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news you can trust I **THURSDAY 08 NOVEMBER 2018 I vol. 15, no 178 I N300

Telcos to form subsidiary platform for agent banking ... Set up sub-committee to ensure CBN regulatory compliance ... First Bank agents to hit 20,000, offers micro loans Jumoke Akiyode-Lawanson

he ongoing push for financial inclusion in the country has led to the formulation of a policy guideline by the Central Bank of Nigeria (CBN), which recommends that telecommunications operators who have a wider reach and more robust technology infrastructure should form a subsidiary platform, funded by the telcos to run agent banking services in the country. Agent banking is the provision of financial services to customers by a third party (agent) on behalf of a licensed deposit taking financial institution and/or mobile money operator (principal). “The telecommunications operators had a meeting with the CBN on Monday and it was recommended that all operators form a subsidiary platform, funded by them to run agent banking for the purpose of financial inclusion in Nigeria. Another meeting has been scheduled to hold next Tuesday to conclude plans and move forward,” Gbolahan Awonuga , Admin Secretary, Continues on page 34

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Inside details of NNPC’s struggle to keep Nigerians hooked on cheap petrol

Doing deals worth $25m a day, $9.5bn per annum Signs deal with AYM Shafa, showing up as restaurant on CAC database

DIPO OLADEHINDE

ecent decisions by the Nigerian National Petroleum Corporation (NNPC) to extend the Direct Sale, Direct Purchase (DSDP) contracts of

oil firms have exposed the extent the corporation is going to ensure Nigerians remain hooked on cheap fuel, documents seen by BusinessDay show. Under the DSDP contracts, introduced by the NNPC in 2015 as a replacement for the

controversial SWAP contracts, the corporation exchanges crude oil worth about $25 million a day - at current prices - with a select group of international and local traders, which in turn, supplies NNPC with refined petroleum products.

The deal is worth an estimated $9.5 billion every year, based on the current prices of crude oil in the international markets. These deals are totally within the operational control of the Continues on page 34

Inside Investors said eyeing stake acquisition in P. 2 Diamond Bank

L-R: Aigboje Aig-Imoukhuede, pioneer chairman, FMDQ OTC Securities Exchange/senior partner, Coronation Capital; Bola Onadele. Koko, managing director/CEO, FMDQ; Sarah Alade, former chairman, FMDQ/former deputy governor, economic policy, Central Bank of Nigeria; Muhammadu Sanusi II, Emir of Kano; Wura Abiola, managing director, Management Transformation Limited; Jibril Aku, vice chairman, FMDQ, and Akinsowon Dawodu, former director, FMDQ/country officer, Citibank Nigeria Limited, during the commemoration of FMDQ’s fifth-year anniversary at the Exchange Place in Lagos. yesterday. Pic by Olawale Amoo

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Investors said eyeing stake acquisition in Diamond Bank ... As Access, ABSA freshly linked LOLADE AKINMURELE

nvestors are said to be making offers to Nigerian lender, Diamond bank, for a possible stake acquisition, in what would help the tier-two bank keep its capital adequacy ratio comfortably above the required regulatory threshold. Seyi Bickersteth, the outgoing chairman of the Carlyle-backed bank, is said to have confirmed the offers made but did not specify the investors involved. Diamond bank’s shares gained 2.5 percent Wednesday but is down more than 20 percent since the beginning of the year, compared with a 12 percent fall on the NSE Banking 10 Index. Bickersteth who spoke to international news organisation, Bloomberg, said the proposal made by investors to Diamond bank was on condition that Chief Executive Officer Uzoma Dozie resigns, without naming the shareholder. Diamond has also discussed selling itself to a larger rival, but this plan was eventually rejected after a boardroom vote, Bickersteth said, declining to identify the potential acquirer. “The majority of us voted against,” the takeover, he said. “The bank cannot be pushed into the hands of one suitor,” if it intends to get the best value for shareholders. Diamond’s biggest investor is U.S. private equity firm Carlyle Group LP, which declined to comment. Carlyle Group, owns 17.75 percent of the bank. Kunoch DB holdings, owned by Pascal Dozie, Uzoma’s father, is the second largest shareholder in Diamond bank with a 9.25 percent stake. Diamond Capital Partners Ltd holds 6.10 percent of the bank while other investors hold 1 percent each and below. Rotimi Oyekanmi, one of four outgoing directors in the bank, did not immediately return a phone call seeking comment but had earlier told Business Day that the matter was still “unravelling” and declined to comment. Ezechinyere Anyanwu, a spokesman for Diamond Bank, confirmed there were meetings last month to discuss the recapitalization of the bank, without giving details. Sources in the banking sector told Business Day that tier-one lender, Access Bank, is among favourites

to inject some equity into Diamond bank by acquiring some stake. South African bank, ABSA, has also been linked in the past. Carlyle is also rumoured to be eyeing fresh investments in the bank and the resignation of the directors was the first step towards recapitalising the bank, according to some people with knowledge of the matter who didn’t want to be named. While the Carlyle option seems possible, it will imply writing a big cheque for the transaction and further recapitalisation, recalling that the US-based private equity investor invested US$147million in Diamond in August 2014. Other Private Equity groups like Helios and DPI are also probable. However, Carlyle is unlikely to do business with them knowing they may offer a cheaper valuation than the amount at which Carlyle bought back in 2014. Diamond is one of a number of smaller Nigerian lenders struggling to maintain a regulatory requirement for banks with international operations to have reserves of capital that cover at least 15 percent of outstanding loans. The tier-two bank’s 16 percent capital adequacy ratio implies that its capital base is slightly above the regulatory benchmark of 15 percent. Capital requirements became a concern for many Nigerian banks in 2016 after a contraction in the economy caused by an oil-price slump triggered a surge in nonperforming loans. Standard & Poor’s on Tuesday cut Diamond Bank’s rating to CCC+/C from B-/B, citing pressure on capital and foreign-currency liquidity. To add to the intrigues surrounding the lender, Bickersteth is challenging an announcement by the bank that he’s no longer chairman. He initially quit alongside three other non-executive directors in a walkout last month, only to rescind his resignation and vote on the proposed takeover proposal. Diamond bank announced October 25 that Bickersteth alongside three other directors had resigned over personal reasons, but news making the rounds is that the directors resigned to pave way for new investors to nominate their representatives on the bank’s board.

Lafarge Africa drops to 2009 low on rights-issue burden ... RSI at 12.5, falls to oversold territory ENDURANCE OKAFOR

afarge Africa Plc fell by 9.8 percent on Wednesday to the lowest since May 2009, with trading volume about double the three-month daily average. The impact of the N90bn rights issue announced last month will be negative for minority shareholders, Moses Waireri Njuguna, an analyst at EFG-Hermes, said. “The rights are not beneficial to minorities because they do not affect the long-term value creation of the company,” Njuguna said. The new stock is being issued “largely to reduce debts and has very

little impact on the growth of the free cash flow,” he said. The stock’s drop pushed the 14day relative strength index (RSI) to 12.5, sharply below level of 30 that signals shares may have fallen too far, too quickly. Lafarge Africa stock is down 65 percent this year Lafarge Africa has N26.4 billion in debt due within the next 12 months, representing 39.4 percent of current total debt outstanding and 144.4 percent of cash balance as of Sept. 30. Cement “demand will be very soft and I don’t think there will be enough of evidence of longevity of government infrastructure projects” going into 2019, Njuguna said.

BIG MOVER

L-R: Abimbola Ogunbanjo, pesident, Nigerian Stock Exchange; Ikponmwosa Alile, son of the late pioneer DG of NSE; Pat Nohuma Alile, wife of the late pioneer DG of the NSE, and Oscar Onyema, CEO, Nigerian Stock Exchange, at the commendation service for late Apostle Hayford Alile at the NSE in Lagos, yesterday.

Insurers Q3 underwriting profit up 34% on appropriate pricing BALA AUGIE

nderwriting profit of listed insurance firms surged by 34 percent in the third quarter (Q3) of 2018 as a reduction in combined ratios and appropriate pricing policy boosted returns. Also helping to drive the turnaround is growth in premium income- supported by the introduction of innovative and market moving product, and ability of management and board of directors to curtail expense ratio. Experts are of the view that regulations including solvency 11 which requires insurers to maintain higher capital levels, without reducing overall returns, and the suspended Tier-Based Minimum Solvency Requirement (TBMSR) have forced insurers to either reduce costs or increase pricing. The combined underwriting profit of 21 largest insurers that have released third quarter results increased by 34 percent to N29.27 billion from N21.77 billion the previous year, this compares with a reduction of 19.51 percent to N21.77 billion recorded in the 2017 period. A breakdown of the figure shows AIICO Insurance- the second largest listed insurer by premium incomerecorded underwriting profit of

N905.43 million in September 2018, from a loss position of N2.071 billion the previous year. AXA Mansard Insurance’s underwriting profit surged by 102.93 percent to N4.44 billion in September 2018 from N2.18 billion the previous year, the first uptick in four years, based on data compiled by BusinessDay. Lasaco Insurance Plc’s underwriting profit surged by 146.47 percent to N1.52 billion in the period under review from N618.59 million the previous year, the first uptick in four years. The underwriting profit is net premium income less claims and underwriting expenses, which is synonymous with gross profit for manufacturing, oil and gas and service firms. “There is sanity in the industry; people are trying to price appropriately. The suspended TBMSR and the process of implementation of solvency 11 have led to increase in capital base,” said Moronfola Monsuru an actuarial analyst at Wapic Insurance Plc. “Shareholders want to see return on the business. The sanity will see improved results in the financial statement.” Experts say the introduction of the TBMSR- albeit it has been suspended by regulator- will ensure that

insurers do not have to be compelled to increase capital to underwrite risks that stress their capital without commensurate return on investment. The new policy, if finally implemented, will ensure that the insurance industry contributes to the development of the economy. In the 80s, insurers were so strong that they bought banks but today the reverse is the case as weak capital and a myriad of challenges such as apathy towards the sector have hindered them from taking on more risk. Nigeria’s insurance penetration (premium as a percentage of GDP) is 0.27 percent, this compares with South Africa (14.27 percent), Morocco (3.48 percent), and Kenya (2.80 percent). An actuarial analyst, who doesn’t want his name mentioned, attributes the impressive underwriting results of the 21 firms to cost optimization as shareholders pay more attention to underwriting profitability. “It is a key performance indicator for them. Some of these firms have reduced management expenses,” the analyst said. The cumulative average combined ratio of the listed firms fell to 78.50 percent in September 2018, from 84 percent and 99 percent, in 2017 and 2016 respectively. A ratio below 100 percent means the insurer earns more in premium than it pays out in claims.

Saraki reshuffles Senate committees, axes Buhari’s loyalist OWEDE AGBAJILEKE, Abuja

enate President, Bukola Saraki, on Wednesday announced the reshuffling of heads of four standing committees in the Senate. Saraki who made the announcement at the end of plenary on Wednesday, stated that the Chairman, Senate Committee on

Police, Abu Ibrahim (APC, Katsina State) has been redeployed to the Committee on Labour, while Tijjani Kaura (APC, Zamfara) takes his stead. Ibrahim is seen as a staunch loyalist of President Muhammadu Buhari and confidant of the Inspector General of Police, Ibrahim Idris, who has been having running battles with the Senate

recently. The Senate President also announced that the immediate past Senate Majority Leader, Ali Ndume (APC, Borno) now heads the Committee on Establishment while the newly sworn-in APC senator from Bauchi State, Lawal-Yahaya Gumau heads the Committee on Federal Character.

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6 BUSINESS DAY NEWS Nigeria records 11.8% growth in ICT … as sector FDI reaches $7bn in 2018 JUMOKE AKIYODE-LAWANSON

igeria’s information and communication technology (ICT) sector has recorded 11.81 percent growth in the second quarter (Q2) of 2018. President Muhammadu Buhari says this signifies a positive growth curve in the economy, as ICT continues to grow despite challenges. Speaking at the 2018 eNigeria Conference and Exhibition organised by the National Information Technology Development Agency (NITDA), the President said the issuance of Executive Order No. 3, which boosts patronage of local content, and Executive Order No.5, which strengthens the role of science, technology and innovation in the country, were deliberate efforts by the Federal Government to enable the growth of ICT to boost Nigeria’s socio-

economic development. “You may recall that in my address at last year’s event, I raised a number of issues relating to ICT’s role in fostering the digital economy in Nigeria, including: the sector’s contribution of about 10percent of the nation’s Gross Domestic Product (GDP) and the need for efforts to be made in enhancing this, especially in our efforts of diversifying the economy. “I am pleased to note that this has been taken seriously and stakeholders’ efforts resulted in ICT emerging as one of the key performers of the second quarter of 2018 by recording 11.81 percent growth,” he said. Concerns were raised about Nigeria’s reliance on foreign hardware technology, as over 80 percent of ICT hardware is imported. Buhari however noted that efforts were being made by all relevant stakeholders in forging strategic partnerships towards ensuring that Nigeria became an

export hub for ICT hardware in sub-Saharan Africa. “The efforts of NITDA aimed at re-organising the registration and certification process for Original Equipment Manufacturers (OEMs) to ensure adherence to world class standards as well as guarantee quality and durable devices are highly commendable. The Agency is encouraged to work with relevant regulatory agencies to ensure strict compliance to these new regulatory instruments,” he said. Also speaking, Adebayo Shittu, minister of communications technology, said there had been a steady incline in the growth of the sector since 2015. “Foreign Direct Investment (FDI) in the ICT sector has increased from $3.2 billion in 2015 to $7 billion in 2018. As a matter of fact, I must also add that as of today, ICT provides more jobs for the country that than the oil and gas industry,” Shittu said.

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Hope for copyright owners as commission seeks partnership with valuers CHUKA UROKO

ope of getting the right value for their intellectual property may be underway for copyright owners as the Nigerian Copyright Commission says it is ready to partner the estate surveyors and valuers on the rights of individuals or institution’s to their works. Nigeria is a country where a lot of copyright owners do not know the value of the property they have. Some have even died in abject poverty while they could have lived a better life if they had tapped from the gains of their copyright and made something out of it. The copyright commission says it is impressed that, as professional valuers, estate surveyors are beginning to appreciate copyright and also seeing it as property that can be valued. It explains that, though intangible, copyright is a property like any other property capable of being transferred, sold or given out. According to the commission, now that the estate

surveyors and valuers have started this process, change will come because copyright owners will have to enjoy their works, reap the benefit of works they have used their intellect to produce. “It is a move in the right direction that estate valuers are becoming interested in finding out the value of copyright and by so doing, copyright in Nigeria can take its rightful place,” noted Lynda Alphaeus, who represented Ezeilo Obi, zonal director, Copyright Commission, Lagos, at a forum on ‘Business Assets and Intellectual Valuation’ in Lagos, recently. Alphaeus who spoke in an interview on the sideline of the forum organized by the Business Division of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), assured that the commission would partner with the estate surveyors in any way one of which was enlightenment. “There is need to enlighten the people because we have discovered that a lot of people,

Lagos calls for memoranda on transport policy MIKE OCHONMA

n tandem with its commitment towards reenergising the various transportation modes and collating it into an effective comprehensive transport policy, the Lagos State government has called for memoranda from the public. While making the call, the permanent secretary in the Ministry of Transportation, Taiwo Salaam, expressed the desire of the state government to create a robust transportation policy that encompasses every sector. Salaam said the state needed the support of all stakeholders such as operators, academia, transport related unions, individuals

Nigeria, Gulf of Guinea remain danger zone for attacks - global piracy report AMAKA ANAGOR-EWUZIE

total of 156 incidents of piracy and armed robbery attacks against ships were reported to the International Maritime Bureau’s (IMB) Piracy Reporting Centre (PRC) in the first nine months of 2018, compared with 121 reported same period in 2017. A breakdown of the incidents shows that 107 vessels were boarded; 32 attempted attacks were recorded; 13 vessels fired upon and four vessels hijacked. Although no vessel was hijacked in the third quarter of 2018, showing the first time since 1994 when no vessel hijacking was reported in two consecutive quarters. Also, the number of crewmembers held hostage increased from 80 incidents to 112 when compared with the

even the owners of copyright themselves, do not understand what they have and the benefits they can derive from this right,” Alphaeus noted. Continuing, she said, “We are ready to partner with the NIESV to help them in any way possible, particularly, to help the copyright owners get value for their copyright. Take, for instance, if the proper thing is done about copyright, people can use their copyright to secure bank loan; they can also transfer this right to their children.” The commission will be cooperating with the professional valuers as well as encouraging people to meet them so that the valuers can help them get value for the copyright. Alpheus hopes for a better synergy between the commission and the estate surveyors, stressing that they would work with them to make this sector grow and develop to what it should be. “We are set to work with them to achieve a common goal on this, which will lift the common Nigerian,” she assured. Power sector transformation: L-R: Wiebe Boer, CEO, All On; Babatunde Fashola, minister of power, works and housing, and Ifeanyi Orajaka, CEO, GVE, in discussion following the Nigeria power sector boardroom session at the African Development Bank’s Africa Investment Forum in Johannesburg, South Africa.

and groups as well as nongovernmental organisations, adding that their contributions were of utmost importance and would be considered in formulating the transport policy for the state He said a stakeholder/ public hearing would soon be conducted before the Lagos State transport policy was finalised The permanent secretary affirmed that submissions of memoranda had since commenced through the ministry’s online platforms, phone line, email address, as well as hard copies received in his office. He urged other interested members of the public to forward their contributions as soon as possible.

same period in 2017. Statistically, the Gulf of Guinea accounted for 57 of the 156 incidents reported globally with most of these incidents reported to have occurred in and around Nigeria. According to the report, the Nigerian Navy has actively responded and dispatched patrol boats when incidents were reported promptly, and there has also been a noticeable increase in the number of vessels boarded at the Takoradi anchorage in Ghana. The report further noted that 37 of the 39 crewmembers kidnapped for ransom globally occurred in the Gulf of Guinea region, in seven separate incidents. Here, a total of 29 crewmembers were kidnapped in four separate incidents off Nigeria - including a 12-crew kidnapping from a bulk carrier off Bonny Island, Nigeria, in September 2018.

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Commenting on this, Pottengal Mukundan, director of IMB, said: “While the record low number of hijackings in the second and third quarters of 2018 is of course to be celebrated, incidents of maritime piracy and armed robbery remain common.” Mukundan urged governments of maritime nations to leverage the timely data available from the IMB Piracy Reporting Centre to concentrate resources in these hotspots. IMB however encouraged all masters and crewmembers to be aware of these risks and report all incidents to the 24-hour manned PRC, which would ensure that reported incidents were relayed without delay to the appropriate response agency and would liaise with the ship, its operators and the response agency until the vessel was deemed safe.

Wapic Insurance holds conference call as Q3 gross premium written spikes BALA AUGIE

apic Insurance plc will hold a teleconference call for investors and analysts today at 2pm in Lagos, with its senior management, to announce the unaudited financial result for the period ended September 30, 2018. There will be an opportunity at the end of the call for management to take questions from investors and analysts. The Nigerian insurer’s aggressive market penetration strategy has paid off it recorded double-digit growth in revenue while underwriting results improved amid sluggish economic growth.

In the first nine months through September 2018, Wapic’s gross premium written (GPW) spiked by 29.19 percent to N10.09 billion from N7.81 billion the previous year. Gross premium income and net premium income followed the same growth trajectory as they increased by 18.40 percent and 24.65 percent to N8.62 billion and N5.42 billion, as against N7.28 billion and N4.389 billion the previous year. The West African multiline insurance company has an appropriate pricing policy and a well-executed growth strategy as evidence in an efficient underwriting capacity. Underwriting profit increased by 7 percent to N1.37 billion in the period under review from N1.29

billion the previous year. “Our nine months’ financial performance is reflective of the focused implementation of our growth objectives across all business lines,” Yinka Adekoya, managing director, WAPIC Insurance, said. “The group reported a commendable N10.1 billion in gross written premiums for the period, a 29 percent increase from the prior year’s position and significantly outperforming industry averages. Our ongoing digitisation efforts and first-in-class customer experience offering will open up new opportunities, which we believe will ensure the continued creation of sustainable value to all our stakeholders,” Adekoya said.

