26,116.02. The Nasdaq Composite fell 1.8 per cent to 8,019.54. Mr Trump’s threat, coming in tweets written on Sunday, wrongfooted investors who had been growing optimistic that a trade deal between the US and China was on the cards, and ruptured the calm that had descended over global markets since December’s turmoil. The US stock market drop followed similar declines in European and Asian bourses. The Eurofirst 300 index was down 1.5 per cent — heading for its worst one-day performance since December — while China’s CSI 300 index of major Shanghai- and Shenzhen-listed stocks closed down 5.8 per cent, marking the worst day since February 2016. Mr Trump’s threats also triggered a furious reaction in markets for US agricultural products, which China has subjected to retaliatory tariffs. Chicago soyabean futures for July delivery dropped 2.2 per cent to $8.24 a bushel early Monday, while June lean hogs fell by their daily 3-cent

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limit to 89.75 cents per pound. “This is the most significant escalation of the US-China trade war to date,” said Aditya Bhave, an economist at Bank of America Merrill Lynch. “The immediate market response suggests that the latest escalation of the trade war was a complete surprise to investors. This means that markets could be in for a bumpy ride before a trade deal is reached.” Mr Trump’s threat came just as a high-level delegation of Chinese negotiators was due in Washington for what are considered to be make-orbreak talks aimed at a new bilateral trade deal. Liu He, China’s vice-premier and top trade negotiator, was originally due to fly to Washington on Monday, leading a 100-strong negotiating team comprising officials from the Ministry of Commerce and other government agencies. “Mofcom is livid,” said a person familiar with Beijing’s reaction to Mr Trump’s latest threat. “They are tired of getting ambushed.” Mr Liu may now fly later in the week for a shortened trip with a much smaller delegation, according to two people briefed on internal discussions in Beijing. “A delay rather than a cancellation of Liu’s trip is more likely as the Chinese want to keep negotiations going but cannot not respond [to Trump’s threat] too softly,” one of the people said. On Monday afternoon, a Chinese foreign ministry spokesman said Mr Liu’s team was still “preparing to travel to the US for the trade talks”. @Businessdayng

The spokesman declined to specify on what timeframe Mr Liu’s team was travelling to the US, or whether the team would make the original date. The prospect of a collapse in talks sent nervous investors to safer assets such as highly rated government debt. The 10-year US Treasury yield slipped 4 basis points to trade at 2.49 per cent, while the dollar and the Japanese yen rose against every other major currency on Monday. China’s onshore renminbi, which is permitted to trade 2 per cent either side of a daily midpoint set by China’s central bank, fell 0.7 per cent to Rmb6.784 per dollar, its lowest level since January. “Although Trump’s strategy is risky, because the Chinese could refuse to negotiate at gunpoint and decide to walk out on the trade talks, both sides have invested too much political capital in the negotiations to let this happen,” said Raoul Leering, head of international trade analysis at ING. “Trump plays hardball, but the renegotiation of Nafta has shown that he is prepared to water down some of his toughest demands.” Monday’s slide follows an extended period of calm in markets and come after stocks had rebounded to fresh highs in recent weeks. Mark Haefele, chief investment officer at UBS Global Wealth Management, cautioned that increased Chinese tariffs and other retaliatory measures “could lead to a 5 per cent contraction in US earnings, which coupled with falling valuations could result in a 10-15% decline in US equities”.

44 BUSINESS DAY

Tuesday 07 May 2019

NATIONAL NEWS

Why oil could help resolve the US-China trade stand-off

Energy is one area where the two countries have a mutual interest in finding common ground DAVID SHEPPARD

f US president Donald Trump wants the lower oil prices he has consistently demanded, then escalating a trade war with China is one unconventional method of meeting that shortterm goal. Crude prices tumbled on Monday alongside stock markets, after Mr Trump’s threat to raise tariffs on $200bn of Chinese goods. Brent crude briefly dipped back below $70 a barrel, taking the international benchmark well below the level it traded two weeks ago when the Trump administration announced it was removing all sanction waivers for Iran’s customers. The decline comes despite bullish traders consistently pointing to the build-up of geopolitical threats in the market, from Iran to Venezuela, which have tightened supplies compared with earlier this year. These threats appeared to increase over the weekend, with John Bolton, US national security adviser, saying a US aircraft carrier was heading to the Middle East to send a “clear and unmistakable message” to Iran. But for most oil traders, the threat of an escalating trade war with China is a more immediate risk. China overtook the US as the world’s largest crude importer earlier this decade, and the two countries account for almost a third of world oil consumption.

So the duo plays an outsized role in the oil market, before even starting to account for the spillover effects that a damaging trade war would have on the wider global economy. Oil, therefore, may not lie at the heart of the dispute, but crude traders cannot easily ignore it, regardless of the threats to supplies elsewhere. But while the risk to the oil market is real, focusing solely on prices may underplay the role that energy could ultimately have in resolving the stand-off. The US is the fastest-growing source of global energy supplies due to the shale revolution. China, meanwhile, accounts for the fastest-growing portion of global oil consumption, while its demand for seaborne cargoes of liquefied natural gas is also soaring. So while the dispute around tariffs goes far beyond trade balances, energy is one area where the two countries have a mutual interest in finding common ground. China has notably slashed its imports of US energy supplies as the trade war has intensified, from more than 430,000 barrels a day of crude in March 2018 to less than 100,000 b/d in March of this year. Few products have the power to influence the US trade deficit with China quite like oil, with a single supertanker carrying approximately $140m worth of cargo.

