BusinessDay 08 Jan 2018 by BusinessDay

businessday market monitor FMDQ Close

Everdon Bureau De Change

Bitcoin

NSE

FOREIGN EXCHANGE

Biggest Gainer

Biggest Loser

Stanbic N47

Nestle N1450

1.08 pc

30,400.28

-1.69 pc

Foreign Reserve - $43.03bn Cross Rates - GBP-$:1.28 YUANY-N53.20 Commodities Cocoa

Gold

Crude Oil

US$2,408.00

$1,289.20

$58.23

₦1,395,970.82

+3.09 pc

NEWS YOU CAN TRUST I **TUESDAY 08 JANUARY 2019 I VOL. 15, NO 219 I N300

BUY

SELL

$-N 357.00 362.00 £-N 453.00 466.00 €-N 404.00 415.00

www.

Market

Spot ($/N)

I&E FX Window CBN Official Rate Currency Futures

($/N)

FGN BONDS

TREASURY BILLS

365.68 306.90

3M 0.19 12.61

NGUS MAR 27 2019 364.89

1.13 14.47

-0.09

15.03

NGUS JUN 26 2019 365.34

10 Y 20 Y -0.08 -0.04 15.20

15.46

NGUS DEC 24 2019 366.24

Mobile money is no rocket science, Ghana shows Nigeria

Transactions hit 68% of GDP, 97.50% of total volume of non-cash retail payments Teleology Holdings withdraws Mobile money accounts outstrip bank accounts, but banks get a piece of the pie from the 9mobile project

CALEB OJEWALE

he utilisation of mobile money in Ghana has become so ubiquitous the average Nigerian who visits would marvel at its pervasiveness in everyday life. To the Ghanaian, however, it no longer has a wow effect as it is just a part of daily life. From purchasing treasury bills, Initial Public Offerings (IPOs), health insurance, to even the basic money transfers and digital service payments, mobile money in Ghana has gone beyond just achieving financial inclusion. It has also immensely redefined consumerism and flow of money within the $47-billion economy. At the end of 2017, mobile money transactions in the country hit $32 billion, according to data from the Bank of Ghana, representing 68 percent of the country’s GDP. Users not only get to deposit and withdraw via mobile money, but there is also provision for interest accruals, between 1.5 percent and 7 percent, as approved by Ghana’s central bank and subject to whatever each telecommunications company can negotiate with each

partner bank. Currently, three telecommunications companies (AirtelTigo, MTN, and Vodafone) facilitate mobile money in Ghana. The mobile money system is bridging the gap between the banked and the under-banked

population while providing convenience in transactions. Interactions during a recent visit by BusinessDay to the country showed mobile money has literally been a lifesaver for many Ghanaians,

Continues on page 38

... Unhappy with digression from original business plan by local shareholders ... Teleology Nigeria Limited to drop the ‘Teleology’ brand name JUMOKE AKIYODE-LAWANSON

eleology Holdings has withdrawn from further participation in the 9mobile project, BusinessDay has learnt. Teleology Holdings is a special purpose vehicle comprised of telecom industry veterans and led by pioneer chief executive officer of MTN Nigeria, Adrian Wood. Sources close to the 9mobile organisation told that Teleology Holdings had become increasContinues on page 38

Inside Abdul Samad Rabiu (r), chairman, BUA Group/CCNN, with Tong Laigou, president, CBMI, during the signing ceremony for the construction of a new 3 million MTPA BUA Kalambaina (CCNN) line 2 in Sokoto State.

Kim, World Bank president, resigns after 6yrs in office P. 2

2 BUSINESS DAY NEWS

www.

Petrobras reform plans hold lessons for NNPC ISAAC ANYAOGU

obert Castello Branco, sworn in on January 3 as the new CEO of Brazil’s stateowned oil company Petrobras, plans to remove fuel subsidies, sell off the company’s non-core assets to settle debts and exit fuel distribution business as part of reforms for the troubled company. As with Petrobras, the Nigerian National Petroleum Corporation (NNPC) is struggling to remain profitable. NNPC owes its joint venture partners over $5 billion and spends the bulk of its revenue on fuel subsidies as it struggles to balance a downstream business that is yet to report significant returns. Brazil’s new president, Jair Bolsonaro, has promised to take a wrecking ball to the political and economic institutions that shoved the country into a brutal recession which has taken four years to recover from. In its place, he is instituting businessfriendly policies, including cutting subsidies and market-led reforms, elements missing from the APC-led government’s reforms. Bolsonaro is bypassing the civil service bureaucracy and hiring private sector technocrats with advanced qualifications in economics, including Branco to head Petrobras, Paulo Guedes to run the economy, and Joaquim Levy who will take over the National Development Bank (BNDES). Branco has a postdoctorate degree from the University of Chicago and is bringing to the table pro-market, privatisation-friendly approach to running the oil company. While truck drivers are on strike, even before being sworn in, Branco wrote in an article for a local newspaper: “One of the lessons we take from the supply crises caused by the truckers strike is the urgent need to privatise not only Petrobras, but also other state-owned companies. It is unacceptable to keep hundreds of billions of dollars allocated to the state-owned companies for activities that could very well be performed by the private sector, while the state has no money to keep basic obligations such as healthcare, education and public safety.” Nigeria knows too well the damaging impact of fuel strikes by truck drivers and oil workers who could send the economy in a tailspin following shutdown of operations. Nigeria’s three refineries produce below 20 percent of their capacity and the NNPC now claims no turnaround maintenance has been done

for over 40 years despite huge billions allocated for it in the last decade. In March last year, the NNPC said it was incurring N774 million daily to subsidise about 55 million litres of petrol it claims Nigeria is consuming. Analysts say Nigeria could spend over N1.6 trillion in subsidy on petrol this year, resources that could have been better utilised to fix broken infrastructure including roads, rail lines, bridges, and fund education and healthcare. “I find no justification whatsoever for the increase in NNPC’S PMS claims,” said Jean Balouga, economics professor at the University of Lagos, commenting on the analysis of NNPC under recovery data in comparison with rise in oil prices. This lack of reforms has left the country poorer. Nigeria emerged from a bruising recession in 2017 but the slow pace of recovery makes it feel like a depression. Growth slowed down to 1.95 percent in Q1 2018 and dropped to 1.50 percent in Q2, before rising to 1.81 percent in Q3, according to data from National Bureau of Statistics (NBS). Decline in crude oil production and subsequent revenue was a key reason for slowdown in the economy in Q2 2018. According to the NBS, oil production, including condensate, dropped from 2.0 million barrels in Q1 2018 to 1.84 million barrels in Q2 2018. A marginal rise in the economy in Q3 coincided with an increase in oil production to 1.94 million barrels in Q3 2018. “We are pro market economists. We like competition,” Branco told local reporters, while indicating plans to continue selling the company’s non-core assets and use the proceeds to cut debt and invest in promising projects. Branco, who was previously a board member of Petrobras, is in favour of the company exiting the fuel distribution business as its noncore, as well as not limiting the role of Petrobras in refining crude oil. The company is Brazil’s sole refiner. Petrobras was created in 1953 and currently produces 2.8 million barrels of oil equivalent every day, owns 9.7 billion barrels in proven reserves, and has more than 600,000 shareholders and 62,700 employees. The company has been in stormy waters recently following corruption allegations. An investigation uncovered schemes of kickbacks paid to politicians favouring concessions or contracts. It is indebted up to the tune of over $100 billion which it is struggling to reduce.

Tuesday 08 January 2019

L-R: Osagie Okunbor, MD, Shell Petroleum Development Company of Nigeria Limited (SPDC); Herbert Wigwe, MD/CEO, Access Bank plc/co-chair, NiBUCCA, and Nicolas Terraz, MD/ CEO, Total Exploration and Production Nigeria Ltd/co-chair, NiBUCCA, at the Nigerian Business Coalition Against AIDs (NiBUCCA) High Impact CEO dinner in Lagos.

ANALYSIS

Kim, World Bank president, resigns after 6yrs in office ONYINYE NWACHUKWU, Abuja

orld Bank Group President Jim Yong Kim announced on Monday that he will be stepping down from his position after more than six years as the head of the Bretton Woods institution. Kristalina Georgieva, the World Bank’s chief executive officer, will assume the role of interim president effective February 1. Kim, 59, was not due to leave the office until 2022, after he was reelected for a second five-year term in 2017. But he will now “join a firm and focus on increasing infrastructure investments in developing countries”, the World Bank said. “It has been a great honour to serve as President of this remarkable institution, full of passionate individuals dedicated to the mission of ending extreme poverty in our lifetime,” said Kim. “The work of the World Bank Group is more important now than ever as the aspirations of the poor rise all over the world, and problems like climate change, pandemics, famine and refugees continue to grow in both their scale and complexity. Serving as President and helping position the institution squarely in the middle of all these challenges has been a great privilege,” he said. Under Kim’s leadership, and with the backing of the Bank Group’s 189 member countries, the institution in 2012 established two goals: to end

extreme poverty by 2030 and to boost shared prosperity, focusing on the bottom 40 percent of the population in developing countries, the World Bank said. These goals now guide and inform the institution in its daily work around the globe. In addition, shareholders strongly supported measures to ensure that the Bank Group be even better positioned to respond to the development needs of clients. “The Bank Group’s Fund for the Poorest, IDA, achieved two successive, record replenishments, which enabled the institution to increase its work in areas suffering from fragility, conflict, and violence,” the Bank said. Also in April 2018, the Bank Group’s Governors overwhelmingly approved a historic USD$13 billion capital increase for IBRD and IFC that will allow the Bank Group to support countries in reaching their development goals while responding to crises such as climate change, pandemics, fragility, and underinvestment in human capital around the world. Over the past six-plus years, the institutions of the World Bank Group have provided financing at levels never seen outside of a financial crisis. “Recognizing the power of capital markets to transform development finance, the Bank Group during Kim’s tenure also launched several new innovative financial instruments, including facilities to address infrastructure needs, prevent pandemics, and help the millions of

people forcibly displaced from their homes by climate shocks, conflict, and violence. “The Bank is also working with the United Nations and leading technology companies to implement the Famine Action Mechanism, to detect warning signs earlier and prevent famines before they begin,” it said in a note on its website. During his term, President Kim emphasized that one of the greatest needs in the developing world is infrastructure finance, and he pushed the Bank Group to maximize finance for development by working with a new cadre of private sector partners committed to building sustainable, climate-smart infrastructure in developing countries. To that end, Kim has announced that, immediately after his departure, he would join a firm and focus on increasing infrastructure investments in developing countries. The details of this new position will be announced shortly, he said. In addition to working on infrastructure investments, Kim announced that he would also be re-joining the board of Partners In Health (PIH), an organization he co-founded more than 30 years ago. “I look forward to working once again with my longtime friends and colleagues at PIH on a range of issues in global health and education. I will also continue my engagement with Brown University as a trustee of the Corporation and look forward to serving as a Senior Fellow at Brown’s Watson Institute for International and Public Affairs,” Kim said.

Time to invest in land as policies on titles, approvals improve in states CHUKA UROKO

or investors and prospective home-owners who want to start with land, time is now to go to the property market as improved land administration and policies on titles and building approvals have made transaction not only easy but also fast and cheap. This means that ownership of land now gives the buyer economic power as he can trade with it or unlock equity on the property. This is a clean break from the past when, because of lack of valid titles, both land and property standing on it were regarded as dead assets. Nigeria is said to have a huge stock of dead assets and, according

Andrew Nevin, partner and chief economist for PwC, it is only land and property ownership reforms that can unlock these dead assets whose value he estimates at N307 billion or 81 percent of the country’s GDP. The reason for this was lack of valid titles which discourages mortgage loans. Many state governments are already carrying out these reforms, though not on large scale, and that explains the rise in land price in some cities, especially Lagos where prices increased significantly with Victoria Island and Ikoyi growing by 11.3 percent and 14 percent year-onyear, respectively. In Agungi, along the Lekki Epe Expressway, prices grew by 18.9 percent. Like Lagos, where improved land

administration accounts for the land price increase and ease of obtaining titles, Edo State has also improved its land administration such that the use of GIS technology in the state has reduced the cost of obtaining Certificates of Occupancy by over 80 percent, while Enugu State government has approved a 50-percent discount on accrued land use charges. A recent report by Northcourt Real Estate notes that the monthly distribution of property titles to beneficiaries of the Homeowners Charter Programme in Ogun State has made land purchase in the estate an interesting and rewarding experience, just as Ondo State has also launched an automated Land Use Charge Payment System.

In the Eastern part of the country, Anambra State, which is the commercial hub of that region, has embarked on a revalidation exercise culminating in the issuance of digital titles to land owners. Ayo Ibaru, director, real estate at Northcourt, said that as an asset class, land is expected to hold its own waiting patiently as its use is decided by the owner’s aspiration and situational economics. He affirmed that towards making land administration effective, a number of states have begun implementing the ‘Systematic Land Titling and Registration’ as part of a broader plan for growing investment. “The use of technology in land administration is paying off in states

like Edo and Anambra and other states are considering the adoption of same. With more registered titles being issued in shorter timeframes, there is a growing case for long-term investment, especially in states outside the leading cities of Lagos, Abuja and Port Harcourt,” Ibaru said. As a country, Nevin says Nigeria needs comprehensive reforms in its land and property ownership systems given that its rigid traditional land tenure system and the current land titling system exclude many people from formallandownership,hamperingfullscaleeconomicactivities,especiallyreal estate which happens on land.

•Continues online at www.businessday.ng

Tuesday 08 January 2019

C002D5556

BUSINESS DAY

C002D5556

Tuesday 08 January 2019

C002D5556

BUSINESS DAY

C002D5556

Tuesday 08 January 2019

C002D5556

BUSINESS DAY

C002D5556

Tuesday 08 January 2019

C002D5556

BUSINESS DAY

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

Tuesday 08 January 2019

comment My wishes for Nigeria in 2019 comment is free

Send 800word comments to comment@businessdayonline.com

Mazi Sam Ohuabunwa OFR, FPSN sam@starteamconsult.com

t is traditional to make wishes for a new year. And it is also normal for everyone to wish for better in a new year. Many Nigerians have wished each other many things for the new year. One common or universal wish is “happiness”. That is why almost every Nigerian must have wished many other Nigerians “happy new year” since the mid nite bell rang on 31st December 2018 ushering the new year- 2019. Indeed the same thing has happened globally, just as it has happened every year since I was a child. I cannot say when the greeting was first used but it must have been since the 1st century or so. But my earliest vivid recall of hearing and exchanging this greeting was at age 5. And that’s over six decades ago and yet this greeting remains current and indeed the major goodwill exchange every new year. Thus it becomes very clear that the attainment of happiness is one the greatest needs of man on earth. But what is happiness? Many dictionaries and psychologists have different takes on the concept of happiness. Vocabulary.com say that happiness is “the sense of well being, joy or contentment, when people are successful or safe or lucky “Another author defines happiness as “ the experience of joy, contentment and a good feeling about yourself and your life. It is a

STRATEGY & POLICY

MA JOHNSON Johnson is an eclectic researcher, writer and columnist whose articles cover maritime, defence, technology and public policy issues and other areas of human interests. He is a member of the BusinessDay Editorial Advisory Board)

new year is here again! This is a time to wish all Nigerians, and in particular, my esteemed readers a happy New Year. This year’s wish may just be a mere expression of goodwill that may not have any relevance to the lives of some of the recipients of the greeting in Nigeria. Although, if one reflects on a few events that happened at the national level in 2018, there is every reason to be happy in the New Year. The rice revolution of the federal government is yielding results. Nigeria, according to the Central Bank of Nigeria, has made claims that the volume of rice importation into Nigeria in metric tonnes has reduced drastically. This has heralded a new dawn in agriculture. Rail transport is gradually picking up with Nigeria

positive emotion that makes you feel good and satisfied. It is joy, satisfaction and well being and a sense of bliss.” Another psychologist defines a happy person as “someone who experiences frequent positive emotions such as joy, interest and pride and infrequent (though not absent) negative emotions such as sadness, anxiety and anger” An ancient Greek philosopher said” happiness is the joy that we feel when striving after our potential” and another adds “happiness comes from within you, rising into your awareness, when the mind is calm and quiet”. Finally another author concludes that “happiness is about loving yourself, while constantly changing to become better. This comes from deep inside your heart and soul. Outside circumstances may create difficulties and hardships, but true happiness prevails because you know that you will survive and move beyond this point in life” From the above it is clear that there are two components to happiness- intrinsic and extrinsic. Who you are and what happens around us. While those with spiritual anchors and who live purpose- driven lives will experience more happiness than those who do not, it is indisputable that external factors do contribute to happiness. Thus while my primary wish for Nigeria and Nigerians in 2019 is that they experience true happiness, I would wish that the external conditions are such that will help them feel truly happy all year round. Safety of physical life is essential for sustainable happiness. When people live in fear of physical harm or death like what has been happening in many parts of Nigeria but specifically in the Northeast, Northcentral and parts of Northwest,

‘

My wish therefore is that whatever has been causing the untimely killing and shedding of innocent blood in these regions must stop in 2019 so that these Nigerians can better experience happiness

’

it is difficult for them, no matter their spiritual strength to have complete happiness. When people in the South of Nigeria fear to sleep in their villages for fear of kidnappers and armed robbers, they are robbed of complete happiness. My wish therefore is that whatever has been causing the untimely killing and shedding of innocent blood in these regions must stop in 2019 so that these Nigerians can better experience happiness. It is indeed hard to live happily in refugee or IDP camps. I wish that all the internally displaced will return to their homes this year. Negative emotions of anxiety, fear and uncertainties detract from happiness. Many Nigerians have entered into 2019 with so much anxiety concerning what will happen with the 2019 elections. Matters are not helped by the refusal of the President to sign the electoral bill after four amendments. Only last week, INEC raised the anxiety level when a known blood- relation of the President Amina Zakari was an-

nounced as the head of the election result collating committee. Ninety one parties under CUPP have protested this appointment and many other Nigerians and observers think this is unnecessary stoking of the fire. INEC must not take any action that will increase the level of tension and suspicion already associated with the elections. Amina may never do anything untoward in collating the Presidential election result, but as they say “Perception can be worse than reality”. There are many other national commissioners in INEC who can fit the role without raising the kind of eye brows Amina has raised. The political parties are key stakeholders in the electoral process and INEC is well advised to pay attention to their concerns in a key democratic exercise. My real wish is that Nigeria will have a free, fair credible and non- violent elections. The way we prepare for the elections, conduct the campaigns, execute the elections, announce the results and handle the post-election responses will in large measures determine if Nigerians will be happy or not in 2019. Luckily, so far we have not heard such rhetorics as ‘baboons being soaked in their blood’ or ‘we must win by all means’; but we can feel fierce competition in the air. It will therefore be appropriate to impress upon the politicians to temper their desperation to win. I encourage all to see elective competition with the eyes and demeanor of President Goodluck Jonathan who repeatedly declared that his “victory was not worth the blood of any Nigerian” and when the test came, he discharged himself creditably and honorably. By the grace of God, I am a spiritual person but I know how one’s spirituality can be challenged by involuntary fasting or hunger. They say a hungry

man can become an angry man. And I do not see how anger can add to happiness. I know how one’s spiritual stability and equanimity can be challenged when bills are not paid and children cannot return to school. I therefore wish that Nigeria’s economy will grow faster than our population growth in 2019 and that unemployment will significantly decrease from the high levels we ended 2018 with. Therefore it becomes imperative that the governments we install at the federal and state levels must be manned by men and women who understand how jobs are wealth are created. The idea of putting novices or untested men in power just hoping that they would know what to do has proven costly to us over the years. Let us shine our eyes to choose wisely and avoid” nmakwara” The other major wish I truly have for Nigeria in 2019 is that Nigeria becomes a land of peace where everybody will live at peace with each other; a land where justice, equity and fair play will reign; a land where discrimination against Ndigbo in Nigeria will cease. I wish that all governments at every level will run inclusive governance where majority and minority are included and where all segments of society are treated equitably and fairly. Whatever made Fulani cattle herdsmen turn from carrying sticks to carrying AK-47 rifles must never be allowed to happen again. Nigeria needs peace- builders and those who bear no grudge against any ethnic group to rebuild national cohesion and peace. This is actually my greatest wish for Nigeria in 2019 and I pray that the Lord will grant me these wishes. I cannot hear your Amen!

Send reactions to: comment@businessdayonline.com

What is new in the year 2019? occupying the 97th position on the 2018 railroad infrastructure quality ranking released recently by the World Economic Forum. While there is modest increase in power supply. The N-Power and School Feeding Programmes are some of the social protection packages of the Buhariled administration. The federal government’s empowerment scheme popularly known as TraderMoni which was created specifically for petty traders and artisans across Nigeria is ongoing. The scheme which was activated in 2018 advances interest and collateral-free loans to market women and artisans across the country. Despite these efforts, most Nigerians are not where they would have loved to be when one compares the state of affairs to what it was in May 2015. Some Nigerians have argued that there was too much corruption and impunity in the immediate past government, but the economy then was better than what it is today. Truth is that the change is not taking place at the speed expected given the promise of change during the 2015 election campaign by the All Progressives Congress (APC).The level of insecurity is high across the entire country and corruption is still booming. Anyway, Mr President has publicly declared that he may be slow but he would wipe out corruption. He has requested religious groups to help his government wipe out corruption

in the country. Many Nigerians are not happy today for so many reasons too numerous to discuss in this article. The level of poverty is high as Nigeria overtakes India as the world’s poverty capital. By implication, Nigeria has the highest number of poor people in the world. If Nigeria continues on this trajectory without drastic steps taken to ensure that the economy grows faster than population, the country may remain the poverty capital and slum of the world for many years to come. Most of the states are deficient in terms of social and physical infrastructure. Most roads are in poor conditions, health and education facilities are below acceptable standard. The number of the unemployed is increasing. About 20.93 million Nigerians are unemployed, according to recent statistics released by the National Bureau of Statistics (NBS). Yet, Chris Ngige, Minister of Labour and Employment, says that “Buhari’s second tenure will end youth unemployment.” Chris Ngige wants to end unemployment in the next four years if his principal is re-elected this year. This simply shows that Chris Ngige is now a miracle worker in addition to his ministerial responsibilities in the federal cabinet. But the Minister of Labour and Employment has not defined the term “full employment.” He needs to define the phrase “full employment” because no economy in the world employs all its skilled and unskilled labour at any given time. What is new in the year 2019 is that

Nigeria will go to the polls from 16 February 2019. But only a handful of politicians are interrogating major issues affecting Nigeria today. What are the politicians telling us about provision of quality education, health, food, and shelter for almost 200 million Nigerians? I have not heard anything worthwhile and commendable on health and education. The minimum wage palaver has not been settled as Labour is mobilising for a prolonged strike. The number of tertiary institutions have increased exponentially, but neither the new ones nor the old ones have sufficient funding or required facilities. The country has serious revenue problem. Indeed, some experts say, that “Nigeria is broke.”The federal government in its Economic Recovery and Growth Plan (ERGP) says that it needs to spend as much as US$3.0 trillion in the next 30 years to fill infrastructure gap. How will the country get such an amount to fill the infrastructure gap? The fact is that the federal government doesn’t have the financial muscle to provide the scale of infrastructure that Nigerians can be proud of in the twenty-first century. Since 2017 till date, the federal government’s revenue has been shrinking. But the country spends billions of Naira daily on petroleum subsidies. The price of crude oil in the international market is dropping, and the country’s Excess Crude Oil Account is depleting. So power sup-

ply, fuel subsidies and other wasteful expenses of governments at all levels gulp Nigeria’s resources which would have been used to improve education and health facilities. Chief executive officers of firms in services and real sectors of the economy are lamenting because of unfavourable business climate. Those who couldn’t cope with the changed business environment have had to relocate from the country. When one looks at the flood of problems in the country, you can guess why some Nigerians are not happy. The country needs the private sector to partner with the government in filling the infrastructure gap. Removal of fuel subsidy is an economic necessity and a political predicament which must be given serious consideration it deserves. As we move close to the general elections, the task before all Nigerians who love and care about the country is to ensure that we vote for politicians seeking elective offices who have the character, commitment and readiness to do the job for which they would be elected. We should remove tribal and religious sentiments in choosing next crop of leaders at state and federal levels, so that we do not maintain our rank as the world’s poverty capital for more than necessary. Nigerians should vote wisely. Happy New Year to every Nigerian.

Send reactions to: comment@businessdayonline.

Tuesday 08 January 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

comment

@Businessdayng

BUSINESS DAY

comment is free

Send 800word comments to comment@businessdayonline.com

What did Melania Trump’s visit to Africa achieve?

Rafiq Raji “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

elania Trump’s staff briefings before heading to Africa in early October are not too hard to imagine. That is even as her staff revealed she had her mind set on the trip at the very beginning of her husband’s presidency. It would certainly not be derisory to reckon there was more talk about clothes than culture, policy or politics at the pre-trip meets. Reminiscent of the colonial era, the American first lady chose to wear khakis with a pith helmet to match while on Safari in Kenya. The television screen could very well have been black and white to make the act complete. Expectedly, she visited some schools and went around to the usual places to affirm some of the misery she was likely told to expect to see. Her comments during the trip were inevitably about her husband. Choosing the African backdrop as the stage for her first substantive public comments on any major political issue, Mrs Trump defended her husband’s controversial choice for the American Supreme Court-

Brett Kavanaugh, and inadvertently revealed she was of the same ilk as her husband. This would not be considered a compliment in most circles. It is probably too mean a characterisation. There was likely a genuine desire on her part to see the continent. And to help. But for someone who was once an international model and travelled the world, it was a little striking she was only just visiting the continent for the first time. But at least, she visited. Her husband has never set foot in these parts before. Did she leave a favourable impression though? And is she likely to make her husband more favourably disposed to the continent? It could be argued that Mr Trump was already beginning to pay attention to goings-on on the continent beforehand. And that perhaps a consequence of that was how the continent was brought to the attention of his still glamorous wife. The visit by two British royals, Prince Charles of Wales and his wife, Camilla, the Duchess of Cornwall, to the continent about a month after her trip probably provides the perfect contrast; since just like her, they do not formulate policy but can influence those who do. Prince Charles, who was travelling in his capacity as the new head of the Commonwealth, visited The Gambia, Ghana and Nigeria. With no formal power of his own, being as that is the forte of 10 Downing Street, African governments were not unaware of his ceremonial purpose. But they still took him and his wife

‘ Let it be hoped then

that just as she visited Ghana, Kenya and Egypt, she would find time to travel widely around the continent soon. Better still, she should hold her husband’s hand as she does it. And hopefully, the couple would get to know about the many positive things also happening on the continent and the tremendous boost greater American engagement could bring about

’

seriously, not only because they are royalty, but also in recognition of their palpably genuine interest in the continent’s progress. Find a problem to solve Another example is the recent trip to Uganda by Kanye West and Kim Kardashian, a globally recognised celebrity couple. Social royalty in their own right, they were received by President Yoweri Museveni in grand style at his residence. While many were and remain sceptical

about their supposed tourismenhancing value, it is an example of how a visiting dignitary need not have formal power to be influential. In any case, Mrs Trump is royalty in her own right. After all, it is very obvious she has some influence over her husband. And she would clearly be able to guide aid and development finance to causes dear to her while doubly seen to further the interests of the American state; if she chooses to. The problem with her recent visit is that there was no sense that she would do all these things. There was the feeling that she really does not have much interest in the matter. For some, she could as well have declared she was going on a vacation. Simply put, her purpose for visiting the continent was not well-defined nor did she use the purported long time in preparing for the trip to decide what she really wanted to achieve from it. It could be rightly assumed that maybe she did not know much to get on with. That is fine. But now that she knows the extent of the problems, it would be sacrilegious for her to come ill-prepared next time. That said, there was certainly palpable excitement in her circle at the announcement of her first solo foreign trip as first lady. It was as if she had finally found something to do with her position via her “Be Best” charity which she says aims to shine “a spotlight on successful programs and organisations that teach children the tools and skills needed for emotional, social and physical well-being.”This is too wide a focus in the African

context. Thus, focusing her humanitarian efforts on a few key issues would be a good start. In this regard, the approach by the Bill and Melinda Gates Foundation might be a good model for her to follow. Bring him along next time Should it be hoped that she would succeed in changing her husband’s views about the continent? It seems she was already beginning to do so even before she stepped on the plane: Mr Trump told everyone who was of good hearing how much he loved Africa ahead of his wife’s trip. Afterwards, in an interview with Fox News, Mr Trump revealed how eye-opening the trip was for his wife. And clearly for him. “She saw some things that were very eyeopening and tremendous poverty. Tremendous poverty. So we’re trying to help.” Let it be hoped then that just as she visited Ghana, Kenya and Egypt, she would find time to travel widely around the continent soon. Better still, she should hold her husband’s hand as she does it. And hopefully, the couple would get to know about the many positive things also happening on the continent and the tremendous boost greater American engagement could bring about. And yes, her summer clothes would do just fine. • An edited version was published in the December 2018 issue of New African magazine Send reactions to: comment@businessdayonline.com

The dangers and folly of micromanagement

Jude Adigwe Adigwe is a certified Human Resource Management (HRM) professional and is the Human Resources and Administration Manager at Sharemind Lagos adigwejudeobi@gmail.com

ith each passing day, many individuals saddled with the responsibility of leading or managing others in organization head to the precipice with the unprofessional practice of micromanagement. Interestingly, they mistake micromanagement for leadership –perhaps they were on vacation when the memo went out that leadership is completely different from micromanagement. Leadership inspires while micromanagement demotivates. What really is micromanagement? Cambridge Dictionary defines the verb micromanage as “to control every part of a situation, project, etc., even including the small details, in a way that may

not be necessary and may not give enough responsibility to other employees.” Business Dictionary defines micromanagement as “close, detailed, and often de-motivating scrutiny of employees’ work on a continuing basis”. Going by these definitions, it is clear that micromanagement is an overly controlling approach to management of employees in organizations. While there may be arguments in favour of micromanagement which seem logical given the peculiar circumstances in question, its long term effect is counterproductive. The dangers of micromanaging employees far outweigh whatever conceivable benefits there are. Experts in job design would agree with me that a job transcends mere duties and responsibilities carried out on a routine or project basis, it is an opportunity for self-expression and fulfilment for employees. Jobs meet deep and ever-present needs within employees. This is the reason why experts talk about concepts like job enrichment; job enlargement et cetera aimed at offering employees opportunities to fully express themselves as well as attain fulfilment. Micromanagement prevents these owing to a lack of autonomy to innovate (every so often), exercise initiatives and fully apply oneself – practices that are central

to the growth and development of employees. Jack Wallen in his article titled 6 big dangers of micromanagement mentioned the following as dangers of micromanagement: loss of control; loss of trust; dependent employees; your own burnout; high turnover of staff; lack of autonomy. When employees are micromanaged especially in a chronic manner, their growth is stifled because their actions are nothing but the ready-made thinking, planning and decisions of their superiors. It is a great disservice to the human mind – call it mental imprisonment, if you will. Micromanagement, to many, is not seen as a problem insofar as it does not tamper with their monthly salary. This is understandable because the fear of hunger and uncertainties makes many accept practices that are antediluvian, unprofessional and illogical. As professionals, we ought to know our worth and make distinctions between what is acceptable and unacceptable. While you get constantly micromanaged, you will get paid however you will lose something more valuable – your confidence. Might I add that your knowledge and skills get rusty or worse still eroded because what is not put to use becomes dysfunctional overtime. This is so because whatever output you lay claim to is solely the thinking, planning and

decision of another. Tell me why you should be on the payroll of your company or be employed by another company if you cannot think? That is too vital a skill to be overlooked. You might disagree by saying ‘I can think, I am simply not allowed to’…just keep in mind that overtime you would be incapable of independent thinking owing to long-term conditioning. Oxford Learner’s Dictionaryy defines folly as ‘a lack of good judgement; the fact of doing something stupid; an activity or idea that shows a lack of judgement’. It is well appreciated that this might put some on the defensive. Nonetheless, it is crucial to dismiss sentiments and call a spade a spade. Save exceptional situations like micromanaging employees who know nothing about their jobs (which by the way calls to question the integrity and validity of the selection exercises) et cetera, there is nothing commendable about micromanagement hence it should not be defended or trumpeted. The folly of micromanagement is most visible when managers expend energy and time trying to be omnipresent and omniscient failing to realize such approach is counterproductive and that organizations are not built around one person but around individuals/groups who work together to achieve a

common objective or objectives. To think that one can chronically micromanage yet have a strong organization is the height of folly. Sometimes, micromanagement is more about the personality of the manager than the competence level of the employee. In other words, micromanagement most times defines the manager more than it defines the employee. It is expected that if micromanagement becomes a last resort, it should be a temporary measure, however if it continues after the employee has improved then it becomes crystal clear that the manager in question has an overpowering need for control – a case that might require psychological attention. The same holds true for cases involving employees who are very competent yet micromanaged. Remember that while micromanagement may give you a sense of total control and feeling of importance, it diminishes your stock as a leader. John C. Maxwell could not have said it any better when he said: ‘leaders become great, not because of their power, but because of their ability to empower others.’ If your words and actions do not empower your subordinates, why do you still occupy that leadership or managerial position? Improve or vacate.

Send reactions to: comment@businessdayonline.com

BUSINESS DAY

www.businessday.ng

Editorial Publisher/CEO

Frank Aigbogun editor Patrick Atuanya DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo

EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure GENERAL MANAGER, ADVERT Adeola Ajewole ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

Tuesday 08 January 2019

The extortion racket in the Southeast

report released by the International Society for Civil Liberties & the Rule of Law last month revealed that Nigerian security and law enforcement agencies pocketed as much as N100 billion in roadside bribery and extortion in the South-eastern part of the country alone over the last three years. The report, titled: “Welcome to Southeast Region: Nigeria’s Headquarters of Official Highway Robbery,” was conducted in all the Southeast states and some parts of Delta State. It revealed what many watchers of events in Nigeria and particularly in the Southeast have always known- that the security agencies, particularly the police engage in barefaced extortion in the Southeast and all roads leading to the Southeast, particularly in the yuletide season. Unsurprisingly, the group’s spokesperson revealed that the report was released to coincide with the Yuletide, a season bribery and extortion by security agencies are said to be at their peak as millions of people embark on holiday trips to the Southeast. So brazen is the extortion that the police and security

agencies have now designed specific levies for different categories of motorists across the region with strict enforcement, sometimes ending with police killing motorists and road users for failure to comply. “For every shuttle or Mitsubishi L300 bus loaded with passengers (only) in Anambra state, it is N50 at every police roadblock, and extra N200 is paid if loaded with goods and passengers” the report found.. “For every commercial motorcycle or tricycle or Datsun or medium range truck loaded with goods, it is N200 at every police roadblock, and for every private vehicle owner accused of “incomplete” vehicle particulars, the least demanded sum is N4,000 or more, which must be paid randomly or on the spot to avoid being dragged to police station and have his or her vehicle impounded and indented as ‘stolen vehicle.” Of course, those who failed to pay the illegal levy are detained and bailed with illegal bail fees, sometimes upwards of N10, 000. The report stated that there were 250 police roadblocks in Anambra state between August 2015 and August 2016, and each made an estimated N40, 000 per day. These personnel manning these roadblocks illicitly collected N10 million per day,

which translated to N300 million per month and N3.6 billion per year. Although bribes and extortions are higher in Anambra, the same thing applies to all the Southeast states. A breakdown of extortion among security agencies shows that the police, as usual, were the lead takers. It was accused of pocketing N78.02 billion. It was followed closely other paramilitary agencies (Customs, Road Safety, NAFDAC, and NDLEA) who collectively were said to pocket N16 billion. The military (Army, Navy and Air force) apparently new boys in the game of road-side extortion, managed only N6 billion. The report aside, we have always wondered about the sheer number of roadblocks and checkpoints in the Southeast and roads leading to the Southeast. During some periods, these roadblocks could be one kilometre apart and dot every nook and cranny of the region. If so many thousand security personnel are detailed to man these checkpoints, one then begins to wonder how many police and security personnel are left to provide security for people in the cities, towns and villages. Is it any wonder then why despite virtually all Inspectors General of Police since 1999 have issued directives for the dismantling

of roadblocks, those directives were never obeyed or obeyed only briefly. This has become a permanent feature on the roads in and leading to the southeast. It is no wonder virtually all significant study and survey done have demonstrated that the Nigerian security agencies, particularly the police, are the most corrupt institutions in the country. One of such is the report of a survey done by the Nigerian Bureau of Statistics (NBS) in collaboration with the United Nations Office on Drugs and Crime and the European Union, in 2017, which shows that the Nigerian police is the most corrupt public institution in Nigeria. The government and all who wish the country well must be concerned with these damning reports on its security agencies. Security agents that are employed to protect the people cannot turn pry, extorting and harassing the same people while the government keeps quiet, pretending it does not know what is happening. Sadly, police and security agencies’ extortions are now about the most significant presence of the government a large section of the country feel. Are we surprised then that many Nigerians do not have patriotic feelings towards the country?