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Rethinking agitation for minimum wage

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

t is important for labour leaders to remain relevant and have influence. To achieve that status, they must aspire to have oversight, insight, hindsight, and foresight about everything that concerns the labour-force rather than agitation and strike actions as their hallmark. The country is in a mess much deeper than we had ever known as political leaders have become more of a burden. The labour leaders have no doubt been useful in terms of securing some level of welfare for the workers. The template adopted by the labour leaders in securing attention from the recalcitrant political leaders has not changed much. It has to change as this is not the period to cry over an increase in minimum wage. It is a time to think of ways to have oversight on the issues that affect the labour force. It is a period to turn information to intelligence. It is a time to look backward in order to be able to influence the future and anticipate the same. Have we ever asked ourselves the question of what level of welfare the previous minimum wage has ever guaranteed? Are the goods and services available to be pur-

chased? Are low-cost houses available to be rented, are the roads motorable, is electricity available for both domestic and industrial or business use? Is security available? How good are the schools and hospitals? What of water and sanitation? Are we anywhere near the 2030 goals set in the Sustainable Development agenda? These and other questions should bother the minds of union leaders. How many union leaders are in the national assembly as legislators? What is the status of the Labour Party? Why can’t we use the platform of the Labor Party to secure the changes we desire? I guess the labour leaders are serious but in the wrong direction. I wonder why the labour leaders are comfortable asking for minimum wage in a country where solipsism and nativism are leading everyone into the wilderness. Are thousands who today are kept away in the IDP camps not part of the labour force of this country? You can’t keep doing the same thing and expect different results. Enough of agitation for minimum wage. It is time to start asking for good roads, well-equipped hospitals, accountability from the government at all levels, sanity in our courts, security for all and sundry, food for all, water and sanitation in all nooks and crannies in this country. Where you do not have to provide your electricity, water, security, roads, hospital, and ‘rent’ teachers for your children and wards, then the minimum wage would be-

‘

I wonder why the labour leaders are comfortable asking for minimum wage in a country where solipsism and nativism are leading everyone into the wilderness. Are thousands who today are kept away in the IDP camps not part of the labour force of this country?

’

come maximum wage. I believe labour leaders keep records of vows made by politicians during electioneering storm which they fail to deliver on in the calm of their positions after elections. If they don’t keep records of such vows I advise they do. Those records should provide the basis for any intended strike action. I am convinced that if vows made in a political storm are not forgotten in a political calm, there might not be a serious need for any agitation for minimum wage. During the electioneering campaigns in 2015, for instance, we were told that a serious government should be able to “fix power problems in six months” and that the only way to have stable electricity is to “vote out PDP.” I am sure PDP was voted out and we have had multiples of six months since 2015 without stable electricity. It is also

on record that the question was asked: “why is the nation’s currency, the Naira, now trading for N180 per Dollar, while the South African Rand is trading at R11 one United States Dollar?” This was a legitimate question but today the Naira trades for N360 to the dollar. When went wrong! It was also drummed even to the ears of the deaf that “it’s time to restructure Nigeria : The present situation of things where all component units get a monthly allocation from the Federal Government only makes the States lazy and Unproductive.” Jonathan was also asked to resign if he “has no solution to the violence being unleashed on some parts of the country.” Have States stopped receiving a monthly allocation from the Federal Government? No. Has violence ceased in Nigeria? No. Is it that the present government is not doing anything to stop violence and other crimes in Nigeria? No. Then, what is the problem? Even though the politics in Nigeria is toxic and prevents real action on pressing issues, I perceive in my heart that there is no government, no matter how naughty, that would not want to make meaning contributions to society. I read recently the compendium of ‘Public Service Reforms’ in Nigeria (2015-2017). The compendium provides a summary of the various reform initiatives of the Buhari administration, the major achievements, key challenges and proposed steps to mitigate all grey areas. The compendium is suggestive that the government desires to improve the living standard of

Nigerians. But, as with other previous governments, not much has been achieved even with the best of intentions. This means that there are fundamental issues to be addressed before governments can begin to make progress in their activities. The progress will not be political ‘party dependent’ but the ability of reasoned debate to win arguments. Neither the present nor the immediate past government gave birth to the present level of abasement but all governments have embraced it enthusiastically by stretching the truth and telling lies with pride. There is no wage that can take the workers home in a country where politicians are willfully divisive and callously cruel. I beg the labour leaders. Strikes are potent where governments are ‘deaf ’ and ‘dumb.’ But let’s go on strike because we have no access to information on the remunerations of our political leaders, especially the National Assembly. Let’s go on strike because our roads are eroded, schools are without teachers in terms of quality and quantity, hospitals are without drugs. Let’s go on strike because there is insecurity everywhere. Let’s go on strike because there is corruption everywhere. We will not soar by an increase in the minimum wage because we can’t keep prices of goods and services constant. The workforce will only be poorer by any increase other than in improvements in institutions and infrastructure.

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On work experience: Addressing faulty recruitment assumptions and practices 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

t is no news that many recruitment adverts are not only ridiculous but unrealistic. In a country like Nigeria (with a faulty educational system that prolongs the time people spend in universities, polytechnics and colleges of education) it is unrealistic to expect profound work experience from new (or relatively new) graduates. For instance, it is ludicrous to require six (6) years work experience from applicants (in the Nigerian system) who should not be older than 25 years of age. Two questions: how was the years of work experience arrived at? Who says a 25-year old applicant is the best fit for the job opening?

Surprisingly (and sadly), most times, the years of experience pinned on job adverts are pulled from the air which renders the exercise subjective. Such practices do not take into consideration individual differences hence it will edge out competent individuals with less work experience. I am of the opinion that a very simple way to address this challenge is to do a mini survey by asking a few job incumbents or past job holders to know how much time it took them to ascend the vacant job position (in their respective organizations) then compute the average of the number of years given. When this is done, state in the job advert that it is the minimum years of work experience required. I must quickly add that there will be exceptions – some individuals are exceptionally good yet might not fit the profile of the ideal applicant hence there is need to occasionally look beyond the specific years of work experience required. As regards setting age limits, I think it is an assumption (and a faulty one) that individuals within certain age brackets would

perform better than others. If this should be the case then it should be premised on thorough research nonetheless I think it will be very discriminatory. Research data could inform the need for improvement of the law but it is not greater than the law which abhors discrimination. I would be remiss if I fail to stress that having experience on a given job role or different job roles is a beautiful thing. It gives employers the confidence that such individuals will hit the ground running and possibly make significant impact within a short period of time when employed. While this assumption seems reassuring, it is important to also keep in mind that this assumption might be faulty. Many people have lengthy work experiences under their belts not as a result of competence rather due to a host of factors not tied to performance hence it is fitting to thoroughly evaluate experiences to gauge depth, quality and relevance. Length of experience is easy to come by being on a job for a period of time. It is paramount to say that length does not imply depth, quality and relevance. What are the remarkable turning points in the work experience

under review? Beyond discharging explicit duties (as stated in the job description) and all other duties assigned, what significant contributions were made? What projects were seen (from conception) to completion? Were duties carried out proactively or reactively? Did work practices measure up to standards in the profession? Are knowledge and skills acquired over the years relevant within the new operational space? There are a litany of questions to ask to help ascertain the richness of the work experience being considered. The essence of thoroughly evaluating years of work experience of job applicants is to determine the best fit for the vacant position(s). This is because work experience could be lengthy but shallow; it could be either of high or low quality; it could be relevant or irrelevant given the dizzying pace at which the world of work is evolving. As a trained industrial-organizational psychologist, I would place open-mindedness, ability to learn fast and a good work ethic above years of work experience (on a scale) when making selection decisions. I

would do so for the following reasons: First, you might have garnered your lengthy work experience not as a function of a solid skill set and excellent work ethic rather as a function of I ma mmadu (an Igbo term that speaks to one’s relationships with influential individuals or simply put, connections). As earlier stated, many have years of experience under their belt not as a function of competence. Second, you may have garnered a decade or more of work experience doing the wrong things (i.e. work practices that fall short of best practices). It is important to stress again that work experience could be of low or high quality. Finally, if you have worked in just one firm, your experience may be admirable in length but found wanting in depth and breadth. Regardless of operational convergence owing to global best practices, organizations differ along service/product, cultural lines et cetera hence your experience might be narrow as regards industrial operational variations.

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Halting the decline in external reserves

UCHE UWALEKE Uwaleke is Nigeria’s first Professor of Capital Market and the Chair of Banking and Finance Department at the Nasarawa State University Keffi

ue largely to effective foreign exchange management policies introduced by the Central Bank of Nigeria notably the Investors and Exporters window helped by recovery in crude oil price and output, some degree of stability has returned to the forex market. But this stability is now under threat. Reflecting the impact of exogenous shocks, driven largely by monetary developments in the United States in particular, the near-term outlook for the currency market in Nigeria appears grim in the wake of dwindling external reserves. A broad retreat by foreign investors from Nigeria on the back of interest rates hike in the United States is largely to blame. Indeed Nigeria has good company in other emerging economies. As reported by Reuters, foreign exchange reserves held by the Reserve Bank of India, the State Bank of Pakistan and Bank Indonesia have recently come under pressure following massive capital outflows. According to the JakartaGlobe, Indone-

JARIKRE JOHNSON Johnson is an Environmentalist based in Lagos

rom the air, the 100-acre Olushosun dumpsite in Ojota, Lagos looks innocent. From the ground, however, the site is a malodorous, contaminated world of its own with towering hills of waste. This landfill is fourth largest in the world whilst retaining notoriety as Africa’s largest landfill. Garbage received at the landfill is estimated at 10,000 tons per day. A substantial portion of this is electronic waste from container ships. Toxic fumes are released from the site and chemicals are absorbed into the ground. Around a thousand homes exist near the site. Residents here eke out a living by scavenging scrap from the dump and sorting, burning and recycling what they can. At the time it was built in the 1950s, the location of the landfill was on the outskirt of Lagos and was originally intended for wastes from individual and corporate sources. Since the exponential urban development that has characterized Lagos, residential, commercial and industrial buildings have since sprung up around landfill.

sia’s foreign exchange reserves dropped by about USD3.1 billion in September alone due in part to currency market interventions by the Central Bank of Indonesia. Back home, while the US monetary policy normalization represents one major reason for foreign investors’ exit alongside concerns over potential fallout from an escalating trade war between the United States and China, another trigger has been the heightening political uncertainty. Besides these, other factors that could be putting a strain on the country’s external reserves include the increasing cost of servicing growing external debts, high import bills despite government measures and the high dollar preference over the naira by politicians which came to the fore during the just concluded political parties’ primary elections. The fast depletion of the country’s external reserves of late provides disturbing evidence that foreign investors’ concerns about Nigeria show no sign of abetting. Political uncertainty is driving up perceived economic risk which in turn is drying up capital inflows. The country’s foreign reserves, which witnessed a remarkable surge in 2018 on the heels of improved oil prices and hitting USD47.8 billion in June is now a little shy of USD42 billion according to figures from the Central Bank of Nigeria. Like every other country, Nigeria needs strong foreign reserves to meet international payment obligations timely,

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Instead of Eurobond sales, the government should issue more of diaspora bonds, as it did in the past, provided the proceeds are tied to viable infrastructural projects

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boost the country’s credit worthiness, provide a buffer against external shocks as well as maintain a stable exchange rate. Of all these, safeguarding the value of the naira is the overarching objective. According to data obtained from the CBN website, Nigeria’s external reserves comprise three components namely, the federation, the federal government and the Central Bank of Nigeria portions. The federation component consists of sterilized funds (unmonetized) held in the excess crude and Petroleum Profit Tax/Royalty accounts at the CBN belonging to the three tiers of government. The Federal Government component consists of funds belonging to some government agencies such as the NNPC,PHCN and Ministry

of Defence for Letters of Credit opened on their behalf among others while the considerable CBN portion consists of funds that have been monetized and shared from which the Bank conducts its monetary policy and defends the value of the naira. While the latest onslaught on foreign reserves may be due partly to influences beyond the control of the CBN, it should remain committed to ensuring stability in the forex market through adequate liquidity. With inflation rate once again on an upward trajectory, abandoning intervention in the forex market in a bid to conserve external reserves will be detrimental to its primary mandate of maintaining monetary and price stability. It bears repeating that the solution to halting the declining external reserves does not lie in suspending the interventions which is tantamount to floating the naira neither does it lie in hiking the monetary policy rate in the hope that it could potentially stem the capital flow reversals. With the meeting of the Monetary Policy Committee some days away, it is most likely that not a few members will argue for a rate hike to arrest the current haemorrhage in external reserves. Be it known however that policy rate hikes did little to reverse the downward trend in the international reserves held by many emerging economies. As a policy response, it was not effective in India. As a matter of fact, Bloomberg reported that India was not alone in raising rates in

Asia. Philippines and Indonesia tightened monetary policy as they sought to support their currencies. According to Reuters, the central bank of Indonesia (Bank Indonesia) has increased interest rates five times since May 2018 by a total of 150 basis points to maintain the attractiveness of Indonesian assets for foreign investors with little success. In order to halt the declining external reserves therefore, the CBN should continue to sustain its demand side management measures including the policy on 41 items. Perhaps more than ever before, complementary fiscal policies are required. The government may consider the use of protectionism, the new weapon in town, to curtail imports. The short term solutions should also include getting wealthy non-resident Nigerians to play a role in ramping up foreign reserves. Instead of Eurobond sales, the government should issue more of diaspora bonds, as it did in the past, provided the proceeds are tied to viable infrastructural projects. By and large, a sustainable approach to foreign reserve accretion remains the pursuit of what has become a no-brainer, the diversification of the export base of the economy to create multiple streams of forex. The government should leverage the current high price of crude oil and implement decisive policies aimed at building international reserves to support the resilience of the external sector.

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Olushosun Dumpsite: Return of the eye sore With this development comes a menace of environmental pollution that is bound to haunt the Lagos metropolis. According to research, health is at risk for those who live within five kilometres of a landfill site. Respiratory symptoms have been detected among residents living close to waste sites. These were linked to inhalation exposure to endotoxin, microorganisms, and aerosols from waste collection and land filling. Other hazards that come with living close to sites include fire and explosion, inhalation of toxic gases, injury to children playing on or around the dump site, disease carried by mosquitoes, flies and rodents and damage to plant and wildlife habitats. Findings have also shown that water borne diseases such as typhoid, dysentery, fatigue and cholera are amongst the ailments mostly suffered by inhabitants within the vicinity of the dumpsite. Some years ago, the groundwater quality around the dumpsite was investigated by collecting nineteen representative water samples from sixteen wells and three boreholes, and a leachate sample from the landfill. The samples were examined in the laboratory for physical, chemical and bacteriological analyses using standard laboratory

procedures. The obtained values of concentration of key parameters in all sampled wells were plotted against distances from the Olusosun dumpsite, in scatter diagrams. Unexpectedly, the concentration did not follow any attenuation pattern, with increasing distance up to the farthest sampled well. It is implied from the outcome of the exercise that the dumpsite is the source of pollution of groundwater in the area. Meaning that solution to the groundwater pollution in the area is thus complex, and one that requires a more drastic and holistic approach. Apart from the health hazards of the dumpsite, Olushosun is known as an enclave of illegal activities for hoodlums, social miscreants and scrap scavengers. Deteriorating soil quality and decrease in vegetation abundance are part of grave consequences of the open waste dumping which have resulted in growing public concern. The growing concern led the Lagos State Governor, Mr Akinwunmi Ambode to shut down the dumpsite in March of this year, as the location of the facility was no longer healthy both for trading and residents living in the neighbourhood. Just before the governor’s intervention, there had been a sudden fire outbreak caused by a flare in the dumpsite.

As is typical of dumpsites, there has been frequent occurrence of flare in the site. Landfill fire in itself isn’t novelty as hundreds of such occur each year on dumpsites around the world. Such outbreaks range from minor surface fire to massive blazes that release harmful emits. During such occurrence, harmful emissions such formaldehyde, hydrogen cyanide, hydrogen sulfide, nitrogen oxides, among others are released and are bound to cause health complications in those living in the immediate environment. This is obviously a major reason why the Lagos State government ordered the residents of Olushosun to relocate. In a statement, the governor noted that “the closure of the site became necessary owing to the need to forestall future occurrences and protect the health of residents”. Upon the closure of the dumpsite, the state government directed waste collection operators to make use of the landfill sites at Owu Elepe in Ikorodu and that of Epe. The closure of the landfill led to the birth of the Cleaner Lagos Initiative (CLI) whose mission is on “improving the environment to make it cleaner, safer and healthier for all Lagosian through a harmonised and holistic ap-

proach”. To achieve its purpose means an innovative response to the issues of waste management in the state. The CLI pooled together several agencies across the value chain to “deliver a safe and sustainable environment for residents”. Under the CLI arrangement, community sweeping was handed to the Ministry of Environment, whilst street sweeping was managed by three private companies – Avatar, Wastecare and Corporate Solutions. The Waste Collection Operators, mostly known as PSPs were directed to be in charge of residential and general waste collection. Visonscape Sanitation Solutions got the mandate to implement waste management infrastructure development across the state. Visionscape’s remit also included public waste collection to cover any service lapses that may occur. The CLI’s division of labour was believed to have been put in place to ensure that all “aspects of the integrated waste management plan in the state received optimum attention”. Note: The rest of this article continues in the online edition of Business Day @https://businessdayonline.com/

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Thursday 08 November 2018

The endangered Nigerian middle-class

rom independence in 1960 to the early 1980s Nigeria grew a solid and robust middle class of professionals – Doctors, teachers, professors, Engineers etc – who were financially secure, lived in GRAs around the country, could afford to educate their children up to university levels (then our universities were still centres of excellence), visited cinemas and prestigious restaurants and social clubs often, shopped in exclusive shopping malls and could buy new cars easily. Then came the structural adjustment programme (SAP) and the devaluation of the naira. The unintended consequence was the decimation of the salaries of the middle class. Imported goods became expensive and out of the reach to all but the elite. New cars automatically went out of the rich of the middle class and they had to resort to buying used vehicles popularly known as Tokumbo in Nigeria. Gradually, those professionals (majority of them) who had the opportunity to relocate abroad left and those who couldn’t leave or didn’t want to leave were

demoralised. Also, the desired locations of the middle class became run down and shabby. By the time Nigeria returned to democracy in 1999, the middle class had all but vanished. However, by the turn of the 21st century, a noticeable change occurred. Through the great work done by the democratic regime of President Olusegun Obasanjo, the middle class was gradually restored and began to grow in leaps and bounds to such an extent that Nigeria became an attractive investment destination to many auto firms (to set up assembly plants) and large chain super-market stores. However, the progress has now firmly been cut short. Due to the deliberate policy choices and inactions of the government, of course, sparked by low oil prices and scarcity of foreign exchange, the naira has taken such a severe hit that the country was thrown into recession. Expectedly, the economic recession with its attendant suffering is not affecting the poor alone. True, prices of consumer goods and services consumed mostly by the poor have tripled. But the steep decline in the value of the naira has also affected the prices of luxury and aspirational

goods and services demanded by the middle class also. Just like it happened in the late 1980s and 90s, Nigeria’s robust but fragile middle class that expanded greatly from 2002 due to deliberate government policy is now shrinking and at the risk of disappearing entirely. Their fat salaries have been eroded by the steep decline in the value of the naira and they can hardly afford to shop in foreign boutiques and stores in Victoria Island and Ikoyi again. Even the fanciful cars they had always bought is now largely above their reach and they had to make do with imported used (Tokunbo) cars. To drive the nail into the coffin of the middle class, a deliberate government policy has now priced Tokumbo cars out of the reach of the middle class. The justification was the implementation of the National Automotive Industry Development Plan (NAIDP) of 2013 meant to grow the volume of locally assembled vehicles by raising tariffs on imported cars. However, the devaluation of the naira has made rubbish of that policy. But how does the government care? It has gone ahead with the implementation of the policy charging 35 percent import

duty and another 35 percent surcharge, making it a total of 70 percent of the market price of the vehicle. The new charge, which applies to a unit of any imported vehicle, irrespective of the model or brand, makes importation through the land borders (smuggling) far cheaper than through Nigerian seaports. But it is not only the people that are suffering. By implementing such punitive tariff regime on imported vehicles, the government has ceded most of the revenues it should be making to Benin Republic, which has taken advantage of the Nigerian government’s irrational policy action to lower its duty on imported vehicles. What is more, the current structure now provides a rich avenue of corruption to customs’ officials who give genuine customs’ documents to these smuggled vehicles for a fee. We are baffled that the government can be so retrogressive and almost irrational in policy decisions. The lack of effective demand for new cars has stymied any plans to establish vehicle assembly plants in Nigeria. The plan is now helping to price out used cars from the reach of Nigerians. that is most retrogressive and should be stopped.

