BusinessDay 07 Nov 2019 by BusinessDay

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news you can trust I **THURSDAY 07 NOVEMBER 2019 I vol. 19, no 430

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Border closure takes toll as manufacturers, exporters suffer Dangote, Cadbury, Unilever biggest hit ODINAKA ANUDU &GBEMI FAMINU

he closure of Nigeria’s border with Benin Republic may be temporary, but it is hurting manufacturers and exporters who are unable to

bring in raw materials or export their finished products. The biggest hit is Dangote Group whose over 100 containers of inputs and products are stuck at Nigeria-Benin border, according to sources close to the group. Sources at Cadbury, a bever-

age maker, said the company has been unable to bring in c h o c o l a t e s f ro m i t s G h a n a plant and cannot export to other markets on the continent. Cadbury exports Bournvita and other beverages mainly to the African market.

Unilever, a fast-moving consumer goods firm, is also unable to br ing in inputs and products and can’t export to earn foreign exchange, BusinessDay gathered. Aarti Steel, a major steel exporter to Africa, has suspended

DIPO OLADEHINDE

Angola’s 3-year recession warning Nigeria could easily slip again

ith debt to GDP at 80.5 percent, weak fiscal consolidation and significant dollar-denominated debt, Angola has struggled to push its way out of the lingering economic recession and in 2018, was advised by the International Monetary Fund to impose austerity measures such as reducing public debt, scrapping fuel subsidies and weakening its currency.

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Dangote refinery will decrease Africa’s crude export to 5.4m in 2025 – OPEC

Herbert Wigwe (4th l), group managing director/CEO, Access Bank plc; Oba Ewuare II, Oba of Benin (m), and other palace chiefs during a courtesy visit to the Oba’s palace in Benin, yesterday.

SEGUN ADAMS

its export segment till the border reopens, with huge implications on jobs and foreign exchange, a source close to the company told BusinessDay. Analysts foresee a big hit on

The reforms which followed a $3.7bn Extended Fund Facility to Angola, Africa’s second-biggest oil producer, is expected to address some challenges the country has, improving IMF outlook on its growth next year to 1.2 percent from -0.3 percent in 2019. “Macroeconomic stability has been restored and maintained through a more flexible exchange rate regime, restrictive monetary policy, and fiscal consolidation,” the World Bank noted earlier this year.

Although out of a recession, Nigeria, which is Africa’s biggest oil producer, shares similar characteristics with Angola and has barely grown its economy since 2017, averaging less than 2 percent annually. Angola’s GDP on the other hand has contracted for the past three years. Angola’s debt-to-GDP ratio is forecast at 90 percent for 2019. The rising debt burden for Nigeria, though at 17.5 percent of GDP in 2018, has remained worrisome as recurrent expen-

diture and debt servicing take prominence in the new budget plan. Nigeria has earmarked N2.45 trillion or about 24 percent of its 2020 budget estimates for debt servicing, just N10m less than capital budget. Public debt, according to the Debt Management Office, stood at N25.7trn in half-year with N8.32trn external debt and N17.37trn domestic debt. External vulnerability has

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he coming of Dangote refinery is expected to reduce Africa’s crude export to 5.4 million barrel per day in 2025, says an outlook report by Organisation of Petroleum Exporting Countries (OPEC). In its closely-watched annual World Oil Outlook (WOO), the Middle East-dominated producer group said significant additions are also expected in Africa with one large project in Nigeria accounting for the largest share. “Due to the expected startup

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Inside Inside details of NERC’s order to cancel licences of 8 DisCos P. 2

Thursday 07 November 2019

BUSINESS DAY

news NDIC extends insurance coverage to licensed PSBs

…as Mobile Money Operators record 9.2m subscribers HOPE MOSES-ASHIKE

T Muyiwa Akinyemi (l), general manager, corporate bank, United Bank for Africa (UBA) plc, and Kola Olayinka, regional commercial manager, West Africa, British Airways (BA), at a signing collaboration agreement between UBA and BA, to reward customers who purchase their flights tickets using UBA cards with discount up to 15%, in Lagos.

Inside details of NERC’s order to cancel licences of 8 DisCos ISAAC ANYAOGU

he Nigerian Electricity Regulation Commission (NERC), the body that regulates the electricity sector, will go ahead with the process that could lead to the cancellation of licences of eight electricity distribution companies (DisCos) accused of remitting poorly to the market even after they withdrew their petitions against the regulator’s review of how much they could remit back to the market. The DisCos’ petitions against the regulator’s decision led to the order to cancel their licences, operators say. In August this year, NERC issued the 2016-2018 Minor Review of Multi Year Tariff Order (MYTO) 2015 and Minimum Remittance Order for the year 2019 (Minor Review). The orders impose at least 30 percent increase in electricity tariffs for consumers while also raising remittance threshold to

the market by the DisCos. The DisCos said the order would not achieve costreflective tariff because it did not factor in technical and operating losses they suffer in the business before arriving at the rate. The DisCos also said that NERC has not accounted for the years 2015 and 2016 which were adversely affected by events outside their control. Government ministries and departments were not paying electricity bills. There were general elections in 2015 and the economy entered a recession in 2016, factors that contributed to the regulator’s decision to keep tariffs constant even when it could not guarantee commercial returns for operators. NERC said the DisCos could recoup shortages in both years in the future, a mechanism called ‘sculpting’, only the prices didn’t move until July 2019. The same year, the regulator imposed on DisCos the obligation to remit

more to the market. This is the substance of the DisCos’ petitions against the Minor Review Order. “But the regulator was angry that we filed petitions against it and ordered public hearings,” said an official in one of the DisCos. Sunday Oduntan, executive secretary, Association of Nigerian Electricity Distribution Companies, in a press release said meeting the obligations imposed by the regulator would severely harm their operations leading to the inability to pay salaries or maintain equipment. The regulator followed with a threat to cancel their licences, DisCos said. In letters to NERC withdrawing their petitions against the Minor Review Order, the DisCos cited the need to engage more with NERC. “The Company will continue with the ongoing discussions with the Commission in seeking lasting and sustainable resolution of the issue

raised in the various letters earlier submitted,” Benin DisCo wrote in a letter to the regulator dated October 30. However, the regulator had severally urged the DisCos to improve remittance to the market as some DisCos failed to meet agreed obligations in their performance contracts to reduce technical and commercial losses. Some even kept more of the revenue collected for themselves, paying others in the value chain, like power generation companies, less. Following DisCos’ petitions against its Minor Review Order, NERC called for public hearings this week. “NERC wishes to notify the general public that there will be no public hearing between 9am-12 noon on November 8th, 2019 as Ibadan Electricity Distribution Company has also withdrawn its petition against the Commission.”

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Police officers’ death benefits endangered as insurance coverage lapses MODESTUS ANAESORONYE

…FG fails to pay premium for 6 months

he Federal Government through the Office of the Head of Service (HOS) of the Federation has not insured men and officers of the Nigeria Police since June 2019 as it has failed to pay the insurance premium for their coverage. Life insurance is a compulsory policy for employees provided by the employer including government, as provided in the Pension Reform Act 2004 as amended in 2014. But since June, insurance companies that had hitherto provided the group life cover for police officers as enshrined in law have not picked up new claims. This means that police officers currently have no cover in line with the ‘No Premium No Cover’ policy instituted by the

National Insurance Commission (NAICOM). As a result, dependants and Next-of-Kin of officers who died since the cover elapsed cannot claim any insurance benefits. Abdul Suleiman Abdul, a deputy commissioner of police, confirmed during the 2019 Annual Interactive Session with Consumers of Insurance Products held in Lagos that the group life of police officers elapsed in June 2019. What this means is that while the “no cover” lasts, the death benefits for any deceased police officer would have to be borne from the state budget. This means that in the event of loss occurring, particularly death, the government will pay compensation from taxpayers’ money, a burden that could have

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been transferred to insurance companies who are experts in risk management. Amid declining government revenue and competing needs, families of deceased officers would face hard times accessing such funds from government that is largely confronted with non-payment of accrued pension rights of retired civil servants since September last year. Abdul appealed for special consideration to be given to the police because of the uniqueness and importance of their service, which has to do with security of citizens. He also called on insurance companies to engage in Corporate Social Responsibility (CSR) and leverage it to educate security personnel on health issues and also execute capacity building for the officers. He stressed

that such efforts would help enhance their living standard, extend their lifespan and overall reduce claims payment brought to insurers. Mohammed Adamu, director at NAICOM, said the insurance industry has been able to overcome the initial challenges associated with insurance of police and the military, stating that it was as a result of lack of data for insured members. Group life policy provides cover to the insured against death and the insurance cover is mandatory for all employees as long as they are in employment. This means that the policy provides for the payment of the sum assured in the event of the death of a member of the scheme from any cause, natural and accidental.

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he Nigeria Deposit Insurance Corporation (NDIC) on Wednesday said it has extended insurance coverage to depositors of the Payment Service Banks (PSBs) recently licensed by the Central Bank of Nigeria (CBN). The CBN on September 18, 2019 issued Approvalsin-Principle to three Payment Service Banks. PSBs are specialised banks established to promote financial inclusion and enhance access to financial services for low-income earners and unbanked segments of the society by leveraging on technology. The NDIC has therefore designed an appropriate Differential Premium Assessment System (DPAS) matrix for premium computation/ payment as well as set an insurable limit to depositors in the event of failure. The Corporation said it was taking these measures to engender confidence in the system and to discourage bank customers from keeping cash at home, shops and other places outside the bank. “Monies kept outside the banks are not insured by the

Corporation and are susceptible to loss through robbery, theft or fire outbreak,” Umaru Ibrahim, managing director/ CEO, NDIC, said during the NDIC’s special day at the ongoing 33rd Lagos International Trade Fair. Ibrahim, who was represented by Joshua James Etopidiok, director, special insured institutions, said the NDIC would in the coming years continue to work with the CBN to ensure effective supervision of banks and the adherence to prudential guidelines and code of corporate governance for banks to ensure their safety and the overall stability of the Nigerian financial system. The NDIC, which celebrated its 30th anniversary last month, has been able to record some significant achievements, which have contributed to the stability of the nation’s financial system. One of the most significant achievements of the Corporation was the provision of the deposit insurance coverage to subscribers of Mobile Money Operators (MMOs) to the maximum limit of N500,000 through the pass-through deposit insurance framework.

•Continues online at www.businessday.ng

#RevolutionNow: Court fixes Dec. 5 for commencement of Sowore, Bakare’s trial …as defendants meet bail conditions FELIX OMOHOMHION, Abuja

Federal High Court in Abuja on Wednesday fixed December 5 for the commencement of trial of the convener of #RevolutionNow protests, Omoyele Sowore, and his codefendant, Olawale Bakare, also known as Mandate. This followed the inability of the prosecution to serve the defence with all the documents it intends to tender in the case. The court had slated Wednesday to commence trial in the matter. However, at the resumed hearing yesterday, counsel to the defendants, Femi Falana (SAN), objected to the commencement of trial because he said he had no access to his client while in the custody of the Department of State Service (DSS). He told the court that he had no adequate time to prepare for his defence because the secret police had not given him access to the defendants Falana said now that the defendants had perfected the bail conditions imposed on them by the court, he could have unhindered access to the defendants to take instructions from them and prepare for their defence if they are released. Falana told the court that he had explained to the prosecution “that we are encumbered by the refusal of the State Security Service to allow us to @Businessdayng

prepare for the defence of the defendants”. “I had already asked my learned counsel for the prosecution, that we are confident that the defendants will be freed today (Wednesday) from the custody of the SSS having met the bail conditions imposed on them by this honourable court,” Falana told the court. “Once they are liberated from the custody of the DSS, we will be in a position to take full instruction from them. In the circumstances, we will be asking for an adjournment to enable us take full instruction from our clients, so that we can fully prepare for our trial,” he said. Sowore, publisher of Sahara Reporters, and his co-defendant are facing a seven-count charge bordering on conspiracy to commit treasonable felony in breach of Section 516 of the Criminal Code Act, money laundering and cybercrimes. The second defendant, through his counsel, aligned himself with the submissions of Falana in urging the court for adjournment. Prosecution counsel, Hassan Liman (SAN), while objecting to the application for adjournment, told the court that the DSS at no point in time restricted counsel from having access to the defendants.

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Hypertension, diabetes leading causes of death in Nigerian men ANTHONIA OBOKOH

n expert on men’s health says hypertension, diabetes are the leading causes of death in Nigerian men, noting that societal pressure also reduces the tendency for men to seek medical attention. However, Nigeria’s average life expectancy rate is one of the lowest in the world at 52.2 years, and men have shorter life expectancies than women. Ademola Denloye, a medical practitioner at Men’s Clinic and medical director, St Luke’s Hospital, says there is also a growing trend in the increase of prostate cancer and sexual issues on erectile dysfunctions, premature ejaculation and sometimes psychosexual disorders. This expert spoke on Doctors on Air on Wednesday on Classic FM 97.3 hosted by Pamela Jackson-Ajayi, founder and managing director, Synlab Nigeria, on the topic ‘Men’s Health’ According to Denloye, mostly hypertension and diabetes are the major killer in Nigerian men today, and lifestyle, the stress of work, dietary habits and sometimes genetic loading were also contributors to the cause. According to Denloye, hypertension is simply an elevated

blood pressure, as the first number, called systolic blood pressure, which measures the pressure in your blood vessels when your heart beats, and the second number called diastolic blood pressure measures the pressure in your blood vessels when your heart rests between beats. “Today, the feature is if your systolic is over 140 and the diastolic is over 90, then you are hypertensive, and so we want you to keep your blood pressure under 140,” he said. He further said basically we know the kind of society we deal with and it was much more difficult to get things done, stating that it was important to focus on men’s health because “basically, men are usually the breadwinners and when something goes wrong it leads to quite a lot of economic hardship. “The average Nigerian’s man behaviour is not seeking medical attention at the appropriate time, even just to screen for hypertension. Men’s healthseeking behaviour in Nigeria is not up to par.” However, the expert also said that basically in their clinic, they found that about 50 percent of people who come in for consultation had a corresponding mental health issues, stating that most of them would not come directly opening up.

Programming, cloud computing, AI are top lT skills for today’s business - Google ENDURANCE OKAFOR & BUNMI BAILEY

t is not news that technology has revolutionised the way companies conduct business, but for organisations to tap from the benefits they have to acquire and apply programming, cloud computing, and Artificial Intelligence, a Google representative said. Commenting on the top IT skills needed to excel in today’s business environment, Juliet Ehimuan-Chiazor, director, Google West Africa, told BusinessDay on the side lines of the 2019 MBA Talent Forum Programme by Lagos Business School (LBS) on Wednesday that it was important to have IT skills that could enable organisations create solutions across board. In her words: “I think there is a lot more adoption of technology but there is room for doing more things because the systems and tools are getting more sophisticated and more can be done.” She further stated that for organisations to scale, leaders need to look into scaling skills in terms of digital solutions. According to a technology trend study by Deloitte, which took into consideration ways some organisations are using IT to extend services and create new revenue streams, it will make sense for organisations to know the dynamics behind the changes that drive the confluence of business and technology. “This is the digital age and it is very clear that technology

is the future because it permits every sector. Technology is a critical asset within agriculture, finance, healthcare, construction manufacturing, and other sectors, so it is important that we are prepared,” Chiazor said. Regardless of the size of an organisation, checks by BusinessDay have shown that technology has important impacts on business operations. This includes both tangible and intangible benefits that will help in revenue generation and to also produce the results demanded by customers. Survey has also shown that technology is important in a business in five key areas such as communication with customers, the efficiency of operations, business culture, class relations and security, and research capacity. According to industry sources, technology affects a firm’s ability to communicate with customers and in today’s busy business environment, employees must interact with clients quickly and clearly. Technology also helps a business to understand its cash flow needs and preserve precious resources such as time and physical space, industry experts have said. At the recent 25th Nigeria Economic Summit, Olatunde Olajide, senior manager for technology application services at Veraki who facilitated the summit’s industry breakfast meeting on information and communications technology, said there was a lot Nigeria could do in a global economy.

L-R: Aliko Dangote, president/CE, Dangote Industries Limited; Muhammadu Sanusi II, emir of Kano/guest speaker, and Adenike Fajemirokun, group executive director, president’s office/group chief risk officer, Dangote Industries Limited, at the Dangote 2019 Group Risk Management Department and Office of the President Retreat, in Lagos, yesterday.

Nigeria’s focus on works, housing in proposed 2020 budget praised but concerns remain SEGUN ADAMS

xperts and professionals in the Real Estate sector have commended the proposal for a budgetary allocation to boost infrastructure and housing next year, but issues around implementation of the budget, ineffective PublicPrivate Partnership (PPP), and lack of continuity of policies are pitfalls they warn Nigeria against. With N259.2 billion earmarked as capital expenditure for the Federal Ministry of Work and Housing, the highest allocation among ministries, the 2020 N10.33 trillion budget is expected to make a positive

impact on the real estate industry despite plans to spend a large chunk of the ministry’s fund on road projects. “Enhanced infrastructure improves connectivity and has a direct impact on real estate performance,” Bola Adigun, director of Deals Advisory, PwC Nigeria, said at The Summit 3.0, an annual Real Estate Business and Professional summit organised by the Nigerian Institution of Estate Surveyors and Valuers Lagos branch. A breakdown of the allocation to Works and Housing sector include N17.5 billion for the Federal Government National Housing, N30 billion for Social Housing Scheme (Family Homes fund), and

Again, Access Bank commits to creative sector

he 2019 Art X Lagos, sponsored by Access Bank plc, held recently in Lagos, but the event, which celebrated local and international artists, exceeded all expectations as it showcased a fusion of cultures, driving for inclusiveness through contemporary art display. Art X Lagos, in the past three years, attracted over 22,000 people from across the world. This year was no different as the fair proved once again to be West Africa’s premier art fair, showcasing 93 artists from 23 countries, thrilling over 10,000 art lovers who trooped in from within and outside Nigeria. The 2019 Art X Lagos featured thrilling performances such as Mirror Mirror, a soundless dance drama by Taiwo Aiyedogbon, and If Not for a Child, a captivating performance focused on the traditions of Omugwo by Ngozi Schommers. There were also Art X talk sessions and the Art X live concert. The highlight of the fair, however, was the display of diverse artworks covering photography, video, virtual reality, and augmented reality, among other

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forms of art. “Art X Lagos is an opportunity to bring together thousands of people from across the world to share in the beauty of art and entertainment in Africa. This fair is not just the premier fair in West Africa, but in Africa as a whole, because it speaks to a wide range of issues,” Access Bank GMD, Herbert Wigwe, said at the opening of the event. “The world must begin to focus on Africa and the quality of creative skills we have. Access Bank has supported this event since inception to demonstrate that, as Africans, we can harness the very best talents we have on the continent to change the African narrative as a whole,” he said. The bank has distinguished itself through its support for the African creative sector and demonstrated unwavering commitment to offer “more than banking” by throwing its weight behind events like ART X Lagos, AFRIFF, BAFEST and Access the Stars. This is an indication of its resolve to support young talents on the continent and truly be Africa’s gateway to the world.

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N210 billion for construction and Rehabilitation of Roads. Significant sums have also been set aside for railway projects including Lagos-Kano, Port Harcourt-Maiduguri, Calabar-Lagos, Ajaokuta-ItakpeAladja (Warri), Kano-KastinaJibiya-Maradi. While some of the experts at the two-day Real Estate summit, tagged “Exploring The Present Realities For The Future,” said the budget was a step in the right direction, others fear a history of lack of funding and poor implementation of the budget would repeat. “The 2020 budget for housing and is dead on arrival,” said Adedotun Bamigbola,

chairman NIESV Lagos, noting, “The minister of works and housing has called for a N10trn bond infrastructure bond which if we don’t take action by next year, we would be needing around a N15 trillion bond in the following year.” Sammy Adigun, director, EchoStones Nigeria, said the proposed 2020 budget was unexciting because of the history of budget implementation in Nigeria. In his estimation, implementation of the proposed budget would be 60 percent at best, “because personnel cost, debt service and overheads would gulp most of the money.”

P&ID scandal: Trial of ex-director begins

principal witness, CSP Umar Babangida, on Wednesday alleged that Grace Taiga, a former director, Legal Services in the Ministry of Petroleum Resources, played a major role in the fraudulent gas supply agreement between the Federal Government and Petroleum and Industrial Development (P&ID). Testifying in an FCT High Court in Abuja, Babangida informed the court that he led the team that investigated the alleged fraudulent activities of the P&ID. ”We opened an investigation as a result of a petition forwarded from the office of the Attorney General of the Federation to the acting chairman of EFCC in July 2015. The team wrote a letter of investigation to the Ministry of Petroleum Resources requesting the Ministry to provide the Gas Supply and processing Agreement dated January 11, 2010. “We also asked them to provide the MOU dated July 22, 2009, which was signed between the Ministry of Petroleum Resources and P&ID. “Upon analysing the two documents, we observed that the MOU was signed by P&ID Nig Ltd while the Gas Supply @Businessdayng

and Production agreement was signed by P&ID Ltd, a company registered in the British Virgin Island,” he said. He said the then minister of Petroleum Resources, Deiziani Allison-Madueke signed for the ministry of Petroleum Resources while the defendant witnessed for the ministry. ”On the strength of this response, we then wrote a letter to the Infrastructure Concession Regulatory Commission, ICRC, to confirm if the Gas Supply and Processing Agreement (GSPA) was forwarded to the commission form the Ministry to enable the Federal Executive Council make a decision. “ICRC replied that the GSPA was not forwarded to the commission and the Federal Executive Council had not deliberated on it. “Based on their reply, we wrote a letter to the office of the Secretary General, to confirm if the GSPA was forwarded to them for the Federal Executive Council to deliberate on. The office of the Secretary General replied that it did not get to them. As a result of this we then wrote to the Bureau of Public Procurement to confirm the role they played.

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This irredeemable debt: As my friend Onye-Nkuzi, Anthony ‘LongJohn’ Maduka goes home!

ik MUO

y father, Ezeamaluchi WO Muo (KSM) transited seamlessly to the great beyond in March,1993. He didn’t have the luxury a “brief illness”; he just died after muttering “may your will be done”. However, before then, he “died” three years earlier, when his best friend, Ichie Julius Mmaduka died in 1990. He came home that day, sat on a wooden chair with his hands on the expansive centre table supporting his chin. So, he went upstairs, sat there and sobbed “Julius; Julius, O Julius”. It was a long while before he tearfully announced to us that Julius had died. It was by God’s grace that he survived the death of Ichie Mmaduka. Now in this year of our Lord, 2019, I faced the same predicament. Onyenkuzi Antony LongJohn Mmaduka, the first son of that same Ichie Mmaduka and who had been my friend for the past 40 years+ and unarguably, my best friend, died on 30/9/19. I received the shocking news from Felix Afuzi, an extended family member, married to Anthony’s younger sister, that Anthony is dead. When I asked “which Tony?” he responded “that Tony you know” and hung up. I was writing my BusinessDay weekly article for 2/10/19 when that call came through and I just wrote “I thank God for making it to October 2019. My friend of 40 years, Anthony Maduka, a jolly good fellow, who was so tall that I named him ‘Long-John’ and who distributed happiness, under all circumstances, to all around him, could not make it. He died on 30/9/19 after 48 hours of sickness. However bad things are, lets thank God for life because once there is life, there is still HOPE” (Cashless banking: So far how far and at 59, we are being gang-raped, BusinessDay, 2/10/19). It was much later that the weight of the news hit me and I wailed uncontrollably. Fortunately, or unfortunately, there was nobody around and so, nothing restrained me giving vent to my sorrow.

Tony did not become my friend because his father was my father’s friend. By an act of God, both of us were posted to Bauchi for our NYSC, where we were sent to the Azare axis for our primary assignment. Tony was always noticeable because of his height, cheerful disposition and his limitless armoury of jokes. He was a wholesale dealer in happiness, joy and laughter, which he received freely and distributed freely generously and effortlessly everywhere he went. If he had gone into comedy then, Ali-Baba would have been a poor imitation. How LongJohn combined this trait with being a disciplinarian-teacher is still one of the questions I will ask him whenever we meet on the other side of the divide. And because I also had a good dose of natural jocularity and given our similar backgrounds, we hit it off since then. Tony joked about everything and anything and I gave it back to him in kind. I named him LongJohn because of his height and any of my relations and friends knew him as LongJohn (That was the name used in a local song by one of our minstrels called 7-7) and when I was in a hurry, I just called him Longus! For instance, I told him that given the laws of division of labour and comparative advantage (my first degree was in Economics), his parents should not have wasted time giving birth to the him and his brothers; they should have “manufactured” only ladies because his sisters were beautiful! One day when he visited me at Enugu, the floor of the bed on which he slept caved in (there was no extracurricular activity) and I accused him of eating so much food to the extent that the weight of the food weighed down the bed. It was an accusation I always raised whenever I saw him eating including during my 60th birthday (1/1/18), my entrepreneurship book launch, where he was the MC (11/11/18) and our 30th wedding anniversary (11/8/19). We were so close that if his parents wanted to tell him something, they would tell me directly or just made sure that I heard it. He also used me as his mailrunner with his parents. In our post NYSC days, we used our mothers’ “Honda50” motorcycle, then nicknamed Nwanyi Nnewi (The “Nnewi woman” because almost every Nnewi wife had one then) to scavenge our entire environment. I still remember how we rode from IgboUkwu to Ukehe (across 4LGAs) to see the man

who mysteriously took residence on top of a very “high-rise” tree. There was a funeral song by our women folk that both of us enjoyed. The song was O di ka ono n’igwe na eziokwu It appears that he (the dead) is truly in heaven). So, we analysed and made a joke of that song, saying that probably somebody had told the women that the dead was in heaven and they were then saying that it appeared that she was truly in heaven. And we would ask ourselves: who gave then the initial information that the dead was in heaven? Tony was born in 1954 and had a degree in English/Education from Jos and lived his life as a disciplinarian teacher, hostel master, Vice Principal and Principal at several schools in Anambra state and Chief Examiner in English for WAEC and NECO. He was a professional and expected the virtues of commitment, hard-work and excellence from his teachers and students at all times. He was a community leader and served his kindred, the Catholic Church and the IgboUkwu community in various capacities. Well Onye-Nkuzi (Teacher), LongJohn Anthony Maduka is gone. He will be buried at IgboUkwu today, 7/11/19. I was not that fleshy but I know that I have lost some flesh in the past 5 weeks. As I say the irreversible goodbye to him, I would request the women folk to sing that our song (o di k o no nígwe néziokwu) but I will not make a joke of it this time. I will also charge him for a breach of contract. He was older than me but for whatever reason, I believed that he would outlive me. I therefore requested him to collate all my articles and publish them as he deemed fit anytime, I died. That was about 35 years ago. But I will ask the judge to have mercy on him because I now have somebody who will do that, even better, for me! He was a friendly friend, who stuck closer than a brother (Proverbs, 18:24). When Jesus died, he said “it is finished”. But that did not absolve us of the irredeemable debt of death. Tony has paid his own debt. He was once like us. We shall one day be like him when we pay our own debt. His death, without even a brief illness, is a lesson for those of us on this side of the divide. I commiserate with Pat, the wife and children and siblings but most importantly with the old mother who in effect is burying her second “husband”. Thankfully, she has born her grief with philosophical calmness.

‘

When Jesus died, he said “it is finished”. But that did not absolve us of the irredeemable debt of death. Tony has paid his own debt. He was once like us. We shall one day be like him when we pay our own debt

Other matters: Still on STD My last outing on STD (Sexually Transmitted Degrees) and my fingercap attracted wide and divers’ reactions, even from those who do not usually react to my writings. I don’t know whether it was due to the title (STD), or the content and the currency of the topic. I just wish to share two of such reactions with my readers today. The first was from Stan Ukeje, teacher, economist, banker and a natural philosopher, who has been classmate and friend since 1987 (32years and still counting). He argues that there is a difference between harassment and outright EXTORTION! Behold his treatise. Ndi Muo, You have fallen into the web of the ignorant who are unable to define terms properly. Anybody who has a duty to perform Any Service and who extorts customers, is not engaged in Harassment but a Malpractice of Extortion! Successfully awarding Fail to an Examination Candidate who should earn a Pass can only occur where the Service Provider’s employer is complacent or has included the receipts from extortion as part of employee benefits. Why do I say so? Examination candidates should be made to know they have a right to have their scripts checked if they are dissatisfied with the score awarded. Terms and conditions usually apply. Examination candidates sign attendance on a sheet provided and submit answer sheets at the end of the examination. The Invigilator must report any candidate that failed to return answer sheet, after signing-in on the attendance sheet immediately. Situations where a candidate does not have a score for examination sat because the script is missing is administration failure. The Invigilator and Examiner should be held accountable. A number of examiners take steps to stay ahead of the muddle in the system. So, it is wrong to declare that All Are Involved. You are however right that legislation cannot solve the problem. It can be checked by the concert of All Involved, especially, the business owners and managers. Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye

Nigeria customs service and its wrong headedness

t is no longer news that the Federal Government of Nigeria is in dire financial stress and therefore needs all the revenue it can garner, as is often said jocularly, like yesterday, to prosecute its various mapped out projects. That the government has fallen short of its projected revenues in its yearly budgets is equally no longer trending. No budget in recent memory has been able to record more than 55 percent of projected revenue. A sampler: out of projected revenue of N7.16 trillion in 2018 budget, actual was N3.91 trillion (i.e. 54.61 percent achieved). Though 2019 budget is still running but one does not need to gaze at the crystal ball to predict that the projected deficit of N1.92 trillion is definitely off mark. Indeed, it will be a miracle for the budget to record the same feat as that of 2018, let alone surpassing it, going by performance indicators so far. To reverse the almost irreversible trend, important organs of government saddled with raising revenues have been assigned targets from time to time. And this is where the Nigeria Customs Service (NCS) as a critical agency of the government fits the bill, by manner of speaking. However, the NCS in pursuit of its job has demonstrated crass disregard for known rules in the statute books. It doesn’t need repeating here the over zealousness with which the NCS usu-

ally goes about implementing mere pronouncements from government officials without official gazettes, especially where the pronouncement is in favour of raising import duties/tariffs but soft pedals if a decrease is the case. If one can call the above over-zealousness within the ambit of the law, one is totally at a loss as to how to describe the recklessness of the NCS in recent times. Recently, the NCS has been in the news for the very wrong reasons. Basically, Customs all over the civilized world are known to operate in the ports (seaports/ airports) to collect the CORRECT import/export duties and on the borders to check smuggling activities. Is this true of Nigeria Customs Service in every material particular? Has the NCS been collecting all the correct duties at Nigerian ports? How effective has it been in checking smugglings through Nigerian borders. The media has been awash with stories of Nigeria Customs invading hotels and car marts in Gestapo manner in search of exotic cars that import duties were allegedly under paid on them. In one particular case, a hotel in Abuja was so invaded that no person was allowed in or out of the hotel while the invasion lasted. The Management of the hotel, it was reported, was asked to identify the owners of the so-called exotic cars lodging in the hotel. The issue of raiding car marts has since become

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a daily occurrence! What is being witnessed currently but no one called the NCS to order then started with Customs men stopping vehicles on the highways and demanding “full customs papers”, irrespective of the year the owner started using the vehicle. Those who were unlucky not to have the ‘full complement’ papers had their vehicles impounded and auctioned off. That off-putting and lawless behaviour is what has today snowballed into the monster that nobody seems ready to tame. For the avoidance of any doubt, one needs clarification to these seemingly pedestrian but highly profound posers: Where are the legitimate duty posts of the customs? On the ports, borders or in the hotels, car marts and highways? Whose duty is it to collect the CORRECT duties for government? Whose duty is it to ensure that the CORRECT duties are collected? The customs or the importer/exporter? Whose duty is it to police the borders to ensure that no smuggling activities take place? The customs or the smuggler? For too long the NCS has failed to carry out some introspection and do the needful. That the matter has reached the stage we are in now speaks volumes of the complicity of both the

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Emeka Okolo

government and the governed in indulging an organisation that is bereft of how to carry out its basic responsibilities. With all the Gestapo activities of the NCS in recent times, no house cleansing of the NCS has been reported. The so-called exotic cars that were under-dutied, as it were, and linked to some notable car dealers, all came through the known Nigerian ports. Who and who signed off on the customs papers before the cars were driven off? The NCS should stop playing the ostrich and square up to its responsibilities, and by so doing save the nation the unsightly display only fit for an antediluvian one. An organisation that is always locking the stable door after the proverbial horse has bolted can’t be adjudged a serious one, no matter its pretensions. This cap certainly fits the NCS! Dr. Emeka Okolo is a chartered stockbroker and management consultant based in Lagos

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Nigerian army and human rights CHRISTOPHER AKOR

espite protestations from Nigerians, civil society, the human rights community and even the toothless National Assembly, the Nigerian military has gone ahead with its Operation Positive Identification (OPI). The operation would entail citizens being stopped and asked for identification. This, according to the army, is to “checkmate banditry, kidnappers, armed robbers, ethnic militias, cattle rustlers as well as other sundry crimes across the various regions of Nigeria. However, citizens and the human rights community have complained that OPI is just another excuse to violate human rights, restrict freedom of movement and militarise the society. This is a society, mind you, where many people do not have any means of identification like the National Identity Cards, the Nigerian International Passport, drivers’ licence or even voters’ card. This, in their view, would amount to the army criminalising non possession of valid national identity card, which isn’t backed by law. Besides, they question the effectiveness of fighting crime by stopping people on the road and demanding valid identification cards. It hasn’t worked before and there is no evidence to suggest it will work now. However, the army has insisted OPI is the only way it can effectively fight crimes in the society. “There is no label on Boko Haram terrorists other than intelligence and this means of iden-

tifying people,” a military spokesman said recently. Just as the operation took off, a video began to circulate on social media showing military personnel executing a bound man and burying him in a shallow grave they dug themselves. From the voices in the video, the incident happened in Maiduguri and one of the soldiers could be heard admonishing his colleagues to dehumanise the suspect before executing him. This is exactly the fears in the human rights community in Nigeria. The Nigerian military certainly has a rich form in extra-judicial tortures and killings. On December 12, 2015, some members of the Islamic Movement of Nigeria (IMN) were doing their normal procession in Zaira and blocked the convoy of the Chief of Army Staff, Lt. Gen. Tukur Burutai. After some altercations, the army promptly mowed them down and for added measure, levelled their Hussainiyya centre, brutalised and arrested the leader of the group, Ibraheem Zakzaky and his wife. To cover up the gruesome killings, the army took away the corpses of those killed, set fire on them and buried them in mass graves. When the news broke, the military attempted to lie its way through, accusing the sect of trying to assassinate the Chief of Army Staff and denying that the army massacred a large number of the group’s members. However, a panel set up by the Kaduna state government to investigate the killings finally indicted the Nigerian army for the Zaria massacre. The Kaduna state government confirmed to the panel that 347 IMN members were killed and buried in secret mass graves. Specifically, the panel indicted Maj. General Adeniyi Oyebade, the General Officer Commanding the Nigerian Army’s 1st Division in Kaduna for authorising the operation. The Panel stopped short of indicting the Chief of Army Staff General

Burutai who also bears responsibility for, and has defended, the killings on several occasions. From the videos of the encounter between the army Chief’s convoy and the sect members, it was clear the situation does not require the use of lethal force. Teargas, at worse, could have been used to dislodge them. But the army chose to massacre them, destroyed their centre and have continued to detain its leader illegally for having the effrontery to stand in its way. As the Panel rightly found out, the killings are a crime against humanity and those responsible should be brought to justice. However, in a bizarre twist, the Kaduna state government banned the IMN from operating in Kaduna instead of pushing for the punishment of all those indicted. Also, security agencies have begun a systematic cleansing of the group in major states in Nigeria. Consequently, the group’s members have been brutally maimed and killed in Jos, Abuja, Kano, and Katsina while protesting government’s actions against the group and the continued unlawful detention of their leader, his wife and other members of the group since their arrest in 2015. The killing of IMN members protesting the continued detention of their leader in Abuja some few months ago is a continuation of the brutal campaign against the group. Also, in May 2017, Amnesty International released a report, backed by videos, photographs and eye witness accounts showing that between August 2015 and August 2016, “the Nigerian security forces, led by the military, embarked on a chilling campaign of extrajudicial executions and violence resulting in the deaths of at least 150 peaceful pro-Biafra protesters in the south east of the country.” The report, “a product of intense investigation comprising analysis of 87 videos, 122 photographs and 146 eye witness testimonies relating to demonstrations and other gatherings between August

‘ This is a society…where many people do not have any means of identification like the National Identity Cards, the Nigerian International Passport, drivers’ licence or even voters’ card. This, in their view, would amount to the army criminalising non possession of valid national identity card, which isn’t backed by law

Trade routes: Preparation meets opportunity

s we journey into the final stretch of 2019, it is looking more certain that the year will be remembered as the year that trade turned the global economy sour. The ongoing trade dispute between the United States and the People’s Republic of China (the PRC) has already scrambled and remapped existing trade routes, trade alliances, and trade networks. And there is more to come. And because the issue at stake between the US and the PRC is much more than balance of trade and current account deficit, no one should expect a quick resolution to this ongoing dispute. Indeed, it will be years before we can truly tally the full economic impact as well as the winners and losers of this trade dispute. However, many companies, economists and other close observers of international trade already know who some of the winners are – more on that shortly. On a positive note, 2019 will also be remembered as the year that Africa “got” trade. With the recently ratified Africa Continental Free Trade Agreement (AfCFTA), Africa commenced a bold journey that will stitch together currently disparate trade practices and rules and make it easier for goods and services to flow among more than 50 countries on the continent. It is indeed a monumental commitment to creating the largest free trade area in the world, which if executed according to plan, will no doubt boost economic growth, produce employment, create and improve infrastructure, and foster the positive socio-cultural externalities that usually emanate from economic connectedness and integration. Yes, some observers will say AfCFTA should

have happened years ago. Maybe so. But an arrangement of this magnitude only happens when the conditions are right. And I say, better late than never. Other observers don’t give the agreement much chance of reaching even a small portion of its potential. But who count out Africa’s determination should just read about the renaissance happening in Rwanda and other parts of the continent. The most important work now begins…the work of creating the modalities of the agreement and the various rules that will undergird it. The negotiations will be hard and complex as rule makers seek to balance the interest of the smaller economies against the larger economies, and it will therefore take time. And that’s exactly why all the stakeholders should get to work immediately. As they seek to balance multiple interests and concerns, they should understand that good is better, and perfect is rarely ever on the menu. One of the lessons of the US-China trade dispute is that success in trade policy does not happen by pure luck. In my book, success is what happens when preparation meets opportunity. In this instance, the one country that exemplifies the preparation required for success to happen in trade is Vietnam. Most trade observers now count Vietnam as one of the most significant beneficiaries of the US-China trade dispute. A report published in June by Nomura, indicated that Vietnam gained 7.9 percent of GDP from trade diversion as western manufacturers sought alternatives to China. That is a significant economic benefit whether temporary or not, and many trade economists will tell you that the positive externalities of

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2015 and August 2016 consistently shows that the military fired live ammunition with little or no warning to disperse crowds. It also finds evidence of mass extrajudicial executions by security forces, including at least 60 people shot dead in the space of two days in connection with events to mark Biafra Remembrance Day.” According to the report, “this deadly repression of pro-Biafra activists is further stoking tensions in the south east of Nigeria. This reckless and triggerhappy approach to crowd control has caused at least 150 deaths and we fear the actual total might be far higher.” But the authorities do not care. In fact, the army in most cases, acts on direct orders to shoot and kill innocent civilians without recourse to the law courts. A fundamental question is why the army has displaced the police in fighting crime and internal security management? Years of military rule and intolerance for the existence of a rival force has led to the whittling down of the powers, functions and capability of the police and the ascendancy of the military in internal security management. That is yet to change even with the return to democratic rule. By 2023, Nigeria would have had 24 years unbroken democratic governance. But 16 of those years have been superintended by former military dictators who supervised the destruction of the police in the first place. But there is now a snag: as the military continually deploy its weapons against unarmed civilians, it is losing the ability to perform its primary function – the defence of the country against external aggression and even internal insurrection. It struggled badly to contain the Niger Delta insurgency until the government found a political solution. Now faced with an armed insurgency since 2009 that has exposed its inefficiency and lack of capacity, it has now resorted to prayers to defeat the enemy.