HEAD, HUMAN RESOURCES Adeola Obisesan

EDITORIAL ADVISORY BOARD Dick Kramer - Chairman Imo Itsueli Mohammed Hayatudeen Afolabi Oladele Vincent Maduka Keith Richards Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Mezuo Nwuneli Charles Anudu Tunji Adegbesan Eyo Ekpo

Enquiries NEWS ROOM 08023165438 08169609331 Lagos 08033160837 Abuja

}

ADVERTISING 01-2799108 08034743892 08033225506 SUBSCRIPTIONS 01-2799101 07032496069 07054563299 DIGITAL SERVICES 08026011296 www.businessdayonline.com The Brook, 6 Point Road, GRA, Apapa, Lagos, Nigeria. 01-2799100 Legal Advisers The Law Union

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

OUR Core Values

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

Tuesday 08 January 2019

C002D5556

BUSINESS DAY

C002D5556

Tuesday 08 January 2019

C002D5556

BUSINESS DAY

C002D5556

Tuesday 08 January 2019

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

COMPANIES & MARKETS

BUSINESS DAY

Mutual funds grow AUM to N650bn in 2018 Pg. 18

C O M PA N Y N E W S A N A LY S I S A N D I N S I G H T

MARKETS

NSE Index records ninth decline in 34 years IFEANYI JOHN

eightened economic uncertainty, emerging market selloff and increased volatility in crude oil prices made a poor market performance almost inevitable for the Nigerian stock market last year, causing the All Share Index to post a full year decline for only the ninth time since 1985. Against the popular belief that the stock market is very risky and there being a high probability of capital loss investing in the market, the NSE has recorded 26 positive yearly gains as against 9 negative years in the last 34 years which translates to a 76.47 percent probability that the broad market index will close higher every year. BusinessDay analysis of the All Share Index performance shows that the NSE index declined last year by -17.47 percent, making it the third worst market rout in Nigerian history behind the 2008 and 2011 selloffs. The Nigerian stock market lost almost a fifth of its value in index points at the end of last year and recorded a 14 percent loss in market capitalization which amounted to N1.88 trillion. According to Bloomberg, the continent’s stocks and bonds did not fare any better as they performed worse than those of all other emerging-market regions in 2018, reversing their outperformance last year. “It would have been miraculous if equity fund managers made considerable returns in 2018,” said Henry Ogbuaku, group head, GDL Asset Management. “The reason is because there are set allocation benchmarks for the equity funds and you cannot go beyond these allocation strategies and migrate to another type of asset class even if the equity market is bleeding,” Ogbuaku told Business Day. Stocks are cheap in the Nigerian market as it stands but bargain-hunters won’t necessarily jump in next

year. Risks abound from tense elections in the country to low oil prices, potential credit-rating downgrades and the prospect of sovereign defaults. Nigerians go to the polls

in mid-Febr uar y, w ith 75-year-old President Muhammadu Buhari trying to fend off a challenge from Atiku Abubakar, 72, a former vice president. Buhari has promised Nigerians

that he will relentlessly continue to fight against corruption. However, his administration has suffered several controversies, causing Nigerians to question if his

team also shares the same agenda. Nigeria’s economy has struggled to grow by more than 3 percent under Buhari, causing economists to ponder if changing the

Edited by LOLADE AKINMURELE (loladeakinmurele@gmail.com) Graphics: CHINEDUM ONYEMA

helm of leadership to a more pro-business presidential candidate like Atiku may actually benefit the economy and build back investors’ confidence in the capital market.

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Tuesday 08 January 2019

COMPANIES & MARKETS AIRLINES

Air Peace launches direct flights to Banjul, increases Accra service IFEOMA OKEKE

e st A fr i c a’s leadi n g carrier, Air Peace commenced n o n -sto p fl ig ht s f ro m Lagos to Banjul, The Gambia Monday, January 7. The airline said it would no longer route its Lagos-Banjul flights through Accra, Ghana. The carrier had earlier broken its connecting flights to Freetown, Sierra Leone. It now operates direct LagosFreetown-Lagos flights. In a related development, Air Peace said it w a s c o n s o l i d at i n g i t s l e a d e r s h i p o f a i r s e rvices on the West Coast of Africa with scheduling of more flights on the Accra, Ghana route. The development, the carrier said, would avail travellers an exciting opportunity to cut cost and travel time. It pledged to continue to

adjust its schedules to better serve its customers on the West Coast of Africa. “ We a re p l e a s e d t o announce the commencement of our nonstop flights to Banjul, the capital city of The Gambia, from Monday, January 7, 2019. We had routed our flights to Banjul through Accra, Ghana. The new schedule follows our experiment with direct flights from Lagos to Freetown. The pieces of feedback we have received from members of the flying public indicate that they prefer to take direct flights to Freetown and Banjul. The option saves air travellers money and time. “ We h a v e a l s o i n creased our offering on t h e L a g o s -Ac c ra w i t h more flights. The new Banjul and Accra flight operations, we are sure, will not only deepen our West Coast operations, but also deliver

L-R: Sacko Seydou, programme officer trade, ECOWAS; Fatima Haram, vice president, Economic and Monetary Community of Central Africa Commission; Seni Adio SAN, chairman, Nigerian Bar Association-Section on Business Law; Joanne McNally, chief operating officer, Mark Eddo Media, and Amine Mari, senior resident representative and mission chief for Nigeria, African department, International Monetary Fund, at the Africa Trade Forum in Lagos, recently.

a variety of smart options to our valued customers. We are a customer-

centric airline and the strategy of our leadership of the airline business in Nigeria and

MARKETS

West Africa is anchored on attaching great importance to the feedba ck o f ou r e ste e m e d

c u s t o m e r s ,” C h r i s Iwarah, corporate communications manager, Air Peace said.

COMPANY RELEASE

Mutual funds grow AUM to N650bn in 2018 Union Bank donates food IFEANYI JOHN

opularity soared for the mutual fund industry last year as they were able to grow assets under management from N418.8 billion in January to N650.6 billion by November last year. Most of the fresh funds flowed into the fixed income mutual funds as double digits yields in debt securities incited investors to reduce allocation to equity funds and invest more in less volatile funds as equity-based funds fell from 3.36% of total mutual funds at the start of 2018 to 1.88 percent of total funds by November last year. Fund managers were tasked with the challenge of managing half as much funds than they were handling in 2017 at the end of 2018, with a capital influx of

over N231.8 billion recorded as at November from the start of the year. The asset under management (AUM) of the mutual funds grew by 55.3 percent at the start of November 2018. A mutual fund is an investment vehicle made up of a pool of money collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and other assets. According to the Securities Exchange Commission data analyzed by BusinessDay, Fixed income funds and money market funds were the top gainers with the highest inflow of capital. Funds like Chapel Hill Denham Money Market Fund, EDC Money Market Fund Class A, Greenwich Plus Money Market Fund and Stanbic IBTC Absolute Fund

(Sub Fund) tripled their net assets in the last year. The combined net asset value of the four funds grew by N19.19 billion from N9.152 billion at the end of 2017. This growth represents 209.7 percent increase in net asset value of all the financial assets which the mutual fund manages on behalf of its clients and themselves. The best fixed income mutual fund performance in the in terms of price change and value to its shareholders was the Nigerian International Debt Fund (15.2%), SFS Fixed Income Fund (12.84%) and Stanbic IBTC Absolute Fund (Sub Fund) (12.4%). Coronation Balanced Fund, Lead Fixed Income Fund and Stanbic IBTC Guaranteed Investment Fund concluded the list of mutual funds that performed above the 12 months

average treasury bills rate of 11.01 percent. Ayo Akinwunmi, Head of Research at FSDH Merchant Bank said the investment strategy and the investment tenor of the fund manager are important determinants of their return “The ability of the fund manager to select stocks of investment instrument is an important factor in determining the return on that fund. Some fund managers are aggressive while some are a little bit conservative,” Akinwunmi said. A further analysis on the mutual funds revealed that Money Market Fund had the highest share of the mutual fund market. Money market funds as a percentage of total mutual funds had a significant increase from 69.25 percent in December 2017, to 79.64 percent in 2018.

items to underprivileged IHEANYI NWACHUKWU

nion Bank, through its UnionCares initiative, provided relief for thousands of the underprivileged by donating over 6,000 care bags containing staple food items. The campaign, now in its third year, is co-funded by Union Bank and its employees. The bags containing nutritional staples included rice, beans, oil, salt and readymade stews. In various parts of the country, the Bank’s employees were seen handing out the bags to people in underserved communities. The Bank also made financial donations to over 30 orphanages, care

homes and NGOs including Wesley Schools for the Blind and Hearing impaired as well as Pacelli School for the Blind and Partially sighted children, all under its UnionCares umbrella. Ogochukwu EkezieEkaidem, head of Corporate Communication and Marketing at Union Bank, described the initiative as one of the Bank’s ways of supporting charitable causes and contributing to the wellbeing of the needy, particularly during the festive season. According to her, “Union Bank will continue to lead the charge for social responsibility and impact. We are firm

Continues on page 19

Tuesday 08 January 2019

www.businessday.ng

https://www.facebook.com/businessdayng

COMPANIES & MARKETS

@Businessdayng

BUSINESS DAY

Business Event

INDUSTRIAL GOODS

SON urges sorghum farmers, processors to embrace innovation HARRISON EDEH, Abuja

he Standards Organisation of Nigeria (SON) has enjoined Farmers and processors of sorghum in Kano State and its environs to embrace the constant innovations provided in the standardisation process, in order to earn premium on the commercialization of high quality sorghum products. Osita Aboloma, the director general of the organisation who gave the directive in a paper presented at a training on food safety standards for food processors, stressed the need for Nigerian Farmers and regulatory agencies to continue to link up. This he said in a statement issued on Sunday is geared towards fostering the desired level of growth in quality food processing generally, with par-

COMPANY RELEASE

Union Bank donates food items to underprivileged Continued from page 18 believers in supporting the communities within which we operate. This outlook drives the initiatives we organise and support under our Corporate Social Responsibility pillars. We launched the UnionCares initiative to touch as many lives as possible during the festive season and it is fulfilling to see the level of impact the initiative has had.” As part of its year end welfare initiatives, Union Bank also distributed care bags to children at the Makoko Christmas party organised recently by Slum2school. The UnionCares initiative has come to be acknowledged as a viable platform which supports the less privileged. In 2017, the Bank and its employees also donated thousands of care bags to the needy across the country during the festive season. Union Bank recently received the ‘Peoples’ Choice Award for the Most Outstanding Company in CSR/Sustainability’ at the 2018 Sustainability, Enterprise and Responsibility Awards (SERAs), emphasizing the Bank’s role as a socially conscious organization, actively supporting its host communities.

ticular reference to sorghum products. Organised by the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) in collaboration with the Federal Ministry of Agriculture and Rural Development (FMARD), International Institute for Tropical Agriculture (IITA), the training was part of the Federal Government Agricultural Transformation Agenda Support Program Phase 1 (ATASP -1). In his address of welcome, Hakeem Ajeigbe, Sorghum Commodity Specialist/ICRISAT Nigeria Country Representative enumerated the objectives of the project as being to enhance agricultural productivity of small and medium scale farmers and processors and improve value addition along priority value chains in the participating states by training sorghum food actors

on the appropriate food safety standards and regulations. The SON paper was presented by the Kano and Jigawa States Coordinator, Yunusa Muhammad, who asserted that the organisation continually promote product quality and safety, including for the agro allied sector, through the elaboration, review, adoption and harmonization of standards via stakeholders’ active involvement. According to him, other areas of SON contribution to general trade facilitation include, product certification, management systems certification, laboratory testing, metrology services and national capacity development through the SON training services. He disclosed that the SON internationally accredited Laboratories, management systems certification and training services would ensure local and in-

L-R: Omomene Odike, MD/CEO, U-connect and Gr8jobsng; Funmi Bucknor, managing consultant, U-Connect; Bolanle Ibitola, Director of Resources, United Capital; Ben Afudego, partner, West Africa Advisory Leader | Advisory Services, Ernst & Young; Mabel George, Head, Business Development Division, West, Sigma Pensions; and Omonike Charles-Binitie, Learning and Development Manager, FrieslandCampina Mamco at the Gr8jobsng Project Employ Career fair held in Lagos.

ternational acceptance of all the services enjoyed by stakeholders including sorghum processors particularly on food safety and regulation. Also in a joint-paper on Harvesting, Threshing, Cleaning and Packaging of Sorghum, Messrs. Hakeem Ajeigbe, Akinseye F.M. and Aliyu Adinoyi of ICRISAT, asserted the need to double the efforts put into production for harvesting and postharvest

activities in order to reduce loss and optimize profit on investment. According to them, other postharvest activities such as drying and storage should be given adequate and appropriate attention. The ICRISAT paper also focussed on methods of sorghum harvesting, drying, threshing (traditional and mechanised methods), packaging of threshed sorghum, advantages

and disadvantages of packaging materials among others. A representative of the National Agency for Food, Drug Administration and Control (NAFDAC) also presented a paper on Food Safety Regulation. The training attracted small and medium scale farmers and processors of sorghum from 4 ATASP-1 zones, namely AdaniOmor, Bida-Badeggi, KanoJigawa and Kebbi-Sokoto.

BUSINESS DAY

C002D5556

Tuesday 08 January 2019

BDTECH

Tuesday 08 January 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

BUSINESS DAY

In association with

Upward trajectory for Huawei, as tech company hits $108.5 billion in sales revenues …Forges ahead in race for 5G Stories by Jumoke Akiyode Lawanson

espite having admitted to facing difficult times in 2018, Huawei, a global technology firm has recorded strong financial growth, having racked up US $108.5 billion in sales revenue alone last year. In a New Year’s message, Guo Ping, rotating chairman, Huawei Technologies described the year 2018 as an eventful year for the firm while promising swift recovery from “negative conjecture and market restrictions”. Undeterred by certain market restrictions, Ping said that Huawei in 2018, managed to sign 26 commercial contracts for 5G with leading global carriers, and have already shipped more than 10,000 5G base stations to markets around the world. “More than 160 cities and 211 Fortune Global 500 companies have selected Huawei as their partner for digital transformation, affording the firm 2018 sales revenues of up to US$ 108.5 billion,” Ping said. The early waves of mobile communications technologies were largely driven by American and European companies. As 5G approaches, promising to unprece-

Frederick Igbinedion; Chairman, Ernest Uduje; MD/CEO, Ibiyemi Okuwoga; Head Sales and Marketing, and, Sanusi Segun; Senior Software Developer, all of itex Integrated Services Limited during a press briefing in Lagos recently to announce the company’s plans for future expansion .

dentedly transform the way people live and reshape the society and industries, Huawei remains a player in the battle to determine who will lead the race, despite being barred by the United States from supplying its government and contractors on allegations that “Chinese manufacturers are spying on the West”. In a statement, Huawei noted that no evidence has ever been provided to prove the accusation, adding that it would not be in Huawei’s interest to carry out the alleged

surveillance activities, as it would cause the company to lose its image and the current position in the international market. The company says it believes that its growth in the past 10 years has worried its international competitors, being the leading networking equipment supplier in the world. Earlier last year, Huawei topped Apple in the number of smartphone units shipped, and ranks only behind Samsung. Analysts say the motivations be-

hind these accusations are partly commercial and partly geopolitical, given that the United States and China are locked in a trade dispute that has disrupted the flow of hundreds of billions of dollars of goods. Project Syndicate, an international media organization, reported on Dec 11, 2018 that Huawei is one of China’s most important technology companies, and therefore a prime target in Trump administration’s effort to slow or stop China’s advance into several

high-technology sectors. Forbes also published an article on Dec 10, 2018 with the heading ‘The Feds shamefully persecute China’s Huawei for being too successful’. A number of carriers globally including British Telecommunications (BT) have expressed support for one of the world’s biggest telecom gear maker. While attending an event in London in November, Neil McRae, BT’s chief architect proclaimed “there is only one true 5G supplier right now and that is Huawei -- the others need to catch up.” Deutsche Telekom responded to an inquiry from Der Spiegel, a German weekly news magazine in November, explaining that they use equipment from various manufacturers, including Ericsson, Nokia, Cisco and Huawei, and stating that they cannot “afford to exclude high-performance suppliers”. Despite the intense 5G race and the US-China trade dispute, Huawei’s business performance remains strong. “We have never stopped pushing forward, and as a result our 2018 sales revenue is expected to reach 108.5 billion US dollars, up 21% year-on-year”, Guo said. He added: “Our business performance remains strong, and this is by far the most direct form of validation that we can receive from our customers”.

NCC instructs telecom operators to refund consumers for illegal deductions

he Nigerian Communications Commission (NCC) recently ordered telecommunication service providers in the country to stop and refund all forceful subscription charges for Value –Added Services (VAS, as well as airtime deductions for these subscriptions following several complaints by subscribers. The Commission said it mandated several initiatives to tackle the menace. These include the institution of a comprehensive investigation and resolution process, the Do-not-Disturb (DND) facility, and the imposition of sanctions for breach.

Disturbed by the persistent occurrence of the menace despite these measures, the Commission revealed in a statement made available to the press that it carried out a long and comprehensive investigative audit into VAS subscriptions across all MNO and VAS platforms. The investigative audit was led by the compliance monitoring and enforcement department of the Commission, with participation from its other departments such as the technical standards and network integrity (TSNI), consumer affairs bureau (CAB), legal & regulatory services (LRS), and licensing

& authorisation (L&A). “The Audit Team analyzed subscribers’ call detail records from MNOs and subscription logs from VAS providers over a period of two years, leading to the conclusion that a huge percentage of VAS services were not voluntarily subscribed for. The audit team also found that some providers had implemented disingenuous mechanisms by which large numbers of innocent consumers were “forcefully” subscribed to VAS platforms, leading to regular deduction of their airtime without their consent,” NCC said. As all stakeholders are aware,

the Commission has persistently insisted that actions of this sort are unacceptable as they are in direct breach of the Nigerian Communications Act and NCC’s many regulatory instruments on the matter. Such actions also undermine the very foundations of the customer/ service provider relationship, that is, transparency and trust. The NCC said that based on the outcome of the investigative audit, the Commission will shortly be directing the indicted organisations to make refunds to affected consumers as appropriate. The Commission is also considering, and will impose

appropriate sanctions as necessary. This outcome justifies the Commission’s commitment to evidencebased interventions. “We wish to use this opportunity to inform the general public that the Commission may suspend or out rightly decommission some VAS platforms and services in the overall interests of consumers. We assure consumers that these measures will be implemented with minimal inconvenience to them, and trust that we can count on the understanding of consumers who may be affected by these measures,” the statement read.

BUSINESS DAY

www.businessday.ng

BDTECH

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

Tuesday 08 January 2019

E-mail: jumoke.akiyode@businessdayonline.com

Facebook Watch: What we have built and what is ahead Fidji Simo, Head of Video, Facebook

018 was a big year for Facebook Watch. Watch launched to every country around the world, the platform opened to videos from all Pages, and we debuted dozens of Facebook Originals. Amazing new content on Watch really got people talking — from Jada Pinkett Smith’s breakout talk show Red Table Talk, to the critically acclaimed dramas Sorry For Your Loss starring Elizabeth Olsen and Sacred Lies from showrunner Raelle Tucker, to live LaLiga football matches in the Indian subcontinent. We also kick-started our slate of global shows with our first interactive game show Confetti expanding to six new markets this year and MTV’s The Real World arriving in the US, Mexico, and Thailand in 2019. And creators around the world, like Nas Daily, Jay Shetty, and Laura Clery, are thriving on the platform with their unique brands of humor, insight, and creativity. Three months since Facebook’s global launch, there are already more than 400 million people monthly and 75 million people daily who spend at least one minute on Watch — and on average, these 75 million daily visitors spend more than 20 minutes in Watch. We’re seeing that people are regularly coming back to catch up on the videos they care about and watching for longer periods of time. In

this post, we’re sharing more details on our video strategy and a range of new updates for Watch. Building watch for conversation, community & connections We know that people have a range of video offerings available to them, but Watch is more than just library of videos — it’s a place where people can follow video creators they care about, start conversations about videos with friends, and build communities of fans who share their interests. Watching video has always been a social experience, but as people increasingly watch video online, it has become more solitary. With Facebook Watch, we set

out to demonstrate what it looks like to build deep bonds through watching online video, instead of just having a passive viewing experience. The ability to connect more deeply around content is what sets the video experience on Facebook apart. We learned with Facebook Live how powerful it is when people can connect with each other around videos in real time, and we’ve been building new video formats and features that capture the togetherness of Live. Since the Summer we have been working to bring Watch Party to everyone on Facebook. We’ve seen it really take off — there have been more than 12 million Watch Parties in Groups alone, and Watch

Parties garner eight times more comments than regular videos in Groups. We’re also working to unify the video experience across Facebook. Right now, people can find videos on Facebook in a number of different places — Watch, News Feed, Search, Pages and more — and all of these can feel different. We want to make the experience of watching video feel immersive no matter where you discovered it. As part of this effort, we’ll be testing a few things in the coming months, like creating a darker background whenever you immerse yourself into a video on mobile, unifying these different viewing experiences under one. And today we’re shar-

ing that people can now find Watch on more surfaces. In August, we rolled out Watch globally on mobile, and from today, Watch is now available around the world on desktop and on Facebook Lite. Creating more opportunities for our partners In 2019, we will continue to expand the ways publishers and creators can make money on Facebook. We’ll bring Ad Breaks to video creators in more countries around the world, and will test new Ad Breaks placements, like in livestreams from gaming creators. We want to bring Brand Collabs Manager to more countries to help match brands and creators for spon-

The winners in company of Henry Ibeh, the country managing director of Elvan Group (Nigeria), and other special invitees at the award presentation in Abuja, recently.

sorship deals, and will be expanding our fan subscriptions test. We’re also exploring new opportunities for advertisers. In September, we introduced In-Stream Reserve for premium online video and TV buyers to deliver their ads alongside the highest-quality Watch content, and next year we will continue to provide advertisers with more options to tailor their video ad campaigns and connect with their target audience. In all this, we’ve learned that for monetization products to work, they must balance the unique needs of video creators, people, and advertisers, providing value for all parties. Next year we will continue focusing on enhancing these tools to enable publishers and creators to generate meaningful revenue from their engaged, loyal audiences on Facebook. Investing in original content that sparks conversations As we move into 2019, we will continue funding Originals, and we’re delighted to announce the renewal of four shows for a second season: Huda Boss, Five Points, Sacred Lies, and Sorry For Your Loss. These shows all cultivated deeply engaged fan bases who came for the episodes, but stayed for the conversations — and are a great example of what can happen when content and community come together seamlessly.

11-year old girl wins $1000 at World Child Innovation Awards Jumoke AkiyodeLawanson

aniella Soje, an 11 year old student of Dansol High School, Ikeja Lagos, who uses home materials such as toothpicks and matchsticks to design artwork has emerged star prize winner of $1000 at the World Child Innovation (Nigeria) Awards. The award is the brainchild of Turkey’s Elvan Groups Founder, Mustafa Kadiroglu, an entrepreneur and innovator. The group forged an alliance with Coderina, Africa’s foremost Youth Capacity Development not-for-profit organisation, after finding information about the group’s activities online. Daniella’s innovative skills and ability to sell over 1000 artworks earned her

the position of first place out of about 156 applications submitted for the awards. Idrees Najeer; a student of Glisten International Academy, Abuja, who built a helicopter out of disused material came second and won $500, while Ujunwa Madu, a student of Spring of Life International School, Enugu State won the third place prize of $250 for creating an interactive game using a program called Scratch; a software program developed by MIT. Ujunwa learned scratch through the Africa Code Week program, a continent wide initiative of SAP. The Africa Code Week is an initiative launched in year 2015 by SAP that brings together hundreds of schools, teachers, governments, businesses and non-profit organisations with the aim to empower

young people across Africa with digital literacy skills. The winners were chosen after analysis and deliberation by the judges comprising of Aminat Showole; head of department (HOD), computer science department, University of Abuja, Peter Oluka; the editor, TechEconomy.ng, Adem Karaduman; the export manager of Africa at Elvan Group and Olajide Ademola Ajayi; IT manager at SAP Ireland. Kola Osundeyi, assistant director at the Federal Ministry of Education, described the creative works submitted by the children from all over Nigeria as a testament to the bright future that lies ahead of the country; a creative, knowledge-based economy principally driven by innovators. Osundeyi who spoke at the venue of the event, said that the program aligns with the ministry’s desire to

strengthen the education structure in the country and increase innovation and creativity among students. “We will not rest on our oars, especially in enlightening the entire citizenry on the importance of STEM (Science, Technology Engineering and Mathematics) education to our nation building. This ministry is committed to projects that offer opportunities for young people to display entrepreneurial and strong innovative prowess that can be commercialised”, he said. Osundeyi extolled the organisers for fishing out the young people who submitted entries. “More importantly, these young people are going to proffer solutions to our local problems, so they deserve our supports”, he said. On her part, Samira Jibir, the chief executive officer, Glisten International

Academy, Abuja- Nigeria, thanked the organisersCoderina and Elvan- for choosing the school to host the event. “I must commend Coderina for the opportunity they are offering our kids and others in different schools. I am most happy that the Federal Ministry of Education has accepted to work with them to promote and grow students’ interest in STEM (Science, Technology Engineering and Mathematics, across schools. “To promote innovation, Glisten has projectbased learning; we tweaked our curriculum to encourage trade (entrepreneurial) skills among the Students. That has allowed them to innovate. “Again, we allow them to play. Like the little boy that received award today. It was on the course of playing that it occurred to him

that he can create something out of the material he was using to play. ‘Playing’ is the best form for the child to learn. Our role is to mentor or coach them to fly”, Jibir added. Henry Ibeh, country managing director of Elvan Group (Nigeria), said his company will continue to support such initiatives that will ensure Nigeria meets its developmental needs. As a brand, he said, Elvan Group encourages young people to pursue problem solving approach to education. Meanwhile, Akinniyi Obaide, Coderina’s relationships and engagement director said; “This awards ceremony actually showcase our commitment to inspire, motivate and reward creativity among African youths. We need to raise problem solvers and innovators.”

Tuesday 08 January 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

BUSINESS DAY

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

‘Holistic approach required to address the education sector challenges’ KELECHI EWUZIE

s the problems bedeviling the education sector in Nigeria continues unabated with no concrete steps being taken to confront them, experts in the education sector have called on government to declare a state of emergency in this pivotal sector if the future of the nation is to be guaranteed. They observed that serious doubts continue to be expressed about the quality of education in Nigeria, adding that from the level of performance at all levels of the education - from primary to tertiary, if nothing urgent is done, the situation may be beyond redemption. Ayo Oyoze Baje, a concerned educationist says the redolent rot in the education system was caused by a combination of the government, parents, school administrators and students. Baje opines that factors such as low budgetary allocation to the education sector, at both the state and federal levels; high number of school age children out of school; very low teacher-to-students ratio; poor quality of teachers

at both the primary and secondary school levels; policy flip-flops; inadequate attention of parents to their children’s education and other are what have hindered the development of the sector in the past. According to him, “With all these self-inflicted challenges

the reasons are patently obvious why we cannot meet the millennium development goals of free universal education and gender parity in education. It also shows why our quest to be ranked among the top 20 economies on the global scale by 2020 may remain a pipe dream.”

Covenant University excels in 2019 Times higher education world universities ranking

ovenant University, Ota Ogun State is the only Nigerian university ranked by subject according to the 2019 Times Higher Education World Universities Ranking. Data from the 2019 ranking indicated that Covenant University was ranked in the 501-600 brackets in Engineering and Technology as well as Business and Economics. The breakdown of the ranking for Engineering and Technology showed that the University garners 56.6 points in Citations; 43.6 in Industry Income;

34.4 in International Outlook; 7.8 in Research; and 18.7 in Teaching. According to the statement obtained from the university website, Covenant in Business and Economics courses scored 22.7 in citations; 78.9 in Industry Income; 9.6 in International Outlook; 16.5 in Research; and 27.9 in Teaching. The world ranking body on its site noted that the 2019 Times Higher Education World University Rankings table for Engineering and Technology subjects uses the same rigorous and balanced range of 13 performance in-

dicators as the overall World University Rankings, but the methodology was recalibrated to suit the individual fields. For Engineering and Technology, it highlights the universities that were leading across general Engineering; Electrical and Electronic Engineering, as well as Mechanical and Aerospace Engineering subjects while in Business and Economics, it highlights the universities that were leading across Business and Management, Accounting and Finance; as well as Economics and Econometrics subjects.

He further suggested that a way out of this education predicament remains adequate funding of the education sector, proper monitoring of funds, deployment of political will by those in government, workable synergy from all stakeholders will reduce the

problems in the sector. Isaac Adebayo Adeyemi, former vice chancellor, Bells University of Technology, Ota Ogun State told BusinessDay that over the years, the hues and cries have been underfunding, non- implementation of agreements and some other logistic factors.

Adeyemi however opines that it is high time all stakeholders take a holistic approach to address the sector challenges adding that failure to do so would amount to dancing in circles. According to him, “We must put in place an independent body free of government interference and made up credible professionals. The major term of reference shall be to evaluate the proportion of the budget that goes into governance, education and research” “This naked dance in the market must stop. It does not take just one group to put an end to the ongoing industrial action by ASUU; it demands the honesty and willingness of government on one hand, and the understanding and cooperation of the operators of the system. Solving the various debilitating issues in a pivotal sector such as education must more than ever before require imputs from University administrations, teaching and non - teaching staff, parents, religious bodies and the private sector. “Education is the business of all stakeholders of the Project Nigeria. Our future and survival depends on it,” he said.

Govt insensitivity to education dims students hope says ASUU Akinremi Feyisipo, Ibadan

he Academic Staff Union of Universities (ASUU) says youth government fails to build through qualitative investment in education and nurtured with right values will sell all infrastructures being built at their expense. ASUU opines that all development plans being developed will fail unless the present and future generation of youths in the country are carried along as government across all levels make development plans. The Chairman, ASUU, UI Deji Omole says that Nigerian youths are increasingly losing hope in the country and are revolting with drugs and crime. According to him, “It

should be clear to managers of the economy that more than ever before Nigerian youths are revolting against the state with growing crimes. It will be recalled that ASUU had embarked on strike since November 5, 2018 to make government implement previous agreements with the Union but yet to have headway in the struggle. The Union then asked President Muhammadu Buhari not to destroy Nigeria’s future by failing to invest in Education. Omole said if previous leaders were wicked as the present crop of leaders, the little education which President Buhari is using to rule Nigeria would have been denied him. He said it is shameful that no public varsity in Nigeria can boast of twenty-first century laboratory.

“We are entering 2019 on a sad note that our future is neglected for pecuniary gains of vocational politician in government. They want to build infrastructure without investing in human capital that will run and use it. That is failure from the start. President Buhari should give Nigerian youths a future by showing concern for education. If only the little he learnt as student is what present Nigerian youths are exposed to, we would not be on strike. It is their generation that enjoyed the best quality of education and it is their generation that is destroying it. The youths are becoming alienated and are revolting with drugs and crime. Only a committed investment in public education will salvage the future of Nigeria,” he said.

BUSINESS DAY

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

Tuesday 08 January 2019

EDUCATION How can children find their Identity?

OYIN EGBEYEMI

any adults feel lost and wonder if there is something missing from their lives. Even when some appear to have it all together, they question whether they have truly found their identity and are fulfilling their purpose. Many go through life every day, wondering if they are doing it the right way or making enough impact. Many end up finding themselves in careers that they hate, in relationships that make them unhappy or they do not grasp any value from the people they are surrounded by. It is commonly said: “The two greatest days of your life are the day that you were born and the day you find out what your purpose is”. If this sounds straightforward to some, it is very likely that they have already found their identity and are living it. If this sounds a little more complex to some, it could be because they have not fully established their identity yet. Within this second set of people, there are two subsets. There are those who have been exposed to an enabling environment through family, school, community and religion or maybe they just have good sense of self-

awareness and maturity. They have the hope that they will, one day, discover what they were set out to do in life and fulfil the impact that they were ordained to achieve. On the other hand, there are those who struggle a little bit with their identity. It would surprise people that even those who went to the best schools, have the best jobs, are making ridiculous amounts of money and really seem to have their lives together may truly not be happy, might feel a void and do not have a genuine identity. The truth is that very few people instinctively know what they want to do or what they were created to do. It is imperative that we place no judgement against those who may not have it all figured out or might even appear to be coasting because every human being, at the back of their minds, believes that they were created to fulfil a certain purpose. Those who do not have this subconscious awareness are either in denial or might be going through extremely challenging circumstances that have kept their minds away from any glimmer of peace, which would allow them to find themselves. This is a complicated issue for adults. What about children? Innocent as they are, and young as they may seem, shouldn’t we take some responsibility as adults, knowing what we know, to help nurture a mindset of understanding who they are and what their role in life is? Sometimes, we underestimate our little ones and try to shield them from the realities of the world so much that when they grow older they begin to lose

themselves. These days, it is particularly challenging for children due to the influence of some external factors that did not exist in the recent past. These include social media and the infiltration of some aspects of western culture that do not necessarily align with our values. As a result, peer pressure has taken on a whole new dimension when it comes to the things that influence our children’s identity. It is one thing for them to discover and embrace what they are passionate about and it is another for that thing to be socially acceptable amongst their peers and in line with what is trending on various media platforms. Nevertheless, the good thing about the western influence is that our children are becoming bolder when it comes to expressing themselves. So we can still take advantage of this and adapt our approach to ensure that we guide our children along the right path towards discovering their true identity. So how do we create this enabling environment for our children, especially given these new external influences? How do we teach them to exploit their experiences to ensure that they are happy and eventually find a way forward which fulfils their identity, especially if they are not so privileged as to discover it early. We are not psychics… neither are we God, so we are in no position to tell our children who they are and why they are who they are. There is also no guidebook for doing this. However there

are a few approaches we can make to help our children out: Listen: Basically, we need to have a very keen and observing eye that pays attention to what our children say and watch what they do. Children have various amazing ways of communicating but the challenge is that we might not understand what they say or the messages their body language passes across. In order to crack these messages, we need to level with them and communicate effectively so that they understand that they have our full support in whatever they do (as long as it is not completely outrageous). This would give them that feeling of comfort such that they know that we are there to help them as their interests evolve. Accept: Back when I was in school, high academic performers were praised while poor performers were pretty much neglected. Then, I did not see enough effort made by teachers or school management to find out why some people lagged behind. Neither was there a means to help them breed other talents, areas that could have even been a part their true identity. These “poor performers” were essentially left behind. “Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will spend its whole life believing that it is stupid”. Albert Einstein This quote pretty much summarises our need to accept our children for who they are. This would help breed our children’s identity and eliminate any feeling of loss or insecurity that stems from inability to perform in areas where others might excel, whereas they are talented in

other areas. Build Passion: If we try to build on our children’s passion and interests first, discovering their identity might follow. It is up to us to show interest in the activities our children are involved in. This would encourage them to expand their horizons and remove the fear of trying out new things. If they do not have this support, they might feel discouraged from moving out of their comfort zones and would continue to feel lost. Push (but be subtle): As much as we build some of the perceived intrinsic values, sometimes we need to recognise that some children need to be pushed out of their comfort zones a little bit in order to discover their identity. This adds to their exposure to new areas and brings forward the possibility of uncovering hidden talents. We however need to be careful when doing so, such that we do not come across as overbearing because this might lead to the opposite effect of pushing them away. Monitor the Media: It would be easy to say that we should keep our children away from media influences. But for some children, the more you keep them away from a certain thing, the more desirable that very thing becomes to them, and this is when abuse might set in. Additionally, whether we agree to accept it or not, children who were born within the last 15 years are digital natives so media is part of their lifestyle and culture. We just have to recognise and accept the fact that digital and social media have a great influence on their identity. We have to be extremely careful

because social media is an area that is very difficult to regulate; anyone can put anything out there. But it is really up to us as parents, teachers and responsible adults to ensure that our children recognise both the positive and negative aspects of social media and inform them of any consequences. We could also ensure that our children are engaged in enough activities that would prevent overreliance on social media. Encourage Quiet Time: In today’s loud and fast-paced world, finding some quiet time is rather challenging. However, it is imperative that we create some time for our children to listen to their lives i.e. think about themselves, who they are, what they want and why they want what they want. We could even go ahead and ask them to reflect on times when they felt they have made a difference, made someone feel better; felt appreciated for doing something, or helped someone out. This act of reflection would help them build that sense of character and breed a stronger identity. Nobody realises his or her identity on their own. We have to ensure that we provide the support our children require whilst also ensuring the need to understand that sometimes it might be a painful experience that will lead them closer to finding their identity. Nevertheless, it is imperative that we ensure that our children feel like their lives matter or will matter eventually through the life-long journey of selfdiscovery. Oyin Egbeyemi is an executive administrator at The Foreshore School, Ikoyi, Lagos.

Bonny camp primary school, Bethesda home get EY support KELECHI EWUZIE

rnst and Young Nigeria (EY) in an effort to boost basic education and also impact positively the lives of less privilege persons within its area of operation, have unveil the renovated and equipped sick bay as well as a bore-hole water provided to Bonny Camp Primary School, Victoria Island, Lagos. The gesture was part of the annual EY Charity Day with the theme ‘Building a Better Working World’. The EY team also visited the Bethesda Home for the Blind, Surulere, where it donated various food items, sanitary items, as well as guiding canes. Bernard Carrena, chairman in charge of the Charity Day, while speaking at the event said the gesture is the corporate social responsibility

initiative of staff of the organisation aimed at putting smiles on people’s faces. Carrena said the projects executed on a yearly basis always make the desired impact, because the beneficiaries al-

ways send letters of appreciation and ask for more. According to him, “The EY team decided to equip the sick bay and construct a bore-hole for the school because these were the most pressing needs

of the school when some representatives of the firm visited for needs assessment, adding that before any intervention is done, the needs of the beneficiaries are always considered”. He stated that after install-

Members of the EY team and pupils at the unveiling of the renovated and equipped sick bay as well as a bore-hole water provided to Bonny Camp Primary School, Victoria Island, Lagos.

ing a project it remain the responsibility of the volunteers from the company to always follows up to ensure that the project is being put to good use and it having the desired effect. Responding, a representative of the school management thanked the organisation for the gesture, saying that staff, students and the parent forum are excited about the projects. The school said the provision of the bore hole which will ensure steady supply of water, especially to the toilets, will prevent the spread of diseases and help keep the environment clean. It promised to maintain the facilities, saying that the health officer will ensure that the sick bay is always neat and ensure that the supplies are in good hand and properly used. At Bethesda Home, the EY team was warmly received by

the inmates with a musical rendition to show that though they are visually impaired, they have other talents that need to be developed. Chioma Ohakwe, director of the home, said the home, which has been in existence since 13 years, is a residence, as well as a secondary school for the visually impaired after which they would attend any federal university of their choice and return to the home during holidays. Ohakwe says the home which currently houses 126 students, relies on donations from individuals and corporate organisations to cater for the students, adding that the home has all the facilities that the students need for their secondary education, but those who will proceed to the university require laptop computers, digital recorders and guiding canes to succeed.