Why radical transparency about salaries can pay off Telling colleagues what we earn is a powerful and ‘subversive’ act — but there are pitfalls

EMMA JACOBS isclosing your salary to a colleague is one of the “most subversive acts” an employee can do, says Melanie Simms, professor of work and employment at Glasgow University’s Adam Smith Business School. Organisations work “very hard” to make pay opaque, she says. “They know they can’t always justify differences. It’s in [their] interest as an employer not to be open about these things.” Such secrecy puts workers at a huge disadvantage in negotiating salary, says Alison Green, the US management consultant behind the site Ask A Manager, who has compiled an anonymous database on pay. “It also makes it far harder to uncover pay disparities by gender or race.” Professor Simms has in the past usefully shared salary levels with peers, although admits to having needed to fortify herself in the pub beforehand to pluck up enough courage. “Almost any conversation that gives a number to your worth comes with [baggage]; it can be emotional, you think your peers will judge you.” Pay has long been considered a taboo subject in many parts of the world. As Kim Scott, previously at Google and Apple, and author of Radical Candor, puts it: “We behave about money the way the Victorians behaved about sex.” Technology and legislation are shifting attitudes to pay

secrecy. At its most extreme, some companies have embraced radical transparency — making their staff’s salaries accessible to each other. Could this be the future? Social media has made the private public, and websites such as Glassdoor and Salary Expert help workers find information about pay. At the same time, legislation has brought pay under public scrutiny. In the US and UK, listed companies are required to publish the pay ratio between chief executives and workers’ averages. Gender pay gap reporting has been introduced in the UK and France. A new law in Germany allows women to ask for the median salary of a group of at least six men doing similar work, and vice versa. Publishing pay information can trigger dissatisfaction and dissent — notably at the BBC, the UK broadcaster. In 2017, the BBC revealed that two-thirds of its highest paid stars were men. The following year, Carrie Gracie resigned from her post as China editor, writing in an open letter that the broadcaster was “breaking equality law and resisting pressure for a fair and transparent pay structure”. In response to complaints, in March the Equality and Human Rights Commission launched an investigation into unequal pay at the broadcaster. The BBC acknowledged that there had been historic equal pay cases but subsequent independent reviews “did not find systemic issues of pay discrimination” and is making “improvements to pay structures”. www.businessday.ng

Foxconn chairman Terry Gou. As most of his company’s factories are based in China, analysts argue that his business interests could conflict with Taiwan’s national interest © Reuters

Foxconn chief Gou tells China to recognise Taiwan’s independence Comments from presidential hopeful highlight challenge of not being seen to pander to Beijing KATHRIN HILLE

erry Gou, the chairman of Apple supplier Foxconn who has joined the race to be Taiwan’s next president, has challenged China to recognise its existence as a sovereign state. China “must acknowledge the existence of the Republic of China”, Mr Gou told reporters on Monday, referring to the official name of Taiwan in a move that highlights his challenge of not being seen as pandering to Beijing. He added that he would not consider meeting Chinese president Xi Jinping unless he had received clarification from Beijing on its policy towards Taipei and had become Taiwanese president himself. The Republic of China was founded in China following the first Chinese revolution in 1911. Taiwan has continued to use the term and the framework on which it was based, such as its founding constitution, after the Kuomintang (KMT) fled to the island following its defeat in the Chinese civil war of 1949. The Chinese Communist party claims Taiwan as its territory, and has threatened to invade if Taipei continues to resist unification. According to opinion polls, a vast

majority of the Taiwanese public wants to retain its de facto independence. Mr Gou has yet to secure the nomination of KMT, Taiwan’s main opposition party, to run in next January’s polls. But since most of Foxconn’s factories are based in China — where it is the largest private-sector employer and the biggest exporter — analysts see him as a potential security risk. They argue that as president, his business interests could conflict with the Taipei’s national interest. Mr Gou’s comments came just a few days after he sparked a backlash by calling Taiwan a part of China. The statement echoes language used by Tsai Ing-wen, the current president with whom Beijing has refused to engage. Ms Tsai said earlier this year that China “must face up to the fact of the existence of the Republic of China”. She has also stressed that Beijing and Taipei should handle their disagreements on a peaceful and equal basis, demanded that the Taiwanese people’s wish for freedom and democracy be respected and insisted that any talks happen only through official channels. Mr Gou said on Monday that

he too wanted to deal with the mainland on an equal basis, even as he is supposedly a presidential candidate on the opposite end of the political spectrum to Ms Tsai. Other KMT presidential hopefuls have also sought to maintain a careful balance on China policy. The party’s official position is that Taiwan is part of one China but Taipei and Beijing have different interpretations of what this means. Any move beyond this vague formula, including a suggestion of peace talks, is risky as some voters suspect KMT candidates might place a Chinese identity ahead of Taiwan’s interests. Within Taiwan, there is no serious debate on whether the island should unify with the People’s Republic of China, the official name of the mainland. Only 2.9 per cent want unification with China now and another 12 per cent support keeping the status quo now and considering unification later, according to a poll conducted by National Chengchi University in March. Instead, domestic political divisions are over adopting a Chinese or Taiwanese identity, and whether the country should drop the ROC label and formalise its independence as Taiwan.