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Thursday 08 November 2018

CityFile Driver gets N2m reward for killing 2 bandits in Zamfara

A Students of Mater Dei High School resume on Tuesday, after the Bayelsa Government ordered closure of schools in the state due to devastating floods. NAN

Why I killed my pastor friend – Evangelist

self-acclaimed evangelist, Prosper Peter says he plotted the killing of his friend, Kelechi Iwuanyanwu, a pastor in a new generation church in Umuahia, for many decades. Peter, who was arrested by the police in Abia in conjunction with zone 9 command, told newsmen at the police officers’ mess, Umuahia, that his grouse was that the deceased refused to assist him financially. He said that he recruited three persons that murdered Iwuanyanwu, his alleged mistress and woman leader in the church, Ruth Eze and Kalu Ikeagwu, the assistant pastor. Iwuanyanwu, who was the founder of Winds of Glory Ministry, Umuahia, was murdered along with the two others at his residence, located at Umuobia Housing Estate in the early hours of October 14. Anthony Ogbizi, the Commissioner of Police in the state, who briefed newsmen on the incident on Tuesday, said that Peter was arrested through the combined efforts of operatives of the command and zone 9. Ogbizi said that police at Umuokpara division got the hint that the pastor’s Jeep, which was taken away by his killers, was found at Ohiya Mechanic Village in Umuahia. He said that the information led to the arrest of the mechanic, who was reportedly engaged by Peter to help in dismantling the security and tracker in the vehicle. He said that the mechanic gave Peter’s identity, adding that Peter was invited to the station during which he was arrested and detained. Narrating how the deceased was killed, the suspect said that he and the hired killers laid

ambush in front of Iwuanyanwu’s residence around midnight. “As soon as he came back and opened the gate, the boys went into the apartment, where they matcheted the three of them to death,” he said. He said that the original plan was not to kill them, but that they were killed after one of the killers realised that he had been recognised by one of the deceased. Peter said that his plan was to attack the pastor and remove some of his valuables, which he intended to share with the assassins. He said that after killing them, he took some of the pastor’s personal effects, including shoes, electronic gadgets, telephones and the jeep. He said that he loaded the items in the pastor’s jeep, which he also attempted to take away but could not because of the security installed in the vehicle. The suspect said that he later got someone that helped him to start the car with which he evacuated the pastor’s property out of the building, located in an isolated part of the estate. On his grouse with the late pastor, he said that when he appealed to him to assist him, “rather than help me, the pastor started avoiding me.” He recalled how he assisted the pastor in the past and was expecting him to reciprocate when he began to do well. “When his ministry was not doing well, he approached me for help and I took him to a native doctor in Ikare, Ondo state, who prepared a charm for him,” Peter said.

He said that the charm was prepared to help the deceased to draw crowd to his ministry on the promise to reward him when things improved for him. He said that he was worried when Iwuanyanwu started making money in Umuahia but allegedly refused to assist him as promised. Peter, who was arrested with his wife, Precious, said that he regretted his action and absolved his wife of complicity. Precious, who said that they had been married for about eight years and had three children, wept profusely. She said that she did not know that her husband could be involved in such a heinous crime. She said that while she lived in Umuahia with their children, her itinerant husband shuttled between Aba and Abuja on evangelism. The commissioner of police said that zone 9 command commenced a manhunt for Peter’s accomplices in the murder of Iwuanyanwu and the two others. The Abia police command also arrested three persons, who admitted to have kidnapped a toddler at Ntigha, near Umuahia, in September and took him to Aba. The baby boy was allegedly kidnapped by one Ulonma Frank, a nurse, who reportedly sold him to one Grace Simeon, also a nurse in Aba, at N300, 000. Simeon told newsmen that she sold the boy to one Onyebuchi Nnaji at N600, 000. Also arrested were a merchant navy, Ifeanyi Osuji, said to be specialised in car theft and some kidnap and armed robbery suspects, accused of terrorising residents of the state.

NIS arrests, prosecutes 3 over passport racketeering KEHINDE AKINTOLA

igeria Immigration Service (NIS) has arrested a passport officer, Peter Ethan and two others, over an attempt to procure Nigerian passport with false breeder documents. Sunday James, spokesperson of NIS disclosed this in Abuja. According to James, false breeder documents are documents used to sup-

port applications for identity, residence and travel documents. He said the suspects had been arraigned over charges including conspiracy to procure passport, using false information; submitting false information to procure passport and counseling a person to produce false information for purpose of procuring passport. “These offences are in contravention of the provisions of the Immigration Act

2015,” adding that the suspects would appear in court on November 13. Meanwhile, the Comptroller-General of Immigration, Muhammad Babandede has advised Nigerians to always ensure they present genuine breeder documents for Passport applications. “Officers and men are hereby warned to desist from colluding with Passport applicants to commit such offenses. The Service will not fail to prosecute all offenders, including serving officers,” he said.

commercial vehicle driver (name withheld), has been rewarded with N2 million cash by the Zamfara State government for killing two armed bandits. Handing over the money on behalf of the state government in his office, the commissioner for local government and chieftaincy affairs, Bello Dankande said the gesture was in fulfillment of the state governor’s pledge to give N1 million on each AK 47 rifle seized from bandits. The driver was said to have ran into the bandits along Gidan Jaja/Gurbin Bore Road of Zurmi local government area of the state in the night. Dankande said the incident happened when the bandits were attempting to cross the road with their rifles on their shoulders killing them instantly. Similarly, two other communities benefited from the same gesture of N1 million each having rounded up two bandits, seized their guns and handed them over to the security agents. The commissioner listed the two communities to include Unguwan Mallamai in Maradun local government and Matuzgi in Talata-Mafara local government areas. He restated the state government’s commitment to continue to the give reward noting that “the state government is ready to give N100 million to any person or group that collects 100 AK 47 and we will continue to improve on the security of all communities in the state.” He said with the additional engagement of 500 youths from each of the 17 emirate councils of the state who were expected to complement the effort and work of conventional security agents, the days of the bandits were numbered in the state.

Ekiti to hand over commercial ventures to professionals RAPHAEL ADEYANJU, Ado-Ekiti

kiti State government is to revamp and hand over publicly owned commercial ventures in the state to professionals. This was disclosed to newsmen by Governor Kayode Fayemi during the continuation of his tour of project sites and infrastructure in the state on Tuesday. Fayemi promised that his government would also be commencing work on all abandoned and dilapidated projects in the state. He lamented the sordid state of legacy projects that are supposed to be the pride of Ekiti people adding that all such projects were in full operation when he left office four years ago. Specifically, the governor said Fountain Hotel would soon bounce back as his administration will embark on rapid rejuvenation of the facility to return its old glory and position it as a profitable venture. He wondered why a government that claimed to be people’s government would allow projects that belong to the people to almost go extinct under its watch. Fayemi said, “We’re going to fix all these things, but it is important for Ekiti people to know the type of leadership that just left office in our state. This facility was one of the sought after facilities for use, because it is attached to the hall that provides very good usage for public and then the 32 rooms that are here are always almost fully booked, so for me to see it in this state, I just ask myself, its not rocket science to manage public property. “We would revive it, we would rejuvenate Fountain Hotel and then let it out to professionals to manage. What this also proves is that we really need to get government out of managing commercial ventures in our state, because government would come and go, but the properties would still be here, and they are legacy properties. All of us should see them as a source of pride to Ekiti people. Other project sites visited by the governor in Ado-Ekiti, the state capital were Ekiti Parapo Pavilion, Adunni Olayinka Civic Centre and Oja Oba.

Innovation

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Thursday 08 November 2018

WWW creator tasks world leaders on web contract to address online violations FRANK ELEANYA, Lisbon

im Berners-Lee, the creator of the World Wide Web (www) has urged founders of technology firms and world leaders to sign the contract for the web which he says will not only protect privacy of individuals but could potentially improve responsible use of online platforms. Berners-Lee who also revealed that half of the world’s population will be online in 2019 said it has become imperative for private organizations to lead the charge in protecting the web from abusers who spread hate speech, fake news and use the internet in a way that is harmful for other people. “Those of us who are online are seeing our rights and freedoms threatened,” Tim said at the Web Summit tech conference in Lisbon on Monday. “We need a new contract for the web, with clear and tough responsibilities for those who have the power to make it better.”

Published by Berners-Lee’s foundation, the new contract calls for safeguards that protect users data from being sold, stolen, or misused. Google, Facebook, the French government and nearly 57 global companies have already signed up. Despite the growing incidence of web violations, the WWW creator said he does not regret creating it but he believes that people, leaders and businesses coming together can address the major problems that the web faces today. “A couple of years ago, I realized there was a change of attitudes. We can’t assume that connectivity will inevitably lead to more understanding,” he said. Revealing the details of the contract, Berners-Lee said it will be published in May 2019, the same year half of the people in the world will be able to get online. “For many years there was a feeling that the wonderful things on the web were going to dominate and we’d have a world with less conflict, more understanding, more and better science, and good de-

mocracy,” he said. “But people have become disillusioned because of all the things they see in the headlines. “Humanity connected by technology on the web is functioning in a dystopian way. We have online abuse, prejudice, bias, polarization, fake news, there are lots of ways in which it is broken. This is a contract

to make the web one which serves humanity, science, knowledge and democracy,” he added. Jacqueline Fuller, VP and President of Google.org said the contract is coming at a significant time and therefore represents a great opportunity for big companies to really “double-down” and bring ac-

Google unveils AI functionalities to transform everyday life CALEB OJEWALE, Amsterdam

rtificial Intelligence (AI) to many people in Nigeria, sounds like yet another sci-fi concept that is not configured to work in this part of the world. However, the Google Making AI event in Amsterdam this week has shown, AI can be put to more use (in Nigeria) if conscious efforts are made to explore these possibilities. From everyday usage to extend functionalities on mobile devices, AI can also offer significant leverage in solving many of society’s problems through the enormous data processing capabilities and adaptive capacities. To many Nigerians, automated homes always look cool in movies, and the practicality of it in the country is now very possible. The Google Home (available on Playstore), can be voice activated through Smart speakers powered by the Google Assistant. It com-

bines Google’s skills in AI, ML (machine learning) and natural language processing with decades of Search experience to deliver personal experience for users. Those who already use the Google Assistant may already be familiar with the app, and by saying the “Hello Google”, it is activated to take commands. From switching on the lights, controlling air conditioning, it can also be connected to home cameras for use at entrances. Some of these were demonstrated this week at the Google Apartment in Amsterdam’s city centre. While all of these may sound very western, it is very possible to put these functionalities to use in Nigeria. At least one person (resident in Nigeria), told TechTalk he is already using it in his Lagos home. In subsequent TechTalk articles, we will put readers through the process of setting up a smart home as well. Also, with Google’s developments in AI, phone users (at least those with Pixel 3),

will be able to ‘screen their calls’. Many times when we receive calls, we hesitate to pick, particularly when occupied and only need to attend to very important matters. The new call screen feature on Pixel 3 phones makes it possible to know what the caller wants in advance. At the tap of a button the caller hears an automated message asking the reason for their call. A transcript of the caller’s answer will appear in real time on the phone’s screen, enabling a person to quickly decide whether to speak to them or not. This in way, replaces SMS options that are sent to simply ‘shut down’ a caller. Other examples of AI and ML applications can be found in the battery life of

phones. Google and DeepMind have developed an adaptive battery technology in the Android P operating system. The technology ensures that apps will still work as expected, but will dramatically reduce “battery drain” caused by an App behaviour such as frequent CPU wakeup (where the device randomly switches from idle to active) or unnecessary data transmission caused by apps “dialling out” over Wi-Fi or the cellular network. With the adaptive battery technology, CPU wake-ups have been reduced by about 30 percent and mobile radio usage by as much as 20 percent in some apps. Life will probably be very boring unless new possibilities are explored. Technology makes it easier for these explorations and some already exist within the Google sphere. With Android devices, all that is required is taking a plunge through these programs and their new features. Next week, they will be highlighted in detail.

cess to everyone. The United Nations Secretary General, Antonio Guterres, also expressed support for the new contract during his presentation at the Web Summit. Gutterres who acknowledged the strides that the internet has made in accelerating human development

particularly with regards to alleviating poverty in many needy communities around the world, noted that there was a need for world leaders to sit down and discuss and agree on protocols and mechanisms to protect citizens on the web. Technology, he said, has had a damaging effect particularly in maintaining peace around the world. “The weaponization of artificial intelligence is a serious danger and the prospect of machines that have capacity by themselves to select and destroy targets is creating enormous difficulties to avoid the escalation of conflict and to guarantee that international humanitarian laws are respected in battle fields. For me, a message that is very clear is; machines that have the power and discretion to take human lives, are politically inacceptable, are morally repugnant and should be banned by international law. “What we need is to create platforms, like the one that was mentioned in the contract,” Gutterres said.

Public voting opens in $2mn Google Impact Challenge Nigeria CALEB OJEWALE

he public can now vote for 12 Nigerian nonprofits competing for a chance to benefit from a $2 million grant being offered through the Google Impact Challenge Nigeria. The competition aims to find the most innovative Nigerian non-profit organisations using technology to solve societal problems. Juliet Ehimuan-Chiazor, country director for Google Nigeria, said in a statement, “It is important to bring people’s attention to the good work done by the numerous innovative non-profits operating in Nigeria. The Google Impact Challenge opens Google’s arms to Nigerian social innovators working to solve challenging social issues, and asks for their bold ideas to grow economic opportunity in the country – and beyond. It brings Google.org funding and the best of Google’s people and products to help turn these entrepreneurs’ ideas into reality. This challenge illustrates how technology, combined with local know-how and a firm

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

resolve, can help to address the challenges so many Nigerians face daily.” “Innovation is happening all around us. Now is the time to reward those who work tirelessly to improve the lives of all Africans,” she said.. The initiative, which attracted over 3,000 submissions from Nigeria, is now in its final stages, and 12 Nigerian non-profits will be receiving a $125,000 grant as well as support and training from Google to implement their ideas. The four people’s choice and judgeselected winners will double their award and win $250,000. Voting can be done at https://impactchallenge. withgoogle.com/nigeria2018 and closes on November 25. Shortlisted finalists are; BudgiT Foundation, Bunmi Adedayo Foundation, HelpMum, Junior Achievement Nigeria, LearnFactory Nigeria, Project Enable Africa, Rural Development and Reformation Foundation. Others are Seed Tracker – IITA, Solar Sister Nigeria, The Cece Yara Foundation, The Roothub Tech 101, and Vetsark. Details of the finalists continue at https://www.businessdayonline.com

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Thursday 08 November 2018

BUSINESSTRAVEL

Lufthansa announces revenue of $30.59bn Stories by IFEOMA OKEKE

ufthansa Group has announced a total revenue of $30.59 billion in the first nine months of 2018 which increased by 6 percent on the prior-year period, while traffic revenues were up seven percent as a result of the first-time adoption of the new IFRS 15 accounting standard. The first-time adoption of IFRS 15 ‘Revenue from Contracts with Customers’ entails changes in revenue and cost positions, especially at the Network Airlines and Eurowings which now account for passengerbased fees and charges that were formerly accounted on both the income and the expenditure side but are now recorded in the income statement. “Future growth in the air transport sector will need to pay far more regard to the capacities of the infrastructure in the air and on the ground,” Carsten Spohr, chairman of the executive board & CEO of Deutsche Lufthansa AG said. “At the same time, we aim to secure the profitability of our airlines through capacity discipline. We also expect the substantial rises in fuel costs to lead to higher ticket prices from 2019 at the latest.” The reported growth of total revenues to $30.9 billion was only 0.5 percent, while the reported traffic revenues declined by one percent to $30.9 billion. Driven by the insolvency of Air Berlin, Lufthansa also announced strong capacity growth in 2018 as it recorded a nine-month seat load of 82 percent in first nine month of 2018.

Unit costs for the period remained stable, excluding fuel and currency effects, despite the extraordinary expense. Unit revenues excluding currency effects increased 0.3 percent. The airlines of Lufthansa Group transported some 108.5 million passengers in the first three quarters of 2018, a new record volume. Lufthansa Group achieved an Adjusted EBIT of 2.73 billion dollars which measures the profitability of a company without taking into account its cost of capital or tax implications for the first nine months of 2018 which was a 7.7 percent decline on the prior-year period which is primarily attributable to the integration costs at Euro wings. Adjusted EBIT margin for the period amounted to 8.8 percent in nine-month results were also burdened by a 609.54 million dollars rise in fuel costs, an increase in the costs incurred in connection with flight delays and cancellations, and higher maintenance expenses. “We expect to see our full-year costs increase by more than £1 billion in 2018 due to fuel costs and the extra expenses incurred from delays

and cancellations alone,” Spohr, said. “But despite this, we achieved an Adjusted EBIT of 2.73 billion dollars for the first three quarters of this year, the second-best nine-month result in our history. And had it not been for the losses at Eurowings, we would have posted another record earnings result. This is a clear testament to our sustainable financial strength – a strength that we have demonstrated even under challenging conditions this year.” Eurowings reports an Adjusted EBIT of 73.92 million dollars for the first nine months of 2018. The 238.83 million dollars decline on the prior-year period is attributable in particular to a non-recurring expense of EUR 170 million for completing the integration of parts of the former Air Berlin, and to additional costs incurred as a result of flight delays and cancellations. “In 2017 we seized a historic opportunity in the consolidation of Europe’s aviation sector,” Spohr said. “And it was the right decision to do so in strategic terms, even if this has given Eurowings a very challenging 2018. We view the

one-off costs of integrating these operations and of our rapid expansion as a long-term investment that will help sustainably strengthen our market position.” According to current market expectations, airlines in Germany are likely to expand their capacities by over 10 percent for the 2018/2019 winter timetable period, a development that is still being driven by the demise of Air Berlin. The airlines of Lufthansa Group, however, will raise their capacity by a more modest 8 percent, and will further reduce their capacity growth to 3.8 percent for the 2019 summer timetable period. Free cash flow for the period declined 59 percent to 1.36 billion dollars largely attributable to a 57-percent increase in net investments, which rose to 2.96 billion dollars as most of this spending 2.50 billion dollars was on aircraft and reserve engines. Pension provisions for the period declined 6.2 percent to 5.46 billion dollars, owing partly to the increase in the discount rate from 2.0 to 2.1 percent. Net financial debt declined 14 percent from its 2017 year-end level to 2.84 billion dollars. The Network Airlines such as Lufthansa, SWISS and Austrian Airlines – further improved on their record earnings of 2017, raising their aggregate nine-month Adjusted EBIT by another 14.78 million dollars to just under 2.27billion dollars. The driver behind this development was SWISS, which achieved an outstanding nine-month Adjusted EBIT of 597 million dollars, 18.8 percent above its prior-year level.