Tuesday 08 January 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

BUSINESS DAY

Expert describes media monitoring service as backbone of media buying agencies Stories by Daniel Obi Media Business Editor

he relative success of the annual multi-billion Naira advertising spend on brands has been linked to the establishment of media monitoring service in Nigeria. Media monitoring is simply the capture of media compliance on the exposure of clients’ materials. It also involves the provision of vital media, marketing and research information to stakeholders to enhance project and campaign planning and execution. In the past, clients were shooting in the dark but with media monitoring, they can plan accurately, know whether their adverts ran in the media and how the campaigns were running. Speaking to BusinessDay recently in Lagos, the CEO of Media Monitoring Services Nigeria Limited, Uche Aligbe said media monitoring agencies provide media planning and

buying firms the pre- and post-information they require to do their job. Media planning firms give expert advice to advertisers, informed by data from media monitoring agencies. “For example, you can’t plan for a station you really don’t know whether it exists, you don’t know how much it is airing; you don’t know the volume of advertising that is passing through it. Not

even those people who are watching or not. In the course of our business, we found out that there were electronic media outfits in this country that would come on when there is public electricity, if there is no electricity, they shut down. Sitting down here you won’t know that, you would think that they are running your campaign. “There are times station breaks

down for months and they keep quiet and the planner keeps buying into what is not in existence. That is our job to identify this and save clients’ money, ensure compliance so that messages will reach the target audience”, Aligbe said. He said advertisers can take proactive steps based on the available data media monitoring agencies provide to them not just what is happening around them but around their competitors. “There is what we call competitive advertising service, we tell you how well you are doing and how well your competition is doing, not just in terms of numbers but in terms of all the parameters you required to be effective in reaching your audience. Apart from telling you who you are, we also provide the industry the growth, the trend, and area you are growing and in what direction you are growing”, Aligbe said. He said his company has invested about N800 million on technologies to serve their clients effectively.

PR practitioners tasked to be innovative, professional

ublic Relations professionals in the country have been urged to be awake to innovative ideas that could resolve issues relating to the profession and their clients in order to attain the needed growth required as well as respectable position among their counterparts. This was the submission of the

Chief Consultant of TPT International, Adetokunbo Modupe, who was guest speaker at the December 2018 edition of the Lagos PR Clinic of the state chapter of the Nigerian Institute of Public Relations (NIPR) under the theme: Ideapreneurship: The Nature of Our Trade. He postulated that PR practitioners are ideapreneurs who should be driven by intellectual ideas that are well tailored towards clients’ needs and their target publics for desired results, and not be inundated with business gains in the manner of entrepreneurs. Modupe, a Harvard-trained ideapreneur with over two decades experience in PR, affirmed that since the profession is dynamic, practitioners should re-examine their business

modules as ideapreneurs, think and develop ideas that would invariably translate to income generation. “Don’t let the world drive you, drive the world with your ideas. This keeps us in a more respectable position before our clients who should not think that we are in the business just to make money. We should not see ourselves as entrepreneurs but there is nothing wrong in thinking about wealth” he explained. Modupe described ideapreneurs as deep thinkers who create jobs, have a mind of their own; explore alternatives to the norms by fostering ideas and are not motivated by pedestrian or temporary success but enduring legacies. He further stated that PR is about thinking and managing thought

processes for the benefit of other people’s reputation, and likened it to innovation pentathlon, a structured process that removes the risk of failure as ideas progress. According to him, great men like Steve Jobs, co-founder of Apple; Elon Musk, Chief Executive Officer of Tesla Motors; and Jeff Bezos, founder of Amazon who have all made global impact in their various endeavours were driven by creative ideas. “It is time we sat down and say to ourselves, what do we really do? If you do not know you are an ideapreneur, you will let yourself down. So let’s change the way we do our business, as we need to conquer our fears,” Modupe challenges his fellow practitioners.

Indomie rewards four promo winners with all-expense paid travel

our winners have emerged from the just concluded Indomie ‘Draw Your Dream Holiday’ promo. The winners went away with various prizes, including a mega prize of all-expense paid travel experience to any country in the world. The ‘Draw Your Dream Holiday’ promo is a consumer engagement promo organised by Dufil Prima Foods PLC, maker of Indomie Instant Noodles, for children to relate their travel experiences during school holidays using illustrations. The campaign was communicated through television, radio and even through wrappers of Indomitables pack. The promo, which ran for three months starting in September, had several interesting entries from children nationwide. At the end of the promo, Aliyat Disu, 10; Chinemeren Eze, 12; Michael Prosper Oluwaseun, 12 and Jimba Solomon Chisom, 13 emerged winners.

TVC News flies high at the NMMA, wins Best TV Station of the Year

or its invaluable contribution towards the deepening of Nigeria’s broadcasting industry, TVC News, a member of TVC Communications, has bagged the NBC Prize for the “Best Television Station of the Year” at the 26th Nigerian Media Merit Awards (NMMA).

SO&U Group’s community initiative puts smiles on Nigerians

he SO&U Group recently celebrated the 2nd edition of its Give Love Initiative. The edition, dubbed “Feed Lagos” was designed to support about 1,000 residents within the Ikeja community and Lagosians at large, with household and food items to enable them have a festive season to remember with their loved ones and families. The event which took place at the SO&U group complex in Opebi, Ikeja, according to a statement, had over 900 Lagosians receive food items ranging from rice, tomato paste, Spaghetti, noodles, potatoes, yam, vegetable oil amongst others

courtesy of the group and its supportive clients in ensuring that it puts a smile on the faces of less privileged during the festive season. Speaking about the initiative, Chairman of the GiveLove planning Committee and Group Art Director, SO&U, Uche Osoka, stated that, “the initiative was born out of the organization’s drive to lend a helping hand and show in the season of giving. He expressed delight at the large turnout of recipients of the outreach program as experienced during the launch of the initiative earlier in the year and also thanked his colleagues for the support in ensuring a suc-

cessful outreach. Also speaking on the initiative, a member of the committee and Chief Operating Officer, Soulcomms Ltd, Mojisola Saka added, “By onboarding friends and partners of our business on this call, the core of our initiative is to implement an effective effort at creating sustainable opportunities of support to those in need especially during the festive season”. “We are particularly humbled by the outcome of this exercise, most especially the contributions and support from our friends, colleagues and clients such as Chi Limited, Guinness Nigeria, Dufil Prima Foods Plc amongst others

in ensuring that the initiative was a success as the group would also explore other opportunities in adding values to the lives of residents within Lagos state. A beneficiary of the initiative, Aderonke Akanni, thanked the organization for engaging in such worthy cause of giving to those in need. She stated that the items received has gone a long way to put smiles on her face and that of her family in celebrating the season. The GiveLove initiative was set up by the SO&U Group to positively impact society through outreaches to less privileged members of its host community.

At the awards ceremony, which held at the Federal Palace Hotel in Lagos recently, Ralph Akinfeleye, Chairman, Panel of Assessors, Nigeria Media Merit Awards, noted that competition in the category was tough. His words: “This year, we had difficulty in picking winners in the Newspaper of the Year, Editor of the Year, Radio of the Year and Television of the Year categories. The scores were too close for comfort. The differences between the winners in the categories were marginal.”

BUSINESS DAY

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

Tuesday 08 January 2019

@Businessdayng

Marketing&Pr

‘We need to live up to our values not some of the time but all of the time’ People will often say that they have the right values but when the going gets tough or when the temptation is considered high, those values often go out the window. In this chat with Olayinka Edmond of the Values Amplified Schools Outreach Programme, she talks about the importance of values for individuals and how teaching values to kids at a young age can make a difference in later life helping them to stick to those values especially when tested. We all know about values but why do you think they make the difference? alues are the core principles and beliefs or accepted standards of a person or social group. A person’s values are what define that individual. It determines the course of that individual’s life. Our values are what determine what choices we make in life and ultimately how our life is shaped. The same thing applies to a community or society – whatever values we all subscribe or commit to as a community determines the state of that community. It determines how we live and relate with one another, for example, it determines how we select our leaders and how we hold them accountable to these values. It is just an incredibly important aspect of our lives as individuals and societies and we need to get it right. It is because of values like freedom, equality, respect for hard work and reward that countries like America are held in such high esteem. They have done a good job of branding it and labelling it the “American Dream” but it is essentially a set of values that they, as a society, have all subscribed to and that is why their nation is perceived in the way that it is. May you tell us then,what Values Amplified is all about? Values Amplified is an initiative aimed at getting values back into our children. I am sure that sounds simple but it is more daunting a task than it appears. Most people claim to understand the importance of values and often espouse to be led by their values but still we find ourselves in a society that isn’t working for most of its people. So as Nigerians, you find that when we speak we say one thing but our actions are exactly opposite and this is very clear with the state of our nation. We need to get back to our foundations, we need to get back to the heart of the matter – getting values back into our children so we can build a better society for future generations. That is what the project is trying to do. So why do you think people often don’t stick to their values when tempted?

Olayinka Edmond

I am not a psychologist by any stretch of the imagination, but I believe the answer to that is simply that most people do not prepare their hearts about their values before those values are tested in their lives. They have not allowed their convictions to underpin the very core of all they do. There is a saying that the time to prepare for war is not at the battlefield - I don’t believe that you decide at the point when you are faced with a tempta-

tion, the decision should already have been made before you face the situation and that way it makes it very clear. Roy Disney once said that when your values are clear to you, making decisions becomes easier, and that is very true. You said we need to get back to our foundations, how is the Values Amplified programme going to help in this direction? When I say back to our foundations, I mean our children. When

We use formats like drama, poetry, ‘ spoken word etc to engage the kids depending on the age group they fall into. I think this is really what makes this programme special because when it comes to learning, the things we experience are far more memorable than those we are told

building a house, one of the most important parts is the foundation, it is what determines whether the house will stand or fall, whether it will be a sky scrapper or a bungalow. So, foundations are very important and the foundation of a community or society is its children – they are the ones that determine how our society will change in the next twenty to fifty years. I think one of the biggest challenges we have in Nigeria is that we do not hold ourselves accountable. These values are those that we hear people say that they are committed to all the time but the state of our society tells us that there is obviously something wrong. If we say that we (as a society), are going to be honest and hold ourselves accountable, then why do we celebrate everything that is opposite to that value? Why do we not call out those who go against that value? For years we have accepted and dare I say, adopted for ourselves, a whole new set of values that are ungodly and we need to retrace our steps and there is no better place to start but at the foundation – with our children. When it comes to teaching values, I guess the saying ‘catch them young’ is applicable. What age range will you be speaking to with this programme? Through the Schools Outreach programme, the Values Amplified project will be visiting schools and sharing, engaging valuesbased content to kids in two age groups; the 6-10-year olds, which are in Primary school and the 11-16-years old which are in secondary school. The aspect of teachers and parents is important in this kind of programme. How will you engage them? It is absolutely critical, and we recognise the importance of not just teaching the kids but also of building capacity for teachers, parents and guardians as well to ensure that the message is really being buttressed by most of those people that are involved in raising and educating these children. So, we use forums like the PTA meetings, specially organised Values Luncheons to reach and build this

very key audience. So what types of platforms will you be using to engage the kids? We use formats like drama, poetry, spoken word etc to engage the kids depending on the age group they fall into. I think this is really what makes this programme special because when it comes to learning, the things we experience are far more memorable than those we are told. Experiencing drama can give learning experiences in a powerful and concentrated making the teaching on values can come alive to the kids in a way that can be difficult to match, even in real life. This concept has already been put in place and thriving as part of what is called Values-based Education (VbE) in parts of Europe and Asia, where values are incorporated into the core curriculum of school rather than something that is an add-on. Some research has proven that VbE teaching has a significant positive impact on academic achievement, improved behavioural changes, student engagement amongst other factors. For example, in one secondary school in South West England, there was an average of 60% increase in the number of students achieving A-C in Maths and English when compared to the year prior to the introduction of VbE. In another example also in the UK, there was a 44% decrease in students facing disciplinary actions in the year following the introduction of VbE principles within the school when compared to prior years. So, what can we expect from the Values Amplified Schools Outreach Programme in 2019? 2019 is going to be very exciting for us as we will run our programme in Secondary schools right across Lagos. We estimate that we will be able to reach upwards of 22,000 Secondary school students through the year as we also run the parents and teachers’ programs in select schools.We are also still looking for support and partners from private and public organisations for the programme and you can find out more information on www.thenedolainitiative.com/valuesamplified.

‘

Tuesday 08 January 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

BUSINESS DAY

Energy Report Oil & Gas

Power

Renewables

Environment

Stakeholders worried over uncertainty around PIB OLUSOLA BELLO

takeholders in the oil and gas industr y are worried that the uncertainties surrounding the Petroleum Industry Bill (PIB) would persist and nobody knows long it would take. This has sent wrong signals to investors in the industry. Any action taken on the bill would be an indicator which provides an important signal to investors, they said. The PIB which would ensure the government can move forward with new fiscal regimes that will make oil and gas attractive for companies to invest, was stalled in November 2018 when President Muhammadu Buhari withheld his assent to it. To worsen the Nigerian situation this year is the production cap placed by OPEC on it members which may have some negative implications in terms of investments in new frontiers, according to industry operators. In the case of Nigeria, for instance, production has been cut to 1.6 million barrels per day from this January.

This situation, the operators say, could make oil companies to limit their investments on production alone and not extend to exploration, Nigeria needs to improve on her reserves. According to Bank- Anthony Okorafor, President of Petroleum Technology Association of Nigeria, stresses that it is imperative for the government to pass the bill for the good of the industry. “My thinking is that it will be signed after the elections,” he said. The nation and oil and gas industry in particu-

lar were shocked when the president refused to sign the bill into law. There has been a general feeling among investors that if the bill is signed into law the oil and gas industry would have access to a new lifeline which would increase the tempo of activities in the upstream of the industry and boost crude oil exploration and production. This explains now the thinking among operators that the action of the president was a big setback to the industry, the nation and the economy gener-

ally, especially for a country which operates a monolithic economy . In the past 11 years there have not been any major exploratory and seismic activities in the sector. All the investments into the sector so far have been for production, and not exploration. The government has been claiming that Nigeria has 37 billion oil reserves for several years. But it has not been able to make new discoveries thereby depleting even the so-called 37 billion barrels on a daily basis. This is because of the uncertainty

Power industry records first system collapse for the year Olusola Bello

he country recorded the first system collapse on January 3, 2019 because of sharp frequency drop from 50.16Hz to 45.16Hz. This happened when Osogbo/ Ihovbor 330Kv line tripped off at Osogbo Transmission Station and a few others at Jebba, Ajaokuta, Shiroro and Ugwuaji transmission stations followed. This situation as usual resulted in blackout in most parts of the country before normalcy was restored. This implies that the transmission infrastructure is still very weak and are not as reliable as the public is made to believe. Babatunde Raji Fashola, minister of Power, Works and Housing, has consistently said that the transmission infrastructure can now wheel 7000 MW of electric-

ity. This is yet to be tested as the last time the country was about to hit the 5,222MW mark was in 18 December 2017. The country is still grappling with lack of steady power supply which the government has blamed on insufficient gas supply. Some oil and gas operators have countered this claim, stating rather that there is enough gas but that it is not being picked by generation stations who in turn are blaming the distribution companies who reject power supply to them to avoid incurring more debts from the generation companies. According to a report from the presidency on January 4, 2019, about 1,814.83 MW was not generated due to unavailability of gas. This is against 1,728 MW not generated on the January 3, 2019 for the same reason. On January 2, the power plants were not able to generate 1,908MW even though

the amount of power sent out was 4,034 MWH/Hour which was higher than the previous days. Except for January 4, when 1,123 MW was not generated due to high frequency resulting from unavailability of distribution infrastructure, the figures for the previous days for the same reason were 1,476 MW for January 3 and 1,449 MW could not be generated. The minister recently said that the private sector should be blamed for the poor performance of the power generation and distribution companies. Reacting to the minister’s position, generation companies refuted the claims, saying they have exceeded contractual obligations set by the Bureau of Public Enterprises, (BPE). Joy Ogaji, executive secretary, Association of Power Generation Companies, argued that it had scaled through despite challenges

Olusola Bello, Team lead, Analysts: Isaac Anyaogu, Stephen Onyekwelu, Graphics: Joel Samson.

in the power sector. “GENCOs despite the stern challenges they are faced with from inception till date, have in association with the above FGN objective, kept to the terms of the industry agreements they entered into with the BPE, which defines the relationship between the privatised companies and the government (Represented by BPE and Ministry of Finance incorporated, MOFI), with a five year period to recover lost capacities. “Records from BPE show that as at the takeover date, in November 2013, available generation capacity was 4,500MW. Also, installed generation capacity currently stands at 13, 496MW as against 12, 500MW at takeover. GENCOs engaged on a massive capacity recovery plan with their acquired assets and achieved in no time lost capacities, increasing available capacity to 7, 913MW.

that has surrounded the passage of the PIB With all the efforts put into making the document by the National Assembly members and the general public, this coupled with the interest it has generated both locally and internationally, fuelled the optimism in the operators that president Buhari would this time around assent to the bill, no matter the anomalies associated with it, while the shortcoming in it would be fine-tuned later as it becomes operational. The Global extractive industry watchdog, Publish What You Pay, PWYP, has stated that Nigeria is losing N3 trillion annually for failing to put in place a proper legislation for the oil and gas industry. The concerns of Nigerians and stakeholders alike stem from the fact that past legislatures promised to pass the PIB, only to renege at the end of their tenures The prospect that the other segments of the bill, which are fiscal, host community would be signed into law when work on them are completed is now very slim, given what has happened to the PIGB . Obviousl, the much expected investment inflow into the oil and gas industry

may be far from coming this year because of this. President Muhammadu Buhari refused to sign into law the PIGB on account that the bill permits the Petroleum Regulatory Commission to retain as much as 10% of the revenue generated in oil and gas industry. Ita Enang, Senior Special Assistant to the president on National Assembly Matters, stated that the bill unduly increased the funds accruing to the commission to the detriment of the revenue available to the Federal, State, Federal capital Territory and Local Governments in the country. Other reasons include expanding the scope of Petroleum Equalisation Fund and some provisions in divergence from this administration’s policy and indeed conflicting provisions on independent petroleum equalisation fund.He also stated that some legislative drafting concerns which, if assented to in the form presented will create ambiguity and conflict in interpretation. “By convention, it is inappropriate to speak on the content of executive communication addressed to the Legislature until same has been read on the floor in plenary,” he said.

BEDC reconnects 42 communities across coverage states

he management of BED C Electricity PLC (BEDC) says it has successfully reconnected to the national grid 42 communities within its franchise states of Delta, Edo, Ondo and Ekiti States, which were hitherto without power supply, as at end of November 2018. The distribution company (Disco) which made this known via a statement declared that the notion that BEDC has not been responsive to community- related issues was incorrect, stressing that it would continue to partner with communities without electricity supply in addressing their challenges, provided they follow the necessary steps for engagement. All the reconnected communities had a customer population of about 20,000 with the highest coming from Ubulu-Uku in Asaba, Delta state which had a customer population of 4,907, followed by Ibusa 2 phase in Koka business unit, with a population

of 4,704, while Issele-Uku also in Delta, came third with a customer figure of 3,248. Famoyegun community in Owo, Ondo state, had the least customer population of 9 customers hooked to a transformer. The company disclosed that contrary to the insinuations in some quarters that it has not given out a single transformer to communities but collect money or leave customers to provide transformers on their own, BEDC has installed transformers in communities ranging from 50KVA to 2.5MVA since inception across the franchise states. Out of the figure, Delta state has 25 communities reconnected which included: Onicha Uku under Asaba business unit; Ovwodokpoko in Isoko, Ephiephphor in Otor Udu, Idama estate, Phase11 in Asaba and Ogbe-Ohu in Agbor. Others are Ukpiovmu, Ughevnughe Oghior, Okirika and Otujeremi, also under Otor Udu business unit.

Email: energyreport@businessdayonline.com, Tel: +234-8023020011; +234-7037817378

BUSINESS DAY

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

Tuesday 08 January 2019

Energy Report

Nigeria’s hunt for gas buyers Gas supply to the domestic market is a hot topic in Nigeria. Producers want to monetise their gas and need to find credible buyers

ressure from government to meet domestic supply obligations (DSOs) remains intense in Nigeria. The current administration’s policy is to not award or renew licences for companies that are failing to meet their DSO. Project approvals won’t be granted unless operators have a gas monetisation plan, while even producers who re-inject gas to enhance oil production will face restrictions. Nigeria’s gas policy states that the government expects that producers will see the obligations as part of their contributions to national development and doing business in Nigeria. The government knows that the domestic market is unappealing, however it expects producers to do their bit regardless. A possible change of government in 2019 won’t ease the pressure either. Although Nigeria’s DSO has been cut significantly in the last two years, the target has still not been met. In 2017 the DSO was double the volume actually delivered. However, the potential costs of DSO non-compliance has focused minds, particularly among the IOCs. All of them are prioritising supply to a market that is constrained in terms of infrastructure and credible buyers. Producers are desperately seeking customers, but are finding that their competitors are on exactly the same mission. A low income is better than no income But suppliers don’t just want to find any offtakers, they want to find reliable offtakers who demand a steady supply of gas and will pay the regulated price of US$2.50/mn Btu. Non-payment for gas remains a chronic problem and the power sector is the major culprit. The sector deficit from 2015 to 2016 was nearly US$2bn. In 2017, the government established a central bank facility of US$2bn over two years to ensure that generators are paid. This in turn should help them pay their gas bills. But the facility will need continual replenishment as long as the industry lacks electricity meters and below-cost tariffs are maintained. To mitigate risk, some producers have experimented with pre-payment arrangements, but the on/off switching of supply is counter-productive for reservoirs and turbines alike. So before producers can dream of accessing deregulated pricing, they would simply settle for getting paid by a reliable customer. Regardless of price, receiving income no matter how low, is preferable to receiving none at all. Can you avoid the power sector? The quick answer is not easily. Large resource holders

will struggle to avoid the power sector if they want to market their gas. Not only because the power sector absorbs nearly two-thirds of domestic gas demand in Nigeria (around 650mn cf/d, but because the government largely controls who you sell your gas to, and the power sector is its priority. Gas supply agreements under the DSO are brokered by the Gas Aggregator Company of Nigeria (GACN), a government middle-man which aggregates gas supply and provides a weighted average price to producers. It is a transitional body that is supposed to make way for direct contracting between buyers and sellers. But after 10 years, it’s still going, even though the current administration views it as “largely unsuccessful”. The trouble is, there is just not enough transmission capacity to carry the available power in Nigeria. Although capacity is officially 7 GW, the grid still struggles with loads much over 4 GW. So power stations (of which 8 GW is available) cannot reach their full capacity. This has knock-on implications for gas suppliers even if they have a supply agreement with GACN. Azura-Edo: extra capacity does not equal extra commodity Azura-Edo near Benin City is Nigeria’s first true permanent independent power project (IPP) that did not involve the IOCs. It started fully generating in May 2018 and is now operating all three turbines with a total capacity of 459 MW. But Azura-Edo would not

have happened without multiple guarantees. It is essentially backed by the government with multi-lateral donor support too, so that its private investors are protected from risks which would typically prevent a project like this in Nigeria. Seplat supplies the gas, receiving an index-linked price of US$3/mn Btu, compared to the regulated US$2.50/mn Btu. Azura-Edo’s output has recently averaged 300 MW or 8pc of Nigeria’s power, so it is already making a major contribution. But its output is not additive; there’s yet to be any increase in total power on the grid. Azura-Edo has displaced power elsewhere because of the grid’s limitations. Power stations without Power Purchase Agreements (PPAs)— namely federal governmentowned National Integrated Power Projects (NIPPs)—are the first in line to be stood down, which spells bad news for their suppliers. But this does suggest that future projects which we expect to be fully contracted and supported like AzuraEdo (e.g. Qua Iboe IPP in the eastern delta) will be favoured over those that are not. Without dramatic improvement in transmission capacity (or rapid decline in Nigeria’s ageing hydro-power generation), supply to risk-laden NIPPs will be squeezed-out in favour of privately-funded generation with binding PPAs. So better quality opportunities for some producers could arise at the expense of others who are locked into un-

contracted power plants with dwindling offtake. But access to such opportunities is not guaranteed unless of course producers are willing to build their own power plants. Despite the welcome success of Azura-Edo and other IPPs that follow it, extra power capacity will not necessarily equate to more power delivery overall. So what are the alternatives? Can suppliers find succour by targeting large industrial offtakers beyond the confines of the gas and power grids? Here, there are some signs of progress. In 2017, Total signed a 74mn cf/d offtake agreement with Greenville LNG. Greenville will take gas straight from the Rumuji manifold near Port Harcourt where the highpressure gas transmission system 1, 2 and 4 gas pipelines converge, so the volume risks are reduced. This is a landmark deal because mini-LNG is a nascent industry involving LNG transport by road. Because liquefaction reduces the gas volume 600 times, mini-LNG offers decent scale for suppliers unlike compressed natural gas. But given the high costs of liquefaction and re-gasification, not to mention the state of the roads, it will be interesting to see whether Greenville proves to be a reliable offtaker for Total’s gas. Total also signed a supply agreement with Indorama of Indonesia. It will use its Northern Option pipeline-built at huge cost due to community issues-to supply over 100 mmcfd for its petrochemical plant expansion at Port Harcourt from 2021. Outside the oil compa-nies, Indorama is one of the biggest and most successful foreign investors in the Niger Delta, and should provide steady offtake for Total in contrast with its short-lived reliance on Alaoji NIPP. Both of these deals were brokered by GACN under Total’s DSO. Hence the aggregator has a major say on how and who gas is marketed to, even beyond the confines of the state-owned gas grid. But attracting foreign investment into a country with major security concerns when there is competition from less risky locations in Sub-Saharan Africa will be tough. It may be

local investment that drives industrial growth in Nigeria. Free trade zones The Lekki Free Trade Zone (LFTZ) is located on the Lekki peninsula to the east of Lagos. It is home to the largest industrial complex under construction in Nigeria including the Dangote refinery, petrochemical plant, a 570MW power station and a deep sea port. Constructed with private money, LFTZ should provide a much-needed new gateway for goods into Nigeria thus bypassing Lagos’s clogged arteries. The refinery is the lynchpin of the LFTZ, and Dangote Group will construct a short 20 kilometre gas pipeline from Lekki to tie-in with the EscravosLagos transmission pipeline, so there are opportunities for gas supply using existing infrastructure, although the possibility of secure supply by extending Shell’s offshore gas gathering system (which has plenty of spare capacity) could be even more attractive. Develop gas distribution In 2017 Shell signed a US$300mn deal with Shoreline Power. It will finance and develop a pipeline network in the Lekki franchise area which Shoreline has owned since 2015. The 20 year franchise provides exclusive rights to distribute and sell gas in Lagos’s commercial centres of Victoria Island, Ikoyi, Lekki and Epe. This includes LFTZ, which Shell is targeting. But as Lagos continues to expand along this eastern axis, Shell foresees opportunities to supply more commercial and industrial consumers on the peninsula, which has developed rapidly

this would be a material share. Gas distribution is not currently regulated in Nigeria, and distributors in Lagos make a healthy margin in this sector with some end-users paying around US$8/mn Btu (which is still far below the equivalent cost of running a diesel generator). There is significant upside here for early movers, provided the government resists its regulatory tendencies. Off-grid generation Because of the physical transmission constraints, there are opportunities to embed small gas-fired power plants into lower voltage distribution grids. Lagos has a few of these including Mainland Power (5.8MW), while others like Island Power (11.5MW) and Akute Power (12MW) have their own distribution grids or supply direct to local utilities. But in 2017, the Lagos State government initiated the far more ambitious “Light-up Lagos” project to generate and distribute up to 3GW of off-grid power and design tariffs to support embedded generators (to put in context, this would be a 75pc increase in national power generation). It also passed its own power sector reform law in February 2018, and established a Lagos State Electricity Board, to develop new generation, transmission and distribution infrastructure beyond the national grid and distribution franchises. How will the market evolve? If Nigeria stays on its current path, then domestic market growth will remain constrained well below its potential. The gas and power sector

over the past 15 years. Shell has been distributing gas on small networks in Nigeria since 1998, but the Lekki franchise is a significant stepup in scale and ambition. In 2017 Shell also signed an MoU with the Rivers State government which could see them develop a distribution grid in the greater Port Harcourt area. Shell aims to displace some of the 18GW of expensive on-site diesel generation which it estimates is being used in Nigeria. This alone would absorb over 4,000mn cf/d of gas, so even 10pc of

will continue to fragment away from the limitations and risks of the state-owned grids, and so diverging tiers of service quality will emerge. Where state-control is dominant, the value chain will continue to suffer chronic illiquidity, non-payment, under-investment and intermittent supply. Long-suffering consumers are unlikely to see much improvement in power supply because the transmission grid will remain constrained. Culled from Petroleum Economist

Tuesday 08 January 2019

Harvard Business Review

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

Tips & Talking Points Getting better at something requires commitment

TALKING POINTS A Slice of the Pie 30%: Apple retains 30% of iTunes and App Store sales of apps made by outside developers. + Calling All Data Analysts

+ Class Matters 61%: According to research from the U.S. Department of Education, 61% of college students enrolled in 2011-2012 came from households that did not have a parent with a bachelor’s degree.

Don’t leave a job you love without saying goodbye

2.7 million: IBM expects U.S. demand for data science workers to reach 2.7 million open positions by 2020. + King E-Commerce 45%: Amazon.com garnered nearly 45% of U.S. retail e-commerce in 2017. + The Onboarding Equation 50%: Companies with standardized onboarding for new employees see 50% greater retention rates.

e all want to get better at something. Maybe you’d like to be a more inspiring leader, be more productive or take more risks. But ask yourself two questions. First, do you really want to do better? Presumably the answer is “yes,” but if you’re looking to improve because, say, your boss wants you to, be honest about that. Change will happen only if you’re committed to it. Second, are you willing to feel the discomfort of trying things

that don’t work right away? Learning anything new is inherently uncomfortable, so be prepared to feel a little awkward. You will make mistakes. You may feel embarrassed or ashamed, especially if you are used to succeeding. But if you remain committed through all of that, you will get better.

(Adapted from “If You Want to Get Better at Something, Ask Yourself These Two Questions,” by Peter Bregman.)

ven when you love a job, sometimes you recognize that it’s time to move on. Whatever your reason for leaving, don’t give your two weeks’ notice and rush out the door. Take the time to say goodbye to the people and spaces that have been important to you. When you do a certain task, attend the all-hands meeting, or even look out your favorite window for the last time, stop for a moment and acknowledge it. And be sure to have a proper farewell with the co-workers you value most. Remember that you aren’t saying goodbye forever; those connections will continue, and can even develop in new ways. Of course, it’s OK to be sad about what you’re losing, even as you celebrate what’s coming next. Feeling sad might make you wonder if you are making a mistake. But maybe it just means that, for a period of time, you were lucky enough to have a job you really enjoyed.

(Adapted from “How to Leave a Job You Love,” by Gianpiero Petriglieri.)

How to maintain a strong data-science team

Ways to deal with your own weak management

The solution to a tough problem isn’t to overthink it

ost great employees won’t abide bad managers for very long. This also applies to data scientists: If you want to retain them, you’d better commit to being a great manager. Here are four crucial goals for those who lead data-science teams: 1. BUILD TRUST AND BE CANDID: Ensure that your employees have interesting projects to work on and aren’t overburdened with vague projects or unrealistic timelines. Be transparent: The moment you start “being nice” to avoid a tough conversation, you and your team begin to lose. 2. CONNECT THE WORK TO THE BUSINESS: Anchor your team’s work in the context of the broader organizational strategy. Don’t let questions from stakeholders become projects for your team until you know exactly what the stakeholder wants to understand. And make sure team

i c ro ma na g e ment gets most of the attention, but undermanagement — weak performance management, a tendency to avoid conflicts with employees, lackluster accountability — may be just as big a problem. The bottom line often suffers as a result. But undermanagement can often fly under the radar because the managers who have these tendencies aren’t necessarily incompetent; they often know their business well, are good collaborators and are well-liked. If you think you might be undermanaging, there are three steps to take. First, don’t be a conflictavoider: To succeed in management, you need to be effective at handling conflict. If you aren’t, you’ll have to work on it. Second, view goal setting

members are regularly invited to strategy meetings. 3. DESIGN GREAT TEAMS: Scrutinize your interview and onboarding processes. Social skills like empathy and communication are critical for a team. Instead of focusing on whether you can get along with a candidate, ask yourself if there is a lens though which this person sees the world that expands the boundaries of the team’s knowledge. This is why diversity is important. 4. KNOW WHEN TO SPECIALIZE: As your team matures and proves its value, recognize that roles will become more defined and some activity will move to other teams. Still, specialization works only when clear requirements are available to offset the coordination delays and costs associated with multiple teams working together.

(Adapted from “Managing a Data Science Team,” by Angela Bassa.)

as critical. If you’re not delivering the results you need to, first make sure your employees’ goals are well-conceived and clear. Lastly, ask workers: Is this work the absolute best you can do? Asking this simple but powerful question when someone hands in an assignment will make him aware he is being held accountable. It’s also a good question to ask yourself if you suspect you are undermanaging: Are you doing all you can to set appropriate goals, hold people accountable to them and deliver the results you need to?

(Adapted from “Undermanagement Is the Flip Side of Micromanagement — and It’s a Problem Too,” by Victor Lipman.)

e all like to consider ourselves smart, but raw intelligence isn’t everything. When we get stuck on a problem, sometimes it’s because we’re overthinking it. Pay attention to when focused thinking isn’t getting you anywhere; perhaps it has turned into obsessing over the same answers or approaches. Consider whether experimenting with a new strategy or talking ideas through with others might be more likely to result in success. Take breaks to let your brain relax and get unstuck. Expand your

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

range of skills for reaching insights and coming up with new ideas; don’t be someone who sees every problem as a nail because your only tool is a hammer. And when you do find yourself ruminating, disrupt it by doing a few minutes of an absorbing activity, such as a puzzle. This can be a surprisingly effective way to break your brain out of a rut.

(Adapted from “5 Ways Smart People Sabotage Their Success,” by Alice Boyes.)

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

Landlords to struggle as market expects 40,000sqm office space in 2019 …analysts bet on co-working spaces for millennials and start-up community Stories By CHUKA UROKO

he year 2018 was not particularly a good one for Grade A office space landlords who, in spite of all the concessions and incentives they had to give to tenants coupled with creative and innovative ideas they brought into the delivery their products, still had an estimated 300,000 square metres empty space to contend with. But that is not even the story at the moment. The story rather is that these landlords are likely to struggle more in the new year as the property market will be receiving, in addition to the existing oversupply, about 400,000 square metres space coming from pipeline projects due for delivery by Q4 2019. What this means is that investment considerations in this space have to be given thorough scrutiny. But patient investors with long term view of the Nigerian market can still take a short, considering that Nigeria has a resilient economy which will begin to boom again when a good leadership with good policy direction is in place. The country is a trading economy. This, coupled with the fact that the fundamentals that drive demand for office space and, indeed, other segments of the real estate market remain unchanged, are enough impetus for fresh investment. But at the moment, this market is struggling and owners of existing facilities are under pressure. Besides the economic slowdown, leading to contraction in business and economic activities, prime office market landlords are also grappling with the growing demand for co-working space as a result of growth in start-up industry. “The supply of co-working spaces is rising to meet up with demand, which continues to increase with the emergence of tech-startups”, Ayo Ibaru confirmed in a recent report by Northcourt Real Estate on real estate outlook

for 2019. Ibaru, who is the company’s chief operating officer, pointed out however that, though vacancy rates for Grade A offices remain high, buildings designed with user-experience as the primary consideration will have lower vacancies, adding that the results of the February and March 2019 elections will determine how much space will be absorbed by the market, especially by the international community. It was not all tales of woe for this market in 2018. Indeed, there was a gradual improvement in the performance of the office market as a few internationals chose to brave the political uncertainties and open up shop. Ibaru recalls that Tek Experts and Axxela Group took up 2,000 square metres and 1,000 square metres respectively at The Wings Towers in Victoria Island just as the International Finance Corporation (IFC) moved into Alliance Place in Ikoyi, Lagos. Contractors were commissioned to redevelop the Number One building (formerly known as the IMB Office) in Victoria Island Lagos being redeveloped for leading South Africa-based cable provider – DSTV. Ibaru mooted that the cost of the redevelopment was over N5 billion, adding that Dangote Industries and Famfa towers in Ikoyi continued to make progress on their respective developments. Grade A office vacancy rates remain high and corporate organisations are in conversations geared towards putting up under-utilised space for co-working use. “Millennials and the startup community continue to drive up demand for co-working spaces with service providers seeking to convince traditional large-scale employers on the benefits of co-working”, Ibaru noted. A major source of worry for landlords is the significant drop in Grade A office rents which remain around $600 per square metre and $700 per square metre in Victoria Island and Ikoyi re-

MKO Balogun

our employees at the highest level of focus. We have created and sustained many industry initiatives”, MKO Balogun, CEO, Global Property & Facilities International (Global PFI), confirmed to BusinessDay in an interview. Established about 18years ago as the first fully defined and classified FM company in Nigeria, Global PFI has, over the years, evolved through mergers, acquisitions and share restructuring. From its humble beginning as Facilities Management Company of Nigeria (FMC), it has undergone name changes to WSP FMC after its partnership with WSP; merger with Domme FM Limited in 2012 and finally, in 2014, it became

Why Lagos is against converting residential buildings for commercial use

spectively. This is coming down from an Olympus height of about $850 per square metres and $1000 per square metres a couple of years ago. To ease take-up of these facilities, landlords have continued with most of the incentives initiated during the recession, including rent free fit out periods, back-end rent payments and the like. Some of them now accept naira payment on quarterly basis as against annually or multi-year advance payment in dollars. Ongoing office developments include Africa Towers, World Trade Centre, Corporate Towers (Eko Atlantic) amongst others. Cornerstone’s 12-floor Head Office located in the Lekki axis is nearing completion. Residential buildings conversions to

office use continue to spring up rapidly in areas such as Ikeja GRA and Lekki Phase 1. Recent completions include the 4,000 square metres Desiderata and the 6,956 square metres Alliance Place with the later yet to achieve strong occupancy levels. Location and security remain essential for clients selecting commercial space and a growing insistence for green and sustainability features. The outlook for this market in 2019 is neither cheering nor promising. Ibaru says high vacancy rates are expected for Grade A offices, at least, until a direction for the economy is determined. “Landlords will need to remain flexible and accommodating of tenants’ preferences to keep vacancy rates manageable”, he advised.