US to deploy aircraft carrier to send message to Iran Move follows end to sanction waivers on Iran oil AIME WILLIAMS

he US will deploy an aircraft carrier and bomber task force to the US Central Command region to send “a clear message to the Iranian regime” that any attack on US interests will be met with “unrelenting force”, national security adviser John Bolton said on Sunday. Mr Bolton said that while the US was not “seeking war” with Iran, it was “fully prepared to respond to any attack, whether by proxy, the Islamic Revolutionary Guard Corps, or regular Iranian forces”. Although it is unclear where the carrier will be sent specifi-

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cally, US Central Command is responsible for the country’s military operations in Egypt, the Middle East and central Asia. The move comes as the US significantly escalates pressure on Tehran. In recent weeks Washington has made a bid to reduce Iran’s oil exports “to zero” by ending all sanctions waivers for countries importing crude. The US has also recently branded Iran’s Revolutionary Guard a foreign terrorist organisation, the first time it formally labelled part of another country’s government as terrorists. Mr Bolton said the move by the US to deploy its USS Abraham Lincoln Carrier Strike Group and bombers was a re@Businessdayng

sponse to “a number of troubling and escalatory indications and warnings”. The National Security Council did not respond to requests for further detail. President Donald Trump withdrew from the Obama-era Iran nuclear deal in May 2018 and moved to reimpose sanctions. In April, the IMF reported that US sanctions against Iran have triggered a collapse in economic growth, pushing the Islamic republic into a deep recession and lifting inflation towards 40 per cent. The fund linked its forecast of a 6 per cent contraction in Iran this year with Mr Trump’s efforts to tighten an economic squeeze on the country.

Tuesday 07 May 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Rising cost of government debt unsettles investors in Nigeria Lagos makes push for tax revenue, as debt-servicing eats up big portion of receipts JONATHAN WHEATLEY

rom the potholed and often barely-paved streets of Lagos to the precarious and accidentprone highways of the interior, foreign investors visiting Nigeria are reminded repeatedly of the country’s urgent need for capital. Many of them continue to be willing lenders, despite the signs that their money may not always have been put to the most productive use. Increasingly, however, analysts are raising questions over the proceeds of bond sales — and whether the public finances of the biggest economy in Africa, according to the IMF, are as sustainable as they appear. “They have borrowed quite a bit, but where is the money being spent?” asks Andrew Roche, managing partner of Finexem, a Paris-based financial consulting firm. He worries that the government has been using borrowed cash to patch up holes in budgets, rather than investing in infrastructure or industry, or in efforts to diversify the economy from a heavy dependence on oil. In a world of cheap and abundant money, Nigeria has been among the big beneficiaries of a global hunt for yield. The country sold its sixth eurobond last November, raising $2.9bn in maturities of seven, 12 and 30 years in an issue that was more than three times oversubscribed. Demand is strong in local markets, too. On April 25, the government raised 100bn naira ($326m at the official rate) in an auction that included a debut 30-year local currency bond that was four times oversubscribed. Yet, Mr Roche says, some investors may have overlooked some worrying metrics. In a presentation to investors in Washington last month, Zainab Ahmed, finance minister, stressed that Nigeria’s government debt, while it has risen in recent years, was still equal to just 19 per cent of gross domestic product in 2018. That is well below the average for emerging markets of just under 50 per cent of GDP, according to the Institute of International Finance. But the same presentation shows that the amount spent on servicing government debt, while it has fallen as a share of the government’s gross revenue collection, has risen to an alarming two-thirds of revenues retained by the central government after it has distributed funds to the states, as mandated by Nigeria’s federal system. That is a pot from which debt repayments — and all other federal spending — must be made. Ravi Bhatia, a sovereign analyst at S&P Global Ratings, says the problem is best understood the other way round. “The issue is not so much that interest payments are high,” he says. “The main problem is that federal revenues as a share of GDP are just very low. They are literally reliant on oil and little else.” Indeed, IMF data show that Nigeria’s general government revenues were equal to just 5.7 per cent of GDP

last year, far below the average of 22 per cent of GDP for the other 44 subSaharan countries for which the IMF collects data. Ms Ahmed stressed in her April presentation that revenue generation was her priority. She also recognised that last year, actual revenues fell short of the budget target by almost 30 per cent. “Peer comparisons of our ability to convert GDP to revenue for capital and social investment . . . show that we have a lot to do,” she said. In its latest report on Nigeria published last month, the IMF also emphasised the need for “revenuebased consolidation” to lower the ratio of interest payments to revenue and said “non-oil revenue mobilisation” should be the top priority in “an urgent reform package”. Yet big questions remain about how that might be done. One of the government’s stated priorities is to raise more revenue through value added tax, which generates the equivalent of just 0.8 per cent of GDP according to Ms Ahmed’s figures, compared with 7 per cent of GDP in South Africa and 6.6 per cent in neighbouring Benin. Raising the rate of VAT, however, has met resistance. “The economy is suffering, so to slap on another tax will not be very popular,” says Mr Bhatia at S&P. “Hence the reluctance in pushing it through. Essentially, [President Muhammadu] Buhari is not a big reformer — he’s a slow-moving, cautious reformer, if at all.” Charles Robertson, chief economist at Renaissance Capital, an investment bank that specialises in emerging markets, argues that to develop a large manufacturing sector any emerging economy needs electricity, adult literacy and investment. But he also argues that, while the first two of those take time to deliver, the third can be used to kick-start growth, as has happened in Ethiopia. While that east African country has a smaller manufacturing sector than Nigeria, it has a much higher level of investment — the equivalent of 38 per cent of GDP last year, according to the IMF, compared with just 13 per cent in Nigeria. Ethiopia’s GDP growth came to 8.5 per cent, more than four times that of Nigeria. Mr Robertson says one impediment to foreign direct investment in Nigeria is the uncertainty generated by the government’s system of multiple exchange rates. While the government and some favoured businesses have access to the official rate of 306.95 naira to the US dollar, others must use a separate managed rate, currently about 362 to the dollar. “There are a host of reasons not to put FDI into Nigeria,” he says, “but unifying the exchange rates would help to normalise the country.” One danger of Nigeria’s managed floating rate, he notes, is that the currency can become artificially overvalued. He estimates that “fair value” for the naira is about 440 to the dollar, and will be about 470 by the end of the year, opening a discount of about 30 per cent to the managed rate. www.businessday.ng

Semiconductors, materials take a hit on trade fears MAMTA BADKAR

emiconductors and tech stocks suffered a blow on Monday after US president Donald Trump threatened to impose 25 per cent tariffs on nearly all Chinese imports this week. Mr Trump’s threat is viewed as driving pressure on Beijing to make concessions on trade ahead of what is considered to be a make-or-break round of negotiations scheduled to begin on Wednesday. Tech investors are viewing the President’s remarks “with some clear trepidation this morning as this remains the biggest overhang on the market and specifically tech stocks such as Apple in the high stakes poker game around US/China trade talks,” said Dan Ives, an analyst at Wedbush.