LARRY EYINLA even a short-term benefit of this nature can be significant. More importantly, some of the benefits will become permanent because companies that are now scrambling to find alternatives to China are now fully aware of the risk of concentration. Their intent to mitigate that risk means once they establish presence in Vietnam, they are likely to remain in one shape or form depending on how quickly Vietnam climbs the production value chain. To a casual observer, Vietnam’s proximity to China would seem to be the primary reason why it is now a trade dispute winner. But as someone who has visited Vietnam many times, met with their government officials, and consulted with western companies that do business in the country, I have had the opportunity to witness Vietnam’s painstaking preparation for this opportunity that finally came. Vietnam prepared by implementing a policy of close coordination between central and regional governments; fostering an environment in language and actions that welcomes rather than bashes investment, investing in infrastructure, including roads and power generation. In addition to focusing on developing the skills required by employers; improving transparency and focusing on creating a regulatory climate, including tax and incentives policies that make it easier for investors to make and commit to long term plans as well as lowering barriers to foster trade. In short, Vietnam focused on the items one will typically find on the World Bank’s ease of doing business index. All is not perfect, and Vietnam still has ways

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to go on this journey. But from my interactions with government officials, I can attest to their commitment to do more. For me, in addition to other countries, Vietnam is a blueprint for African governments as they seek to reap the rewards of trade. Vietnam’s story is the strongest reminder yet, that growth and development seldom happen by accident. Yes, globalisation has its faults, but no reasonable person would dispute that fact that many Asian countries tapped into globalisation to lift millions of their citizenry out poverty, and to create economic opportunities that would make it easier for the next generation to remain home rather than emigrate. Without trade, there is no telling where the Chinese economy would have been today. But the fact is, Vietnam is not special or unique. Indeed, many African countries provide more compelling rationale for Western companies to divert production to Africa. In addition to cultural and political affinity and proximity to Western end markets, many African countries already enjoy preferential trade arrangements with the US and European Union, for example, under the Africa Growth and Opportunity Act (AGOA) and the Economic Partnership Agreement (EPA). That is to say, under the right environment, Africa should be a winner in the context of the current US-China trade dispute. And it is never too late. Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Eyinla is EY Africa tax leader

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Thursday 07 November 2019

Editorial Publisher/CEO

Frank Aigbogun editor Patrick Atuanya DEPUTY EDITOR John Osadolor, Abuja NEWS EDITOR Chuks Oluigbo EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, STRATEGY, INNOVATION & PARTNERSHIPS Oghenevwoke Ighure ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai COPY SALES MANAGER Florence Kadiri DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

Imperative of lifting 100 million Nigerians out of poverty

ne of the high points in Presid e n t Mu hammadu Buhari’s D em o cra c y Day speech was the announcement that over the next 10 years, the government would lift 100 million Nigerians out of poverty. For every informed Nigerian, whether rich or poor, there can be no better news to cheer. In 2018, Africa’s most populous nation was labelled the poverty capital of the world, which, as derogatory as it sounds, is simply what having 91 million people, and counting, living in extreme poverty amounts to. We fully agree with and support the President’s intention to pull 100 million citizens out of absolute poverty over the next 10 years.

The number is tragic; it’s equivalent to the populations of Ghana, Côte d’Ivoire and Niger Republic combined. The need is urgent; if nothing is done more than 100 million Nigerians will be living in poverty before 2029. While the president’s intention – for this is what it is at the moment – should be applauded, it requires in addition to purposeful leadership, recognising that government cannot do it alone. It requires a clear understanding of the causes of this pervasive poverty level. One of the causes of poverty is lack of income, especially income generated from employment that people can depend on to meet their needs. And incomes are earned from jobs generated by businesses. Thus, above all, it requires a commitment to a private sector– led economic growth. As

the past four years have shown a government-only approach through social investment programmes won’t work. Neither more debt nor the recovery of Abacha loot will do. Lifting 100 million Nigerians out of poverty is thus a commitment to a private sector-led growth plan. A credible plan that translates the intention of the president into concrete goals that can life an average of 10 million Nigerians out of poverty every year for the next decade. The urgency and capital required to achieve this goal calls for a mix of fiscal, monetary and industrial policies that can remove the bottlenecks in the economy and boost output of goods and services, and breathe life into comatose firms strewn around the country. It is these companies that will dent unemployment in the country which according

to the National Bureau of Statistics (NBS) was 23 percent as at the end of the third quarter of 2018. This excludes the high rate of underemployment. Nigeria can take a cue from two countries, China and India. China, the most populous nation, has stunned the world with its antipoverty programme. In 1978, 90 percent of its population lived below the extreme poverty line; by 2014 99 percent of the population lived above that line. China has set a target of eliminating extreme poverty by 2020, and to achieve this, it set to lift 10 million people out of poverty each year from 2016. Between 2005 and 2016, India pulled 270 million of its people out of extreme poverty through a rapid increase of good and services produced to become a middle-income nation.

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Breaking the mould of let them pay at XL106.9FM Uyo The Public Sphere

CHIDO NWAKANMA

hey walked in quietly at the Nigerian Institute of Public Relations Communication Directors Conference at the Ibom Hotel and Golf Resort on October 31. Reporters from a radio station were around to cover the conference. Without invitation and payment? Yes. They also dispatched a four-person crew to cover the annual meeting of the Actors Guild of Nigeria, taking the opening live and interacting with Nollywood’s bests who visited the city. A return to professionalism is playing out in the beautiful ambience of Uyo, capital of Akwa Ibom State. Less than six months into its opening, XL106.9FM has chosen to walk the path the broadcast media abandoned in Nigeria from 1994. XLFM does not demand or collect payment for news coverage and broadcast. The radio station with a heart commenced broadcasting in April 2019. Former Newswatch journalist and ADC Airlines communication guru Utibe Ukim runs the station. Travellers would remember Utibe’s touch with the commercial success of ADC Airline’s in-flight maga-

zine, The Plume. Advertisers queued to feature in the magazine with its rich content of engaging stories and features. It showed that good journalism could be self-sustaining. XLFM describes itself as Uyo’s premium urban news, music and talk radio. It is one of seven commercial stations serving Akwa Ibom State, with two others as laboratory stations of a university and a polytechnic. Three more stations are on the way. Managing Director and station promoter Utibe Ukim affirmed, “The word is out. We don’t collect money for press conferences or any coverage. As long as it is news, there is absolutely no cost attached to it. People come to us to say, ‘how much are you collecting. Come and cover our events.’ We do not do so. We decide on what to cover and when based on standard news values and the interest of our listeners. Any day we hear that somebody collected money in the name of our station to cover an event, it will lead to a separation.” The CEO of XL is not pollyannaish. He sees clearly and is facing the reality of a tight market in a city lacking the commercial vibrancy of Aba, Onitsha, or further afield Lagos or Abuja. He is convinced though that the performance of the station will fetch revenues through advertising and special projects in the best traditions of broadcasting. It was a pleasant surprise in the city of many surprises. Nigerian broadcasting descended to Let Them Pay beginning 1994 with commercialisation. The Federal Government asked stations to fend for themselves. Someone came up with the idea of Let Them Pay, a slang for saying entities other than the govern-

ment should pay for news coverage and mention. I can still recall the night of November 7, 1996, when ADC Airlines Flight 086 went missing and crashed into the swamp at Ejinrin in Epe, with 155 passengers and crew on board. It took more than an hour of pleadings by Chijioke Amu-Nnadi, and the intervention of a kind hearted executive for NTA to agree to air the announcement of the missing aircraft. By the way, today marks 23 years of that crash. We pray repose for the souls that departed that day. The position contradicted the Code of Journalism Practice that the Nigerian Press Organisation re-affirmed in the Ilorin Declaration 1998. Section 7, subsection 2 of the Code states: “To demand payment for the publication of news is inimical to the notion of news as a fair, accurate, unbiased and factual report of an event.” The private broadcast stations that came on board followed the lead of the public broadcasters and made payment for news coverage and broadcast the norm in Nigerian broadcasting. Stations across the land classified the news and placed charges for political, religious, corporate, educational and social news coverage. They even charge for news commentary, breaching the sacred sanctorum of the editorial opinion of the medium. Payment for news coverage has caused significant disquiet. It is at the intersection of the debate on funding models versus ethics. It has now led to the phenomenon of the institutional brown envelope, as my ongoing research has shown. Brown envelope has become almost

‘

I can still recall the night of November 7, 1996, when ADC Airlines Flight 086 went missing and crashed into the swamp at Ejinrin in Epe, with 155 passengers and crew on board. It took more than an hour of pleadings by Chijioke AmuNnadi, and the intervention of a kind hearted executive for NTA to agree to air the announcement of the missing aircraft. By the way, today marks 23 years of that crash

Hire graduate entrepreneurs ahead of ‘paper graduates’

ndeed, nothing has ever remained the same. The success paradigm before this information age was to get the best grade out of schools to be employed by top organisations. Things are changing. We are producing more graduates than the available jobs, and the quality of our school system is dropping in terms of capacity and contents. Those days, as you graduated from the university or polytechnics with top grades, or you passed your professional examinations as an undergraduate, you are the toast of the employers. But today, we have many graduates and semi-qualified products whose knowledge are staled with the fast-moving social media and information age. I have been sitting on job interviews as a consultant for some friends and companies in the last eighteen months. It is both a hobby and a career path for me to be involved in assessing people for vacant roles. In most instances, we have graduates who have spent years at home doing nothing after graduating from school except endless search for jobs amid opportunities to do one thing or the other to serve over 120 million Nigerians. The vast population, though a pain in the neck for some, is an advantage for others who could use their education to solve problems or provide services if the ego of being graduates is not a showstopper for them. My default decision for anyone who is not doing anything after graduating from school for 24 months is not to recommend them for employment except in a few cases when their performance is exceptional. For employers who want the best out of their staff, it is better to employ graduate entrepreneurs. I place a premium on people who avoid ego education can give and exude humility by doing things to prevent idleness. After all, an idle

mind was said to be the devil’s workshop. I don’t know any employer that want unused and untested minds and still expect high productivity. I met Francis Ejembi at the NYSC Sagamu orientation camp in March 2019 during one of my speaking engagements for the Positive Growth Africa. Francis stood out with his multiple skills among the corps members. Aside from being a graduate of Industrial Physics, he has expert level skills in graphics, sewing and has driven cars as a driver while in school to survive financial hardship. Life has taught him a lesson and prepared him ahead of the post-school job shortages. He is today serving Nigeria and at the same time earning income to support his family. He is not among the graduates that are at the offside lane of what education is meant to be – education is intended to open the minds of people to see possibilities even when the eyes cannot see correctly. Francis is under my mentorship programme, where his soft and life skills are being refined to support his service and technical skills. Also, I met another graduate who will preferably be his boss than begging family and friends to survive. I took an uber cab to Wuse zone 5 from Itako district in Abuja last week. No one needs to tell me that the driver is a welleducated and promising Nigerian. As I engaged in a conversation with Atuegbu Joseph, I saw that the future of work and dignity in Nigeria is bright if we get our national value right. Joseph is a graduate, but the urge not to be an idle mind or liability to others prompted him to drive uber cab when the white-collar jobs are not forthcoming. From our conversation, you will notice his positive attitude, ambience and high proficiency in body language. No doubt, companies and recruiters want to hire staff with the possibility of staying on the job and with the organisations for years.

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However, being threatened by candidates who are not idle and have the gut to start their business or do other legitimate jobs to earn income pending the right opportunity is another way of embracing slavery. Many candidates attending interviews often hide what they are legitimately doing to earn income for fear of not being considered for the role. You cannot hire the likes of Francis and Joseph without getting something extra for the work environment. They are graduate entrepreneurs that will think and act like the owners with lots of innovations. Life has developed skills in them. They will be more secured and effective than someone who has not tried other things. The battle is how to moderate and align their zeal with that of the organisations. This is where an appropriate onboarding programme for new hires come into play. These graduates’ entrepreneurs are looking for opportunities to use the developed capacities unlike the “paper graduates” who have waited years without developing their creativity with the challenge of lack of employment. Recruiters should stop seeing people who dare to venture into running businesses or doing things outside the scope of their studies in schools as distracted or have the propensity not to be focused at work but see them as people who have developed their capacity and tenacity to add value in the workplace. A significant advantage from employing graduate entrepreneurs in the Nigeria content is to discourage being lazy, dependent and unimaginative. If you can’t figure out what to do in the middle of a problem like unemployment, you might be under-employment with a job. I can see the few who can go out of their ways to earn a living being those that will be a career entrepreneur and add more value to the employers.

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integral to journalism practice in Nigeria. Media houses and organisations that patronise them have complied. Worse, some media firms then moved ten steps backwards. They offer their front pages for whoever is willing to pay. It turns out one flamboyant publisher notable for good and adverse developments in the industry discovered his editors were taking huge returns as the banks, telcos and others demanded the first-page prominence for photos from their events. Chief Executives believed they belonged on the front pages. Often there was no substantial news value behind the images. Money value then replaced news values. However, this payment did not reflect in the coffers of the firm. Mr Publisher then formalised the practice of charging not only for photos but also for news on the front pages. It was shocking when a ship lost its flag and joined. Payment for news has played out in several ways. Best practice in media relations is to tell your client’s story accurately. It often means today writing it and agreeing with the client on the narrative. You avoid accidents of misspelled names, errors of facts and such-like by reporters trained in the handout tradition and who pay scant attention at events they have come to report. Note: The rest of this article continues in the online edition of Business Day @ https://businessday.ng Nwakanma is a Visiting Member of the BusinessDay Editorial Board and serves on the Adjunct Faculty at the School of Media and Communication, Pan Atlantic University, Lagos. Email chidonwakanma@ gmail.com.

Positive Growth with Babs

Babs OlugbemI Another reason a recruiter should look beyond paper qualifications and give a nod to people who dare to venture and declare what they are doing to engage their minds is to reward being truthful. Being truthful at interviews is a virtue that speaks volume about the strength of the character of the would-be employee. Two years ago, Yakubu was bold to tell the interviewers that he needs the job for two years to raise capital to start his business. Only one of the panellists insisted Yakubu was the best candidate and should not be judged by being truthful. Thank God Yakubu was not dropped for having the gut to express his desire to start his business. Today, he is over two years with the employer and has built a reputation of a highly cerebral and performing staff. He has equally found what he loves to do on the job and made up his mind to commit his career life with the company. It is high time we started rethinking our educational system and align the output with the realities of our time. Recruiters and leaders are, therefore enjoined to look beyond qualifications and hire potentials to be a good fit and go-to employees by giving opportunities to graduate entrepreneurs. Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, the Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.

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Thursday 07 November 2019

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

Markets

EM attracts $22.5bn in portfolio flows in October as equity flow slumps SEGUN ADAMS

nflows into emerging markets (EM) debt instruments helped sustain appetite in EM assets after equity flows saw a big decline that weighed on portfolio flows into developing regions. Hot money slumped by 40 percent as Foreign investors pumped in $22.5 bn into EM in October, data from Washingtonbased International Institute of Finance (IIF). Non-residents dump stocks in the region in favour of debt instruments but indications are that interest in EM assets remain at comfortable levels especially considering the negative FPI flow seen in August. Debt inflows slowed by 22.8 percent to about $21.3 bn from last month while equity slumped by 88 percent to $1.2bn. The poor sentiment in EM stocks

was seen outside China; while China equity flows were $2.7 bn, EM excluding China flows came in at -$1.5bn. “Ongoing trade tensions and resulting uncertainty have impacted financial flows meaningfully… but global supply chain disruption is still limited,” IIF said in its monthly flow-tracker report. “This bounce-back in sentiment is directly explained by the “truce” in the trade conflict.” United States and China in October agreed on the outlines of a partial trade, Bloomberg reported, as both nations begin de-escalation of a trade dispute that has dampened outlook for global growth in 2019. Meanwhile, the IIF maintains a pessimistic outlook for equity flows to non-China EM on the heels of the large amount of hot money that has already gone to EM in recent

years. The persistent weakness of emerging market currencies to the United States Dollars (USD) another concern highlighted by the Washington-based institution. It recalled the 2018 EM sell-off, which was owing to many different forces at work currently, including geopolitical uncertainty, weak commodity prices, and idiosyncratic difficulties. “But perhaps the single common denominator is non-resident capital flows to non-China EM, which have been successively weaker for every EM-bullish catalyst,” IIF noted. Despite a material Fed easing cycle EM currencies, as in the past, have remained relatively weak due to a positioning overhang that reflects a decade of strong flows due to accommodative policies in the developed markets which continues to play a

heavy role. IIF’s broader measure of net capital flows to EM (including banking and FDI flows) was -$31.4 bn in September, almost twice as large as the net outflow

in the previous month. China contributed around 50 percent to the September number (-$17.3 bn). Nigeria saw a net capital flow of $0.6bn compared to $1.3bn in the previous

month. This means foreign investors’ appetite for Nigerian assets improved although at positive levels the net capital flow suggests that fewer foreigners hold Nigerian assets.

L-R: Anthony Ashiwe, project coordinator, Saints Lagos Football Academy; Lesile Oghomienor, chairman, Blaugrana Group International; Mathew Sanger, global development manager, Southampton Academy Football Club, and Benjamin Ashaka, director, Blaugrana Group International, during a visit to Blaugrana Group Intentional office in Lekki, Lagos.

Consumer Goods

Shoprite mulls exit from Africa except South Africa as earnings dip OLUWASEGUN OLAKOYENIKAN

hoprite Group, Africa’s largest grocer, is considering exiting countries outside South Africa where the performance of its supermarket operations are unimpressive, according to the firm’s operational update for the quarter ending in September. The company said it would conduct a performance review of the markets after it recorded a 4.9 percent dip in revenue in the third quarter of 2019 excluding its South African market where it has its core business. “If we have to close a country we will, we will make the decision no matter how hard it is,” Chief Executive Officer Pieter Engelbrecht told shareholders at an annual meeting on Monday. “We are not scared to take the hard decisions.” In the review quarter, the company said the continued currency devaluations and Xenophobic

attacks on its Nigerian business after violence erupted in South Africa against immigrants from other African countries, combined to weigh on the company’s performance in countries beyond the South African borders. As a result, the company said its management was “reviewing the return” on its capital invested in the rest of the continent, while it intensifies efforts to cut costs. But in spite of these headwinds, Shoprite’s South African unit defied the economic downturns in the country to deliver a 10.3 percent increase in revenue in the three months leading to September this year. This compares with a 1.7 percent sales growth recorded in the same period a year earlier. The shares of the grocer jumped some 3 percent Tuesday to 139.20 rand as of 7:00 pm Nigerian time on the Johannesburg Stock Exchange (JSE), bringing the company’s market value to 82.31 billion rand

($5.6 billion). The group’s other operating segments, which include the OK Franchise, Computicket, MediRite pharmacies and Checkers Food Services, reported a 6.4 percent increase in sales. The OK Franchise division grew sales by 8.6 percent. The company said it opened 15 new stores during the quarter across its three supermarket trading brands – Usave, Shoprite and Checkers – comprising eight Usaves, four Shoprites and three Checkers stores. “Our furniture store base reduced by a net 10 stores,” it said. “Liquor shop added a net 10 stores to reach a milestone 500 stores. Our OK Franchise division grew its base by a net 10 stores in the quarter.” The group said its Xtra Savings Rewards Programme, which marries advanced data processing with marketing automation into a powerful personalisation engine, has exceeded expectations through its launch in all

Checkers stores in South Africa, with more than a million members signing up after just one week. “This launch aligns with the Group’s focus to ensure our customers save more every day, paving the way for smarter decisionmaking and precision re-

tailing,” Shoprite said in a statement. “It also unlocks alternate revenue streams from existing and new customers.” The company remained confident of an impressive outing this year. “With the momentum achieved during the first quarter, the

Group enters the important festive trading period with confidence in our operations and Group brand strategy both of which position us to deliver unsurpassed value to our 35 million customers across South Africa and the rest of Africa.”

L-R: Umesh Amarnani, Managing Director, Pacegate Limited; Oluwatosin Oladele-Michael, Sales Manager - Steel Drums; Lydia Aguoma, Sales Coordinator; and Ayodapo Keshinro, General Manager, Sales and Technical; all of Pacegate limited at the celebration marking one year of steel drum production in Lagos.

Thursday 07 November 2019

BUSINESS DAY

COMPANIES&MARKETS

Business Event

BANKING

Agusto & Co releases 2019 consumer digital banking index report …assigns ‘4 star’ ratings to two banks in Nigeria SEGUN ADAMS

gusto & Co Limited, leading Pan African credit rating agency in Nigeria for over 26 years has released its 2019 Consumer Digital Banking Satisfaction Index report which highlights customer’s preferences and attitude towards digital banking platforms provided by banks in Nigeria. This Index in its second year was carried out following an extensive online and offline consumer survey carried out by Agusto and Co. Limited across various geopolitical zones in Nigeria. The survey was designed to gain an insight into the behavioural patterns of the respondents, these respondents were selected from both the formal and the informal sector. The output of the Index is based on information provided by respon-

dents on the top eight banks in Nigeria by total assets as at 31 December 2018. Two banks were assigned a ‘4 Star’ rating for Consumer Digital Banking Satisfaction of which Zenith Bank Plc scored the highest, emerging the ‘Best Digital Bank in Nigeria’. The ‘4 Star’ rating assigned to Zenith Bank Plc reflects transaction success rates, ease of use, perceived security and good troubleshooting & IT resolution on its different digital platforms. The Index revealed that Zenith Bank Plc has the highest transaction success rates on the bank’s digital banking platforms such as mobile app, USSD (Unstructured Supplementary Service Data) or web; the bank’s respondents experienced the most ease in navigating through the digital platforms, the bank has one of the highest number of custom-

ers who felt it has excellent rating on IT issue resolution. However, the Index indicated areas where the respondents requires an improvement on the services enjoyed on the various banks’ digital platforms. These areas include improvement on the interface of the various platforms, improvement on the success rate of transactions, enhanced security measures on the digital platforms and reduction in charges for frequently used services such as airtime and data top-up. According to Agusto & Co, the objective of this Index is to create an independent appraisal of the ease of using digital banking platforms by the Nigerian populace following increased competition by banks on digital platforms as well as the growing quest for financial inclusion using digital means.

L-R: Shigeyo Nishizawa, trade commissioner/MD, Japan External Trade Organisation (JETRO); Yumi Okpara, operations director, and Anthony Okpara, MD/CEO, Green Diamonds Limited, at their stand at the on-going international trade fair in Lagos. Pic by Pius Okeosisi

POWER

Ibadan Disco sets up team to curb aggregate, technical and commercial losses OLUSOLA BELLO

badan Electricity Distribution Company has commenced a major revenue protection campaign with a crack team of over 60 executives and officers to curb aggregate, technical and commercial losses. Inaugurating the team in Ibadan, the chief operating officer, John Ayodele said revenue protection is needed to block leakages that could make the Company go under, and that this trend has made many Discos unable to pay their bills to the Market Operators and the Nigerian Bulk Electricity Trader (NBET). He said lack of efficient revenue protection measures has been a major challenge as it deals with illegal consumption of power, pre-paid meter bypass, under billing, wrong tariff classification of Custom-

ers and energy theft. The company has discovered that energy theft and meter tampering accounts for about 60 percent of revenue losses across its Franchise, between January to Oct. 2019, as it has dealt with about 1,333 cases of Meter bypass. The setting up of the team is another initiative taken by the company to curb revenue leakages, other measures include: • The use of Advance Metering infrastructure-this allows for two-way communication between the meter and the utility provider •Whistleblowing initiative to get and investigate reports and tip-offs on corruption for prosecution. John Ayodele while receiving a delegation of the Management of the National Environmental Standards and Regulations Enforcement Agency (NESREA) in Ibadan

said the losses and financial challenges in the sector is worsened by multiple taxation and huge debt by government agencies and parastatals, Ajani Adeleke, the Zonal Director South-West who led the delegation charged every Nigerian to be environment safety conscious especially concerning environmental regulations. In a similar development, Ibadan Disco pledged its support to the rescue operations of the Federal Road Safety Corps in Oyo state, the chief operating officer who also received the Road safety commandant Uche Winifred Chukwurah touched on the need for proper earthing of houses to avoid loss of property, accidents and deaths, Chukwurah on her part promised to continue the job of keeping Nigerian roads free of accidents.

COMPANY RELEASE

L-R: Sammya ZamZam, society relations manager, EMEA; Gary Baker, managing director, EMEA, CFA Institute; Sunday Matthew Olumoroti ,CFA Charter awardee; Sade Odunaiya, CFA board member, and Banji Fehintola, CFA Society president, at the CFA charter award ceremony held at Four Points by Sheraton.

L-R: Devlin Hainsworth, MD, foods division, Flour Mills of Nigeria Plc (FMN); Enitan Olaleye and David Olaleye, winners; Rita Tsehai, head of marketing, FMN, at a presentation ceremony for winners of the allexpense paid Honeymoon to Dubai, by Golden Penny ‘Feed Your Love’ Campaign, in Lagos yesterday. Pic by Pius Okeosisi

Avant-Garde to address sustainable development, economic growth through Table Discourse Series

vant-Garde Innovation and Technology Limited, a company with interests in mitigating environmental risks and advancing socio-economic development in Africa, has announced the sophomore incarnation of its widely successful Sustainability Table Series, slated for 13th November 2019 at the prestigious Lagos Oriental Hotel, Victoria Island, Lagos at 10 am. The focus on sustainability for modern businesses is not only profitable, it is one that has huge positive impact on the global or local environment, community, society and economy and the Sustainable Development Goals, adopted by the United Nations in 2015, provide a viable roadmap for entrepreneurs committed to

championing businesses that are built to last. Thus, the need for the conversation about sustainability as it applies to Nigeria has grown. This year’s symposium offers the theme, The Future of Sustainable Development in Nigeria: Achieving economic growth with low carbon trajectory in a Circular Economy. The discourse brings together various experts from tiers of Government, researchers, universities, corporates and civil society organisations to discuss and solve pressing challenges facing select industries as it relates to the Environment, People, Climate Change, and the quest for a Circular economy. In a statement from Kayode Olaniyan, the Principal Con-

sultant and Convener, “protecting the environment is a global priority and Nigeria seems to be throttling its activities. Among the objectives of this year’s edition is to sharpen the evolving dialogue on the United Nation’s SDGs, share ideas and host deep-rooted arguments within the realm of sustainability in order to proffer solutions.” He elucidated further, stating that, “There is intensifying demand for a paradigm change, wherein the protection of the environment is directly correlated to a booming economy. It is particularly important to recalibrate from a resource-based economy to a knowledge-based economy in a bid to achieve Sustainable Development Goals.”

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L-R: Wale Adeniyi, vice president, NIPR; Charles Udoh, Akwa Ibom State commissioner for information; Nkechi AliBalogun, council member, NIPR, and chairman organizing committee, counci member, NIPR, and Toby Osoluka, member, organizing committee, at the Nigerian Institute of Public Relations (NIPR) Directors’/Heads of Department conference in Ibom Resort in Uyo Akwa Ibom.

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Thursday 07 November 2019

BUSINESS DAY

RESEARCH&INSIGHT

In association with

A WEEKLY PUBLICATION OF BUSINESSDAY RESEARCH & INTELLIGENCE UNIT(BRIU)

briu@businessday.ng

08098710024

Domestic debt stock at June 2019 : How the states stand

Jigawa’s domestic debt grew by 74 per cent to a tune of N38.67 billion in June 2019 from N22.19 billion in December 2015. Bauchi and Ekiti states got the least double-digit growth rate at 69 per cent and 65 per cent respectively, yet still higher than the national growth rate of 58 per cent during the reference period. Gombe, 49 percent, Cross River, 46 percent; AkwaI bom, 40 percent; Zamfara, 33 percent; Bayelsa, 29 percent; Ogun, 25 percent; Ebonyi, 23 percent,

tic debt by the states carry varied implications. For instance, the national domestic debt per capita is N20, 497. That is, if we add up the domestic debts of the 36 states and FCT and the sum were to be shared equally among Nigerians, each person would have been liable to pay N20, 497. However, sixteen states surpassed this threshold. Bayelsa, one of Nigeria’s oilrich states has a domestic debt per capita to the tune of N58,535. Cross River’s domestic debt per capita is at N43,665. It is followed by Delta at N41, 241; Lagos, N38,169; and Akwa Ibom, N37,652. On the flip side, twenty-one states have their domestic debt per capita below the national threshold. The five states at the bottom of this table are Yobe, N8,338; Niger, N7,522; Sokoto, N6,705; Jigawa, N6,636 and Anambra State, N6,048. It is certain that the increasing domestic debt stock by state government has implications for current and future populations of each state. One of the implications is the tendency of governments to raise the level of taxes to meet up with debt servicing. In August 2019, the 36 states of the federation paid N6.43 billion for servicing domestic debt under the Irrevocable Standing payment Order (ISPO). Ad-

and Plateau, at 2 percent, showed the order the states increased their domestic debt stock as at June 2019. The State of Osun maintained the same domestic debt stock as it was in 2015. Other states recorded growth in their domestic debt stock, albeit, below the national growth rate during the period. On the other hand, FCT, Kebbi and Delta states witnessed a decline of 1 per cent, 7 per cent and 27 per cent respectively in their domestic debt portfolios. The different amounts owed as domes-

ditionally, the 36 states also paid N17.9 billion for servicing debts incurred through the National water Rehabilitation Projects; National Agricultural Technology Support Programme, salary bailout, payment for fertilizers as well as for the National Fadama Project. Therefore, between January and August 2019, it means that the 36 state governments have paid N51.44 billion for servicing ISPO debts and N143.2 billion for servicing debts regarded as other obligations.