How social impact initiatives defined FM industry in 2018 hough largely impacted by the slowdown in the real estate space from which it feeds, the facilities management (FM) industry in Nigeria is recording improvements in its growth and development processes and initiatives in a country where it is relatively new. Apart from the spirited efforts at creating awareness about the industry which the operators are making, the industry is increasingly featuring in property transactions, especially as luxury apartment occupiers currently place 15 percent -20 percent premium on service. The out-gone year (2018) will go down as a significant one for the industry with the many social impact initiatives that were recorded in the course of the year. Besides the launching of the National FM body known as Association of FM Practitioners Nigeria (AFMPN), the final approval of the FM bill 2018 and the draft National Policy on Maintenance of Public Assets by the Federal Ministry Power, Works and Housing, many of the frontline FM companies had their hands on the plough. “As a company, we have grown well, improved, created new solutions, innovative ideas and support for our clients and suppliers; we have put

Tuesday 08 January 2019

@Businessdayng

Global Property and Facilities International Limited. Gradually but steadily, the company is becoming Pan African with operations in major African cities of Nigeria, Ghana, Cote d’ Ivoire, Cameroon and Kenya. It is an ISO 2008:2015 certified company and, according to the CEO, “we remain committed to providing world class real estate service to our clients all over Africa”. “Over the years, the company has done a few things that impact directly on people and the economy. We have created a maintenance economy; we have trained people and will continue to train more people for skills that are employable; our target is to graduate 100 people from our ProFM Credential Africa Center”, Balogun disclosed, assuring that in the new year, they would be upbeat in training and adding value such that clients wouldn’t have need to source skilled labour from abroad. At industry level, he noted that the industry was fast evolving, pointing out that it is rapidly expanding globally, regionally and locally with growing awareness, acceptance just as the global market is changing with global players strengthening their presence in Africa with mergers and

partnerships. Clients’ expectation has increased and demand for FM value has also increased away from service. This explained the launch of four FM ISO standard including, ISO 41011:2017, 41012:2017, 41013:2017 and 41001:2018; to ensure uniformity in the way FM is seen, appreciated, valued and implemented by both clients and providers. With the new FM definition as ‘an organization function which integrates people, place and process within the built environment with the purpose of improving the quality of life of people and productivity of the core business’, the industry seems well prepared to respond to the new demand. Balogun was, however, worried with the slowdown in the real estate sector which he blamed on the players in that sector who, he noted, have failed to understand the market dynamics. “The real estate sector has continued to slow down largely due to oversupply in commercial and retail sectors, as well as inappropriate supply in the residential sector”, he said, pointing out that investors have not really looked at the area where is huge and real demand in the market.

ncreasingly, buildings in residential areas of Lagos are being converted into offices and business premises against the state government’s building approvals and environmental protection laws. Apart from the environmental impact of turning a residential area into a commercial enclave, converting buildings meant for residence has enormous implications for Lagos whose major social problem is housing accommodation for its residents. It is estimated that 80 percent of Lagos residents live in rented accommodation, spending about 50 percent of their income on paying house rents. This is to be expected in a sprawling city sitting on a small land mass with an over-arching population that is well above 18 million. The state has a housing demand-supply gap estimated at three million, requiring about 200,000 houses to be built annually to close. These are the sources of concerns raised by officials of the state government who have warned those involved in the indiscriminate conversion of buildings to desist from doing that forthwith. The conversion is no respecter of locations as it happens on the island as much as it does on the mainland. Places like Ikoyi, Lekki and Victoria Island on the island have witnessed this almost on equal measure with places on the mainland including Ikeja GRA, Surulere, Ilupeju, Apapa, etc. Commercial activities in these locations have degraded the environment considerably. “Property conversion is contributing to increase in refuse generation as well as the attendant illegal dumping of refuse in unauthorised places”, Babatunde Durosinmi-Etti, the state commissioner for the Environment, said at a stakeholders’ meeting with Victoria Island and Ikoyi Resident Association (VIIRA) in Victoria Island. The Commissioner explained that the development was illegal and capable of causing grave danger to the community, urging Victoria Island and Ikoyi residents to prioritize clean environment by being observant and protective of their immediate environment. Government is against this conversion because it goes against approved master plan for the areas and also frustrates the commitment of the government to attain a clean, healthy and sustainable environment. Durosinmi-Etti stressed that the state government had repeatedly warned against any abuse of its laws and all acts capable of compounding the challenge of waste management in the state. He also noted the proliferation of religious worship centres and Nite clubs in various residential areas in the Victoria Island and Ikoyi axis, and called for caution on the noise level to avoid rancour in the society. “Any noise above the approved noise levels contravenes the provisions of the National Environmental Noise Standard and Controls Regulations 2009 as well as the Lagos State Environmental Laws 2017”, he said, seeking the cooperation of religious centres and club owners for the maintenance of the acceptable noise levels for residential areas, which is 55 decibels during the day and 45 decibels at night.

Tuesday 08 January 2019

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

‘We think proptech is going to do more enabling than disrupting’ IBRAHEEM BABALOLA, the CEO/Cofounder of Muster, an AI-powered peer-to-peer shared housing market place, in this interview with ENDURANCE OKAFOR, gives insights on how technology is going to impact Nigerian property market and also how Muster is helping young Nigerians solve their accommodation challenges as their basic salaries cannot afford them comfortable apartments. Excerpt:

ell us about yourself My name is Ibraheem Babalola. I am the Cofounder and CEO of Muster which has enabled people in Nigerian cities to have access to affordable housing. The company has also helped people that have spare rooms in their apartments to be able to earn money on this spare rooms that would otherwise have been used as guest room, or packing store to earn income, especially at a time when the economy is recovering and people do not mind alternative sources of income. Muster is a new entrant into Nigerian property market. What gave birth to the idea behind it? Muster was something that needed to happen. If we didn’t roll out Muster at the time we did, I am sure some other people would have, because the problem was evident, and the opportunity was there. There was a problem of income versus rent mismatch, which meant that the average rent was higher than the average salary. Credit Sales reports that the average rent of Nigerians between 20-35 years of age is around $230 monthly and the average price of one bedroom in mega cities like Lagos, Abuja and Port Harcourt is around $300 per month. This means that a lot of people cannot afford to rent by themselves. Also, there was a problem of the upfront annual rent requirement which meant that the product would break those payments into monthly payment, because a lot of the people earn their salary on a monthly basis. There was also the problem of not-fit-for-purpose development, because property developers continued to develop properties for families, the 3 bedroom, four bedrooms, without thinking of the single young Nigerians that were just starting out in their career and needed just enough space

annually. The entire experience is on them. Before you even get to that stage, Muster does a multi-level verification for every user; whether you have a room and whether you’re looking for a room or whether you’re a property manager. Every user that goes on Muster has to upload invalid form of government ID, which is then verified on this government database if it’s driving licence, it will verify it on road safety database and if it’s passport with immigration.

Ibraheem Babalola

to lay by. What this also meant was that the people that absolutely had to rent these large apartments, had spaces that they were not using and those spaces are what they now put on Muster and earn income on them by renting them to verified people in the Muster community. There is also the problem of rapid urbanization. World Bank says that to take care of people that come into cities every month, we need to build cities the size of New York every month and it is impossible. But what we can do is to optimise the available resources by co-living and co-working. Muster enables co-living to happen in a way where it’s safe, verifiable and affordable as well. So there is an economic impact that the company has on the demand side of people that are looking for rooms and on the supply side of people that have rooms as well. There is also the benefit for property developers and managers because we can guarantee

rental income them. We have a wait-list that has over 3,000 people. If you build a development that the price makes sense they can be filled in a week from our wait-list. How do you verify people before putting them on Muster community? We have an algorithm for matching that suggests and says, for example, Mayowa would be a good match based on what she’s learnt about you. Our system learns about users and, based on that, it is able to make recommendations on rooms or flat-mates and so on. We have built Muster in a way that the entire process and experience is detected by the user. They have total control of where they want to leave, who they want to rent to, who they want to rent with, how much they want to pay and how much they want to collect, how they want to pay; whether it’s monthly, quarterly or annually and how they want to collect rents, whether it’s monthly, quarterly or

So how has the journey been so far? The journey has been great so far. I think one thing that we never had issue with is on the demand because the problem is evident. A lot of people want affordable rooms. Muster cuts-off quickly on the demand side; the supply side takes a bit longer because there needs to be some kind of education on the part of telling apartment owners that they can make money from their spare rooms and there will always be the security questions. So the reaction is on both sides. The reaction for the people that are looking for the room when they found out about Muster was excitement. You could hear them say, ‘yes I can finally go and live in a place where I don’t have to journey for 5 hours to get to my work place’. The reaction on the other side for the people that had the room was curiosity. What you hear from people on this side is, ‘oh, ok this makes sense; I can make money from this room that is idle; as a property manager I can rent my apartment to these two young people but are they verified and how am I sure who is coming into my apartment; how am I sure he is going to be able to pay, how am I sure. So it’s more curiosity than excitement on the side of the supplier and on the side of the people that have rooms. But what we have seen is that once

they move on from that curiosity to understanding the product, they get very excited and they become more repeat users. How many Nigerians have you helped solve accommodation challenges? We have done over 600 rented rooms in just over a year and we have thousands of users on our platform and that’s not bad. We are going to do more with acquiring supply this year so that we can move people from the wait-list as we currently have over 3000 people waiting to get apartments. Muster emerged as BusinessDay business idea of 2018; how do you feel about that? I think that was very honouring, particularly because we had no idea that was happening. We just found out about it in the papers. The most honouring part of it was that it was after the nomination that it was made open to the public to decide which business idea won it. It is very touching and honouring to know that people look at Muster in that way and say, oh this is our business idea for 2018 that this company has had as much impact, particularly when you look at other companies that were nominated for the award. Going forward, how do you see technology impacting Nigerian property market? I think, generally, technology is going to affect all sectors of the Nigerian economy, from Fintech to proptech, medtech to whatever name you want to call it. I think that there is a lot of proptech innovation that is springing up every-day because there is clearly a problem in that space that you can use tech to solve or to help make me better and Muster is leading the chart in innovations. We think that propptech is going to do more enabling than disrupting.

FG set to adopt FMBN’s rent-to-own housing scheme for FISH programme …as HOSF commends initiative as homeownership enabler CHUKA UROKO

t is good news for civil servants as the federal government says houses being built and commissioned under the Federal Integrated Staff Housing (FISH) programme will be allocated to benefiting workers using the Federal Mortgage of Nigeria’s (FMBN’s) rent-to-own housing scheme. The new housing scheme makes it possible for workers to move into their homes and pay conveniently via monthly or yearly rentals over a maximum of 30-year period at 9 percent interest rate. Another key feature of the scheme is the elimination of the need for equity payment and other costs associated with a typical mortgage transaction. All completed and ongoing FMBN-funded estates in over 20

Oyo-Ita

states are for the rent-to-own scheme for contributors to the National Housing Fund (NHF). Winifred Oyo-Ita, Head of Service of the Federation (HOSF), commended the management of the Federal Mortgage Bank of Nigeria (FMBN) for developing and introducing the innovative scheme to ease the financial burden of home

ownership for Nigerian workers and increase access to affordable housing. Oyo-Ita spoke recently at the public presentation of the FISH Handbook on processes and procedures of the programme for both civil and public servants, and the new corporate website in Abuja. “The FMBN rent-to-own housing product provides a fantastic payment option for civil servants by making it possible for them to move into their homes and pay conveniently over long periods with monthly rent”, the HOSF noted. She also commended Ahmed Dangiwa, the CEO of FMBN, for his support and commitment to the FISH programme, a scheme established to facilitate the provision of quality and affordable housing for federal civil servants through stra-

tegic partnership with government agencies and private real estate developers. The HOSF disclosed that the office of the Head of Service’s strategic funding partnership with FMBN was for the provision of off-taker support finance in the form of loans and mortgage finance to civil servants for the purchase of houses offloaded on the programme at single digit rates. The FMBN’s flagship contribution to the FISH programme includes the ABSI FMBN funded estate in Kuje 2, which comprises 83 housing units of 2-bedrooms apartments. The estate was commissioned in December 2018 and keys to the houses were given to the Head of Service of the Federation for handover to beneficiaries. Dangiwa expressed delight at FMBN’s association with the FISH

programme, saying, “in our own way at FMBN, we are actively committed to seeing to the success of the FISH programme through the provision of mortgage loans from the National Housing Fund (NHF) scheme and the offer of some of our completed estates for the take-off of the programme. “We have also enhanced the mortgage affordability level of Nigerian workers by eliminating the need for down-payment for mortgage loans of N5 million and below and a reduction to 10 percent flat rate for loans above N5million to N15 million from the initial 20 percent and 30 percent”. The CEO also commended OyoIta and urged federal civil servants to key-in and take advantage of the NHF and the FISH programme so they can become home owners.

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Tuesday 08 January 2019

Why FMBN could disbursed only N193.4bn for mortgages in 41years Endurance Okafor

n the last 41 years of its existence, the Federal Mortgage Bank of Nigeria (FMBN) says it has so far disbursed N193.4 billion to 18,935 Nigerian workers. Ahmed Dangiwa, Managing Director of FMBN, revealed the information recently in Abuja at the launch of FMBN’s digital platforms which it did in collaboration with Nigerian Labour Congress (NLC), Trade Union Congress (TUC) and Nigeria Employers Consultative Association (NECA). BusinessDay analysis reveals that the N193.4 billion disbursed across the country as mortgages by FMBN since it was create in 1977 is N3 billion less than N196.4 billion Lagos state Internally Generated Revenue for the first 6 months of 2018. Reacting to this revelation, Yemi Stephens, a partner at Estate Links, a real estate firm said, said the amount disbursed could only be measured to a needle dropped in an ocean. “This is like dropping nothing in an ocean; no wonder the country has a huge housing gap”, he said, explaining that food, shelter and clothing were the basic needs of any man. “It is unfortunate that people are even sleeping under the bridge in Lagos.” Nigeria has one of the lowest mortgage-to-Gross Domestic Product (GDP) rate at about 0.6 percent, which obviously lags Ghana’s 2 percent, South Africa’s 30 percent, the U.S and UK rate at 60 percent and 70 percent respectively. This has negatively robbed off on the housing sector of Africa’s most population nation, and analysts have

disclosed that the country requires about 16-20 million housing units to solve its housing demand considering it has an average growth rate of about 3 percent per annum. Property analysts polled in a BusinessDay survey linked the poor performance of Nigeria’s mortgage industry to legal, economic and socio-cultural factors coupled with lack of advocacy, as studies have shown that only one out of 15 adults in the country understand what mortgage means. Adeniyi Akinlusi, CEO, Trustbond Mortgage Bank said “a large portion of Nigeria’s population is outside the housing market and mortgage remains too expensive for many of them to access and afford.”

He explained that the informal sector which is the largest segment of the Nigerian population is still outside the housing market and this population accounts for over 60 percent of the country’s GDP. Mortgages are also loans which means that they come with interest rates, and typical mortgage interest rates in Nigeria range between 7-10 percent for the FMBN-supervised National Housing Fund (NHF) and between 15-25 percent for commercial mortgage institutions. Property experts say the rate is one of the highest in the world. Aside from the interest payable, the potential buyer must also have a certain percentage of the total amount needed for the purchase

readily available; this amount is known as equity and should range between 20-50 percent of the total cost of the home. So, in Nigeria for instance, a Mortgage of N25million at 15 percent per annum interest rate means repayment of N37.9 million in interest only over the 15 year period, which is even more than the principal itself. The trick here is that at 15 percent interest rate, it takes a lender approximately 7 years to recover the N25million it lent to you. That is about 6 years if the interest rate is 20 percent. Stephens asked that “government should wake up and own up to its responsibility; it should fund and monitor FMBN; in short, they should restructure everything well and bring

in a ‘new’ mortgage bank.” According to Association of Housing Corporation of Nigeria (AHCN), underdevelopment of Nigeria Mortgage sector in driving home ownership is worrisome as more than 90 percent of new homes utilise funds from personal savings for incremental construction. Nigeria government in the second quarter of last year revealed its plans to inject N500 billion ($1.4 billion) into the Federal Mortgage Bank of Nigeria for over the next five years with effect from 2019 in an effort to spur home ownership that has failed to take off in Africa’s largest economy. According to industry experts, the intervention by the government through the mortgage lender is likely to address the housing issues in the country to some great extend, although not much has been said about the plans since the announcement in 2018. FMBN was created in 1977 to replace the Nigerian Building Society. Between 1978 and 1985, the lender was the only mortgage institution in Nigeria. According to the constitution of Nigeria, the Federal Mortgage Bank was established to meet the housing needs of all citizens of the country. It is regarded as the apex mortgage finance institution in the country and regulates the activities of primary mortgage loan originators In a direct government intervention to expand the mortgage industry in Nigeria, the bank was established by the military government of Olusegun Obasanjo to be a wholesale and retail credit institution that would provide long term financing to home buyers, building material firms and mortgage financial institutions.

Good news for retail business as investors roll out plans for 2019 CHUKA UROKO

he new year (2019) may be a defining moment for retail business in Nigeria as feelers from investment plans being rolled out for the year show possible momentum for the challenged sector. Since 2015, the retail sector in Nigeria has been under-performing, leading to high vacancy factor that has placed investors in that space on neutral gear. The challenge has been such that it has tended to erode all the gains and successes the sector has achieved over the years. But a new report by Northcourt Real Estate on the outlook for real estate in 2019, points to something quite encouraging. “Nigeria has 10 cities among the top 50 urban consumer markets in Africa and 52 million consumers who can afford products within the above average to premium range. 9 million of these consumers are in Lagos and it appears that International and local players know this”, the report notes. In that direction, $22 billion Universal Music Group announced that it would open a new office in Lagos as part of its West Africa expansion and American fast foods business - $12 billion Burger King outlined plans to open up shop in Sub-Saharan Africa with Nigeria as a focus market. As part of its campaign to reach

100 stores before the end of 2019 and 774 stores by 2022, Konga outlined plans to invest ₦2.9Bn into its logistics arm, Kxpress, to achieve same day delivery rates higher than 80 percent by mid 2019. In the same vein, Japanese retail brand, Miniso, rolled out a franchise strategy to have 200 stores operational in Nigeria by 2019 and a 45 percent local content by 2020. Leading Asian retailers have increasingly approached mid-sized mall landlords for space as a means of testing the Nigerian market. Backed by the $350M Novare Property Fund II, the 7,178 square metre Novare Central opened to the public in Q3 with ongoing conversations around launching its next offering in the nation’s leading oil city, Port Harcourt. Local mid-sized retailer, Ebeano

opened a new outlet in Ikeja and continued plans with its Sangotedo, Lagos development. Filmhouse Cinemas has all but moved in to Circle mall and is poised to increase footfall. Bildiamo’s mall development project, also in Sangotedo is carrying out finishing works and projects a full opening by Q1 2019. Owners of the 30,000 square metre land acquired for the potential development of a Spar outlet in the Ajah area are yet to move to site, possibly hedging until after elections. Still, experts are optimistic of improved activity by Q2 of 2019. Jubilee mall in Lekki Phase 1 also joins the rooster of retail stores in the Lekki Phase 1 area as Spar opened another outlet in Ikeja. In the outgone year, there were also a series of expansions by global chains. Krispy Kreme reopened its

outlet shut by the Consumer Protection Council after the regulators found it compliant with relevant health and safety standards and opened stores in The Palms Lekki, Novare Sangotedo and Maryland Ikeja malls. Persianas Group, developer of The Palms, is also in the concluding stages of opening a mall near the Lagos airport area in Ikeja. Domino’s Pizza opened a store on Awolowo Road, Ikoyi sticking to its model of opening on major highways in Nigeria. However, according to Ayo Ibaru, Northcourt’s chief operating officer, Grade-A mall operators have continued the existential battle to keep vacancy rates low by deploying a raft of strategies which include space redesign, delayed rental payment options and part funding of fit out expenses for retailers. “Nigeria’s consumer class has grown by nearly 140 percent over the last decade. Ikeja city Mall and the Palms Lekki recorded vacancy rates of 0 and 1 percent respectively. Novare Central, Abuja, the Atlantic mall, Lagos and Big Treat, Port Harcourt recorded 70 percent, 34 percent and 8 percent respectively”, he noted. New entrant into the retail sector, NEXT Mall, Port Harcourt, was 31 percent vacant. In Q4 2018, Hubmart opened its 4th store with forecasts to add four more stores in 2019. GradeA malls have dedicated more space

to entertainment features, including expanding cinema halls to accommodate the growing demand. Online retail continues to rise, highlighting the need for efficient logistics and effective warehouse space. Jumia, Nigeria’s leading ecommerce platform, is still in talks to list on the New York Stock Exchange at a valuation of $1 billion. Expectations are that IPO will go live with a sale of $250 million in shares by the Q1 of 2019. Going into the future, Ibaru noted that proximity to densely populated areas, accessibility, parking and entertainment facilities remain key factors to the growth and success of the retail market. The grounds gained by family entertainment options are expected to deepen with more retailers now aware of its role in sustaining footfall. “Having tested the mid-range mall concept albeit vicariously through the likes of retailers as Blenco and Ebe Ano in Lagos, investors are warming up to developing mid-sized malls, adding strong entertainment features for good measure”, he said. According to him, the growth of Nigeria’s film industry, Nollywood, will further increase the number of movies available and translate some benefits of the growing hunger for local big budget productions to the financial statements of mall operators.

Tuesday 08 January 2019

www.businessday.

AVIATION

GUIDE

www.facebook.com/business-

@businessDayNG

kin Olateru, commissioner, Accident Investigation Bureau (AIB), an aircraft engineer has stated that in 2019, AIB will do more in the upgrade of its infrastructure, ensure constant review of its systems, processes and procedure, and invest more on human capital development. All these, Olateru noted would make AIB world class institution and an enviable place to work. This is as the commissioner also took a holistic assessment of the agency and said he was pleased with the remarkable achievement of the agency in 2018. He however called on the staff to roll up their sleeves, tighten their seat belts and be prepared for greater work

deliveries. He assured that they would do so in the most cordial manner fostering an even better working relationship with dynamism. In a New Year message to the workers, the AIB boss disclosed that the feat achieved by the aviation agency was even more appreciable by the laurels AIB was decorated with during the NIGAV awards 2018, stressing that the feat was made possible by management and staff of the agency who worked tirelessly to make the agency one of the most vibrant in the outgone year. For 2019, Olateru said, “We shall be better than before. We will do more in upgrading our infrastructure, equipment and invest more on human capital development. All these I believe will make AIB a world class institution and make it an enviable place to work. “I therefore call on us all to

BUSINESS DAY

in association with

AIB projects infrastructure upgrade, capacity development for air transport in 2019 Stories by IFEOMA OKEKE

@Businessdayng

roll up our sleeves, tighten our seat belts and be prepared f or greater work deliveries. This we shall do in most cordial manner fostering an even better working relationship with dynamism.” He thanked the entire AIB team for the unalloyed support and cooperation he had enjoyed working with each and every one of them through 2018. He further stated that no doubt, year 2018 came with its highs and lows, the sense of community was unparalleled in the way each one contributed to the call to duty. “I take this auspicious moment to applaud our corporate hard work and synergy and to say well done for a good job in 2018. We will not rest on our oars but must be determined to make more successes than we have recorded.” The AIB was one of the stand-out agencies in the sec-

tor with many of the reforms put together by Olateru, an aircraft engineer in less than two years he assumed leadership of the organisation. The speedy release of accident reports that had gathered dust on the shelf and other measures led to the commendation by the highly revered United States National Transportation Safety Board (NTSB) for its rich accident investigation programmes, which are expected to enhance air safety in the country. The Bureau also achieved a great feat December last year, releasing timely and accurate air accident report in Sao Tome and Principe. Olateru led his team to submit the final report of the accident involving Cavok Airlines CVK 7087 AN-74TK-100 Aircraft Registered Ur-CKC, which occurred at Sao Tome International Airport, Sao Tome on July 29th, 2017.

Turkish Airlines wins ‘Best Corporate Travel Program for Business Travelers’

urkish Airlines is the recipient of three 2018 GT Tested Reader Survey awards by Global Traveler magazine, including the first-ever award for “Best Corporate Travel Program for Business Travelers” for its prestigious Turkish Airlines Corporate Club program. In addition, the global airline was awarded “Best Airline for Business Travelers” and “Best Airport Staff/Gate Agents” for the second consecutive year. This is the 15th year of the magazine’s survey, which polled more than 22,000 frequent business and luxury travelers to name the best in more than 80 travel-related categories. “At Turkish Airlines, we place a premium on the value of our business and corporate travelers. Many of the hallmarks of Turkish Airlines’ award-winning services are

Mert Dorman, Turkish Airlines SVP Corporate Marketing and Distribution Channels, said. “We thank our passengers, Corporate Club members and Global Traveler magazine for recognizing our award-winning product and services.” Turkish Airlines Corporate Club offers one of the world’s most extensive corporate frequent flyer programs, designed to offer a wide variety of costeffective advantages for corporations while offering premium services. There is no fee to join and no commitments, and members receive benefits such as exclusive upfront discounts, special baggage allowances, flexibility of changes/cancellations without penalty, free tickets, upgrades and access to passenger lounges. In addition, an important part of business and corporate travel is access to destinations globally.

Heartland FC bags another Dana Air sponsorship deal

ana Air has extended its Multimillion naira sponsorship deal for Heartland FC of Owerri, Imo state. The sponsorship which was first unveiled in 2018 was extended for the duration of the 2018/ 19 Nigerian Professional League (NPFL) Season at a short ceremony held at the conference hall of DE-Range hotel in Owerri, the Imo state capital. Speaking at the contract extension event, Kingsley Ezenwa the Media and Communications Manager of Dana Air said, “we are happy to be back here to unveil another mouth-watering deal for our darling team – Heartland fc of Owerri, Imo

state. We are proud of the innovations that the club is introducing to our league and the transformation that the team is undergoing at the moment.’ “At Dana Air we are not just concerned about flying our guests to and fro Owerri and Abuja, but we are concerned mostly about what we can positively contribute to the development of the state, in furtherance of other CSR activities we have carried out in Imo state. “We believe sports; particularly football is another way we can impact the state and the good people of Imo state by doing everything to ensure that their beloved team gets all the support to play the continental games

this season. Also, considering the futuristic airline partnership that we have with the forward-looking Imo state government, Heartland fc becomes central in our sponsorship considerations. ‘’ Goodfaith Etuemena, the Chairman and President of Heartland FC, Goodfaith Etuemena also commended the management of the airline for considering the club in its sponsorship initiatives in the state describing it as the “first ever in the country by any airline in the country and the most innovative for the second year running. “We are thankful to Dana Air for considering an extension of this sponsorship deal for our great club – Heartland fc of Owerri. We have

also done a lot on our part to improve so that we can continue to attract amazing sponsorship like this. At the moment, we have a foreign partnership for the production of our kits and they are of top quality. We also have a new home ground, a foreign coach and with Dana Air embossed boldly on our home and away jerseys we hope to make them proud for their investment and believe in the team since we came from the lower league. ‘’ Dana Air in 2017 entered into an airline partnership with the Imo state government to aid commercial and tourism potentials of the state, create jobs and provide convenient fares for guests traveling to and fro the state.

L-R: Akin Akindoyeni, chairman of Council, Institute of Oil and Gas Research and Hydrocarbon Studies, performing the induction of the managing director/CEO of Engineering Automation Technology Limited (EATECH), Emmanuel Okon as a Fellow of the Institute with specialisation in Corporate Leadership and Foresight at an event held recently in Port Harcourt.

developed with a long-term vision of creating a seamless door-to-door experience for our business and corporate travelers, and these awards are a true testament of our customer-first philosophy,”

Turkish Airlines flies to more than 300 destinations in 124 countries on five continents and connects 17 cities in the Americas to more than 40 countries that are less than three hours from Istanbul.

BUSINESS DAY

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

Tuesday 08 January 2019

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

Beta Glass delivers better returns for shareholders BALA AUGIE

eta Glass Plc, one of Nigeria’s glass makers, has provided shareholders with a larger return on their investment inform of dividend and share appreciation. Little wonder the glass maker is among the thirty most capitalized firms-NSE 3O firms- in Africa’s largest economy. It was one of the best performing stocks in 2017, having outperformed the Nigeria Stock Exchange All Share Index .Its share price has return 32.15 percent since last year, to close at N67 as of January 4, 2018. While other manufacturers capitulated to the recession of 2016 as they were unable to make profit, Beta Glass thrived, as it recorded the strongest margins in that period. See Charts. The company attributed the stellar performance to the price adjustments, exposure to the export market among other strategies that added impetus to revenue and profit. It has a free cash-flow of N3.93 billion as at September 2018, which means it has the financial strength to pay its debt, fund future expansion plans and pay dividend without having to sweat retained earnings. Financial Performance for Q3 2018 Beta Glass’s sales increased by 28.98 percentage to N29.18 billion in September 2018, this compares with N14.87 billion recorded in the corresponding period of (Q3) 2017;The uptick at the top line was driven largely by price increases in response to inflationary trends and partly by volume increases in order top offset the rising input costs. The company made N180.09 million in foreign exchange gains in the period under review, owing principally to its consistent

export sales to Cameroon, Cape Verde, Gambia, Ghana, Guinea, Liberia and Sierra Leone. Gross profits were up 44.42 percent to N4.660 billion in September 2018, the highest since 2015 as the company continues to manage direct costs attributable to projects. Operating profit otherwise known as Earnings before Interest and Tax (EBIT) spiked by 86.42 percent to

N4.16 billion in September 2018, eclipsing 2016 all time high of N4.0 billion. Profit before tax was up 58.23 percent to N5.19 billion as at September 2018, exceeding 2016 all time high of N4.25 billion. Profit after tax followed the same growth trajectory as it increased by 50.22 percent to N3.35 billion in the period under review, a marked improvement from the record level of 2016.

Cost of sales were up 24.74 percent to N14.52 billion as at September 2018 as against N14.87 billion as at September 2017. Input costs are higher than the 11.28 inflation figure, and the company attributed the uptick in cost of production to increase in material costs. However, the glass maker is spending less on input cost to produce each unit of product as cost of sales ratio fell to 75.57 percent in the period under review from 78.27 percent the previous year, and the lowest since 2015. Beta Glass has been able to turn each Naira invested in sales into higher profit while contemporaneously utilizing the resources of shareholders in generating higher profit. Gross profit margin increased to 24.29 percent in the period under review, higher than the 21.67 percent, 22.23 percent and 24.04 percent recorded in the cor-

BD MARKETS + FINANCE Analysts: BALA AUGIE

ressponding period of 2017, 2016 and 2015. Net profit margin increased to 18.40 percent in September 2018 from 15 percent the previous year. An 18 percent profit margin indicates the company earns 18 kobo in profit for every Naira it collects. EBIT Margin increased to 21.68 percent in the period under review from 16.57 percent the previous year. Experts say Beta Glass impressive performance amid a tough and volatile macroeconomic environment validates management and board of directors’ focus and market penetration strategies. Dwindling purchasing power among consumers, insecurity in the northern part of the country, decrepit infrastructure, high incidence of smuggling, counterfeiting locally manufactured products, and the menacing grid lock at the Apapa Ports have made it

practically difficult for manufacturers to make profit or bolster margins as amid sky high cost of production. Other challenges bedeviling the industry are: high excise duties on products, exorbitant cost of haulage, and congestion at the Lagos seaports arising from the non-functionality of other seaports in the country. Historical Background Beta Glass is a subsidiary of Frigoglass Industries Limited, exporting glass packaging materials to 13 countries. The company has manufacturing plants in Ughelli, Delta State, and Agbara, Ogun State, with three furnaces that exceed 600 tons of produced glass containers per day. Breweries account for 43 per cent of its total glass unit sales while soft drinks constitute 29 per cent. Wine and spirits make up 12 per cent just as pharmaceuticals and cosmetics’ patronage is estimated at 16 per cent. Frigoglass to Invest €2530 Million at the Beta Glass Guinea Plant Frigoglass, manufacturer in commercial refrigeration and West Africa’s leading glass producer announces today that it will invest €25-30 million to expand its furnace capacity at the Beta Glass Guinea plant, located in Agbara, Ogun State. The investment will increase capacity at the plant by 35,000 tons per year. It includes a new furnace which will replace an existing one which has reached the end of its life, an additional production line, upgrades to existing production lines, as well as, new quality inspection equipment to strengthen the plant’s capabilities. This strategic investment will drive continued growth in the company’s Glass business across the West African region. The new furnace, with an expected productive life of more than 12 years, demonstrates the commitment to both existing and new customers across West Africa.

Tuesday 08 January 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

BUSINESS DAY

@Businessdayng

35 51

Live @ the Stock exchange Prices for Securities Traded as of Monday 07 January 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Company

Volume

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC NPF MICROFINANCE BANK PLC

BANKING ACCESS BANK PLC. UNITED BANK FOR AFRICA PLC ZENITH BANK PLC

167,782.24 263,335.54 668,745.32

5.80 7.70 21.30

-8.62 -2.53 -1.84

OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC

219 91 489 799

7,329,051 2,995,854 19,746,394 30,071,299

269,214.70

7.50

0.67

196 196 995

10,819,546 10,819,546 40,890,845

3,169,534.38 98,443.41

186.00 11.35

0.44

53 116 169 169

124,179 2,996,940 3,121,119 3,121,119

376,604.52

640.00

2 2 2 1,166

1,860 1,860 1,860 44,013,824

1,900.00 11,300.89 17,610.58

95.00 45.20 6.60

0 0 0 0 0

HEALTHCARE PROVIDERS EKOCORP PLC. UNION DIAGNOSTIC & CLINICAL SERVICES PLC

PHARMACEUTICALS EVANS MEDICAL PLC. FIDSON HEALTHCARE PLC GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. PHARMA-DEKO PLC.

BUILDING MATERIALS DANGOTE CEMENT PLC LAFARGE AFRICA PLC.

EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC

REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) UPDC REAL ESTATE INVESTMENT TRUST

OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND VALUEALLIANCE VALUE FUND

CROP PRODUCTION FTN COCOA PROCESSORS PLC OKOMU OIL PALM PLC. PRESCO PLC FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC.

DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. JOHN HOLT PLC. S C O A NIG. PLC. TRANSNATIONAL CORPORATION OF NIGERIA PLC U A C N PLC.

411.91 3,312.39

552.20 103.20

0 0 0 0 0

440.00 74,023.42 64,000.00

0.20 77.60 64.00

-3.00 -

1 8 9 18

1,200 227,188 77,620 306,008

511.20

4.26

0 0

1,560.00

0.52

14 14 32

335,985 335,985 641,993

767.71 171.23 1,903.99 48,777.59 24,923.22

0.29 0.44 2.93 1.20 8.65

7.41 3.45 -9.90

4 1 1 72 53 131 131

172,923 79,256 1,865 6,151,432 2,321,401 8,726,877 8,726,877

711.32

4.79

0 0

30,756.00 165.00

23.30 6.60

0.22 -

21 0 21

445,709 0 445,709

4,287.35

1.65

-5.17

13 13 34

281,892 281,892 727,601

954.53

0.20

BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. GOLDEN GUINEA BREW. PLC. GUINNESS NIG PLC INTERNATIONAL BREWERIES PLC. NIGERIAN BREW. PLC.

0 0

13,466.73 242.22 153,326.80 270,769.65 627,756.81

1.72 0.89 70.00 31.50 78.50

-2.78 -1.26

FOOD PRODUCTS DANGOTE FLOUR MILLS PLC DANGOTE SUGAR REFINERY PLC FLOUR MILLS NIG. PLC. HONEYWELL FLOUR MILL PLC MULTI-TREX INTEGRATED FOODS PLC N NIG. FLOUR MILLS PLC. NASCON ALLIED INDUSTRIES PLC UNION DICON SALT PLC.

3 0 30 3 155 191

10,150 0 746,385 2,078 5,265,368 6,023,981

29,500.00 168,000.00 80,777.48 8,802.52 1,340.10 855.36 47,689.89 3,676.41

5.90 14.00 19.70 1.11 0.36 4.80 18.00 13.45

-1.67 -4.11 -9.84 -5.93 -

66 60 44 54 0 0 15 0 239

1,695,687 976,717 1,058,645 1,813,675 0 0 167,159 0 5,711,883

18,124.65 1,149,351.57

9.65 1,450.00

-1.69

13 74 87

28,106 828,770 856,876

1,680.31 4,690.67

22.10 4.50

-5.33

PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. UNILEVER NIGERIA PLC.

0 56 56

0 5,394,412 5,394,412

47,645.72 193,893.93

12.00 33.75

-2.44 -7.02

BANKING DIAMOND BANK PLC ECOBANK TRANSNATIONAL INCORPORATED FIDELITY BANK PLC GUARANTY TRUST BANK PLC. JAIZ BANK PLC SKYE BANK PLC STERLING BANK PLC. UNION BANK NIG.PLC. UNITY BANK PLC WEMA BANK PLC.