The Philadelphia Semiconductor index, which tracks 30 companies that design, distribute and manufacture semiconductors, was down 2.4 per cent. Meanwhile, the S&P 500 semiconductors sub-industry index fell 2 per cent. Here’s how some of the largest tech and semiconductor names were faring: Apple shares were down 2 per cent to $207.85 Advanced Micro Devices shares fell nearly 4 per cent to $27.15 Intel shares fell 1 per cent to $50.95 Shares in Broadcom were down nearly 2 per cent to $310.03 Shares in Nvidia fell 3.3 per cent to $177.02 Qualcomm shares were down 2.2 per cent to $87.32 Materials stocks also took a hit with the sector down 1.7 per cent —

led by a 4 per cent drop in chemicals group DowDuPont to $33.56. The tariff fears sideswiped markets and prompted a sell-off across sectors. Auto companies took a hit as GM shares were down 3 per cent to $37.74, Fiat Chrysler shares were off 3 per cent to $15.39 and Ford shares slid 1.3 per cent to $10.27. US steel and aluminium stocks were also down for the count. US Steel shares fell 3 per cent to $16.37, Alcoa shares tumbled 4 per cent to $25.53 and AK Steel shares fell 2 per cent to $2.50. Meanwhile, shares of US-listed Chinese stocks were also punished with Alibaba shares down more than 4 per cent to $186.71, Baidu shares declining 3 per cent to $162.17 and JD.com shares falling 6 per cent to $28.28.

Venture capital: funding bounds There are no special goggles to see through murky ownership structures

rivate investments require not only the long view but a bit of Xray vision. Betting on a start-up means multiple rounds of funding. From afar, it seems easy enough to deduce the value of the enterprise by taking the latest investment multiplied by outstanding shares. Think again. Headlines citing the billions of dollars a start-up is valued at in its last round of funding can be misleading. For a start, nascent companies often have different share classes. Later investors putting up more capital get preference in the case of any liquidation. These later rounds do not reflect the valuation for all shareholders.

Funding round valuations only reflect the last investment, not previous stages. Most of us dream of getting in early for the next Apple or Netflix. But early stage investors may well find themselves with less protection should the venture go out of business. All shares are not created equal. First in does not mean first out in the case of trade sales or liquidations. Investors putting in money last should get the first call on any sale funds. This applies to investment “exits” too. In an initial public offering each holding would normally convert into common shares — giving every shareholder the same price. But the company may receive a private

bid (trade sale) instead of an initial public offering — particularly if the enterprise collapses. Then different rules apply. Investors in start-ups often do not realise the inequity of their positions until it is too late. That does not diminish the popularity of venture capital funding. In the year to April 2018, UK venture capital trusts, designed for retail investors, raised £720m. This is the most in more than a decade. But visibility on the structure of early stage investments is even less clear in a fund. There are no special goggles to see through the murky ownership structures in venture capital investment.

Telenor and Axiata to create pan-Asian powerhouse with merger Malaysian group and Asian arm of Norwegian rival will create operator with 300m customers RICHARD MILNE

elenor, the Norwegian telecoms operator under pressure from an activist investor, is proposing to merge its Asian assets with those of Malaysian rival Axiata, creating a group with 300m customers from Thailand to Indonesia. The merged group would have $13bn in annual revenues and be the biggest telecoms operator in south-east Asia while the deal would be one of the largest transactions on the continent outside of China or Japan. Telenor would own 56.5 per cent

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of the combined entity while Axiata, whose main shareholder is the Malaysian sovereign wealth fund, would hold 43.5 per cent under the proposed deal, which would involve no cash changing hands. Both groups have operations in Malaysia, Thailand, Bangladesh, Pakistan and Myanmar. Axiata is also present in India, Indonesia, Sri Lanka, Cambodia and Nepal. The Bangladesh operations of Axiata are excluded from the deal. Telenor, majority-owned by the Norwegian government, has sold off a number of stakes in central and eastern Europe as it seeks to concentrate on the Nordic and @Businessdayng

Asian regions after being embroiled in a damaging bribery scandal in Russia. It agreed to buy a majority stake in Finnish telecoms challenger DNA last month for €1.5bn, and makes more than half of its revenues from Asia. Telenor is also facing a campaign by Constructive Capital, a little-known activist investor from Norway, as first reported by the Financial Times. The Norwegian telecoms operator has hinted it may bow to some of the activist’s demands, such as increasing its debt levels and looking at options for its mobile infrastructure assets.