SWISS remains the Group’s most profitable airline, with an Adjusted EBIT margin of 14.3 percent. Lufthansa’s nine-month Adjusted EBIT of 1.48 billion dollars was 4.2 per cent down on the prior-year period, while Austrian Airlines’ 104.65 million dollars represents a 14-per-cent decline. Lufthansa confirms its full-year earnings projection for 2018. With originally-planned capacity for the winter timetable period now slightly reduced, total annual capacity is expected to be around 8 percent above 2017. The Group still expects to post a slight increase in unit revenues for the year as a whole. The reduction in unit costs excluding fuel and currency effects is expected to be around one percent, despite the negative impact of integration costs at Eurowings. Fuel costs are projected to be around 966.88 million dollars higher than in 2017. The Group expects to report a slightly lower annual adjusted EBIT for its Aviation Services segment. This is related to a more negative result at Other Businesses & Group Functions, owing to an absence of the currency gains reported here in 2017. All in all, Lufthansa Group continues to predict an adjusted EBIT for 2018 that is slightly below the record level seen last year. “We have achieved solid earnings for the first nine months of this year, and are still on course for our secondbest-ever annual EBIT result,” Ulrik Svensson, chief financial officer of Deutsche Lufthansa AG confirmed. “So our earnings projections for 2018 as a whole remain unchanged at slightly below previous year.”

Air Peace resumes Kaduna flights, insists on strict safety standards

ir Peace on Monday resumed Kaduna flight services, pledging that it would continue to observe high operational standards to ensure the safety of its customers, crew and other categories of staff. Air Peace suspended its LagosKaduna-Lagos flights on October 21, saying the action was to safeguard the lives of its customers and staff. The development was sequel to a 24-hour curfew imposed by Kaduna State government to address security threats in the state. A statement signed by Chris Iwarah, the carrier’s Corporate Communications Manager, said the airline restored its Kaduna flights based on the state government’s assurances that the security situation had improved. The airline empathised with members of the flying public who were affected by the suspension of its flights into and out of Kaduna, commending them for their cooperation and understanding while the development lasted. In a related development, Air Peace said it would continue to sustain its observance of strict safety standards in its flight operations to safeguard the lives of its

customers, crew and other staff. The carrier said it had a reputation for grounding its aircraft for simple technical and weather challenges because of the premium it placed on the lives of its customers and staff, saying its pilots were mandated by its standard operating procedure to

return to base or divert whenever they were not sure there was a perfect weather condition or there was a technical challenge with the operating aircraft. “We are reputed for running a very strict safety and maintenance programme and have sustained this in the four years of our flight

operations. In the last four years of our flight services, our operations have been subjected to the scrutiny of reputable corporate and regulatory organisations and we acquitted ourselves creditably. “Just within two years of our operations, we secured our International Air Transport Association

Associate Partner, DETAIL, Abiodun Oyeledun (left); Senior Associate, DETAIL, Ifedayo Adeoba; Associate Partner, DETAIL, Samson Enikanoselu; interface manager, DETAIL,Toun Olumide; Adjunct Professor, IE Business School, Kenneth Dubin and director, IE West Africa Region, Onyekachi Eke at the 8th DETAIL Business Series in Lagos.

Organisational Safety Audit (IOSA) certificate. Our IOSA certificate was renewed in April 2018 after our operations were subjected to a tougher scrutiny by IATA. “We quite understand that aircraft are machines and as such can malfunction without warning. Besides, weather is a recurring issue in aviation all over the world. When there is a technical or weather challenge, our practice is never to take any risk however slight the situation may be. “We have mandated our pilots to always err on the side of safety and they have continued to display professional discipline in this regard. When our pilots have any doubt with regard to technical or weather issues, the practice is to return to base or divert to the closest airport for checks or to wait till it is safe to operate the flight. “Although our pro-safety approach comes with a huge financial burden, we are pleased that its guarantees the lives of our valued guests, crew and other members of the Air Peace family, including our chairman and directors who fly us because they are sure of the depth of maintenance we do,” Iwarah said.

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COMPANIES & MARKETS

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Nigeria Paints grappling with high operational cost

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Libya ramps up gas development as Nigeria’s Train 7 waits STEPHEN ONYEKWELU

ibya might still mean civil strife to some but the North African country is pushing on with development of natural gas projects as Nigeria’s Train 7 still awaits final investment decision for take-off. NLNG Train-7 is a gas production expansion project valued at over $7 billion by the Nigeria Liquefied Natural Gas Limited (NLNG) located in Bonny Island in Rivers. While this project awaits FID Libya is attracting foreign investment into its natural gas exploration and production. Libya is set to complete the second phase of its offshore natural gas project in 2018, state owned National Oil Corporation has said in a statement following meeting between Mustafa Sanalla, NOC chairman and Claudio Descalzi, Eni chief executive officer (CEO). Phase 2 of the project completes the development of the

largest offshore producing gas field in Libya, increasing production potential by 400 million standard cubic feet per day (MMscfd). Phase 2 will be completed between September and October, bringing total field production to 1,100 MMscfd. Bahr Essalam, located about 120 km northwest of Tripoli, contains over 260 billion cubic metres (Bcm) of gas. This is delivered through the Sabratha platform to the Mellitah onshore treatment plant before principally being used to supply the national network. Chairman of the Presidential Council of Libya and Prime Minister of the Government of the National Accord, Fayez Al-Saraj, attended the opening ceremony. Eni’s current projects in the country include the Wafa plant, with first gas scheduled to come on stream in next few days. It also aims to restart activities of the Exploration and Production and Sharing Agreement in the first half of 2019. Eni currently produces 280,000 barrels of oil equiva-

Unity Bank de-risks balance sheet, re-strategizes for improved shareholder value SEYI JOHN SALAU

nity Bank of Nigeria Plc has announced a total derisking of its balance sheet, ridding the bank of toxic legacy assets and paving the way for significantly improved return on shareholder value in the coming years. Already, signs of a return to improved performance was evident in the thrd quarter, 2018 result of the bank which showed a profitability of N644 million. Derisking is an accounting terms that means the reduction of all risks that present threats to the growth of companies. According to the 2017 annual report of the bank, made available to the Nigerian Stock Exchange (NSE), Unity Bank has successfully written of a total of N16 billion, being Goodwill that arose from legacy merger issues. This one-off derisking strategy that has cleaned up the bank’s books impacted the bottomline leading to a net loss of N14.2 billion. The report also showed the ratio of non-performing loans standing at zero percent, a clear indication of the management’s excellent risk assessment for the period. The report also indicated a marginal Loan-to-Deposit Ratio

of 3.6 percent, pointing towards a significant room for growth and the attendant income boost. Presenting the Facts-Behindthe-Figures, the bank said although financial performance declined in 2017, as the Bank took the bold action to tackle the lingering effects of legacy problems, the new Board & Management of the Bank took firm and strategic action in a bid to eliminate the drag on the Bank in the form of huge legacy non-performing loans, an inefficient operating structure which manifested in excessive costs, poor branch spread and inadequate application of technology amongst others. These strategic initiatives, amongst others, the report continued, are geared towards a complete transformation of the bank and setting it on the path of strong and sustainable growth and profitability. “The courageous action taken by the Bank towards cleaning up the observed issues thus resulted in a negative capital base but also gave birth to a leaner, smarter and dynamic Bank with a healthy Balance Sheet,” the report stated. To sustain the new momentum and return the bank to one of the best performing in the Nigerian market, the bank said it has been making significant progress in its ongoing capital raising exercise.

L-R: Demola Sogunle, chief executive, Stanbic IBTC Bank PLC; Adamgbe Emmanuel Terlumun, special assistant to deputy governor, EP, Central Bank of Nigeria; Cedric Turbet, senior sales manager, GFC Media Group, and Kobby Bentsi-Enchill, head, debt capital markets, Stanbic IBTC Capital Limited, at the 2018 Bonds, Loans and Sukuk Nigeria Briefing sponsored by Stanbic IBTC in Lagos

lent per day in Libya. In July, the NOC and Eni had announced that Mellitah Oil & Gas, Eni and NOC joint venture Company (50/50) has started production from the first well of the offshore Bahr Essalam Phase 2 project. This comes just three years after the final

investment decision. Two further wells will begin production within a week. An additional seven wells will come onstream by October 2018. In August, Kemi Adeosun, former minister of Finance, said the federal government is committed to supporting the

Hubmart CEO sees growing consumer confidence in retail market

fter exiting from economic recession that enveloped the Nigerian economy in 2016 and part of 2017, which slowed consumer purchasing power, confidence is gradually returning in the economy, Murat Bektaslar, chief executive officer (CEO) of Hubmart Stores Limited said. Bektaslar who made the remark during the awoof Promo draw organsied by Hubmart to appreciate customers who patronizes their three outlets in Lagos, said retail business has huge potential in Nigeria. According to him, this is the company’s small way to thank its teaming customers who have followed in the journey. Winners emerged in the different categories of the draw from the Lekki, Victoria Island and Ikeja Stores outlets, taking away shopping vouchers amounting to over N3.5 million for the first months draw. He said the company will be opening a new outlet in Omole Estate in Ikeja by next month, while another four outlets will be opened next year, Bektaslar stated. “We have come a long way from one outlet in Victoria Island to three outlets which will soon become four – with Omole coming on stream this quarter. We take pride in our capabilities in fresh and our

acceptance by our teeming customers is testament to the good work we have done. The Hubmart Awoof Promotion is a small way of telling our customers, thank you”. “We have come a long way from one outlet in Victoria Island to three outlets which will soon become four – with Omole coming on stream this quarter. We take pride in our capabilities in fresh and our acceptance by our teeming customers is testament to the good work we have done. The Hubmart Awoof Promotion is a small way of telling our customers, thank you”. Onyeka Onwenu, Nigeria’ music legend who conducted the promotional draw, says she identified in Hubmart in this exercise because as a household manager being a woman she appreciates the importance of shopping for the home and shopping quality. According to her, the company is adding value to the Nigerian economy and creating employment opportunities for many Nigerians. Cheng Fuller, vice president, Marketing said it is our tradition of delighting our customers, urging them to shop from Hubmart as the more purchases a customer made, the more the customer’s chances of winning were increased.

commencement of the Train-7 initiative driven by the Nigerian Liquefied Natural Gas (NLNG) plant during a visit to the NLNG plant in Finima Bonny Local Government Area of Rivers State. She said the most important critical need from the

government as a shareholder was support for the investment to commence. Tayo Oginni, general manager, Production at NLNG said that the delay in investing in Train-7 would drop Nigeria to Number 10 from Number four in gas production by 2025.

AXA Mansard joins in eradication of poverty

XA Mansard – a member of the AXA Group, the global leader in insurance and asset management joins in the celebration of the International Day for Eradication of Poverty. The International Day for Eradication of Poverty is globally observed and celebrated every year on the 17th of October all over the world. The theme for 2018 was “Coming together with those furthest behind to build an inclusive world of universal respect for human rights and dignity”. Naomi Aduku, head of Business Development at AXA Mansard Pensions Ltd, stated that, “With old age many times comes a decrease in capacity to work, coupled with difficulties in accessing health care and other essential services, increasing the likelihood of older people becoming and remaining poor. Older people are particularly vulnerable to the effects of economic

change, and those without savings, assets, or the capacity to generate income are among the least able to withstand economic shocks”. She further said “An effective means of reducing old-age poverty and reducing the difficulties faced by multi-generational households is to establish a pension plan earlier on in life. At AXA Mansard Pensions, we are committed to seeing the end of old age poverty in Nigeria.” AXA Mansard Pensions offers Retirement Savings Account, Pension Fund Management and Pension Advisory services; our dedicated team of professionals provides quality customer service across our customer segment. Our mission and vision is to build life-long financial partnerships with our clients, giving them an assured future. As a pension provider, we also avail our customers a multichannel access to superior investment solutions.

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Business Event

Nigeria Paints grappling with high operational cost CYNTHIA IKWUETOGHU

financial metrics used to measure the efficiency of a company’s operations by comparing its expense to net sales showed that paint companies are grappling with some kind hard times. BusinessDay conducted an analysis on operating ratio of Industrial goods companies on the Nigerian Stock Exchange (NSE) in the nine months ended September over a period of 5 years to identify trends in operational efficiency or inefficiency from the industry average of 21 percent, 29 percent, 25 percent, 25 percent, and 24 percent in 2014-2018 respectively. Paint companies which includes Berger Paints Plc, Portland Paints and Products Nigeria Plc, and Premier paints Plc displayed operational inefficiency with an

average ratio of 38 percent (9M’ 2014), 32 percent (9M’ 2015), 41 percent (9M’2016), 31 percent (9M’ 2017), and 39 percent in nine months 2018. This implied that Nigeria paint companies incur a high percentage of their revenues for operating expenses. Premier paints especially had an operating ratio of 49 percent this year and 56 percent same period last year. “The operational efficiencies of paint manufacturers stem from higher expenditure on advertisement and promotional expenses owing to the nature of their product.” Gbolahan Ologunro, Equity Research Analyst, CSL Stockbroker Limited said. According to theory, a high ratio is seen as a negative sign for the companies as it indicates that operating expenses are growing larger or net sales are growing

smaller. Hence, paints companies need to implement cost controls for margin improvement. Nigeria Cement companies on the other hand includes Cement Company of North Nigeria Plc (CCNN), Dangote Cement Plc, and Lafarge Africa Plc exhibited operational efficiency though, not the least operating ratios. “Cement producers tend to incur lower expenditure outlay on advertisement and sales promotion in attracting consumers to purchase their products,” Ologunro added. The average ratio of these companies over five years are 13 percent (9M’ 2014), 25 percent (9M’ 2015), 16 percent (9M’ 2016), 17 percent (9M’ 2017), and 13 percent (9M’ 2018) with Lafarge Africa having the highest operational efficiency in the cement industry.

L-R: Mbaegbu Chibuikem, ReadySetWork participant; Monsur Salam, Human Resources Manager, Leadway Assurance; Okwuazu Doris, ReadySetWork participant; Olamide Fanimokun, HR Generalist, Leadway Assurance, and Ibrahim Wasiu Daniel, ReadySetWork participant, at the recent graduation ceremony of participants in the 2018 edition of the Ready Set Work initiative organized by the Lagos State Government and supported by Leadway Assurance.

Dangote Sinotruk expands to enhance local content, provides more jobs MIKE OCHONMA

angote Sinotruk West Africa Limited has entered anotherphaseinitsexpansion drive; the company has said that it was increasing its local input into the assembling plant up to 60 per cent, even as it plans to roll out commercial vehicles soon. The expansion drive, which is part of the backward integration plan, is meant to enhance value addition and local content. Hikmat Thapa, group general manager of the company, made this known during a recent facility tour of the Ikeja plant by the Lagos State Commissioner of Commerce, Industry and Cooperatives, Olayinka Ola-

dunjoye. He said having done with the phase one of the project, the company has embarked on the phase two which has to do with adding of the facility for cab welding, painting & trimming. Thapa stated that, the third phase of the project expansion would be to add the facility that would be used to fabricate, paint & assemble different type of Trailer bodies, load bodies with dual & triple axles, tipper bodies & tankers and so on. He explained that Dangote Sinotruck has installed capacity to assembleandproduce15-16trucks per shift or 10,000 trucks annually and will create over 3,000 different jobs across Nigeria.

According to him, the company has the plan to have welding &paintingshopstofabricate&paint truck cabin & Trailers of different type so as to enhance local content of Completely Knocked Down (CKD) operation of commercial vehicle Manufacturing, “In next one year, we have on our agenda to assemble and fabricate Truck Cabins, different type of trailers, Tipper bodies and Tankers etc. in our plant to increase value additions up 40 – 60 %” The automobile company said it hopes to expand sales to all the neighbouring West African States saying “we are targeting to sell our products to ECOWAS countries in addition to fulfilling local market requirement.”

L-R: Toyin Adeniji, executive director, micro enterprise, Bank of Industry; Akinwunmi Ambode, governor, Lagos State; Vice President Yemi Osinbajo, and Jide Sanwo-Olu, Lagos State APC governorship candidate, during the inauguration of TraderMoni, in Bariga, Ketu and Oshodi Markets, in Lagos.

BIC reaffirms confidence on economy, deepens consumer relationship

IC, Nigeria’s leading shave has reaffirmed its confidence in the Nigerian economy, while ensuring that it will continue to sustain its relationship with her loyal customers. The company, which is over 40 yearsinNigeria,saidthecountrywith its huge population remains a major market for its products, as there are over one million young people entering the age of shaving which portends a large growth opportunity for the leading shave company. To appreciate its customers for their continued support, BIC has embarkedonanationwide“Shave& Win” Promo, now in its second year targeted at rewarding loyal customers for their patronage. Regis Tromeur, managing direc-

tor, Nigerian Ball-Point Pen Industries (nipen), CFAO Groups, partner withBIC,RegisTromeursaiddespite the challenges in the environment, which is unique to Nigeria, it has made its road to the market stronger. He said the promo, has seen the company get more orders, sales rise “and we expect to seem more sales in the months ahead as the promo will run for three months climaxing December. Adeyemi Ojo, business development manager, BIC said for just buying a stic of shave, you are automatic winner of something, stating that over thirteen Nigerians have won recharge cards, while One million and several Households gifts will be won every months, through the duration of the three months exercise.

Damola Adelabu, deputy general manager, Commercial, at nipen said consumer response to BIC, confidence on the brand, which has been consistent. “It also shows how much we are able understand the Nigerian landscape, our ability to sustain quality of our range of products”. For more than 70 years, BIC has honored the tradition of providing high quality, affordable products to consumers everywhere. Through this unwavering dedication and thanks to everyday efforts and investments, BIC has become one of the most recognized brands and is a trademark registered worldwide for identifying BIC products which are sold in more than 160 countries around the world.

L-R: Segun Anako, general manager, Primero Transport Services Limited; Fola Tinubu, managing director, Primero Transport Services Limited and Francis C. Obi, director, Primero Transport Services Limited, at the Media Parley and Facility Tour which held at Primero Transport Services main depot, Majidun Awori, Ikorodu

Novarick Homes’ new estate strong on low energy cost for residents CHUKA UROKO

art of the advantages prospective residents of will enjoy for living in Earls Court is reduced energy cost which the promoters of the estate say will come down considerably. Earls Court is a premium private green estate that will run on renewable energy for its power supply. The estate is designed to be the best holiday home for people who love serene environment. The estate, which is located in the heart of Ibeju-Lekki, will be eco-friendly and devoid of noise

and air pollution. Earls Court promises the finest of living experience. With plot sizes measuring 300 square metres and 600 square metres, the land comes with government approved excision. The green energy estate is within close proximity to major developments in the Ibeju Lekki Area. It is about 5 minutes’ drive to the 4th Quadrant of the Lekki Free Trade Zone and the proposed International Airport. The estate is about 45 minutes away from Ajah town. “We are dedicated to building greener communities all around Africa; Novarick Homes is offering

millennials opportunity to live in the future by investing in the first renewable energy powered estate in Lagos”, said Noah Ibrahim, Novarick Homes’ managing director. Ibrahim disclosed that land in Earls Court currently sells for N1.25 million for the 300 square metre-plot and N2.5 million for the 600-square plot with payment plans that can be spread across 3 months, 6 months and 12 months respectively. “Earl’s Court is 100 percent dry land and subscribers will get instant allocation of their plots along with all necessary documents”, He assured.

L-R: Jude Ogbuja, IBM product manager, Interdist Alliance; Omotayo Ogunyemi, sales manager, IBM Cloud; Solomon Omorodion, IBM Global business partner; Adenike Lucas, sales leader, oil and gas/CMUT, IBM Global markets; Nnamdi Otuonye, strategic sales manager, Inlaks; Tunde Fasanmi, regional product manager, Interdist Alliance (West English Africa), and Kayode Ogunrinde, sales manager, experience business unit, Inlaks, at the Digital Transformation Seminar held with Inlaks partners in Lagos.