36 73 109 682

561,887 3,503,561 4,065,448 22,052,600

45,857.57 247,718.94 55,052.11 996,245.42 15,026.77 10,687.83 56,717.12 168,900.37 11,689.34 22,758.93

1.98 13.50 1.90 33.85 0.51 0.77 1.97 5.80 1.00 0.59

10.00 -3.57 -1.04 1.04 -3.77 -3.33 1.69

294 34 95 236 36 0 167 34 10 24 930

77,676,284 1,356,493 4,711,822 8,456,407 1,800,789 0 3,993,738 3,154,588 119,859 3,014,203 104,284,183

4,117.00 4,712.54 19,635.00 2,660.00 19,811.94 2,945.90 2,411.47 1,913.74 1,412.20 487.95 2,197.03 2,148.17 5,760.00 1,760.00 12,356.38 1,857.48 2,691.28 1,400.44 1,751.57 4,483.72 2,582.21 2,800.00 516.46 3,200.00 2,912.00 5,888.40

0.20 0.68 1.87 0.38 1.91 0.20 0.53 0.50 0.23 0.38 0.30 0.50 0.72 0.22 2.34 0.24 0.50 0.21 0.21 0.48 0.20 0.20 0.20 0.20 0.21 0.44

6.25 2.19 -9.09 4.76 -10.00 5.00 -4.76 -8.70 10.00

0 11 8 0 0 2 0 0 0 0 11 3 4 3 9 4 1 3 12 0 0 0 0 0 2 12 85

0 513,394 1,269,020 0 0 19,500 0 0 0 0 654,000 113,000 19,000 245,500 167,400 4,606,444 5,115 1,200,000 6,194,680 0 0 0 0 0 130,200 1,502,570 16,639,823

BUILDING CONSTRUCTION ARBICO PLC. INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. ROADS NIG PLC. REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC

AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC

FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. NESTLE NIGERIA PLC. HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. VITAFOAM NIG PLC.

INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC AIICO INSURANCE PLC. AXAMANSARD INSURANCE PLC CONSOLIDATED HALLMARK INSURANCE PLC CONTINENTAL REINSURANCE PLC CORNERSTONE INSURANCE PLC GOLDLINK INSURANCE PLC GREAT NIGERIAN INSURANCE PLC GUINEA INSURANCE PLC. INTERNATIONAL ENERGY INSURANCE PLC LASACO ASSURANCE PLC. LAW UNION AND ROCK INS. PLC. LINKAGE ASSURANCE PLC MUTUAL BENEFITS ASSURANCE PLC. NEM INSURANCE PLC NIGER INSURANCE PLC PRESTIGE ASSURANCE PLC REGENCY ASSURANCE PLC SOVEREIGN TRUST INSURANCE PLC STACO INSURANCE PLC STANDARD ALLIANCE INSURANCE PLC. SUNU ASSURANCES NIGERIA PLC. UNIC DIVERSIFIED HOLDINGS PLC. UNIVERSAL INSURANCE PLC VERITAS KAPITAL ASSURANCE PLC WAPIC INSURANCE PLC

MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC UNION HOMES SAVINGS AND LOANS PLC. OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC CUSTODIAN INVESTMENT PLC DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. ROYAL EXCHANGE PLC. STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC

MEDICAL SUPPLIES MORISON INDUSTRIES PLC.

COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC

11,799.67 3,658.62

2.58 1.60

0 6 6

0 370,000 370,000

4,116.00 7,370.87 5,922.05 5,098.38 2,949.22

0.98 0.50 1.42 0.45 3.02

-10.00 -

0 0 0 4 0 4

0 0 0 1,000,000 0 1,000,000

7,880.00 34,997.09 660.00 31,684.34 1,080.53 481,305.99 17,100.00

3.94 5.95 0.44 1.60 0.21 47.00 2.85

-2.46 -1.23 1.08 -1.38

40 7 0 104 2 30 79 262 1,287

667,170 510,928 0 6,993,001 20,240 2,064,237 4,238,482 14,494,058 136,788,064

1,680.29 888.28

3.37 0.25

-7.41

0 21 21

0 1,254,327 1,254,327

544.04

0.55

0 0

366.17 7,425.00 14,589.69 2,401.00 1,346.68 556.71 325.23

0.50 4.95 12.20 2.45 0.78 3.62 1.50

0 3 14 10 18 0 0 45 66

0 4,000 1,701,036 125,856 340,684 0 0 2,171,576 3,425,903

710.40

0.20

COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC

0 0

1,470.89

0.50

IT SERVICES CWG PLC NCR (NIGERIA) PLC. TRIPPLE GEE AND COMPANY PLC.

0 0

6,413.06 648.00 381.11

2.54 6.00 0.77

PROCESSING SYSTEMS CHAMS PLC E-TRANZACT INTERNATIONAL PLC

0 1 0 1

0 300 0 300

939.21 16,590.00

0.20 3.95

0 0 0 1

0 0 0 300

2,492.48 22,050.00 242,497.59 696.42 313.43 1,999.41 1,279.20

8.60 31.50 18.45 0.33 0.59 2.52 10.40

6 8 11 2 1 0 0 28

54,508 10,278 85,872 45,000 53,666 0 0 249,324

2,256.91 3,082.31

2.09 1.75

0 8 8

0 174,359 174,359

33,498.12 388.02

67.00 9.10

6 0 6

62,371 0 62,371

100,754.14

62.50

0 0 42

0 0 486,054

CHEMICALS B.O.C. GASES PLC.

1,577.57

3.79

METALS ALUMINIUM EXTRUSION IND. PLC.

2 2

287 287

1,803.64

8.20

0 0

852.39

0.20

0 0

50.60

0.23

0 0 2

0 0 287

ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC

1,252.54

0.20

INTEGRATED OIL AND GAS SERVICES OANDO PLC

7 7

968,674 968,674

56,562.93

4.55

-1.09

PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC CONOIL PLC ETERNA PLC. FORTE OIL PLC. MRS OIL NIGERIA PLC. TOTAL NIGERIA PLC.

106 106

1,700,518 1,700,518

66,205.29 16,134.39 5,738.24 37,576.58 7,055.81 67,972.27

183.60 23.25 4.40 28.85 23.15 200.20

-0.65 2.33 -2.53 -9.92 -1.38

10 22 7 74 2 22 137 250

228,993 119,619 181,663 560,722 121,888 539,610 1,752,495 4,421,687

2,219.52

0.50

0 0

19,988.83

2.05

2 2

3,620 3,620

411.72

0.35

-7.89

1 1

133,386 133,386

2,475.89 328.19

4.20 0.70

1 2 3

1,000 1,700 2,700

642.33

0.20

2 2

4,801.22 2,889.53 7,862.53 46,362.46

3.10 1.39 3.50 6.10

-9.15 -

0 1 0 0 1

0 180,000 0 0 180,000

4,800.00

0.40

0 0

302.40

0.50

BUILDING MATERIALS BERGER PAINTS PLC CAP PLC CEMENT CO. OF NORTH.NIG. PLC FIRST ALUMINIUM NIGERIA PLC MEYER PLC. PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC CUTIX PLC. PACKAGING/CONTAINERS BETA GLASS PLC. GREIF NIGERIA PLC AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC

MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC.

ADVERTISING AFROMEDIA PLC AIRLINES MEDVIEW AIRLINE PLC AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC TRANS-NATIONWIDE EXPRESS PLC. HOSPITALITY TANTALIZERS PLC HOTELS/LODGING CAPITAL HOTEL PLC IKEJA HOTEL PLC TOURIST COMPANY OF NIGERIA PLC. TRANSCORP HOTELS PLC MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC PRINTING/PUBLISHING ACADEMY PRESS PLC.

36 26

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

LegalPerspectives

With

@Businessdayng

Tuesday 08 January 2019

Odunayo Oyasiji

Case Review Gerhard Huebner V. Aeronautical Industrial Engineering and Project Management Company LTD (2017) LPELR-SC.198/2006

hat to note: This is a matter that was decided at t h e S u p re m e Court of Nigeria in 2017. It addresses the issue of trust extensively i.e. meaning and nature of trust, elements of trust, nature of resulting or implied trust and what the doctrine of constructive trust entails. Fact The District Head of Kajuru District in Kachia Local Government Area of Kaduna State (acting on the instruction of the Emir of Zaria) granted permission to the Appellant to build a temporary weekend hospitality resort on a hilltop in Kajuru Village sometimes in 1975. The Appellant built a temporary structure. He later built permanent structure and named it “The Kajuru Castle”. In order to expand the business, the Appellant in 1981 started negotiating through the agency of the District Head to purchase the 70 hectares of land surrounding the hill. He was in the final stage of the negotiation when he was appointed as the Managing Director of the Respondent. The Appellant was advised to to buy the land in the name of the Respondent because it was unlawful for him to hold a legal estate in Kaduna State being a German. He took the advice and purchased the lan in the name of the Respondent. The receipt that serves as the evidence of the purchase was issued in the name of the Appellant and the Respondent. A certificate of occupancy dated January 1, 1997 was issued to the Appellant by Kachia Local Government. The certificate was used to apply for a statutory certificate of occupancy from the Kaduna State Government. The application was successful and a certificate of occupancy dated March 6, 1999 was issued by Kaduna State Government. The two certificates were issued in the name of the Respondent. The issue of the ownership of the property arose between the Appellant and the Respondent. The Appellant being the plaintiff at the High Court instituted the action claiming the ownership of the property and that same was held by the defendant/ respondent upon a resultant trust to the benefit of the plaintiff. The Appellant’s case was dismissed by the trial court. The Court of Appeal also dismissed the appeal that was filed by the Appellant. The Appellant being dissatisfied then appealed to the Supreme Court. Issues for determination The counsel to the Appellant formulated two issues for determination of the Appeal. The issues are – “1. Whether the Court

of Appeal was right to confirm the trial Court’s exclusion of documentary and oral evidence which were adduced by the Appellant before the trial Court to establish circumstances by which it may be implied that the Respondent held the legal estate in the subject property upon a resultant constructive trust in his favour. 2. Whether the Court of Appeal was right to hold that the Appellant was obliged to prove an implied resultant constructive trust by “credible and reliable evidence” showing the “grant” by him and “acceptance” by the defendant of the trust.” Counsel to the Respondent also formulated two issues. The issues are-“1. Whether the Court of Appeal was right to confirm the trial Court’s finding at law and upon the facts and circumstance of the case before the trial Court that the documentary evidence before it (i.e trial Court) as borne out by Exhibits A1, A2 and A3 being the Kachia local Government Certificate of Occupancy and the Kaduna State certificate of Occupancy respectively cannot be varied or altered by oral or extrinsic evidence as sought by the plaintiff/appellant to establish a resultant or implied or constructive trust in his favour. 2. Whether the Court of Appeal was right to hold that the Appellant has the onus of proof as required by law (i.e standard of proof in civil proceedings) to prove an implied resultant/ constructive trust by credible and reliable evidence.” The court adopted only one issue for the purpose of determining the matter i.e. “whether the lower court was right when it dismissed the Appellant’s appeal for failure to adduce sufficient evidence in proof of his claim that the Respondent is holding the legal estate upon an implied trust in respect of the disputed property for his benefit

by implication of law.” Arguments/Submissions The counsel for the Appellant submitted that the evidence before the court clearly shows that the land in dispute was purchased and developed with the Appellant’s private resources and that the certificate of occupancy issued by the state and the local government in the name of the Respondent were meant to establish that the Respondent is just an implied trustee for the benefit of the Appellant. He stated that implied trust is an equitable conversion of the holder of the property into a trustee by operation of law, as such the question of leading evidence to prove a grant and acceptance does not arise. The Respondent’s counsel on the other hand argued that the oral testimony of the Appellant cannot vary the content of the two certificate of occupancy issued in favour of the Respondent. He also argued that the Appellant failed to establish before the lower court the existence of any legal relationship between him and the Respondent. Judgement The Supreme Court dismissed the appeal. The court held on the issue of implied trust that “the nagging issue of whether implied trust on the basis of equity crops up in favour of the appellant. In considering it, the acts of the appellant come into question, firstly assuming he knew he was not qualified to own land in Northern Nigeria, he acted in going ahead to make the purchase wrongfully and illegally and therefore without clean hand which equity cannot encourage or assist. The flip side would be if he made the payments with his funds not being aware that he could not have such ownership, then his ac-

tion would be caught up by the principle that, ignorance of the law is not an excuse. Therefore, either way, he lacked the capacity to enter into the purchasing transaction for land being a foreign national. It follows that whether in law or equity he lost out.” With regards to nature of trust, the court held that “In its legal sense, “a trust” is the relationship, which arises wherever a person called the trustee is compelled in equity to hold property, whether real or personal, and whether by legal or

Conclusion

equitable title, for the benefit of some persons (of whom he may be one and who are termed cestuis que trust) or for some object permitted by law, in such a way that the real benefit of the property accrues, not to the trustee but, to the beneficiaries or other object of the trust. To this end, there are Express Trusts, Implied or Resulting Trusts and Constructive Trusts. Express Trusts arise when the owner declares himself a trustee of the property for the benefit of another person or vests property in another person as trustee for the benefit of another person. Implied or Resulting Trust arise from the presumed intention of the owner, and the presumed intention arises by operation of law not by agreement of parties. Constructive Trusts are trusts imposed by equity regardless of the intention of the owner of the property, where it will be unconscionable for the “apparent beneficial owner” or trustee to hold the property for his benefit-We are concerned with implied or resulting trusts, which may arise in the following circumstances (i) Where an express trusts fails (ii) Where the beneficial interest under an express trust is not fully disposed of or exhausted.(iii) Where there is a purchase in the name of another or where a person makes a voluntary conveyance of his property to another.

I will conclude with the words of Muhammad JSC in the case of Madu V Madu (2008) 6 NWLR (Pt. 1083) 296 where he stated that “Before I drop my pen, I think I should observe that this case, as I see it, should be an eye-opener to many people. Although, it is not illegal or prohibited to make use of another person’s name in transactions that are solely meant to be in favour of a particular individual, I think it carries a lot of risks where there is a failure in achieving goals for which the transaction is meant. I fail to appreciate the wisdom behind the concealment of name or identity of a person, who in actual sense, is the owner of a thing but would prefer to use the name of another person. The presumption is always that if a document for instance, bears the name of Mr. “X” it in law; belongs to Mr. “X” except where same is accompanied by conditions and exceptions. A good example is where a university certificate or a West African School Certificate (WASC) is issued in the name of “X”. The presumption is that it is “X” that is the rightful owner of that certificate. So it is a dangerous practice where people prefer to hide their identities and resort to using the identities of others in transactions, which are from the bottom of their minds. If such transactions are meant to be held in such resulting trust, I think they should be qualified by explanations, exceptions or conditions attached ...”

Wednesday 09 January Tuesday 08 January 2019 2019

www.businessday.ng

https://www.facebook.com/businessdayng

LegalPerspectives

With

@Businessdayng C002D5556

with the Director of Factories at least six months before the commencement of actual construction of a building or structures intended to be used as a factory. (3) Any person who‐ (a) not having been issued a certificate of registration as aforesaid, occupies or uses a factory or any premises which have not been registered as a factory; or (b) having been issued a certificate of registration of a factory as aforesaid, occupies or uses as a factory any premises which were not so registered as a factory, shall be guilty of an offence. (4) Any person who commits an offence under subsection (4) of this section

Caveat emptor

shall be liable on conviction to a fine not exceeding N2,000 or to imprisonment for twelve months or to both such fine and imprisonment and if the contravention is continued after conviction, the person shall be guilty of a further offence and liable on conviction in respect thereof to a fine not exceeding N 100 or to imprisonment not exceeding fourteen days for each day on which the offence was continued. (5) Where the Director of Factories refuses to issue a certificate of registration under this section he shall, if so requested by the applicant, state in writing the grounds of such refusal.”

Suspicious transaction report

ome financial transactions are usually reported to the Economic and Financial Crimes Commission. They are usually tagged “suspicious transaction”. What makes a transaction suspicious and thereby warrant being reported to EFCC? The answer is in section 6 of the Money Laundering (Prohibition) Act, 2011. Section 6(1)-(3) of the Act states that “(1) Where a transaction- (a) involves a frequency which is unjustifiable or unreasonable; (b) is surrounded by conditions of unusual or unjustified complexity; (c) appears to have no economic justification or lawful objective; or (d) in the opinion of the Financial Institution or Designated Non-Financial Institution involves terrorist financing or is inconsistent with the known transaction pattern of the account or business relationship, that transaction shall be deemed to be suspicious and the Financial Institution involved in such transaction shall seek information from the customer as to the origin and destination of the fund, the aim of the transaction and the identity of the beneficiary. (2) A Financial Institution or Designated NonFinancial Institution shall within 7

37 279

Odunayo Oyasiji

Do you know?

t is compulsory to register a factory with the Director of Factories. Anybody who fails to register is guilty of an offence. The punishment for the offence is stipulated in section 3(4) of the Factories Act 1987. The entire section 3 is reproduced below“(1) Before any person occupies or uses as a factory any premises which were not so occupied or used by him at the commencement of this Act, he shall apply for the registration of such premises by sending to the Director of Factories an application containing the particular set out in the First Schedule to this Act. (2) An application under this section shall be filed

DAY BUSINESS BUSINESS DAY

his is a regular notice we see on properties all around the country. However, the meaning and implication of it is not quite clear unto many. It’s a latin maxim for “let the buyer beware” i.e. trying to caution whoever is interested in the purchase of a property to be careful and not just deal with anybody or buy the property without doing the necessary investigations and findings. It is the principle of law that regulates the sale of property after the date of closing. The principle also extends to the sale of other goods. It is often used as a way of disclaimer of warranty. This is because it is assumed that the seller most times have a deeper knowledge and information about what he is selling. This information is mostly not made available to a buyer who is at risk of either buying a deficient product/property or losing his or her money to a wrong seller. Under this principle, the buyer is to beware as he cannot recover damages from the seller for selling a property with defect that renders it not to be fit for purpose. The only situation where damages can be recovered from the seller is if the seller is guilty of material misrepresentations that are

meant to mislead the buyer or if the seller actively conceals the latent defects. It is therefore important that serious caution should be exercised when buying a property. Necessary steps must be taken to do thorough investigation on the title of the person that wants to transfer the property- this is because you cannot give what you do not have. If the person’s title is defective then the person cannot pass a good title to the buyer. Furthermore, it is essential to do thorough physical inspection of the property that is the subject of the transaction. It is advised that the services of experts should be secured so as to be sure that thorough investigation and inspection is done. It may cost more to do this, but it is safer.

Locus Classicus

Walton Harvey Ltd v Walker & Homfrays Ltd [1931] 1 CH 274

he owner of a hotel in order to boost his hotel business entered into a contract with an advertising agency. The contract is for the advertising agency to put illuminated advert on the top of the roof of the hotel. The contract was entered into by both parties and the wish of the hotel owner was carried out. The local authority later compulsorily acquired the hotel and demolished it. The advertising agency then approached the court on the basis of breach of contract on the side of the owner of the hotel. The owner of the hotel argued that the contract had become frustrated

due to the compulsory acquisition of the hotel by the local authority. The court held that the contract was not frustrated. This is because the hotel owner was aware of the intention of the local authority to acquire the hotel before entering into the contract with the advertising company. He should have known that it is possible for the acquisition to happen during the lifetime of the contract. Therefore, provision should have been made for such occurrence in the contract between the parties. The hotel owner was held liable to pay damages for breach of contract to the advertising agency.

Who is a trustee in law?

days after the transaction referred to in subsection (1) of this section- (a) draw up a written report containing all relevant information on the matters mentioned in subsection (1) of this section together with the identity of the principal and, where applicable, of the beneficiary or beneficiaries; (b) take appropriate action to prevent the laundering of the Special Surveillance on Certain Transactions. proceeds of a crime or an illegal act; and (c) send a copy of the report and action taken to the Commission. (3) The provisions of subsections (1) and (2) of this section shall apply whether the transaction is completed or not.” From the above, the your financial institution is in some

circumstances empowered to seek information from its customer on the origin and destination of funds that enters and goes out of the customer’s account. Also, they can ask questions on the aim of the transaction and the identity of the beneficiary. The reason for bringing out the above is that I have been questioned on few occasions with regards to who I am transferring money to, the purpose and the identity of the person. I felt embarrassed and even argued that my privacy is being intruded. If this has ever happened to you or you fall into the same situation later in future, remember that the law empowers the financial institution to ask such questions.

trustee can be a person or firm. What the person or firm does is to hold and administer a property or assets for the benefit of another person usually referred to as the beneficiary. Trustees can be appointed in case of bankruptcy, for a charity, for a foundation or even for a trust fund. A trustee is expected to make decisions in the interest of the beneficiary. Trustees usually have fiduciary duty to the beneficiaries. Therefore, they are under an obligation to always act in the best interest of the trust and not allow personal interests to be the driving force. There are certain duties which the position of being a trustee imposes on the person occupying the position. A trustee must adhere to the terms of the trust deed. He must do and abide by all

that is contained therein. A trustee must be loyal – he must administer the trust in the interest of the beneficiaries. They are not meant to benefit personally from the trust asides what is due to them as stipulated in the trust deed. They also have the duty to manage the trust efficiently- to do this well, a trustee must be familiar with the terms of the trust, the purpose of the trust, the trust assets and liabilities and the circumstances of the beneficiaries. He also has the duty to act personally, he must be involved in decision making. The trustee must always put the beneficiaries into consideration when discharging their duties as trustees. Another major duty that must be observed is with regards to the trust account, they must keep and up to date account and other records.

38 BUSINESS DAY NEWS

Mobile money is no rocket science, Ghana... Continued from page 1

enabling them to make urgent or

even scheduled payments in situations where cash was not available. “I don’t know how to express this, but if not for mobile money, my son would have died,” said Obed Addo, an artist who does portrait paintings and landscapes. Addo told BusinessDay that his five-year-old son, Bethel, took ill sometime in 2016, and he believed the ailment would have claimed his son’s life if urgent medical care had not been provided. The hospital required him to pay GH¢550 ($113) before his son would be admitted for treatment, since at that time he was yet to register for health insurance. He was, however, broke and all he couldscraptogetherwasGH¢220($45). His saving grace was his sister, who transferredthebalanceofGH¢330($68) to him via mobile money. “When I told my sister I had money but not much, she used mobile money and within seconds, I got the money, and there are agents everywhere, which made withdrawal easy. One, two steps and you find a mobile money agent to facilitate a withdrawal,” Addo said with excitement on his face as he recalled the incident. “It is because of this mobile money and how fast it comes that my son is still alive. You know, in our hospitals if you don’t pay you won’t be attended to,” he said.

Addo said he did not understand all the medical terms spoken by the doctors, hence he was unable to recall what exactly the ailment was. All he knew was that his son was very sick and needed urgent treatment. Isaac Norteye, a 22-year-old shop attendant in Osu, Accra’s business district, was once stranded at the marina mall late at night with no ‘Tro Tro’ buses available. He needed to take a taxi to Osu area where he lives but did not have enough cash on him. He asked the driver if he had registered mobile money on his line. When the driver responded in the affirmative, Norteye requested to pay using mobile money. Thiswasyetanotherdemonstration of how mobile money could be used to pay for even the seemingly smallest transaction where cash is completely unavailable. However, as this reporter would find out when attempting to replicatethesamething,notalldrivershave registered for mobile money, and they arepartoflessthan5millionGhanaians who are yet to do so. Ghana has 23.9 million registered mobile money accounts out of an estimated 28 million population. This is almost double the number of bank accounts, which was 12.5 million in 2017. Despite this, banks do not appear to consider the mobile money system as a threat. The financial service providers have buy-ins structured into the operation of the mobile

Teleology Holdings withdraws from the... Continued from page 1

ingly uncomfortable with actions

taken outside of the agreed business plan since the November 12, 2018 formal take-over of 9mobile. Instructively, Teleology Holdings has been blocked from concluding a management services contract with the local joint venture, Teleology Nigeria Limited. The management services contract would have enabled Teleology Holdings and its team of experts to oversee the implementation of the organisation’s elaborate business plans, including funding proposals. Also, founder of Teleology Holdings Limited, Adrian Wood, is understood to have resigned from the boards of Emerging Markets Telecommunication Services (trading as 9mobile) as well as Teleology Nigeria Limited. “Fifteen Teleology experts have worked since June 2017 on detailed 9mobile turnaround planning, development strategies and financial restructuring. This included lining up more than US$500 million fresh direct foreign investment from international institutions. 9mobile is an exciting op-

portunity to build a revolutionary mobile network that could be the pride of Nigeria. Unfortunately, it appears that we will not be able to participate,” Wood said, expressed his disappointment with the development. “We now must stand down from further work on the 9mobile project,” he added. Teleology Holdings Ltd will be seeking to exit its shareholding in the local joint venture Teleology Nigeria Limited, which will be required to change its name. Teleology Holdings’ successful bid for 9mobile may not be unrelated with the quality of its proposed sevenmember management team which included Adrian Wood and was approved by the NCC Technical Evaluation Committee, the 13-member bank lending syndicate as well as the acquisition finance provider, Afreximbank. 9mobile, formerly Etisalat Nigeria, is the fourth of Nigeria’s GSM service providers.Itbegantradingas“9mobile” sequeltothefinancialtroublesinwhich it was embroiled when it defaulted in the servicing of a syndicated loan of

www.

money system, which invariably makes it beneficial to them, even though pessimists will opine it is denying them of cash flow. Ghana’s central bank in a 2017 report even alluded that “the growth in mobile money emanated from productive collaboration between mobile money operators and banks”. Volume of transactions soared from 266.2 million in 2015 to 550.2 million in 2016, and the growth continued in 2017 with a 78.4 percent increase to 981.5 million transactions. Similar growth has been occurring in value of mobile money transactions, from GH¢35.4 billion in 2015 to GH¢78.5 billion in 2016, and then a 98.51 percent growth to GH¢155.8 ($32 billion) in 2017. A boost to everyday life, business Ebenezer Tetteh manages his father’s four boats at the Albert Bosomtwi-Sam fishing harbour in Sekondi. Tetteh said he been using mobile money on his AirtelTigo line for more than five years, and it has made managing his father’s business easier. “Since mobile money came, we have been able to transact a lot of businesses without carrying money around. Sometimes fishing materials are needed from Accra, the capital city, so we talk to the seller, he hands over to a driver who assures you it is with him, you send the money, and they bring your goods. This is unlike before when you had to physically go and make purchases yourself,” said Tetteh.

$1.2 billion owed a consortium of 13 Nigerian banks. In the aftermath, its erstwhiletechnicalpartners,Etisalat,exitedthebusinessandrequestedthatthe use of the “Etisalat” brand name by the company be discontinued forthwith. According to data from the telecommunications industry regulator, 9mobile network has been at the receiving end of considerable customer attrition since financial troubles became public in 2017. From more than 22 million customers in its heyday in October 2016, for instance, the 9mobile network had just a little over 15 million active subscribers in November 2018 and has consistently lost customers with each passing month. Saving the company from a foreclosure together with its implications on job loss, and possibly the stability of the larger telecom industry, necessitated the intervention of the duo of the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) in what was supposed to be a guided liquidation of the company but which now increasingly appears to be an imbroglio.

•Continues online at www.businessday.ng

He explained that because there is no bank located near the fishing harbour,bankerssometimescamearound to look for customers. However,he said, people no longer grant audience to the bankers because of an incidence of microfinance fraud; they would rather go to Takoradi and deposit their money with established banks. “When the boats come ashore and we discharge the fish to sell, I simply walk to the mobile money agent in the harbour and deposit the money I receive. So, when I’m walking around, you don’t see anything on me. All my money is in the phone, and nobody can come and cross me because he thinks I’m carrying cash,” said Tetteh with a wry smile on his face, suggesting he feels mobile money helps him outsmart potential thieves. “If you take my phone, you get nothing because you don’t know my PIN,” he added. Alex Dankwa, a mobile money agent for four years, said at first he sold only airtime and other things but made just little profit. The mobile money business has, however, increased his profit and improved his standard of living. “Instead of taking a car to the bank and staying on a queue to send money, the mobile money has eliminated that,” Dankwa said, explaining, however, that he did not think the mobile money operation was a threat to the banks. “The mobile money is linked to banks. As for us agents, we have to visit a bank before we can get eCash for our phone. If you don’t go to the bank, you won’t get it, so the banks are also benefitting from it,” he said. Most businesses accept mobile money when customers want to make payments to them. The ease of collection and even withdrawal, they said, has made operations easier for them. Before the advent of mobile money, Addo, the painter, recalled that after chatting with potential clients on phone and getting commissioned to make a painting, he still had to physically meet the clients for payment. “The client wants to pay but he doesn’t have time because of work, unless you take a car and go there, and with traffic too, it delays the work and puts pressure on you. But because of mobile money, he/she can stay in his office and just send the money in the blink of an eye, and this makes the work easier,” Addo explained. Nana Ahemaa, a small business owner seen making cocktails at a street fair, said mobile money was making business easier and helping with collections. “Sometimes when people come to make a purchase, they say they don’t have enough money on them and ask if I take mobile money. I say yes, I take mobile money. So I think it is making business and collection much easier,” said Ahemaa, who has not contemplated using a POS. Norteye, the shop attendant who had once been saved by mobile money when he got stranded, also said it is accepted for payment at the business he works for. “If someone sees a product and it attracts him but he doesn’t have cash but has it in the mobile money, I can give him our number and he sends the money,” Norteye said. The number belongs to the owner of the business, and since the phone is not with Norteye as a store attendant, verification is done via a phone call and the sale is concluded. Mobile money maintains exponential growth The mobile money ecosystem in Ghana has continued to grow since the passage of the Electronic Money Issuers and Agents Guidelines in July 2015, according to Ghana’s central bank. The number of registered mobile money accounts as at December

Tuesday 08 January 2019

2017, at 23,947,437, represents a 21.34 percent growth rate over the 2016 position of 19,735,098. Similarly, the number of active mobile money accounts increased by 33.75 percent, from 8,313,283 in 2016 to 11,119,376 in 2017. The number of active registered agents of the three mobile money operators (MMOs) in 2017 stood at 151,745, up from 107,415 the previous year, showing a growth rate of 41.27 percent. The Central Bank of Ghana also noted that mobile money financial services experienced exponential growth as compared to other noncash payment streams. This, it said, was on account of expansion in agent network and introduction of innovative products. The growth in mobile money emanated from productive collaboration between mobile money operators and banks. While cheques continued to be the major non-cash retail payment instrument in terms of value of transactions, value of cheques cleared as a percentage of total value of non-cash retail payments dropped from 60.21 percent in 2016 to 49.33 percent, while value of mobile money grew from 31.02 percent in 2016 to 42.81 percent in 2017. The volume of mobile money transactions represented 97.50 percent of total volume of non-cash retail payments. However, in terms of value of transactions undertaken in 2017, cheques continued to maintain the lead with GH¢179.6 billion ($36 billion), while mobile money followed closely with GH¢155.8 billion ($32 billion). MTN, which was the first telco to launch mobile money in Ghana, also made its Initial Public Offering available via mobile money, described by the company in a December 2018 publication as “the 1st IPO in the world to use mobile money as a medium to subscribe shares”. The 2017 State of the Industry Report on Mobile Money by GSMA also noted that the “2015 regulatory guidelines from the Bank of Ghana have allowed customers to accrue interest on mobile money deposits, resulting in exponential growth in total deposits in that market”. It said “mobile money customers can also purchase treasury bills through their devices, thanks to a collaboration between Ecobank and MTN Ghana”. Certain charges are attached to different levels of cash withdrawals, BusinessDay observed. In an AirtelTigo shop, a notice showed withdrawal between GH¢1-50 attracts a charge of GH¢0.50, GH¢50.1 to GH¢1,000 attracts 1 percent charge, and withdrawal above GH¢1,000 attract GH¢10. This, for a Nigerian, would have been discouraging as it exceeds the N52.50 for an inter-bank transfer. For the Ghanaians, however, this appeared to be a non-issue. For instance, a GH¢50 (N3,719) withdrawal will attract a fee of 50 pesewas, equivalent to N37. Above GH¢1,000, the fee becomes GH¢10, equivalent to N743, which is 14 times more than the N52.50 a Nigerian bank customer pays to transfer as much as N2 million (GH¢26,000) in a day, depending on the bank. Still, the average Ghanaian appears unperturbed on the withdrawal and (some) transfer fees, because as far as they are concerned, the convenience is worth the price. People who have to make payment to businesses through mobile money also know they have to add the requisite withdrawal charges for the recipient to ensure the person/business being paid withdraws the exact amount. So far, security risks for mobile agents appear to be less of a concern, but incidents of attack are not entirely non-existent.

•Continues online at www.businessday.ng

Tuesday 08 January 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

Bola Tinubu to take charge as APC drops Amaechi as PCC DG IGNATIUS CHUKWU, INIOBONG IWOK & JAMES KWEN

resident Muhammadu Buhari, Monday, inaugurated the All Progressives Congress (APC) Presidential Campaign Council (PCC) and asked the national leader of the party, Bola Tinubu, the co-chairman of the council to fully take charge of the campaign. This might be connected to the audio clip posted by Reno Omokri, an aide to former President Goodluck Jonathan, on his Twitter handle, echoing a voice he attributed to Rotimi Amaechi, minister of transport, purportedly saying, “Buhari neither reads nor listens to anyone.” Amaechi was reported to have been caught on tape criticising President Muhammadu Buhari. However, speaking at the inauguration of the Council at the International Conference Centre, Abuja, the President, who is the chairman of the Council, said the

… as court disqualifies APC candidates in Rivers leadership that formulated the campaign policy would supervise its execution. According to Buhari, the director-general of the Council will have overall responsibility for all aspects of the campaign, including field operations while the Secretary will be responsible for all administrative and treasury-related activities of the Council. “Though we have only 40 days, this campaign is going to tax us all, because we intend to touch all corners of our great and vast country. “But I must also add that, though we will all be deeply involved, I would like to assure the nation that I will do my part without making governance or my work suffers. “Asiwaju Bola Ahmed Tinubu, my co-chairman, will be fully in charge, and is going to be on 24-hour vigil. The president implored the leadership of the party to resist being provoked, remain focused and civil in their campaigns.

“Let us engage our citizens on issues and ask for reflection on the comparative difference between 2015 and 2019 on security, economy and corruption and abuse by those entrusted with leadership in Nigeria. “As we embark on the campaign to secure mandate for the next level, I want to acknowledge the sacrifices and contributions of all stakeholders who have endeavoured to keep our party united, and our governance successful,’’ he said. Earlier in his remarks, the director-general of the Council, Rotimi Ameachi, narrated the achievements of the Buhari administration in the past three and half years. Ameachi assured that members of the council would do all they could legally to ensure electoral victory for the APC in the forthcoming general elections. Meanwhile, a Federal High Court sitting in Port Harcourt, Monday, issued a restraining order on the In-

dependent National Electoral Commission (INEC) not to recognise candidates of both factions of APC for the forthcoming elections. The presiding judge, J.K Omotosho, ruled that following the nullification of the congresses of the APC in Rivers State, the direct and indirect primaries conducted by both factions of the party were built on nothing. Omotosho declined the request of Magnus Abe and forty-three others asking to be declared as authentic candidates of the APC in Rivers State. He said the restraining order on INEC was binding until a higher court sets aside the ruling of Justice Chiwendu Nworgu nullifying the congress and primaries conducted by the APC in the state. The Rotimi Amaechi and Abe factions of APC producing two sets of candidates with Tonye Cole as well as Abe as governorship candidates conducted parallel primaries in Rivers State.

@Businessdayng

39 NEWS

BUSINESS DAY

‘Opportunities abound in Nigeria with success of Egina FPSO’ KELECHI EWUZIE

amsung Heavy Industries says future opportunities abound in Nigeria to be explored with the successful completion of the Egina Floating Production Storage Offloading (FPSO) unit and the achievement of first oil in the facility. The company says it is all the more extraordinary given that this is the first ship fabricated by the $300 million fabrication and integration facility, which itself was created to build this ship. A statement by the company at the weekend stated that the completion of the largest floating oil platform in the world, Egina, would be an achievement for any yard. According to the statement, “A number of records were broken during construction. This is the first ever project to meet Nigeria’s demanding new standards for “local content,” which in simple terms means Nigerian-owned business delivering work in Nigeria. “This project went further than just that: Nigerian parts and expertise were even flown to Samsung’s headquarters in Korea to be installed in the early stages of construction of the Egina before it was sailed to Lagos for final construction. “This success story has been made possible through Samsung Heavy Industries’ belief in the potential of Nigerian companies and workers to deliver to their tough, exacting standards. Over 9.7 million hours of time have

been spent by the Nigerian workforce, with over 6,000 Nigerians in employment on the project at its peak via Samsung and its partners and subcontractors.” The company further said, “Perhaps even more exciting than this direct opportunity for the best companies and workers is the potential it opens up for the country as a whole. As we all know, the oil and gas industry is growing across the whole of Africa, and that means many more floating oil platforms and other pieces of large equipment need to be repaired, maintained and built.” Before Samsung’s fabrication and integration yard (known as the SHI-MCI yard) was completed, the only choice was to complete this work outside of Africa, removing opportunity and investment from Nigeria’s shores. “Now, the choice is clear: Nigeria is home to a worldclass yard and is standing ready to take on the next challenge. Is this the end of Samsung’s ambitions for Nigeria? Not at all. Their vision is a future of extraordinary growth and opportunity, building on their now-proven model for heavy involvement of local companies and local workforce talent. “The combination of Korean efficiency and expertise, fused with Nigerian talent and passion, presents limitless possibilities for a future repairing, maintaining and building high value ships to serve needs in Africa and beyond – just watch this space,” the company said.