Tuesday 07 May 2019

BUSINESS DAY

ANALYSIS

Brazil’s Bolsonaro keeps it in the family

The president trusts few people and so with his sons is building a dynasty in Latin America’s largest nation BRYAN HARRIS, ANDRES SCHIPANI AND CAROLINA UNZELTE

ne is known as the “pit bull”. Another is embroiled in a corruption scandal. The third is a rightwing gun enthusiast who is seeking to spread a populist movement throughout Brazil and Latin America. More than four months into the administration of President Jair Bolsonaro, his three sons have emerged as a powerful force that is reshaping Brazilian politics. This has fuelled fears that they exert undue political influence and are consolidating a new political dynasty in a continent with a long and contentious history of family politics. “The sons have unprecedented influence,” said Aline Souza, an analyst with consultancy Prospectiva. “The Bolsonaro government has already broken with traditional modes of governance. One example of this is precisely this relationship with the children.”

tory in October. Since then, the men have moved into politics, taking with them a shoot first and ask questions later mentality. Front and centre in recent weeks has been Carlos Bolsonaro, a 36-yearold whose fierce loyalty to his father earned him the “pit bull” moniker. Officially a city councillor in Rio de Janeiro, Carlos co-ordinated his father’s social media campaign during the election and is widely credited with helping the once outsider candidate dramatically expand his voter base.He has since emerged as a de facto spokesman for the Brazilian president, utilising social media to hound potential adversaries, including most recently vice-president Hamilton Mourão. In a tweet last week, Carlos, slammed Bill de Blasio, the mayor of New York, after the Brazilian president decided not to visit the city. The decision followed a public outcry from environmentalists, gay activists and Mr de Blasio himself over

Jair Bolsonaro’s sons Eduardo, Carlos and Flávio have been outspoken since the inaugeration of their father in January © Reuters/AFP

“The perfect word is dynasty,” added Esther Solano, a professor of politics at the Federal University of São Paulo. “The situation we have is that we voted for a president, but in fact his children have governmental powers. We have a family clan in the government.” One reason the issue is controversial is because Flávio, Carlos and Eduardo — the three Bolsonaro sons in descending age order — have been so outspoken since the inauguration of their father in January. In the US, Ivanka Trump and Jared Kushner, the president’s daughter and son-in-law, maintain a lowprofile in comparison to the Bolsonaro sons, who have stormed on to Brazil’s political stage with a combination of social media invective and a visible presence in policymaking. “They have the last word on everything. That is just a matter of fact. The president trusts no one else,” said William Waack, a political commentator. “This is not gossip. Bolsonaro himself talks publicly about how important his sons are.” The men wield power in myriad ways, from publicly setting out policy priorities to speaking on behalf of their father, said Malu Gatto, a Brazilian assistant professor at UCL. “They are seen as representatives of their father by many in government,” she added. Raised on a military base, the sons were using firearms from the age of five, according to their father, a former army captain who was elected president in a landslide vic-

the Brazilian-American Chamber of Commerce’s move to honour Mr Bolsonaro at a gala. “Jair Bolsonaro needs to stop anyone occupying the centre ground. He can only maintain power if there are no centrists to challenge him. That is what Carlos is doing. He shapes the debate,” said Eduardo Mello, a professor at the Getúlio Vargas Foundation. Carlos’ domestic role is complemented on the international front by his younger brother Eduardo. A federal deputy and chair of the house foreign affairs committee, Eduardo has adopted the role of de facto foreign minister, travelling to the US, Hungary and Italy in recent months to build relations with likeminded rightwing populists. His office in Brasília is adorned with framed rifle rounds, bobblehead figurines of Ronald Reagan and Donald Trump and a sports cap that reads “Trump 2020”. In February he pledged to “reclaim sovereignty from progressive globalist elitist forces” when he was named Latin America leader of The Movement, the populist group being spearheaded by US ideologue Steve Bannon. He also won high praise from Donald Trump for orchestrating a meeting between the Brazilian and US presidents in March. “Eduardo Bolsonaro has this very strong foreign policy agenda. The visit to the White House was very symbolic. He was the one alongside his father then, not the actual foreign minister,” said Ms Souza. www.businessday.ng

Why US Democrats don’t want to mention Trump’s (trade) war The dispute with China has hit farmers but presidential hopefuls are reluctant to campaign against it DEMETRI SEVASTOPULO AND JAMES POLITI

ave Walton is puzzled. The Iowan farmer cannot understand why most of the Democratic presidential contenders swarming the state are not talking about his big economic concern: the impact of the USChina trade war. “I haven’t heard a lot of them speak much at all about trade,” says Mr Walton on his farm near the Mississippi river. “We’re an agriculture state and we depend on exports . . . To not talk about trade in Iowa is a big mistake.” The tit-for-tat tariffs imposed by both sides over the past year have hit farmers in Iowa, which helped elect Donald Trump in 2016, and other agricultural states in the Midwest. Yet Democratic contenders have been slow to address the issue, partly because farmers tend to vote Republican. They are also concerned about appearing to be soft on China after Mr Trump’s tough stance on Beijing in the 2016 presidential race resonated with voters. When Mr Walton, 53, first spoke to the Financial Times in late March, he was hopeful that the US was on the verge of signing a deal with Beijing that would eliminate Chinese tariffs on soyabeans — a key crop in Iowa — imposed after Mr Trump opened the trade war by slapping tariffs on Chinese products. US officials were preparing to meet their Chinese counterparts in Washington this week for more discussions, following talks in Beijing last week. However, Mr Trump said on Sunday he would increase the existing 10 per cent tariff on $200bn of Chinese goods to 25 per cent on Friday, and that $325bn of additional goods that were currently “untaxed” would “shortly” be subject to tariffs of 25 per cent. The threat, which has angered Beijing, was made, said the president, because talks were moving “too slowly”. As the trade war continues, Mr Walton, whose family has farmed in the area since 1835, says the situation is deteriorating rapidly. He adds that his friends across the Midwest are warning about a potential spike in farm bankruptcies. “[They] all know farmers who are bankrupt but just don’t know it yet because the bankers are hoping things will improve and have extended their credit lines,” says Mr Walton, who calls himself an independent. “If that changes, many farm operations will be left without money and few choices. It’s bad, really bad.” Speaking in Dubuque, a city in eastern Iowa, the week after launching his presidential cam-