Thursday 08 November 2018

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

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BUSINESS DAY

In association with research@businessdayonline.com

Business leaders foresee rising optimism in 2019

activities in the economy. • Respondents expect the Naira to depreciate, inflation rate to rise while exchange rates are to remain unchanged in 2019. • Respondents are confident about revenue growth in their firms and plan to implement cost cutting measures and new product development as a way of sustaining their businesses. Also, they said they are planning to employ more employees in the coming year.

OGHOGHO EDOSOMWAM

economy. With so much change in the Nigerian business landscape in the last couple of years, it is valuable to know what the leaders of today’s leading companies in Nigeria are anticipating for the next few years ahead. Leveraging on the success of the BusinessDay CEO Forum, a business survey was carried out to gather insights of today’s leading business leaders in the country across a broad range of sectors, activities and risks. Businessday Research Intelligent Unit (BRIU) surveyed a cross section of CEOs across industries and obtained in-depth perspectives from a number of them on their optimism for revenue growth in 2019, the general economic condition, recruitment plans, factors likely to limit business operations and some socio-economic threats. The findings provide powerful insights into the thinking and strategies that will shape business decisions in the next few months.

FINDINGS Designations of individuals: From the survey carried out by BRIU, the results showed that a higher percentage of the respondents were Chief Operating Officers (COO) while the remaining were Chief Executive Officers(CEOs). Sectors of operations: The results from the survey showed that 54 percent of the respondents were from the service sector and none from the agricultural sector. Highlights The highlights of the outcome of the Business Expectations Survey are as follows: • Respondents expressed more optimism on the macro economy and business environment in 2019 when compared with the current state of the economy. • Respondents identified insufficient power supply, unclear economic laws, unfavourable political climate and bad good roads, as the major factors constraining business

Nigeria’s Business Environment Findings showed that about 71 percent of the firms are of the opinion that the Nigerian business environment is improving and about 29 percent say it is deteriorating. However, in 2017, the World Bank Ease of Doing Business ranking report indicated that Nigeria had moved up by 24 points from 169th position on the 2017 ranking to 145 in the 2018 report. A high ease of doing business ranking means the regulatory environment is more conducive to the starting and operation of businesses. According to the International Monetary Fund (IMF), Nigeria, South Africa and Angola are projected to witness sluggish growth in 2019 and beyond. The GDP growth forecast was cut from 2.3 percent in 2018 to 1.9 percent, according to the fund’s latest World Economic Outlook report. IMF also noted that although the region would witness growth next year, the growing number of working class coupled with less jobs opportunities, huge public debts and poor infrastructure present a challenge in achieving the developmental goals of the United Nations. The results showed that 82 percent of respondents are positive about the growth of their businesses despite economic downfalls. This is in line with the Central Bank of Nigeria (CBN) business expectation survey report. Businesses expressed optimism on their operations. Particularly, respondents from the services and industrial sectors expressed relatively more optimism on own

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operations. Fifty six percent (56%) of businesses plan to employ more workers in 2019 which will help tackle one of the problems listed above by the IMF. As we know, chronic unemployment especially amongst the youth is evident in Nigeria, as thousands of youths graduate from higher institutions while the economy does not create jobs that are commensurate with the labour force. Businesses planning to employ more workers in the economy will do a lot of good to help solving this major societal problem. The survey showed that businesses are sceptical about the effect of the coming 2019 general elections on business operations. In the business world, risk is often preferred to a state of uncertainty. Risk is often described as a situation where you have a clear knowledge of the likely outcomes of a situation. A state of uncertainty is when you cannot determine the outcomes of a particular situation. In this case, you are completely stepping into a dark hole and you are not sure of what will hit you or where it will come from. When faced with such situations, most investors will rather not make investment decisions and even when they are forced to make one, they will always ask for very steep returns to compensate for the higher risk of investing in an uncertain environment. The uncertainty that generates, as well as political instability and regulators whose actions will be difficult to predict remain among the top risks for businesses in the year ahead. However, businesses are positioning themselves to be able to withstand the uncertainties in the economy. The chart below shows plans to be undertaken by businesses in the year ahead to be able to survive in the uncertain political environment. A total of the 53 percent of the respondents would like to develop new products and 38 percent would like to implement cost cutting measures to be able to grow revenue as well as profits. The survey shows that 41 percent of respondents are of the opinion that exchange rate will remain the same in 2019 and the Naira will depreciate. 12734BDN

very economy across the globe has its problem and challenges, and Nigeria is not an exception. As a developing country, she faces her own share of social, political, economic and cultural problems, which have, in no small measure, affected the welfare of the populace as well as businesses in the country. Coming out of recession, the Nigerian economy performed well in the first half of 2018 as economic indicators indicate. The country benefited from the rising crude oil prices and increased production amongst other factors. A recovery occurs when an economy strengthens after a period of recession and in such a situation, various indicators will turn higher including the gross domestic product(GDP). A recovery implies that confidence will start increasing and demand for goods and services will rise. For the first six months of 2018, the Nigerian economy recorded improvements that were stimulated by increasing business activities, rising oil prices in the global market, increased oil output by the country, declining inflation and increased inflow of foreign exchange. Economic indicators have remained positive since the beginning of the year except for the equities market which saw a lot of volatility. The elevated political tension observed in the country ahead of the 2019 general elections is negatively affecting major reforms expected to drive growth in the economy. As business activities increase, a more favourable business environment is likely to entice the start-ups and the expansion of existing ones across different sectors. This, in turn, would boost the output of these sectors and the economy’s total output. Growth in the economy, driven by a better business operating environment, is likely to further entice new businesses as the confidence of investors and business owners are usually strengthened by a thriving

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Thursday 08 November 2018

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BUSINESS DAY

Interview

‘Emotan Gardens will redefine the housing landscape in Edo State’ Korede Lawrence is the head, Business Development and Sales at Mixta Nigeria, the Nigerian subsidiary of Mixta Africa, one of Africa’s leading players in the real estate sector. In this interview with Osa Victor Obayagbona, Lawrence explains how the ongoing 1,400-unit Emotan Gardens Estate will assist in bridging Edo State’s housing deficit. He also gives insight into the partnership between Mixta Nigeria and the Edo State Government through the Edo Property and Development Agency (EDPA).

ell us about MIXTA Nigeria and what you do for the company? We are a real estate development company focused on providing quality real estate products. We have operations across the entire market spectrum. Our focus, however, is in affordable housing market. As our slogan says, we build communities across Africa. Just as your fingers are different in size, in the communities we build, everybody is represented. So, we offer different housing types to everybody within these communities. As head of Sales, I am in-charge of making sure that all our projects across Nigeria get the requisite visibility for the value we create and that they get to the right people seeking that value. For us, that means giving real estate value to different market segments in Nigeria. From your experience, what is your assessment of the Nigerian housing sector? The Nigerian market is growing and is characterised by an increased number of participants in the sector and across the value chain of operations, from development to sales. Everybody is a potential agent, whether they are trying to sell property or lease property which in its entirety is good for the sector. It is a dynamic sector which is still growing but has a huge potential to do more. However, there is a huge challenge with regulating the sector which currently seems to be in-process spearheaded by developers and the professionals that offer service within the real estate value chain. At Mixta Nigeria, we strive to push boundaries and are deliberate about moving the real estate industry forward as a key stakeholder. What peculiar challenges has your company encountered in the sector? Everyone in the sector has the same challenges, principal of which is access to funding which when provided is usually on short-term arrangements. How do you fund a long-term project with short-term money? In addressing this challenge, Mixta Nigeria has approached the capital market for long-term loans. Our success in raising funds in the capital market shows investor confidence in us and encourages other developers to explore similar options for financing. Another challenge is this segment of people who, due to the lack of regulation, operate

unprofessionally, creating the occasional negativity that makes the idea of buying real estate somewhat scary for prospective clients. Everybody seems to have a story about somebody that has been duped on a land matter and so on. A lot of people are a bit sceptical, if not afraid, to take on real estate transactions. These are some of the challenges for developers intent on doing legitimate business within the industry. For us, we are primarily in the sector to add value and we contend with these challenges that have hindered growth in the sector and continue to push the development of healthy communities in Nigeria and Africa. Tell us, why are you in Edo State? We are in Edo State to develop Emotan Gardens which is located on approximately 70.1 hectares of land on Upper Sokponba Road, in Benin City. The plan is to offer affordable and quality housing to every stakeholder in the state. To achieve this, we have partnered with the Edo State Government through the Edo Development and Property Agency (EDPA) to make sure this is a success. How affordable are these houses? The thing about the word ‘affordable’ is that it is a relative term. We are, however, sensitive to the economic realities and have priced our offerings to cater to this. With as low as N5.7 million, you can move into your own home in a fully-serviced estate, Emotan Gardens. We also have medium-high-priced homes in the same estate to cater to those in these categories. There really is a house for everyone within

Emotan Gardens. But the bigger question is really about access to funding. So, that probably is one of the hindrances. With us, even though we are real estate developers that are into the business for financial gain, we are primarily into the business of creating real estate value. MIXTA Africa is wholly-owned by Asset & Resource Management Holding Company Limited. From

our investment background spanning well over 20 years, we have sought to add value to people’s lives, from the cradle to even the legacies our customers leave after they exit this world. With a huge portfolio of products that allows you to take care of children, and parents, the emphasis on the quality of life for individuals remains paramount throughout our offerings. We are in real estate business with the same ethos, which is about value creation and that is what we brought to building houses and building commercial spaces for Nigerians. How much value in monetary term is MIXTA Nigeria bringing to Edo State? Really, our coming to Edo State is through a Joint Venture partnership. The Edo State Government has taken it upon itself to offer value to Edo people. First of all, to build an estate you need different people to participate. You will need labourers, technicians, engineers, you will need agents to sell the houses and what the state government has done is to create an avenue where all of these economic opportunities are open to the indigenes and residents of the

state. The investment Mixta Nigeria is bringing is substantial and I would not like to put a figure on that currently because it is still evolving. The thing about investment terrains is that you might have foreseen that you would do a particular amount, but as you come into the terrain and you engage with the people, you may see that you may want to do a little more. Generally, it is still an evolving relationship. But our investment is significant. Besides, we have different house types within the estate and we are executing the project in phases, and as such the contribution for every phase is different. So, even though we are doing 2- and 3-bedroom housing units first, which really are the lower-priced products, our first release is somewhere around 400 units. A good number of them are two-bedroom units while others are of other types. That is to get people through the barriers of buying. The 2- and 3-bedrooms types are wellpriced. The government has looked at how it would add value by subsidising some of the house types for civil servants and people that do their jobs adequately, as a way of rewarding people. So, that is also in the mix. When you say subsidising, do you mean if the house value is about N10 million, the state government will bring, say, N2 million as subsidy?

Today, we are selling for about N5.7 million. These houses cost more than that in the market, but the prices have to come down to a level which everybody can partake. We have gone a step further in the relationship with government by making sure that people can make payment in instalment. So, you won’t pay N5.7 million at once. The payment plan depends on the individual. The thing with Mixta Nigeria is that we are big on the journey. Buying real estate generally is a journey for us; it is not a sprint. We try to understand the individual that is buying, so that we tailor their needs to whatever we are doing regarding the payment options in acquiring these houses. One size doesn’t really fit all here. It is a conversation between individuals, with them deciding what they want to do and how they want to do it. With that, we will move the product forward. What attracted Mixta Nigeria to the Governor Obaseki ledadministration? Why did you choose to come to Edo State now? There are a range of things that attracted us to Edo. I will touch on a few. For investment to come into Edo State, it is important to create a fertile, viable platform for such investment. First of all, the people must believe that the government of the day is upstanding. When they say something, they would

as much as possible keep to their word on transactions with you, which is why you will go into a relationship with the government on a long term. We intend to be here for a few years. We are here for a few years because we believe that the government of the day has said they would do something and put things in place for the people and we have seen the commitment. We see the way they are going about their activities and that gives us the confidence to come here. When the government of the day asks us to take a particular parcel of land with the Certificate of Occupancy (C-of-O), assuring that we will develop it together and that they would participate in one way or the other, we are ready to work with them. We understand that it has been well over 16 years since the last estate was built by government. So, this is a big thing. We looked at a number of things. Benin is not the first place we are building an estate. We know that the number of people who have uncles, aunts, brothers, sisters in the diaspora is huge. The remittance at some point last year was somewhere around N96 billion per month into the state. If we are to follow these numbers, verified or not, that alone offers a huge possibility and potential for anybody to invest in a state like this. So, the time is right. The government of the day is responsive, responsible. We believe that they have the good of the people at heart and they have created a viable environment for us to come in, take root and offer not only housing, but jobs to the indigenes of the state. That alone offers us a lot of confidence. In fact, what we see here since we have been here is an increase in the number of people looking inwards. The government of the day has not stopped adding value. The more we stay, the more we are emboldened to stay and do a lot more here. What does your relationship with the host community tell you about Edo State? Who doesn’t want growth? Today, a client walked into the site and said that we are bringing Lagos to Edo. He is an elderly gentleman who travels to Lagos to see his son regularly. During the conversation, he said we are bringing Lagos down here. Who does not want growth? Everybody wants it. At the end of the day, regardless of how you see it, many indigenes are ready for the urban regeneration and potential prosperity that comes with this project. Everybody is aspirational; we always want more. Edo State

wants more for itself; it deserves it and through this government is demanding more for itself. We see it with the way things are going. We have labourers from Edo State. In fact, as a proviso to this particular arrangement, it was important that we employ people from Edo State, that indigenes with the requisite skills work on the site. At the end of the day, all the materials used on the site are purchased here within the state. The multiplier value for a project like this is that the materials are sourced from within, wages are paid to labourers from within. The value will be felt by the people within regardless of who buys it. Edo State prospers. There is a huge multiplier effect on how we touch lives and how monies go to different people and different spheres. It can only get better from here. Talk to us about the status of the C-of-O? When government gives a C-ofO, it is said that they bequeath all powers on the land to the person. That is usually the source document with which projects like Emotan Gardens Estate get a deed of assignment. These deeds of assignments are then given to individuals stating that they now own a portion of the property with their C-of-O. That is exactly what exists. At the end of the day, the individual that buys land from us has bought a parcel of land in Edo State, sold by the Government of Edo State to them. On infrastructure, potential homeowners will like to know how the roads, water and other facilities will be managed or maintained to ensure it does not become another failed project. The plan as earlier stated is to bring value. For us, value is what is on the table. I will go back to our pedigree. We have done this in Nigeria and we are in other countries in Africa, in Senegal, Ivory Coast, among others. We have experience in this field. Depending on where we build an estate, we inculcate some amenities and something to change that environment and give value. In the case of Emotan Gardens, we will have a one-hectare lake, which is man-made. It would allow the residents relax. Road network is huge for us; electricity is particularly huge for us. In our estates, our pedigree is that we offer 24/7 electricity. It is what we do and what we have done. All of these obviously come at a cost. The plan is that, within that community, in whichever direction you go, you should be able to either go five minutes to leisure or five minutes to an

area that is planned specifically for commercial activities. As it is, there is a range of people that want to bring their businesses to the commercial areas: hospitals, shopping malls and so on. The truth is that it will be a town within a town. That is what an estate is. An estate is that location where you comfortably obtain everything that enriches your life without moving. That is what we want to bring to Emotan Garden. As a public-private partnership project, another fear that needs to be addressed is continuity. Will the estate project continue if there is change in government in the future? The thing about Emotan Gardens is that it is built like most good projects. Regardless of politics, the government of today has been responsive enough that it has put measures in place to make sure it is continued and sustained for future generations to come. Is there any arrangement for mortgage financing for the housing units? There are quite a number of mortgage banks that are interested in offering accredited people, that is, those that they have vetted to buy these houses. There are a few of them that we usually do business with on a regular basis. They are already here, looking for customers to avail funds. There are about six of them. It is not only for people in the formal sector, like bankers; they will also look for people in the informal sector, that is, people that trade. This housing estate is for everybody. As long as you have a will to participate, we

will try to make sure we accommodate that prospective client. How do you intend to key into the diaspora market? We see a lot of activities online, especially with the Edo State Diaspora community. They are looking back home always to see what is going on. Our plan is to be visible to them, wherever they are, and to get them to visit the site. They need to see it and know that this is happening for real. The potential that they have heard it from somebody is very high. Somebody will tell them, ‘Dem dey do this thing for here, una don see?’ So, by the time they check online, they should be able to see some kind of representation that shows them that Emotan Gardens is here and is viable. Today, there are housing types that are already standing because one of the things we found is that there was a lot of scepticism. We see that a lot of people are wondering if this will happen. Some have asked, if these people do this, how much will we get it? It is because of such questions that we are making ourselves more visible online. We are offering as much information to give comfort and reassurance. This is not like previous experiences that some people had in the state. We take every opportunity to put information out there to assure people from day one that you are dealing with the right people. We have sales representatives on site, who speak languages people understand. We can also be contacted through EDPA. Our website and telephone numbers are out there for people to know they are dealing with genuine people.