Attack on Conoil facilities, reawakening of terror on investors - activist FRANCIS SADHERE, Warri

President Muhammadu Buhari (m); Akinwunmi Ambode, governor, Lagos State (l), and Rotimi Amaechi, minister of transportation, at the inauguration of All Progressives Congress (APC) Presidential Campaign Council in Abuja, yesterday

84m Nigerians to vote at next general elections JAMES KWEN, Abuja

t least, 84 million Nigerians are expected to vote in the February 16 and March 2 general elections. After the mandatory display of the register in all polling units nationwide for claims and objections from November 6 – 12, 2018, the final register for the 2019 general elections stands at 84,004,084 voters. Mahmood Yakubu, chairman, Independent National Electoral Commission (INEC), said this Monday at the regular quarterly consultative meeting with political parties at the Electoral Institute, Abuja, where the voter

... as IPAC accuses INEC of favouring APC register was presented to each political party. Yakubu said the Commission had printed and delivered the Permanent Voters’ Cards (PVCs) to the states for collection by registered voters, and urged all registered voters who had not collected their PVCs to approach any of the INEC LGA offices and other designated collection centres nationwide to pick up their cards. He said, “While we are encouraged by the response so far, millions of cards are still yet to be collected. I wish to reiterate that the Commission will not allow the collection of PVCs

by proxy. Registered voters should endeavour to collect their cards personally without which no person can vote on election day.” The INEC chairman reemphasised that the Smart Card Readers would be used for the 2019 elections for accreditation of voters to confirm, verify and authenticate the voter and as well as to confirm that the PVC was genuine and issued by INEC so that cloned cards or cards that do not match the codes for a particular polling unit in which the voter was registered would be rejected by the Card Reader. According to Yakubu, “the separate Incident Form

used in previous elections which is only completed by the Presiding Officer without the involvement of the voter is now abolished. Similarly, the claim that the Card Reader has been enhanced to recapture voters’ fingerprints at polling units and automatically overwrite the biometric record on our database is untrue and should be disregarded.” Meanwhile, the Inter Party Advisory Council, IPAC has accused INEC of sabotaging the electoral process to favour the ruling All Progressives Congress, APC and warned the INEC Chairman not to tinker with any process that would skew victory to the APC as Nigerians would stage resistance.

iger Delta activist, Sheriff Mulade on Monday condemned the recent attacks on Conoil facility in Koluama, Bayelsa State, describing the attack as reawakening of terror on investors. Mulade, in a statement made available to BusinessDay in Warri, Delta State, sympathised with the management of Conoil Energy over the economic constraints that would be occasioned by the interruption of operations as a result of the unprovoked attacks on their facility. It was reported that a militant group, Koluama Seven Brothers, on Sunday, January 6, 2019, carried out an attack on oil facility owned by Conoil Energy Company in Bayelsa State. Mulade, who frowned at the attack, noted that attacks on oil facilities often created unnecessary tension,

military action, economic disaster and environmental degradation that could jeopardise the relative peace in the Niger Delta communities and also undermine national security. He said the attack was a negative and senseless approach to express ones displeasure, appealing to the Nigerian Army to go after the perpetrators and save Koluama community from the fear of invasion. He said, “It is condemnable for anybody or group of persons to put on a charade of fighting for a community and memorandum of understanding. “I urge Koluama community to disassociate themselves and condemn the dastard act, the issues of who gets what from the company does not justify any form of criminality and group of community youth related recklessness that tends to unleash terror on investors and oil facilities, such must be rejected.

BUSINESS DAY

C002D5556

Tuesday 08 January 2019

Nigerians fail to discuss manifestos of candidates 39 days before election

such as Twitter, Instagram and Facebook, ethnic champions who were not even sure of being alive in 2023 exchanged diatribe and belittled each other on an issue that would clearly be defined by time. As of now, no one is talking about Atiku Abubakar’s capacity to deliver on his Eldorado promises on education and health, which is something that should have been happening by now. Buhari’s Next Level matters little to a people hard hit by hunger, high unemployment and security chaos. “Every election, newspapers and commentators advocate ‘issue-based campaign’. They call for messages containing ideas that the candidates want the voters to support. Yet, just about 40 days before Nigeria’s presidential election, the ideas of the two main candidates, President Muhammadu Buhari and former Vice President Atiku Abubakar, are hardly the subject of media analysis or public discussion,

despite sharp differences in their messages,” Olu Fasan, international trade negotiator and visiting fellow at the International Relations Department of the London School of Economics (LSE), said on his Monday column on BusinessDay. The Nigerian electorate seem to be going to the presidential election without knowing what Buhari’s Next Level entails or Atiku’s Plan means. Currently, there are several diversionary plans by the two main parties and the electorate are not able to see where this is leading to. In 2016 United States presidential election, Candidate Donald Trump’s positions were clear: Build the Wall against Mexico; do away with Obamacare, and America First policy, among others. Americans discussed issues based on what Trump or Hilary Clinton, who wanted a continuation of Obama’s policies, had. “But you rather hear a lot of frivolities.,” said Sam Agbodia, a political commentator. “The challenge again is that people are not concerned about it. They are more concerned about religion and regions but they will complain the moment anybody wins and starts doing what they like,” he added. For Fasan, “Next month’s presidential election will not be about issues.” Recently, Nasir Ahmad El-Rufai, Kaduna State governor, called Peter Obi, PDP vice presidential candidate, a tribal bigot. ‘Peter Obi is a tribal bigot. He was widely quoted on national television that the SSS was right to detain me for 48 hours in an hotel in 2014 on the grounds that ”El-Rufai has no business being in Anambra State as it is not Katsina State. I sued the SSS and awarded N4m damages.” This, as usual, attracted the attention of many Nigerians but took the electorate away from the bigger issues.

environment,” the expert adds. On drawing investments into the country, the ACPN manifesto mentions that, “We will also attract at least three top-quality global health providers to be linked with the Nigerian Health Insurance Scheme in each sub-region.” The general health sector policy objective in the manifesto was directed at reducing infant and maternal mortality and reducing medical tourism. “The central plank of our health agenda is to build a functional health system that serves the needs of different segments of our population. The specific objectives include:

to reverse and significantly reduce by 50 percent the negative trend of maternal and infant mortality rate as well as needless deaths caused by non-communicable diseases while also reducing the trend of medical tourism,” the ACPN manifesto says. The National Health Insurance Scheme was set up under Act 35 of 1999 Constitution by the Federal government with the aim of improving the health of all Nigerians and ensure that affordable health care was available to all, irrespective of class, gender or social status. It came into operation in 2005 during the second term of President Obasanjo’s democratic rule.

ODINAKA ANUDU

igerians are still not discussing the manifestoes of presidential candidates despite that elections are 39

days away. As usual, citizens are caught in the web of issues that have little to do with candidates’ capacity to govern and their programmes for the people, as the electorate join politicians in fiddling while Rome burns. One of the issues that have dominated discourse in the last one month is whether President Muhammadu Buhari is actually the Buhari Nigerians voted for in 2015 or one Jubril Aminu Al-Sudani from Sudan. This claim, which is being vehemently projected by leader of the Indigenous People of Biafra (IPOB) Nnamdi Kanu, has taken the centre stage in the last one month, shifting the electorate’s attention away from manifestoes presented by presidential candidates in November. Yemi Osinbajo, Nigeria’s vice president and the All Progressives Congress (APC) vice presidential candidate, recently came up with a rather weird and diversionary tactic of asking the South-West to vote for him and his principal so that the region will have another chance of ruling Nigeria in 2023. “Yoruba have a crucial role to play in the 2019 elections so ensure that APC wins. We are looking at 2023. If we don’t do well in 2019, the opportunity might evade us. We should be forward-looking and not spoil our future by allowing those who had plundered our nation to come back to government. They have been coalescing again to continue the plunder but God shall not allow them. If one is building a house, he has to construct a very solid foundation. The foundation might not be easily noticed but when it is built on, the house will emerge,” Osinbajo said when he vis-

ited the Alaafin of Oyo, Oba Lamidi Olayiwola Adeyemi, in his palace on December 23. Two months earlier, Babatunde Fashola, minister for power, works and housing, had asked the South West to vote for President Muhammadu Buhari in the 2019 elections to guarantee a return of power to the region in 2023. The News Agency of Nigeria reported that Lai Mohammed, the minister of information and culture, had led three other ministers including Fashola, ministers of transportation, Rotimi Amaechi and water resources, Suleiman Adamu, to a town hall meeting. “A vote for Buhari in 2019 means a return of power to the South West in 2023. I am sure you will vote wisely,” Fashola was reported as saying. The two separate comments generated a number of reactions, turning into the usual tribal jibes. After these events, APC members from the South-East and those

sympathetic with the region turned against Buhari And Osinbajo for offering two regions the same ticket in 2023. In its reaction, the Buhari Support Group issued a communiqué saying that 2023 will be the turn of the South-East. “The rotation convention is meant to erase the fears of marginalisation of any ethnic nationality, hence implant sense of belonging to all Nigerians. We are also witnesses on how His Excellency, Dr Alex Ekwueme of blessed memory was shoved aside from a party he co-founded, in order to appease the South West, and His Excellency Ogboniya Onu was also in the same manner shoved aside, hence the commencement of the rotation of president from the South West in 1999,” the communiqué issued by the BSO Southeast coordinator, Stanley Ohajuruka and its acting secretary, Godwin Onwusi, said. On all social media platforms

Ezekwesili to broaden National Health Insurance Scheme IFEANYI JOHN

biageli Ezekweseli, presidential candidate of the Allied Congress Party of Nigeria (ACPN), in her ‘Project Rescue Nigeria: The Manifesto’ has pledged to broaden the National Health Insurance Scheme (NHIS) if elected in 2019. In a 48-page document detailing her proposed programme for Nigeria, Ezekwesili says, “Our government will broaden the National Health Insurance Scheme (NHIS) to ensure universal coverage in a decade. Every Nigerian will be migrated in the system, starting with those

currently earning income.” The objective of the NHIS is to ensure that every Nigerian has access to good health care service, to protect families from the financial hardship of huge medical bills, to limit the rise in the cost of healthcare services and to ensure equitable distribution of health care costs among different income groups. Despite the efforts of stakeholders in attaining these objectives, the coverage of the NHIS has struggled to take off with coverage numbers ranging from five to 10 percent of the entire population. Industry specialists continue to appeal to the Federal Government to enforce

laws adequately to enable access of the remaining 90 percent uncovered Nigerians into the scheme. “The population of citizens that are not enrolled in NHIS is an investment opportunity to anyone who has the assurance of a genuinely ordered policy by the Federal government to improve the health sector through insurance,” an industry expert says. “We can pull foreign investments into HMOs by having clear policy directions on where the country is headed in terms of our health sector. Businessmen do not need to be told about a great opportunity. Foreign direct investments will flow into the sector once there is an enabling

Tuesday 08 January 2019

C002D5556

BUSINESS DAY

Buhari set for landslide victory, says Salvador Iniobong Iwok

ead, Buhari/Osinbajo Presidential Campaign Support Group (Lagos Southwest) Moshood Salvador has said President Muhammadu Buhari will win next month election with a landslide. Salvador who spoke Saturday at the All Progressives Congress (APC) rally in Maryland, Lagos, noted that the votes from the Northwest and Southwest was fully guarantee to the President. He added that Peoples Democratic Party (PDP) Presidential candidate Atiku Abubakar campaign to restructure the country was not genuine. He said the party lacked the capacity to implement such programme. Salvador who was a former People’s Democratic Party (PDP) chairman in Lagos State, explained that the country’s political configuration made it impossible, stressing all sections must be involved to restructure the country. He advised those playing the restructuring card ahead of the election, to stop being mischievous. “The PDP knows that restructuring of the country is the agenda of the Southern Nigeria. The party knows that the only way restructuring can gain dominance is to ask the old men in the south to talk about it. “What have these old men been

doing this while? Some of them joined politics when they were 27 years old and are now in their 90s. Why has it been impossible for them to restructure over the years and is it now they are over ninety, they can achieve it? According to him, restructuring we agreed is a southern agenda. Olusegun Obasanjo was there for eight years, he did not restructure because he knew the truth that it is not feasible. Jonathan was there, he never talk of restructuring. He only talked of derivation because it benefitted his own region alone. “How comes the Yoruba are

championing restructuring because it is almost impossible. We are under a democratic administration, and it is always a game of number, even when you want to go to referendum, the National Assembly has to be set aside. But is the National Assembly ready to be set aside? So, restructuring is not possible under the dispensation. Salvador said the alternative was for states to come together for economic gains, where they can channel their resources and make direct economic investment instead of looking up to federal hand-outs.

L-R: Former military Head of State and chairman, National Peace Committee, Gen. Abdulasalami Abubakar and Presidential candidate of PDP and former Vice President of Nigeria, Atiku Abubakar, during a condolence visit to the family of late former President, Shehu Shagari, in Sokoto.

ormer Vice President and Presidential candidate of the Peoples’ Democratic Party (PDP) Atiku Abubakar, has condemned the Federal Government over the invasion of the offices of the Media Trust Limited, publishers of the Daily Trust newspapers by Nigerian soldiers and subsequent arrest of the Nrwspaper’s regional editor and a reporter. Atiku said this in a statement issued on Monday by his Media Adviser, Paul Ibe, saying “we are alarmed at the military invasion of the offices of Media Trust Limited, Publishers of Daily Trust newspapers. We are further outraged by the arrest of their regional editor, Uthman Abubakar and a reporter, Ibrahim Sawab. “We totally condemn these actions and call on President Muhammadu Buhari to immediately call off his forces to order and end their attack on the media and the freedom of the press. This is a travesty, the likes of which we have not seen since the heinous days of military rule. Atiku Abubakar and other

pro-democrats did not risk their lives fighting for democracy for this to happen.” Atiku noted that the action is unacceptable adding that the media is not only a partner in progress to the government, but they are also a quasi-arm of government being, as Edmund Burke propounded, the “Fourth Estate of the Realm.” The Wazirin Adamawa pointed out that the particular use of heavily armed soldiers also shows the abuse of scarce resources which has exacerbated the insecurity currently plaguing Nigeria. “Our soldiers should not be used to target law-abiding citizens. A dutiful and prudent commander-inchief should rather deploy them to either the Northeast or the ZamfaraKatsina axis, especially after the Governors of both states held New Year’s Day conferences bemoaning the breakdown of law and order in their respective states. “Again, we urge President Muhammadu Buhari to use his powers as C-in-C to protect the people, rather than to oppress Nigerians. If the government has issues with Media Trust Limited, it should bring

Sanwo-Olu

2019: Lagos APC flags off gubernatorial campaigns Iniobong Iwok

head of the forth-coming general election, the Lagos State chapter of the All Progressives Congress (APC) will officially flag-off its gubernatorial election campaign across the state on Tuesday. Babajide Sanwo-Olu, who was a former two-time commissioner in the state, under the Babatunde Fashola-led administration, is flying the party flag in the March 2 election. Publicity Secretary of the party in the state, Joe Igbokwe, disclosed in an interview with BusinessDay, that the campaign would kick-off in Ikeja. Igbokwe enjoined all party members to come out and take the party to victory, stressing that the APC was sure of victory in all elections in the state. “We urge all party members to come out for the flag-off of the campaign across the state, we are starting Tuesday at the Airways ground, at Police College Ikeja and we know it would be peaceful,” Igbokwe said.

Amaechi’s leaked tape: You have failed, resign, PDP tells Buhari

Atiku blasts FG over invasion of Daily Trust, urges Nigerians to emulate Shagari Innocent Odoh, Abuja

According to him, since restructuring was not a northern agenda, the issue would always be defeated through popular votes. He noted that the PDP Presidential candidate Atiku Abubakar would later come up with excuses why he could not restructure because of the inherent challenges. “The record of the PVC we have shown that the Southwest has 14 million voters, the Southeast 7 million and the South-south 7 million voters. Then go to the North which does not have restructuring as its agenda; North-west has 18.9 million votes, Northeast 12 million and North central has 10 million votes. “All these put together show that the north will defeat the south on the restructuring agenda, so it is not within the power of Atiku to say he would restructure or north but the constitution has to be followed to achieve it.” Speaking at the event former Senator Anthony Adefuye, charged party members to move from house to house to canvass for votes, adding that victory for President Muhammadu Buhari would provide opportunity for the Southwest to reassert itself for future election. He advised party members to forget whatever acrimony that came up in the selection of candidates being presented for the elections. “Some people may have been offended during the primary that is not enough to revolt against the APC’s candidates. Let vote them first”.

charges against them at a court of competent jurisdiction or the Nigeria Press Council, the statutory body that governs ethical standards in the Nigerian press. “Nigeria had a free press before this administration and we assure the President and all Nigerians that a free press will outlast this government,” he said. Meanwhile, the former Vice President has urged Nigerians to emulate the virtues of the late former Nigerian President Shehu Shagari, who worked for the entrenchment of democracy in Nigeria. Atiku Abubakar said this while fielding questions from journalists shortly after paying a condolence visit to the family of the late President in Sokoto on Saturday. The former Vice President’s condolence visit to the family of the late President Shehu Shagari was in company of former Head of State and Chairman of the National Peace Committee, Abdulsalami Abubakar Responding on behalf of the family, Shagari’s eldest son, Bala Shagari said it is comforting for the family to hear the soothing words of those visiting to condole with them.

Innocent Odoh, Abuja

he People’s Democratic Party Presidential Campaign Organisation (PPCO) has asked President Muhammadu Buhari to throw in the towel and end his re-election bid, following the expressed disapproval and vilification by his own Campaign Director-General, Rotimi Amaechi in the leaked audio recording. The PPCO noted in a statement issued on Monday by the PDP National Spokesman, Kola Ologbondiyan, that since the audio recording leaked last Friday, neither Rotimi Amaechi nor the Buhari Campaign Organisation has mustered the strength to deny or offer any cogent explanation on the matter, an indication that President Buhari has lost the loyalty of his support base. The PPCO added that this development amply shows that the Buhari Campaign Organisation is in agreement with Amaechi that President Buhari’s incompetence, nepotism, insensitivity and corruption and not the 16 years of the PDP in government are responsible for the myriad of problems facing our

nation. “Our party, therefore, holds that President Buhari now lacks the honour and integrity to campaign and seek for votes since his Campaign Organisation is holding him directly responsible for the biting economic hardship and security problems our nation has been facing in almost four years of his tenure, as expressly communicated in the leaked recording. “Amaechi’s confession, that President Buhari does not listen and that he does not give a hoot about the suffering of Nigerians but laughs and glees at the misfortunes and plights of our citizens shows the world the level of disdain President Buhari holds for Nigerians,” the statement said. The PDP pointed out that President Buhari is now merely clinging on straws and walking by his own shadows and Nigerians can now see why he is desperate to use his niece in INEC, Amina Zakari, to rig himself back to power. “The PPCO challenges President Buhari to dare Amaechi and speak out on this poor rating by his Campaign Organisation, without which he lacks the rectitude to canvass for votes among Nigerians.

Tuesday Monday08 07January January2019 2019

www.

g C002D5556

BUSINESS DAY DAY BUSINESS

9 42 37

Tough economic choices politicians must make as election draws nearer HARRISON EDEH, Abuja

he Nigerian political space has been charged with the general election drawing closer and almost due in few weeks.But the fundamental question has not been addressed by most political office holders vying for elective offices which is blow by blow account of how they intend to embark on the business of governance ,in addition to tough economic choices that must be made to entrench efficient and effective governance. Politicians often appeal to public sentiments and emotions during electioneering periods ,while in an attempt to win the populace over to themselves with several uncanny and witty behavioural patterns such as entering public transport,taking hair cut at public barbing salon,and other

similar behaviours.However,the business of governance is beyond these forms of election cycle behavioral patterns and rhetorics. To state the least,recent developments in Nigeria’s sociopolitical space wherein politicians are more particular about returning themselves to their respective positions rather than deliver on the business of governance has unraveled the weak understanding of the what governance entails by those vying for elective offices under various political platforms. Beyond the rhetorics of electioneering promises lie the depth of governance business . Also,Nigeria’s poor economic indices in several global rankings mostly in economy and health is a serious cause for concern. Alarmed by these concerns,analysts are of the view that politicians must have the needed competence to drive the governance process. Chijioke Ekechukwu,former director General of Abuja Chamber of Commerce and Industry said one of the tough choices by the politicians is to make commitments of signing performance targets contracts in exercising their mandates to ensue proper tracking of their performance within a given period of time.

Clarifying his stance with Nigeria’s taxation model,Chijioke said the in -coming political office holders must be able to make the hardchoice of ensuring that high number of Nigerians mostlybin the informal sector of the economyvwho are still untaxed and are benefitting from the economy must be made to pay tax to tie up loose end on the economy. Ekechukwu pointed out further that to drive the economy and ensure that small and medium scale enterprises must contribite meaningfully to the economy;political office seekers should be determined to ensure micro,small and medium enterprises bank comes on stream to drive easier lending to direct end users while growing the sub sector. “This msme bank should not operate like the Bank of Industry with lending rate still at 9%.The lending must be made easier to ensure direct access at a more cheaper rate to end users. Stating his stance on fiscal governance choice political office holders must adopt he said, public office seekers much be resolute on timely and efficient delivery of budgets at various levels of the economy. “It is due to lack of ineffective financial year by most politicians that have made our fisical year

not to be running as it should. The fiscal year has been so distorted that no one even knows when to close the year.If such as thing happens in a country like the United States that is when you will experience such thing like shut down and as such you cannot spend any non appropriated money.But that does not happen here at all. Also,Eze Onyekpere,Lead Partner Centre for social Justice said political officer holders from the President to the least person must sober down and reflect over various challenges plaguing our country currently ranging from infrastructure deficit,outstanding salary payments .With these issues on their mind,they must make the hard choices of streamlining their appetite for lavish life style while ensuring that they cut the cost of governance. “In making the hardchoice that would ensure we enter the economic Kingdom that we desire,they must have to work further bin harvesting the untaxed into the tax net.They must have to remove fuel subsidy.It is not just he question of saying you are paying under recovery,rather there must be blow by blow account of how any penny is disbursed and to whom. Celestine Okeke,lead partner Small and Medium Enterprise

Development Agency said the incoming administration must eat the humble pie and get a central cordinating economic team. “The key tough choice the incoming administration should make is to think more of the next generation not prioritising the next election. The challenge we have had so often is that the government thing more of the next election than next generation. The need to focus more on growing the economy than returning themselves to the seat of Power. “What are the long term solution to the recurring unemployment problems and even the farmers and herders clash. Can we have a cordinating economic programme that out lives current administration.A pan Nigerian agenda that captures socio-economic yearnings of our people.These are hard decisions incoming administrations must take to restore Nigeria to its economic heaven. “When you look at the bulk of the activities being carried out by the Vice President,you discover that the focus is on next election not on long term economic benefits of Nigerians.They don’t have long term economic importance of the Trader mini, the N-Power programme are just for re-election bids and not addressing core issues which has been confronting us economically.

NEWS

Atiku in Lokoja, says Buhari administration is dead OWEDE AGBAJILEKE, Abuja

he Peoples Democratic Party (PDP) presidential candidate, Atiku Abubakar, has declared that the President Muhammadu Buhari administration is dead as it has failed to deliver on its campaign promises to the people. The former vice president said since the present government assumed office over four years ago, it has taken steps to promote widespread decadence in national economy, a development he lamented had produced unprecedented expansion in the level of poverty, unemployment and misery in the land. Speaking on Monday at a political rally in Lokoja, Kogi State capital, Atiku criticised the All Progressives Congress (APC) administration for non-payment of salaries and allowances of workers. “The unemployment rate

which is very prominent in Kogi State and the whole country is a disaster. You know our number one programme of the next PDP government is the creation of jobs. I want to commit to you that we will create as many jobs as possible to reduce the unemployment,” Atiku said. “The inland ports which this government has abandoned, we started it; when you vote for PDP, we will come back and complete it for you. Kogi State is endowed with so many natural resources. Look, we want to convert those natural resources into tangible resources and the resources that can contribute to the improvement of your lives and that can bring development,” he said. Atiku promised to complete all the infrastructural development projects that had been abandoned. “I have always advocated for the restructuring of this country.

If there is any state that is going to be beacon of progress, a beacon of hope after restructuring, it is Kogi State because Kogi State has all what it takes to be one of the most promising states in this country. “Therefore, do not be deceived by APC. You have seen them, you have voted for them, what have they done in these four years? What have they done here in Kogi State? They cannot even pay salaries and pensions. Schools are not working, hospitals are not working. This is a dead government and we have the opportunity to correct it now. We made the mistake, I made the mistake. Today, we have retraced our steps and we are determined to correct the mistake that has been made. How many of you will vote for PDP?” he said. He condemned what he called government tendencies to clamp down on opposition politicians, stating specifically that Kogi State has one of the most prominent

young politicians in the country who has been a victim. “Today, he is under detention, unlawful detention for that matter. Dino, Dino. Free Dino! Free Dino!! Free Dino!!!” he shouted and the crowd chorused after him. Atiku assured Nigerians of his commitment to the revival of the power sector, stating, “Ajaokuta is the legacy of the PDP. The power stations, Geregu 1 and 2, are the legacies of PDP. I am here to pledge to you that if you vote for PDP and you return me as president, all those projects that have been abandoned by this government, I will complete them for you.” In his remarks, Senate President Bukola Saraki, director general, PDP Presidential Campaign Organisation, lamented the growing level of poverty and urged supporters not to ignore that factor during voting. “Come February 16, when it is time to vote we will remember one

thing, the poverty and the hunger. Also, the insecurity is too much. These are not meant for Nigeria. We are not born to suffer. So, people of Kogi must go out on that day, but if you believe that this hunger is not enough, you can follow them. But if you know is time that we end this hunger in this country, this is the man you will vote for (pointing to Atiku),” he said. In a reference to the controversial remarks in a recently released audio tape, Saraki said, “My own presidential candidate cares, my own presidential candidate knows, my own presidential candidate reads. My own presidential candidate is ready to move Nigeria forward. So my people of Kogi, it is a serious matter.” Other personalities at the event include the PDP vice presidential candidate, Peter Obi; former governors of Kogi State, Ibrahim Idris and Idris Wada, as well as National Assembly members from the state.

Tuesday 08 January 2019

C002D5556

BUSINESS DAY

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

Tuesday 08 January 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

BUSINESS DAY

Live @ The Exchanges Top Gainers/Losers as at Monday 07 January 2019 GAINERS Company

Market Statistics as at Monday 07 January 2019

LOSERS Opening

Closing

Change

Company

Opening

Closing

Change

STANBIC

N46.5

N47

0.5

NESTLE

N1475

N1450

-25

GUARANTY

N33.5

N33.85

0.35

TOTAL

N203

N200.2

-2.8

DIAMONDBNK

N1.8

N1.98

0.18

MRS

N25.7

N23.15

-2.55

ETERNA

N4.3

N4.4

0.1

UNILEVER

N36.3

N33.75

-2.55

N7.45

N7.5

0.05

OKOMUOIL

N80

N77.6

-2.4

FBNH

ASI (Points)

30,400.28

DEALS (Numbers)

3,746.00

VOLUME (Numbers)

222,583,260.00

VALUE (N billion)

3.342

MARKET CAP (N Trn

11.336

Resort Savings full year loss widens to N947.4m … Shareholders fund depletes by 44.46%, key audit matters raised Stories by Iheanyi Nwachukwu

he full year Loss After Taxation (LAT) of Resort Savings and Loans Plc expanded by 36.98 percent to N947.430million in 2017, from a lower Loss After Tax (LAT) of N691.648million the company reported in the preceding full year 2016. Its recently released full year scorecard at the Nigerian Stock Exchange (NSE) for the period ended December 31, 2017 shows Resort Savings and Loans Plc top-to-bottom line figures were in the red. The company’s Gross Earnings decreased by 44.50percent to N490.578million in 2017 from N883.993million in 2016. Its interest income decreased by 22.83percent to N415.837million,

from N538.858million recorded in 2016. Its fee and commission income decreased by 91.68 percent to N8.925million, representing a decline from N107.225million reported in 2016. Investment income of N11.163million as against N15.561million in 2016 represents 28.26percent decline. Loss before income tax of N933.374million shows a decline of 37.86percent, from N677.022million in 2016. Total Asset depleted by 6.16percent to N7.181billion, from N7.653billion in 2016. Total Liabilities of N10.260billion in 2017 represents 4.86 percent increase compared with N9.784billion total liabilities in 2016. Shareholders fund depleted by 44.46percent to N3.078billion as against N2.131billion recorded in 2016 financial year. The directors of the company in their report

said they assessed the bank’s future performance and financial position on an ongoing basis and “have no reason to believe that the bank will not be a going concern in the next twelve (12) months from the date of this report. For this reason, these financial statements are prepared on a going-concern basis.” “One of the Directors of the Company raised a whistle blowing petitions to regulators during the financial year bothering on perceived fraud. However, the matter is still under in-

vestigation by regulatory agencies”, the directors noted. Independent auditors in their report to the members of Resort Savings and Loans Plc raised key audit matters. “Substantial portion of directors’ loan which was written-off in 2011 as bad due to its non-performing nature was written back into the books in line with Central Bank of Nigeria (CBN) directive. The amount of the loan was N2billion. Necessary entries had been passed to reinstate the loan earlier written-off

SAHCO eyes expansion as N1.89bn IPO closes tomorrow

kyway Aviation Handling Company (SAHCO) Plc plans to ride on the back of the success of its ongoing initial public offering (IPO) to further push its vision of becoming the leading provider of aviation handling services in the West African region. SAHCO is offering 406.074 million ordinary shares of 50 kobo each through an IPO at N4.65 per share. Application list for the N1.89 billion IPO closes tomorrow Wednesday, January 09, 2019. Ten (10) percent of the shares being offered for sale will be reserved for staff of SAHCO under an Employee Stock Ownership Plan to be set up and administered by a Trustee. Interestingly, SAHCO plans to consolidate its leading position in the Nigerian aviation handling industry with expansion into other West African countries as part

of efforts to ensure longterm values for shareholders. The board of the company has also assured that the company would provide good returns to shareholders citing its impressive historic growth and potential upside from ongoing growth initiatives. SAHCO plans to ride on the back of the success of its ongoing initial public offering (IPO) to further push its vision of becoming the leading provider of aviation handling services in the West African region. Minimum subscription to the IPO is 500

shares and thereafter in multiple of 100 shares. This implies that any Nigerian with N2, 325 will be able to be part of owners of the company, thus realizing one of the objectives of privatization of creating and distributing wealth to Nigerians. SAHCO was privatised by the Federal Government in 2009. Sifax Group acquired the entire share capital of the company but the Share Sale Purchase Agreement (SSPA) mandated the majority core investor to partially divest the shares of the company to the general Nigerian investing

public. Taiwo Afolabi, chairman, Skyway Aviation Handling Company (SAHCO) Plc said the company’s future strategy is to create long term shareholder value through the profitable operation and expansion of its business into other West African markets with a vision to become the leading provider of passenger, ramp and cargo handling services in the West African region. “In order to achieve this objective, SAHCO seeks to pursue growth and opportunities consistent with its business operations by focusing on operational excellence and efficiency, enhanced service delivery, strategic partnerships and alliances that would enhance its capability both in the domestic market and globally as well as strategic investments among others,” Afolabi said.

from the books. Interest had however been suspended on the loan balance. “The matter is considered key audit matter due to the materiality of the amount involved to the operation of the bank and in compliance with the directive of the apex Bank” BBC Professionals, the independent auditors to the Resort Savings and Loans Plc noted in their report. The independent auditors added: “The bank is required by Central Bank of Nigeria (CBN) to inject minimum fresh capital of N10.793 billion to meet the minimum capital requirement of a Mortgage Bank.” Resort Savings & Loans Plc is duly licensed to carry on Mortgage banking business. It is a primary Mortgage Bank (PMB) authorised to receive deposits and maintain accounts for their customers for the purpose of providing ser-

vice, creating mortgage assets and other credit facilities. The bank has been actively involved in the provision of retail Mortgage Banking Services to variety of its customers to own their own houses. Resort Savings and Loans Plc is actively involved in the National Housing Fund loan disbursement and the monthly NHF remittance collection. The bank is also engaged in the provision of liability management through its product range. Some of these include Resort InsuranceLinked Mortgage Fund (RILMFUND), Resort Asset and Liquidity Jewel, Current Account, Savings and Tenor Deposits. Resort Savings & Loans Plc fully owned subsidiary; Resort Developers Limited carries on the business of real estate development, management and loan syndication and consulting services.

NSE employees extend hands of care to less privileged

s part of its Employee GiveBack Initiative aimed at extending a hand of care to the less privileged during festive seasons, employees of The Nigerian Stock Exchange (NSE) pulled resources together during the 2018 year-end festivities to fund specific needs in two charity homes: Bethesda Home for the Blind, Lagos and Children of Promise Orphanage, Ibadan. These two emerged from a ballot, following employees’ nomination of deserving charities. The Give-Back initiative is in alignment with the Exchange’s Corporate Social Responsibility strategy. Children of Promise Ministries (CHIPROM) is a non-governmental, n o n - d e n o m i nat i o na l charitable organization created specifically to respond to the needs of vulnerable children. They are committed to instilling hope for a better future for

the children in communities across the nation. As a child service provider, they take seriously the responsibility to ensure a stimulating and nurturing environment for these children. Their vision is to positively revolutionize the way people think about the plight of children in the 21st century. Bethesda Home for the Blind is a voluntary and non-profit organization set up to support physically challenged persons who are visually-Impaired and helpless. The idea to set up the home stemmed from the fact that the promoter (Mrs. Ohakwe) has siblings who are visually impaired. This provided her with firsthand knowledge and understanding of the difficulties the blind go through and the need to give them compassionate care and protection. They currently care for and sponsor over 150 blind students through primary to tertiary education.

46 44

BUSINESS DAY

C002D5556

Tuesday 08 January 2019

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Xi Jinping’s top economic aide unexpectedly attends China-US talks Vice-premier Liu He’s appearance underscores Beijing’s desire to strike trade deal Lucy Hornby

hina’s most senior economic official made an unexpected appearance at crucial trade talks with the US on Monday, signalling Beijing’s eagerness to end a bruising economic battle between the two countries. A Chinese participant shared a photo on social media showing a smiling vice-premier Liu He, President Xi Jinping’s top economic adviser, meeting US deputy trade representative Jeff Gerrish for the two-day negotiations in Beijing. The appearance of one of China’s most senior officials at the talks — the first since Mr Xi and Donald Trump, US president, agreed to a truce in the trade war at the G20 summit in Buenos Aires last year — surprised analysts because the negotiations are supposed to be between mid-tier bureaucrats. Beijing’s show of support for the negotiations comes as both sides face the prospect of an economic slowdown, which is driving volatility in financial markets. The S&P 500 has fallen 13 per cent since October while Chinese

stocks were the worst performing in the world last year. A Chinese foreign ministry spokesman said on Monday that both sides had expressed a will to work together, maintaining the upbeat tone that has prevailed in Beijing since the Argentina meeting between the two presidents. But some expect that Mr Gerrish’s immediate boss, US trade representative Robert Lighthizer, would be unwilling to resolve the issue too quickly so as not to lose leverage in his broader effort to decouple American manufacturing from China and bring it back onshore. “Lighthizer is savvy enough that he might do a deal that leaves enough room to keep the pressure on China,” said Arthur Kroeber of Gavekal Dragonomics, a consultancy. The Chinese in December rolled out a series of reforms long demanded by the US, including formal commitments to create a level playing field for American companies investing in the country. Long-delayed measures to open the financial sector were announced last year. “The US wants to keep China negotiating with itself, keep it rolling out reforms,” one former

At last, US banks are introducing contactless cards Issuers which are first with long-delayed technology are set to reap benefits Robert Armstrong

o tourists from much of the rest of the English-speaking world — the UK, Canada, Australia — a visit to New York can feel like a trip into the past. They tap their credit cards against subway turnstiles or shops’ card readers and wait for something to happen. Nothing does. Contactless cards, taken for granted in many countries, will at last roll out at scale in the US in 2019, giving card-issuing banks a chance to grab market share away from cash and, potentially, one another. But the fact that tap and go payments have taken so long to hit the US shows the challenges to financial innovation in one of the world’s biggest markets. In 2017, according to the Federal Reserve, US consumers made $6.6tn in payments on credit, debit, and prepaid cards, 8 per cent more than the year before — and a little less than half of total consumer expenditures on goods and services. That proportion could be even higher, analysts think, if the US did not lack cutting-edge card payments networks. “Free enterprise is an inhibitor of progress in payments in the US, not the enabler — we get the privilege of living in chaos,” said Thad Peterson, consumer payments analyst at Aite, a research firm. In smaller markets, the shift to new payment standards is effectively mandated by common agreement between banks, with support from standard-setting bodies. The

UK made the shift toward cards with chips “quickly, efficiently, and well” by 2006, Mr Peterson said, opening the way for contactless shortly thereafter. The US only just completed the move to chip cards. The age, size, and complexity of the US market has been a barrier. The US was where the card industry began, “and is arguably the most complex market in the world, with over 50 years of legacy systems”, said Craig Vosburg, president of Mastercard North America. There are thousands of banks — compared to a handful of major ones in other markets — tens of millions of merchants, and a fragmented industry that provide payments technology. This makes it hard to settle on ubiquitous solutions. The US industry muddled along with magnetic stripes and improvements to back-end technology. “Then Target happened” said Oliver Jenkyn, head of North America for Visa, referring to the retailer’s massive data breach in 2013, which included credit card numbers. “Everyone was saying ‘I shop at Target’. It was a major tipping point.” It pushed issuers to issue cards with chips, which are much harder to counterfeit. The crucial move to make chips ubiquitously acceptable in the US was a shift in liability rules at the card networks. After October 2015, merchants rather than banks became liable for fraudulent transactions using magnetic stripe cards, giving the merchants a strong incentive to update their card-reading equipment.