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paign in March, Beto O’Rourke, the former El Paso lawmaker and one of 21 Democratic White House contenders, said he worried about the long-term impact of tariffs. China has already replaced much of its US soyabean imports by turning to Brazil, and although it has committed to buying at least 20m tonnes of US soyabeans to sweeten the talks, farmers say their big concern is that the longer the trade war continues the higher the odds of losing the market for good. “Thirty per cent of what is grown in this state is bound for foreign markets. When those markets close down because of the tariffs we’ve levied, and the reciprocal tariffs that our farmers face . . . those buyers will find other sellers from other countries,” Mr O’Rourke told the Financial Times. At the Red Berry Café in Muscatine, New York senator Kirsten Gillibrand — another of the Democratic hopefuls — took aim at Mr Trump, saying that when he “creates a trade war with China he’s crushing our local farmers and it’s making it impossible for them to make ends meet”. Yet while the Democratic contenders were willing to discuss the trade war when asked, most have not made it a prominent issue in the campaign in Iowa, which holds the first caucuses in the 2020 primary race next February and is an important swing state in the general election. One Democratic strategist says this reticence is explained by the conundrum the candidates face: it is “easy to say” that they do not like Mr Trump’s trade war but much more difficult to explain how they would confront China. “There will be virtual unanimity that tariffs are bad, but there will also be a strong view that we have to get tough on China and that going forward we need better trade deals,” he says. “On both of those propositions, Democrats will be saying things that at least on the face [of it] don’t sound too different from Trump.” Other US business sectors are nervous about the rise in protectionism and the impact it might have on their industries, but agriculture has the most to lose. With a relatively stagnant domestic market, US farmers have depended heavily on exports to sustain profits and prices — and China has played a critical role over nearly two decades. When China joined the World Trade Organization in 2001, US agricultural exports to the country were close to zero. By 2012, they were worth $30bn. While farm exports to China fell to $25bn in the final year of the Obama administration, they col@Businessdayng

lapsed in 2018 after China imposed its retaliatory tariffs, falling to $13bn. The value of soyabean exports — the most important agricultural commodity to China — plunged by 75 per cent to $3bn from $12bn the previous year. Even before the tariffs were introduced, farmers were struggling with mounting debt levels which in nominal terms is expected to hit a total of $426bn this year. Yet any backlash over the tariffs appears restrained. According to a tracking poll from Morning Consult, Mr Trump’s approval rating in Iowa is 43 per cent, marking the same level of support he had in the state before the trade war. The Democrats face the same conundrum on agriculture as on industrial products such as steel: how to take issue with Mr Trump without losing the chance to win back Democrats who liked his protectionist stance and pledge to reduce the US trade deficit with China. “At some point the Democrats who are serious [about winning] in Iowa are going to have to talk about trade, but it’s hard,” says David Salmonsen, head of congressional relations at the American Farm Bureau, the biggest agricultural lobby group. “What they say there could come back and bite them in other parts of the country. You can’t campaign to get rid of the tariffs [in Iowa], and then go to Michigan where they expect them to bring back manufacturing.” Yet some Democrats argue that the party has a chance to win over Republicans who are frustrated by the tariffs, just as Mr Trump attracted Democrats angry about certain trade deals, such as the North American Free Trade Agreement, that were signed during the Clinton and Obama administrations. Amy Klobuchar, the Minnesota senator who is also running for president, argues that Democrats have an opportunity to attract disillusioned Republicans. She says her strategy of talking about the impact of the trade war on soyabean farmers has won her the support of Republican farmers in her home state. Chart showing Trump’s net approval rating A retired worker in Davenport, Kevin O’Brien, agrees. He says that although the chances of Republican farmers voting for a Democrat may be slim, their anger at the trade war might cause them not to vote at all. Others remain sceptical. Tom Furlong, whose family came to Muscatine in 1856, says few Republican farmers would vote for a Democrat, unless the situation was really catastrophic. For now, that has been avoided at a cost of $12bn in subsidies that the administration promised to farmers last year to help ease their pain.