ISAAC ESOWE

s at June 2019, the 36 states of the federation and the Federal Capital Territory (FCT) owed N3.97 trillion as domestic debt. When compared with 2015 when all the states and FCT owed local creditors N2.50 trillion, the 36 states’ domestic debt witnessed an increase of about 58 percent during the 42-month period. Another way to look at this development is that the sub national governments and FCT borrowed an average of N34.8 billion on a monthly basis between December 2015 and June 2019. In terms of growth, Anambra, Yobe, Katsina, Borno and Sokoto topped the debt chart in as those states have a combined debt profile of N247 billion representing 6 per cent of the domestic debts owed by the 36 states of the federation. Among the states with the highest growth rate in domestic debt, Anambra State was indebted to the tune of N33.43

states have the growth rates of their domestic debts at above the national growth rate. Put differently, the aforementioned states recorded growth in their domestic debts from 100 percent to 190 percent. The states with double-digit growth

billion as at June 2019, and this represented a growth rate of 835 per cent when compared with N3.58 billion in December 2015. This value grew above the national growth rate of 58 per cent during the reference period. Yobe State is second on the radar with a growth rate of 610 per cent, implying that its domestic debt rose from N3.88 billion in December 2015 to N27.47 billion as at the end of June 2019. Following the same trend, Katsina, Borno and Sokoto states grew their domestic debt profiles by 476 per cent; 289 per cent and 187 per cent respectively. Taraba, Kogi, Benue, Nasarawa, Lagos, Oyo, Ondo, Imo, Abia and Adamawa

rates include – Rivers, Kaduna Niger, Kwara, Edo, Kano, Jigawa, Bauchi and Ekiti. The growth rate of each of their domestic debts as at June 2019 ranged from 65 percent to 98 percent. Niger State grew its domestic debt profile from N21.50 billion in December 2015 to N41.79 billion in June 2019, almost doubled the value of 2015. Kwara State doubled its domestic debt by 92 per cent when compared with the 2015 value of N31.97 billion as against N61.34 billion at the end of June 2019. Edo State, with N84 billion and Kano, with N117.34 billion domestic debt on the other hand, grew their debt by 81 per cent respectively. Similarly,

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Thursday 07 November 2019

BUSINESS DAY

Investor

In association with

Helping you to build wealth & make wise decisions Market capitalisation

NSE All Share Index

NSE Premium Index

N11.721 trillion

Week open (25– 10–19)

31,924.51 26,348.73

N12.826 trillion

2,191.31

Week close (01– 11–19)

26,293.30

N12.799 trillion

2,198.18

Year Open

Percentage change (WoW) Percentage change (YTD)

-0.21 -16.34

2,241.37

0.31 0.14

The NSE-Main Board

1,456.29 1,064.72 1,056.11

-0.81 -26.65

NSE ASeM Index

NSE 30 Index

NSE Banking Index

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

130.95

723.46

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

291.84

2,272.45

1,254.54

1,212.79

801.09

1,438.19

426.64

757.63

1,066.52 1,067.28

318.01

119.49

509.20

224.57

1,678.48

1,036.88

933.44

316.56

119.89

505.82

235.70

1,689.26

1,047.79

941.75

-0.40

0.33

-0.66

757.63

-0.21 -4.56

0.07 -24.69

-20.65

-5.21

-32.45

4.96

0.64

1.05

0.89

-22.01

-24.38

-15.36

-22.01

Access Bank: Still creating long-term value for shareholders …9M’19 financial scorecard impresses investors …analysts’ ‘buy’ rating means stock currently undervalued Iheanyi Nwachukwu

ccess Bank Plc is one of the teir-1 lenders that recently reported impressive financials for the nine months (9M) period ended September 30, 2019. A review of the financials published for the investing public shows the bank is already reaping synergies from its six months old business combination with Diamond Bank. The 9M’19 financials In the review 9M period to September 30, Access Bank grew its gross earnings by 37 percent year-onyear (y/y) and 15 percent quarter-onquarter (q/q) to N513.7billion (9M 2018: N375.2billion), with interest and non-interest income contributing 79percent and 21 percent respectively. The bank’s Interest Income grew by 48percent to N405billion in 9M 2019 (9M’2018; N274.5billion), coming from the combination with Diamond Bank coupled with the growing efficiency of the bank’s balance sheet. On the other hand, Non-Interest Income increased by 8percent y/y to N108.6billion in 9M 2019 from N100.4billion in 9M 2018, largely from increased retail commissions. Following its merger with Diamond Bank in March 2019, Access Bank Plc has become one of Africa’s largest retail banks by retail customer base. Access Bank’s Profit Before Tax (PBT) for the 9M’2019 period was

Herbert Wigwe, Access Bank MD

N103.1billion, which implies an increase of 47percent when compared with 9M 2018 level of N70.3billion, while Profit After Tax (PAT) increased by 44percent to N90.7billion from N62.9billion in 9M 2018. Return on Average Equity (ROAE) stood at 21.9percent with a Return on Asset (ROA) of 2.1percent in the period. The asset base of Access Bank remained strong and diversified with growth of 33percent year-to-date (YtD) in Total Assets to N6.61trillion in September 2019 from N4.95trillion in December 2018.

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Net Loans and Advances totaled N2.94trillion as at September 2019 (December 2018: N2.14trillion), while customer deposits increased by 65percent to N4.24trillion in September 2019, from N2.57trillion in December 2018. The balance sheet growth is reflective of the bank’s drive to increase lending and low cost deposits. Capital Adequacy Ratio (CAR) remained strong at 20.3percent, reflecting full impact of the IFRS 9 implementation as Risk-Weighted Assets increased by 26percent.

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Transitional CAR stood at 23.9percent. Similarly, Liquidity ratios of 48.5 percent (September 2018: 44.2percent), remained well above regulatory requirements. Non-performing loans (NPL) ratio stood at 6.3percent as at September 2019 (December 2018: 2.5percent). Net Interest Margin (NIM) of 6.8percent in 9M 2019 from 5.3percent in 9M 2018 while Cost of Funds (CoF) decreased 40 basis points (bps) y/y to 5.2percent from 5.6percent in 9M 2018. Yield on Assets of 13percent went up 110 bps y/y from 11.9percent in 9M 2018. Cost-to-Income Ratio (CIR) reduced by 170bps y/y to 63.1percent in 9M 2019 (9M 2018: 64.8percent). With this post merger 9M’19 scorecard, Access Bank Plc has proven its position as a diversified financial institution which combines strong retail customer franchise and digital platform with deep corporate banking expertise and proven risk management and capital management capabilities. Research analysts’ comments In their November 4 equity note, the Usoro Essien’s team of analysts at Vetiva Research set a reviewed target price (TP) of N12.38 per share for Access Bank (Previous: N12.43). They noted that the bank’s nine months profit strengthened despite cost pressures. “Q3 2019 was a challenging quarter for most banks under our coverage; hence, we were not overly perturbed by the bank’s weaker than expected Q3 performance. The bank’s shares

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have gained 9.6percent year-to-date (YtD) and are currently trading at a P/B of 0.5x versus a Tier-I peer average of 0.7x”. Also, research analysts at Lagosbased CardinalStone had in their October 28 note to investors assigned Access Bank stock a “Buy” rating. The analysts also identified some positives in the bank’s nine months scorecard. “We note that Access Bank was one of the few banks that met the Central Bank of Nigeria (CBN) loan to funding requirement as at September 2019. “Notwithstanding the 4.7percent quarter-on-quarter (QoQ) increase in operating costs, we note the improvement in efficiency as cost to income moderated by 200 basis points (bps) during the quarter. “Year-to-date, cost to income has declined by 80 bps to 63.1percent despite the one-off integration costs incurred. We believe the moderation in cost to income ratio suggests that the bank is already reaping synergies from its merger with Diamond”, according to research analysts at CardinalStone. Also in their market commentary on the nine months scorecard of Access Bank Plc, the Guy Czartoryski-led research analysts at Coronation Merchant Bank said, “We have a target price of N8.70 per share for Access Bank and given the upside relatives to current price of N7.50 per share, we maintain our ‘buy’ rating on the stock,” research analysts at Coronation Merchant Continues on Page 18

Thursday 07 November 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

Investor’s Square

United Capital Investment Views

Equity market: Renewed interest expected following tighter regulations on OMO market participation …as NSEASI tumbles 4.6% in October

he equities market ended October 2 0 1 9 b e a r i s h, a s the Nigerian Stock Exchange (NSE) All Share In d e x ( A S I ) d i p p e d by 4.6percent month-on-month (m/m) and year-to-date (YtD) loss worsened to -16.1percent (September-12.1percent). This was amid Q3 earnings releases and corporate action announcements. However, the last week of the review month w itness e d s ome buying interest, following CBN regulation which barred Non-Banking corporates from accessing the OMO market. Accordingly, the NSE-ASI ended 3 of 5 trading days in the green territory. However, on a week-on-week (w/w) basis, the profit takers had the upper hand, as the NSE-ASI fell by 21 basis points (bps) while yearto-date (YtD) return worsened to 16.3percent. O n a w / w b a s i s, w e observed a mixed performance across the 6 sectors we track, as 3 sectors closed the week in the green territory while the other 3 traded southwards. The Oil & Gas sector index (+5percent)

led the gainers camp, buoyed by price appreciation in Seplat (+9.28percent). The Industrial Goods (+1.1percent) and Insurance sector followed (+0.3percent), thanks to gains recorded by Cement Company of Northern Nigeria (+6percent), Dangote Cement (+2.4percent), AIICO (+11.1percent) and Continental Re (+0.42percent). On the flip side, the Banking (-0.5percent) and Consumer Goods (-0.7percent) sectors traded in the red territory, dragged by price declines in GTBank (-4.2percent),

Stanbic (-5.4percent), and Nestle (-1.7percent). In the telecommunication space, we saw a renewed selling interest in MTNN (-2.7percent). The market was abuzz w i t h c o r p o rat e a c t i o n s throughout the prior week. Notably, the biggest bank by assets in Nigeria- Access Bank announced its acquisition of controlling interests in Transnational Bank of Kenya Plc. In the cement industry, Dangote Cement announced its intention to conduct a share buy back as well as a reverse stock split. Also, Cement Company of Northern Nigeria announced a proposed merger with BUA’s Obu cement, which will lead to Obu Cement replacing CCNN on the main board of the Exchange. Also, Global Spectrum Energy Services Plc (N0.05/ share), Nestle (N25/share), Seplat ($0.05/share), Nigerian Breweries (N0.50/ share) all proposed to pay interim dividend. Meanwhile, we saw a spree of earnings announcements from listed players looking to beat the exchange’s deadline for

earnings publication. Looking into November 2019, we expect to see renewed interest in the equities market following tighter regulations surrounding participation in the OMO market by non-bank corporates. Also, increased activities are expected to be driven by positioning for Full Year 2019 dividend payments. Money Market: Stop rates crash at the NTB auction For the previous week, overall system liquidity remained buoyant, with naira injections surpassing outflows. In terms of inflows,

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we saw OMO maturities (N346.4billion) and NTB maturities (N132.5billion) hit the system, however, these were mopped up by corresponding OMO (N363.1billion) and NTB (N132.5billion) sales. Also, according to CBN’s financial data, there was an OMO repayment of N507.4billion during the review week ; however details of the inflow were unknown as at the time of this report. In all, money market indicators reflected the high liquidity level, as average interbank funding rates –open buy back (OBB) and Over Night (O/N) rates closed the week lower at 3.5percent (versus prior Friday’s 6.4percent). Elsewhere, primary market activities were upbeat, as local investors “shut out” from OMO auctions, scrambled for NTB instruments. At the NTB auction, while the Debt Management Office (DMO) offered N132.5billion, total subscription was N565.5billion, with significant interests across all maturities offered [Bid to cover: 91-day (2.6x), 182-day (4.6x) and 364-day (4.7x)]. With the overwhelming demand, the DMO was able to crash rates compared to the previous auction, as stop rate on the 91-day was 9.5percent (previously 10.8percent), 182day at 10.5percent (previously 11percent) and 364-day at 11.5percent (previously 12.9percent). For the OMO auction held on Thursday, the CBN offered a total of N330billion, with N50billion on offer for the 96 & 187-day bills and N230billion on the longest maturity. Demand remained strong for the 364-day (bid to cover: 1.8x) even though the auction was limited to only banks and foreign portfolio investors (FPIs). Meanwhile, demand for the 96-day (0.2x) and 187-day (0.2x) bills remained underwhelming. Like the NTB auction, stop rates across the maturities offered inched lower by an average of 4bps, with the CBN keeping rates high enough to attract FPI inflows. With demand unfulfilled at the auctions, we saw it filter into the secondary market, as average treasury bill yields declined by 36 basis points (bps) w/w to 12.4percent.

•Have you been shabbily treated by your registrar, stockbroke r or other capital market operators? Let us know and investor will help you investigate and report back. E-mail: iheanyi.nwachukwu@businessdayonline.com

Economy & markets

Flour Mills sustains profit growth in H1 Iheanyi Nwachukwu

lour Mills of Nigeria Plc recently released its unaudited half year (H1) results for the year 2019 which shows the company sustained growth in Profit After Tax (PAT) which increased by 16percent to N 5 . 9 b i l l i o n f ro m N 5 . 1 billion in H1’2018. Despite the challenging operating environment and continuing pressures on the profitability of most companies in the Fa s t- M o v i n g C o n s u m e r Good Sector, Flour Mills of Nigeria group’s unaudited half year result reflects the management’s strategy and commitment to growth and value creation.

Key highlights of the result at the Nigerian Stock Exchange (NSE) show the group recorded volume growth of 6percent when compared to the same period of last year; Profit Before Tax (PBT) came in at N8.6 billion, compared to N8.3 billion in H1, 2018, representing 4percent increase year-on-year (YoY). Finance Cost dropped to N8.8 billion, compared to N11.2 billion in H1’ 2018 (21percent decline YoY). The company’s management’s deleveraging strategy and lowered interest rates continue to achieve desired results. Although the revenue from some of our food businesses was adversely impacted by lower volumes, Pasta and Noodles recorded positive growth in base products, and the sugar

business continued to show remarkable growth in line with projections. The Agro-Allied business also continues to show improvements especially in the Animal feeds and Fertilizer segments. Commenting on the result, Paul Gbededo, the Group Managing Director, said: “We have posted an impressive result for the first half of the year with Profit After Tax increasing by 16percent to N5.9 billion when compared to last year.” “I am confident that we are on track to achieve our growth targets for the year as we continue to improve operational efficiency, reduce our finance cost and ultimately grow the wealth of our shareholders by increasing earnings per share,” he added.

L–R: Rasaq Ozemede, chief risk officer The Nigerian Stock Exchange (NSE); Michael Ango, associate director, Andersen Tax; Akin Oyegoke, managing consultant, Johan Consults; Tinuade Awe, executive director, Regulation, NSE; Linus Osita Okeke, Partner Ernst & Young and Oluyemi Obadare, business continuity manager, NSE during the Nigerian Capital Market Information Security Forum 2019, theme: The Nigeria Data Protection Regulation – Achieving Compliance” at the Exchange in Lagos.

Access Bank: Still creating ... Continued from page 17 Bank further stated. The analysts “Buy” rating for Access Bank stock is because they consider it currently undervalued and expect and expect the stock to underperform the market’s benchmark indicator over the next 12 months. CEO’s comments While commenting on the results, Herbert Wigwe, Managing Director/CEO, Access Bank Plc said “The Group delivered a robust performance in the first six months post merger, despite a challenging and fast-changing macro and

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banking landscape.” The results, he said which reflects the performance of the combined entity post merger “has outstripped those of the combined entities on a standalone basis.” “This further reinforces the bank’s sustainable business model and brand promise to deliver more to all stakeholders as we work to realise the envisioned synergies of merger. “The effective execution of our strategies ensured strong top- line figures of N513.7billion, a 37percent growth from the previous year, on the back of a 48percent y/y growth in interest income. @Businessdayng

“Customer deposits recorded a 65percent gain year-to-date (ytd) to N4.239trillion with low-cost deposits accounting for 54percent of the deposits mix. Pre-tax profits also grew 47percent y/y to N103.1billion, driven largely by a 71percent y/y increase in Net Interest Income, evidencing proficient utilisation of the bank’s assets”, the GMD said. “Customer deposits grew by 8.1percent since the merger from a combined customer deposits of N3.92trillion in March 2019 to N4.24trillion in September 2019 with strong retail base. Similarly, net loans and advances grew by 7.2percent post the merger.

Thursday 07 November 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

Seplat: Core business remains highly cash generative …Still a value stock for investors Iheanyi Nwachukwu

or investors who are looking for stocks that can create value –either through capital appreciation or dividend income – Seplat Petroleum Development Company Plc is one of them. Seplat is an independent Oil and Gas Exploration and Production (E&P) company in the Niger Delta region of Nigeria. The company has a 45percent stake in OMLs 4, 38, 41 and 40 percent stake in OML 53 and OPL 283. The company’s focus is on maximizing hydrocarbon output from its existing assets and exploring new opportunities in the energy industry. The value some analysts attach to the stock has not changed lately as shown in its reoccurrence in their stock picks till date. For instance, despite being priced at N 517 per share as at October 31, Lagos-based Vetiva research analysts in their market commentary following Seplat’s recently released third-quarter (Q3) results set a target price (TP) of N1, 188.65 per share for the stock. They also rated the stock a “Buy”. Vetiva ‘buy’ rating refers to stock that they consider highly undervalued, but with strong fundamentals, and where potential return in excess of or

Austin Avuru, Seplat CEO

equal to 15percent is expected to be realised between the current price and analysts’ target price. Listed on both the Nigerian and London Stock Exchanges, Seplat recently announced its unaudited results for the nine months ended September 30, 2019, following which it declared a $29million interim dividend to shareholders and highlighted that its recent £382million cash acquisition of Eland Oil and Gas Plc would create more value opportunities for shareholders going forward. In the review nine months period, Seplat working interest

production averaged 47,163 barrels of oil equivalent per day (boepd) for the period (2018: 50,303 boepd) and reflects slippage to the intended production drilling programme as a result of rig mobilisation delays and availability. Four drilling rigs are now operating across Seplat’s portfolio to drive liquids working interest production to an expected exit rate of 30,000 bopd. Production uptime stood at 91percent while average reconciliation losses for the first nine months stood at 13percent. This factor for the third quarter only, stands at 1percent while the factor for the first six month period is still under review and expected to be consistent with prior periods when finalised Full year average working interest production guidance has consequently been revised downwards to 45,000 boepd to 48,000 boepd (from 49,000 boepd to 55,000 boepd), comprising 23,000 to 25,000 bopd liquids and 128 to 133 Million Standard Cubic Feet per Day (MMscfd) gas. The company’s 9M revenue of $495 million in 2019 (2018: $568 million) reflects lower production and sales yearon-year together with lower price realisations of $64.22 per barrel (/bbl) and $2.8/Mscf (2018: $71.14/bbl and $3.06/ Mscf); gas tolling revenue of $67 million also recognised in relation to the processing of

Nigerian Petroleum Development Company (NPDC) gas at the Seplat sole risk funded Oben gas plant 375 MMscfd expansion between June 2015 and end 2018. Gross profit of $265 million (2018: $306 million) represents a 54percent gross profit margin; operating profit of $211 million (2018: $264 million) with $36 million recognised within Other Income (including a $31 million oil underlift position and $3 million income generated by third party useage of the Group’s Warri pipeline) and a $5 million net fair value gain offset by a $40 million impairment of NPDC receivables. Profit for the period of $185 million (2018: $91 million) positively impacted by a 37percent year-on-year reduction in finance costs reflecting deleveraging of the balance sheet early in the year when the outstanding balance on the 2022 RCF was ultimately reduced to zero. Cash generated from operations stood at $306 million (2018: $386 million) versus capex incurred of $64 million (2018: $29 million). Full year 2019 capex spend expected to be around $120 million; gross debt of $350 million at 30 September consists solely of the 2023 senior notes with undrawn headroom of $225 million available through the 2022 Revolving Credit Facility (RCF).

Conoil sustains profitability as Q3 revenue soars by 49% Iheanyi Nwachukwu

onoil Plc continued on it streaks of impressive performance this year with the frontline oil marketing company posting an 8 percent increase in Profit Before Tax for the nine months period ended September 30, 2019. The unaudited results of the company released recently at the Nigerian Stock Exchange (NSE) showed that Conoil recorded a 49 percent increase in revenue to N112.7 billion from N75.8 billion in the same period in 2018. The report also showed that the company declared a profit before tax of N2. 45 billion compared to N2.26 billion recorded in the previous year, an increase by 8 percent while profit after tax (PAT) jumped by 7percent from N1.58 billion in the corresponding nine months

period of last year to N1.7 billion in Q3’ 2019. Th e p e r f o r ma n c e o f the major fuel marketer so far this year showed that it continued to brave the stifling operating environment in the downstream sector of the nation’s petroleum industry. The result indicates that the company’s shareholders are in for another financial year of bumper reward. The company attributed this sterling performance to the adoption of robust growth strategies, efficient management of resources and total elimination of waste in its operations. Revealing its edge, the company said it strengthened and repositioned its core b u s i n e s s e s, w i t h h u g e investments in retail network expansion, which involved building multi-million Naira mega stations across the country.

FCMB Flexxtern contest winners get internship, employment opportunities

Expert outlines strategies to attract global institutional investors

nother set of thirty young Nigerian graduates are ready to gain firsthand work experience and employment opportunity in the corporate w orld under the fourth edition of the First City Monument Bank (FCMB) internship programme and contest, tagged #FCMBFlexxtern. The participants, who are between the ages of 16 and 25, emerged victorious in an online contest organised by the Bank as part of its youth engagement, capacity building and reward initiatives. This brings to fifty, the number of winners produced by the #FCMBFlexxtern initiative since it was launched in 2016. The latest winners (Flexxterns) were inaugurated and presented with certificates at an event

icky Okoye, founder and chief strategist, Nicky Okoye Organisation (NOO) has outlined six strategies that can reposition and usher in monumental wealth and prosperity for Nigerian and African businesses over a short term period. Okoye , who worked with Merrill Lynch, Nigerian Stock Exchange, Transcorp and NITEL, advised entrepreneurs to adopt a new approach to raising capital and investment which he termed a Global Capital Strategy. He spoke at the Global Capital Strategy Session hosted by NOO in Awka, Anambra State, which was attended by over 600 entrepreneurs Nigeria and Ghana. According to him, the strategies, which were developed by his team, if adopted by entrepreneurs,

on October 31 in Lagos. Each of them will get a 3-month paid internship and career building experience with either FCMB or one of the organisations partnering with the bank on this capacity building initiative. The thirty beneficiaries also stand a chance of being retained for full employment at the end of their respective internships. The inauguration provided an opportunity to meet the Flexxterns and introduce them to the organisations they would respectively work with. In attendance were representatives of the partner organisations such as Insight Publicis, Terragon Group, Digiengage and TISV Digital. Other partners were 618 Bees, Lumenave, Sagerock & Associates, Vas2Net, School Kits Limited, Dmastermind as well as Wetherheads. www.businessday.ng

The 2019 #FCMBFlexxtern contest, which began on September 13 and ended on October 5, was held at Flexxzone, the exclusive m i c ro si t e bu i l t a rou n d FCMB’s Flexx proposition and which also provides relevant content to the Flexx target audience on a wide range of areas, including fashion, lifestyle, entrepreneurship. To qualify, interested youths were advised to upload a 45-second video to YouTube with the hashtag #FCMBFlexxtern, explaining why they were the best for the job and invite their friends to vote for them. At the end of the public voting stage, the 60 entries with the highest number of votes were shortlisted, after which a panel of judges carried out an independent rating of the contestants. This led to the

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will receive favorable attention from global capital institutional investors. He talked about the China Strategy, which he said Nigerian and African entrepreneurs could use to gain from over 85 million jobs that will be leaving China for new manufacturing bases over the next five years, as China joins the high income countries. Okoye spoke about having a Digital Strategy in which over 10 million African businesses need to adopt a new digital profile and reposition using cutting edge technologies of virtual reality, artificial intelligence, nano technology and robotics. Other strategies he outlined, included an Agricultural Strategy which will convert strategic sites in Nigeria into a global base for processing and export of processed agricultural products, especially citing industrial processing estates @Businessdayng

for cassava, cashew, cocoa, sorghum, sesame seed and palm products, all agricultural products that Nigeria leads as top three or top ten in global production today. The NOO boss also mentioned a Local Content Strategy which has achieved success in Nigeria’s oil and gas industry, saying it needed to be extended beyond hydrocarbons. This is an Africa Content Strategy which would allow entrepreneurs and businesses to build capacity on the back of the Africa Continental Free Trade Area agreement currently being established and there is also the Diaspora Strategy which gives entrepreneurs and businesses the possibility to start looking at the $270 billion in annual earnings of the Nigerians in Diaspora population as a market into on itself,” he said.

Thursday 07 November 2019

BUSINESS DAY

Thursday 07 November 2019

BUSINESS DAY

Stakeholders at BusinessDay investment and Capital Markets conference in Abuja

Frank Aigbogun, publisher/CEO, BusinessDay Media Limited, giving his welcome address.

Zainab Ahmed, minister of Finance,

L-R, Dahiru Usman, director, DSU Brokerage with Titi Odunfa, CEO Sankore Investors,

L-R, Dahiru Usman, director, DSU Brokerage with Isa Ahmed, chairman, Nasarawa Micro Finance Bank Limited.

L-R, Titi Odunfa, CEO, Sankore Investors with Ayotunde Owoigbe, partner Banwo and Ighodalo.

Cross section of participants.

L-R,Mary Uduk, acting director general, SEC; John Osadolor, director, BusinessDay Media Limited and Ade Adefeko, vice president, corporate and government relations, Olam Nigeria.

L-R, Dahiru Usman, director, DSU Brokerage with Haruna Jalo-Waziri, CEO, CSCS.

L-R: Tolu Osinibi, MD FCMB Capital Markets with Jude Chiemeka, head trading business NSE.

L-R: Stella Duru, with Toyin Bashir, partners both of Banwo and Ighodalo.

Muhammad Suleman,(l) head Strategy, AMCON with Mary Uduk, (r) acting director general SEC.

L-R, Nonso Obikili, chief economist, BusinessDay Media Limited with Oscar Onyema, CEO, NSE, during a fireside chat.

L-R, John Osadolor, director BusinessDay Media Limited; Mary Uduk, acting director general, SEC, and a guest.

L-R, Abimbola Kasim, vice president corporate finabce FCMB Capital; Haruna Jalo-Waziri, CEO, CSCS; Anthony Osae-Brown, bureau chief Bloomberg Nigeria; Titi Odunfa, CEO, Sankore Investors, and Jude Chiemeka, head trading business NSE.

L-R, John Osadolor, director, BusinessDay Media Limited; Fibian Akagha, executive director, operations; Frank Aigbogun, publisher/CEO, BusinessDay Media Limited and Bashir Ibrahim Hassan, GM business development north, BusinessDay.

L-R, Ehimeme Ohioma, head survelance, PENCOM; Chuka Mordi, CEO, Ellah Lakes; Steve Osho, co-managing partner, Commercio Partners; Kemi Akinde, head research Meristem Securities; Emeka Ngene, CFA-head of Investment Banking, DLM Advisory Partners, and Nonso Obikili, chief economist BusinessDay Media Limited. Pictures by Tunde Adeniyi

Thursday 07 November 2019

BUSINESS DAY

PRIVATEEQUITY &FUNDRAISING

Survey shows tech M&A leaders bullish about deal activity for next 12 Months, but forecasts are cooling MICHAEL ANI

new survey by Morrison & Foerster, a leading global law firm, reveals that dealmakers are becoming increasingly split on what lies ahead for deal activity in the technology space. According to the findings, the majority of dealmakers (about 40 percent), expect activity to increase over the next 12 months while 32 percent predict activity will remain t h e sa m e, and 28 percent anticipate a decline. Although most dealmakers remain bullish, the results show a narrowing gap, with more respondents delivering a cooler forecast than they did in October 2018, when the last survey was conducted. The report found that economic factors accounted for most of the dealmakers’ concerns, w ith 61 percent citing fears of a potential recession and 57 percent citing tariffs or trade disputes as possible deterrents to future deals. “I don’t think it’s surprising that dealmakers have mixed opinions at this time,” said Eric McCrath, co-chair of Morrison & Foerster’s Corporate Department. “The environment is changing. There are a number of unprecedented economic factors and political situations currently at play that make accurately forecasting future deal activity more difficult. Also, 2018 was a record year for tech M&A. We’re beginning to see those highs level off and return to a more sustainable model.”

According to 451 Research’s M&A KnowledgeBase, 2019 tech M&A activity currently trails in comparison to the bullish deal volume and value totals of 2018. In the first three quarters of 2019, nearly 2,700 deals valued at $356 billion were completed, whereas 2,854 deals, valued at $447 billion, were completed over the same period in 2018. Additional key findings, takeaways, and analysis from the Tech M&A Leaders’ Survey include: Private Equity forecasts are also mixed Respondents were also split on how they think tech acquisitions by private equity firms will proceed in the

next 12 months. 35 percent of the respondent say they are expecting an increase in activity, 37 percent predicts activity will stay the same while 28 percent say they are anticipating a decrease. According to 451 Research, private equity deals are currently at a slight decline this year, with financial sponsors having completed 7 percent fewer deals so far in 2019, compared with last year’s record activity. Eight out of ten survey respondents point to higher pricing as a cause for this year’s dip in deals, while nearly the same number (70 percent) believe that the need to put more equity into each deal also played a part.

Cross-Border M&A is at a crossroads While cross-border M&A is expected to decline across most regions, targets in Asia-Pacific are most likely to be impacted with 48 percent of respondents, say they expect a decrease in deal flow into the region by international acquirers. This number is slightly less for Western Europe, where 42 percent of respondents predict a decline. The majority of respondents think cross-border activity will remain consistent in South America (58 percent) and the Middle East and North Africa (52 percent), while respondents were evenly split about their

predictions of North America: 32 percent think acquisitions by international acquirers of North American targets will increase, while the same number project a decrease. Trade disputes are considered the biggest potential hindrance to future international acquisitions, with 73 percent of dealmakers citing it as a concern. Dealmakers are also taking Brexit into account, with 58 percent anticipating it having an impact. A higher percentage of respondents are also more concerned with Committee on Foreign Investment in the United States (CFIUS) than they were last year, with 70 percent citing CFIUS as a possible deter-

rent to deals compared to 54 percent in October 2018.

level and with management also contributed to HIK’s expansion as a business. “Over the eight-year investment term, we were able to assist the company in improving the evaluation of new investments and capital projects, as well as improve their financial reporting and corporate governance.” While this exit brings to a close the partnership

between EXEO Capital and HIK, Strauss said that aquaculture remains a focus area for current investments. “Just last year, our AgriVie Fund II concluded an investment into TerraSan - a fast-growing aquaculture company operating on the South and West coasts of South Africa. This is our second Agri -Vie Fund, building on the success of its predecessor $100m Fund.”

A drop in valuations is anticipated A little more than half (54 percent) of respondents expect private company M&A valuations to decrease in the next 12 months. This correlates with current market trends, according to 451 Research, which found that among private tech companies selling for $100 million or more, the median multiple stands at 5x trailing revenue in 2019, down from 5.3x last year. About the same number (56 percent) believes both corporate acquirers and private equity firms will pay lower multiples on future deals.

Agri-Vie sells stake in SA abalone farming company

gri-Vie Fund I, the Africa food and agribusiness investment fund managed by pan-African private equity investment firm EXEO Capital, has announced its exit from abalone farming company HIK Abalone Farm The Agri-Vie interest was sold to African Pioneer Group, a black-owned investment company, with other interests in the fish-

ing sector. Izak Strauss, EXEO Capital partner, said: “With the ocean’s natural resources coming under increasing pressure, we have long had a keen interest in investing in good, viable aquaculture projects. Established in 1998 in the Southern African coastal town of Hermanus, HIK was already a well-established company at the time of investment and had an ex-

cellent management team. “Furthermore, most of their income was USDbased, which promised a good rand hedge for the fund,” Strauss added. This reasoning proved sound, based on the impressive return achieved by the fund upon exiting. “Over the eight-year investment term, we invested a total sum of R41.5m in two tranches and achieved an excellent return that is

in line with expectations for private equity investments,” said Strauss. “We were also able to enhance our knowledge of aquaculture business in our interaction with the company and industry. We expanded our network in the industry through building a strong relationship with management and fellow shareholders.” Strauss believes that this interaction at board

BusinessDay PRIVATE EQUITY & FUNDRAISING (Team lead: LOLADE AKINMURELE - Analysts: MICHEAL ANI, DIPO OLADEHINDE, ENDURANCE OKAFOR, DAVID IBEMERE ... Graphics: SAMUEL IDUH ) Businessday’s Private Equity and Fundraising section is a weekly publication that provides in-depth analysis on private equity trends and tracks deal activity in Nigeria.

Email the PE & F team loladeakinmurele@gmail.com

Continues on page 34

Thursday 07 November 2019

BUSINESS DAY

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Thursday 07 November 2019

BUSINESS DAY

Retail &

consumer business Luxury

Malls

Companies

Deals

Spending Trends

Consumers make early yuletide shopping as Lagos International Trade Fair kicks off OLUFIKAYO OWOEYE

he annual Lagos International Trade Fair, the largest international trade fair in Nigeria has over the years become a gathering of top brands and a convergence point for the creme de la creme of Nigeria and foreign top business organizations and personalities to display their latest offering to con-

sumers. Visit by BusinessDay to Tafa Balewa Square (TBS), venue of the event reveal that despite the sluggish economic growth shoppers are taking advantage of the opportunity provided by the Fair to buy different products such as household items, food items, cooking utensils, fabrics, financial institutions were also present at the event At the event, various

brands were also seen jostling for prime space at the venue to catch the attention of shoppers. The annual event has also helped shoppers from the nook and cranny of the country to make early shopping at discount prices to avoid the yuletide rush shopping. Elizabeth Adejo, a Lagosbased housewife said she takes advantage of cheaper prices to buy some clothes for her children ahead of

Christmas and New Year celebrations. “Usually one would expect that the prices would come down, that is the essence of a trade fair, but this year’s trade fair is different as the is no significant change in price compared to other markets outside,” she said. Another shopper at the event, Kingsley Nwachukwu, said he always look forward to the Trade Fair and buy some goods in bulk with the hope of selling them dur-

ing the festive periods. “So far the turn-out is still low, but by the weekend, more shoppers would visit this venue to make buy products here,” he said. Chi Wang, a Chinese and tent owner at the event said Lagos International Trade Fair has become a well-known platform for his organisation to display their latest brands for Nigerians. “Nigeria is a very important country for several for-

eign brands on he continent and Lagos being the commercial capital of Nigeria is very strategic to our growth,” he said. The 10-day event usually begins on the first Friday in November of every year, since 1981. The Lagos Chamber of Commerce and Industry, which is the foremost highly influential in Nigeria, took over the organisation of the fair in 1986 and has been staging the fair annually to date.