American official said. Mr Liu’s presence on Monday was a sign of goodwill given China’s byzantine government structures that can sometime bedevil foreign negotiators. The nuts and bolts of the negotiations over the past year have been handled by Wang Shouwen, deputy commerce minister.

Known as a “steady” person who “thinks things through pretty thoroughly”, Mr Wang’s English is excellent but he rarely strays outside his brief. “He’s very professional. He sticks to his talking points even more than most government officials,” said a US consultant who has met Mr Wang regularly.

But while Mr Gerrish’s boss Mr Lighthizer has Mr Trump’s ear, Mr Wang’s formal position as vice minister of commerce puts him many levels below Mr Xi. Mr Liu, by contrast, has served as Mr Xi’s economic adviser for many years and has direct access to the Chinese leader.

Eli Lilly to buy Loxo Oncology for $8bn in cancer drug push Deal is latest by large pharma groups seeking to bolster pipelines James Fontanella-Khan and Eric Platt

li Lilly has agreed to splash out $8bn on smaller rival Loxo Oncology, the latest in a series of multibillion-dollar pharmaceutical deals as traditional drugmakers buttress cancer treatment portfolios with novel therapies that have been proven effective in treating the disease. The deal comes just days after Bristol-Myers Squibb announced one of the largest healthcare deals of all time, as companies spend billions to restock their pipelines before existing blockbuster oncology medicines lose patent protection. Bristol-Myers Squibb last week agreed to a $90bn deal to buy Celgene, a biotech company with a deep portfolio of cancer-focused assets. That deal followed GlaxoSmithKline’s $5.1bn takeover of oncology-focused Tesaro in December. The contest for supremacy in on-

cology has been long running among the biggest pharmaceutical groups, with acquisitions and research and development dollars centred on new gene therapies that harness the body’s immune system to fight the disease. AstraZeneca on Monday announced the appointment of José Baselga, a controversial but prominent cancer doctor, to lead its oncology R&D unit as part of its new strategic plan to “double down” on the field. Cancer treatments are seen as relatively immune to pricing pressures, especially in the US where pharma companies have been under attack by President Donald Trump for raising drug prices. Lilly’s $8bn cash transaction was announced on Monday, ahead of the JPMorgan Healthcare conference in San Francisco, an industry summit where many deals are hatched at the start of every year. It is the largest deal Eli Lilly has ever completed, and comes months after it floated its animal health busi-

ness to focus itself around its human pharmaceutical business, according to data provider Dealogic. “Using tailored medicines to target key tumour dependencies offers an increasingly robust approach to cancer treatment,” said Daniel Skovronsky, Lilly’s chief scientific officer. He added: “Loxo Oncology’s portfolio of . . . inhibitors targeted specifically to patients with mutations or fusions in these genes, in combination with advanced diagnostics that allow us to know exactly which patients may benefit, creates new opportunities to improve the lives of people with advanced cancer.” The Loxo portfolio includes several drugs that are in trial as well as at least one that has been approved for use in patients, known as Vitrakvi. Lilly’s oncology portfolio includes lung-cancer treatment Alimta and Erbitux, a therapy for certain colorectal cancers. The company last year spent $1.6bn to buy Armo BioSciences to bolster its cancer treatment pipeline.

World Bank president Jim Yong Kim abruptly resigns

Official to join firm focusing on infrastructure investment in developing economies James Politi

im Yong Kim, the president of the World Bank, abruptly announced that he will be leaving his post on February 1, more than three years ahead of the end of his term. “It has been a great honor to serve as President of this remarkable institution, full of passionate individuals dedicated to the mis-

sion of ending extreme poverty in our lifetime,” Mr Kim said in a statement on Monday. “The work of the World Bank Group is more important now than ever as the aspirations of the poor rise all over the world, and problems like climate change, pandemics, famine and refugees continue to grow in both their scale and complexity,” he added.

Mr Kim has been at the helm of the World Bank since 2012, and was re-elected for a second five-year term that began in 2017. Kristalina Georgieva, the chief executive of the World Bank, will be interim president starting on February 1, while Mr Kim said he would join a firm that focuses on infrastructure investments in developing economies.

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

NATIONAL NEWS

FT Saudi teenager threatened with deportation to remain in Thailand

Gabon authorities thwart apparent coup bid

UN refugee agency granted access to 18-year-old seeking asylum after fleeing her family

Government arrests soldiers who tried to overthrow President Ali Bongo

John Reed

Neil Munshi

Saudi teenager detained at Bangkok airport and threatened with deportation has been permitted to remain in Thailand to be assessed by the UN after saying that she feared she would be killed if she was forced to return home. Rahaf Mohammed al-Qunun, 18, arrived at the Thai capital’s Suvarnabhumi airport on Saturday from Kuwait, planning to continue to Australia. But she said Saudi embassy officials in Bangkok seized her passport and were trying to return her to Saudi Arabia via a flight to Kuwait. She said family members had threatened to have her killed as she appealed to the UN to help her seek refugee status or political asylum in Canada, the US, Australia or the UK. “I’m formally asking the United Nation[s] to help me seek a refugee status or asylum to any of these countries,” she said in one of a series of Twitter posts on Monday from the hotel room in which she was being held. In another she posted a picture of her barricaded inside, with a chain lock on the door and a mattress blocking the way. As Ms Qunun’s plight made headlines around the world, Thailand’s immigration police chief said on Monday evening that the teenager would be admitted into the kingdom for evaluation by the UNHRC, the refugee agency. Major General Surachate Hakparn told reporters that she would be granted entry under protection of the UNHCR, which would take at least five to seven days to evaluate her case. The UN agency said it had been given access to Ms Qunun “to assess her need for international protection”. It added: “UNHCR consistently advocates that refugees and asylum seekers — having been confirmed or claimed to be in need of international protection — cannot be returned to their countries of origin according to the principle of non-refoulement.” A flight to Kuwait on which Ms Qunun was due to be deported left without her earlier on Monday, Thailand’s immigration bureau said. It had said that the teenager was denied entry to Thailand and faced deportation because she could not show a return ticket or proof of funds or accommodation. The Saudi embassy in Bangkok denied that officials had taken away Ms Qunun’s passport. “[Thai] immigration refused to give her entry because she doesn’t have a return ticket,” the embassy told the Financial Times. “Nobody took her passport.” The case of Ms Qunun highlights the conflicting forces that have shaped the status of women in Saudi Arabia in recent years. While the economic and social reform plan led by Crown Prince Mohammed bin Salman has offered more rights and opportunities for women to work and participate in public life, many remain at the mercy of male relatives thanks to guardianship rules based on tribal culture and a narrow interpretation of Islam. Under Saudi Arabia’s restrictive male guardianship system, adult women must obtain permission from a male guardian, usually a family member, to marry or travel abroad.

Tuesday 08 January 2019

Nigerian market businesses say that just a few years ago they could do a roaring trade. But now, with nearly a quarter of the population out of work, ‘the middle-class man doesn’t have any money, so there’s no customers’

Nigerians feel economic pinch as presidential election looms Worries over growth and unemployment are dominant concerns ahead of February vote Neil Munshi

t the New Market in the Lekki area of Lagos, Nigeria, Joy Eno is painting a customer’s toes bright yellow. It is one of the few bits of business she has done all day. “Customers come but not really that much because they don’t have money and there’s no jobs,” said the 23-year-old beautician. “The economy is not really good.” Nearby, Peter Chuks can remember a time just a few years ago when businesses in the market could do a roaring trade. “You couldn’t move in here,” recalled the 38-year-old, who deals in chemicals to treat water. Now, with nearly a quarter of Nigerians out of work, “the middle-class man doesn’t have any money, so there’s no customers”. As Africa’s most populous nation heads toward presidential elections in February, its roughly 200m citizens are feeling the pinch of sluggish economic growth. The government last month released unemployment data for the first time in a year, which showed joblessness had risen to 23.1 per cent in the third quarter, from 18.1 per cent a year earlier. While the country has emerged from a recession brought on by a slump in oil prices, the economy grew at just 1.8 per cent in the third quarter, according to data released in December. “We’re not in a recession officially but there’s no growth that would actually inspire any confidence,” said Nonso Obikili, an economist at Abuja-based Economic Research Southern Africa. “We are trudging

along.” Yvonne Mhango, Sub-Saharan Africa economist at Renaissance Capital, said growth in 2018 was well below the 3 per cent she had expected. “We didn’t appreciate how weak the consumer was and how much more it will take for the consumer to emerge from this slump.” As the battle for the presidency hots up, analysts expect a close race, dominated by economic concerns. Mr Obikili noted that a vote that will pit incumbent president Muhammadu Buhari against Atiku Abubakar, a former vice-president, will be “one of the first elections where there seems to be some kind of policy difference” between the candidates. “The Buhari policy focuses more on state-driven, more interventionist, more social, and the Atiku policy ideas are more market-sensitive, business-friendly,” he said. “Depending on who wins you will see reactions either in the stock market or just in overall business sentiments.” Growth has picked up of late thanks to improvement in nonoil sectors such as telecoms. The government also ramped up infrastructure spending and foreign direct investment for the first three quarters of 2018 which, at $14.7bn, exceeded the figure for the whole of 2017. But the multiple security crises that have plagued the country, including a brutal insurgency by Boko Haram militants in the country’s north-east, are “having a material impact on growth”, Ms Mhango said. The naira has come under pressure, despite the central bank’s

relentless focus on stabilising the exchange rate. Double-digit inflation has come down, but its effects are abundant in the wallets of Nigerians whose wages have stagnated, if they are lucky enough to be working at all. And the drop in crude prices is hitting Nigeria, Africa’s biggest oil producer, which pumps out about 2m barrels per day. When Nigeria’s oil minister was asked last month on Bloomberg TV why the country would only make a small contribution to Opec’s planned production cut, he was blunt: “We need the money.” Foreign reserves have fallen from $47.6bn in May to $42bn in November. Observers said such outflows were typical investor behaviour ahead of elections and with US interest rates also rising. But Bismarck Rewane, chief executive of Lagosbased Financial Derivatives Company, said outflows were accelerated by the government’s decision in the autumn to impose $10bn in fines on MTN, a telecoms operator. The move was widely panned as anti-private sector. MTN recently settled the matter with a $53m payment. He said he had little confidence of any correction soon. “It’s quite a tough situation, and in the run-up to the election there’s no way the officeholders or policymakers can make any efficient decisions,” he said. Most of Lagos’s business elite hope the economy will improve with Mr Abubakar, a wealthy businessman, at the helm. But at the New Market Mr Chuks has little faith that a change of political leadership will make any difference.

Wall Street firms back new exchange rival to NYSE, Nasdaq Bid to break the dominance of largest trading ventures supported by retail brokers, banks and market makers Philip Stafford

more than a dozen exchanges and 30 alternative trading venues already vie for business. The venture will be mutually-owned, a common form of ownership for trading venues. Exchanges such as NYSE were also mutual before many went private and listed their shares. Brokers Bank of America Merrill Lynch and UBS, retail brokers Charles Schwab and E*Trade, and electronic market maker Virtu Financial are also participating in the new MEMX venture. MEMX said it would file an application with the Securities and Exchange Commission, the US markets regulator, early this year for approval. It normally

takes around a year for a licence to be granted, although the SEC’s operations are affected by the US government shutdown. Launched three years ago IEX, the exchange profiled in Michael Lewis’s book Flash Boys, has had limited success in taking market share. Exchanges owned by Intercontinental Exchange’s NYSE, Nasdaq and Cboe account for the majority of business conducted on exchanges. Shares in Intercontinental Exchange, which owns the NYSE, were down 2.8 per cent in early trading on Monday. Nasdaq dropped 2.9 per cent and Cboe Global Markets was 2.1 per cent lower.

abon’s government has arrested a group of soldiers who seized the oil-rich central African nation’s state radio station early on Monday morning, seemingly ending a coup attempt against President Ali Bongo, who is recovering in Morocco from a stroke. The government announced that the attempted coup plotters had been arrested just six hours after they had seized the radio station and declared their intention to “restore democracy” to the nation of 2m, according to the BBC and Radio France Internationale. The soldiers had said a New Year’s eve address by Mr Bongo, which had been meant to reassure citizens that he was healthy after months of relative silence from the government, had “reinforced doubts about the president’s ability to continue to carry out the responsibilities of his office”. The soldiers said they represented the Patriotic Movement of the Defence and Security Forces of Gabon. News agency AFP reported that gunshots were heard in the capital Libreville, where the BBC said tanks and armed vehicles could be seen. Reuters, citing a source close to the government, reported that “the plotters appeared to be a small group of soldiers”. Gabon is a member of Opec but is one of the smallest producers in the oil cartel, pumping just under 200,000 barrels a day in November, or approximately one-tenth of the output in Nigeria, Africa’s largest producer. Oil prices were up almost 2 per cent on Monday at $58 a barrel, extending a rebound from last week. Gabon’s economy has been pressured by lower oil prices since 2014, when the rise of the US shale industry undermined the $100-a-barrel oil era. According to the US Energy Information Administration, the majority of Gabon’s oil exports go east towards Asia and Australia, with only some being shipped to Europe and occasionally the US. Total output in the country has almost halved since 1997, but still makes up a significant percentage of government revenues. In 2014 it made up 45 per cent of revenue, according to the IMF. France’s Total and Royal Dutch Shell are among the biggest producers in the country. Mr Bongo’s family has ruled Gabon for almost fifty years. He took office in 2009 after the death of his father Omar. The younger Mr Bongo’s re-election in 2016 was disputed by claims of vote rigging and marred by a violent state crackdown on opposition protests. Imad Mesdoua, senior analyst for political risk consultancy Control Risks, said there was little clarity about the attempted coup, but that it might be the result of broader infighting among Gabon’s elites over the country’s future. “In recent weeks, multiple behind-the-scenes discussions have been taking place in Libreville about what a post-Ali Bongo or indeed a post-Bongo family era would look like,” he said. “What we might be witnessing is a set of actors involved in these internal debates taking actions into their own hands, but the overall situation remains unclear.”

Tuesday 08 January 2019

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Reliance Communications makes $18.6m payment in Ericsson Swedish group accuses Indian telecoms company of breaching order to pay $79m Simon Mundy

eliance Communications has deposited $18.6m at India’s supreme court in a “partial payment” to creditor Ericsson, which is pushing to have its chairman Anil Ambani imprisoned for alleged contempt of court. Last week, the Swedish group filed a petition with India’s supreme court, accusing RCom of breaching a court order to pay $79m in unpaid dues. It alleged that the telecom company had “illegally pocketed” the proceeds of asset sales, instead of transferring funds to creditors. On Monday, RCom said it had deposited Rs1.31bn ($18.6m) of its operational funds with the supreme court registry, as a partial payment towards the amount claimed by Ericsson, which it remained “fully committed” to paying. The initial payment represents more than a third of the Rs3.8bn that the company had in cash and cash equivalents at the end of September, according to its most recent financial report. It separately accused Ericsson of “attempting a trial by media and sensationalising issues”, and claimed that the Swedish group’s conduct “gravely endangered” the interests of RCom’s secured lenders, which include 17 Indian public sector banks. RCom had total liabilities of more than $7bn at the end of September. RCom said the supreme court had given it four weeks to submit a response to Ericsson’s petition, and would then give Ericsson a further week to file a rejoinder, after which the court would hear the case. RCom was once the key asset in Mr Ambani’s corporate empire and among Asia’s most valuable telecoms groups but, over the past decade, it has had big losses in its market share to rivals led by Bharti Airtel and Vodafone India. This left it vulnerable to a price war launched

in late 2016 by Reliance Jio, the telecoms company backed by Mr Ambani’s older brother Mukesh. Since the Ambani brothers divided their father’s Reliance conglomerate between them in 2005, the market capitalisation of Mukesh’s Reliance Industries — which earns most of its revenue from oil products — has grown to $100.3bn. In contrast, the aggregate value of Anil’s listed companies — which include operations in power, infrastructure and financial services — has declined to $3.7bn. After creditors including Ericsson started proceedings under India’s new bankruptcy law, RCom in December 2017 agreed to sell its main mobile assets to Jio. Ericsson had claimed $158m from RCom in unpaid fees for outsourced management services, but agreed to accept half that sum after assurances that it would be repaid swiftly with the proceeds of the Jio transaction. The agreement brought the insolvency proceedings to a halt. But while RCom has handed over some minor assets to Jio, completion of the full deal hinges on approval from the government, which is pursuing RCom for outstanding dues related to spectrum acquisition. While it fends off the contempt of court action from Ericsson, RCom has launched a contempt suit of its own against the government’s telecoms department, which it accuses of breaching a commitment to approve the Jio deal. Companies in Anil Ambani’s Reliance group are also seeking at least $11.4bn in 26 defamation lawsuits against politicians and foreign and domestic media groups, including the Financial Times. The complaints, all filed in the western city of Ahmedabad, relate to coverage of the group’s involvement in a big defence deal and its broader financial performance.

Wall Street firms back new exchange rival to NYSE, Nasdaq Bid to break the dominance of largest trading ventures supported by retail brokers, banks and market makers

Philip Stafford

ome of the US’s largest retail brokers, banks and market makers have given their backing to a new stock exchange to break the dominance of the New York Stock Exchange, Nasdaq and Cboe Global Markets. Fidelity Investments, TD Ameritrade, Morgan Stanley and Citadel Securities are among the big names which will back and control the venture, called Members Exchange, or MEMX. MEMX’s aim is to increase competition and simplify the cost of trading for institutional and retail investors in the world’s largest equities market, where more than a dozen exchanges and 30 alternative trading venues already vie for business. The venture will be mutuallyowned, a common form of ownership for trading venues. Exchanges such as NYSE were also mutual before many went private and listed their shares. Brokers Bank of America Mer-

rill Lynch and UBS, retail brokers Charles Schwab and E*Trade, and electronic market maker Virtu Financial are also participating in the new MEMX venture. MEMX said it would file an application with the Securities and Exchange Commission, the US markets regulator, early this year for approval. It normally takes around a year for a licence to be granted, although the SEC’s operations are affected by the US government shutdown. Launched three years ago IEX, the exchange profiled in Michael Lewis’s book Flash Boys, has had limited success in taking market share. Exchanges owned by Intercontinental Exchange’s NYSE, Nasdaq and Cboe account for the majority of business conducted on exchanges. Shares in Intercontinental Exchange, which owns the NYSE, were down 2.8 per cent in early trading on Monday. Nasdaq dropped 2.9 per cent and Cboe Global Markets was 2.1 per cent lower.

Finally, China gets its go-to guy in Washington Lighthizer designated point person for talks, and Beijing knows it is talking to someone with authority Lucy Hornby and James Politi

ear readers, welcome to FT Free Trade 2019! It’s all kicking off with a bang, as US negotiators are in China to try to set the stage for a lasting peace between the two giant trading nations and strategic rivals. Here’s our dispatch from Lucy Hornby in Beijing on how the Chinese see things . . . The Chinese have been curiously optimistic ahead of trade talks in Beijing this week. The reason may seem counter-intuitive, but here goes: Robert Lighthizer, the brains behind Donald Trump’s tariffs, has been designated point person for negotiations. He is tough, but China finally knows it is talking to someone with authority. “At least a formal, clear negotiating representative has been set up by the US,” said Arthur Kroeber, of China-focused consultancy Gavekal Dragonomics. Mr Lighthizer, whose aversion to travel is well known, is not in Beijing, but his spirit will be. Leading the US delegation is Jeff Gerrish, his loyal deputy and fellow alumnus of Skadden Arps, the law firm, where they

together waged many battles on behalf of the US steel industry against Chinese competitors. Elevating Mr Lighthizer rewinds the clock to the Clinton administration, when US trade representative Charlene Barshefsky negotiated with China the terms of its accession to the World Trade Organization. She remains well respected in Beijing for being tough but fair. Lead Chinese negotiator Liu He had been asking for a point person since last March. After Mr Trump scuppered a 2017 deal by commerce secretary Wilbur Ross, Beijing attempted to negotiate through Treasury secretary Steven Mnuchin, while reaching out to other Goldman Sachs alums. Beijing had correctly noted that Wall Street is far more kindly disposed than economic nationalists such as hawkish Trump adviser Peter Navarro, author of Death By China, but needed to have a better grip on where it stood. In appealing to the Treasury department the Chinese were faithful to the Strategic Economic Dialogue architecture set up during the Bush administration and expanded under Barack Obama. But

critics argued that the format had become bogged down in incremental items, and the Trump administration ditched it. While Mr Lighthizer drives a much harder bargain than the Goldman crowd, at least if he agrees to a deal the Chinese side can be confident it will stick. Focusing the broader dispute back on to tradespecific issues suits Mr Liu, whose immediate goal is to prevent any escalation in tariff rates while chipping away at tariff categories. But Beijing should beware of becoming too fixated on a narrowly defined agreement in the interests of allowing Mr Trump and his Chinese counterpart Xi Jinping to declare a short-term win. That would leave the field open for future pressure from Mr Lighthizer, whose broader goal is to bring US manufacturing back onshore. Now that the US side has cleared things up, a similar question might arise regarding who speaks for China. Mr Trump and Mr Lighthizer plan to travel to Davos this month for the World Economic Forum, where they will find Chinese vice-president Wang Qishan.

Wall St gains as markets track US-China trade talks Powell comments and strong US jobs data offer support Michael Hunter and Hudson Lockett

tocks were mixed in Europe and the US as participants awaited any details from the latest round of US-China trade talks, although investors remained hopeful that an agreement between the two sides could ease the conflict. The dollar lost ground to most major currencies, with the renminbi touching a one-month high. Oil prices continued to rise. As European stocks trimmed earlier losses, Wall Street’s S&P 500 pushed 0.6 per cent higher to 2,546. The Nasdaq Composite index was up 0.9 per cent. The trading pattern came after a week of market turmoil amid signs that the impact of the dispute was showing up in economic data and in demand in China, after Apple issued a revenue warning. But the mood on Wall Street remained buoyed by a dovish signal on the pace of US monetary policy tightening from the Federal Reserve’s chairman, Jay Powell, on

Friday. Last week’s strong US employment report also continued to offer support, as markets digested the latest non-manufacturing survey from the Institute for Supply Management, which showed the pace of growth in the US service sector falling to its lowest level in five months. China’s renminbi rose to a onemonth high and China-focused stocks also gained, helped by the announcement of stimulus measures on Friday. The onshore renminbi, which moves within a trading band of 2 per cent in either direction from a fix set by China’s central bank, was 0.3 per cent higher at Rmb6.8445 per dollar after touching its highest point since December 5, while the offshore rate not bound by that band gained 0.3 per cent to Rmb6.8457. Frankfurt’s Xetra Dax was down 0.4 per cent and the FTSE 100 fell 0.6 per cent. The region-wide Stoxx 600 was 0.3 per cent weaker. There was a brighter showing in Asia. Tokyo’s Topix index rose 2.8 per

cent with gains across technology stocks in demand. In Sydney the S&P/ASX 200 gained 1.1 per cent. Hong Kong’s Hang Seng rose 0.8 per cent while in China the CSI 300 index of Shanghai and Shenzhenlisted stocks rose 0.6 per cent. The gains came as US and Chinese officials resumed negotiations in Beijing, news of which helped the S&P 500 finish Friday’s session up 3.4 per cent. Stocks also got a leg up from soothing comments made by US Federal Reserve chairman Jay Powell suggesting the central bank would be patient on monetary policy this year. On Monday futures tipped the US stock index to gain 0.3 per cent at the open later in New York. Forex and fixed income The dollar index was weaker, down 0.4 per cent at 95.76. The yen firmed by 0.1 per cent to ¥108.43 per dollar. The euro was up 0.6 per cent at $1.1458, while the pound ticked up 0.3 per cent to $1.2765 Sovereign bond markets were muted, with the 10-year US Treasury yield flat at 2.65 per cent.

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Tuesday 08 January 2019

ANALYSIS Apple changes strategy to stream video on Samsung TVs Until now, iPhone maker has tried to keep content tied to its devices Tim Bradshaw

US-China: farmers count the cost of the trade war America’s soyabean exports to the world’s biggest market have all but disappeared, leaving farmers dependent on a $12bn bailout Gregory Meyer

he final 230 miles of the Mississippi river have long reinforced American might in global food markets. Ten grain terminals tower like fortresses along its bends, receiving crops from upstream farms, banking them in concrete silos and sending them over the levees into the holds of foreign ships. Together they can export 500,000 tonnes a day. Yet this year the autumn high season never came. The amount of grain and oilseeds moving through Mississippi river ports has dropped by 9 per cent since the autumn of 2017, according to the Federal Grain Inspection Service. Buoys for mooring vessels bob unused. Cargill, the world’s biggest agricultural trading house, repeatedly idled its two terminals on the river, including a five-day shutdown in November when workers stayed home unpaid. “We’ve never done that [before],” says Jeremy Seyfert, the terminal manager. “We had the ability to take the plant down for five days because we didn’t have anything to load.” Between September and December, soyabean volumes shipped through Cargill’s river terminals in Louisiana are down 40 per cent year on year, Mr Seyfert says. The disruption at the mouth of the Mississippi is an acute result of the US-China trade war. After US President Donald Trump imposed new tariffs on Chinese goods, Beijing punched back with duties on US exports including most of its $20bn in agricultural commodity sales. Soyabean exports, worth $12bn in 2017, were hit hardest. The oilseed’s conquest of farm fields in the past 20 years has largely been down to US farmers gambling on China’s demand for protein to nourish pigs and chickens. Beijing raised tariffs on soyabeans by 25 percentage points in July, pricing the US crop out of the world’s largest market and making it a symbol of deteriorating bilateral relations. “As soyabeans have remained the most exposed commodity in the trade war, investors should monitor this market in assessing the state of SinoUS trade negotiation,” says Citigroup. Soyabean prices depressed by the dispute remain weak, reflecting low expectations even as US and Chinese officials resumed trade talks on Monday. Exporters are focusing their attention on other markets. Soyabean stockpiles are clogged up and down the Mississippi, upsetting rhythms of the crop calendar at a multibilliondollar cost to American farmers and taxpayers. Hopes rose in the US farm belt after Mr Trump and President Xi Jinping of China met in Buenos Aires towards the end of last year and agreed not to escalate their dispute for 90 days, a period that ends on March 2. Beijing has in recent weeks purchased a few million tonnes of soyabeans for its government reserve, in a sign of goodwill.

Yet the market is sceptical about the possibility of a permanent detente. “The reality is that we’re in the early stages of a new cold war,” says Jan Lambregts, global head of financial markets research at Rabobank, a lender to the food and agriculture sector. “China has thrown down the gauntlet: they want to be number one. The US has responded saying that’s not going to happen . . . Within that context, there is no way I can see a lasting deal.” Even if Beijing and Washington make peace, the effects of the 2018 soyabean showdown will endure. Market veterans recall how a 1973 US embargo on soyabean exports sparked Brazil’s ascent as a major player in the sector. “Once you are branded with the scarlet letter of being an unreliable supplier, it is hard to completely regain those lost sales,” says Scott Irwin, a University of Illinois agricultural economist. Food security is a priority for Beijing. So uncertainty over US relations may cause it to further diversify its soyabean sources. “No doubt in my mind, this will have some sort of long-term impact,” says Jim Sutter, chief executive of the US Soybean Export Council, a trade promotion body. “We’re going to do all we can to try and minimise the long-term damage in China, but after the 90-day period is over I don’t think we’ll wake up and go back to normal.” The council has requested government funding to develop fast-growing alternative markets such as India and Nigeria. “We’re trying to make sure we’re going to new markets, reducing, perhaps, our dependency on a particular large market,” Mr Sutter says. For the year up to September 30, China imported 94m tonnes of soyabeans, more than a third of it from the US. For the year that began on October 1, US government economists forecast China will import 90m tonnes, the first decline in 15 years. The US has captured very little of that demand. From September 1 to mid-December US exports of soyabeans to China had amounted to just 341,000 tonnes, compared with 18m tonnes in the same period of 2017, US agriculture department data show. Meanwhile, US farmers have hauled in what is estimated to be a record 125m-tonne crop. The partial government shutdown over Mr Trump’s proposed border wall has prevented the release of more recent official data on US exports. China looks able to make do with minimal amounts of US soyabeans until new supplies begin streaming in from South America. Its own reserves were already high when the China Feed Industry Association in October lowered the protein standard for pig and poultry feed. If fully embraced, the policy will reduce the country’s annual soyabean demand by 14m tonnes, says Chenjun Pan, a Rabobank analyst in Hong Kong. Further reducing millions of tonnes of demand, an African swine fever outbreak has led China’s livestock farmers to cull pig herds. Last summer China ended duties on soyabeans and rapeseed — another protein-rich oilseed — from five Asian

countries including India. It later reopened its market to Indian-crushed rapeseed meal, dismissing earlier quibbles about its quality. President Vladimir Putin has said he wants to sell more soyabeans to China, and in November a queue several kilometres long formed at Russia’s easternmost border crossings as a “massive supply of soy” made its way through, according to local reports cited by AgriCensus, a price reporting agency. The biggest winner of the trade war so far has been Brazil, as China snapped up its previous crop. Gross profit margins for farmers exceeded 50 per cent in Mato Grosso state, compared with a historical average of 30 per cent, according to Guilherme Bellotti, senior agribusiness analyst at Itaú BBA bank in São Paulo. Land planted with soyabeans this year is expected to reach a record 36m hectares, adding pressure to convert more forests into cropland. White House officials have made confident noises that China will offer big commitments to buy more American products such as soyabeans, corn and dairy. Yet crop traders are wary of basing decisions on such pronouncements. “People in the grain industry spend a lot of time forecasting real demand, real supply, consumption patterns, rainfall patterns. Those are what used to drive grain flows,” says Michael Ricks, the Cargill trading and merchandising manager responsible for the company’s North American soyabean portfolio. “Now you’ve added a new element, which is geopolitical policy. And that’s something that we’re not at all skilled at forecasting.” The impact of the crop back-up is visible across the US interior. Soyabeans that cannot be exported have in most cases been stored in a bet on higher prices. White polyethylene bags stuffed with excess crops line fallow fields. They are cheaper in the short run than building metal storage silos, whose cost has soared because of new US tariffs on steel imports, silo manufacturers say. Stocks of soyabeans available just before the 2019 harvest will more than double year on year, the US agriculture department estimates. In the upper Midwest, soyabean trains that normally shuttle to Pacific ports have instead been redirected to head south-east towards the Mississippi river docks at St Louis, Missouri, says Kayla Burkhart, a grain manager at the CHS SunPrairie co-operative in North Dakota. There they are loaded on barges lashed together and pushed by tugboats to Louisiana terminals. Flotillas of northern soyabeans in the autumn overwhelmed the local market in Louisiana, where farmers typically grow the crop alongside rice, sugarcane, cotton and pond-raised crayfish. Terminals, already full of supplies intended for overseas markets but which no longer had buyers, stopped purchasing Louisiana-grown varieties. More than half the crop in southern Louisiana was unmarketable or left to rot in the fields, according to the Louisiana State University AgCenter.

strong contender for Apple’s biggest product launch of 2019 will come in the form of an app — for Samsung televisions or Amazon’s home speakers. As Apple prepares to unveil a streaming service with over $1bn of new television shows from Oprah Winfrey and Steven Spielberg, and TV shows from the likes of JJ Abrams, it is looking for viewers well beyond the owners of iPhones, iPads and Apple TV set-top boxes. On the eve of the Consumer Electronics Show in Las Vegas on Sunday, Apple said it would bring its existing iTunes movies and TV app to Samsung’s latest TV sets. The move marks the first time that Apple has allowed a TV manufacturer to integrate iTunes. Owners of Apple’s smartphones and tablets will also be able to stream content from their devices to Samsung’s big screens using AirPlay 2, the same proprietary wireless system that iPhone owners can use to listen to music on third-party speakers such as Sonos. Apple also revealed a tie-up with TV maker Vizio at CES on Monday. Similar to the Samsung deal, Vizio set owners will be able to stream

pressure, analysts say Apple is looking to build a services business that can thrive outside its tight-knit family of products and generate meaningful revenues of its own. Video will be central to its renewed services push, as Apple builds on the foundation of iTunes to develop a competitor to the likes of Netflix, Amazon Prime Video and Hulu. Morgan Stanley estimates that a bundle of media services, including video, music and news, could generate $37bn a year by 2025. Such a sum would vastly outstrip today’s modest sales of the HomePod and Apple TV, which have not been among Apple’s more successful devices. “Instead of creating software to make its hardware more appealing, as has been the status quo, Apple is now permitting its software services on competing hardware,” Mr Munster said. Since the beginning of 2016, Apple has worked to convince investors that its services business is both more consistent and fastergrowing than the quarterly gyrations of iPhone sales. In 2017, chief executive Tim Cook set a target of reaching $50bn in annual services revenues by the end of 2020. He reiterated Apple’s commitment to that goal in his letter to investors last week. Despite warning

content from their iPhones using AirPlay. Until recently, Apple has seen its digital services, such as Apple Music and iMessage, as a way to keep customers loyal to its more profitable devices business. But that strategy is now changing. The Samsung partnership is “further evidence that Apple is willing to change its hardware-first approach and work with third parties to boost Services revenue”, said Gene Munster, a longtime Apple analyst and tech investor with Loup Ventures, in a note on Monday. The deal follows Apple’s partnership late last year with Amazon to put Apple Music on the online retailer’s Echo speakers, to be controlled using its virtual assistant, Alexa. Both steps are unusual for Apple as they hand an advantage to devices competing with its own $179 Apple TV set-top box and $350 HomePod wireless speaker. Making its software and services available on rival platforms is not a brand new trend — Apple brought iTunes to Windows back in 2003, which fuelled huge sales of Apple’s iPod music player. Nonetheless, as its core iPhone business comes under increasing

of a sharp drop in iPhone sales in China, Mr Cook pointed to “remarkable strength” in other areas, including record services revenues of $10.8bn. “They’ve managed to turn their business into something more than a single transactional sale,” said Ben Wood, analyst at CCS Insight. “That is a relatively unique position. Much as plenty of other companies such as Samsung and Xiaomi talk about wanting to do that, they are not delivering against it in the same way Apple are.” Mr Cook added last week that the number of devices in active use had increased by more than 100m units in the past 12 months — pointing to a likely total of 1.4bn active devices, based on last year’s figures. Many Apple customers own several of its products, with analysts estimating the company has somewhere in the range of 650m to 800m unique customers (the company has never disclosed this figure itself). In a series of notes on its services business late last year, Morgan Stanley estimated that Apple could increase annual revenues from that division by more than 20 per cent over the next five years, reaching $101bn by 2023.

Tuesday 08 January 2019

C002D5556

BUSINESS DAY

52 BUSINESS DAY NEWS

www.businessday.ng

www.facebook.com/businessdayng

2019 elections: Growing incidences of disparaging adverts worry APCON DANIEL OBI

dvertising Practitioners Council of Nigeria (APCON) has expressed fears that there may be repetition of hoard of hate speeches and unwholesome advertisements as politicians push and become eager to win in the forthcoming 2019 elections. The advertising regulatory body says it has already observed with dismay the growing incidences of exposure and broadcast of political campaign advertisements, which are in breach of the extant regulations. In a statement signed by APCON’s CEO, Ijedi Iyoha, the body reminds sponsors of political campaign advertisements in the various media platforms that it was unlawful to expose, broadcast any advertisement that do not have the approval of APCON. “For the avoidance of doubt, the purpose of preexposure approval by Advertising Standard Panel of APCON is to prevent exposure to the public of advertisement which may misinform, mislead or offend the public, disparage or malign competitors or provoke unwholesome consequences such as violence,” Iyoha says. The agency says extant

regulations require that political campaigns advertisements be focused on issues and devoid of attack on personalities or disparaging references to opponents. The body therefore warns that henceforth, any advertisement that is exposed without ASP approval would be blanked or stopped from further broadcast or publication without recourse to the advertiser. In anticipation of the commencement of the 2019 general elections, APCON had late last year organised a forum on the forthcoming 2019 general elections and hate speeches in Abuja, where stakeholders discussed critical issues around the management of electioneering campaign communications. At the forum on Political Communication, the stakeholders called for campaign communications to be fair and truthful enough to aid democratic choice by the electorate and devoid of any traits that could precipitate violent conflicts. In his paper titled, ‘Trends and Consequences of Smear Political Campaigns,’ Udeme Ufot, group managing director of SO&U Group, said, “Smear campaigns utilise unverifiable rumours and distortions, half-truths and even outright lies. Even when

the facts are seen to lack substance, the targets reputation, in most cases, is often already tarnished before the truth is known. Often such targets are typically forced to focus on correcting the false or erroneous impression rather than the real issue.” According to Ufot, when political campaigns are not issue based, there is a strong tendency to dwell on theatrics, verbal assaults and character assassination. Contrasting this with more sophisticated environments, where political campaigns often combine the three prong approach of advocacy, contrast and attack, he stressed that “their campaigns are more professionally packaged to associate the candidate with salient issues and subject the electorate holds dear.” To succeed, Ufot charged communicators to engage deeply with the people, conduct research and analysis to arrive at communication that would most resonate with the people. Reiterating that such exercise requires some rigor of process, sound strategising, discipline on the part of the candidate to subject himself to the professional management of his communications consultants as well as effective programme funding.