Tuesday 07 May 2019

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Monday 06 May 2019 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. 247,039.32 6.95 0.72 209 23,615,847 UNITED BANK FOR AFRICA PLC 229,136.12 6.70 -0.75 205 36,996,911 ZENITH BANK PLC 656,186.72 20.90 -0.48 329 10,485,910 743 71,098,668 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 265,625.17 7.40 -0.68 158 4,762,656 158 4,762,656 901 75,861,324 BUILDING MATERIALS DANGOTE CEMENT PLC 3,084,331.84 181.00 0.56 57 75,994 LAFARGE AFRICA PLC. 177,185.75 11.00 - 81 328,686 138 404,680 138 404,680 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 341,239.00 579.90 - 4 595 4 595 4 595 1,043 76,266,599 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 - 1 950 1 950 1 950 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 1 950 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 68,681.52 72.00 - 8 5,277 PRESCO PLC 58,000.00 58.00 - 17 57,568 25 62,845 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,860.00 0.62 - 6 96,950 6 96,950 31 159,795 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 741.24 0.28 - 1 646 JOHN HOLT PLC. 182.90 0.47 - 3 15,970 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 50,809.99 1.25 1.60 162 17,157,399 U A C N PLC. 20,169.08 7.00 - 98 3,389,605 264 20,563,620 264 20,563,620 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 35,574.00 26.95 - 19 47,770 ROADS NIG PLC. 165.00 6.60 - 0 0 19 47,770 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 3,975.55 1.53 -8.93 9 200,000 9 200,000 28 247,770 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 11,196.18 1.43 - 6 68,699 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 1 888 GUINNESS NIG PLC 109,519.14 50.00 - 45 72,833 INTERNATIONAL BREWERIES PLC. 171,917.24 20.00 - 11 126,850 NIGERIAN BREW. PLC. 528,195.38 66.05 - 53 336,620 116 605,890 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 88,750.00 17.75 3.80 343 7,208,984 DANGOTE SUGAR REFINERY PLC 168,000.00 14.00 -0.36 52 311,695 FLOUR MILLS NIG. PLC. 66,221.13 16.15 - 102 1,693,143 HONEYWELL FLOUR MILL PLC 9,357.63 1.18 - 13 274,972 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 47,557.42 17.95 - 19 42,395 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 529 9,531,189 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 22,162.78 11.80 - 34 240,593 NESTLE NIGERIA PLC. 1,204,837.50 1,520.00 - 30 32,566 64 273,159 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,990.87 3.99 - 7 5,110 7 5,110 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 35,535.77 8.95 - 30 96,793 UNILEVER NIGERIA PLC. 178,095.17 31.00 - 33 206,645 63 303,438 779 10,718,786 BANKING ECOBANK TRANSNATIONAL INCORPORATED 183,495.51 10.00 - 48 5,624,639 FIDELITY BANK PLC 55,052.11 1.90 -0.52 80 5,340,536 GUARANTY TRUST BANK PLC. 971,228.91 33.00 -1.35 193 5,149,103 JAIZ BANK PLC 15,910.69 0.54 -3.70 28 16,318,127 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 76,294.61 2.65 -1.89 19 1,672,263 UNION BANK NIG.PLC. 203,845.27 7.00 -1.41 37 541,011 UNITY BANK PLC 9,351.47 0.80 - 6 236,942 WEMA BANK PLC. 28,159.36 0.73 -1.35 29 2,157,226 440 37,039,847 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 1 1,000 AIICO INSURANCE PLC. 5,474.86 0.79 1.28 27 1,454,851 AXAMANSARD INSURANCE PLC 21,000.00 2.00 - 13 235,000 CONSOLIDATED HALLMARK INSURANCE PLC 2,357.70 0.29 - 1 1,000 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 2,945.90 0.20 - 9 966,649 GOLDLINK INSURANCE PLC 1,501.48 0.33 -8.33 3 2,561,525 GUINEA INSURANCE PLC. 1,228.00 0.20 - 2 200 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,197.03 0.30 3.33 20 2,017,670 LAW UNION AND ROCK INS. PLC. 1,976.31 0.46 - 4 43,185 LINKAGE ASSURANCE PLC 4,080.00 0.51 - 8 340,211 MUTUAL BENEFITS ASSURANCE PLC. 2,458.00 0.22 - 4 87,614 NEM INSURANCE PLC 12,831.62 2.43 9.95 30 897,247 NIGER INSURANCE PLC 1,547.90 0.20 - 5 41,847 PRESTIGE ASSURANCE PLC 2,529.80 0.47 - 9 76,144 REGENCY ASSURANCE PLC 1,667.19 0.25 8.70 6 1,357,000 SOVEREIGN TRUST INSURANCE PLC 2,085.21 0.25 8.70 39 5,860,503 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 4 116,956 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 23 483,200 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 4 710,500 VERITAS KAPITAL ASSURANCE PLC 3,050.67 0.22 - 0 0 WAPIC INSURANCE PLC 5,219.27 0.39 5.41 32 2,122,497 244 19,374,799 MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,224.16 1.41 - 22 190,707 22 190,707

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 3,780.00 0.90 - 1 1 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 0 0 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 1 1 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 8,000.00 4.00 - 46 570,858 CUSTODIAN INVESTMENT PLC 37,349.84 6.35 - 10 63,001 DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 37,625.15 1.90 -2.56 69 3,884,686 ROYAL EXCHANGE PLC. 1,183.44 0.23 - 4 177,564 STANBIC IBTC HOLDINGS PLC 445,464.05 43.50 - 12 20,881 UNITED CAPITAL PLC 15,480.00 2.58 2.38 62 1,802,273 203 6,519,263 910 63,124,617 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 888.28 0.25 4.17 6 429,100 6 429,100 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 1 1,000 1 1,000 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 6,900.00 4.60 - 14 93,734 GLAXO SMITHKLINE CONSUMER NIG. PLC. 10,762.89 9.00 - 13 35,181 MAY & BAKER NIGERIA PLC. 3,968.04 2.30 1.77 14 409,110 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,272.44 0.67 - 1 260 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 42 538,285 49 968,385 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 852.48 0.24 9.09 9 30,675,909 9 30,675,909 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 1 35 NCR (NIGERIA) PLC. 648.00 6.00 - 1 15 TRIPPLE GEE AND COMPANY PLC. 346.47 0.70 - 1 100 3 150 PROCESSING SYSTEMS CHAMS PLC 2,301.07 0.49 8.89 35 4,103,688 E-TRANZACT INTERNATIONAL PLC 11,088.00 2.64 - 1 300 36 4,103,988 48 34,780,047 BUILDING MATERIALS BERGER PAINTS PLC 2,130.20 7.35 - 8 33,180 CAP PLC 23,800.00 34.00 - 16 5,143 CEMENT CO. OF NORTH.NIG. PLC 201,095.56 15.30 -3.47 35 329,922 FIRST ALUMINIUM NIGERIA PLC 886.35 0.42 - 2 4,010 MEYER PLC. 313.43 0.59 - 1 63,998 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,959.74 2.47 - 1 400 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 63 436,653 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 3,258.45 1.85 -1.07 14 263,356 14 263,356 PACKAGING/CONTAINERS BETA GLASS PLC. 28,498.40 57.00 1.79 14 137,015 GREIF NIGERIA PLC 388.02 9.10 - 0 0 14 137,015 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 91 837,024 CHEMICALS B.O.C. GASES PLC. 1,731.58 4.16 - 1 1,406 1 1,406 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 1 15 1 15 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 55.00 0.25 - 3 3,964 3 3,964 5 5,385 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 2,254.57 0.36 -7.69 231 58,614,436 231 58,614,436 INTEGRATED OIL AND GAS SERVICES OANDO PLC 60,292.35 4.85 -1.03 96 1,943,209 96 1,943,209 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 63,104.17 175.00 -1.13 31 350,589 CONOIL PLC 13,948.44 20.10 - 29 97,082 ETERNA PLC. 5,281.79 4.05 - 44 391,936 FORTE OIL PLC. 45,521.71 34.95 - 10 23,280 MRS OIL NIGERIA PLC. 6,354.80 20.85 - 3 1,176 TOTAL NIGERIA PLC. 55,002.54 162.00 - 35 31,854 152 895,917 479 61,453,562 ADVERTISING AFROMEDIA PLC 1,997.57 0.45 - 1 500 1 500 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 376.43 0.32 - 1 6,870 1 6,870 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,242.23 5.50 - 1 50 TRANS-NATIONWIDE EXPRESS PLC. 361.01 0.77 - 1 200 2 250 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 1 1,000 1 1,000 HOTELS/LODGING CAPITAL HOTEL PLC 4,723.78 3.05 - 1 50 IKEJA HOTEL PLC 3,326.07 1.60 -8.57 4 151,990 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 41,042.18 5.40 - 1 49 6 152,089 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 181.44 0.30 - 2 100,200 LEARN AFRICA PLC 1,033.74 1.34 - 2 14,452 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 793.79 1.84 - 4 23,366 8 138,018 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 497.31 0.30 - 11 49,600 11 49,600 SPECIALTY INTERLINKED TECHNOLOGIES PLC 764.54 3.23 - 0 0 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 0 0 0 0