Company

Carbonated beverage makers should get prepared as government mulls excise duty .... may suffer dip in sales like beer makers BUNMI BAILEY

roducers of carbonated drinks should get ready for the worst as government mulls imposition of excise duties on soft drinks such as Coca-Cola, Pepsi, Bigi Fanta etc. At a time when consumer goods players are struggling with slower sales and thinning margin, the impact of the proposed excise duty will further depress top and bottom-line. This was the experience of their counterparts in the brewery space when government imposed higher levies on their products. ‘Over the last 16 months, the increase in the excise duty has been pressuring their margins and combined with weak consumer spending’, said Abiola Gbemisola, a research analyst at Lagos-based investment firm, Chapel Hill Denham. According to Gbemisola, brewing companies have not been able to increase the prices of their products to offset the impact of higher duty as a result of the weak purchasing power of an average Nigerian. Last Month, Nigeria’s Minister of Finance, Zainab Ahmed, while addressing the media at the side-lines of the recent annual meeting of the International Monetary Fund in Washington , said Federal Government is contemplating on the introduction of excise duty on carbonated drink as a source of additional

revenue to cash-strapped government. “In expanding the revenue base, we have proposed the increase of VAT but there are also other revenue streams that we are looking at and some of them include the introduction of excise duties on carbonated drinks but there is a process to doing these things,” Ahmed explained. An excise duty is a levy placed on the manufacture of locally produced goods. Government introduce excise duty basically to discourage the purchase of goods that may harm consumers or the environment. The carbonated soft drink market commands a unique hold in the food and beverage sector in Nigerian economy. Despite the huge popularity of the juice and still drink market, the unique tasting appeals of carbonated soft drinks and its many array of flavour have always been a strength other drinks cannot match. Innovation has centred on flavours this year as companies like Pepsico and Unilever introduced new ready to drink Lip tea drinks and Pepsico’s new flavours such as Pepsi berry, Pepsi lime and Pepsi mango. Also, Coca-Cola increased the volume of it drinks from 35cl to 50cl and Chapman increased theirs to 60cl still at the same price of N100. “They are testing the water generally and growing their portfolio by introducing more www.businessday.ng

flavours in the market, it is an additional increase in sales for them, an inventory manager at Coca-Cola who wishes to be anonymous said. “So it is a two way thing if the duty is placed on them. They will have to increase prices and if they do that they will lose money, be less profitable and most of them will restructure their business and if they don’t increase prices due to the weak purchasing power, they will have to let go of some of our staffs,” the manager said. Nigeria’s fast-growing population brings with it a continuing demand for soft drinks, especially as the climate is quite hot. According to Euromonitor International, a global market intelligence publisher, the country ranked fourth globally in the volume of soft drink sales recorded in 2016. It is believed that an excise duty is a charge that the consumer is supposed to pay not the company. “In a situation where most players implement a pass on to consumers, I believe demand would not be significantly affected because carbonated drinks are not very elastic,” Ayorinde Akinloye, a consumer analyst at CSL Stockbrokers said. Akinloye maintained that players who hike prices to offset the impact of the duty may see demand for their products drop as consumers will most likely switch to substitutes that are not affected by price increase. https://www.facebook.com/businessdayng

@Businessdayng

Thursday 07 November 2019

BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

AICIF: Experts call for awareness, legal framework to aid Islamic financial inclusion in Nigeria IFEOMA OKEKE

xperts in financial sector have called on relevant regulatory bodies to increase awareness and create strong legal framework that will help increase Islamic financial inclusion in Nigeria. Speaking during the 4th Edition of African International Conference on Islamic Finance (AICIF) in Lagos, Ashraf Amma, director PWC, Luxembourg said Sudan has continued to be a leader of Sukuk issuance volume in Africa. Sukuk is an Islamic financial certificate, similar to a bond in Western finance that complies with Islamic religious law commonly known as Sharia. He however noted that sadly, globally, Africa contributed less than one percent in Sukuk issuance in 2018, showing that there are lot of untapped opportunities in Africa. “Africa has continued to face considerable challenges in developing strong sukuk market as a result of regulatory tax and legal framework, lack of transpar-

ency, cost of issuance, number of debit indexes benchmark and hedging currency risk. He spoke on the need for Africa to have level playing field in taxation of Islamic contracts and the need for more awareness among multilateral development banks and agencies. Speaking during a panel session themed: ‘Regulatory and Cross Border Issues Affecting the Utilisation of Sukuk,’ Adeola Sunmola, a partner in Udo Udoma and Belo-Osagie’s banking and Finance, power, projects and infrastructure said there is lack of

clarity in Nigerian laws in relation to how Sukuk is structured. “When there are issues in relation to Sukuk, people often do not know who to run to. There should be clarity on the transaction structure and taxation exemptions. Our laws and regulations are reactionary. We need to be more forward looking in terms of making laws that can adapt to transactions of this nature, so we can understand them when these issues arise,” Sunmola said. Muhammed Dabai Suleyman, director Central Bank of

Nigeria and Head of National Programme for the Financial System Strategy (FSS2020) who also spoke during the panel session said Sukuk is needed to fund

infrastructure development. “Domestic market must be very robust. We need to develop Continues on page 29

HiiL 2019 innovating justice challenge to unveil next generation of justice innovators … Adekoya, Candide-Johnson, others to speak at regional finals

he HiiL (The Hague Institute for Innovation of Law) has announced that it would reveal the winners of its innovating justice programme, come November 14th, 2019. This reveal, which will take place at the West Africa regional finals of the Innovating Justice Challenge, scheduled to hold at the Consulate General of the Kingdom of the Netherlands, 14A Walter Carrington Crescent, Victoria Island, Lagos, will unveil the next generation of justice innovators under this programme. The programme has earned a global community of justice entrepreneurs international recognition for making justice systems more user-friendly, is aimed at supporting innovators that prevent or resolve people ́s pressing justice problems. The Regional Finals is one of four events taking place across Africa the Netherlands Ministry of Foreign Affairs to scout the next

a financial identity infrastructure that enables financial services to verify and onboard the identities of individuals and businesses BANKLY, is a savings and cash digitisation platform that allows its customers to save up for emergencies using vouchers and an agent network.

generation of promising justice innovations preventing or resolving people’s most pressing justice needs. The finalist will on this occasion, pitch their ground-breaking innovations to a jury of international experts who will choose the best three. The winners of the challenge, will gain acceptance into HiiL’s Justice Accelerator, can receive up to 20.000 Euro in grant funding and potential third party investment, tailored training and busiwww.businessday.ng

ness development support, access to HiiL’s international network of experts and global exposure. The finalists include: Africlaim, Appruve, Bankly AFRICLAIM specializes in securing financial and non-financial compensation for African airline passengers involved in flight disruptions including cancellations, delays, and overbooking. APPRUVE: Many Africans have no valid means of identification and as a result, are excluded from many services and benefits including financial services. Appruve is https://www.facebook.com/businessdayng

COMMUNITY PEACE INITIATIVE Community Peace Initiative seeks to promote peace and justice in conflicting communities in Northern Nigeria by engaging their traditional and religious leaders to resolve communal conflicts. LAY BETTER Lay Better through its conversational mobile bot Liliane provides legal advice in more than 10 areas of law for citizens of Benin Republic. SUNULEX

In order to help Senegalese citizens understand the law, Sunulex provides them with free short videos explaining their rights and procedures of enforcing them. Sunulex also offers online access to legal resources for francophone Africa. THE FLEMER PROJECT INITIATIVETo facilitate the decongestion of Nigerian prisons, The Flemer Project Initiative uses an incentive-based volunteer system enabled by technology, to provide active legal representation for indigent pre-trial detainees. VESICASH Despite the benefits of e-commerce for both buyers and sellers, it brings with it its own unique type of disputes. Vesicash is an escrow platform that prevents disputes and uses its digital dispute resoluContinues on page 29

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Thursday 07 November 2019

BUSINESS DAY

PERSPECTIVE

LegalBusiness

Legal consequence of Nigeria’s recent amendment of the Deep Offshore Inland Basin (Production Sharing Contract) Act ADEOYE ADEFULU

igeria’s President gave his assent to the Deep Offshore Inland Basin (Production Sharing Contract) Act CAP D3 LFN 2004 (Amendment) Bill 2019 recently passed by the National Assembly. The Bill amends the Deep Offshore Inland Basin (Production Sharing Contract) Act (the “Principal Act”) mainly by providing for a different royalty regime. This paper scrutinises the fiscal provisions of the Bill in the deep offshore area and the potential implications of its passage. Before doing so however, I will discuss Production Sharing Contracts (PSCs) in Nigeria and provide a background to what made the Principal Act necessary. PSCs and the Deep Offshore Inland Basin (Production Sharing Contract) Act Prior to the promulgation of the Principal Act, Nigeria’s fiscal terms were determined by the Petroleum (Drilling & Production) Regulations

(“PDPR”) (Rent & Royalties) and the Petroleum Profits Tax Act (“PPTA”) (Taxes). Under the PDPR the applicable royalty rates were: The PPTA provides for taxes at 65.75% for the first five years of a company’s production and 85% thereafter. Nigeria entered its first PSC in 1973 with Ashland Oil. Ashland Oil’s assets were acquired in 1998 by Addax. The PSC became the preferred petroleum development agreement for the Nigerian government in 1993, when Nigeria sought to develop its deep offshore resources and was unwilling to contribute money as it had done under the joint venture arrangement. In recognition of the risks associated with developing these offshore assets, the PSCs were designed to provide enough fiscal incentives to encourage International Oil Companies (IOCs). Under the PSCs signed in 1993 (1993 PSCs), the royalty rates were graduated according to water depth as follows: The royalty rates were applicable to the contract area. The 1993 PSCs also provided that the applicable petroleum profits tax rate to the contract area would be 50%. These provisions contrasted with the royalty provisions under the PDPR and the tax regime under the PPTA. Whilst the Nigerian National Petroleum Corporation (NNPC) executed the PSC as concessionaire and it was approved by the Minister of Petroleum Resources, the 1993 PSCs did not have the power to override the PDPR or the PPTA. This explains the need to legislate the fiscal elements of the PSC in the Principal Act. The Act replicated the PSC royalty provisions, save for areas up to 200 metres water depth, over which it was silent. It also adopted the provision for a 50% petroleum profits tax rate. Amongst other provisions, the Principal Act provided for the review of the provisions of the Act and the adjustment of the PSCs in

favour of the government, if the price of crude oil exceeds $20 in real terms. Notwithstanding these provisions, the Act was to be subject to review 15 years after the commencement date of the Act and every 5 years thereafter. Until the recent passage of the Bill, the Act has not been reviewed. This has been a source of tension between the government and the IOCs. Over the years, the government has expressed its concerns about the fall in government revenue, arising from the perceived favourable terms under the 1993 PSCs. It has proposed changes to the fiscal regime under various iterations of the Petroleum Industry Bill, which have failed to pass from 2009 till date.

(assuming the oil price of 4th of November 2011 of US$ 62.17). This of course will have immediate economic impact on any project in that circumstance. Stabilisation Clause to the Rescue? The 1993 PSCs include a stabilisation clause in Clause 19.2, which provides that in the event of any change in law which “materially and adversely” affects the rights and obligations or the economic benefits of the Contractor, the parties shall use their best efforts to modify the PSC in such a way as to compensate for the loss of economic benefits. This means that if a

It is my view that the parties are unlikely to agree a modification to the PSCs within the 90-day deadline prescribed under the contract. Where no agreement is reached, I expect that the matter will be referred to arbitration, most likely by the Contractor. In my opinion, it will be straightforward for the Contractor to establish that: 1. A change in law has happened; and 2. The change in law has had a material and adverse effect on the Contractor’s economic benefits under the PSC. Where this happens, it will be up to the arbitration panel to determine the most ap-

The Bill The Bill was introduced to the Senate as an executive Bill in October 10, 2019 and passed by it on October 15, 2019 before being passed by the House of Representatives and given assent by the National Assembly on November 4, 2019. It is fair to say that the timelines are unprecedented. The Bill provides for a new royalty regime for companies operating in the deep offshore area.

Instead of the graduated royalty by water depth provided under the PSC and the Principal Act, the Bill provides for a dual royalty regime. Royalty by volume of production will be at a single rate of 10% and is to be calculated on a field basis as opposed to contract area basis under the Principal Act. It is not clear whether the basis of calculations would have any fiscal implications on producing companies in the deep offshore area. In addition to the royalty by volume, the Bill also introduces royalty by price. This is based on the price of oil at the time of production. The applicable rates are as follows: The effect of the above is that a company currently producing in an area of 1001 metres water depth, which under the Principal Act pays 0% royalty will now be required to pay 10% royalty in terms of royalty by volume, and an additional 4% in terms of royalty by price

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contractor under the PSC can demonstrate that the change in royalty under the Bill has had a material and adverse economic effect on it, NNPC is obliged to discuss and incorporate changes to the PSC terms to minimise the impact of such adverse economic effect. The economic levers available to the parties under the PSC to address this situation are limited as most of the levers will require changes to legislation. An obvious area however, which will not require legislative change is an amendment to the profit sharing terms. The PSC allocates Profit Oil (the available oil after Royalty Oil, Tax Oil and Cost Oil have been deducted) between the NNPC and the Contractor on a graduated basis depending on the volume of production from the contract area. Under the 1993 PSC, the split in favour of NNPC may rise to 60% of the Profit Oil when the cumulative production is between 1,501 to 2,000 million barrels of oil. The parties may of course agree to modify the contract in relation to non-economic levers. Clause 19.2 requires the parties to make the necessary modifications within 90 days and where this fails, either party may refer the matter to arbitration. The determination of the arbitrator is final, and the PSC will be deemed modified in accordance with the determination of the arbitrator. My opinion

propriate mechanism for compensating the lost economic benefits. The net effect is that with respect to the 1993 PSCs, the overall government take (i.e. royalty, tax and NNPC profit share) will not increase if the provisions of the stabilisation clause are brought into effect. Concluding remarks It is worth noting that the provisions of the Principal Act applied not only to companies with PSCs with NNPC but also to licences obtained under the sole risk awards made in the 1990s. These licences have no protection from the economic consequences of the change in the fiscal terms under the Bill. Whilst I have highlighted the potential legal consequences that may arise as a result of the passage of the Bill and assent by the President, there are other strategic considerations for both the government and the Contractor, which may influence the outcome. The chief consideration in this regard is the expiry of the 1993 PSCs. These contracts have a 30-year tenure and renewal discussions are ongoing. I expect this to be used as leverage by the government. Another consideration is the pending final investment decisions (FID) on a few 1993 PSC projects. FIDs on such projects will be delayed as the companies consider the impact of the royalty changes in the Bill to the feasibility of those projects and the government will need to reflect on the impact of such delays on its overall objectives. The speed of the passage of the Bill and its assent is also instructive. On the one hand, it shows that the Executive and the Legislature are working hand in hand and gives hope that the petroleum industry bill will be passed in one form or the other under this government. On the other hand, the private sector will be concerned about the lack of consultation with it and what this means for the wider reforms to the sector.

*Dr. Adeoye Adefulu is an Energy Partner in the law firm of Odujinrin & Adefulu. Dr. Adefulu writes and speaks regularly on legal and regulatory issues in Nigeria’s oil and gas industry. https://www.facebook.com/businessdayng

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Thursday 07 November 2019

BUSINESS DAY

INDUSTRYFILE

LegalBusiness

Experts at DealHQ Roundtable underscore need for sanctions, accountability and ethics in board activities …As law firm unveils Corporate Governance Compliance Report Generator for Private Companies

n Thursday, 31st October 2019, Commercial Law Firm, DealHQ Partners, one of the newest entrants into the transaction advisory space in Nigeria; hosted over 40 C-Level Executives at its inaugural Enterprise Roundtable. Lead Advisor, Tosin Ajose disclosed that the roundtable which will be consistent in the firm’s calendar going forward, is intended to entrench knowledge management through stakeholder engagements and active conversations that birth solutions, influence business practices, drive policy changes and ultimately deepen the performance of enterprises within the Firm’s demography. The First edition brokered conversations around the theme: “Building Sustainable Enterprises Through Adaptive Corporate Governance Practices”. The CEO of the Financial Reporting Council, represented by Prof. Musa Inuwa Fodio, set the tone for the event with a keynote address on Institutionalizing Corporate Governance Best Practices in Private Enterprises. He emphasized the intention of the Financial Reporting Council of Nigeria to make good governance practices a culture within Corporate Nigeria; where without the need for sanctions, accountability, sustainability and ethics become the pillars of their management. Others who spoke at the event include, Adebisi Adeyemi, MD, DCSL who spoke on “Entrenching Effective Board Practices for Optimal Corporate Performance”. She emphasized the need to embed accountability, foresight, strategy and

PHOTOFILE

OANDO 2019 Legal Seminar

L-R: Managing Partner, Akin Delano Legal Practitioner, Oluyele Delano SAN; Partner, Olisa Agbakoba Legal, Babatunde Ogungbamila; Partner, F. O Akinrele & Co, Olumide Aju SAN and Ajibola Olomola - Partner, KPMG Professional Services at OANDO 2019 Legal Seminar at The Wheatbaker Hotel, Ikoyi. Theme: Management of disputes and enforcement of arbitral awards against Sovereign states. www.businessday.ng

supervision in board activities. Banji Fehintola, the President of the CFA Society Nigeria and Senior Director/Head of Treasury & Financial Institutions, Africa Finance Corporation, spoke on “the Role of Responsible Financial Reporting in Enterprise Growth”. He reiterated the need for transparency, comprehensiveness and consistency in the financial reporting practices of companies in Nigeria. The Lead Advisor of DealHQ, Tosin Ajose spoke on “Navigating the National Corporate Governance Code for Effective Compliance”, giving meaningful insights on how companies can effectively embrace compliance with the Code and other governance Best Practices. The panel session was moderated by Femi Awofala, CEO, Brickstone Africa, who led conversations with Moshood Olajide, Executive Director,

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Finance and Risk Management, Forte Oil; Charles Ojo, Company Secretary, CSCS Plc; and Prof. Musa Inuwa Fodio, Member Governing Council, Financial Reporting Council of Nigeria. The session focused on the cost of compliance to private companies proffering ideas on how to ensure that the implementation of the code enhances rather than impede the operational and financial performance of Private Companies who are expected from January 2020 to comply with the new Governance Code. The event ended on a very high note with the unveiling of the demo of the DealHQ Corporate Governance Compliance Report Generator for Private Companies; an automated system of reporting and measuring compliance with governance and other legal and regulatory obligations of private Companies.

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Thursday 07 November 2019

BUSINESS DAY

PHOTOPAGE

LegalBusiness

Photos from the 4th African International Conference on Islamic Finance (AICIF) organised by the Metropolitan Law Firm in collaboration with the metropolitan skills limited in Lagos, Nigeria.

Continues on page 30 www.businessday.ng

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Thursday 07 November 2019

BUSINESS DAY

LAW &FINANCE

LegalBusiness

Insight from the 4th AICIF

Islamic finance, fastest growing area in global and finance - Sanusi Lamido

he Emir of Kano, Sanusi Lamido Sanusi (II) who was the keynote speaker at the 4th African International Conference on Islamic Finance (AICIF), has said that Islamic finance is an alternative finance industry that is now generally accepted in the world, regardless of the challenges if faces with licensing, statement that it was not only a non-interest finance solution but also a tool that addresses the fundamental problems we have around the world.

Sanusi made this statement Monday, during the 4th African International Conference on Islamic Finance (AICIF), organised by the Metropolitan Law Firm in Lagos. Speaking on the future of Islamic Financing he said that Islamic Finance as at today is the fastest growing area in global finance, which is why most world leaders are interested in having their countries as the center of Islamic finance. He believes that the potential of the product is very huge as tangible results can be seen in areas the

SUKUK funds were utilised. “SUKUK (bonds) for example, show Nigerians where the money is going to by making sure the money is used in the actual project it was meant for, it makes sure we have cash backing for projects, and takes care of the problem of inflated contracts as a result of the ethical and responsible nature of the finance. “The problem with the government is that Money taken long term are used majorly for overheads and we see a situation where there is little set aside for

PHOTOFILE

infrastructural development. This is where SUKUK comes in, to take care of the Infrastructural financing gap we have in the country today, the Emir said. To ensure that one in four Africans who do not have access to banking-and finance can access it then there is need to tackle the problems in these ways, “How we delivery our financial services, Invest more in financial literacy and enlightenment, “On the part of delivery, Using FINTECH is a major way to deal

AICIF: Experts call for awareness... Continued from page 25

LEGAL BUSINESS celebrates Olumide Akpata, Senior Partner & Head of Corporate & Commercial Practice Group at Templars on the conferment of the BUSINESS LAW ICON OF THE YEAR AWARD on him at the ESQ Nigerian Legal Awards over the weekend..Here is wishing you more successful years ahead

HiiL 2019 innovating justice challenge to unveil... Continued from page 25

tion mechanism to resolve digital transaction dispute in less than 72hrs. The Keynote Speech at the Regional Finals will be delivered by Justice Yetunde Adesanya, Chairman of the Small Claims Court Committee, Lagos State. The Honourable Minister of Industry, Trade and Investment will be speaking on Making the SDGs a Nigerian Reality through entrepreneurship and innovation and Mr Jan van Weijen, Consul-General of the Netherlands will deliver the welcome address. Other distinguished speakers and panelists include Funke Adekoya, SAN - Partner, Aelex, Yemi Candide-Johnson, SAN - Partner, Strachan Partners, Kemi Eweje, FCIArb - Partner Patreli Partners, Theodora Kio-Lawson – Legal

with some of these challenges. We have not done enough even in delivering mobile financial services. He added. Speaking further he said that there is a huge need to create awareness of these products across the country. “When I was the Governor of the CBN, we approved $5 million for training in capacity building. There needs to be a big investment in capacity building in the finance industry. This takes care of that,” Sanusi said.

Business Manager, BusinessDay, Solape Hammond - Founder Impact Hub, Lagos and Special Adviser to the Lagos State Governor on Sustainable Development Goals and Lagos Global. Others are, Dotun Olowoporoku, Associate Investment Director, Novostar Ventures and Nichole Yembra, Managing Partner, Chrysallis Advisors. HiiL (The Hague Institute for Innovation of Law) is a social enterprise devoted to user-friendly justice, which means justice that is easy to access, easy to understand, and effective. Speaking about the intiative and the programme, Country Representative, West Africa of Justice Innovation, Odunoluwa Longe said that HiiL will ensure that by 2030, 150 million people will be able to prevent or resolve their most pressing justice probwww.businessday.ng

lems. ‘We do this by stimulating innovation and scaling what works best. We are friendly rebels focused on concrete improvements in the lives of people. Data and evidence are central in all that we do. We are based in The Hague, the City of Peace and Justice. Innovation is happening’, she said. ‘HiiL’s Justice Accelerator grows and scales justice innovations so they can reach many more people. We look for innovations that provide legal information, legal services or dispute resolution’ Longe said. HiiL has supported more than 90 justice innovations worldwide since 2011. Some of those have impacted the lives of hundreds of thousands of people who through the help of the programme/initiative have the potential to become regional or global players.

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new products for long term. There should be a level playing ground for all operators to operate across all regions. We need to address knowledge gap, so that operators understand that the products they bring to the table must complement with Sharia laws,” Suleyman said. Ummanhani Amin, managing partner, the Metropolitan law firm and chairperson 4th AICIF 2019 planning committee said AICIF started because they felt there is a gap in Islamic financial inclusion. “This is the main reason for the conference and that is why we have been working towards financial inclusion. We are working towards letting everyone know what products to take because people do not understand. “There is a belief that Islamic finance is meant for Muslims and it is not. It is meant for everyone. There are Muslims and non-Muslims in the conference and they are all speaking Islamic finance. We want to sensitise people and make them know that it is just another product which is ethical,” Amin said. She said the awareness process has been gradual in Nigeria because Nigeria is new to Islamic finance. She disclosed that the first AICIF conference was quite successful because a lot of people were curious and out of curiosity to understand Islamic finance, people came. She further disclosed that during the second conference, people were understanding it gradually. “The fourth one, we have seen the amazing turn out and all our speakers and panellists are top-notch and are all in the financial industry. We are making a lot of progress and I believe the next one will be bigger and better,” Amin said. On the level of responsiveness to sukuk in Nigeria, she @Businessdayng

said, “I was involved in federal government sukuk as a legal adviser and I know sukuk has been oversubscribed twice; the first in 2017 and second in 2018. “Before then, in 2013 there was sukuk which was basically for education and has been very successful because for the first time, government took money and put it in education. It has been successful. The federal government’s sukuk is mostly for social infrastructure financing and the need for it has been utilised and that is what Islamic finance is all about.” Abdulkader Thomas, chairman Shariah Board of Sterling Bank PLC and also a speaker at the conference noted that some questions raised in financing projects using Sukuk are if the contractor will complete the project as at when due and according to the specifications and integrity of funds. He mentioned some of the liquidity risks in Sukuk to include necessity of secondary market, eligible instrument for trading, source of money, what sukuk represents and what the bench mark is. He listed some of the default to include risk of non-completion, non-payment, failure to honour payments and supply chain being able to support delivery. He said Sukuk are usually non-dynamic and compliance should be a front end issue. Another spear, Chinua Azubike, who is also the managing director Infra Credit said people should be looking at where the market lies and ensure the structure works in compliance with Sharia laws. “When Sukuk is demystified, people will begin to understand its benefits. The opportunities in sukuk are enormous. The principles of sukuk can be applied to leasing of equipment, agro business, amongst others. There should be more market awareness,” Azubike said.

Thursday 07 November 2019

BUSINESS DAY

GLOBAL REPORT

LegalBusiness

Reed Smith converts to ABS Merging Coventry law firms strive for Midlands expansion in first for US firm

wo Coventry-based law firms have announced a merger, which they claim will allow them to serve 16,000 clients across the Midlands. Band Hatton Button has acquired Richardson & Davies’ eight-strong team, which will move into Band Hatton Button’s premises in January 2020. According to the firms, the merger will create a business with a £5m turnover, with 90 staff serving more than 16,000 clients. Mark Moseley, managing director at Band Hatton Button, said: ‘Growth is a key part of our long-term strategy. Moving into our new offices at Earlsdon Park was one big part of the jigsaw, and joining forces with Richardson & Davies is an important

Left-Right: Nick Button, Miles Barker-Davies, Mark Moseley and Bill Evans

addition for us. ‘Richardson & Davies’ staff bring a wealth of knowledge and experience with them, par-

ticularly within commercial property, and we look forward to working with them to grow the business over the coming years.’

nternational law firm Reed Smith has converted its UK operation to an Alternative Business Structure (ABS) in what it says is a plan to ‘future-proof’ the practice. The ABS licence, which applies to the UK LLP, means non-lawyers can now manage and own Reed Smith. The firm is also allowed to provide services beyond traditional legal advice and to receive external investment. The conversion could potentially mark the first step towards flotation. Reed Smith is the first international practice to be granted an ABS licence from the Solicitors Regulation Authority. ABS models are not permitted in the firm’s home jurisdiction of Pittsburgh, Pennsylvania, nor in the United States more generally. However, states such as California, Utah and Arizona are pushing for regulatory reform. According to the firm, the switch

will have no impact on the existing corporate structure of the firm, and the single partnership and single global profit pool will be unaffected. Tamara Box, managing partner for Europe and the Middle East, said: ‘As the first international law firm to convert to an ABS, we are future-proofing our business and now have the agility to immediately seize new opportunities – in tech, big data and other specialised consultancy services – that will help us drive our clients’ businesses forward.’ She added that clients are looking for ‘a strategic service provider that can go beyond just providing advice on the black letter law’. Andrew Jenkinson, London office managing partner, said: ‘As some states in the US look to replicate the possibilities provided by the ABS model, we are excited to be at the vanguard among international firms in this wave of legal sector innovation.’

Law firm employee gave own CV reference through fake email account

law firm worker who went to great lengths to validate her false CV has been barred from working in the profession again. Sameena Usmani began working as an administrative assistant at Buckinghamshire firm Clarity Family Law Solicitors in March last year. But she was subsequently dismissed after the firm

found she had submitted a CV including false information about her employment history. According to a notice published by the Solicitors Regulation Authority, Usmani had acquired a domain name which was deliberately similar to that of another firm, then used that domain name to provide her new firm with a fake email

address which would supply a reference for her. She then responded to that request falsely purporting to be someone else and provided false information to corroborate her manufactured employment history. The SRA found her conduct to be dishonest and made a section 43 order against her. The order prevents her from

working for any regulated firm without SRA permission. Meanwhile, the SRA has also refused to grant a practising certificate to Juhi Valia, after she was judged not to be a fit and proper person to practise as a registered foreign lawyer. In October last year, an academic misconduct panel at BPP University found that Valia had intentionally plagia-

rised most of a paper submitted as part of her LLM degree. The panel found there was a serious degree of premeditation and recklessness in her conduct. The SRA did not consider Valia rehabilitated at the time of her registration application, a decision upheld by an adjudication panel of the SRA after Valia appealed.

RIGHTSWATCH

NDDC Establishment Act: LEDAP seeks restraining order on Appointment of Officer

he Legal Defence and Assistant Project. (LEDAP) has on Tuesday, asked a Federal High Court in Abuja, challenging composition of the Management of the Nigerian Delta Development Commission (NDDC). The plaintiffs in the suit are : Iruo Onoruvwe, Anatole Osuji, Walter Avered and LEDAP. Joined as defendants are: Minister of Nigeria Delta Affairs, The NDDC, Dr. JOI Nunnieh, Dr. Cairo Ojougboh. and Chief Ibanga Bassey. The Plaintiff through their lawyer, Dr. Chino Obiagwu (SAN) is asking the court for a declaration, that the appointment of a three-man-interim Management committee for

the NDDC consisting of the third to fifth defednant is contrary to the NDDC Establishment Act 2000 He is seeking a declaration that the appointment of the third to fifth defednant as acting Managing Director, Executive Director of Project, and Executive Director Finance and Adminstrtion respectively, is contrary to the provisions of the NDDC Establishment Act. According to him, the Act provides that such appointment shall be by the President and Commander in Chief of the Armed Forces, subject to confirmation by the Senate and House of Representatives. Plaintif avers that by virtue of the NDDC Establishment Act www.businessday.ng

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2000, the Managing Director of the Commission performs his function under general direction of the Board of the NDDC. Plaintiff, therefore, wants an order, nullifying the purported appointment of the third to fifth defendant in their capacities. He wants an order, restraining the second defendant from handing over or allowing the third to fifth defednant perform the aformentioend roles. Plaintiff also wants an order restrainng the first defendant from interfering in the management of the NDDC in a manner that contevens the provisions of the Establishment Act. No date has been fixed for hearing of the new suit.

Thursday 07 November 2019

BUSINESS DAY

TECHTALK Innovation

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

Broadband Infrastructure

Bank IT Security

The NDPR isn’t perfect but it’s a step to data protection for Nigeria Stories by FRANK ELEANYA

ith its huge population, often e s t i mat e d at 200 million, Nigeria is a data miner’s treasure field. On a daily basis, millions of critical information are giving away by Nigerians to local and international businesses, government agencies and institutions, most of which are unaccounted for. The lack of accountability also means people’s information are getting into the wrong hands and are being used to target them for fraud and other criminal activities online. In 2015, Nigeria witnessed 2,175 cyber attacks. In the same year, 14 percent of internet users suffered a form of cyberattacks. In 2017, the country was ranked third behind the US and UK - in the world for cybercrime according to the Nigerian Communications Commission (NCC). Cyber-attack cost the Nigerian economy about $500 million per annum. Experts at a recent data security roundtable organised by Bloomfield Law in

collaboration with Citrix said there is no going back on data protection for Nigeria and that an overarching policy to hold data handlers accountable was long overdue. Until recently, only the 1999 Constitution was the only legal document that referred to data protection. “Data is the new oil and no business can survive today without access to data,” Ayodele Oni a partner at Bloomfield said. The Nigerian Information Technology Development

DAAYTA 2020 application opens for innovative Nigerian students, graduates FRANK ELEANYA

igerian graduates with solution-driven ideas can now ap p ly to t h e D e j i A l l i ARM Young Talent Award (DAAY TA) programme 2020 for a chance to turn them into viable businesses. Asset and Resource Ma n a g e m e n t H o l d i n g Company Limited (ARM) in partnership with Technovision Communications Limited said in a statement that applicants to the DAAYTA 2020 programme are required to propose practical solutions with a credible business plan for profit-making ventures that have the potential of generating significant, measurable and sustainable social impact while tackling the specific challenges identified. ARM which setup the DAAYTA programme in

2015 as part of efforts to honour its founding CEO, Deji Alli, said the goal is to promote learning by aiding young Nigerian graduates and undergraduates bring their ideas to life. The 2019 edition was won by Murtala Sani, who created a solution called WeSabi. The solution essentially helps households find reliable and prescreened artisans in their neighbourhood through a website, mobile app and a USSD platform. Sani recently completed an accelerator program at the Enterprise Development Centre (EDC) where he has enhanced his business and technical skills Applications are opened till November 17, 2019, and shortlisted candidates will be contacted to pitch their business ideas to a closed group of business professionals, entrepreneurs, and investors in Lagos on a select date.

Agency (NITDA) in 2013 had moved to address data insecurity with a Guideline on Data Protection policy in 2013. But the guideline was largely considered a failure as its provisions were not able to hold industry players accountable and protect people’s data. In January 2019, NITDA released the Nigeria Data Protection Regulation (NDPR), which is to a large extent a mirror of the European Commission’s General Data Protection Regulation

(GDPR). The NDPR has been described by many stakeholders as the most comprehensive generally applicable legislation on data protection in Nigeria. It prescribes the minimum data protection requirements for the collection, storage, processing, management, management, operation and technical data in Nigeria. Olufemi Daniel a senior legal officer for NITDA and one of the creators of the NDPR said the principle behind the regulation is to drive

investment by ensuring local businesses are competitive globally; keep people’s information safe and prevent manipulation of data. “We want to build a data culture in Nigeria,” he said. “What we have tried to do is to create opportunities for the private sector.” The NDPR defines data as characters, symbols, and binary on which operations are performed by a computer, which may be stored or transmitted in the form of electronic signals is stored in any format or any service. While stakeholders agree with Daniel that a new data culture will drive investment, they say collaboration between NITDA and the private sector has not been one hundred percent. “There is a lack of synergy among stakeholders,” said Fatai Tella, chief data officer, Sterling Bank Plc. “We need to sit down and ask what we are solving? What are the data breaches that should necessitate a policy?” The lack of uniformity in data control is also a major challenge according to Tella as it exposes individuals and

Security capabilities to prevent, disrupt payment fraud unveiled by Visa CALEB OJEWALE

suite of innovative security capabilities to help prevent and disrupt payment fraud, breaking new ground in Cybersecurity and fraud prevention across Central & Eastern Europe, Middle East and Africa (CEMEA) has been launched at the Visa CEMEA Security Summit 2019 recently held in Barcelona, Spain. The new payment security services and capabilities according to Visa, help protect the integrity of the payments ecosystem by detecting and disrupting fraud threats targeting financial institutions and merchants. The new capabilities are available to Visa clients at no additional cost or sign-up, but through Visa’s continued investments in intelligence and technology. These, the company says add to the long list of benefits financial institution and merchant clients enjoy as participants in the Visa global payment network. “Cybercriminals attempt to bypass traditional defenses by stealing credentials, harvesting data, obtaining privileged access, and attacking trusted

third-party supply chains,” said Hector Rodriguez, regional risk officer, CEMEA, Visa. “Visa’s new payment security capabilities combine payment and cyber intelligence, insights and learnings from breach investigations, and law enforcement engagement to help financial institutions and merchants solve the most critical security challenges.” Visa’s new security capabilities add to existing protections and including: • Visa Vital Signs – Actively monitors transactions and alerts financial institutions of potential fraudulent activity at ATMs and merchants that may indicate an ATM cashout attack. To limit financial losses for financial institutions, Visa can automatically or in coordination with clients, step in to suspend malicious activity. • Visa Account Attack Intelligence – Applies deep learning to Visa’s vast number of processed card-not-present transactions to identify financial institutions and merchants that hackers may be using to guess account numbers, expiration dates and security codes through automated testing. The machine learning technology

detects sophisticated enumeration patterns, eliminates false positives, and alerts affected financial institutions and merchants before fraudulent transactions begin. • Visa Payment Threats Lab – Creates an environment to test a client’s processing, business logic and configuration settings to identify errors leading to potential vulnerabilities. For example, Visa can verify if a financial institution is effectively validating cryptograms—dynamically generated codes unique to each transaction—for EMV® chip transactions. • Visa eCommerce Threat Disruption – A proprietary solution that uses sophisticated technology and investigative techniques to proactively scan the front-end of eCommerce websites for payment data skimming malware. Identifying potential website compromises limits the amount of time malware might be present on a merchant website and significantly reduces exposure of customer and payment data. Visa in a statement said these capabilities complement its Payment Threat Intelligence, which provides actionable and

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

businesses to multiple entry points. However, Olufemi Oyenuga, chief Customer Enterprise Architect, Oracle Nigeria, said the existence of many buckets of data was not exclusive to Nigeria. The difference is that whereas the countries in the western world have attained a certain level of maturity in the handling of buckets of data, Nigeria is still on the way. NITDA had also in the past created policies that rubbed off wrongly on businesses. In some cases, the agency’s inability to respond proactively to changing industry environment contributed to the erosion of profitability of companies in the IT sector. For instance, the lack of clarity on what constitutes critical infrastructure and making policies to protect them continues to be a sore spot in NITDA’s relationship with many telecom operators. “There are a multiplicity of policies, but we’ve yet to see the impact,” said Ifeloju Alakija, head, Regulatory Services, MainOne. “We do not have a regulation that protects the technology infrastructures in this country.”