BUSINESS DAY

C002D5556

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BUSINESS DAY

C002D5556

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

Year Open

38,243.19

Market capitalisation

N13.609 trillion

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The NSE-Main Board

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2,564.13

1,713.69

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Week open (26 – 10–18)

32,907.33

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2,414.24

1,441.81

786.19

Week close (02– 11–18)

32,124.94

N11.728 trillion

2,339.62

1,416.86

786.19

Percentage change (WoW) Percentage change (YTD)

-2.38 -16.00

-3.09 -8.76

NSE Lotus II

NSE Ind. Goods Index

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330.69

2,560.39

1,975.59

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738.56

297.65

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1,218.91

714.57

289.85

2,208.59

1,399.15

1,184.05

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475.44

139.37

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420.89

124.88

419.29

121.92

NSE 30 Index

-1.73

0.00

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976.10

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-29.18

-14.18

SAHCOL awaits regulatory nod for IPO on Lagos Bourse T

NSE lifts suspension placed on Premier Paints, Ekocorp, Austin Laz, Academy Press shares

IHEANYI NWACHUKWU

arlier this week (Monday November 5, 2018) parties to the proposed Initial Public Offering (IPO) of Skyway Aviation Handling Company Limited (SAHCOL) were at Southern Sun Ikoyi for the signing ceremony of the offer documents which now awaits the approvals of the Securities and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE). For the first time, Skyway Aviation Handling Company Limited is going public and the company is targeting to raise N1.8billion by offering 406,074,000 units of its shares at N4.65kobo per share. Vetiva Capital is the Lead Issuing House to the IPO while Cordros Capital is the joint Issuing House. SAHCOL is 100percent owned by the Sifax Group and incorporated as an Aviation Ground Handling Service Provider under the Nigerian Company and Allied Matters Act of 1990. The company’s decision to go public was part of the share purchase agreement that it had with Bureau of Public Enterprises (BPE). Part of the share purchase agreement when its 100percent equity was handed over to the SIFAX group requires that after a period of time, some shares of the company will be diverted to the public and that is exactly what we are respecting today. SAHCOL is involved in all the actions that take place from the time an aircraft touches down on the tarmac to the time it is airborne. SAHCOL which was formerly known as Skypower Aviation Handling Company Limited, before it was privatized and handed over to the Sifax Group on the 23rd of

L-R: Goodie Ibru, director of Agri-Finance (AgriFin)/principal, G.M Ibru & Company; Emuobo Ibru, and Kudzai Gumunyu, divisional head, agric business of First City Monument Bank (FCMB), during the AgriFin conference sponsored by FCMB in Lagos. December 2009, was carved out of the liquidated Nigeria Airways Limited as part of the Nigerian Federal Ministry of Aviation’s reform of 1996. “The Skyway Aviation Handling Company Limited (SAHCOL) is going public. The process has been on and that was all I am permitted to say because we want SEC and NSE to give approval. “When you get to a process, you understand how the process works. Today is the signing in ceremony, which had SAHCOL at the side. We do not have a control on the process. This is our first time going public; we are taking the company to the stock market,” said Basil Agboarumi, the new Managing Director of SAHCOL. Skyway Aviation Handling Company Limited, with its new

private sector management composition and orientation kicked off the development of business models geared towards ushering in efficient ser vice deliver y. SAHCOL has invested in personnel development, state-of-the-art fleet replacement and massive infrastructural development, to ensure efficient and speedy service delivery. Currently, SAHCOL is significantly present in all the commercially operated airports in Nigeria, where services are offered in the following areas: Ramp handling, Passenger handling and Cargo handling. These are in addition to other services such as Aviation Security, Baggage Reconciliation, and Premium Lounge. The company’s coverage cuts

across all the regions in Nigeria which include Abuja, Minna, Kaduna, Jos, Yola, Katsina, Kano, Maiduguri, Sokoto, Gombe, Port Harcourt, Calabar, Enugu, Owerri, Uyo, Lagos, Ilorin, Benin, Asaba, and Akure. “The need to go public was part of the share purchase agreement that we had with Bureau of Public Enterprises, which is the government. “SAHCOL was handed over to the SIFAX group 100percent. Part of the share purchase agreement states that after a period of time, some shares of the company will be diverted to the public and that is exactly what we are respecting today. We are aligning ourselves with the documents that were signed. SAHCOL becomes one of the first case of that they want to put out to the public of privatization”, Agboarumi noted.

he Nigerian Stock Exchange (NSE) on Tuesday November 6, 2018 lifted the suspension it placed on Premier Paints Plc, Ekocorp Plc, Austin Laz & Company Plc and Academy Press Plc. These four companies were among the companies the NSE earlier suspended for noncompliance with Rule 3.1, but they have now submitted their respective Financial Statements. The NSE in a notice signed by Godstime Iwenekhai, Head, Listings Regulation Department, notified the general public that the suspension placed on the trading of the Companies shares has been lifted effective Tuesday November 6, 2018. “We refer to our Market Bulletins dated; 5 July 2017, 2 August 2017, and 4 October 2017 notifying the public of the suspension of seventeen (17), one (1) and four (4) listed companies respectively for noncompliance with Rule 3.1, Rules for Filing of Accounts and Treatment of Default Filing, Rulebook of The Exchange (Issuers’ Rules) which provides that; if an Issuer fails to file the relevant accounts by the expiration of the Cure Period, The Exchange will: send to the Issuer a “Second Filing Deficiency Notification” within two (2) business days after the end of the Cure Period; suspend trading in the Issuer’s securities; and notify the Securities and Exchange Commission (SEC) and the Market within twenty- four (24) hours of the suspension.” “In view of the companies submission of their respective accounts and pursuant to Rule 3.3 of the Default Filing Rules, which provides that: the suspension of trading in the issuer’s securities shall be lifted upon submission of the relevant accounts provided The Exchange is satisfied that the accounts comply with all applicable rules of The Exchange; the Exchange shall thereafter also announce through the medium by which the public and the SEC was initially notified of the suspension”, the NSE stated.

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Thursday 08 November 2018

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WEEKLY REPORT United Capital investment views

Domestic bourse dances to a bearish tune STOCK MARKET REPORT FOR NOVEMBER 2ND 2018

â&#x20AC;Śsheds 2.4% week-on-week, 0.9% in October A total turnover of 1.267 billion shares worth N20.346 billion in 15,088 deals were traded this week

he NSEASI fell to the tune of the bears in the week that ended 2nd November 2018 and reversed the three week-on-week (w/w) gains recorded earlier in the month of October. Although the market opened the week on an upbeat note, a bearish theme that beleaguered the market on three of five trading days dampened the index performance and led to a 2.4percent w/w decline. Consequently, the index exited the 33,000 points threshold to clos e at 32,124.9 points while market capitalisation she d N285.6billion w/w to N11.7trillion. The domestic bourse declined 0.9percent in the month of October while year-on-year (YtD) return sank to -16percent. Attributing the weekly performance across sector indices showed the bearish theme sweep across all sector indices except the peripheral Agriculture index which rose 5.7percent w/w due to price appreciation in PRESCO (+12.9percent) â&#x20AC;&#x201C; the top gainer for the week and LIVESTOCK (+9.6percent). The Industrial Goods (-4.1percent), Consumer Goods (-3.2percent) and Oil & Gas (-2.6percent) sector indices led the laggards as declines in CCNN (-18.8percent to N20.3), WAPCO (-4.1percent to N17.5), DA N G C E M ( - 2 . 9 p e rc e nt t o N204.9), NESTLE (-1.5percent to N1,360), NB (-6.5percent to N82.3), DANGFLOUR (-21.1percent to N5.8), DANGSUGAR (-10.9percent to N13), ETERNA (-12.1percent to N5.45) and SEPLAT (3percent to N625) dragged the indices. The Insurance (-2.4percent) a n d Ba n k i ng ( - 0 . 4 p e rc e nt ) sector indices also trended southwards consequent on selloff in NIGERINS (-14.3percent to N0.2), AIICO (-10.1percent to N0.7), DIAMOND (-16.7percent to N1.2), FBNH (-15percent to N7.6) and FIDELITY (-5.3percent to N1.9). Investorsâ&#x20AC;&#x2122; sentiment remained underwhelming with market breadth closing at 0.3x (previously 0.6x); 15 stocks advanced while 47 declined. We expect the market to rebound in the week ahead as market speculators hunt for bargain. Money Market: CBN issues N135.7bn fresh OMO papers In line with the CBNâ&#x20AC;&#x2122;s tacit tightening stance, the Apex bank did not hike OMO rates this week but rather, ended up issuing fresh OMO papers worth N135.7bn (i.e. N517.6bn worth of OMO bills were sold relative to N381.9bn maturities). Nonetheless, system liquidity remained afloat as inflows from FAAC payments and OMO maturities helped to offset the CBNâ&#x20AC;&#x2122;s tightening activity. Overall, system liquidity was modestly buoyant as money market rates (the Open Buy Ba ck a n d O ve r n ig ht rat e s ) averaged 8.6percent, compared to 14percent in the preceding week. Furthermore, the Apex bank conducted its bi-monthly NTB auction, wherein it successfully re-financed N145.3bn. Demand was relatively modest as bids of 1.8x the offer turned up, against 3.3x recorded at the previous a u c t i o n . No n e t h e l e s s , t h e 364-day bill remained mostly demanded (bid-to-cover ratio of 2.4x compared to 1.8x and 1.9x at the 91-day and 182-day

bybills investors on the floor of the Exchange in contrast to a total of 1.454 billion shares valued at respectively). Expectedly, looming effect of the US sanction N15.263 billion exchanged hands last week in 16,682 deals. Brent price traded below on Iran, stop rates that closed c. 60bps higher compared to the last auction

$75/b during the week as Saudi

Arabia to cover all shortfalls â&#x20AC;&#x201C; especially at Industry the 364-day The Financial Services (measuredbill by volume) led the plans activity chart with1.082 billion shares from Iran. Overall, FX rate at the due to the double hike in OMO valued at N12.735 billion traded in 8,397 deals; thusInvestors contributing and 85.38% and 62.59%segment to the total Exporters stop rates in October; 91-day equity turnover volume and value respectively. The Consumer Goods Industry followed with 83.168 (10.98percent vs. 10.96percent appreciated marginally by 3bps million shares worthauction), N 3.295 billion 182-day in 2,888 deals.Thew/w thirdto place was at Conglomerates Industry with close N363.74/$1, while at the last ratesin 654 at deals. the Interbank market a(13.49percent turnover of 32.817 million worth N 109.846 million vs. shares 12.69percent at the last auction) and 364-day

depreciated 2bps to close the week at N306.60/$1. Parallel

(14.4percent vs. 13.449percent at City Monument Bank Plc, Guaranty Trust Bank Plc Trading in the Top Three Equities namely First market rates closed the week the last auction). and Zenith Bank Plc, (measured by volume) accounted for 670.295 million shares worth N11.019 flattish to finish at N361.0/$1. In the secondary market, billion in 2,768 traded deals, contributing 52.90% and 54.16%Looking to the total equity turnover and value ahead, wevolume expect the players on liquidity respectively. s e n t i m e n t s a s y i e l d s o n sustained weekly FX intervention

Investorâ&#x20AC;&#x2122;s Square â&#x20AC;˘Have you been shabbily treated by your registrar, stockbroke r or other capital market operators? Let us know and investor will help you investigate and report back. E-mail: iheanyi.nwachukwu@businessdayonline.com

Q3 scorecards: Union Bank shows strength across all performance metrics â&#x20AC;Śstock underperforms NSE ASI, down 35.3% year-to-date

benchmark Nigerian Treasury by the CBN to continue to B i l l ( N T B ) p a p e r s e a s e d support the local unit as demand IHEANYI NWACHUKWU Equity Turnover - Last 5 daysto close at pressures persist. Meanwhile, the 29bps on average 13.4percent: 91-day (down 83bps decline in global crude oil prices, to 12.2percent), 182-day (down if sustained, portends a negative ecently at the reserves.Declined Unchanged Turnoverand 364Turnover outlook TradedforAdvanced 163bps to 13.2percent) Nigerian bourse, Global Equities upbeat as dayDate (up 8bps Dealsto 16.5percent). Volume Value (N) Stocks Stocks Stocks Stocks Union Bank earnings, geopolitics remains In this coming week, system 2,624 Â 150,504,778 Â 2,877,179,114.91 Â 103 Â 17 Â 17 Â 69 Â o f Ni g e r i a P l c m29-Ââ&#x20AC;? a Ot ct-Ââ&#x20AC;? u r18 Â i t i e s t o t h e t u n e o f in focus Major 30-Ââ&#x20AC;?Oct-Ââ&#x20AC;?18 Â 3,418 Â 309,155,395 Â 5,994,921,622.55 Â 98 Â equity 17 Â indices 24 Â in the57 Â announced its unaudited N376billion â&#x20AC;&#x201C; made entirely of US closed the week upbeat as OMO maturitiesis expected 3,211 Â 212,509,350 Â 3,765,458,924.20 Â 94 Â 15 Â 30 Â 49 Â financial statements for Oct-Ââ&#x20AC;?the 18 Â system to31-Ââ&#x20AC;?hit and we expect the S&P 500, NASDAQ and DJIA rose 3.6percent, 3.3percent and62 Â the nine month period the tempo of this events to guide 3,019 Â 355,757,979 Â 4,858,377,108.36 Â 97 Â 11 Â 24 Â 01-Ââ&#x20AC;?Nov-Ââ&#x20AC;?18 Â ended September 30 2018. trading sentiments through the 3.2percent w/w respectively. This 93 Â the wake 14 Â of continued 21 Â 58 Â was in 02-Ââ&#x20AC;?Nov-Ââ&#x20AC;?18 Â 2,816 Â 239,117,563 Â 2,849,770,526.39 Â week. The Group Financial Bond Market : Yields rise earnings declaration and the US Highlights shows profit Labor Departmentâ&#x20AC;&#x2122;s report that amid offshore sell-off before tax was up The Bonds market started off showed that the nation added

250,000 new jobs in October the week with a spike in yields while the unemployment rate which came on the back of some offshore sell-off. Overall, For Further Inquiries Contact: Market OperationsFGN Departmentstood at 3.7percent. Additionally, Page 1 reports that a potential dĂŠtente bond yields edged higher by c ou l d b e re a c h e d b e t w e e n 24bps on average to close at China and the US raised hopes 15.4percent, driven by increases of an agreement between the two in maturities 2034 (+40bps), nations after President Trump 2036 (+39bps), 2030 (+38bps) tweeted that talks were â&#x20AC;&#x2DC;moving and 2026 (+36bps). Also, average along nicely â&#x20AC;&#x2DC;during the week. yield for FGN Eurobond inched In European markets, bullish lower marginally by 1bps to sentiments also pervaded into settle at 7.3percent while average the major equity indices which yield in corporate Eurobonds saw the Pan European STOXX edged higher to 14.7percent from (+4.2percent), Germanyâ&#x20AC;&#x2122;s DAX 9.3percent amid sharp uptrend ( + 4 p e rc e nt ) , F ra n c eâ&#x20AC;&#x2122;s C AC in GTbankâ&#x20AC;&#x2122;s 6percent NOV 08, (+3.8percent) and UKâ&#x20AC;&#x2122;s FTSE 2018 Eurobond which mature (+3.3percent) trend northwards on Thursday 8th November 2018 w/w. The Bank of England and Diamond Bankâ&#x20AC;&#x2122;s 8.75percent voted to leave key policy rate May 21, 2019 Eurobond. Looking u n c h a n g e d a t 0 . 7 5 p e rc e n t ahead, we expect further uptrend while stating that its economic in yields amid aggressive liquidity outlook depends significantly mop-up by the CBN. on the nature of the BREXIT deal Foreign Exchange: Weekly between the UK and Europe and Na i r a - U S D p e r f o r m a n c e , the smoothness of transition. divergent across FX widows Additionally, reports that the EU In line with the week before, and UK have reached a tentative the w/w performance of the agreement that UKâ&#x20AC;&#x2122;s financial local currency against the U.S services firms would be allowed dollar was mixed across market to access the EU after BREXIT segments. The CBN sustained also bolstered sentiments. its weekly FX intervention in Emerging market equity the wholesale and retail FX indices as represented by the market, as the bank remained BRICS classification also trended resolute on defending the naira upbeat. South Africaâ&#x20AC;&#x2122;s JALSH within a perceived band of (+7.4percent) and Indiaâ&#x20AC;&#x2122;s SENSEX N360-N365/$1. Accordingly, the (+5percent) recorded the highest countryâ&#x20AC;&#x2122;s FX reserves depleted gains for the week. While, Russiaâ&#x20AC;&#x2122;s further by 0.7percent w/w to RTSI (+3.3percent), Chinaâ&#x20AC;&#x2122;s $42.0bn as at Wednesday, a slight S CHOMP (+3percent) and improvement when compared Brazilâ&#x20AC;&#x2122;s IBOV (+) also trended to the prior 3-weekâ&#x20AC;&#x2122;s trend of northwards w/w. c. 1.0percent w/w decline in reserves. Meanwhile, despite the

14percent to N14.9billion in third-quarter (Q3) of 2018 (N13billion in Q3 2017). Gross earnings was up 12percent to N122.2billion (N109.5billion in Q3 2017), driven by higher earning assets and a 46percent growth in noninterest income. Interest income was up 3percent to N91.5billion (N88.5billion in Q3 2017). T h e b a n k â&#x20AC;&#x2122;s n e t interest income before impairment increased by 5percent to N49.4billion (N46.9billion in Q3 2017); continuously led by increased earning assets. Non-interest income was up 46percent to N30.8billion (N21billion i n Q 3 2 0 1 7 ) ; a re s u l t of intensified recovery efforts, continued improvements in alternative channel revenues and treasur y trading gains. Despite this feat, the stock price at N5.05kobo as at Monday November 5, 2018 shows Union Bank Plc shares has yielded negative returns of 35.3percent, far underperforming the Nigerian Stock Exchange (NSE) All Share Index (ASI) which yielded negative return of 16.20percent on same day. Union Bank reported net operating income increase of 17percent to N72.8billion (N62billion in Q3 2017); while operating expenses increased by 18percent to N58.0billion (N49billion in Q3 2017); driven mostly by a 28percent increase in regulatory levies.

Gross loans increased by 5percent to N588.9billion (N560.7billion Dec 2017) as the bank begins to selectively create new risk assets across various business lines. Customer deposit was up 10percent to N882.2billion (N802.4billion Dec 2017). â&#x20AC;&#x153;In the third quarter of the year, our numbers continue to track strongly across all performance m e t r i c s. T h e G ro u pâ&#x20AC;&#x2122;s gross earnings grew by 12percent to N122.2 billion from N109.5 billion in Q3 2017. Profit B e f o r e Ta x ( P B T ) i s up 14percent to N14.9 billion compared to Q3 2017 as a result of strong treasury trading income, intensified recover ies and a 144percent growth in alternate channel revenuesâ&#x20AC;?, said Emeka Emuwa, CEO, Union Bank Plc. â&#x20AC;&#x153;The Non-Performing Loan (NPL) ratio is down to 9.8percent from 10.8percent as at firsthalf (H1) 2018 as asset quality continues to strengthen as we realize more recoveries while continuing to selectively grow our loan book with high quality risk assets. L everaging positive investor confidence in the Bank, we concluded a successful inaugural issuance of Series I and II bonds under our newly-registered N100billion bond program. We will remain focused on driving and enhancing productivity across the Bank to e n s u re w e d e l i v e r o n

our expectations for the year,â&#x20AC;? he noted. â&#x20AC;&#x153;Notwithstanding our deposit book growth, our focus on optimising our funding costs ensured that they remained flat year-on-year. This drove profitability from gross revenues to the bottom line, with higher net revenue from funds (after impair ment) in the periodâ&#x20AC;?, said Chief Financial Officer of Union Bank, Joe Mbulu. â&#x20AC;&#x153;Non-Interest Income (NII) is up by 46percent compared to prior year as re cover ies grew by 94percent to N3.9 billion during the period, up from N2.0 billion in Q3 2017 and fee and commission income grew 22percent in the same period driven by higher transaction volumes. In addition, the Bank also benefitted from opportunistic treasury trading income realised in the period. Our foreign currency deposits are up 37percent compared with December 2017, as we continued to optimize our balance sheet. Notwithstanding a c ha l l e n g i n g ma c ro economic backdrop, we are judiciously growing the Group loan book, which is up by 5percent from N560.7 billion as at December 2017 to N588.9 billion as at the end of Q3 2018. The bank remains adequately capitalised to pursue its growth ambitions with Capital Adequacy Ratio (CAR) at 16.8percent.â&#x20AC;? he said.