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BUSINESS DAY Tuesday 07 May 2019 www.businessday.ng

CEO in focus

The CEO under whose watch Fidelity’s customers’ deposits crossed N1trn mark focuses on lending to the retail sector of the market. Fidelity’s total asset has grown some 10 percent to N1.7 trillion as at December 31, 2018, from N1.1 trillion at the end of 2013, while customers’ deposits have grown at an average of 4.5 percent from N806 billion in 2013 to N979.4 billion at the end of 2018. Customers’ deposits for the bank currently sit at N1.01 trillion, according to data obtained from the first quarter scorecard of the bank. In 2017, Fidelity Bank successfully raised $400 million five-year Eurobond with a 10.50 percent coupon which is the second-largest combined new issue and liability management offering ever by a Nigerian issuer after Ecobank. Groomed at two prominent top-tier bank in Nigeria – Guaranty Trust Bank and United Bank for Africa – Okonkwo came up with a five-year growth plan in 2017 that would see the bank join the league of other lenders in the tier-1 space by 2022.

MICHEAL ANI & DIPO OLADEHINDE

hen he first entered the banking arena, those who accurately predicted a brilliant future in the industry for Nnamdi Okonkwo didn’t need to have looked into a crystal ball. Even in the tough terrain that is Nigeria’s banking industry, paying attention to what counts and spending time and energy on what’s important will take one to the pinnacle. With 20 years of experience in banking, Okonkwo, the CEO under whose leadership Fidelity Bank customers’ deposit hit N1 trillion, is today one of the finest bankers in the country, having worked assiduously to shift Fidelity Bank from the margins to the centre of the banking ecosystem in the country. Okonkwo left his breakthrough role in UBA and joined Fidelity Bank plc as executive director in charge of the bank’s businesses in Southern Nigeria in 2009, a position he held until January 1, 2014, when he was appointed managing director/CEO of Fidelity Bank. Reorienting the organisation to focus on retail and digital banking, Fidelity has blossomed, a late-blooming flower that grows latest and smells sweetest. Beginning from last year, Fidelity Bank began to drive a five-year strategic plan that would see it migrating to a tier-1 bank status in the country by 2022, growing organically but with an eye on inorganic growth opportunity. In his sixth year as chief executive of the bank, Nnamdi Okonkwo has taken Fidelity Bank to an enviable height among the tier-2 lenders in Nigeria. “This is my sixth year as chief executive of the bank and by God’s grace we are driving the plan and the numbers show that we are making steady progress, year-on-year, in terms of balance sheet size, deposit and profitability,” Okonkwo said in an exclusive interview with BusinessDay. With a strategic business focus on niche corporate banking, Small and Medium-scale Enterprise, retail and

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Nnamdi Okonkwo

electronic banking, the bank has grown its revenue by an average of 8.4 percent since 2014, while profit before tax (PBT), a metric which measures a firm’s profitability, also grew by an average of 29.6 percent in the same period under review. “As we are doing this, we are keeping our eyes on the safety of the bank. We have thus kept our eyes on the bank’s capital adequacy, liquidity ratios, risk management framework, governance and compliance practices. For instance, as a result of our prudence in building up capital, we were able to cushion the impact of the implementation of IFRS 9 so we took the charge outright,” Okonkwo said. In order to drive growth in the retail

space, the firm has leveraged on the usage of high-end digital technology with over 42 percent of its customers enrolled in the bank’s mobile/internet banking products. Similarly, more than 81 percent of the total transactions are done on its digital platforms resulting in 25 percent of feebased income coming from digital banking. Recently, the bank announced the appointments of three new executives by its board of directors as part of corporate realignment aimed at repositioning the bank for further growth. These appointments, the bank said, would help in strengthening the corporate market for the firm even as it

This growth, according to him, would be driven organically even as the bank keeps its key fundamentals including its capital adequacy, liquidity ratios, and risk management framework, governance and compliance practices in line with regulatory threshold. Both in branding and products, Okonkwo’s innovations have earned Fidelity Bank respect and today, the bank is ranked among leaders in the Nigerian banking industry with presence across cities in the country. Looking at the bank before and after Okonkwo’s accession to the top post is like comparing stone to fine jade, red soil to gleaming amethyst.

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