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informational cyber intelligence to clients and merchants worldwide. It offers timely intelligence reporting, technical delivery and educational materials. This includes alerts, analysis, technical indicators, and mitigations for potential cybercrime threats, account compromises and fraud. According to a global report by Forrester Consulting commissioned by Visa, ATM cashout attacks that exploit vulnerabilities among financial institutions and processors to remove fraud controls to withdraw money from cash machines fraudulently, and automated testing of values and credentials to gain unauthorized access to information and functionality called “enumeration attacks” were among the most prevalent account-related fraud types identified by respondents. At the same time, card-not-present fraud that includes ecommerce, phone and mail orders was found to be less frequent but caused more damage to businesses— representing nearly 40 percent of fraud losses and operational costs. Managing payment fraud holistically is imperative to meet these challenges.

Thursday 07 November 2019

BUSINESS DAY

UNDERSTANDING NIGERIA’S

DAIRY VALUE CHAIN

Tackling the challenges faced by the Nigerian Dairy Sector: Lessons from Kenya Oluwafisayomi Kayode In 2018, the Food and Agriculture Organization’s World Cattle Inventory reported that Nigeria had the 4th largest cattle population in Africa with over 20 million cattle out of which 2.3 million were dairy cows. Despite this large herd size, milk production remains low due to poor genetic make-up of indigenous cows as they produce an average of 1.5 litres of milk per cow per day compared to 7 litres produced in Kenya, a country which has invested in addressing key production challenges. In fact, Kenya’s dairy market produces approximately 5.4 million tonnes of liquid milk annually from about 4.2 head of dairy cows, 9 times higher than Nigeria’s current annual production volume of 600,000 tonnes. In Kenya, the sector contributes $2.1 billion, 4-8% of Gross Domestic Product (GDP) and 14% of agricultural GDP while the contribution of Nigeria’s dairy industry to GDP is negligible. Interestingly, the Kenyan dairy landscape used to be very similar to Nigeria’s; dominated by pastoralists and peri-urban farmers who were mostly nomadic, with challenges associated with low yields, genetic composition, limited support structures, market linkages and a dependence on imports. However, through concerted and strategic interventions, the sector has experienced rapid growth and transformation. Nigeria can gain at least four critical lessons from the strategic steps taken by the Kenyan government, development organisations and private sector stakeholders to create an enabling environment for dairy production. First, Kenya shifted from the use of low producing local breeds to improved exotic breeds over time by

introducing artificial insemination through various dairy development programs, such as the Smallholder Dairy Commercialization Program and the East Africa Dairy Development Program. Private artificial insemination service centers such as the Kenya Animal Genetic Resources Centre (KAGRC) were also established. As a result, smallholder Kenyan dairy farmers now own about 2-5 crossbreeds, which contain up to 95% genetic component of exotic breeds increasing productivity levels. It is important to note that there are a number of initiatives to adopt this strategy in the Nigerian context, as reinforced by the recent Nigerian Dairy Development Programme (NDDP), spearheaded by Sahel Consulting, which worked with dairy companies in Oyo and Kano to inseminate over 3,000 cows with semen from improved, Friesian-

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Holstein and Jersey breeds. While this programme has proved the potential of this intervention, there is a critical need for an entire ecosystem of veterinary doctors, artificial insemination inputs and service providers, technical experts and consultants to scale this process, and ensure successful genetic improvement of indigenous cows. Second, Kenya transitioned from its nomadic and archaic system of cattle rearing by the Maasai tribe to the use of a combination of semiintensive (peri-urban with semigrazing) and intensive (zero-grazing) production systems. This was achieved through the establishment of the Kenya Dairy Board (KDB) in 1958, which regulates and facilitates a value driven and sustainable dairy industry in the country. The KDB integrated dairy farmers into the formal value chain through the formation of cooperatives, improved

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their access to finance through formal channels such as loans from financial institutions as well as grants from the government and development organisations. These initiatives served to increase the farmers’ interest in dairy production. Efforts are being made in Nigeria through the creation of dairy farmers clusters and the integration of over 2,000 dairy households into the formal value chain who were provided with access to extension services and production inputs including milk cans, solar powered boreholes and feed by NDDP. However, more needs to be done, in partnership with the federal and state governments, dairy processors, dairy farmers associations, financial institutions and private and development organisations, to rapidly improve the sector. At the state level, all stakeholders ought to leverage the implementation of the National Livestock Transformation Plan (NLTP) to empower smallholder dairy communities to improve their access to productive resources and value addition services such as artificial insemination to improve indigenous cows’ genes and productivity levels. This would also encourage the emergence of commercially produced feed. Third, the Kenyan government encouraged every dairy farmer to become a member of a community cooperative with formal governance and management structures. This played a critical role in milk aggregation as dairy cooperatives were supported by KDB and other development interventions to build formal milk collection centres and procure evacuation trucks that collect milk at farmers’ doorsteps. In addition, Kenya dairy farmers through common interest @Businessdayng

groups (CIG) and cooperatives promote ownership, cross learning and role modelling, which effectively enhances adoption of best practices. The dairy cooperatives also provide extension services and proper milking equipment such as milk cans to its members to improve production practices. Drawing from the Kenyan example, Nigerian stakeholders should promote more public/private partnerships with key dairy farmers and processors associations such as the Miyetti Allah Cattle Breeders Association of Nigeria (MACBAN) and Commercial Dairy Ranchers Association of Nigeria (CODARAN) to integrate the smallholder dairy farmers into the formal value chain to create better linkages between local production and formal processing through formation of common interest groups and cooperatives. Finally, the Kenyan dairy sector disincentivized milk imports with a tariff regime attracting a 60% duty plus an additional 7% levy from the Kenya Dairy Board (KDB) on both concentrated and non-concentrated milk and cream products thereby increasing local milk sourcing. The Nigerian policy environment needs to ensure consistent tariffs and regulations to encourage local dairy sourcing. The government should also create an enabling policy environment that promotes backward integration and incentivizes private sector investments along the value chain to boost local sourcing. Kenya’s experience demonstrates what is possible in the Nigerian context with political will at the highest levels, an enabling policy and a tariff regime. It is imperative that the key stakeholders in the sector work collaboratively to ensure that Nigeria matches and even exceeds Kenya’s milk yields and outputs and inches towards becoming the dairy sector leader in Africa.

Picture here Oluwafisayomi Kayode Sahel Consulting Agriculture & Nutrition www.sahelconsult.com

Thursday 07 November 2019

BUSINESS DAY

Corporate Social Impact

20 Years of JAN Impact and its Wave-Making Alumni Stories by ONUWA LUCKY JOSEPH

unior Achievement Nigeria (JAN) is celebrating 20 years of living its mission “to inspire and educate young people to become conscientious business leaders”. This it has done consistently by implementing economic education programs that develop attitudes and skills necessary for personal success and social responsibility. And it has some high achieving alumni to show for it! By forging relationships with more than 4,000 volunteers over the past 20 years, JAN has reached over 970,000 students in over 20,000 classrooms in all the 36 states across the country and the FCT. This puts it on track to reach its one million students milestone by the end of 2019. A look at some of its programs (yes, we are spelling programs American style because JAN has its startup and linguistic foundations in the US and formally spells its projects the American way) gives you an idea that this tall order will be one more milestone ticked off by year end. The JA Company Program: This teaches senior secondary school students how to start and run their own businesses. A success story from this program is Iyinoluwa Aboyeji. In 2005, while in senior secondary school, he produced love shaped cupcakes for sale on St Valentine’s Day. The JA Company Program

Adenike Adeyemi

Oduolayinka Osunloye

Ink Eze

Tunji Eleso

taught him the fundamentals of how to start a business. That in turn sparked his interest in entrepreneurship. Iyinoluwa, JAN is proud to announce, is the co-founder of Flutterwave, a payment gateway to connect Africa to the global economy. He also

co-founded Andela – Africa’s largest software engineering organization. The Venture in Management Program (ViMP): Designed as a one-week intensive “mini-MBA” session to introduce selected members of the National

Iyinoluwa Aboyeji

Youth Service Corps to the different facets of managing a business, it takes them through the process required for making crucial business decisions and developing skills for general management. Since inception in 2000, ViMP success stories of impact include that of Tunji Eleso, who is a ViMP 2001 alumnus. Since attending the program, Tunji has led investing efforts at Co-creation Hub Nigeria through Growth Capital by CCHUB with responsibility for providing early stage support and funding to technology ventures solving real challenges in our society. As well, Adenike Adeyemi is a ViMP 2002 alumnus. A development sector professional with over 17 years of experience in nonprofit management, enterprise development and youth enablement strategies, she currently serves as the Chief Executive Officer, FATE

Foundation, Nigeria’s foremost non-profit organization focused on enabling aspiring and emerging Nigerian entrepreneurs start, grow and scale their business. Adenike credits ViMP as the main pivot for expanding her horizon and career perspective in the nonprofit and development space. Leadership Empowerment Achievement and Development (LEAD) Camp: This was created to inspire and empower young girls to become high-achieving women leaders. Since inception in 2002, Junior Achievement Nigeria has organized over seven LEAD camps. Fueled by the success stories of beneficiaries such as Ink Eze, Founder, Aso Ebi Bella which is an online community of African attire lovers and Oduolayinka Osunloye, Director of Marketing, Innovation and Impact at Junior Achievement Nigeria, JAN has remained inspired to continue with offering LEAD Camp to more young girls across Nigeria. JAN, via its programs is helping elevate entrepreneurship in Nigeria by supplying the skills needed to drive tomorrow’s organisations. As we know, it’s not enough to be enterprising or to want to set up a business. Without the requisite skill set, those businesses won’t survive and so we might have disillusioned though enterprising folks heading right back to the employment queues. CSI applauds JAN for doing what it does and for identifying youngsters as its target. In another ten years, we shall, we believe, have a lot more distin-

Asisat Oshoala teams up again with Emzor for Nigerian girls Schneider Electric celebrates Go Green sisat Oshoala has been team at Innovation Day Lagos firing on all cylinders this

season for her team Barcelona in Spain. In some of her recent games, she has come out the heroine for her team, recently, netting the winner and only goal as her team overcame hard fighting Sporting de Huelva, and following that up on 26th October with a brace as her team demolished Real Madrid 4:0. Of note is that she is also scoring elsewhere, on the social responsibility front. Asisat is one of those players who understand the import of responsibility, knowing that the privilege she enjoys as an international star started from the alternately dusty and muddy street corners of Lagos. She makes sure to go back there every now and then to give a hand to the many kids who look up to her and would like to be like Asisat sometime in their future. In this venture, she has quite a number of partners. One of the strongest is Emzor, owned by a woman, and mentor to men and

women, the redoubtable Stella Okoli. One woman to another and then to many others; that’s how the Emzor/Asisat partnership is shaped. Asisat’s major role as Emzor Brand Ambassador is to help with the Emzor Football Clinic for Girls which is now in its 5th edition. Okoli described Oshoala as ‘an inspiring young woman, who is www.businessday.ng

also a great role model to young women in Nigeria. We are very proud of all her accomplishments and effort towards encouraging under-privileged girls through her foundation”. Reason why according to Okoli, “we are renewing her contract today as Emzor Brand Ambassador so that she can continue helping girls in need”.

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chneider Electric is always on the lookout for bold ideas and for this reason taps into the vast potential of young people everywhere to help actuate the change the world needs. The Go Green City Challenge is its prime vehicle for locating and rewarding the bright minds world over who are willing to put their skills and ideas to the test. At I n n ov a t i o n Day Lagos, Schneider Electric had the opportunity to congratulate and reward the participation of four students from Covenant University and University of Ibadan, who rep-

resented Anglophone Africa in the Semi-finals. The company welcomed over 400 customers and partners who experienced the power of EcoStruxure in today’s digital economy, and exchanged ideas about the future of Energy and Automation. Industry experts from Nigeria and around the world were on hand to share their expertise.

@Businessdayng

Thursday 07 November 2019

BUSINESS DAY

Corporate Social Impact

Onuwa Lucky Joseph (08023314782) Editor.

The Black Leadership Fund backed by Kevin Durant, Diddy, Will Smith, Others, donates its profits to 11 charities to improve diversity in tech Stories by ONUWA LUCKY JOSEPH

n the online letter where he announced the nonprofits that The Black Leadership Fund was going to be partnering, Chris Lyons started with this line from the Drake song, 6pm in New York: “If me and Future hadn’t made it with this rappin’ We’d prolly be out in Silicon tryna get our billions on” That’s the spirit of young black people everywhere who want to, as it were, be significant variables in integrating the technology sector, a sector that still is largely fenced off to people of colour, though not quite in the sense that schools, parks and other public places were segregated in the United States under the Jim Crow Laws before the 1960s civil rights movement and the Supreme Court ensured that those sectors were legally desegregated. Chris, who grew up outside of Atlanta, where none of my friends or family worked in technology, began his professional career as a producer and audio engineer for Jermaine Dupri at Southside Studios, during the golden era of Atlanta music. He understood how great creatives move across mediums, and he could see that technology was taking over the industry. And he wanted to be part of that movement. He’s a self-taught computer engineer and designer who made the move to California enrolled in an accelerator and stared a tech company convinced that he “could build the next billion dollar business”. It didn’t quite that way, but folks in Silicon Valley noticed

P DIDDY

Will-Smith

his smarts and drive and eventually he ended up as Chief of Staff to Ben Horowitz at Andreessen Horowitz. And it was here that his life mission finally crystallized via the Cultural Leadership Fund in 2018. Its goals are two-fold: 1) connect the greatest cultural leaders in the world to the best new technology companies; and 2) enable more African Americans to enter the technology industry. According to Forbes magazine, “Black cultural icons from Shonda Rhimes to Kevin Durant to Quincy Jones have pooled nearly $18 million to invest in Andreessen Horowitz’s Cultural Leadership Fund. In the year since it launched, the fund has cut 39 checks to startups including Overtime, a sports media network, and Propel, which helps people manage their food stamps. Some of its backers have gone a step further and added personal investments, like when Will Smith backed Hipcamp, which helps landowners rent out campsites Airbnb-style”. Chris Lyons, a CL Fund Partner told the magazine that “If you believe that the next generation of wealth is happening within the technology sector, African Ameri-

cans need to have our place in that as well. “So the Culture Leadership Fund is putting a number of [backers] across all different worlds onto the cap tables of some of the world’s most competitive companies.” “Even though we’re making money, we’re giving it all away because we feel like it’s important to really empower and build up this ecosystem,” Lyons said. On Friday, the fund announced it had selected the 11 organizations it plans to donate its management fees and future carry to, ranging from The Last Mile, which helps incarcerated individuals learn to code, to Management Leadership for Tomorrow, which helps train Black, Latino and Native American leaders. Capital Preparatory Schools: A K-12, year-round college preparatory model developing scholars into responsible engaged citizens for social justice. CodePath: An innovative education nonprofit building the largest pipeline of high-performing, underrepresented software engineers in the industry, with courses at over 49 universities including Mississippi State, Howard, and Virginia Tech.

Shonda Rhimes

Love, Luck & Faith (LLF): Provides opportunities for longterm economic sustainability in underserved communities by inspiring and empowering young boys and girls with career readiness resources to pursue entrepreneurial and skilled professions in Science, Technology, Engineering, Arts and Math (STEAM). With a focus on automobiles and art, LLF will partner with All Star Code and Eagle Academy Foundation to support young men of color to develop a creative mindset, networks, and necessary career skills development and create a 21st Century automotive tech-talent pipeline. Management Leadership for Tomorrow (MLT): Provides African Americans, Latino, and Native Americans with a winning playbook, professional coaching, and door-opening relationships to advance at all career stages, including senior leadership. nPower: Creates pathways to economic prosperity by launching digital careers for young adults from underserved communities. Per Scholas: Drives social change through rigorous and tuition-free technology training for adults from overlooked

MTN takes ‘what we can do together’ Maltina teacher of the year to get school community projects to SE/SS named after Him in his village

TN, through its Foundation, has been spreading light, water, better schools, etc. to communities across Nigeria. The Foundation has been, without doubt, a vehicle for delivering good goods pan Nigeria. In true grassroots fashion, the company requests that interested individuals nominate projects they believe require the attention of the telecoms giant, projects some of which have constituted intractable nuisance issues for as long as the nominators can remember. Last weekend found the Foundation in the South South and South East on the dual mission of commissioning some of the community projects that form part of the 110 projects in the third phase of What We Can Do Together, and to recognize the concerned individuals who nominated the projects. The nominators were described by MTN officials as heroes and as champions for taking time to act in a way that brings solution. That number, by the way, would bring to 510 the number of such projects executed by MTN in about 450 communities nationwide. The issue with community proj-

ects in Nigeria is that everyone knows they exist but few bother with doing anything about them. Well, according to Innocent Etonu, MTN Regional Manager, “We have 110 Nigerians who did exactly that. They took a step forward, took action and partnered with us to bring about change to their world. Today, their communities are better for it. Because of them, school children have learning material; medical equipment have been installed in healthcare centres, and solar-powered boreholes have been installed in communities where they had no water”. The community projects which fall under the rubric of MTN’s ‘What We Can Do Together’ initiatives comes in phases. In thanking the nominators, Reginald Okeya, an MTNF Director affirmed that though “proud of what we have achieved so far, we are very aware that none of this would have been possible without our customers…. Each one of you shares in all the credit that MTN Foundation receives today”. Way to go, MTN! Everywhere we go in Nigeria, may we see community development. Amen! www.businessday.ng

t was a rollover of good things for Collins Ezem, announced Maltina Teacher of the Year 2019 as the management of his school, Royal Family Academy, Wuye in Abuja has decided to pass on the classroom block attached to the prize. At a celebratory session in honour of the winner and other staff of the school, RFA management announced that the classroom block and other facilities attached to the prize would be better appreciated in Mr. Ezem’s village where a school should be founded and named after him. The proprietress of the school, Pastor Sarah Omakwu who had earlier lauded Mr Ezem for his exemplary qualities, explained that though the school was most appreciative of the gesture, students at Royal Family Academy already had

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the structures in place and so would like to give other Nigerian children the opportunity of attending a well-built school complete with a well-stocked library and toilet facilities, the type planned by NBL. She said such a gesture would make everybody at RFA most glad. This is indeed a good turn of events. Not even the organisers, Nigerian Breweries Plc. could have seen this coming. But a good thing can only keep on giving. Corporate Social Impact appreciates this selfless gesture on the part of Royal Family Academy. We are confident that other better heeled schools would keep looking for appropriate ways to impact their immediate and remote environments to the end that Nigeria becomes a place brimming with quality schools everywhere. @Businessdayng

communities creates onramps to businesses in need of capable and diverse talent. Pursuit: Helping to close the prosperity gap in America, and transform the lives of adults with the most need and potential by helping them launch careers in tech and raising their salaries. SMASH: Empowers brilliant underrepresented students with rigorous science, technology, engineering, and math (STEM) education, culturally-relevant coursework, as well as access to resources and social capital that pave a path for successful careers in tech and entrepreneurship. Social Works: Empowers the youth through the arts, education, and civic engagement to inspire creativity, build dreams, and advocate for youth success in all its forms. The Last Mile: Provides technical training to prepare incarcerated populations for successful reentry, and help break the cycle of generational recidivism. #YesWeCode: Cultivates future tech leaders and entrepreneurs from underrepresented backgrounds, creating a pipeline of diverse talent that will shift the culture of the tech sector.

Merck named to 2019 Working Mother 100 best companies list

erck was named again to the 2019 Working Mother 100 Best Companies list. Merck has been on the list for more than 30 years and is part of Working Mother’s quarter-century club. For its 100 Best Companies list, Working Mother recognizes companies that receive high marks in the areas of workforce profile, benefits, flexible work, paid time off, company culture and work-life programs. This is in recognition of Merck offering many valuable programmes and resources to help employees manage their well-being and productivity in both their professional and personal lives. Merck’s acknowledged investment in employee wellbeing is one way it demonstrates commitment to its employees. (For feedback, contact us at csrmomentum@gmail.com / 08023314782)

Thursday 07 November 2019

BUSINESS DAY

BUSINESS TRAVEL Air Peace success offers operational lessons for domestic carriers IFEOMA OKEKE

espite the harsh operating environment, A ir Peace which started operations five years ago with just four aircraft now has 30 airplanes in its fleet while other domestic carriers have struggled. The airline placed a firm order for 10 brand new Embraer 195-E2 aircraft. The order comprises purchase rights for another 20 E195E2 jets. Also, 124-seater jet in dual class and 146-seater jet in single class configurations respectively. With all purchase rights exercised, the contract is valued at N640.5 billion ($2.12 billion) based on current list prices. The carrier also set a regional record in September 2018 when it ordered 10 brand new aircraft from Boeing, increasing its fleet size then to about 37 aircraft. With the new order, Air Peace’s fleet size has increased to 67 aircraft. Air Peace had earlier set a domestic record as the first Nigerian airline to acquire and register the Boeing 777 aircraft in the country. Three of the four wide-body aircraft it acquired for its long-haul operations to Dubai, Sharjah, Johannesburg, London, Houston, Guangzhou and Mumbai have so far been delivered. Industry stakeholders, though marvelled at the unparalleled investment in capacity, they are optimistic that the 14 million passenger record may as well double in a year, when at least half of Air Peace new orders join the current operating fleet. But the worry is the systemic hurdles that will shackle the enormous potential and attendant benefit. No-city-left-behind initiative The airline which started a campaign of not leaving out any city uncovered in its operations has sustained this drive in a bid to integrate cities across the country with low-capacity but strategic Embraer jets. Out of the 10-brand new Embraer 195-E2 aircraft, Air Peace has taken delivery of about seven 50-seater Embraer 145 jet. The equipment, according Air Peace, is part of its vision of providing seamless flight services on the domestic, regional and international routes. Air Peace says the company’s goal of guaranteeing seamless flight operations as well as connecting unserved and underserved routes was fast being fulfilled. The arrival had further strengthened the airline’s resolve to provide seamless flight services on the domestic, regional and international routes, as well as extend the reach of exceptional oper-

ations to many more unserved and underserved destinations under the no-city-left-behind initiative. “Upon the arrival of our first Embraer 145 aircraft in February this year, we set another record in Nigeria’s aviation industry with the establishment of a subsidiary, Air Peace Hopper to organise our plan to democratise air transport and deliver exceptional flight services to unserved and underserved cities in Nigeria and the West Coast of Africa. The company reiterated that it is in aviation to create job opportunities, connect people and business and leisure destinations, help in growing the economies of Nigeria and other nations and make our nation proud in the global aviation community. International front The airline has spread its tentacles to also meeting international travel demands helping to restore the pride of the nation with Lagos-Dubai operation, as a forerunner for London, India, Beijing, Johannesburg, and New York operations. Air Peace which operates the West coast regions has also been able to sustain Sharjah operations (UAE route). The airline which commenced Dubai route in July 2019, is shaking up competition on the route. High-end airlines which had operated on the routes for years have had to crash their prices since Air Peace provided relatively cheap fares for Nigerian passengers. This huge ticket reduction is seeing summer passengers book for tickets, as airline currently records almost 80percent load factor on its fight flight to Sharjah. While AirPeace is not flying directly to Dubai like its competitor, Emirates, it is making provision for a complementary bus to convey its passengers from Sharjah to Dubai which is within a space of 15minutes. The airline is also leveraging its new aircraft, Boeing 777 aircraft; the same aircraft www.businessday.ng

Emirate also uses to drive patronage on the route. AirPeace operates three times weekly to Sharjah; Tuesdays, Fridays and Sundays, from only Murtala Muhammed International Airport (MMIA) Lagos. With the commencement of operations on this route, Air Peace is offering travellers from Nigeria the opportunity of connecting 23 other destinations from the United Arab Emirates. The destinations that could easily be connected from Sharjah international airport include: Riyadh, Madina, Jeddah, Beirut, Delhi, Colombo, Dhaka, Mumbai, Kathmandu, Moscow and several others. In addition to this, the airline’s repatriation of over 500 Nigerians from South Africa at no cost to the returnees or government has received commendations from Nigeria and outside the country. Air Peace is currently playing the supposed role of the national carrier in the evacuation of several stranded Nigerians in South Africa as a result of the xenophobic attacks. The airline spent over N300 million to carry out the evacuation. Air Peace, no doubt is the highest employing carrier in Nigeria, creating over 5,000 direct and indirect employments; again playing the role of a national carrier. Why Air Peace stands out Several people have raised concerns why the airline seem to recording great strides despite numerous challenges in the industry ranging from multiple taxations, absence of maintenance facility, scarcity of foreign exchange, high cost of aviation fuel and unfavourable policies amongst others. Allen Onyema, the Chairman of Air Peace had described his airline as prudent and disciplined, adding that the airline is always careful when making investment decisions. Dapo Olumide, former man-

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aging director of Virgin Nigeria Airways and currently the CEO of Ropeways, said that one of the reasons why airlines in Nigeria fail is lack of corporate governance. Olumide said an airline should have the kind of people in the board that would question decisions taken that are not good for the sustenance of that company. He regretted that many Nigerian airlines do not have corporate governance and that explained why some of them went under. However, Air Peace is setting a pace in the move to overcome that major ailment of Nigerian operators by appointing eggheads, industry experts and corporate gurus to its board. The board members came with invaluable entrepreneurial acumen and they aim to guide and unravel the vision of the airline to become a major carrier in Africa and in the world. Em e ka Ng ig e ( SA N ) , Re nowned lawyer, Mutiu Sunmonu, former Managing Director of Shell Petroleum Development Company, Benedict Adeyileka, former acting Director General of the Nigerian Civil Aviation Authority (NCAA); and other new directors of Air Peace pledged to work airline to deliver on the airline’s vision to transform air travel and project a positive image for Nigeria in the global aviation community. Onyema said the airline is in good hands with the pedigree of its Board Members and expressed the hope that the targets mapped out for the airline when it was established is being actualized. He noted that while corporate governance is key to driving a business to success, it is pertinent to also look carefully while engaging those that will pilot the affairs of the company whether as Board Members or senior executive staff. Policies to make local airlines thrive With the success Air Peace has recorded in just five years, it @Businessdayng

is enough reason to justify that local carriers can get it right if the government would listen to their yearnings. John Ojikutu, a member of aviation industry think tank, Aviation Round Table (ART) and chief executive officer, Centurion Securities, listed some ways government could support domestic airlines. First, Ojikutu said there should be a careful assessment of their business plans to ensure the airports designated for their operations are well equipped to support and sustain their day and night operations and even during inclement weather. Secondly, he explained that government policies on open skies and commercial agreements with foreign airlines must limit their operations in domestic routes. He said concessions given to foreign airlines for multiple destinations must be reduced to two in different airports outside Lagos and Abuja. Allen Onyema has stressed that Air Peace will never be able to combat international aeropolitics without the support of the government. “It is a shame that several Nigeria airlines have come to Dubai and they were pushed out either through unfair competition or some arm-twisting tactics, it is very unfair. The only plan we have is the plan of sustainability, to sustain our operations to the best of our abilities. That is so far as we can go, if we are not supported,” Onyema said. Another major challenge for local carriers is the exorbitant interest rate banks charge airlines access loans. While other African Airlines are accessing fund to purchase and lease aircraft at an interest rate of three to six percent, airlines in Nigeria access loan facilities with interests rates of between 21 and 26percent. “It is better to get new airplanes and get rid of older ones but to make this happen, we need financing. In Nigeria, no bank wants to finance an airline for more than ten years. So, you find out that it is difficult to keep up with payments on a 21 percent interest rate for ten years,” Obi Mbanuzuo, chief operating officer, Dana Air told BusinessDay. He said, “When we send one aircraft for C-check, it cost us almost $1 million and takes between one to two months to get back. On the other hand, a new airplane will only need maybe 20 days ground time. It will be a bit cheaper to maintain because it hasn’t gotten to a point where of doing corrosion prevention works on the aircraft. However, interest rates to acquire more aircraft in Nigeria are scaring operators away,” he added.

Thursday 07 November 2019

BUSINESS DAY

MADE in aba

Why Aba must mimic China’s shoe industry model ODINAKA ANUDU & GBEMI FAMINU

stimates show that China produces 12.6 billion pairs of shoes every year. In 2017, country’s footwear industry generated $123 billion, representing a 4.4 percent increase from 2016, according to China Leather Industry Association. The country is world’s biggest shoemaker and exports to nearly every part of the world. China’s leather strategy is no different from the strategy adopted in other industries. Chinese firms produce for export and are competitive in terms of pricing. A research was done recently by Anthony Clothier, a United Nations Industrial Development Organization (UNIDO) consultant, in cooperation with Ferenc Schmél of UNIDO and two other researchers, Song Wen Xian and Su Chaoying. The report says that the quality of China’s shoe industry’s infrastructure is a major contributor to the success of the industry. The research reveals that one major reason for the success of the industry is discipline of the work force. They accomplish a task within the stipulated time. Chinese footwear industry has some of the largest factories in the world. It enjoys economies of scale and produces several units per hour. Consequently, as 2005, the largest shoe manufacturing group employed 90,000 people, which is equivalent to the

number employed by BATA in Czechoslovakia in 1938, the report says. Due to small and micro nature of Aba shoemakers, the entire industry employs between 50,000 and 80,000 people. Talks have been on about a mega shoemaker entering the Aba space for long, but this is yet to materialise. The Abia State government said in 2016 that Huajian Group in Ethiopia, which made shoes for Ivanka Trump, United States president’s wife, would be coming to Aba. In September 2017, Sherry Zhang, general manager of Huajian Shoes in Addis Ababa, told BusinessDay in Addis that the company was still interested in setting up a shoe factory in Aba,

southeast Nigeria. But this has not happened since then. There are talks that a big manufacturer is in town, but production is yet to start. China produces for the export market. China has comparative advantage in renewable energy, which helps its manufacturers to produce cheap goods, including shoes. It is the world’s frontline c ou nt r y i n e l e c t r i c i t y production from renewable energy sources, with a total capacity of 728 GW of renewable power, mainly from hydroelectric and wind power as of 2018. But the opposite is the case with Nigeria where even the socalled hydrocarbon energy generated and distributed cannot power Lagos State.

According to Euromonitor’s April 2019 report on Chinese footwear, sports footwear is a fan favourite as it garners strong loyalty among all demographics. Sports footwear is an emerging market in Nigeria and players say it is money-spinning. But many shoemakers in Aba are yet to key into this market. “ M o r e o v e r, s p o r t s footwear is strongly supported by the government policies that promote healthy living and the urban fitness boom,” Eurpmonitor says. “The footwear category in China is comparatively fragmented due to there being many local brands and private label products. However, the bankruptcies of Belle and

Daphne in 2018 reshaped the competitive landscape,” Euromonitor adds. The major challenge in Nigeria is that there is little support for Aba footwear. The federal and state governments have patronised the industry, but analysts say it is not enough. “We are already struggling to meet demands,” said Ken Anyanwu, secretary of the Association of Leather and Allied Industrialists of Nigeria (AL AN), who produced Nigerian armed forces shoes in 2016. “But the problem is that we in Aba have no good machines,” Anyanwu said. “The Bank of Industry has done its best by giving some of us N300,000 each, but it takes $250,000 to N750,000 to set

L-R: Kelvin Qin, manager, international business, IVECO Hongyan; Li Young, MD, Asia-Africa International FZE; Jani Ibrahim, MD, LUBCON Oil; Rotimi Ashley-Dejo, chairman, LAC Trucks & Spares Ltd; Femi Olushakin, MD, LAC Trucks & Spares Ltd while unveiling two truck brands -IVECO Genlyon and IVECO Kingkan at the 2019 Wheels of Wealth business summit and trade show held at Eko Hotel, Victoria Island , Lagos, last week.

up a standard shoe factory. So, what can N300,000 do when the industry is capital intensive?” he asked. One million pairs of shoes are produced by more than 80,000 leather makers in Aba each week. With 48 million pairs produced each year at an average price of N2,500 a pair, the industry is said to be worth up to N120 billion. T r a d e r s f r o m We s t African neighbours storm the industrial city every week to buy different product designs, just as Southern African schools are beginning to place orders directly from the shoe makers. Canadians, Europeans and the Chinese are also in the party, placing orders themselves directly or through their Nigerian proxies, BusinessDay was told in Aba. The Abia leather industry is made up of shoes, trunk boxes and belts. It provides employment for tens of thousands, with many specialising in different stages such as designing, patterning, cutting, skiving, stitching, peeling and finishing. It is made up of clusters such as Powerline, Imo Avenue, Bakassi, Aba North Shoe Plaza, Omemma Traders and Workers, ATE Bag, and Ochendo Industrial Market, comprising input supplers, among others. However, the industry is in thriving in chaos as the majority of shoe makers in the industrial city are poorly structured and are not registered at the Corporate Affairs Commission. Exports are made informally, making tracking and planning difficult.

NADDC partners Abia to train auto-technicians GODFREY OFURUM, Aba

he National Automotive Design and Development C ou n c i l ( NA D D C ) , a n agency under the Federal Ministry of Industry, Trade and Investment, and the Abia State Government, h av e c o m m e n c e d t h e training of automobile technicians in Abia State. The aim is to improve their capacities and bring

t hem up to date w ith trends in modern vehicle techniques. About 60 autotechnicians selected from Umuahia and Aba benefited from the pilot phase of the programme, which will be replicated all over the country. Lawal Gada, managing d i r e c t o r, G r e e n a d o International L imited, consultants to NADD C on the project, explained that the training would prepare the mechanics www.businessday.ng

for the next phase of electric vehicles that would soon hit the local market. According to him, NADDC wants to use the programme to empower auto-technicians to enable t h e m a c q u i re m o d e r n equipment and learn advanced ways of doing mechanic business that will guarantee customer satisfaction. “It is a skill acquisition programme that will increase their income and

livelihood,” Gada stated. He praised the Abia team on the project, stating that the state’s partnership with NADDC would boost the programme in the State. “A b i a S t a t e, particularly Aba, is important to the federal government, because it hosts so many artisans, especially automobile technicians and that is why it is the first in the cycle. We also saw seriousness in the state’s

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team, which ensured that we come here to train their people”. Chukwuma Ogbonna, m e m b e r, A b i a S t a t e Automotive Committee, urged auto-technicians in the state to take advantage of the ongoing training programme to formalise their businesses. In his words, “We are going to reach out to all of them. We want them to be organised, because we are going to put them in clusters, where the @Businessdayng

state government would provide them with modern equipment. “The training is also to ensure that their businesses are well organised. You know that the majority of them operate informally, and in an informal setting, you’ll not be able to track what they are doing. We also want to make sure that they attain customer satisfaction, which is the basic thing in business and their growth a s s ma l l a n d m e d i u m entrepreneurs (SMEs)”.