Thursday 08 November 2018

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BUSINESS DAY

Investor

Helping you to build wealth & make wise decisions

Vetiva Research

Dangote Cement: Decent year-on-year performance driven by strong operations In this equity research on Dangote Cement Plc by Onyeka Ijeoma, the Lagos-based Vetiva Capital analyst favours ‘Buy’ for the stocks at target price of N265.41.

trong operations continue to drive earnings Dangote Cement recently released its nine months (9M) 2018 result, reporting decent earnings for the period. Bottom line came in at N158 billion, 3percent ahead of 9M’17 and just shy of our N169 billion expectation. The earnings growth was driven by strong operations across the Nigerian and Pan African businesses, with Group EBITDA rising 15percent yearon-year (y/y) and 2percent ahead of our estimate at N337 billion (49.2percent margin). Drilling down to regional performance, Nigerian EBITDA remained strong, rising 13percent y/y to N306 billion, printing at N79 billion in third-quarter (Q3) as smaller volumes, lower prices and high operating costs moderated margins (9M margin: 65percent, Q3 margin: 62percent). Pan African EBITDA also rose 21percent y/y to N39 billion, following an 8percent quarter-on-quarter (q/q) jump in revenue (9M margin: 18percent). According to management, the improvement in Pan African EBITDA was from stronger pricing and improved volumes

in certain regions. Furthermore, DANGCEM recently announced the acquisition of gas turbines in their Tanzanian operations, capable of generating 25 MW of power. Prior to its arrival, the Tanzanian plant was powered by diesel, a more expensive fuel source, whilst the kilns run on coal. The company also plans to connect gas lines to the kilns in November, a move which is expected to generate a positive EBITDA margin in Tanzania. Overall, in spite of higher Net finance costs (9M’18: N19 billion; 9M’17: N13 billion), PBT rose 12percent y/y to N247 billion (Vetiva: N259 billion). Cement volumes rise 8percent y/y despite seasonally slower Q3 In spite of the expected slowdown in third quarter sales, 9M cement volumes in Nigeria still rose 12percent y/y to 10.8 million MT (Vetiva: 11.1 million MT), and revenue, 13percent y/y to N471 billion (Vetiva: N496 billion). In a bid to tap into new markets, Dangote cement recently launched two new products, “Falcon”, an all-purpose 32.5R grade cement and “Blocmaster”, a 42.5R grade cement, which

is meant to be used for heavy duty construction activities. Given that these products cater to segments of the market that DANGCEM was not previously in, management does not see any cannibalisation on their current lines. That said, we expect the additional sales from the new lines to compensate for any possible shortfall on the original products. Meanwhile, whilst Pan African volumes rose 6percent q/q to

2.5 million MT, 9M cement sales were flat y/y at 7 million MT (Vetiva: 7.3 million MT), owing to slower sales momentum in H1’18. Revenue was also 8% up q/q to N76 billion, whilst 9M revenue came in at N214 billion (Vetiva: N200 billion). We recall that in the first half of the year, Dangote cement halted operations in Ethiopia (due to social unrest), Tanzania (high energy costs) and Ghana (exports stopped

due to high logistics costs). While Ethiopian and Tanzanian operations have resumed, the timeline for resumption of exports to Ghana has been extended to H2’19. Overall, the Group reported an 8percent y/y increase in volumes to 17.8 million MT and a 14percent y/y rise in revenue to N685 billion (Vetiva: N696 billion). Forecasts revised to reflect 9M run rate Though we maintain our

optimistic view of DANGCEM’s operations, we have made a series of adjustments to our estimates to reflect the mild earnings deviation in Q3. First, we revise our FY’18 volumes estimate for the Nigerian business to 15.0 million MT (Previous: 15.4 million MT), translating to an FY’18 revenue of N645 billion (Previous: N685 billion). We also cut our volume forecast for Pan African business from 10.8 million MT to 10.1 million MT, taking into account the volumes miss in Q3 as well as the revised timeline for exports to Ghana. However, owing to the stronger prices, we arrive at a higher topline of N297 billion (Previous: N273 billion). Overall, we revise our FY’18 Group volume forecast to 25.1 million MT (Previous: N26.2 million MT) and our FY’18 Group topline to N943 billion from N958 billion. In spite of revisions to the forecasts, we note that DANGCEM is still on track to deliver record profits this year. After adjusting our costs to reflect the 9M’18 run rate, we revise our FY’18 PAT to N227 billion and Target price to N265.41. We maintain a BUY rating on DANGCEM.

C&I Leasing grows third-quarter pretax profit by 11.4% …share price rallies 117.1% this year IHEANYI NWACHUKWU

&I Leasing Plc recently announced its unaudited results for the third-quarter (Q3) period ended September 30, 2018 showing profit before tax of N1.3 billion, up 11.4percent year-on-year (September 2017: N1.2 billion). This stock is among the few equities at the Nigerian Stock Exchange (NSE) that has yielded impressive returns and far more outperformed the NSE All Share Index (ASI). At N2.80 per share as at November 5, 2018, the share price of C&I Leasing has increased by 117.1percent this year and outperformed the NSE ASI with negative return of 16.20percent. The company’s profit after tax in the review third-quarter (Q3) 2018 period stood at N1.2 billion, up 25percent year-on-year (September 2017: N950million). C&I Leasing Plc consolidated income statement shows gross earnings of N19.9 billion, up 15.6percent year-on-year against N17.2 billion in the corresponding third-quarter of 2017. C&I Leasing Plc is managed along three business lines -C&I Fleet Management, C&I Outsourcing and C&I Marine.

C&I Leasing Plc recorded lease rental income of N13.9 billion in Q3 of 2018 which indicates an increase of 17.5percent year-onyear against N11.8 billion in Q3’17. Personnel outsourcing income increased by 10.4percent to N5billion year-on-year against Q3 2018 level of N4.5 billion. Lease rental expense grew by 32.9percent to N6.3 billion yearon-year (September 2017: N4.8 billion); net operating income of N5.7 billion, up 8.6percent year-on-year (September 2017: N5.2 billion). Basic earnings per share increased to 73.45 kobo, up 25percent year-on-year (September 2017: 58.75 kobo). Total assets of N58.1 billion, up 29.2percent year-to-date (December 2017: N45billion); and operating lease assets of N35.6 billion, up 31percent year-to-date (December 2017: N27.2 billion). Shareholders’ funds increased to N10billion, up 10.1percent year-to-date (December 2017: N9.1 billion). “This result was achieved on the back of increased efficiency from all the business units as well as improvement in capacity utilisation of both marine and non-marine assets”, said Andrew Otike-Odibi, Managing Director/ Chief Executive Officer of C&I Leasing Plc.

Segun Osuntokun, managing partner BCLP; Ahmed Sule, head, Trade Nigerian High Commission London; Paul Onifade, chairman, NISM and Author; Justice Oguntade retied, High Commisioner to the UK; Edward George, head research, Ecobank; Gbite Oduneye, CEO, AOA Investment Group; George Etomi, managing partner, George Etomi and Partners; Femi Fadahunsi, George Etomi &Partners; and Theophilus Emuwa, managing partner, AELEX ,during the launch of ‘Legal Guide to Investing in Nigeria’ by Nigerians in the Square Mile (NISM) at Standard Chartered London.

“This continued progress of our business units and brands is the result of our dedication to quality service delivery and efficient processes coupled with

increased visibility following some successful strategic marketing activities. “As at 30 September 2018, the capital adequacy ratio still

stood at 8.9percent below the CBN minimum requirement of 12.5percent and this is due to the pending conversion of $10 million loan stock from

Abraaj which is expected to be completed through 2018 and result in our CAR returning to normalized levels,” Otike-Odibi said.

BUSINESS DAY

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Nigeria’s foremost gin brand patrons win big at Felabration, 2018 Ifeoma Okeke

igeria’s foremost gin brand – Chelsea London Dry Gin recently partnered with organisers of the annual musical festival, Felabration held in honour and memory of late Afrobeat Legend, Fela Anikulapo-KutiThe event which held at the popular New Africa Shrine, Ikeja, from October 15 to 18 this year (2018) attracted over 80 musical acts from within and outside Nigeria. The seven-day event saw music fans troop out in their thousands to attend the event. Chelsea London Dry Gin rewarded consumers for their loyalty with daily raffle draws for consumers who bought Chelsea gin and there were dancing competition were fans inside the arena voted for the best dancers. Amongst the gifts won

Afolabi Kasomo, brand manager, Chelsea London Dry Gin, presenting gifts to winners at Felabration 2018

by patrons of the brand and best dancers are TV sets, deep freezers, power generating sets, table top fridges, gas cookers & washing ma-

chines. This year’s Felabration was tagged ‘Overtaking Overtake’ and also celebrated Fela’s posthumous 80th

Birthday. Afolabi Kasomo, brand manager, Chelsea London Dry Gin, presenting gifts to winners at Felabration 2018

Thursday 08 November 2018

Consumers remain cautious despite October retail uplift

etail sales in the UK rose slightly in October, new figures from the BRC KPMG Retail Sales Monitor show. Sales increased 1.3% in October on a total basis – above the three-month average of 1.1%, but below the 12-month average of 1.4%. October’s like-for-like retail sales increased by just 0.1% year on year. Non-food retail sales in the three months to October decreased by 1% on a likefor-like basis, and increased 0.1% on a total basis. It was the first increase in the category for four months. Helen Dickinson, chief executive of the British Retail Consortium, said retail sales growth continues to be low by historical standards, while consumer spending remains cautious. “Brighter weather and the anticipation of better deals in the Black Friday November sales have dampened demand for discretionary purchases,” she

said, and added that the low growth of consumers’ wages over an extended period has left shoppers “with less money in their pocket, squeezing retailers’ margins in the face of high costs”. Dickinson said the prospect of a no-deal Brexit means retailers could be left facing higher import prices and further drops to consumer demand: “Time is running out and it is essential that the Government, the EU and the UK Parliament come to an agreement on the backstop and delivers a Brexit deal detail which gives confidence to both consumers and retailers, and avoids squeezing real wages further.” Culled from drapersonline.com

Living under poverty line How Nigerians are struggling to survive

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

Trader in dire need of funds for dialysis, surgery Name: Mrs Ugbede Kehinde Oluwatoyin State of Origin: Ogun Age: 35 Dependents : Mother and three siblings Occupation: Trader I deal in eggs and foodstuffs at Appo Market, Abuja. Before I ventured into this business, I worked a bank, having graduated from the University of Abuja where I studied economics. In 2008, I was employed at Oceanic Bank (now Ecobank) where I worked as a teller before I was moved to the customer service desk. I served in different branches of the bank before I was relieved my job. From Appo market, I moved to Kubwa where I was trading until I was diagnosed of kidney failure in 2018. How did it start? It started in August, 2017 but like malaria and typhoid. I had the same experience every two weeks. By November, 2017, we were treating ulcer but unknown to us, what I had was bigger than ulcer. I was

short of blood and was given two pints of blood. Before I got married in December, 2017, I was referred to Maitama Hospital for endoscopic but my fiancé did not allow me to go because of the cost. Two

months after the wedding, my condition deteriorated and that was why I was diagnosed of kidney failure. The situation got worse in January, 2018 when I started bleeding through the nose and vomiting two

or thrice a week. Second week in January, I was at Kubwa General Hospital. I asked the doctor the result of the general tests carried out on me and she said they were all good. But, I wasn’t getting any better.

Analyst: Chinwe Agbeze, Graphics: Joel Samson

The bleeding and vomiting still persisted. I also lost appetite, had sleepless nights and coughed profusely. I was given antibiotics, malaria drugs and cough syrup. With the medication, it even got worse. On February 23, 2018, I was diagnosed of Chronic Kidney Disease (CKD) at Kubwa General Hospital. I was referred to Gwagwalada Teaching Hospital for further treatment and dialysis. I spent six weeks at the hospital before I moved to Zenith Medical and Kidney Centre in Abuja, where I have been receiving treatment till date. What is the cost implication? I was told the best treatment option for my condition is kidney transplantation and it would cost about N13.3m. This sickness is really capital intensive. My husband and I cannot bear the cost. I do dialysis twice a week and the treatment drugs cost N110,000 per week. On every dialysis, I take injection for blood because I’m anaemic and

infusion because I lack vitamins and glucose. How have you coped so far? We get assistance from family, friends and good spirited individuals. This sickness is really capital intensive. A plea for help My husband works as a mathematics teacher at ElisAngel Model School. From the time I was diagnosed of this sickness till now, it has not been easy for him. My husband’s salar y couldn’t take care of the sessions of dialysis in a week. Since I was diagnosed of this disease, I couldn’t do any work to support my husband and the family. O n a monthly basis, I spend N1m on dialysis, drugs and admission. The doctor said the lasting solution is the kidney transplant. N10m is required for the transplant but I sincerely do not know where or how to get that kind of money. I am calling on Nigerians to come to my aid and help me raise the funds for my kidney transplant.

Thursday 08 November 2018

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BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

Effective business intercourse Oyeyemi Aderibigbe

de is a third year Associate in a law firm, and he has just been selected to attend a legal awards ceremony where his firm has been nominated alongside his Managing Partner. He is beside himself with excitement as this is the first time he would be asked to attend a formal event on behalf of the firm. In the same breath, he is hit by waves of fear and a lot of questions to which he has few answers. What do I wear? What do I say when I receive questions? What will my boss expect of me? What is the protocol for such events? You may be in Ade’s shoes tomorrow; would you know what to do? It would be helpful if you are prepared for such impromptu events. Whether you are attending in your personal capacity or representing your firm, it is critical that you are conscious of the fact that you are a mobile autograph of your organisation, so the stakes are higher, and you should be intentional. Casually tabbing the date and not preparing for the event is the first faux pas! Instead of focusing on the “what nots” I will like to drop a few hints on what you should think of and do, to make it

a successful outing and improve your personal credit. Gather your “intel”: It goes without saying that failure to prepare is standing in the line to hug failure. As such, one of the first indicators of preparation is the information you have at your fingertips. You should be clear on the date, the venue, the time, the exact hall, special seating for your boss and yourself (where available), the subject matter of discussion or purpose of the event and more recently, I have learnt that if you can get information on who it is that would be attending the event then you should. In Ade’s case, it is an awards ceremony and the firm has been nominated, that is a big deal. In your case, it may be simply a business meeting to touch base with an old friend or client, even then, that is a big deal. Every time is a big deal! Why? You are representing the firm and whether casual, formal, trivial or important, you wear a brand and you should put your best foot forward. More importantly, you should get a sense of the personality and the inclinations of your boss in such settings. This is very crucial when you have not had significant interactions with your boss. Ask senior colleagues for information

tactfully. I would give an example, knowing that your boss prefers that you appear in traditional black suits for such events will prevent you from wearing a GQ like cobalt blue suit which in some other context would have been acceptable. Some may call this extra, but this is one way to differentiate yourself. You should understand who it is that you would be dealing with and be clear on his/her expectations. Show up on time: I need not flog this much, timeliness is like fragrance, it enhances you. Your choice in this regard should be to get there before or alongside your boss. Getting there after should not be an option. Fix your get-up: How you look is critical. You must dress well and do not take risks. Risqué dressing such as plunging necklines and exaggerated slits are totally outlawed. Be conservative, clean and formal. Again, you have to get your information right about the event and align yourself as such. Sometimes, being the centre of attraction may be detrimental. Your smile is part of your getup, use it. Your business cards Continues on page 26

DOA once again takes front row seat at the Law Digest Awards Theodora Kio-Lawson

t would seem the law firm of Duale, Ovia and Alex-Adedipe (DOA) is on a relentless path to the top of the legal profession, as it yet again bags another round of awards at this year’s Law Digest Awards. The firm which was nominated in six categories: Emerging Law Firm of the Year (1-3 Partners; Young Managing Partner of the Year; Managing Partner of the Year; Property, Infrastructure and Construction Team of the Year; IP and Technology Team of the Year and Power, Energy and Natural Resources Team of the year; came up tops in three out of these categories. DOA won the categories of Young Managing Partner of the Year, Managing Partner of the Year and Emerging Law Firm of the Year. It would be recalled that in 2017, the firm was nominated in several categories at the Law Digest Awards and also won awards in two key practice areas: Telecommunication, Media & Technology (TMT) and Real Estate & Construction at the Nigerian Legal Awards.

Run by the trio of Adeniyi Duale, Soibi Ovia and Adeleke Alex-Adedipe, DOA continues to leave its mark in key areas of practice and the legal industry in Nigeria, taking giant strides and demonstrating capacity as well as a competitive edge in the legal market. The partners have expressed

appreciation at the recognition they have received in the industry, as well as the trust clients continue to place in the firm’s ability to deliver value driven legal services. Commenting on this recent achievement, they reiterated their commitment to delivering worldclass legal services. Recipient of two of the awards, DOA managing partner, Adeniyi

Duale, is recognised as an astute lawyer with more than a decade of experience advising on various aspects of corporate and commercial matters. He specialises and has depth of experience in Energy (Oil and Gas, Power and Infrastructure), Capital Market, Telecommunication, Media and Technology, Real Estate, Aviation law, Mergers and Acquisitions,

Private Equity and Business Regulatory and Advisory. Located in the heart of Lagos at the highbrow Lekki Peninsula, DOA is a bespoke full-service commercial law firm, which offers a wide range of expert legal services to a highly diversified client base both local and international operating in various sectors of the economy.

BUSINESS DAY

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RIGHTSWATCH

BDLegalBusiness

Forceful entrance: HEDA petitions IGP, seeks prosecution of embattled NHIS boss, others

he Human and Environmental Development Agenda (HEDA) Resource Centre, has urged the Inspector General of Police, Ibrahim Idris, to investigate, arrest and prosecute the embattled Executive Secretary of the National Health Insurance Scheme (NHIS), Usman Yusuf over the forceful entrance into the scheme’s head office in Abuja on the 22ndOctober, 2018 with the aid of security operatives. In a petition signed by HEDA’s chairman, Olanrewaju Suraju, the Resource Centre said the situation is one that can cause chaos and a breakdown of law and order in the scheme’s office and as such requires the arrest of anyone found wanting or trying to jeopardize the security of the institution. The petition read: “We hereby write to request for the investigation, arrest and prosecution of the suspended Executive Secretary of the National Health Insurance Scheme (NHIS) and officers of the force for the forceful entrance into the scheme’s head office in Abuja on the 22nd October, 2018 with the aid of security operatives. “According to reports from an online news medium dated the 22nd October, 2018 the suspended Executive Secretary; Yusuf in a flagrant display of high handedness and disregard for official protocols, used unknown police officers in his entourage to overpower workers, staff, union and

security officials at the head office while trying to gain access in spite of his suspension by the governing council of the scheme, who had set up a panel to probe allegations of fraud and infractions against the Executive Secretary. There are also allegations of the use of tear gas on workers by these officers of the police force. “The Force Public Relation Officer subsequently dissociated the force from that action and those officers involved in the illegal act of brigandage and harassment of public officers on official duty at the NHIS head office. Mr. Yusuf refused to adhere to the suspension order of the council and forcefully gained access to his office while being guarded by police officers. “ HEDA noted that, “It is worth noting that Mr. Yusuf was previ-

Thursday 08 November 2018

ously suspended by the Minister of Health, Isaac Adewole, in July 2017 over alleged gross misconduct and fraud but was in February controversially reinstated by President Muhammadu Buhari. This was before his second suspension by the Governing Council over similar allegations of fraud and infractions. “The above is quite devastating and alarming as it suggests that an individual can make attempts to sabotage an entire system with the cooperation of the police as against the existing structure of an agency of the federal government. “This situation is one that can cause chaos and a breakdown of law and order in the scheme’s office and as such requires the arrest of anyone found wanting or trying to jeopardize the security of the institution,” the petition said.

Effective business intercourse Continues on page 25

(where applicable) must not be left at home, they are still conventional in formal settings so make sure to keep them at hand. Also, knowing something about the subject of the event (where it is themed on a specific subject matter) helps a lot. The ability to display some knowledge about the theme is always an add-on and y0u get the benefit of it where your boss witnesses you display such knowledge. Please note that this is not a call to outwit yourself or speculate on things on which you have no clue, in such instances, just listen, you probably would learn a lot. Tactful and concise engagement: Loud laughter, loud chattering with a friend you accidentally meet, butting into conversations, longwinded responses, unwarranted arguments with strangers take away from you. Conscious determination of when to speak and what to say comes with time but, you should start by listening carefully and responding with tact. Where it is a question of knowledge, engage when you know what is being said, speculating just because you want to have a say could be destructive for your career, check your data. Also, pay attention to conversations, it is a learning opportunity. Be confident and attentive: Such experiences can be daunting especially at the first try, but this should not make one avoid such situations. If you have done your homework well

and gathered your intelligence appropriately, you should have nothing to fear. If seated at a table of notable seniors along with your boss, do not have a fearful posture. Listen, nod your head and maintain an open posture to show you’re absorbing what is being said. Where in doubt, keep your questions and ask your boss after the event. You need not directly engage if you are unsure about the propriety of your queries. Be yourself: Finally, be yourself. Forged accents, contrived facial expressions and inflections are unsuitable. Also, some of us resort to our phones like comfort food. No! Avoid using your phone as a face guard, it is impolite and except the circumstances are exigent, you should put it away. These rules are not exhaustive, clarity comes with time and you sure will find your voice. These tips aid instalmental progression and you sure will be better for it.

OYEYEMI ADERIBIGBE is a Senior Associate at Templars. She is also the current Vice-Chairman of the Young Lawyers’ Forum of the Nigerian Bar Association -Section on Business Law and the Young Lawyers’ Committee Liaison Officer of the African Regional Forum of the International Bar Association. Feedback – Oyeyemi.aderibigbe@templars-law.com; yemiimmanuel@yahoo.com.