FIRS targets N8.3trn tax revenue in 2019 HOPE MOSES-ASHIKE, SEYI JOHN SALAU & ISRAEL ODUBOLA he Federal Inland Revenue Services (FIRS) says the agency envisages N8.3 trillion revenue from the collection of various taxes in 2019, which is N2.98 trillion higher than the amount the agency realised in 2018. Babatunde Fowler, executive chairman, FIRS, disclosed this at a stakeholders’ retreat organised Monday in Lagos, themed ‘Parliamentary Support for Effective Taxation of a Digital Economy.’ This goal can be accomplished with the collaboration of taxpayers and stakeholders, Fowler said. According to Fowler, tax revenue realised in 2018 was N5.32 trillion, the highest in the history of the agency, as against N4.03 trillion generated in 2017. While the share of nonoil revenue tax in the total tax revenue contracted by 8.62 percent basis points to 53.63 percent in 2018 from 62.25 percent in 2017, the contribution of tax from oil and gas grew by 8.63 percent basis points to 46.38 percent in 2018 from 37.75 percent a

year earlier, he said. Increase in tax revenue in 2018 is attributable to technological measures such as electronic payments channel, electronic receipts and Value Added Tax (VAT) introduced by the agency to deliver quality taxpayers’ services, he said. Revenue from VAT has been on the upward trend since 2015. N828.9 billion, N972.30 billion and N1.11 trillion was generated from VAT in 2016, 2017 and 2018, respectively, he stated. Similarly, revenue generated from electronic stamp duties has been on the increase since 2015. From N5.6 billion generated in 2016, revenue realised from this kind of tax jumped to N15.66 billion in 2018. “There cannot be any serious discussion on diversification of the economy without reviewing the tax regime of the country for optimal performance,” Fowler said, adding that the agency shall continue to engage stakeholders, particularly the legislature, to get support that would foster tax compliance. A research analyst at Lagos-based CSL Stockbrokers, Gbolahan Ologunro, said the target looked opti-

mistic and was achievable on the premise that if the informal sector, which account for a large fraction of economic activities in Nigeria, was moved to the formal sector and they were captured in the database of FIRS, the expectation of N8.3 trillion tax revenue in 2019 would be accomplished. Ologunro attributed Nigeria’s low tax-to-GDP ratio, which is about 5 to 6 percent, to the fact that some companies were not rendering their tax returns, which should prompt FIRS to step up to bring such companies into its tax net. If this can be done, the target is realisable, he said. Fowler said the number of taxpayers that requested for and processed their Tax Clearance Certificate (TCC) through tcc.firs. gov.ng grew from 9,574 to 59,350 within a year of introducing the platform. John Enoh, chairman, Senate Committee on Finance, who was represented by Umaru Ibrahim Kurfi, deputy chairman, said taxation contribution to any economic growth and especially government revenue was largely dependent on revenue generated by the FIRS.

@businessDayNG

@Businessdayng

Tuesday 08 January 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

53 NEWS

BUSINESS DAY

Lassa fever: Edo makes breakthrough with tech to identify viruses without prior knowledge of cause of disease

G Children of different schools on their way as schools resumed after Christmas and New Year holiday in Lagos, yesterday. Pic by Olawale Amoo

Nigeria overtook South Africa, Kenya in start-up deals in 2018 … ranked first in 2018, third in 2017 … raked in 136 deals in 2018, 34 in 2017 BUNMI BAILEY

igeria, Africa’s biggest economy, moved up by two places to overtake South Africa, the continent’s most industrialised nation, and Kenya, to clinch the first position on start-up investment deals last year, according to a 2018 Africa Venture capital report by WeeTracker Research. WeeTracker is a global tech media platform with a marked focus on the African technology and start-up ecosystem. BusinessDay analysis of the report shows that Nigeria, which was in the third position in 2017, outperformed all other locations with a total of 136 deals in 2018.South Africa, the number one location of start-up investment deals in 2017, came in the second with 107 deals, fol-

lowed by Kenya, the secondplace winner in 2017, came in third with 73 deals. Ayo Akinwunmi, head of research, FSDH Merchant Bank, attributed Nigeria’s improved ranking to the country’s recovery from recession, stable economic economy and current exchange of the naira that enables foreign investors to mobilise large amounts of the local currency to invest locally. “The changes in the economic environment occasioned by the current exchange rate regime where you have high exchange rate has created a lot of opportunities for some small companies and start-ups to pick up and then making some foreign products attractive in Nigeria again,” Akinwunmi said a telephone interview Akinwunmi further said that a lot of young innova-

tors are picking that as a challenge to bridge that gap in Nigeria. “The growth of Information Communication Technology solutions companies is also encouraging a lot of entrepreneurs to develop applications and innovative products to solve problems which are attracting investors,” He said The tech and innovative companies in the continent are fast becoming an attractive destination for investors as $725.6 million was invested across 458 deals, a 300 percent huge leap in total funding amount and over 127 percent increase in the number of deals as compared to 2017. “During our multiple conversations with the stakeholders of the ecosystem last year, it turned out that Africa is fertile for any kind of business to prosper. The demand

SAHCO to close IPO January 9 IFEOMA OKEKE

kyway Aviation Handling Company plc (SAHCO) has announced that the Initial Public Offering (IPO) for the sale of its 406,074,000 ordinary shares of 50 kobo each at N44.65 per share, which commenced November 12, 2018, will come January 9, 2019. The sale of SAHCO’s IPO, being handled by Vetiva Capital Market Limited, the lead issuing house, and Cordros Capital, the joint issuing house, got the company enlisted on the Nigerian Stock Exchange (NSE). The director-general of the Bureau of Public Enterprises (BPE), Alex Okoh, SAHCO’s management and shareholders, and other

stakeholders witnessed the signing ceremony of the enlistment, which took place in Lagos. According to Taiwo Olayinka Afolabi, chairman, SAHCO, “The IPO is in line with the Share Sale Purchase Agreement (SSPA) to divest 406,074,000 Ordinary Shares of 50 Kobo each representing 30 percent of the entire issued and fully paid up Ordinary Shares of SAHCO. We have given investors an opportunity to become part owners of SAHCO, the leading aviation ground handling company in Nigeria, which is currently 100 percent owned by Sifax Group.” Afolabi further stated that the Ordinary Shares being offered was allotted on the basis of equality among the 360 Federal constituencies and

the Federal Capital Territory, thus, giving every Nigerian a chance to become part owners of SAHCO. Reacting to the IPO, Okoh said one of the first rule of listing on the NSE was that a company must be profitable. In his words: “SAHCO has been growing in profitability in the past five years with an operating margin of 12.1 percent and profit margin of 11.6 percent, and viable projections ahead. “Since its privatization in 2009, SAHCO has grown its market share from 21 percent in 2009 to over 40 percent, and its revenues have grown by over 100 percent. And at the end of December 2017, SAHCO maintained a stable operating performance with a compounded annual revenue growth rate of 4.43 percent.”

for traditional business is as high as technology-driven enterprise, but when both are combined, what we get is an exceptional business,” the report stated. Ibrahim Tajudeen, head of research at Chapel Hill Denham, believes that Nigeria’s demography is what is really attracting such start- up investments into the country. “For instance, if you are doing business in Africa and you are not in Nigeria then you are missing a lot of opportunities. Nigeria is the biggest country in terms of economic size and population,” Tajudeen further said Finance and funding are a major aspect of starting or setting up a business. In Nigeria, funding is one of the major problems especially if an entrepreneur does not have enough to kick-start the business.

overnor Godwin Obaseki of Edo State has charged chairmen of local government areas in the state to intensify the campaign on environmental sanitation and other efforts geared at mitigating resurgence of Lassa fever in the state. Obaseki gave the charge in Benin City, as a team of scientists working with staff of Irrua Specialist Teaching Hospital (ISTH) have made a breakthrough with a “rapid portable genomic sequencing technology to identify viruses without prior knowledge of the cause of the disease.” In a statement by Crusoe Osagie, special adviser on media and communication strategy, the governor said the state government had already rolled out a campaign to sensitise the public on how to prevent the spread of Lassa fever. The state government has mobilised relevant health agencies and is working closely with a delegation of the Nigeria Centre for Disease Control (NCDC) and the World Health Organisation (WHO) to reduce the chances of a resurgence of the ailment, Osagie said. According to Osagie, “It is no news that we are susceptible to Lassa fever in some parts of the state, due to a number of factors. The risk of resurgence in Nigeria is high in the dry season, as people engage in bush burning. “However, the Edo state government has commenced an elaborate sensitisation campaign to ensure that the people are better informed on what can cause or spread Lassa fever this sea-

son. We are aware of the resurgence in other states and are committed to stamp out the disease from our state. “This is why the governor is calling on the chairmen of local government areas, who are closest to the people to ensure that this message gets to our people everywhere. They are to mobilise information units in their areas to take the message of how to prevent the disease to remote parts of the state.” Meanwhile, a team of scientists working with staff of Irrua Specialist Teaching Hospital have made a breakthrough with a “rapid portable genomic sequencing technology to identify viruses without prior knowledge of the cause of the disease.” The research, led by scientists from Public Health England (UK), the Bernhard Nocht Institute of Tropical Medicine, Germany, in collaboration with the NCDC and the WHO, has been described as a major breakthrough in Lassa fever diagnosis. The breakthrough is contained in a report published in the journal, Science. The research was conducted during the 2018 Lassa fever epidemic in Nigeria. Chief medical director of ISTH, Sylvanus Okogbeni, was quoted as saying “The result of the sequencing reassured managing Clinicians in ISTH, the main centre for the diagnosis and treatment of Lassa Fever in Nigeria. “I would like to congratulate the team for the feat. The institution is very willing to collaborate further to ensure that on-site sequencing is a regular feature of its Institute of Lassa Fever Research and Control.”

FG’s N8.83trn 2019 budget unrealistic - NECA JOSHUA BASSEY

igeria Employers’ Consultative Association (NECA) says Federal Government’s 2019 budget of N8.83 trillion is rested on faulty estimates and the $60 per barrel of crude, which the budget is benchmarked, is unrealistic. Timothy Olawale, director-general of NECA, stated this after a careful review of the budget by the employers’ body. President Muhammadu Buhari tabled the budget before the National Assembly on December 19, 2018. Olawale said there was little to cheer, as the budget seemed incapable of taking the economy out of the woods. According to Olawale,

who shared the employers’ view, the foundation on which the budget is built ‘is worrisome.’ “The budget was benchmarked against $60 per barrel of oil at 2.3m litres daily, an exchange rate of N305 to $1, an inflation rate of 9.98 percent and a GDP growth rate of 3.01 percent. These assumptions negate the reality of oil price volatility. Oil industry experts had rightly warned that the political dynamics of the Middle East might drive down the price of Crude. “True to prediction, a barrel of crude today sells for $54, $6 less than the benchmarked price and it is yet unknown how government will increase our present 2.09mbpd crude production to 2.3mbpd in 2019 and with OPEC’s resolution on cut in

oil production, Nigeria’s daily production should now be 1.7mbpd,” he said. NECA also faulted the allocation in the budget to some critical sectors of the economy, describing those as grossly inadequate. “A cursory a look at budgetary allocation to some critical sectors raises some germane questions about our readiness as a nation to address certain fundamental questions. Human capital development has been noted as critical to a nation’s development. “It is therefore worrisome that education was allocated N462.24 billion, which is less than six per cent of the entire budget. This is a far cry from the UNESCO’s benchmark of 26 per cent of the national budget,” the employer body noted

54 BUSINESS DAY NEWS

www.businessday.ng

Why soldiers invaded Daily Trust’s offices - Nigerian Army STELLA ENENCHE, Abuja

igerian Army Monday offered explanation over its invasion of Daily Trust offices on Sunday. Recall that soldiers, who took away some staff and computers, invaded the headquarters of Daily Trust in Abuja, and its Lagos and Maiduguri offices. However, the Army has since predicated its action on Sunday Trust’s lead report, which it said divulged classified military information. Director of Army Public Relations (DAPR), Sani Usman, in a statement, said the publication was contrary to sections 1 and 2 of the Official Secrets Act. “The Nigerian Army wishes to clarify on alleged invasion of Media Trust Headquarters in Abuja and regional office in Maiduguri. We would like to state that soldiers of the Nigerian Army along with elements of Nigeria Police Force and other

Security Agencies were indeed at Abuja and Maiduguri offices of the publishing company to invite the staff of the company over its lead story on Sunday Trust publication, which divulged classified military information, thus undermining national security. “In it, the newspaper made disclosed details of planned military operations against the Boko Haram terrorists. The disclosure of classified security information amounts to a breach of national security and run contrary to Sections 1 and 2 of the Official Secrets Act,” Usman said. He insisted that the publication had revealed Army’s planned operation against Boko Haram fighters. “It afforded the Boko Haram terrorists prior notice of our plans and giving them early warning to prepare against the Nigerian military, thus sabotaging the planned operations and putting the lives of troops in imminent and clear danger.

Government postpones Yuletide gains: Hotels, fun resumption date of unity schools places, transporters take stock, over proposed labour strike link boom to reforms DANIEL OBI

ederal Government has postponed the resumption date of unity schools by a week, from December 5 to December 12, 2019. This is a strategic move as government sensed that the organised labour might proceed on strike over the failure to reach a compromise on the minimum wage. “The postponement of the resumption date is to avoid embarrassment. It is also important and strategic not to keep the students in schools without having teachers to teach them, if finally the teachers join the labour to embark on the proposed strike,” a source told BusinessDay. In addition to this, government also wants to give parents enough time to pay the school bills as the time of three days between the holiday of January 1, 2019 and resumption day is too short for parents to meet up on payment of schools bills, the source said. Ordinarily, government move is to give room for more discussions with the labour on the continuation of efforts to resolve the lingering minimum wage crisis and avert the proposed nationwide strike billed to start today. It is gathered that labour had since commenced the mobilisation of members and its civil society allies for what it said would be a long drawn nationwide industrial action to demand for the implementation of the N30,000 new minimum wage.

oming out of an eventful holiday season, hotel owners, transporters, nightclub owners, event centres and fun places in Benin City, say their businesses recorded a boom, which they linked to the widespread reforms of the Governor Godwin Obaseki-led administration. According to them, the early payment of salary to government workers; the influx of Edo people in the Diaspora, into the state for Christmas and New Year celebrations; improvement in security and the state government’s huge investment in road infrastructure as well as the growing confidence in the state’s economy, combined to boost activities in their subsectors. Egbe Ufumwen, a nightclub owner in Benin City, said: “Business was better during the Christmas holiday, compared to previous years. Night Club business is a night affair and security is a big deal for players in this business. “Our business starts late in the night and people start leaving the club in the early hours of the next morning, so we can tell when people begin to feel more or less secure, by the number of people that come out at night. “Last December, we recorded unprecedented number of clients and most of them told us that the state is now safer and that they could access anywhere in town because of the good roads in the city.” He added, “Years back, the road leading to my business place was in a bad condition and it impacted on my business. But with the reconstruction of TV Road, my nightclub has become one of the most patronised.”

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

Tuesday 08 January 2019

Oil prices rise to $58 as OPEC cuts take effect DIPO OLADEHINDE

ith support from Organisation of Petroleum Exporting Countries (OPEC) production cuts and steadying equity markets, the benchmark for Nigeria’s crude oil Brent crude rose to $58, extending a rally from 18-month lows. Brent crude futures rose 98 cents, or 1.7 percent, to $58.50 a barrel by 5pm Nigerian time, up from December’s slide below $50, which was its lowest level since July 2017. US West Texas Intermediate crude oil futures rose 1.57 percent to $49.53 a barrel. “Momentum is coming back into the market from very depressed price levels,” Petromatrix strategist Olivier Jakob told CNBC. “We’ve had five consecutive days of price gains already, so what you have today is a continu-

ation of that.” The oil prices are beginning to draw support from an agreed supply cut by OPEC and non-allied members led by Russia, which has led to a fall in OPEC oil supply by 460,000 barrels per day (bpd), to 32.68 million bpd. The aim of the production cut is to rein in a surge in global supply, driven mostly by the United States, where production grew by nearly a fifth to over 11 million bpd in 2018. “If compliance by OPEC and the allied non-OPEC countries is similarly high as in the agreement two years ago, the oil market is likely to be rebalanced during the first half year,” a Germany based banking and financial services company based in Frankfurt Commerzbank said in a note. OPEC and its allies including Russia agreed in December to reduce output by 1.2 million barrels per day

(bpd) in 2019 versus October 2018 levels. This is supposed to trim the excessive global supply and stabilize prices. However, it’s going to take time. Traders feel that if OPEC can stay true to the deal, the global supply glut could be cleaned up within 3 to 4 months. Also on Monday, Malaysia’s Petronas has completed the acquisition of a 10 per cent interest in Block 61 of the Al Khazzan onshore gas field through its subsidiary PC Oman Ventures (PCOVL). The stake was purchased from Oman Oil Co Exploration & Production (OOCEP) subsidiary Makarim Gas Development. PCOVL reached an agreement last October for the acquisition after a bidding exercise conducted by state-owned Oman Oil Company through its exploration unit OOCEP. “The acquisition of Block 61 marks an important step in realising Petronas’ growth

strategy in the upstream sector in the region and globally, as it aligns its activities to ensure sustainable energy supply,” Petronas said in a statement. With the acquisition, PCOVL now owns a 10 per cent stake in the block, which is operated by BP Exploration (Epsilon) with a 60 per cent interest. Makarim Gas Development holds the remaining 30 per cent interest. The Khazzan field began production in September 2017. Last year, the field was producing around one billion cubic feet of gas per day (Bcf/d) and around 35,000 barrels per day (b/d) of condensate. Last April, BP and OOCEP approved the development of Ghazeer, the second phase of the Khazzan field. Once the development of the second phase is completed in 2021, production from the field is expected to increase to 1.5Bcf/d.

L-R: Babajide Sanwo-Olu, governorship candidate, All Progressives Congress Lagos State, his deputy governorship candidate, Kadir Obafemi Hamzat, receiving a recognition certificate from Tajudeen Gbadamosi, president, Lagos State League of Muslims Leaders, during their consultative meeting with Muslim Leaders, at Lagos Central Mosques, in Lagos, yesterday.

How Nigeria moved from 5% to 31% broadband penetration in five years JUMOKE AKIYODE-LAWANSON

t came as a surprise to many people when the Nigeria Communications Commission (NCC) announced that Nigeria had met and even surpassed the 30 percent target set for the National Broadband Plan (NBP), after stakeholders had envisaged that the target could not be met with Nigeria’s snail pace penetration level. This is mainly because at the end of 2017 and in the months before November 2018, broadband penetration figures stood at 21 to 22 percent due to the deficiency in last-mile infrastructure, hindering the expected penetration levels to the hinterlands. Stakeholders in the information and communications

technology (ICT) industry had then suggested that the government needed to roll out more national cable infrastructure, give licences to more infrastructure companies (InfraCos) in order to achieve the milestones set in the National Broadband Plan. Broadband internet is a high-capacity transmission technique using a wide range of frequencies, which enables a large number of messages to be communicated simultaneously, faster than the traditional dial up access. “There is very limited network of these international cables and the lack of national cable infrastructure is stalling efforts to deepen broadband penetration as there is very little or no transport to the hinterland,” Lanre Ajayi,

past president of Association of Telecommunications Companies of Nigeria (ATCON), told BusinessDay in a telephone interview. On how Nigeria was able to surpass the target, NCC data show that there were a total of 168,729,005 “GSM” mobile subscribers in Nigeria in November 2018. Of these, 108,457,051 were subscribed to internet access services provided by the major operators. In terms of broadband services, a total of 58,965,478 connected to the internet through 3G and 4G networks (including those provided by the Long Term Evolution (LTE)-only service providers such as Smile and nTel) speed of 1.5 megabytes per second. This distinction is critical

because Nigerians predominantly rely on mobile networks to access the internet, including broadband networks since the fixed broadband access, which was to have been led by the erstwhile state incumbent – NITEL – is now literally non-existing. “Broadband penetration is typically measured by the percentage of total population with access to broadband networks out of each hundred. So, if we take the total active broadband subscription figure of 58,965,478 and divide by the population figure of 190,886,311 (using the UN’s projection as at December 2017), we come to a penetration percentage of 30.9 percent,” the telecoms regulator said in a statement sent to BusinessDay.

Tuesday 08 January 2019

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

Interview

GEEP program increasing traders access to finance – Uzoma Nwagba The TraderMoni scheme of the Federal Government has generated a significant amount of buzz and national conversation: from those who laud its impact, and those who view it as politically motivated. TraderMoni is one of three microcredit products of the Government Enterprise and Empowerment Programme (GEEP). In this exclusive interview with BusinessDay, a man behind the wheels, and Chief Operating Officer of GEEP, Uzoma Nwagba explains how GEEP was a direct response to the challenge of access to funds for micro-enterprises, and financial inclusion.

hat is this GEEP program really about? GEEP is a microcredit programme that provides much-needed capital to traders, artisans, farmers, petty traders. It is one of the social intervention progammes of the Federal Government, and comprises of three products: MarketMoni, FarmerMoni, and TraderMoni. GEEP was initiated in 2016 by the Federal Government; with an understanding that there are over 30 million Nigerians at the base of the pyramid who are in active commercial activity but never have an opportunity to access credit. In 2017, only 0.04 percent (i.e. less than 1 percent) of bank loans went to this micro segment. These hardworking Nigerians are not “interesting” to the traditional lenders: they have little to no financial track record, they have no collateral, some barely have formal identities. However, they are actively trading and in dire need of capital. They are sellers of the food stuff you cook, the beverages you drink, the airtime you use, and kiosk items you buy. And there are tens of millions of them, across the 36 states and the FCT. GEEP is an opportunity to properly identify and capture these Nigerians, provide them with capital, and in the process onboard them into the formal financial system of bank accounts and mobile wallets – in a way that they can be sustainable recipients of credit. Our goal is to advance financial inclusion from its current mythical state into actualization. GEEP grants interestfree loans of between N10,000 to N300,000 in a graduating scale of N10,000; N20,000; N50,000; N100,000; and N300;000. Traders either start at N10,000 (TraderMoni), or N50,000 (MarketMoni), or N300,000 (FarmerMoni). It all depends on the scale of your current trade, and preparedness to meet the criteria at each level. The N10, 000 ($27) TraderMoni component of the GEEP scheme has come under huge criticism for the loan value: some Nigerians do not think it is barely anything to help a trader. Was there intelligence that suggested otherwise for which the TraderMoni team settled on N10, 000 as the first level? Recall that these loans go from N10, 000 to N300, 000. You start at N10, 000 if you are a petty trader – and you quickly graduate to N300, 000 by simply repaying your loans. More importantly, you would be surprised to know that the GEEP programme did not start with N10, 000 loans. We started with N50, 000 loans. In the process of executing a programme N50, 000 and above, we found something quite startling: the vast majority, I mean up to 90 percent, of our targets did not have inventories of more than N10,000. You would

therefore the digital collateral. As a result, we make a conscious effort with their first TraderMoni loan to make the carrot more attractive than the stick. That is, we make it very simple to get the next higher loan (N15,000) once the first loan (N10, 000). You literally receive a disbursement in minutes when you dial a USSD code after paying your first loan. We are using TraderMoni to test this model and we are studying the effect because it’s also an opportunity to build knowledge for the ecosystem. What the government learns from this program will be used to drive even private sector lending.

Nwagba

more than double their capacity with a N10,000 loan. We would have missed the scope and scale of this if we had not spent the last 2 years on the field, giving loans, learning more. Besides the fact that this population not only needs small amount for a start, they also do not have the traditional bells and whistles – BVNs, KYCs, bank accounts, collaterals – which are the requirements of traditional lending. So we had to create a product specifically for them, driven by agents on the field, equipped with tablet computers, and disbursed through mobile wallets which only require the trader to have a mobile phone. We believe this can be truly transformative to this sector, and to the lending ecosystem. The results are showing. In the past 2 years, we have given over 1.5 million loans across the three programs, 1.2 million of which are TraderMoni beneficiaries. The loans are driven strictly by scale of demand. Where is the money coming from and how sustainable is the program given the time value of money (for which interests are usually charged), and Nigeria’s unique political system where continuity is always an issue? From Day-1 of GEEP, we instituted the BVN as a non-negotiable requirement. The first application of the BVN was to serve as a unique identifier which checkmates fraud. However, the second application of BVN is even more powerful: for the first time, we have an effective (digital) collateral. People who took the MarketMoni loans, our first GEEP product, accept agreements that the Bank of Industry had the right to block their BVNs if they were in severe default. A blocked BVN means the candidate is unable to operate any of their bank accounts or perform any financial

transactions until they fulfil their debt obligation. Obviously, we had to balance this carefully with the overarching goal of financial inclusion. This means that you don’t want to have people included into the financial system, only to block them out of it soon after. So, first we establish the usage and habit of finance and accountability by giving the loans. Next, we communicate aggressively on repayment and defaults, warning severe defaulters of an imminent blocking of their BVN. And then, we select cohorts of defaulters who inevitably get the BVN blocking. We do this while aggressively learning and improving the process. The journey is still an evolving one, but we are absolutely committed to more and more innovation around the collateral problem that has excluded this group from credit for decades. With the advent of technology and innovation – we must think outside the box, seeking for digital collaterals that are effective. You would not believe that the regulation that allows for what we have just done has been in existence since the 1970s. However, without the right advancement in technology (e.g. BVN which means you can finally take action on all accounts belonging to an individual in the entire financial system), there would be no way to execute that regulation. Thankfully, the future is now, and it is our goal to continue to push the boundaries on what is possible. For the TraderMoni scheme (for petty traders at the very bottom of the pyramid), we are taking a slightly different approach of not requiring BVNs or bank accounts as our targets are significantly less educated or sophisticated. We need to first solve their problem of access and reduce the barriers to that. So, we use what they have: their mobile phones. It is only on the second loan that the BVN and bank account requirements kick on, and

Given such a large-scale programme with a target market that has limited education, how are you able to deliver the numbers you report? The operation of the program does not mirror its target demographics. What I mean is: the more illiterate or unsophisticated our beneficiaries are, the more sophisticated our operation has to be. All the complexity has to be absorbed by us and taken out of the trader’s experience. We have a highly technologydriven program. Everybody who has a TraderMoni, MarketMoni or FarmerMoni loan is enumerated at their point of trade. What this means is that one of our over 4,000 agents across the country, walks up to them and registers them on a tablet device. I am talking full registration of biodata, GPS location of the trader’s point of trade, information on what the trader does or sells, pictures of them and their trade, address, phone number, BVN (where applicable) which is validated against the national BVN database, background and risk profiles where accessible. We have a sophisticated digital base that connects these tablets of our over 4,000 agents across the country to central systems at BOI, as well as third-party connections to banks and mobile wallets for disbursements and repayment. Similar connections happen for tracking and monitoring of the loan and repayments. The most surprising thing you would find out about the programme is how obsessive we are with its operation. Some members of my team joke that we are a technology company that happens to give loans. With more experience and learning, we will continue to innovate and set the standards. And, yes, this is all possible in a government programme. What sort of impact does the GEEP program hope to make, how is it being measured/tracked today? Tremendous impact. For most of our beneficiaries, it starts out like a dream. An agent walks up to you in your market association, at your kiosk, sometimes on the street while you hawk. They speak about a government benefit, and interest-free loan to enable your trade. You are not asked for a col-

lateral, and you are not asked to vote for anyone. They would capture details of you on their tablet, you would get an SMS in days on your qualification, and you would get a disbursement shortly after. Even playing this back to myself now, it sounds crazy, too good to be true. But this is exactly what happens. So you can imagine traders’ skepticism at first, which our agents have to overcome, until disbursements start happening. For most of our over 1.5 million beneficiaries today, this is the first time they have successfully accessed credit in their entire lives. I interact with traders, from Bauchi to Yenegoa, who tell me they have been doing the same trade in the same spot for 30 years, and this is their first time ever experiencing something like this. They are able to invest in their trade, or deal with issues that have been historically disruptive to their trade. They keep their businesses alive, enabling them to pay back in tiny instalments over six months. They are empowered. Most of this is silent; you don’t hear it buzzed around. But this has been the reality of GEEP, every single day, since May 2016. When a lot of people hear about the GEEP programme (either TraderMoni, MarketMoni, FarmerMoni), they think about how transformative it is for the beneficiaries, but in a lot of ways it’s also life-changing for those of us implementing the programme. Nothing would have prepared us for this scope and scale of impact. Nothing could have connected us better to the realities of the everyday Nigerian. We literally spend the day with them in the markets, get in their heads, support their trade. For some beneficiaries, like tomato sellers in Mile 12 market, TraderMoni represents negotiating power with their suppliers. The traders can now pool more funds together, sometimes up to 15 people pooling N150,000 using TraderMoni, and negotiating for bulk-buying of tomatoes in baskets, bringing their individual costs down by 40% for the same quantities they sell. For others, like the keke riders or cart pushers in the North, it is investing in more petrol and maintenance upfront, enabling much less interruptions during the day to enable them earn more. For the tailor or plank seller on MarketMoni, it is inputs, or light machinery (like a sewing machine or electric saw). For the farmer, we are talking stock feed or fertilizer. The stories are so diverse, and so beautiful. What weaves this all together is a common thread of industrious low-income Nigerians in productive commerce that require credit, and now this requirement has gone from a wish to a reality. Note: The rest of this interview continues in the online edition of BusinessDay @www.businessday.ng

BUSINESS DAY

NEWS YOU CAN TRUST I TUESDAY 08 JANUARY 2019

www.businessday.ng

facebook.com/businessdayng

@Businessdayng

INSIGHT/INNOVATION

Will Nigeria pursue necessary reforms? OGHO OKITI Dr. Okiti is the president, Time Economics Ltd @ Dr_Okiti 081.7153.0058

n June 2018, a Brookings report found that Nigeria has overtaken India to become the country with the largest population of people living in extreme poverty. The report, authored by Homi Kharas, Kristofer Hamel, and Martin Hofer, all associates of the World Data Lab (see Brookings.edu), claims that Nigeria has 87 million people in extreme poverty category and that this number is increasing by 6 people every minute. So, by the time you have finished reading this article, there will be 60 more Nigerians living in extreme poverty. The report, based on surveys conducted in April same year, recent economic growth data from the International Monetary Fund (IMF), and computed poverty trajectories for 188 countries in the world, concluded that the rise in Nigeria’s poverty is driven by three parameters – low economic growth, high inequality, and population growth. Five months after, the National Bureau of Statistics (NBS) released the much-awaited report on Nigeria’s unemployment. The report

PROPHYLAXIS

AYULI JEMIDE Ayuli Jemide is Founder and Lead Partner of Detail Commercial Solicitors. An entrepreneur, public speaker and writer. Email: AJ@ayulijemide.org Twitter: @JemideAyuli

s the February 2019 elections draw closer Nigerians - politicians and non-politicians alike - are keen to get as much information to help them take decisions on who to vote for. Political strategists also want to take decisions on how to campaign, where to campaign and where to deploy resources. Nigerians are entitled to authoritative information from the Independent National Electoral Commission (INEC). This is one commission that should have an overabundance of resources readily available on its website. Unfortunately, for whatever reason INEC’s website is not a repository of information and is in fact very low on key information. Some of the information that Nigerians would want to see on INEC’s website include: The Guidelines for 2019 Elections which as at today has not been published on the INEC website. Nigerians want to see in writing how elections would be conducted in February 2019. Of particular

showed that unemployment increased from 18.8% in Q3 2017 to 23.1% in Q3 2018. Which means that Nigeria’s unemployment is up by 5 percentage points just in a year. However, what should worry economists and the next President in the medium to long term is that the labour force expanded by about 15 million in three years between 2015 and 2018. According to the figure released by the National Bureau of Statistics (NBS), the labour force increased from 75.9 million in Q3 2015 to 90.5 million in Q3 2018. This shows an increase of about 5 million annually, whereas it was about 2- 3 million annual increases just over 6 years ago. Put another way, the Nigerian economy needs to create about 5 million jobs annually just to maintain current levels of unemployment. These dramatic increases in the number of those entering the jobs market reflect rising general population and expanding youth population, and it is line with the study that population growth is driving up poverty. In 2018 also, the 2015 Demographic Health Survey (DHS) by the United Nations Children Fund (UNICEF) and the Nigerian government, released few months ago show that the population of out of school children in Nigeria has risen from 10.5 million to 13.2 million. This means that Nigeria has the highest number of out of school children in the world, accounting for more than one in five out-of-school children and 45 percent of out-of-school children in West Africa. These statistics should worry any nation, but in an election year, it’s the last thing that wants to be discussed by our politicians. Meanwhile, Nigeria’s Gross Domestic Product (GDP) figures for 2018 have been very weak. Real quarterly GDP growth for Q3 2018 stood at 1.81%, from 1.5% in Q2 2018. Starting

‘

But while these problems may appear very daunting, the process towards solving these huge economic problems of poverty and unemployment begins with wholesale changes to the way businesses operate and invest

from 2015, the annual growth of GDP has been weak compared to the decade before that, with growth rate for 2015, 2016, and 2017 at 2.79%, 1.58% and 0.82% respectively. In the first three quarters of 2018, it’s been 1.95% for Q1, 1.5% for Q2 and 1.81% for Q3. It thus means that for three consecutive years, Nigeria is expected to record less than 2% GDP growth rate, but population growth rate estimated at 2.6% annually. There is plenty evidence that Nigeria’s economic policy framework and its development has failed to dent the serious challenges of unemployment and poverty. In the last few years, governance has been reduced to the “fight against corruption”. But you cannot fight corruption in the absence of growth, and growth depends on serious and effective economic policies. Indeed, growth, investments, jobs, and prosperity depends on seriously thought

through economic policies that address the dearth of both domestic and foreign investments and skills. But while these problems may appear very daunting, the process towards solving these huge economic problems of poverty and unemployment begins with wholesale changes to the way businesses operate and invest. These can only be achieved when we carry out reforms across many sections of the economy in order to drive investments and jobs. Reforms here simply refers to changes to existing economic, legal, and policy framework for the purpose of improving economic efficiency, reducing distortion for the purpose of driving up investments, and increasing the ability to create jobs or general improvements in economic outcomes. As in many other countries, Nigeria does carry out reforms. However, our reform efforts tend to be weak and half-baked, late, inconsistently implemented, and few and far in between. Successful reform economies have mastered not only how to conduct reforms, but provided robust mechanism for doing so. Therefore, in Nigeria, despite wide acceptance that the current policy structures – political, legal, business – are not providing the desired outcomes, we consistently fail to even start the debate on the necessary reforms for investments and jobs. From 2019, we can proceed either by resign to fate and hope to wake up to the stark reality that without necessary reforms, growth will continue to slow, and unemployment continues to rise or realise that policies are powerful, and pursue ones that are thorough, have depth, and provide incentives that link solving the problems to associated rewards.

Do Nigerians have many questions for INEC? interest is what will happen if card readers fail. Premium Times of November 14, 2018 refers to Festus Okoye, a commissioner at INEC, who is also the Chairman of Information and Voter Education in the commission. He was quoted as saying:‘’the voting procedure will be in accordance with the Continuous Accreditation and Voting System (CAVS) and only voters with permanent voter’s cards verified by the smart card reader would be allowed to vote.’’ Whilst this is salutary, can we take Mr. Okoye’s statement to the bank without formal guidelines for 2019 elections duly issued by INEC? Should the guidelines not have been in place months ago? INEC has announced at press conferences that as at today Nigeria has about 82 Million Voters for the 2019 Elections. Questions: Can we see on the website the breakdown of voters per state and per polling booth? Can we see how many of these registered voters have in fact collected their PVC’s

‘

If as an umpire people have raised eyebrows about the political neutrality of a given person appointed a play a specific role should the Chairman of INEC not simply reverse the decision? Would reversing such a decision jeopardize the administration of the electoral process in anyway?

on a state by state basis? Is this information not supposed to be updated on your website on an online real time basis, so as PVC’s are collected Nigerians and indeed political parties know which states are lagging, so they can ask questions and mobilize their constituents? Nigerians would also want to know the updated information on Polling Units for the 2019 Elections. The data on the INEC website is as at January 2015. How many more Polling Units are there in each Local Government? How many new Polling Units have been created? Where are the new Polling Units? There seems to be no information on the INEC website on ‘’Aspirants and Candidates’’ as the placeholder created for it is empty. Knowing the candidates should be the most important thing about voter education. In relation to the electoral amendment bill that was assented to by Mr. President, Nigerians wonder if INEC as an independent umpire should not have been the champion of the bill in the first place. To all intents and purposes this bill was aimed to amongst other things: create greater voting transparency and leverage on technology to ensure votes are counted electronically. Would INEC not benefit if the processes are tightened to ensure greater veracity in collation? And talking about collation, the word ‘’collation’’ seems to be trending with the recent issues around INEC’s Commissioner, Amina Zakari. The major question being asked by opposition parties is whether Amina Zakari is related to the President or not and if she is does this raise a conflict of interest given her new appointmentas Chairperson, National Collation Centre for the 2019 elections. Nigerians are also asking INEC: If as an umpire people have raised eyebrows about the political neutrality of a given person appointed a play a specific role should the Chairman of INEC

not simply reverse the decision? Would reversing such a decision jeopardize the administration of the electoral process in anyway? There is a general belief that it is fundamental that an umpire should be independent but beyond that it is also important that an umpire strives to ensure that stakeholders actually perceive the umpire as independent. If INEC would simply reverse its decision on Amina Zakari and appoint someone else in that role would it not greatly improve the perception of INEC’s neutrality? That said, we must all agree that there are no perfect elections anywhere in the world, and INEC despite its best efforts may still be accused of being shoddy and sometimes even biased towards one candidate or another. There would always be accusations and counter accusations. Donald Trump who won an election through the electoral college still insists that he should have won the popular votes but for widespread voter fraud. President Trump claims that dead people on the voters register also voted. Despite how preposterous this claim may sound, it buttresses the fact that allegations would always be raised in every electoral process. There were allegations and counter allegations related to the 2015 elections and the same would happen with the 2019 elections. It simply comes with the territory. Having said all, the strength of any electoral process is hinged on the participation of all of us. If more people participate the elections become more credible for very many reasons. So instead of being social media e-rats and political wall geckos we must all collect our PVC’s and go out there to vote. Thomas Jefferson was quoted as saying: “We do not have government by the majority. We have government by the majority who participate.” Prepare to vote!

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Advert Hotline: 08034743892. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Anthony Osae-Brown. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.