Thursday 07 November 2019

BUSINESS DAY

news Dangote refinery will decrease Africa’s crude... Continued from page 1

of the new Dangote refinery in Nigeria, crude exports from Africa are expected to decline to 5.4 mbd by 2025,” said the World Oil Outlook, which presents OPEC Secretariat’s medium-term and long-term analysis of the energy market, as well as projections for the global economy. OPEC said Africa now has the potential capacity, linked to the Dangote project in Nigeria, which changes the balance predominantly in West Africa. It noted that the last 12 months had been “challenging” for energy markets. It revised its forecast for global oil demand growth over both the medium term and long term, citing tough market conditions and “signs of stress” in the world economy. “Signs of stress have appeared in the global economy and the outlook for global growth, at least in the shortand medium-term, has been revised down repeatedly over the past year,” OPEC said. The 14-member producer group said its own production of crude oil and other liquids is expected to decline over the next five years, falling to 32.8 million bpd in 2024, down from 35 million bpd in 2019 while also lowering its outlook numbers for global oil demand growth to 104.8mpd by 2024, and 110.6 million bpd by 2040. “At the global level, growth is forecast to slow from a level of 1.4 million bpd in 2018 to around 0.5 million bpd towards the end of the next decade,” OPEC said in the report. The report comes at a time when many energy market participants are increasingly concerned about a repeat of rising supply and faltering demand, the same situation that precipitated a dramatic fall in crude futures from mid-2014 to 2016. OPEC admitted that it will continue to remain under pressure from rising US oil output. America has become the world’s top oil producer through developing hydraulic fracturing, commonly

known as “fracking”, in states such as Texas and North Dakota. “The main driver of medium-term non-OPEC supply growth remains overwhelmingly U.S. tight oil,” OPEC said in its latest World Oil Outlook, using another term for shale oil. The OPEC’s outlook report noted that oil accounted for more than 31 percent of global energy demand in 2018, ahead of coal at 27 percent, and gas at 23 percent. Over the next 20 years, oil is projected to still remain the largest contributor to the energy mix, accounting for more than 28 percent, it said. While natural gas is not expected to overtake oil in the forecast period, it will grow from 65.6mboed to 90mboed, becoming the second-largest energy source with 25 percent of the energy mix, while renewables will see growth of around 6.9 percent between 2018 and 2040. “Demand increases for gas will come primarily from Asia, led by China and India, as well as OPEC Member Countries,” the group said. OPEC said electric cars sales were “gaining momentum”, despite representing a very small share of the global fleet at present. They are expected to account for almost half of all new passenger cars in OECD countries by 2040, with almost a quarter of those in China and more than 26 percent globally. OPEC’s supply has been gradually dwindling in recent years, partly because of a pact with Russia and other non-OPEC members to support the market. The group, sometimes referred to as OPEC and allied members, is expected to restrain oil production in 2020. OPEC and its partners are due to meet next month in Vienna, and will consider whether to deepen their current output cutbacks to avert another glut in 2020, according to the organisation’s Secretary-General Mohammad Barkindo. Russia, the most important of OPEC’s allies, has been more cautious in signalling what needs to be done.

L-R: Salisu Shuaib, chief of staff to the governor; Daniel Kolenda, president and CEO, Christ for all Nations; Dapo Abiodun, governor of Ogun State; Tunde Akinsanya, state chairman of CAN, and Tokunbo Talabi, secretary to the state government, when the governor received the CFAN president in his office at Oke-MOSAN, yesterday.

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companies’ margins in the next financial year. They say manufacturers and exporters that send goods to West and Central Africa are possibly the biggest hit. Jobs are also in jeopardy, with analysts predicting ballooning unemployment rate by the third quarter of 2020. “ The complaint has been about preventing illegal imports. I do not know why exporters are not allowed to ship out their products,” Ede Dafinone, chairman, Manufacturers Association of Nigeria Export Promotion Group, told BusinessDay. President Muhammadu Buhari recently shut borders with Benin Republic to curb smuggling from rice to petrol, but the price of local rice has risen by over 50 percent, according to market surveys. Nigerian exporters are beginning to mull a sea option, but the challenge remains cost of freight. It was gathered that there is

Angola’s 3-year recession warning Nigeria could easily ... Continued from page 1

heightened and foreign reserve continues a downwa rd t re n d t o a rou n d $40.28bn with significant foreign debt, as defending the naira remains a burden Nigeria is unwilling to let go. Meanwhile, fiscal consolidation is uncertain in the face of an ambitious plan that pits record-high spending of N10.33trn against a questionable revenue target of N8.155trn, most of which would for the first time come from “other sources” asides

tax and oil. Unlike Angola, critical reform to unshackle the economy has been slow if not lacking, seen in near 17 percent decline in stock market return year-long, as growth prospects for Nigerian companies dampen on weak macroeconomic signals. New worries are emerging and put the economy at risk of another recession should the oil market become depressed as external buffers continue to thin. In October, analysts at www.businessday.ng

only one ship that moves products from Nigeria to Ghana, but the cost could not be ascertained as of the time of going to the press. However, land movement is far cheaper than sea. Dafinone said exporters might explore the sea option, but while big players such as multinationals can afford it, small and medium enterprises will struggle in this space. Muda Yusuf, directorgeneral of the Lagos Chamber of Commerce and Industry (LCCI), said many industries have invested in products registered under the ECOWAS Trade Liberalisation Scheme (ETLS) and that the border closure has hurt their investments and margins. The ETLS enables free movement of goods and persons across West Africa. “These are investors whose business models were anchored on market opportunities in the ECOWAS. These investments have been completely disrupted and dislocated,” Yusuf said.

“Majority of the victims of the border closure are small businesses, most of them in the informal sector. Their means of livelihood has been put in great jeopardy,” he said. Nigeria has a 23.1 percent unemployment rate and the country is now the world’s poverty capital with slightly over 98 million people in multidimensional poverty, according to the United Nations Development Programme (UNDP) 2019 report. Inflation rate is at 11.02 percent, representing a fall since early 2019, but food inflation is seen rising by 2020. Olu Fasan, member of the International Trade Policy Unit (ITPU) of the London School of Economics and Political Science, said for a government that talks a lot about increasing non-oil exports, the border closure will hurt exports. “According to one analysis, over 90 percent of Nigeria’s trade with the West African subregion

is by road, with Nigeria exporting several finished products to the subregion,” Fasan said. “Surely, closing the land borders will hurt the export trade, not to mention the possibility that other West African countries may retaliate against Nigeria, as the angry reactions in some of those countries against the border closure have indicated,” he said. Vincent Nwani, CEO, RTC Advisory Services, said while the government said the border closure was a method of curbing terrorism in the country, it is necessary to use a more sustainable palliative measure other than the border closure. “Before we can compare ourselves to China, we need to understand that we do not have the same ideology, innovation, infrastructure, strategy and policy that China had when it closed its walls years back,” he said. “The border closure has consequentially increased the menace of smuggling as the border lacks the right infrastructure to function effectively,” he said.

data for unemployment since 23 percent was reported in the third quarter of 2018, anecdotal evidence points to rising unemployment estimated at 30 percent, Financial Derivatives said. The combination of high unemployment, high inflation and decelerating growth for Nigeria which slowed for two straight quarters to 1.94 percent in the second quarter of 2019 remains worrisome. The recent move to close the border to check smuggling and boost local rice production helped maintain the dollar/naira peg at near N359/$, according to esti-

mates by Bismarck Rewane, foremost economist and CEO of Lagos-based Financial Derivatives. The trade-off, however, is seen in the declining performance of firms and lower productivity of labour with a direct impact on national output. For instance, in the latest three months to September 30, a period reported by most listed manufacturers, Nigerian Breweries saw a 71.4 percent drop in profits, Guinness and Unilever slipped into a loss, Presco saw profit decline by 51.1 percent, International Breweries worsened loss

by more than 100 percent, among other players that underperformed. “Vacancy factor is rising in Ikoyi and Victoria Island,” said Rewane, as the impact of flat growth weighs on demand for real estate. Reforms remain lacking in the power sector where non-cost-reflective tariff has questioned the commercial viability of private investment in the sector. Industry experts advise 1 megawatt to 100,000 people but Nigeria’s estimated 200 million people make do with 4,000-megawatt of electricity, increasing cost of operation for many businesses.

Border closure takes toll as manufacturers’, exporters suffer

Lagos-based Financial Derivatives said there is a 25 percent chance Nigeria in 2020 enters stagflation or recession-inflation, which occurs when the inflation rate is high co-existing with high unemployment in a sluggishly growing economy. Inflation, currently at 11.24 percent, is expected to remain elevated due to minimum wage cost and increase in food price following recent land border closure alongside external imbalances and imported inflation. While there is no new

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Thursday 07 November 2019

BUSINESS DAY

news

IWEC Foundation appoints Ibukun Awosika as new president of its board of directors

Babatunde Fashola (2nd l), minister of works and housing; Abubakar Aliyu (2nd r), minister of state in the ministry; Abdullahi Sule (m), governor of Nasarawa State; Abdullahi Adamu (l), senator representing Nasarawa West Senatorial District, and AbdulMumin Muhammad Ari (r), member of House of Representatives representing Nasarawa/Toto Federal Constituency, shortly after a courtesy visit and meeting to discuss developmental issues with the ministers by the governor of Nasarawa State in company of some lawmakers from the state at the Ministry of Works and Housing, headquarters in Abuja.

Alade’s appointment excites Nigeria’s finance minister Cynthia Egboboh, Abuja

inister of Finance, Budget and National Planning, Zainab Shamsuna Ahmed, has expressed delight over the appointment of Sarah Alade as special adviser to the President on finance and economy. The minister, in a statement signed by her media aide, Yunusa Tanko Abdullahi, said Alade’s appointment was a welcome development

as she was expected to come into her new role with a vast experience in finance and economy, considering her experience and exposure. “I am particularly delighted and wish to express my profound gratitude to President Buhari for his foresight and diligence in selecting and picking our best brains as we strive to get our economy working again,” Ahmed stated about the appointment the Presidency announced on Tuesday. Alade, who holds degrees

NDIC extends insurance coverage to licenced PSBs …says Mobile Money Operators record 9.2m subscribers HOPE MOSES-ASHIKE

he Nigeria Deposit Insurance Corporation (NDIC) on Wednesday disclosed it had extended insurance coverage to depositors of the Payment System Banks (PSBs) licenced by the Central Bank of Nigeria (CBN). The CBN on September 18, 2019 issued Approvals-in-Principle (AIP) to three Payment Service Banks. PSBs are specialised banks established to promote financial inclusion and enhance access to financial services for low income earners and unbanked segments of the society by leveraging on technology. Consequently, the Corporation it has designed an appropriate Differential Premium Assessment System (DPAS) matrix for premium computation/payment as well as set an insurable limit to depositors in the event of failure. The Corporation is taking these measures to engender confidence in the system and to discourage bank customers from keeping cash at home, shops and other places outside the bank. “Monies kept outside the banks are not insured by the Corporation and are susceptible to loss through robbery, theft or fire outbreak,” Umaru Ibrahim, managing director/CEO said at on the occasion of the NDIC special day at the 33rd edition of

the Lagos International Trade fair. Represented by Joshua James Etopidiok, director, special insured institutions, he said the NDIC will in the coming years; continue to work with the CBN to ensure effective supervision of banks and the adherence to prudential guidelines and code of corporate governance for banks to ensure their safety and the overall stability of the Nigerian financial system. The NDIC, which celebrated its 30th anniversary last month has been able to record some significant achievements, which have contributed to the stability of the nation’s financial system. One of the most significant achievements of the Corporation was the provision of the deposit insurance coverage to subscribers of Mobile Money Operators (MMOs) to the maximum limit of N500,000 though the pass-through deposit insurance framework. As it stands, the number of licenced MMOs by the CBN is 23 with eight being “bank-led” and the remaining 15 are “non-bank led”.As at June, 2019, the number of subscribers to MMOs stood at 9.24 million. Ibrahim noted that as at June, 2019, the Corporation received a total number of 35 petitions/ complaints from banks customers on various issues such as ATM frauds, unauthorised funds transfers, cheque related issues and much more. www.businessday.ng

in Economics also has a PhD in Management Science, was a senior management staff at the Central Bank of Nigeria (CBN) where she held various positions including Deputy Governor, Economic Policy, Director Banking Operations, chairman, Board of Directors, Nigeria Interbank Settlement System (NIBSS). She was also acting governor of the CBN. Speaking further, the minister said, “I am passionate about the values and energy Alade is bringing into the team. Her vision and dedica-

tion, thoroughness, finance, economy and the management acumen is inspiring and heart-warming. “I believe Alade will find the Ministry of Finance Budget and National Planning truly a home. “Since the office is to be domiciled in the Ministry of Finance, Budget and National Planning, this is a very welcoming news for me and my entire team as we look forward to working with Alade, a brilliant and accomplished economist and scholar.”

Osinbajo’s aides get sack letters, as Buhari sends 35 packing ...Party stalwart kick against escalating tensions Tony Ailemen, Abuja

ides of Vice President Yemi Osinbajo on Wednesday began the collection of their letter of disengagement following the termination of their appointments by President Muhammmadu Buhari. Their disengagement had created controversy following alleged plan by the President to reduce the influence of the Vice President. BusinessDay Villa check reveals that two of the Vice President’s aides received their letters of disengagement on Wednesday. But the senior special assistant to the President on Media and Publicity (Office of the Vice President) Laolu Akande, could not be reached at the time of filing this report A senior presidential aide, who spoke with BusinessDay on condition of anonymity, revealed that two of the Vice President’s aides were served their letters on Wednesday. “Two of the VP aides just received their letters.” Osinbajo’s travail, BusinessDay gathers, is connected to the current power struggles with people identified as, “Villa cabals.” Following the return of President Buhari for the second term, the Vice Presi-

dent came under attacks over alleged misappropriation of funds in some government agencies including the Federal Inland Revenue Service (FIRS). B u s i n e s s D ay g a t h e r s that the cabals have allegedly refused to forgive the Vice President for sacking the former director-general, Department of State Services (DSS), Lawan Daura. A top member of the r u l i n g A l l P ro g re s s i v e s Congress (APC), Suleiman Lamorde, while reacting to the development, however, blamed those he described as “political distractors,” according to him, “making a mountain out of an anthill.” “ T h e P re s i d e n t i s i n charge of the government and every one engaged in the Presidency is engaged by the President and deployed to the offices, including the office of the Vice President. So, the Vice President’s aides owe their allegiance to the President,” he said.

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nternational Women’s Entrepreneurial Challenge Foundation (IWEC) has announced the appointment of Ibukun Awosika to their Board of Directors as its new president. Awosika is the chairman of First Bank of Nigeria Limited. Awosika was elected to replace Miguel Valls, former president of the Barcelona Chamber of Commerce and president of the IWEC Foundation, who passed away last month. “The Foundation is very excited to announce the appointment of our new president,” stated Ruth A. Davis, IWEC chairwoman and distinguished former US Ambassador. “Ibukun Awosika has been a solid, steady presence at IWEC since its inception, and she is also a past IWEC awardee. Ibukun has not missed one IWEC Conference since 2008 and has lent her voice and experience not only to our conferences, but to our meetings after joining our Board in 2017. We are delighted that our Board of Directors voted on her appointment, and we’ll introduce her as our president at our upcoming 12th Annual IWEC Foundation Conference in New Delhi, on November

10.” The Foundation’s 2019 conference will focus on “Connecting Women Businesses Globally: Leading the Way to Innovation and Integration”. The event would be hosted locally by the FICCI Ladies Organisation (FLO) of the Federation of Indian Chambers of Commerce and Industry (FICCI), which represents over 5000 women entrepreneurs and professionals across India. This year, IWEC welcomes 39 awardees from 18 countries, with combined revenue of over $5.7 billion among all awardees to date. IWEC Foundation vice chair, Carmen Castillo, CEO of SDI International, said: “Ibukun has demonstrated a significant commitment to IWEC over the years. Her breadth of knowledge extends from being an entrepreneur running ‎SOKOA Chair Centre Limited, to overseeing the board of directors for the renowned First Bank of Nigeria Limited. We are looking forward to her wise counsel and to continuously drive IWEC globally as a source of support, connection and impact for women business owners all over the world.”

Buhari can rule from anywhere - Presidency Solomon Ayado, Abuja

enior special assistant to the President on National Assembly Matters (Senate), Babajide Omoworare, says contrary to claims from certain quarters that it is unlawful for the president to be away without transmitting power to his Vice, President Muhammadu Buhari can rule from anywhere around the world. This is as he said for Buhari to travel without informing the National Assembly does not in any way undermine the powers in the office of Vice President Yemi Osinbajo. Buhari had travelled out of the country without transmitting a letter to allow his Vice to act. But, according to Omoworare, who spoke with journalists in Abuja, the President remains in charge even when out of the country. “Contrary to the claims by some individuals and groups, The President has not in any

way undermined or relegated the office of the Vice President. He has no reason to do so. I don’t think there is any way or manner that the office of the Vice President has been relegated. “The President of the Federal Republic of Nigeria can work from anywhere he is in the world,” he said. Stating further, Omoworare noted, “The only celebrated case was that of the late President Umaru Musa Yar’ Adua, who was Ill and could not transmit any letter to the National Assembly. “The National Assembly had to work round the situation by ensuring that the executive powers go to the vice president.” Insisting that Buhari’s situation at the moment is far not same with that of former President Umaru Musa Yar’adua, the SSA said it is only when the president is sick and on long vacation without notifying NASS that is wrong doing.

Amid controversy, Bill to increase tax to 7.5% passes second reading in Senate Solomon Ayado, Abuja midst controversy, the Senate on Wednesday passed forsecondreadingthebillto increasethevalue-addedtax(VAT) from 5 percent to 7.5 percent. President Muhammadu Buhari had increased the tax and announced it while presenting the 2020 budget before the joint session of the National Assembly. Nigerians including lawmakers groaned over the increase, saying it would bring hardship to the citizenry because of instability of the nation’s economy. DuringplenaryonWednesday,

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some senators kicked against the passage of the bill, saying clearer explanations on it were not furnished by the executive. The bill was passed for first reading on Tuesday. Among the concerns the lawmakers raised against the bill, they said senators did not even have copies of the bill, let alone having proper knowledge of it. Majorly, Binos Yaroe (Adamawa South, PDP), in his submission said, “Our rules say that printed copies of the bill shall as soon as possible be sent to every senator. We are at the stage of the second reading of this bill.

Thursday 07 November 2019

BUSINESS DAY

news

Edo Broadcasting Service generates N24.05m as IGR in 10 months

do State Broadcasting Service (EBS) has remitted a total of N24.05 million to the Edo State government as Internally Generated Revenue (IGR) from December 18, 2018, to October 29, 2019. The new financial status of the station follows sweeping reforms instituted by the Governor Godwin Obaseki-led administration to reposition the media outfit for optimum service delivery. In its October report, acting general manager of EBS, Ransley Abu-Osagie, said the state government-owned broadcast service remitted a total of N24,050,000 since he assumed management of the station, noting, “On Internally Generated Revenue (IGR), the sum of two million and fifty thousand Naira (2,050,000) was remitted to government thus bringing the total sum paid to the government treasury since December 18, 2018 to date to twenty-four million and fifty thousand Naira (24,050,000).” He noted, “The station remit-

ted part payments to external auditors for year 2017 and year 2018 auditing respectively.” Abu-Osagie said the station also paid off some inherited debts owed the Benin Electricity Distribution Company (BEDC) to address some of its power supply challenges, adding that repair work is ongoing on a 400KVA generator, which provides alternative power supply to the station. According to him, “Some months back a portion of the inner fence measuring about 40 feet fell and compromised the security of our equipment. As at date, we are happy to report that the failed portion of the fence has been repaired up to 90 per cent.” Recall that Governor Obaseki embarked on an overhaul of EBS in his commitment to revamp all state-owned media enterprises. The overhaul led to the appointment of a new management that has turned the lossmaking entity into a revenuegenerating outfit.

‘Health app - a high point in Nigeria’s clinics’ ANTHONIA OBOKOH

igital health technology improves quality and patient safety in Nigeria, a complete healthcare mobile app that offers free teleconsultation with doctors along with home delivery of medicines and healthcare products developed by the MeCure “Smart Buy” is proving a hit with more than 34,000 registrations says the organisation. Nigeria is embracing technology as a way to improve healthcare for its citizens, especially those living in remote and rural areas. In less than three months after going live, the app, which is available on both Android and iOS smartphones, is generating massive interest from consumers in Lagos as it aims to provide easy access to healthcare, which has been a big pain point for Nigerians. “Our vision is to provide access to primary healthcare services in the most affordable and convenient way possible,” said Adekunle

Megbuwawon, chief medical officer of the company. Megbuwawon says traditionally, access to top quality doctors has been the very first problem for all of us, and we are resolving this by removing barriers using technology. He therefore explains that if you are sick today, just download the app and book a teleconsultation with our panel of qualified doctors. They will give you a call, assess your health condition and advise on the way forward. “In case a physical examination is needed, they will refer you to a qualified doctor closest to you. For simple ailments that can be treated with over-the-counter medication, consumers can get it home delivered within 2-3 hours anywhere in Lagos,” says Megbuwawon. Meanwhile, Nigeria’s healthcare system is underfunded leading to poor services and suffering for many of its citizens, but digital health are beginning to fill the gap with some innovative solutions.

HCI Healthcare rebrands, assures customers of better deal

ealthcare International Nigeria Limited, a health maintenance organisation (HMO) in Nigeria, is pleased to inform its customers and members of the public of its change of name to HCI Healthcare Limited. The name and logo change comes as part of the company’s strategic initiatives to further consolidate its market leadership within the managed healthcare space and to ensure better service delivery through improved consumer engagement. “We are conscious of the desire of the consumer for more innovative product offerings that are efficiently

and timely delivered in an atmosphere of trust and respect for the consumer,” said Kunle Omilani, chairman of HCI Healthcare. The new corporate identity underscores the company’s avowed commitment to continuously meet and surpass the expectation of the consumer and to create a more positive service experience for the customer, he said. H C I H e a l t h c a re w a s incorporated in 1997 but officially commenced operations in February 1999 following its accreditation by the National Health Insurance Scheme (NHIS) as a national HMO to provide quality health insurance services to the population. www.businessday.ng

L-R: Bolarin Okunowo, non-executive director, Chemical and Allied Products plc (CAP); Oscar Onyema, CEO, Nigeria Stock Exchange (NSE); Awuneba Ajumogobia, chairperson, CAP plc; David Wright, managing director, CAP plc, and Udo Okonjo, non-executive director, CAP plc, at the closing gong ceremony at the NSE in Lagos, yesterday. Pic by Pic Pius Okeosisi

NNPC, NUPENG, marketers allay fears of fuel scarcity at yuletide Olusola Bello

... 2bn litres available

ajor stakeholders in the downstream sector of the petroleum industry have allayed fears of any fuel scarcity, nor strike in the build-up to yuletide, saying they would ensure a steady supply of Premium Motor Spirit (PMS) - petrol for the period and even beyond. According to them, they are joining hands with the government to remove all obstacles that may impede steady supply of fuel to Nigerians during the season. They gave the assurance when Mele Kyari, group managing director, Nigeria National Petroleum Corporation (NNPC) visited Ijegun Egba Satellite Depot, Lagos, to assess the state

of road infrastructure leading to the depot. The NNPC chief, who said he was in the depot because respite had come through the palliatives depot owners, put in place by pulling together their resources to fix the road infrastructure. He said the result would be that there would be free movement of trucks from Ijegun to other locations throughout the country. Around 18 million litres of PMS are loaded from the depots on a daily basis. He said: “There would be wider engagement of all other stakeholders to put a permanent solution to the issue of road infrastructure around the depot. The stakeholders being engaged

are the NNPC, Federal Ministry of Works, Lagos State government, and depot owners to make sure there is a lasting solution to this road problem.” He stated that in the meantime the depot owners had done a good job and there was a palliative solution that would ensure that products were delivered throughout the country. The NNPC helmsman explained that there was 2 billion litres of PMS in store for the country, which was enough beyond the yuletide. Because of the poor state of road networks truck owners under the Petroleum Truck Drivers (PTD) directed its member to suspend activities in the depot until something tangible was done by the government. Their action resulted in lock-

ing up around 300 million litres of PMS, a situation that has made the truck drivers to now divert to depots in Apapa for loading thereby compounding the already congested Apapa roads. “We are here because respite has come, the depot owners have been able to pull their resources together to put the road infrastructure in place through the Nigerian Army corps of Engineers, and the result would be that there would be free movement of trucks from this location to other locations throughout the country. House of Representatives has also said it would do everything possible to support the NNPC and other stakeholders to ensure that there is robust supply of PMS during the yuletide.

Nigeria should think innovation beyond UBA partners British Airways to technology to solve problems – Forum reward loyal customers Daniel Obi

igeria is today trailing some of its peers when certain economic indices are compared, but a recent forum organised by NigeriaBritain Association says the country can only make progress with innovative ideas that are not necessarily technology driven. The forum advises Nigerians both in the public and private sectors to think of innovations on broader sense of adding value to life in order to solve the challenges slowing the country down. The forum themed ‘Innovation: Path to sustainable growth’ underscores government roles such as policies, incentives and tax breaks that enable innovations in Nigeria, but advises the private sector to always create innovations to surmount infrastructure and policy constraints. KPMG official, Segun Zacchaeus, who led the discussion at the one-day forum, describes Nigeria’s economic

challenges as ‘wicked problems’ and says it is only through innovations the problems can be tackled. Zacchaeus lists some of these perennial problems as diminishing growth, high level of poverty, unemployment, poor infrastructure, poor education and health systems and high number of out of school children in Nigeria, among others. “Nigeria is currently in a quagmire with every indicator showing that Nigeria is in a serious situation. In strategy, this is called a wicked problem. It is a problem one tries to solve but it persists and as we go through the years, the problem is still there,” Zacchaeus says. According to Zacchaeus, Nigeria’s economic challenges are further complicated with the changing world. “While Nigeria is battling with basic problems of unemployment, poverty, children out of school, insecurity, poor health care, poor education, the world has gone to the next level, which is the 4th industrial revolution.”

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HOPE MOSES-ASHIKE

nited Bank for Africa (UBA) plc and British Airways have announced a collaboration to reward loyal customers who are cardholders of the bank. The promo, which will last for six months from November 2019, will witness UBA customers getting significant discounts when they buy their British Airways tickets using their UBA cards. The promo will allow customers to enjoy up between 10% to 15% discount on any ticket purchased during the campaign. The ticket fares are exclusive of taxes as is applicable to purchases of all goods and services. The collaboration is aimed at increasing customer experience and satisfaction for both UBA cardholders and customers of British Airways. General manager, corporate bank, UBA Directorate, Muyiwa Akinyemi, who expressed delight at the collaboration, noted that the promo between the two organisations was carefully thought out to ensure that loyal customers @Businessdayng

of the two institutions are duly rewarded, while ensuring that they also receive more value for their money. He added that for persons without a UBA account, all they require to benefit from this promo is to procure a card instantly from any UBA branch nationwide. “UBA is excited to collaborate with one of the foremost Airlines in the world to run a promotion aimed at rewarding our cardholders and premium customers who will enjoy discounted tickets and other ancillary benefits such as loyalty points on the British Airways Executive Club.” He explained that as a customer-centric institution, UBA is always on the look-out for services and reward schemes that would ultimately benefit the customers, in line with its customer first policy. Akinyemi noted that the bank has plans to partner with other airlines in future to provide further opportunities of reducing cost of travel for its customers. “For now, we are partnering with a pre-eminent airline that offers class and distinction,” he said.

Thursday 07 November 2019

BUSINESS DAY

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Thursday 07 November 2019

BUSINESS DAY

POLITICS & POLICY Sanwo-Olu renounces ‘Excellency’ title adopts ‘Mr. Governor’ …Says, ‘title undemocratic, impedes good governance’ Iniobong Iwok

abajide SanwoOlu, governor of Lagos State, has renounced the title of “His Excellency”, saying that the title was undemocratic, while preferring to be addressed as “Mr. Governor”. Sanwo-Olu, who was elected on the platform of the All Progressives Congress (APC), said that the title had affected the disposition of leaders over the years, which makes people tend to see them as dictators, which also distracts them from their primary responsibility to the citizenry and the electorate. He stressed that his position as governor required upmost trust, humility and sacrifice to the citizenry, which the title would not allow him to do. Sanwo-Olu, however, hoped that the measure would lead to a renewed

vigour and sense of responsibility among leaders and public office holders in the state on the need to be more responsive and accountable to the electorate. The governor said that the measure was intended to sanitise government, while promising to issue an executive order that will formally ensure full compliance with the new policy. According to him, “In the last five months that I have been privileged to exercise the mandate freely given to me by the great and hardworking people of Lagos State, it has come to my consciousness to review certain features of citizengovernment relations which impede the genuine expression of the democratic spirit of our society and the meaningful exercise of the sovereignty of our people. “The office of the governor has been celebrated as the paragon of excellence, a temple of perfection and a

Babajide Sanwo-Olu

throne of purity. This demigod mystique spreads over the entire machinery of the executive arm of the government, symbolising an authoritarian disposition on the governed.

“It has deformed the orientation of elected and appointed persons who are paid from the taxes of the people to see themselves as oppressors who can do no wrong and must be served,

Kogi poll: PDP calls for removal of Hakeem Basuri …Solicits release of DCP Ejeh Abutu VICTORIA NNAKAIKE, Lokoja

head of Kogi gubernatorial election, the People’s Democratic Party Campaign Council in the state has passed a vote of no confidence in the state’s Commissioner of Police (CP) Busari Hakeem, stating that with his presence, Kogi people should not expect an election devoid of rancour come November 16. Austin Okai, the Council’s deputy director of public communication, Austin Okai Usman, in a statement on Wednesday, said police operations in the state have been reduced to taking instructions from the APC-led state government. Okai expressed serious concern that the activities of the state Police Command under the Commissioner, would reduce the lead up to the November 16 governorship election to a battle between the police and PDP “This is a clear indication that virtually all government

officials in Kogi and top APC members and their thugs were being protected and at the same time using the state Police Commissioner’s men to chase, harass, intimidate and threaten to kill PDP members across the state,” he said. “Specifically, the Council noted with serious concern the activities of Governor Yahaya Bello’s spokesman, Kingsley Fanwo, in Mopa Muro Local Government; Ndamodu Ali, former Commissioner of Local Government in Ofu, and the clampdown of our supporters in Dekina, Ankpa, Bassa, Idah, Olamaboro and the concluded plans to spread across the state, with the aid of the state Commissioner of Police, his men and the fake uniformed men, including those imported by Yahaya Bello, engaged in dirty and illegal duties in Kogi,” he further said. The Council alleged that the police hierarchy under Hakeem lacks the impartial posture necessary to supervise and monitor the Novemwww.businessday.ng

rather than serve the people. “Whatever might have been the reason for this myth, let us be honest, the office is occupied by a mortal who has been called upon to serve the electorate with humility and sincerity. The office of governor is a public trust that calls for sacrifice, modesty and willingness to add value to the lives of the people.” In a statement he personally signed Wednesday, a copy of which was sent to BusinessDay, Sanwo-Olu said: “Fellow Lagosians, I have come to the conclusion that for us to change the narrative of governance, we have to strike down this seeming symbol of executive arrogance that commands popular obeisance and undermines the democratic role of citizens as the masters of those they have elected and appointed to serve. “It is a conviction that I believe will send the right

signals to all politicians and civil servants that service to the people has brought us here. It is the duty we are obliged to do. It is the responsibility that we bear wherever we find ourselves; whenever we are called to serve.” According to him, “Only God, the Almighty, the Creator, the Protector is the Most Excellent. No man can share His eternal qualities. “Thenceforth, I wish to be addressed simply as Mr. Governor, a title that will constantly remind me that I have been chosen out of so many fellow compatriots to lead a collective salvage of our political economy. “A salutation that sanitises the paraphernalia of office and reminds us all of our imperfections and mortality. To give official effect to this announcement, I shall issue tomorrow an executive order that will formally ensure full compliance with this new policy.”

Activist floats environmental vanguard for Lagos …Says, ‘it is to complement state govt’s efforts’

ber 16 election, appealing to the Inspector General of Police (IGP) to, as a matter of urgency, effect his removal to avoid what it termed as the potential for a breakdown of law and order in the state The PDP also hinted that continuous detention of DCP Ejeh Suleiman Abutu in SARS custody, who was supposedly abducted by the APC’s alleged private army from his residence, taken to Dekina Governor’s lodge, tortured for a forced confession, and later forced the police hierarchy to accept the records of the illegal activities of Bello Onoja’s men. Against the backdrop of the serious allegations, the PDP appealed to the IGP to remove the Police Commissioner Hakeem in the interest of fair play, security of lives and property and to avoid reprisal attacks from any side of the political divide, particularly the PDP. “It has also been informed of the plans by the state government to enlist and incorporate the army on spe-

cial operations in its quest to retain power at any costs come November 16”. The Council called on the Commandant Army Records, Major General Adewale Ogunkale, to closely monitor the activities of his men so as to insulate them from the alleged infiltration of security agents by the state government. The Commissioner of Police, Hakeem Busari, when contacted expressed sadness that in spite of all he was doing with his men to ensure a free and fair election, certain people are still castigating him, taking aim at the PDP for its antics and, in his words, “accusing me wrongly.” “Honestly, the PDP is not fair to me for accusing me wrongly. They asked for police security, we provided them. We have never treated any party above the other, and if any of my men are caught conducting themselves in a way that is nonprofessional let them call my attention to it and we will deal with them,” he said.

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human rights activist and public commentator, Razaq Olokoba has floated a voluntary non-governmental outfit to assist the government and Lagos residents in reducing the environmental hazards resulting from dirty environment and blocked drainages. The outfit, Sanwo-Olu Vanguard on Environmental Sanitation, according to Olokoba, is for the members to serve as volunteers to go round periodically to assist in clearing refuse at strategic places throughout the nook and cranny of the state The founder, Olokoba, while addressing a selected journalists, reminded the public of the danger of indiscriminate dumping of refuse, the result of which can cause environmental pollution through stench oozing out of the carelessly dumped wastes. He added that in some cases where the dirt is being burnt within residential areas, the effects are always devastating to the health of the people, warning that, if something drastic is not done @Businessdayng

by complementing the efforts of the government towards providing a clean environment, the negative outcome would not spare anybody. Olokoba further stated that, “great attention would be paid to the blocked drainages with a view to freeing them to allow for unhindered passage of water,” reminding that, blocked drainages are the major causes of flood that ravages communities and cause irreparable damage to life and property. He however, made it clear that, “We are out to support and compliment the efforts of relevant environmental agencies to ensure cleaner Lagos and never to usurp anybody’s statutory duties constitutionally assigned to them by the authorities.” The activist also disclosed that, “Our activities would go beyond clearing of refuse and freeing the drainages alone, we will always mount enlightenment campaigns against indiscriminate dumping of refuse, blocking the drainages and other acts that can lead to environmental degradation and injurious to the health of the populace.”

Thursday 07 November 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper KANA INAGAKI

asayoshi Son, the defiant founder of SoftBank, admitted he had turned a “blind eye” to governance lapses at WeWork but vowed to revive the crisis-hit group after disclosing a $4.6bn writedown on the Japanese company’s investment in it. The dismal results on Wednesday came two weeks after SoftBank agreed a $9.5bn package to rescue the US office-sharing group following an aborted attempt at an initial public offering. The deal saw WeWork’s valuation sink from $47bn in January to $8bn. Despite the setback, Mr Son defended Softbank’s strategy in his two-hour presentation, insisting the WeWork deal was not “a bailout”, its $97bn Vision fund was still doing better than other venture capitalists, and that plans to deploy another $100bn fund were on track. “I made a bad investment decision and I am deeply remorseful,” Mr Son said at a news conference in Tokyo. “But there is no change to my strategy or vision.” Mr Son said SoftBank would aim to get a return on its WeWork investment in four to five years with a turnround plan that involves a freeze on new leases and shutdown of its lossmaking noncore businesses. “The logic is simple. Time will resolve . . . and we will see a sharp V-shaped recovery,” Mr Son said. For the July to September quarter, SoftBank reported a net loss

SoftBank’s Son admits turning ‘blind eye’ to WeWork lapses Founder of Japanese group expresses remorse after $4.6bn writedown

Masayoshi Son at a press briefing in Tokyo on Wednesday: ‘I made a bad investment decision and I am deeply remorseful’ © AFP via Getty Images

of ¥700bn ($6.4bn) from a year earlier profit of ¥526bn. The performance of its Vision fund, which had driven SoftBank’s earnings since its launch in 2017, was pressured by unrealised losses totalling ¥538bn from its investments including WeWork and ride-hailing group Uber. Mr Son admitted there may be “plenty” of other investments backed by the Vision fund that were overpriced such as Wag, the

France to ‘take back control’ of immigration policy

rench president Emmanuel Macron’s government has pledged to “take back control” of immigration policy, cracking down on illegal migrants and preparing quotas for foreign workers in an initiative designed to win voters from far-right leader Marine Le Pen. “We’ve decided to go far in opening up where we think it’s good for France, and go far in restrictions where the abuses are intolerable,” Edouard Philippe, Mr Macron’s prime minister, said in Paris on Wednesday as he outlined the new policy flanked by four ministers. “We want to take back control of our migration policy,” he said. “Retaking control means when we say yes it really means yes, and when we say no it really means no.” Ministers insisted that France remained open to legal migrants, including students and family members of earlier migrants. But they also signalled a hardening of official attitudes to visitors who overstay their visas or migrants who remain even after their asylum applications have been rejected.

Christophe Castaner, interior minister, said the unsanitary encampments of 1,500 to 3,000 migrants on the northern fringes of Paris would be moved by the end of the year. Rightwing and far-right politicians and voters have long complained about what they see as excessive immigration, especially by Muslims from north Africa, and Ms Le Pen’s Rassemblement National party has built a strong base of support among white French voters with its antiimmigration platform. The new plan includes quotas or targets for legal economic migrants, as well as a measure to deprive newly arrived asylum seekers of access to basic medical care for three months. The proposals have prompted angry denunciations from leftwing politicians and grudging approval from some on the right. The French government is portraying its plan as a move to encourage legal migrant workers sought by labour-starved French employers, while cracking down on illegal migrants and asylum seekers from countries such as Albania and Georgia who are unlikely to face political persecution at home and whose applications have little chance of success. www.businessday.ng

The WeWork crisis has been a rare blunder for the billionaire founder of SoftBank, an aggressive dealmaker who claims to be guided by a gut feeling in picking winners in the technology industry. Under pressure from investors, Mr Son revealed that the company will adopt new measures to tighten governance at companies it backs, as earlier reported by the Financial Times. The Japanese group poured more than $10bn into WeWork as

Crisis star RG Niederhoffer struggles in calm markets

Macron government says it will crack down on illegal migrants and fix quotas for foreign workers VICTOR MALLET

dog-walking company. But the SoftBank boss insisted there will be more upside than downside, saying 37 of 88 investments by the Vision fund increased in value while 22 others declined. The value of SoftBank’s equity holdings increased 7.1 per cent from the past quarter. That was mainly driven by gains in its stake in Chinese ecommerce group Alibaba. Net debt increased from ¥4.9tn to ¥5.5tn.

Mr Son backed Adam Neumann, the co-founder of the property group. But governance concerns and questions about its business model killed WeWork’s hopes for a listing after it failed to fetch even a $15bn valuation from investors. Mr Neumann was ultimately forced out of the company, but not before he secured a controversial $1.7bn exit package even as 4,000 WeWork employees are to be fired. “I turned a blind eye to many of his negative aspects. I have major regrets particularly on [WeWork’s] governance problem,” Mr Son conceded on Wednesday. Mr Son stressed that its new $108bn Vision fund will “launch on schedule”, but Saudi Arabia and its neighbour Abu Dhabi, the two major investors in the current $97bn fund, have been slow to commit following the WeWork turmoil. Some analysts questioned Mr Son’s bullish outlook on WeWork’s recovery plan. “Cost reductions are necessary of course, but a corresponding pullback in growth makes WeWork look a lot like IWG, which is worth $4.5bn, and that is even lower than the implied $8bn SoftBank just paid,” said Kirk Boodry, a tech analyst at Redex Holdings who publishes on research platform Smartkarma.

Hedge fund’s 22% drop this year comes after fresh burst of central bank support LAURENCE FLETCHER

top-performing hedge fund during the financial crisis is heading for one of its biggest annual losses, as a return of easymoney policies from central banks helps suppress the market volatility it has been betting on. New York-based RG Niederhoffer Capital Management, headed by computer scientist and opera aficionado Roy Niederhoffer, has suffered a 22 per cent loss in its flagship Diversified fund this year to the end of October, according to numbers sent to investors. The fund, which was set up in 1993 and is one of the world’s oldest computer-driven hedge funds, uses algorithms to make bets lasting from a few minutes to several weeks to try to profit from swings in equity, bond and other markets. It tends to do well when market volatility spikes, and can also profit by betting that rallies during a bear market will fade. But the fund has found life tough in an environment dominated by central bank stimulus, which has pushed up asset prices while keeping a lid on volatility. It is a problem

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faced by many other hedge funds, whose complex trades based on analysis of economic fundamentals have often delivered lacklustre returns compared with the low-cost option of betting on ever-rising markets. “It’s certainly been a long period of frustration,” Mr Niederhoffer told the Financial Times. “One of the greatest equity rallies in history” has been a “less-than-ideal” backdrop for his fund, he added. Mr Niederhoffer, an accomplished pianist who owns five pianos, including one in his office, was one of the star performers during the financial crisis. His fund made 30 per cent in 2007 and 51 per cent in 2008, when many asset managers were experiencing large losses. But the fund was down by double digits in 2016 and 2017, as trillions of dollars of quantitative easing helped to keep markets sedated. Assets at his firm have shrunk from about $1bn a decade ago to roughly $400m, even as the fund cut fees charged to investors in 2016. The Federal Reserve’s pivot towards monetary easing at the beginning of this year, combined with dovish moves from the European Central Bank and the Bank of Ja@Businessdayng

pan, have also capped big swings in prices. That wrongfooted Mr Niederhoffer’s fund, which had seen gains from a turbulent fourth quarter and was positioned for more of the same. “It’s been so quiet in equities, we haven’t had the opportunities,” Mr Niederhoffer said. Almost every time his fund tried to bet on falling prices, it was “met by a wave of liquidity coming into the market.” The losses have put him on track for one of his toughest years on record, close to the 22.4 per cent the fund lost in 2012, although still some way off the 32.5 per cent it lost in 1999. “It’s a bit too spicy,” said one hedge fund investor who has opted not to commit cash to Mr Niederhoffer’s fund. “You never know when you’re going to make money.” Mr Niederhoffer, a New York resident who led a rescue of its City Opera from bankruptcy four years ago, sees the next steps of central banks as the key question confronting the global financial system. “Can central banks keep the liquidity [flowing]?” said Mr Niederhoffer. “If they do, then everything is going to go up. If they fail, then it’s going to be the [global financial crisis] all over again, and maybe worse.”

Thursday 07 November 2019

BUSINESS DAY

NATIONAL NEWS

China enjoys bumper demand for euro-denominated bonds

Investor orders total close to €20bn against the €4bn raised GEORGE HAMMOND

hina’s first euro-denominated government bond in 15 years has been gobbled up by yield-hungry investors including European pension funds, feeding expectations of further deals. Beijing’s Ministry of Finance sold a trio of bonds on Tuesday, raising a total of €4bn. There were close to €20bn of orders from investors, according to figures shared with the FT. The issuance will set a new price benchmark after the expiration of the last euro-denominated sovereign bond, which was issued in 2004. For big investors, the Chineseissued, euro-denominated bonds provided an opportunity to diversify and grab higher yields than those available in Europe. The bonds had maturities of seven, 12 and 20 years, with yields of 0.197 per cent, 0.618 per cent and 1.078 per cent, respectively. By contrast, a seven-year German Bund yields minus 0.5 per cent. The deal is likely to encourage further issuance, according to analysts, and sets a price benchmark for corporate bonds. It demonstrated “the depth of market demand for quality Asian issuers”, said Samuel Fischer, head of China onshore debt capital markets at Deutsche Bank, one of 12 banks involved in the deal. “The transaction attracted not only dedicated [emerging markets] investors, but also European continental pension and insurance names which are welcoming new

issuers in the market,” he added. All three parts of the deal were heavily subscribed, with the €1bn, 12-year bond attracting more than €6.25bn in orders. Offering three tranches had allowed China to target “a range of investor types”, said Sean McNelis, HSBC’s co-head of debt capital markets for Asia-Pacific. “The enthusiastic reception to the transaction should open the door for a lot more euro issuance from Chinese corporates and institutions as those issuers look to further diversify their funding strategies,” he added. The Ministry of Finance was expected to follow up the launch with further deals, as often as once a year, according to one banker involved in the deal. Beijing is seeking to encourage diversification away from dollardenominated bonds, both in terms of its own debt and for corporate China, according to analysts. The vast majority of the country’s foreign currency-denominated debt is in US dollars, across corporates, financial institutions and government agencies. Euro-denominated bonds make up around 5 per cent of the total, according to Dealogic data. China mandated a dozen banks as managers and bookrunners for the euro bonds. Alongside domestic players Bank of China, Bank of Communications and China International Capital Corporation, international banks Citigroup, Bank of America, Commerzbank, Crédit Agricole, Deutsche Bank, HSBC, Société Générale, Standard Chartered and UBS were involved in the deal.

Bondholders warn Argentina not to make debt ‘uninvestable’ Too harsh a restructuring deal could scare off investors, says one creditor COLBY SMITH

ome of Argentina’s biggest bondholders say they are ready to negotiate with the incoming government led by Alberto Fernández over roughly $50bn they are owed in sovereign debt, but warn that too harsh a restructuring would make the country “uninvestable”. After months of informal conversations involving Greylock Capital Management, T Rowe Price, GMO and more than two dozen other bondholders, a subset of creditors has begun to band together in a formal committee to ensure a unified front when talks begin with Mr Fernández’s team. The group is pushing for a deal in which bondholders give the government more time to pay back its debts without so-called haircuts, or losses on the face value of the bonds — an approach previously endorsed by Mr Fernández. Investors see this as a good starting point, but warn there is a limit to what they will endure. “If they attempt a major haircut or a deep restructuring on the debt like they did back in 2005, they are risking Argentina becoming really uninvestable,” said Carl Ross, a partner at fund manager GMO. “There may come a point where a lot of international bondholders may say there is no price at which they can own Argentina.”

Discussions around how to stretch out or cut unaffordable debt repayments for Argentina began before Mr Fernández became president-elect last month. In August the incumbent Mauricio Macri announced the country sought a “voluntary reprofiling” of longer-term debt held mostly by foreign investors. In addition to postponing $7bn of payments on short-term local debt, Mr Macri said the country would need to delay repayment on $44bn of loans already disbursed by the IMF from its record-breaking $57bn bailout agreed last year. Following meetings in Washington with IMF officials and associates close to Mr Fernández, creditors have braced themselves for more protracted negotiations after hearing the institution is considering conditions on further funds that could force bondholders to shoulder more pain. Argentina’s dollar bonds have slipped as a result and now trade at around 40 cents on the dollar — about half of their value three months ago. One creditor in the group said a 40 per cent cut to the face value of the bonds — one potential solution — would be too steep, warning that a settlement “that severe” could lead to contentious, multiyear negotiations. “If [the government] is looking to return to market access within 18 to 24 months, they have to walk that walk,” the person said. www.businessday.ng

Adam Schiff becomes public face of Democrats’ impeachment push Congressman’s role has earned him Republican enmity — and a nickname from Trump: ‘Shifty Schiff’ LAUREN FEDOR

o win his first election to Congress in 2000, Adam Schiff defeated James Rogan, a Republican who had been among Bill Clinton’s most vocal critics during his impeachment trial. Nearly two decades later, Mr Schiff, 59, is now a central figure in a different impeachment probe, as chairman of the House intelligence committee and de facto leader of the Democrats’ investigation into Donald Trump. A longtime ally of Speaker of the House Nancy Pelosi — the thenjunior congresswoman from California raised money for Mr Schiff’s first congressional campaign — Mr Schiff has been tasked with leading the impeachment inquiry after top Democrats were disappointed by the House judiciary committee’s handling of Robert Mueller’s investigation. For Democrats, the former prosecutor represents a safe pair of hands to steer the politically precarious proceedings. For Republicans, Mr Schiff is now public enemy number one, having even earned the dubious distinction of his own Twitter nickname from the president: “Shifty Schiff.” A member of the New Democrat Coalition — a group of centrists who

describe themselves as “moderate” — Mr Schiff has long demonstrated an interest in national security issues, having set up the Democratic study group on national security policy after September 11, 2001. Described by colleagues as careful and deliberate, he represents California’s 28th congressional district, an overwhelmingly Democratic area that includes wealthy neighbourhoods like West Hollywood and Burbank. Steve Israel, the former congressman from New York who calls Mr Schiff his best friend, said he is “perfect” for leading the impeachment probe “because he blends the skills of a former federal prosecutor with the deep knowledge of intelligence matters”. Unlike Jerrold Nadler, the chair of the House judiciary committee, Mr Schiff held off on calling for an impeachment inquiry into the US president until late this summer, when a whistleblower from the intelligence community raised red flags over a July 25 phone call between Mr Trump and his Ukrainian counterpart, Volodymyr Zelensky. The Republican National Committee has repeatedly accused Mr Schiff of parlaying the House’s investigations in Mr Trump into cable news appearances for his own personal gain. Last year, the RNC released a report saying Mr Schiff had

participated in more than 200 television interviews in the president’s first year in office. In Washington, many expect Mr Schiff to run for US Senate when Dianne Feinstein, the 86-yearold senior senator from California, eventually retires. More recently, House Republicans sought to censure Mr Schiff for “misleading the American people” and making a “mockery of the impeachment process” when he parodied Mr Trump’s July 25 phone call in a televised congressional hearing. Mr Schiff, who was once an aspiring screenwriter and is said to be able to recite full scenes from the film The Big Lebowski, had likened the US president to a mafia boss: “I have a favour I want from you though. And I’m going to say this only seven times so you better listen good. I want you to make up dirt on my political opponent, understand? Lots of it.” Republicans have nevertheless continued to attack Mr Schiff for how he is conducting the impeachment inquiry and claimed the proceedings, which have so far primarily consisted of closed-door depositions, lacked transparency. The inquiry will move into a new public phase in the coming weeks, with live televised hearings, after the majority of the House backed a resolution last week setting out the next steps in the investigation.

SocGen misses forecasts in restructuring hit Lender sees 35% fall in profits but says investment bank overhaul ahead of DAVID KEOHANE AND STEPHEN MORRIS

ociété Générale said the overhaul of its struggling investment bank was ahead of schedule and reported a better than expected capital level in the third quarter, helping offset a 35 per cent drop in profit. Quarterly net income at France’s third-largest bank fell to €854m compared with the same period a year ago, missing the average €942m estimate from analysts, as revenue faltered at its mergers and acquisitions advisory and equity-trading unit and it booked a €115m charge for withdrawing from the Balkans. However, an improvement in

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SocGen’s core equity tier one capital ratio — a closely watched measure of balance-sheet strength — helped support the stock, which rose more than 4 per cent after the announcement on Wednesday. However, the shares have fallen 15 per cent in the past 12 months. “The deleveraging in the investment bank is fully completed, which helped SocGen improve its capital faster than anticipated,” said Lorraine Quoirez, an analyst at UBS. As a result, “the CET1 ratio progressed to 12.5 per cent, significantly above consensus expectations”. Chief executive Frédéric Oudéa, who has led the Paris-based lender for 11 years, announced 1,600 job cuts in April after several consecutive @Businessdayng

quarters of poor performance at its investment bank, part of a push to trim €500m from annual costs. The bank plans to close its commodities business and proprietary trading unit and is reorganising its fixed-income division to make it more profitable. “You should see 2019 as a transition year” for the investment bank, Mr Oudéa said. Risk-weighted assets in the global markets trading business have fallen by €8bn so far this year, ahead of the bank’s 2020 target. Almost all large European banks have struggled to generate acceptable levels of profitability in recent years as they are squeezed by new regulations, negative interest rates and a declining revenue pool in investment banking as the industry shrinks and digitises.

Thursday 07 November 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

CVS quarterly results lifted by higher prices for brand name drugs US drugstore chain raises earnings outlook sending shares higher MAMTA BADKAR

VS Health boosted its full-year earnings outlook as it reported quarterly results that exceeded expectations, boosted by higher prices for brand name drugs. The Rhode Island-based company said revenues jumped 36.5 per cent from a year ago to $64.8bn, eclipsing analyst expectations for $62.99bn, according to Refinitiv survey of Wall Street analysts. The boost came primarily from the company’s $69bn acquisition of Aetna last November as well as higher prices for brand name drugs, despite criticism from politicians over the skyhigh price of many drugs. Revenues in the company’s pharmacy ser vices division, which includes pharmacy benefit management services to employers, climbed 6.4 per cent from a year ago. Meanwhile sales in its retail unit, which includes pharmacy prescriptions, a wide range of general merchandise and healthcare services through walk-in clinics, rose 2.9 per cent. CVS has been working to reorient some of its stores to focus on so-called “health hubs” — where customers can obtain a broader range of healthcare services — and away from candy aisles. The company said its net income climbed to $1.5bn in the

three months ended in September, up from $1.39bn in the year ago quarter. That translated to earnings of $1.17 a share. Adjusting for one-time items — like the loss on the sale of pharmacy chain Drogaria Onofre and charges related to closing stores — the company reported earnings of $1.84 a share, higher than analyst expectations for $1.77. CVS is trying to broaden its customer base with the use of drone delivery systems to bring it closer to rural communities or those who cannot access its stores because of their limited mobility. The company has teamed up with United Parcel Service and at the start of this month successfully completed its first revenue generating drone delivery of a medical prescription from a CVS pharmacy to a residence in North Carolina. The results come a day after the FT reported rival Walgreens Boots Alliance has been exploring the possibility of a $70bn take-private deal. CVS Health also raised its fullyear adjusted earnings outlook to a range of $6.97 to $7.05 a share, up from its previous outlook of between $6.89 to $7 a share. That compared with analysts’ expectations for $6.98 a share. Shares in the company, which are up 3 per cent year-to-date as of Tuesday’s close, climbed more than 2 per cent in pre-market trade to $68.95.

PizzaExpress’s Chinese owner to inject more cash into UK chain Hony Capital plans to buy back £80m of bonds in struggling high-street group DANIEL THOMAS AND ROBERT SMITH

hina’s Hony Capital is set to pump more money into PizzaExpress, cutting the 54-year-old restaurant chain’s debts and increasing its chances of retaining control in any restructuring. Fears for the future of the highstreet pizza group have emerged this year because of its high debt load and weak performance, with bondholders warning that Hony may be forced to give up ownership in any restructuring of its loans. The company has appointed advisers Houlihan Lokey and Kirkland & Ellis to explore options. The Chinese private equity firm bought the pizza chain in a £900m leveraged buyout in 2014, saddling the group with debt at a time when the casual dining sector was beginning to suffer from oversupply and rising costs. On Wednesday, PizzaExpress said it had no plans to shut any outlets in the UK, in spite of falling sales. The company told bondholders that Hony planned to buy back £80m of its £200m unsecured bonds, which are trading at less than a quarter of their face value. Hony has offered to purchase the

bonds at between 20 per cent and 40 per cent of the face value of the debt, according to a document seen by the Financial Times. If successful, Hony would become the biggest holder of this “junior” debt in the group — which analysts had seen as likely to be wiped out in any restructuring — giving the Chinese firm a strong position in any negotiations with other bondholders. The company has £665m of bonds outstanding, of which the secured £465m matures in August 2021 and the unsecured £200m in August 2022. The company could use the stake to avoid going through a debt-for-equity swap in which it would lose control of the business, said one high-yield bond fund manager. “If they are willing to pay then they can recreate control — it’s messy but it can be done.” One person briefed on the situation said the plan to buy back a chunk of the bonds showed that Hony saw more value in the chain than some investors, with its planned acquisition of a large stake in the weakest part of the company’s capital structure. “It will also surprise some that Hony even has the money to do so,” he added. www.businessday.ng

A stock market tussle lays bare Vietnam’s north-south divide Ho Chi Minh City is the economic and financial hub but Hanoi could host new merged exchange JOHN REED

n Vietnam, the regional differences between north and south are a topic of light banter that, if you dig too deep, can veer into taboo territory. Northerners tend to take their food, including the staple pho soup, saltier than southerners, who like theirs sweeter. Residents of Ho Chi Minh City (also still widely known as Saigon) in the south will tell you they are quicker to smile than Hanoians in the north, who they see as diligent but austere — po-faced even. Hanoians see Saigoneers as more entrepreneurial and cosmopolitan but too spendthrift, people who both work and play hard. The north-south rivalry is likely to come into focus this month, as communist lawmakers discuss a draft securities law that would merge the two cities’ equity markets into a single Vietnam Stock Exchange. One of the topics to be addressed is whether the new market will be in the capital of Hanoi (population 8m), or Ho Chi Minh City, the business hub of 9-10m. At stake is something bigger than whether the index arbiter Morgan Stanley upgrades Vietnam to “emerging market” status (it’s still classified as a frontier market). The question gets at the heart of tensions between the north and south. “There is some latent resentment among southerners that the northerners are dominating the political system, and unfairly exploiting the south,” says Le Hong Hiep, a fellow at the ISEAS-Yusof Ishak Institute in Singapore. “It’s not the language they use, but the resentment is there.”

A Hanoian consumes a bowl of pho. Vietnam’s northerners prefer their soup to be saltier than do their southern counterparts © Getty

In a country split by colonialism and war and reunited at great human cost — and where state censorship applies — regional tensions are a delicate topic, broached officially only in politically correct language, if at all. Many Vietnamese believe (though it has never been officially confirmed) that top political jobs are divvied out regionally: Nguyen Phu Trong, the president and communist party secretary, comes from the north; Prime Minister Nguyen Xuan Phuc from the centre; and Nguyen Thi Kim Ngan, chairperson of the national assembly and Vietnam’s most senior female politician, is from the south. For business, Vietnam’s unique geography — two megacities divided by more than 1,700km and a tapered, less-developed hinterland, is both a challenge (for online retailers, for example) and an opportunity (for airlines plying the sixth-busiest flight route in the world). Trekking north to see the politicians in Hanoi and “touching

your forelock in tribute”, as one Saigon businessman puts it, is a routine protocol for chief executives. Logic would dictate that the planned VSE should be based in Ho Chi Minh City, whose stock exchange, with capitalisation of about $150bn, is more than 10 times the size of Hanoi’s. Most big companies, whether based in north or south, list on the HOSE. Ms Ngan said in August that she thought the merged market should be “located in the place where there is the most vibrant and active market”. But a draft proposal on the VSE, drawn up by the ministry of finance (headed by a northerner), stipulates the merged exchange will be based in Hanoi. When asked where the market should be, Luong Thi My Hanh, deputy CEO and chief investment officer of VietFund Management, the country’s biggest domestic asset manager, based in Ho Chi Minh City, laughs tactfully. “If we had a choice — if we had the right to decide — in Ho Chi Minh would be better,” she says. “It’s closer to the enterprises, to the companies.”

Barrick hikes dividend on rising gold price Gold prices have risen 16 per cent this year to a six-year high NEIL HUME

arrick Gold raised its dividend on Wednesday as earnings jumped on the back of higher gold prices. However, the world’s second biggest gold miner said output would be flat over the next five years at 5.15 to 5.6 million ounces — or roughly what it expects to produce in 2019. Barrick, which is led by Mark Bristow, a fast-talking South African, has announced a string of deals over the past year in an effort to boost output and answer questions about its long-term growth prospects. Barrick’s annual production has fallen from more than 8m ounces a decade ago. These have included the acquisition of Randgold Resources, the buyout of Tanzania-focused Acacia Mining and a joint venture with arch rival Newmont GoldCorp in Nevada. “We have prepared detailed fiveyear plans for each region which we are sharing with the market this quarter,” said Mr Bristow said in a

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statement. “These will be followed by a 10year production plan, scheduled for publication with our next annual report. The objective is to make capital allocation, budgeting and forecasting more dynamic.” In the three months to June, Barrick posted adjusted net earnings of $264m, or 15 cents a share, up 70 per cent on the previous and beating analyst forecasts that were pitched around 11 cents. That allowed the Toronto-based company to declare a dividend of $0.05 cents a share, up 25 per cent on the previous quarter. Net debt fell 14 per cent to $3.2bn. Gold prices have risen 16 per cent this year to a six-year high around $1,500 an ounce, as investors have looked for safe places to park warehouse cash amid rising economic and geopolitical uncertainty. This has boosted the share prices of major gold producers including Barrick, which is up 18 per cent. Barrick said it had realised an average gold price of $1,476 in the quarter, up from $1,317. @Businessdayng

During the quarter Barrick produced 1.31m ounces of gold, down from 1.35m in the preceding three months, which it blamed on the suspension of operations at its North Mara in Tanzania. However, Barrick said it still expects to hit the top end of its existing guidance range of 5.1m to 5.6m ounces at a cost of $870 to $920 an ounce. In October, Barrick paid $300m to settling a long-running dispute with the government of Tanzania, that shredded at profit at Acacia Mining. “Following the Acacia buyout, Barrick and the Tanzanian government have agreed in principle on a settlement of that company’s tax and fiscal issues. A dedicated team is currently working on evaluating and stabilising the North Mara and Bulyanhulu mines,” Barrick said. Mr Bristow said the planned disposal of non-core assets was progressing as scheduled and was expected to realise $1.5bn or more by the end of next year.

Thursday 07 November 2019

BUSINESS DAY

ANALYSIS

Ukraine aid was linked to Joe Biden probe, Trump envoy admits Democrats describe revised Gordon Sondland testimony as evidence of a ‘quid pro quo’ LAUREN FEDOR

onald Trump’s envoy to the EU has acknowledged linking military aid for Ukraine to a commitment by Kyiv to pursue investigations demanded by the US president, in what Democrats said was the most direct evidence to date of a presidential quid pro quo. The disclosure by Gordon Sondland came in revised testimony to House of Representatives impeachment investigators, which was released on Tuesday along with a transcript of his appearance before Congress in a closed-door session on October 17. Mr Sondland said in a sworn statement that he now recalled telling a Ukrainian official that “resumption of US aid would likely not occur until Ukraine provided the public anti-corruption statement that we had been discussing for many weeks”. He said he was reminded of the conversation on September 1 with Andrey Yermak, a top adviser to Volodymyr Zelensky, Ukrainian president, after reading of testimony given by William Taylor, the top US diplomat in Ukraine, and Tim Morrison, Mr Trump’s leading Russia adviser. On Monday Mr Sondland’s lawyers sent Adam Schiff, the Democrat chairing the House intelligence committee and de facto leader of the impeachment inquiry, a signed statement from the ambassador saying his “recollection about certain conversations in early September 2019” had been “refreshed”.

Other US officials who have testified before the impeachment inquiry have described how Mr Sondland and Mr Trump urged Mr Zelensky to publicly launch an investigation into Joe Biden, former US vice-president, and his son, Hunter Biden, who had held a board position at Burisma, a Ukrainian oil and gas company. Mr Trump also reportedly sought an investigation into alleged interference in the 2016 US presidential election. Joe Biden is among the Democratic front-runners seeking to challenge Mr Trump as he seeks re-election in 2020. Mr Biden’s deputy campaign manager, Kate Bedingfield, said on Tuesday that Mr Sondland “testified under oath that there was indeed a quid pro quo arranged by the president to extort a foreign country into spreading universally-debunked lies” about the former vice-president. “Donald Trump’s dangerous unfitness to serve as president has been obvious long before we learned of this, but the abuse of power he committed is unprecedented,” she added. The congressional committees leading the impeachment inquiry also released a transcript of testimony from Kurt Volker, the former US envoy to Ukraine, and copies of text messages between Mr Volker and other US officials. The disclosures followed the publication on Monday of transcripts from closed-door sessions with Marie Yovanovitch, the former US ambassador to Ukraine, and Michael McKinley, a former top aide to Mike Pompeo, US secretary of state.

German eurozone banking plan wins cautious backing European policymakers mull proposal for common deposit reinsurance scheme MARTIN ARNOLD AND GUY CHAZAN

uropean financial policymakers and supervisors have given a cautious welcome to proposals from the German finance minister Olaf Scholz to create a common deposit reinsurance scheme for the single currency zone. But there was concern among some conservatives in Angela Merkel’s Christian Democratic Union, who said they had been blindsided by Mr Scholz’s intervention and warned it could destabilise the “grand coalition” government in Berlin. “We still need to erect the banking union’s third pillar: European deposit insurance,” said Andrea Enria, head of the ECB’s Single Supervisory Mechanism, which oversees the eurozone’s biggest banks. “We hope to see signs that there is a little bit more openness to move ahead in this project.” Writing in the Financial Times, Mr Scholz offered hope of a breakthrough in plans to create a full eurozone banking union by ending Berlin’s opposition to a common scheme to protect savers’ deposits. He said it was “no small step for a German finance minister”. However, he placed a caveat on his proposals with calls for restrictions on banks’ sovereign debt holdings and non-performing loans, demands that are bound to spark concern in EU member states with weaker finances or fragile banking sectors. There is likely to be strong opposition from within the German government, too. Mr Scholz is a social democrat, and his CDU coalition

partners are strongly resistant to the concept of a eurozone deposit insurance scheme. A CDU adviser said Mr Scholz’s paper had come as a “complete surprise” to the Christian Democrats’ parliamentary group and would destabilise a coalition already roiled by disagreements over pension reform and foreign policy. The adviser said the CDU was still insisting that a common deposit insurance scheme could only be introduced once non-performing loans on bank balance sheets had been reduced. “These processes must happen in sequence, not in parallel,” he said. Asked whether Mr Scholz’s opinion piece in the FT had been co-ordinated with Ms Merkel, her spokesman Steffen Seibert said it was merely a “contribution to a discussion”. “It will feed into the discussion both internationally and within the government,” he said. However Mr Enria, who was speaking at an ECB conference on Wednesday, welcomed Mr Scholz’s apparent change of heart, saying: “Depositors must be sure that their money is well protected no matter whether it is deposited with a bank in France, Italy, Greece or Germany.” German banks have been vocal opponents of a eurozone deposit insurance scheme. However, HansWalter Peters, head of the Association of German Banks, welcomed Mr Scholz’s proposals on Wednesday, saying: “The fact that the German ministry of finance is distancing itself from the European Commission’s previous proposal for a communitisation of deposit guarantee schemes is an important step in the right direction.” www.businessday.ng

Doubts grow over López Obrador’s ‘hugs’ strategy to fight Mexico crime Massacre of Mormon family fuels sentiment that leader is failing on security JUDE WEBBER

he murders this week of nine members of a prominent Mexican-American Mormon family — including eight-month-old twins and four other children — by suspected cartels in northern Mexico’s drug badlands was a stark reminder of the security challenge facing President Andrés Manuel López Obrador. The massacre, which has left the country in shock, came barely three weeks after Mexico botched the arrest of one of the sons of jailed drug lord Joaquín “El Chapo” Guzmán. The capture, then release, of Ovidio Guzmán in October proved a fiasco in which the Sinaloa Cartel laid siege to the state capital of Culiacán for hours, outmanning, outgunning and outmanoeuvring Mexican security forces. “If the Sinaloa Cartel did that, just imagine what the Jalisco New Generation Cartel could do,” noted one chief executive from the Jalisco state capital, Guadalajara, referring to Mexico’s most aggressive criminal group. Yet, despite calls to respond

more aggressively, Mr López Obrador has been unwilling to change tack on security. After the attack on the Mormon family, he even claimed — despite evidence pointing to the contrary — that Mexico had “been able to halt the escalation of violence”. During his election campaign last year, Mr López Obrador vowed to break from his predecessors’ stance and pacify a country suffering record homicide rates. He pledged to pull soldiers off the streets and tackle the root causes of crime. He has scrapped police forces, replacing them with a National Guard under military command. His selfdescribed “hugs not bullets” strategy has also included programmes of bursaries for young people to prevent them getting into trouble and organised crime. He has urged cartel members to “think of their mothers”. “Our strategy is going very well because we are dealing with the causes that lead to violence,” he said last month after the Guzmán fiasco. However, there are signs that public opinion is starting to doubt the president can deliver more than just comforting words. For now, the president enjoys 73 per cent popularity. Experts see two reasons for it: 23m Mexicans have more cash,

thanks to state handouts; and the president’s communications mastery — aided by a lifeless opposition — has allowed him to spin setbacks into success. But Mr López Obrador’s approval ratings have declined since a peak of 81 per cent in February, according to poll of polls Oraculus. And a survey this week in Reforma newspaper, which the president routinely attacks, found that 60 per cent thought the security strategy was failing, up from 56 per cent in October. “Previously people’s expectations were underpinning his approval rating — and the money helped,” said Jorge Buendía, one of the pollsters behind Oraculus. Critics at home are becoming more vocal. Alex LeBaron, a former politician, slammed the government’s strategy on Twitter, posting a video of a burnt-out vehicle in which his relatives died in a remote area where authorities say cartels fight over territory. “This is how we live under the government of @lopezobrador_. Mexican Mormons, innocent women and children ambushed in the mountains of Chihuahua are riddled with bullets and burnt alive by the Cartels that rule in Mexico,” he wrote.

Uber shares hit new low as early investors’ lock-up period expires Pre-IPO backers have a green light to sell but many are sitting on paper losses MILES KRUPPA

ber shares traded at a new record low on Wednesday as early investors in the 10-yearold ride-hailing company gained the ability to cash out following the end of a lock-up period, six months after its stock market flotation. At its worst, the stock fell 9 per cent to $25.58, putting it 43 per cent below the price of its initial public offering in May. Later, it traded down 4 per cent on the day. Analysts estimated that close to 90 per cent of Uber’s shares could have become available for trading on Wednesday. That has raised concerns that its early venture capital backers will look to sell their stakes and depress the stock price. The plant-based food company Beyond Meat fell 22 per cent last month on the day its lock-up expired after early investors such as Kleiner

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Perkins signalled they would sell shares. But many private investors in Uber remained underwater on their holdings compared with the prices they paid in private markets, forcing a difficult decision: sell and cut losses or wait for a reversal in the stock. “Uber is a poster child for a company that was brought to market at too rich of a valuation, with too much hope baked into the multiple,” said Richard Kramer, managing partner at Arete Research. Uber’s largest shareholder, Japan’s SoftBank Group, was sitting on more than $800m in paper losses this week after buying a 13 per cent stake in the company through a private funding and tender offers. SoftBank said on Wednesday that a decline in the fair value of its Uber stake had contributed to an operating loss in the third quarter. Other private backers who invested beginning in 2015 could also be @Businessdayng

facing paper losses, according to regulatory filings. Saudi Arabia’s Public Investment Fund’s $3.5bn investment in 2016 included preferred shares priced at $49, the filings showed. Uber’s persistent losses have tested the patience of public market investors. Chief executive Dara Khosrowshahi said this week that the company would begin making a profit in the 2021 calendar year, after it reported widening losses in the Uber Eats food delivery unit and other fastgrowing new businesses. The company has also come under pressure from short-sellers, which have placed bets against the company totalling almost $1.6bn, or almost 8 per cent of the company’s shares, according to data from S3 Partners. Some early Uber investors such as venture capital firm Benchmark Capital already gained the ability to sell some shares during the tender offer led by SoftBank and Dragoneer Investment Group in 2018.

Thursday 07 November 2019

BUSINESS DAY

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Thursday 07 November 2019

BUSINESS DAY

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

Nigeria LPG market needs $750m in three years for infrastructural development Olusola Bello

n order to have a successful Liquefied Petroleum Gas (LPG) utilisation programme in the next four years, Nigeria needs an estimated $750 million to boost infrastructural development and this is to be done through private sector initiative according to Dayo Adesina, Senior Special Adviser to the vice president on Domestic Gas. The critical areas, where the money would be deployed, are transportation and retailing; this is because it is estimated that about 3000 LPG filling plants would be required to meet consumersâ&#x20AC;&#x2122; demand for the period under review while 10,000 trucks (bobtails, bridgers) are needed also. Another 5000 bridgers along with additional skids would be required. According to 2019 update on the National LPG Expansion Plan, part of the plan to

ensure nationwide LPG usage in Nigeria in six months would require rapid scaling of LPG usage through a combination of awareness, sensitisation, infrastructure delivery and funding starting with household usage. The Federal Government is also required to create awareness for the usage of the product nationwide by using various media to target focus populations.

High level of sensitization and enumeration for use and safety training, build data for business models are encouraged. Other steps taking are delivering Fiscal incentives via VAT, duties, tariffs tax holidays to stimulate investors. Reviewing the Regulatory framework, Health Safety & Environment Policy and tracking enforcement. Meanwhile the Federal

Government is planning to flood the market with 50 million LPG cylinders in the next few years according to industry sources just to help promote the usage of the product among Nigerians. Modalities for funding the cylinder scheme is still in the works,the source said. The current national consumption of 780,000 metric tons per annum constitutes a fraction of the annual poten-

tial which has been projected at between 3million â&#x20AC;&#x201C; 5million metric tons per annum. The market is a $10 billion economy There are also plans by the government to ensure that the consumption level of LPG in the country hits between 900,000 metric tons to 1,000 000 million metric ton by the end of this year, two million metric tons in 2023 and five million metric tons by the year 2028. The most important item in the LPG value chain which is the cylinder will henceforth be owned by companies as against the current practice where individual consumers own them. One of the sources told BusinessDay that the government has approved that 20 million cylinders should the injected to the rural areas in the nearest future. For immediate needs of consumer, the Federal Government is planning to ensure that about two million cylinders get

into the market. Also commenting, Nuhu Yakubu, president of Nigeria Liquified Petroleum Gas Association(NLPGA) and managing director of Banner Energy Limited urged the Federal, states, and Local Government Authority Urban and regional planning and approving authorities to introduce LPG into building codes, in addition to electricity, and water piping in order to ensure safety and proper alignment of its usage domestically. He said it is heart warming that banks now have better perspective of the business as they now accept LPG assets as collateral for funding the business. Nigeria has one of the fastest growing LPG sectors in the world. Around 40percent of domestic LPG supply relies on imports through the coastal facilities in Lagos, Calabar, Oghara and Warri, as well as from the neighbouring Niger Republic.

Govt should raise duties on imported Lubricants to encourage steel drum manufacturing - PACEGATE boss PACEGATE limited is a company which manufactures steel drums and supplies lubricant additives and industrial greases. Umesh Amarnani who is the managing directors of the company in this interview with Olusola Bello gives more insight into the operations of the company in Nigeria. Excerpt How long has PACEGATE been in operations in Nigeria and what was the concept behind its establishment? ACEGATE started operations in Nigeria in 2017. Our technical partner in Dubai that has been manufacturing steel drums, trades in lubricants, oil and gas services for the past 25 years was keen to enter the Nigerian market. After our due diligence, we realised that there was a good opportunity to establish a steel drum factory in Nigeria. In addition, Nigeria has a growing population and the government is trying to encourage more local industries by raising duties of finished product import like lubricants so the demand for steel drums will continue to grow over time. What is the nature of these products/services, and who are your clients for these products? PACEGATE offers UN Certified steel drums and we have four types. Closed top drums for industrial lubricants, closed top drums with an option of internal coating for locally blended chemicals or chemicals imported in bulk and repackaged here and Open top drums for Styrene Acrylic and Industrial paints. We also have Open top internally coatedsteel drums

Olusola Bello, Team lead,

for the Agricultural Industry to package orange pulp, mango juice, pineapple pulp and also Soya Lecithin- used for animal feed. Apart from steel drums, we offer lubricant additives and industrial greases and all our products are targeted at industries in the lubricants, chemical, paints, and oil&gas sectors. How does one differentiate your products from your competitors? We have two key differentiating factors that have set us above our competitors. First, PACEGATE is the only UN Certified steel drum manufacturer in Nigeria. This UN certification is a mandatory global requirement for steel drum exportation and highly required by our clients. Secondly, we operate a brand new state of the art factory which is fully automated. What is that UN certification and why is it relevant to your business? UN certification confirms that the drums have gone through rigorous testing and certified to carry precious liquid or solid which can either be hazardous or nonhazardous. This certification confirms that the drums are environmentally friendly with no spillage or leakages. The certification also ensures no contamination of products even if stored over a long

Graphics: Joel Samson.

Umesh Amarnani

period of time. To achieve this milestone, our drums were fully tested abroad and like mentioned earlier, only UN certified drums can be exported, which gives us a competitive edge as our customers can fill their products and export them in drums meeting international packaging standards. What are the advantages of steel drums over plastic drums? The advantages are numerous. First, steel drums are cost effective, safe and secure. Even though there is a general misconception that

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plastic drums are a cheaper alternative in relation to steel drums due to its re-sale value. However, steel drums place more value. Steel drums are an ideal way to package liquids and provides safety for exporting products. Also, steel drums are versatile as the chances of breakage is low when compared to plastic drums. Despite various environmental concerns of steel on the environment, steel drums are environmentally friendly. For clean environments, the difference between plastic and metal must be considered. Metals can

always be recycled creating a sustainable environment. Steel drums also last longer than glass or plastic because they are corrosion resistant, and do not leach chemicals when exposed to sun/heat. Countries across the world are moving towards a green environment. For example, in India, the use of plastic bags have been banned as they are not environmentally friendly. Metal is the global standard and this is what we believe should be replicated in Nigeria. What are the major challenges you encounter doing this business in Nigeria? The lack of awareness and education in the market that steel drums are available locally and at reasonable prices, and of course the benefits of using steel drums over plastic drums are some of our major challenges. Do you have problems with power supply? How does it affect your bottom line? Quite favourably, we are located in an Industrial area, so there is constant power supply from the Discos. We run the factory on gas which is more cost-effective and environmentally friendly. Gradually, as we increase our production, our economies of scale will enable us cover costs, making us globally

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competitive. Ho w ha s PAC E G AT E been able to maintain topnotch products, despite the challenges? Quality is key and we can never compromise on this especially as we service top companies. To ensure consistent quality, we work with partners overseas to import our steel. Also, we ensure we have adequate stock to constantly offer our clients the best quality without compromise. Furthermore, we ensure our employees are trained regularly from a technical point of view. What is your policy on safety, health and environment? PACEGATE is an IS O 9001:2017 certified company. Asides compliance to this international standard, we also have an elaborate Health and Safety policy, compliance which is driven by top management down to every staff. We have an HSE Officer who is well trained to monitor compliance. We take safety very seriously and we operate with the highest standards in all our processing and manufacturing. Due to the level of enforcement we attach to HSE at PACEGATE, we are proud to say that there has not been any record of a crisis situation since inception of the business.

Thursday 07 November 2019

BUSINESS DAY

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Thursday 07 November 2019

BUSINESS DAY

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PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 296,802.63 8.35 0.60 304 45,615,447 UNITED BANK FOR AFRICA PLC 215,456.35 6.30 -2.33 211 59,055,076 ZENITH BANK PLC 544,729.17 17.35 0.29 426 26,457,816 941 131,128,339 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 195,629.35 5.45 -0.91 206 8,828,034 206 8,828,034 1,147 139,956,373 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,503,605.11 123.00 -0.81 92 5,432,589 92 5,432,589 92 5,432,589 BUILDING MATERIALS DANGOTE CEMENT PLC 2,520,291.05 147.90 -1.07 70 426,305 LAFARGE AFRICA PLC. 225,509.14 14.00 - 43 351,690 113 777,995 113 777,995 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 332,471.18 565.00 - 5 199 5 199 5 199 1,357 146,167,156 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 11,873.80 4.45 - 3 8,300 3 8,300 3 8,300 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 3,312.39 103.20 - 0 0 VALUEALLIANCE VALUE FUND 0 0 0 0 3 8,300 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 50,509.53 52.95 - 14 4,804 PRESCO PLC 34,600.00 34.60 -9.90 58 138,718 72 143,522 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 5 400 5 400 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,380.00 0.46 - 6 75,870 6 75,870 83 219,792 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 741.24 0.28 - 0 0 JOHN HOLT PLC. 214.03 0.55 - 3 2,847 S C O A NIG. PLC. 1,903.99 2.93 - 3 3,680 41,460.95 1.02 3.03 39 13,035,768 TRANSNATIONAL CORPORATION OF NIGERIA PLC U A C N PLC. 17,864.04 6.20 - 30 187,410 75 13,229,705 75 13,229,705 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 1 8 1 8 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 24,486.00 18.55 - 9 46,533 165.00 6.60 - 0 0 ROADS NIG PLC. 9 46,533 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,520.44 0.97 - 12 251,123 12 251,123 22 297,664 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 7,751.20 0.99 - 5 33,050 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 51,035.92 23.30 - 66 641,780 INTERNATIONAL BREWERIES PLC. 88,107.58 10.25 -9.69 9 113,409 NIGERIAN BREW. PLC. 371,855.95 46.50 - 39 278,771 119 1,067,010 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 111,250.00 22.25 - 0 0 DANGOTE SUGAR REFINERY PLC 124,200.00 10.35 - 48 455,421 FLOUR MILLS NIG. PLC. 62,325.77 15.20 0.33 25 940,591 HONEYWELL FLOUR MILL PLC 7,771.59 0.98 - 12 1,421,400 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 39,344.16 14.85 - 17 67,542 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 102 2,884,954 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,030.74 9.60 - 21 208,814 NESTLE NIGERIA PLC. 911,554.69 1,150.00 - 42 264,468 63 473,282 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,440.50 3.55 1.43 18 284,439 18 284,439 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 22,036.15 5.55 - 13 25,723 UNILEVER NIGERIA PLC. 138,167.38 24.05 - 31 131,561 44 157,284 346 4,866,969 BANKING ECOBANK TRANSNATIONAL INCORPORATED 128,446.86 7.00 - 31 41,943 FIDELITY BANK PLC 50,995.64 1.76 -6.88 67 6,528,936 GUARANTY TRUST BANK PLC. 772,568.45 26.25 0.77 215 19,699,533 JAIZ BANK PLC 15,616.05 0.53 -5.66 30 6,574,900 STERLING BANK PLC. 63,338.92 2.20 - 300 10,338,086 UNION BANK NIG.PLC. 203,845.27 7.00 - 21 94,778 UNITY BANK PLC 6,779.82 0.58 - 10 152,321 23,144.68 0.60 1.67 24 3,443,588 WEMA BANK PLC. 698 46,874,085 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 1 200 4,712.54 0.68 2.94 28 2,249,259 AIICO INSURANCE PLC. AXAMANSARD INSURANCE PLC 17,325.00 1.65 - 2 1,750 CONSOLIDATED HALLMARK INSURANCE PLC 3,333.30 0.41 - 2 7,200 CONTINENTAL REINSURANCE PLC 24,272.22 2.34 - 2 73,770 CORNERSTONE INSURANCE PLC 7,217.46 0.49 8.89 8 200,800 909.99 0.20 - 0 0 GOLDLINK INSURANCE PLC GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,977.33 0.27 3.85 12 2,201,974 LAW UNION AND ROCK INS. PLC. 2,148.17 0.50 8.70 2 104,000 LINKAGE ASSURANCE PLC 4,080.00 0.51 - 1 2,500 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 3 1,152,552 NEM INSURANCE PLC 10,561.01 2.00 - 19 429,835 NIGER INSURANCE PLC 1,547.90 0.20 - 1 300 PRESTIGE ASSURANCE PLC 2,745.10 0.51 - 0 0 REGENCY ASSURANCE PLC 1,333.75 0.20 - 4 387,000 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 1 8,000 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 4,282.48 0.32 -5.88 34 2,271,528 120 9,090,668

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MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,721.10 1.19 - 4 6,501 4 6,501 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,200.00 1.00 - 1 500 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 1 500 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,900.00 3.95 - 23 135,743 CUSTODIAN INVESTMENT PLC 29,409.32 5.00 - 25 326,985 DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 34,456.72 1.74 1.75 59 2,322,201 ROYAL EXCHANGE PLC. 1,080.53 0.21 - 2 2,400 STANBIC IBTC HOLDINGS PLC 395,896.48 37.80 -3.08 23 4,542,314 UNITED CAPITAL PLC 12,960.00 2.16 0.47 57 2,140,030 189 9,469,673 1,012 65,441,427 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 852.75 0.24 - 0 0 0 0 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,510.90 3.60 - 7 56,759 GLAXO SMITHKLINE CONSUMER NIG. PLC. 7,534.02 6.30 - 18 20,731 MAY & BAKER NIGERIA PLC. 3,381.46 1.96 - 6 6,104 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 740.67 0.39 - 7 53,285 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 38 136,879 38 136,879 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 816.96 0.23 - 3 13,500 3 13,500 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 486.00 4.50 - 0 0 TRIPPLE GEE AND COMPANY PLC. 316.77 0.64 - 1 2,000 1 2,000 PROCESSING SYSTEMS CHAMS PLC 1,080.09 0.23 -4.17 10 222,920 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 0 0 10 222,920 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,157,510.66 308.00 - 5 1,153 5 1,153 19 239,573 BUILDING MATERIALS BERGER PAINTS PLC 2,173.68 7.50 - 6 43,899 CAP PLC 17,885.00 25.55 - 15 36,407 CEMENT CO. OF NORTH.NIG. PLC 215,553.42 16.40 - 31 146,847 MEYER PLC. 313.43 0.59 - 1 2,000 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 0 0 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 53 229,153 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,465.85 1.40 - 11 213,099 11 213,099 PACKAGING/CONTAINERS BETA GLASS PLC. 26,898.49 53.80 - 3 25,000 GREIF NIGERIA PLC 388.02 9.10 - 0 0 3 25,000 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 67 467,252 CHEMICALS B.O.C. GASES PLC. 2,547.42 6.12 - 5 3,133 5 3,133 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 2 37,000 2 37,000 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 83.60 0.38 - 0 0 0 0 7 40,133 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 1 8,000 1 8,000 INTEGRATED OIL AND GAS SERVICES OANDO PLC 41,893.86 3.37 - 35 384,133 35 384,133 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 53,332.04 147.90 - 13 3,391 CONOIL PLC 10,686.86 15.40 - 8 25,703 ETERNA PLC. 3,716.81 2.85 - 7 95,832 FORTE OIL PLC. 20,709.45 15.90 - 17 35,192 MRS OIL NIGERIA PLC. 4,663.23 15.30 - 5 1,154 TOTAL NIGERIA PLC. 41,829.09 123.20 - 9 11,085 59 172,357 95 564,490 ADVERTISING AFROMEDIA PLC 1,642.45 0.37 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 270.56 0.23 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,623.26 4.45 - 4 20,190 TRANS-NATIONWIDE EXPRESS PLC. 398.52 0.85 - 1 9,000 5 29,190 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,259.15 2.75 - 0 0 IKEJA HOTEL PLC 2,224.31 1.07 - 2 2,890 7,862.53 3.50 - 0 0 TOURIST COMPANY OF NIGERIA PLC. TRANSCORP HOTELS PLC 41,042.18 5.40 - 2 803 4 3,693 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 205.63 0.34 - 0 0 LEARN AFRICA PLC 902.60 1.17 - 6 11,117 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 1 10 UNIVERSITY PRESS PLC. 616.92 1.43 - 1 950 8 12,077 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 729.39 0.44 - 3 43,922 3 43,922

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Thursday 07 November 2019

BUSINESS DAY

Garden City Business Digest NPA Rivers Port now partners with Energy Maritime Reporters (EMR)

Gov Wike releases funds to complete Opobo first-ever road

• As battle for eastern ports hots up

Ignatius Chukwu & Sam Esogwa

he management of Nigerian Ports Authority, Rivers Port Complex, now led by an engineer, Yunusa Ibrahim Anji, has promised to work with Energy Maritime Reporters (EMR) of Nigeria in a bid to ensure good reportage of its activities. This is said to be to deepen the efficiency being witnessed in the port as part of bigger plan to revive eastern ports. The new port manager made this known when members of the EMR of Nigeria paid him a courtesy visit in his office last week. Expressing delight at the visit, the engineer said he appreciated the cordial working relationship existing between the group and the Rivers Port management and promised to ensure its sustenance. According to him, the importance of EMR lies in the fact that it reports a sector that generates huge revenue for the country, adding that with positive reporting from the group, many of the vessels and goods that are channeled to the western ports could be redirected to the east which he said would in turn increase the revenue generated at the port. He said he has not recorded any major security issue since he assumed office as manager of the Port and promised that any importer who brings his goods through the port will not regret it. His predecessor did also not witness any security issue, it was gathered. Anji stated; “We’ve improved the services in the port. Anybody who brings goods to this port will not regret it. Importers have not regretted their relationship with us. We meet with them every day”. On the request for support by EMR, the manager said they would do the bit they could within their power, while appealing to members of the group to cross-check their information before publishing their reports

Hadiza Bala Usman

to avoid disseminating fake news about the port which he warned could scare foreign investors away. Earlier, the EMR chairman, Martins Giadom of Radio Rivers, said the visit afforded his group the opportunity to deepen the relationship between it and the Rivers Port in the new drive to reposition the port along other eastern ports. He expressed joy at the recent improve-

ments made in the Rivers Port in terms of rendering efficient services, renewed viability, and enhanced security which he said his group would help project. Giadom thanked the Rivers Port management for making available to the group, daily shipping updates and appealed for quarterly interactive sessions with the management as well as logistics support to enable the group function more efficiently.

wo citizens last weekend cried out over the impassable nature of the virgin road being constructed into Opobo for the first time in history. The next day, Gov Nyesom Wike reacted saying he just released payment to fast-track the road and promised it would be commissioned in May 2020. The citizens, Allwell Ene of Classic FM and one Deborah J. Ogolo have been rejoicing on facebook, if not outright gloating. On Monday, the state governor stated that the State Government will complete and deliver the Ogoni-Andoni-OpoboNkoro Unity Road as part of the first year anniversary of his second term. He announced the immediate release of additional funds to the contractors for the completion of work on the all-important road. He said: “We have directed the contractor to use the funds to complete the road. The road will be completed to Opobo and Andoni towns. The road will be commissioned as part of the first year of our second term.” Governor Wike announced that the Rivers State Government will intervene in the construction of the shoreline protection project for Queens town. He announced the extension of the Sakpenwa-Bori Road to Kono Town. He said that the contractor has been mobilised to construct the new section of the road and also install streetlights on the entire stretch of the road. Governor Wike thanked the people of Opobo-Nkoro for their total support. He said that the peaceful nature of that community has made development easy.

All eyes on Gov Wike as Edo honours its first class students Port Harcourt by Boat

IGNATIUS CHUKWU

he first class students of Rivers State origin who graduated from the Rivers State University (RSU) in 2019 are said to be praying and hoping that Gov Nyesom Wike will remember their file. The six students were celebrated in June 2019 as top brains but the sack of the vice chancellor that followed the graduation ceremony may have diverted attention to constructive matters with the RSU. As news of the goodwill that have come to the first class graduates of Edo University, Iyamho at the weekend breezes through the south-south, the first class brains of Rivers State were said to have started another round of fasting to draw the attention of the king (governor) to their situation. Last weekend, the Edo State Governor

offered automatic employment to the five best graduating students of their own university, after handing N1m to each of them at least to offset the trauma of fighting for excellence. Most students borrow and owe to make it to the finish line after many years of life as students. In Edo, the five graduating students with first class honours were offered employment as graduate assistants by the university. A bank that does business with the state also offered them automatic employments. The governor said it was up to the students to choose which job to accept. The Edo varsity VC also announced the sum of N2.5m to each of the two best graduating students with business plans (Aweni Mohammed Yahaya and Godwin Evbuomwan). He added that the best five graduating students will also form the first set of beneficiaries of the school’s Tertiary Education Trust Fund (TETFUND) grants to testrun its agreement to collaborate with the University of Sunderland in Postgraduate studies and supervision. The state government said the offers were to show that the state valued brains and to show other youths that good endeavours can pay off. Many in Rivers State said this is also the kind of motivation needed in the state. The Wike administration has cried out always against cultism, violence and other

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youth vices. Many say giving support to top brains in the state would show that good too pays in a state where most youths now think otherwise. It was gathered that though Gov Wike did not attend the 2019 convocation event at the RSU, the names of the Rivers first class students were sent to the Govt House in PH but nobody knows how far the list got to. The

Wike

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Governor was said to have got angry with the then Blessing Didia-led administration in the university and soon kicked him out after spate of cult-related killings and alleged employment racketeering. Many students plead that now that the situation has calmed down, the governor could look into the list waiting for him. Rivers State for decades was classified as one of the educationally disadvantaged states and the federal and state government have pushed a lot of measures to shore up the state’s fortunes in education, and it seems to be paying off now. Many thus think that encouraging first class graduands would help boost interest in academic excellence. Also, it is believed that banks and other big corporations that do big business with every state government always support the states at such moments as Sterling Bank did to Edo. In Rivers State, Zenith Bank is believed to do big business with the Rivers State government. The state’s IGR netting in 2019 is average of N12.7Bn. The banks that handle this must be seen as mega-partners to the government and are thus needed to support the govt in offering automatic jobs to the state’s first class students, just six of them. This is how it is done everywhere else, though it is the state government that will put the demands on the table.

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Thursday 07 November 2019

BUSINESS DAY

Investing in Rivers State Insecurity:

2019 International Trade Fair is to prove PH is safe for business again - Mike Elechi Stories by Ignatius Chukwu

usinesses may have continued fleeing from Rivers State believing the place is insecure for operations. The decision of the Dangote Group to overlook Rivers State to locate their multi-billion Dollar refinery and petrochemicals outfits is usually used as the case in hand. Now, the over 2000 members of the Organised Private Sector (OPS) in the Garden City have vowed to prove that PH is a good place for business and that insecurity is not the only name for the city. Thus, the 2019 International Trade Fair has been dedicated to proving this point. Several international business groups have been courted to show up. The enthusiasm is high and the preparations seem equally on high. The Port Harcourt Chamber of Commerce, Industry, Mines and Agriculture (PHCCIMA), now led by an international businessman and naturalized Nigerian who is a chief, Nabil Saleh (CEO of M-Saleh and other businesses), seemed to carefully handpick a media manager and administra-

Trade Fair: Middle in national dress; Mike Elechi, 2nd vice president of PHCCIMA and Trade Fair committee boss, flanked by members and newsmen

tor now a modern mega-farmer, Mike Elechi, to spearhead this new narrative. The Knight and chief, who is known to have turned around the Peter Odili image in the then governor’s second tenure when he became the permanent secretary in the Ministry of Information which led to the explosion of private

newspapers in the state from one to 14 and turning Port Harcourt into a news headquarter after Lagos and Abuja, has continued to build collaborations and partnerships to rescue the image of Port Harcourt using the international trade fair as a kick-off. Elechi and his team including Uche Onochie, Maraizu Uche and If-

eoma Okeke, have toured broadcast media houses. The team followed up with a media interactive session to plot ways to deliver the trade fair successfully and use it to show to the world that safety is back to PH. The argument of the team is that though some sparks of crime may flare up in the oil city but that same or even more is also happening in Lagos and other cities. Elechi highlighted some of the strategic actions being lined up to make the upcoming international trade show a huge security success; one being the relocation of the fair to Obi Wali International Conference/Cultural Centre located between two military installations (Bori Camp being headquarters of 6 Division of the Nigerian Army, and Nigeria Air Force headquarters) on Aba Road. The other is to keep away anyone who has no business at the fair. For this, major companies have been lined up to participate with innovative products that may excite the PH and South-South audience. . Thus, it is not only for the media to say something good and new but to fid what is good and new to dwell on all through the two weeks beginning from December 6 to 20, 2019. Elechi stated: “For this year’s

edition, there is need or collaborations and partnerships especially with media houses in Port Harcourt. There is a reason for this. Security scares business people away from Port Harcourt, and it is bad press that caused it. Port Harcourt is not the worst. “The 2019 PH International Trade Fair is here to change the narrative and put a stop to de-marketing of Rivers State. The city is for all of us; if the city dies, we all die. So, the city now generates good news and let the media give it out. “Rivers State is good now. Tension has reduced because elections are over. Lagos, Port Harcourt, Kaduna and Enugu are the four approved international trade fairs in Nigeria. There are over 2000 business in the OPS (organised private sector) in Port Harcourt and they must take the lead. The Trade Fair is our flagship event each year. “PH is safe again for business and November 7, 2019, is official unveiling. Businesses were leaving PH and the city was dieing, but things have changed. There is need for strategic partnerships to sustain the new steam”. The media gurus and the trade fair committee deliberated on ways of making this a reality.

Model UN conference holds in PH to groom future diplomats • As FTI celebrates 10 years of effort

he Model United Nations (MUN) Conference series took place in Port Harcourt from November 1 to 4, 2019, to continue the task of grooming future diplomats and global citizens. It also marked the 10th year anniversary of the organization that has been making it possible for Nigerians and other Africans to join in the scheme, Future Trust Initiative (FTI). The deputy governor of Rivers State, Ipalibo Harry Banigo, declared the even open. UN Sec-Gen: Antonio Guterres Good that you are taking part in some of the biggest issues of our time; peace, climate action, sustainable development, and human rights. Our world has achieved remarkable progress from increasing life expectancy to reducing child mortality. The Un is the platform for action on global issues. I hope you will take what you learn here into your lives, to your family, etc. Namibian High Commissioner to Nigeria: Humphrey Geiseb Africa’s youths must work together t make an impact and not only be recipients of other people’s innovations. The youths must truly aim to create the future they wanted and they must recognise that the world is increasingly a global village and that what happens in one one’s small village can and o impact lives of people thousands of kilometers away.

Maureen Ifeyinwa Egbuche (FTI Founder) As late comers to the Model UN (MUN) conference series, Africa is yet to appreciate the gains from the experience. The gap is yawning one and so we cannot rest until we have created both the awareness and an enabling environment for our students to benefit from the opportunity. For us at FTI, bringing the conference series home to Africa has been one of the major highlights of these 10 years gone by. TAFMUN has made the experience accessible to many more people, most of whom cannot

Maureen Egbuche www.businessday.ng

afford the cost of international travel. Another highlight is the sponsorship of public secondary school students to the National High School Model UN (NHSMUN) conferences in New York, USA. We started out selecting, coaching, and taking secondary school students to New York, USA, for the NHSMUN conference series, the very first non-government organisation in Nigeria to do so. Time was when all you needed to prove your academic mettle was a set of good grades. Not any more. You must have more to offer. The learning from MUN sets you apart on a pedestal of global relevance. Foreign university admissions recognise and attest to this. You may recall the concerns that that led to the conference making its Nigerian debut in Lagos in 2015. We thus wish to commend the administration of Gov Nyesom Wike in Rivers State for a safer and more conducive Port Harcourt that has made it possible to bring this event to the Garden City in 2018 and now 2019. TAFMUN is a time to step out of your comfort zone. We are confident that students who participate will become the policy shapers and world leaders of tomorrow in diverse fields. They would have learnt the importance of cooperation and negotiation in life and in their career fields. Obi of Onitsha: The Igwe, Nnae-

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meka Alfred Achebe: TAFMUN brings home to Africa, Nigeria and Abuja, Lagos and Port Harcourt the simulation of the UN’s proceedings by our secondary school and university students unto proffering solutions to real topical issues and problems of our world today. It is a wonderful opportunity for those who cannot afford the cost of international travel to New York to get a similar experience here at a comparatively insignificant cost. For the government, this should be considered a vital part of the mandate. For the corporate bodies, it is a good aspect of corporate social responsibility by helping these brilliant youths to get to higher ambitions. Deputy Governor; Represented by Director of Admin, Ben Roberts: This body, FTI, is giving our youths a voice in the world. Considering cultism, militancy, yahoo-yahoo boys syndrome, the challenges facing the youths are enormous. There is need to encourage and reward those doing well. The Rivers State government has evolved policies to address these issues. There are policies focused on girls and the girl-child. There initiatives that partner with NGOs and organisations to help the female child. Prostitution rate is getting too high. The PH initiative is starting to train the youths. The students here are @Businessdayng

good prospects for future successes. We urge the visitors to do a tour of the state and find out that the state is safe, that PH is the safest city in Nigeria. Nabil Saleh: PHCCIMA President: The world is now a global village; no village is complete without the children or youths. Skills are very key in the world of today. Negotiation is critical in achieving any good life today. This is where the event of today is very relevant because the school children have come together to begin training on diplomatic skills and art of negotiation. The world today is pigmented by violence occasioned by intolerance which is a product of poor communication of desires and lack of negotiation abilities. PHCCIMA is making its own contribution in the area of development and promotion of youth entrepreneurship, and this has value for the youth. NACCIMA has a youth wing and PHCCIMA supports them. The experience here will help them. We urge parents to take advantage of this opportunity provided by the FTI-backed Model UN Conference system to build a sharper generation. Igo Weli: SPDC: The founder is a Shell product and she is simply wonderful. The quality shows.

industry Insight

BUSINESS DAY Thursday 07 November 2019 www.businessday.ng

Is Africa ready for AfCFTA? Odinaka Anudu

ifty-four African countries recently ratified a continental trade treaty that will create an estimated $3.4 trillion market opportunity. Po pu l a r l y ca l l e d t h e A frican Continental Free Trade Area(AfCFTA), the trade treaty promises to liberalise trade among African countries and create a single market for goods and services on the continent. It is easily the largest trade agre eme nt si n c e the Worl d Trade Organisation (WTO) in 1994 and a flagship project of Africa’s Agenda 2063. The treaty is expected to raise Africa’s nominal GDP to $6.7 trillion by 2030 and liberalise 90 percent of products manufactured in Africa. This means that a country can only protect 10 percent of its local industries. Trade liberalists argue that it will favour small and mediumsized enterprises in Africa by enabling them to supply inputs to larger regional companies. They cite the South African example. Due to free trade, large car makers in South Africa source leather for seats from Botswana and fabrics from Lesotho, under the preferential Southern African Customs Union trading regime. The AfCFTA officially came into force on 30th May 2019 when the required number of ratifications—22— were obtained, making the agreement a binding international legal instrument. Negotiations are, however, ongoing. After months of consultation and dilly-dallying, Nigeria’s President Muhammadu Buhari signed the AfCFTA in July this year, seeking fair trade for Nigeria. Speaking at an event in Niamey, Buhari noted that “Nigeria wishes to emphasise that free trade must also be fair trade.” “As African leaders, our attention should now focus on implementing the AfCFTA in a way that develops our economies and creates jobs for our young, dynamic and hard-w orking population,” he added. This made front pages of newspapers, but concealed a critical issue of trade readiness by Nigeria and the rest of Africa. Today, many African countries, including Nigeria, are going against the spirit and letters of the AfCFTA. In the first place, AfCFTA is targeted at open and free trade, but Nigeria has been the biggest violator. The Central Bank of Nigeria is still increasing the list of items that are ineligible for foreign exchange access and is vehemently supporting closure of Benin borders. These two actions are antitrade, according to experts, and they fail to factor in issues like

the supply-side constraints in the agriculture sector, inflation, pressure on manufacturers and exporters as well as possible impact on trade, analysts say. Olu Fasan, member of the International Trade Policy Unit (ITPU) of the London School of Economics and Political Science, said the border closure will enrich local producers, without increasing their productivity and competitiveness, while also harming the interests of Nigerian exporters and consumers. “Truth is, Nigeria’s deep-seated protectionism is not compatible with its international legal commitments. It would have to decide whether to comply with its international obligations, legally invoke the escape provisions in international trade agreements or withdraw from them altogether,” he said in a Monday column in BusinessDay. In his article entitled, ‘Border closure: Nigeria is trampling upon the world legal order’, Fasan said the border closure is a blatant violation of Nigeria’s commitments under the World Trade Organisation (WTO) and Economic Community of West African States (ECOWAS) treaties. “Surely, by closing its land bor-

ders to stop cross-border movement of goods, Nigeria is, firstly, prohibiting or restricting imports other than through duties, taxes or other charges, and, secondly, nullifying and impairing the benefits accruing to other WTO members, especially those in West Africa, whose legitimate exports to Nigeria are being restricted, in violation of WTO law,” he said. “What’s more, Nigeria could justify the closure of its borders on the ground of curbing smuggling or customs enforcement under Article XX or on the ground of national security under Article XXI, provided the border closure does not constitute ‘a disguised restriction on international trade’. But everyone knows that the underlying reason for the border closure was not smuggling or national security concerns, but the protection of local industries, and, thus, it’s a disguised restriction on international trade,” he further said. But Nigeria is not the only country in this party. Perhaps, much noise is made about Nigeria because of its strategic position as Africa’s most populous and biggest economy. Sudan, in September, ordered

closure of its borders with Libya and Central African Republic, citing security and economic dangers. In June, Kenya shut its borders with Somalia for security reasons one week after outlawing along the coast near the Somalia border. Kenya authorities cited increased illegal trade, as well as human and drug trafficking in the area as major reasons for the latter action. In April this year, Eritrea unilaterally closed all border crossings with neighbouring Ethiopia less than a year after the two countries made peace. Before the outright closure in April this year, Ethiopia-licensed vehicles traveling to Eritrea from the Ethiopian town of Rama had been asked for permits in December 2018, according to a Reuters report. “We did not receive any prior notice,” Reuters quoted Liya Kassa, spokeswoman for the regional administration in the Tigray region which borders Eritrea, as saying in December 2018. In March this year, Rwanda shut down borders against Uganda over diplomatic row that has seen the two countries suspecting each other. In June this year, three civil

society organisations sued Rwandan and Ugandan governments on behalf of women traders suffering financial losses owing to the border closure. The civil society groups said it contravened the 1999 Treaty for the Establishment of the East African Community and violated the economic rights of women to engage in trade. Deaths were reported along the border, with security forces accused of perpetrating the acts. In August, Equatorial Guinea said it was building a Trump-like border wall to stop Cameroonians and West Africans from illegally entering its territory. Kenya, Rwanda, Equatorial Guinea, and Uganda, among others, are among countries that have signed onto the AfCFTA. Eritrea is not part of the AfCFTA. Analysts believe the AfCFTA may fail unless African countries understand the impact of unilateral trade policies. “Border closures are against the spirit and letters of the AfCFTA,” said an analyst. “If we continue this way, there will be a lot of unilateral trade decisions that will be taken across the continent in AfCFTA era. This could defeat the AfCFTA objectives,” the analyst further said. Though few of the reasons are understandable, given their connections with health, security and politics, decisions of border closure should not be taken without due consultations, say trade analysts. This leads to the question: Is Africa really ready for the AfCFTA? Helen Suzman Foundation, which promotes liberal constitutional democracy through broadening public debate and research, said in a publication that South Africa’s past experience of free trade paints a bleak picture. The Southern African Development Community (SADC) was founded in 1992. Despite agreement to reduce tariff, Malawi, Mozambique and Zimbabwe failed to cut tariffs on South African goods, arguing that the loss of potential tariff revenue was too great. This is despite that the SADC, unlike AfCFTA, excluded a number of important products such as vehicles, base metals, minerals and textiles. “Trade in sugar – viewed as a ‘political good’ – was a source of major dispute and eventual impasse,” the report said. Many experts are keeping mute over possible issues that could arise when the AfCFTA starts, but they are aware that it will test Africa’s readiness to trade. The continent’s intratrade is estimated at 16 percent, which is relatively low when compared to Europe’s 59 percent, Asia’s 51 percent and North America’s 37 percent. There is a potential danger, but Africa is ye to discuss it.

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