Towards securitization of intellectual property rights for commercial transactions in Nigeria

ntellectual Property (IP) refers to conceptions of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce. IP Rights are property rights in something intangible that protect innovations and reward ingenious activity. IP Rights allows people to own their inventiveness and innovations in the same way that they can own physical property and it is indeed the most valued asset owned by a company. Traditional conception of property did not admit of the existence of intangible property. Accordingly, IP rights were largely unrecognized. This was especially so in the commerce and trade industry where investors were anxious for tangible property as collateral for loan grants. However, as the economic base of society shifted, other types of property acquired value, and debtors and creditors began to recognize the worth of IP rights as collateral for commercial transactions. That notwithstanding, the possibility of employing IP rights as security for commerce raises intricate issues of legal concern. This article is an attempt towards examining the employability of intellectual property rights as security for commercial transactions in Nigeria; especially in a develop-

ing economy where the relevance and importance of intellectual property rights are almost relegated to the background. The request for loans for funding of companies is as pronounced as ever. Property that a mortgagor has covenanted as security in a transaction is often referred to as security. Up until now, commercial lending was reserved only for companies that had substantial tangible assets and notable accounts receivable. Mortgagors conventionally pledged tangible assets and accounts receivable to secure bank loans, and intellectual property was a mere reflection in the creditor’s credit exploration. However, as the fiscal base of the society shifted, other forms of property attained value, and mortgagors and mortgagees began to recognize the worth of IP as collateral. Ever since Thomas Edison first used his patent on the incandescent electric light bulb as security to secure finance to start his company, the General Electric Company, IP began to gain the deserved recognition in the financial market as security. IP rights are assets that can be used as security for financing one’s enterprise over a secured transaction. Using IP as collateral is an evolving business alternative that may offer a financing prospect for companies with valued

IP assets looking for other sources of capital. Companies, large and small, may possibly need additional capital for a variety of purposes. Startup and smaller companies may need capital for such reasons as starting up or expanding operations, sustaining or increasing their research and development spending, or for complementary acquisitions.Today, mortgagors can give creditors security interests in intangible properties as well as physical assets. Intangible assets include IP rights, such as patents, trademarks and copyrights, and as a country’s economy develops progressively, IP rights are likely to become more and more valuable security. The economies with low interest rates have sparked a revival of securitization of risky assets. Traditionally, creditors secure loans with tangible assets; however, IP assets are becoming increasingly popular with both creditors and debtors now seeing them as veritable leverage to closing a deal. Truly, a person or company’s IP can be its most valuable asset, and one of the best means to take advantage of this asset’s value and monetize it to the company’s benefit is through securitization. Asset securitization is the practice of converting an asset or a stream of cash flows into

marketable security. It is well known in the finance industry but relatively new to the world of IP. Moving into the future, securing funding using IP will be more important as the focus of corporations continues to move towards developing IP. Though it may sound commercially unviable, risky and quite unimaginable to use IP as a source of security especially in Nigeria where little or no regard is paid to IP rights, yet it is a possibility. It is no doubt that we all enjoy the goodness of Facebook and other social media sites. What we enjoy today is nothing but the result of one man’s innovative thought. Facebook’s market capitalization is currently more than $460 billion as at April 2018. In the same light, there are so many software developers with mind blowing innovations like that of Facebook yet lacking in funds to bring their innovation to the limelight. In business world of today, the IP collection of many businesses forms a vital part of the company’s assets. As such, banks and other financial institutions advancing money to companies (in Western Europe, the U.S.A., Canada and other developed countries) are increasingly taking security over debtors’ IP portfolios as part of a security package. Particularly in transactions

where the IP held by the debtor is of significant commercial value. Careful consideration is required as to how security interests are to be created. Creditors valuing a debtor’s IP portfolio (in the context of taking security) have tended to focus on registered IP. The trade mark, patent, and registered design registers administrated by the Patent Office provide readily accessible information on registered IP, enabling creditors to easily identify not only the rights in question but also to verify information such as the term and ownership of such rights. These registers also contain information as regards any encumbrance theses IP rights labours under. Furthermore, the Patent Office operates a priority recording system whereby the record of a creditor’s security interest over a particular right means that third parties later acquiring an interest in that right (whether ownership, a license, or a security interest) will take subject to the creditor’s earlier registered rights. Consequently, while a debtor may not have any portfolio of registered IP, creditors may find that the debtor’s unregistered IP is of substantial commercial value. The identification of registered and unregistered IP will be a primary factor in deciding how security interests are to be created.

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INDUSTRY FILE Practice administrators forum holds seminar in collaboration with NBA-SBL

he Practice Administrators Forum in collaboration with the NBA Section on Business Law holds a one-day seminar today, Thursday November 1st, 2018 at the Lagos Court of Arbitration (LCA) in Lekki Phase 1. T h e s e m i n a r, themed ‘Mastering the Generational Diversity in Law Offices’, will examine key drivers impacting the future of legal services, with critical focus on the rapid changes in the workplace and how the legal profession can effectively adapt to these changes. Revealing a survey, which states that in the next 4 years, 75% of the workforce will be millennials, the organisers have disclosed that the conversation would touch on technology, innovation, globalisation, commoditisation; how demography is altering the face of law practice

and how all of these will impact the traditional business model of law practice. The Association of Law firm administrators in September hosted over 50 Legal Administrators and professionals at a similar event, where it highlighted the role and valuable contributions of legal management professionals to the business of law.

PHOTOFILE NBA-SBL Chairman, Seni Adio, SAN and Irene RobinsonAyanwale of the Nigerian Stock Exchange, Co-chairpersons of the Nigerian Coalition of Services Industry (NCSI) were in the office of the Director General, Nigerian Office for Trade Negotiations (NOTN) to validate the Nigerian Draft Market Access Offer for Trade in Services (Schedule of Specific Commitment). In the photo is the DG, Ambassador Osakwe, who witnessed the signing.

BUSINESS DAY

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Hong Kong highlights IP as priority with move toward specialist court

ong Kong is to hire intellectual property judges as it seeks to manage a growing caseload of IP disputes, taking the lead from jurisdictions that already have specialist courts – including mainland China and the UK. The special administrative region’s judiciary is in the process of taking steps to appoint specialist judges. Cases involving IP disputes would then be listed and directed to those judges. Charmaine Koo, partner at Deacons in Hong Kong and co-head of the firm’s IP department, said a specialist court was ’very much needed’ to cope with an increasing amount of IP litigation in Hong Kong. Having specialist judges will help ’streamline cases and minimize time and costs for both the parties and the courts’, she said. It is not known yet if the recruitment exercise will be open to foreign judges. The proportion of foreign judges in Hong Kong’s courts has declined since China took back sovereignty in 1997. However its highest court – the Court of Final Appeal - has 12 non-permanent justices from common law jurisdictions including the UK and Australia. Former Supreme Court President Lord Neuberger is among those to have sat in the court. The Gazette understands that practitioners are being consulted about the plans with a further announcement expected early next year. The move comes as China’s government seeks to champion its ‘Greater Bay Area’ project,

an ambitious ‘technology hub’ linking the special administrative regions of Hong Kong and Macao with cities on the Chinese mainland. Earlier this year, Hong Kong’s justice secretary Teresa Cheng visited London where she said the development of the area will ‘naturally result in a lot of IP rights that will be generated and disputed.’ She added that despite China’s history of ‘not dealing with IP in the most mature way’, protection is becoming essential. A similar system has also been implemented in China. In 2014, IP courts in Beijing, Shanghai and Guangzhou were opened and this month, the National People’s Congress was reported to be considering legislation that would create an IP tribunal within the Supreme People’s Court that would act as a national IP appeal court. Xun Yang, partner at LlinksLaw in Shanghai, said: ‘IP laws continue to be an emerging legal regime given the fast-developing technologies. The establishment

of the specialised IP courts facilitate the gathering of IP experts, jointly improving IP judicial practice.’ In the England and Wales, what was the Patents County Court was reformulated as a specialist list of the High Court as the Intellectual Property Enterprise Court in 2013. Earlier this month it was also revealed that UK judges are being recruited to help establish an IP court in Ukraine. At a launch event in London Lord Neuberger – one of the judges who will be advising on the implementation of the Ukraine court - said he hoped to help establish an ‘independent and reliable’ justice system in the country. The pilot scheme for the new IP court – which is being funded with £850,000 of UK overseas aid - will discuss the legislative framework, advice on best practice and help launch a training programme for newly appointed judges. -Culled From Law Society Gazette

Winners emerge from 2018 Lawyers table Tennis Open

winner has emerged from the 2018 Lawyers table Tennis Open, The known as the Mfon Usoro Cup. At the tournament, which is in its 10TH year (since 2009), Titilayo Osagie won the women category of Lawyers Table Tennis Open (Mfon Usoro cup) 2018 after defeating the defending Champion Yetunde Martins in the keenly contested finals that ended 11- 6; 11-5 and 12-10 in favour of Osagie. Osagie has won the tournament seven times previously before Yetunde Martins beat her in the 2017 games to emerge the 2017 Champion. Titilayo Osagie bounced back in 2018 to defeat Yetunde Martins in the 2018 finals making it the 8th time she will be winning the trophy. Zainab Olabode Shodunke beat Queenette Hogan to win the third place prize. The match ended 5-11; 11-6; 12-10; 12-14; 8-11 in favour of Zainab. In the men’s category, first time players in the competition took the first, second and third positions kicking Tunji Abdulhameed the defending champion to a position of obscurity. Yahaya Olarewaju,a first time

competitor from Lokoja took the trophy away after beating Seye Oki is a fierce finals which ended 11-5; 11-6; 11-6. Joshua Nyengierefaka took the third place position after beating Kabir Adeleke 5-11; 11-8; 6-11; 11-9; 4 -11. Among the dignitaries present were the President of the Nigerian Bar Association, Paul Usoro SAN, the sponsor, Mfon Usoro; the chairman of the NBA Lagos Branch, Chukwuka Ikwuazom; the Vice Chair Bola Animashaun; Alex Mouka, former chairman, NBA Lagos; and Martin Ogunleye, former chair-

man, NBA, Lagos. Others were, Aisha Ado Abdullahi, former national treasurer Nigerian Bar Association and Efe Etomi wife, of pioneer Chair of the Nigerian Bar Association Section on Business Law. Lawyers also came from Jalingo, Abuja, Kano, Port Harcourt, Kaduna, Lokoja, Ibadan, Abeokuta, Lagos, etc. The winners of the event took home N250, 000 .00 N150, 000 .00 and N100, 000 .00 respectively. The winner of the women prize also went home with the ‘Efe Etomi prize’ worth a hundred thousand Naira.

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Leadership

Thursday 08 November 2018

Shaping people into a team

Don’t underestimate the power of women Anne Welsh

o n ’ t u n d e re st i mate the power of women connecting and supporting each other at work. As my experiences from being a rookie accountant to a managing director at an investment bank have taught me, conversations between women have massive benefits for the individual and the organization. When I graduated college in the 1970s, I believed that women would quickly achieve parity at all levels of professional life now that we had “arrived.” I viewed the lack of women at the top as more of a “pipeline” problem, not a cultural one. But the support I expected to find from female colleagues — the feeling of sisterhood in this mission — rarely survived first contact within the workplace. When I was a first-year accountant at a Big Eight firm (now the Big Four), I kept asking the only woman senior to me to go to lunch, until finally she told me, “Look, there’s only room for one female partner here. You and I are not going to be friends.” Unfortunately, she was acting rationally. Senior-level women who champion younger women even today are more likely to get negative performance reviews, according to a 2016 study in The Academy of Management Journal. My brusque colleague’s behavior has a misogynistic name: the “Queen Bee” phenomenon. Some senior-level women distance themselves from junior women, perhaps in order to be more accepted by their male peers. As a study published in The Leadership Quarterly concludes, this is a response to inequality at the top, not the cause. Trying to separate oneself from a marginalized group is, sadly, a strategy that’s frequently employed. It’s easy to believe that there’s limited space for people who look like

you at the top when you can see it with your own eyes. Worse than being snubbed by the woman above me was the lack of communication between women at my level. Of the 50 auditors in my class, five were women. All of us were on different client teams. At the end of my first year, I was shocked and surprised to learn that all four of the other women had quit or been fired — shocked at the outcome, and surprised because we hadn’t talked among ourselves enough to understand what was happening. During that year, I’d had difficult experiences with men criticizing me, commenting on my looks, or flatly saying I didn’t deserve to work there, but I had no idea that the other women were having similar challenges. We expected our performance to be judged as objectively as our clients’ books, and we didn’t realize the need to band together until it was too late. Each of us had dealt with those challenges individually, and obviously not all successfully. I resolved not to let either of those scenarios happen again; I wanted to be aware of what

was going on with the women I worked with. As I advanced in my career, I hosted women-only lunches and created open channels of communication. I made it a point to reach out to each woman who joined the firm with an open-door policy, sharing advice and my personal experiences, including how to say no to doing traditionally gendered (and uncompensated) tasks like getting coffee or taking care of the office environment. To personal assistants, who might find some of those tasks unavoidable, I emphasized that they could talk to me about any issues in the workplace, that their roles were critical, and that they should be treated with respect. The lunches were essential, providing a dedicated space to share challenges and successes. In doing so, I hope it lowered the attrition rate of women working at my company, rates that are, across all corporate jobs, stubbornly higher for women than men, especially women of color. My own daughter has arrived to a workplace that has not changed nearly as much as I had hoped; although 40% of Big Four

accounting firm employees are women, they make up only 19% of audit partners. Only one in five C-suite members is a woman, and they are still less likely than their male peers to report that there are equal opportunities for advancement. So, what are women in the workplace to do, when research shows that we’re penalized for trying to lift each other up? The antidote to being penalized for sponsoring women may just be to do it more — and to do it vocally, loudly, and proudly — until we’re able to change perceptions. There are massive benefits for the individual and the organization when women support each other. The advantages of sponsorship for protégés may be clear, such as access to opportunities and having their achievements brought to the attention of senior management, but sponsors gain as well, by becoming known as cultivators of talent and as leaders. Importantly, organizations that welcome such sponsorship benefit too — creating a culture of support, and where talent is recognized and rewarded for all employees. Sponsorship (which

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

involves connecting a protégé with opportunities and contacts and advocating on their behalf, as opposed to the more advicefocused role of mentorship) is also an excellent way for men to be allies at work. But there’s still so much work that needs to be done. I’m thrilled by the rise of women’s organizations like Sallie Krawchek’s Ellevate Network, a professional network of women supporting each other across companies to change the culture of business at large. I am attempting to make my own dent in this area, having endowed the McNulty Institute for Women’s Leadership at my alma mater, Villanova, which supports new research and leadership development opportunities for women. But nothing can replace the benefits of and the necessity for connections among women inside a company, at and across all levels. It reduces the feeling of competition for an imaginary quota at the top. It helps other women realize, “Oh, it’s not just me,” a revelation that can change the course of a women’s career. It’s also an indispensable way of identifying bad actors and systemic problems within the company. It need not be a massive program, and you don’t need to overthink it — in fact, there’s a healthy debate about affinity groups run from the top down. Whether you are a firstyear employee or a manager, just reach out and make those connections. I’m guessing you’ll find that the return on investment on the cost of a group lunch will be staggering.

(Anne Welsh McNulty is the cofounder and managing partner of JBK Partners, with businesses including investment management and a private philanthropy, the McNulty Foundation.)

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BUSINESS DAY

GARDEN CITY BUSINESS DIGEST As multi-million naira oil mill complex for women lies waste in Gokana due to working capital

Cooperative body pleads with Rivers first lady as project vandalised

...War against ‘Miracle Centres’ where 8As can be made by dull heads

pportunity to effectively engage over 100 women in Gokana, Rivers State, in palm produce business seems to lie waste at Kpor, the local council headquarters, due to carefree attitude of past governments at both state and local level in the state. BusinessDay gathered that the multi-million naira oil palm and plantation project was funded by Shell Nigeria as far back as 1999 to help engage women in Gokana local council area in particular and Ogoni in general in meaningful business using palm produce as base. The project was said to be mid-wifed by a nongovernmental organization (NGO) called International Foundation for Education and Self Help (IFESH). BusinessDay who visited Gokana at the weekend found that the complex is now under lock and key at the backyard of the local council secretariat at Kpor. A lone security guard stands at the gate area that has since been removed by hoodlums, along with some of the power plants expected to power the many machines in the place. The project was built for the Legedu Women Cooperative Society Limited to produce palm oil and kernel in commercial quantity and probably control the palm produce business route in that zone. The president of the Coop-

Brace up, merit will return to Nigeria – Rivers education boss IGNATIUS CHUKWU & FAVOUR ICHEMATI

IGNATIUS CHUKWU

erative, Patience Bien Pebana, who has turned to an activist under the citizens Trust Advocacy & Development Centre gave details while calling on the current Rivers State first lady, Suzzette Wike, to intervene for the Gokana women because the group had exhausted all appeals to offices run by men. The president said; “It was founded in 1999 by IFESH when Shell invited them to help enhance the women in Gokana. They came to four local council areas in Ogoni, with skill acquisition (saloon, tailoring, etc). The oil mill project is where I belong and it is in Kpor, Gokana.” After the successful execution of the project, the president narrated, “The NGO asked

the local council authority to provide the running cost or trading capital but they never did it. Shell had installed all the machines while the council was to provide the working capital to scout for palm fruits. The chairman that time, Fred Kpakol, did not. He just gave us peanuts probably to wave us out. When we saw that the council was not forthcoming, the women were discouraged because the little money they contributed did not go far. This is because the mill is gigantic and needs plenty of fruits at a time to run well.’ She went on: “I signed a bond with Shell to hold me responsible for anything missing in that project. For this reason, I kept caring for the project. I

even employed a guard and paid by myself. I called the women back but they no longer cared. I continued to look after the project alone.” According to her, the next council chairman was briefed on the project but showed no interest. “At this point, I proceeded to the Rivers State Ministry of Women Affairs, but they did not respond. I went to the NDDC. The man came and we showed him everything. He left and promised to be back. I went there several times but no response came. When Gov Chibuike Amaechi took over and hoisted a came to Kpor for a Town Hall Meeting, I presented the matter once more. He sent a person to come and see it, but nothing came out of it.”

ivers State scholars have been warned to get back to serious studies and hardwork because the years of merit are around the corner. The state’s Commissioner of Education, Tamunosis Gogo Jaja, dropped the bomshell at a Shell event (Schools Quiz contest) last weekend in Port Harcourt at the Shell Industrial Area where he spoke as special guest. He predicted that years of ‘who you know’ to get into position would soon die because Nigeria would have no option than to join globalisation which emphasises on merit and using the best brains and hands. He thus warned the children to dig deeper into their books saying everythng a child needs to succeed in life is in books. He also warned aganst cultism, saying using force to obtain marks would soon be a thing of the past because merit will soon rule again in Nigeria. The commissioner said this was the objective behind the renewed war against ‘Miracle Centres’ exam centres where he said students without brains easily carte away eight distinctions (As) which he said they cannot defend. He warned that only those prepared for the new era of merit by woking hard to excell would survive. He wants Rivers State to be part

of the new era of merit. He went on : « Students are the future of Nigeria because that is where all the leaders would emerge from. That is why the Rivers State government under Gov Nyesom Wike takes education as priority. We learnt of sharp practices including introduction illegal fees in schools and the government has launched a war against this. I am just coming from school to school promt visits to check this. So far, some principals have been suspended for collecting items and money from students and that some students have kept away from school on this account. » Open school door, close prison door : One of the surest ways to battle militancy is education. The man who opens the doors of a school has shut the door to the prison. Schools creates dreams in the young ones and fire their ambitions to leadership and scholarship. It is sad that children of the rich are often robbed of any dreams because they rather fire the dreams of the children of the poor. This is because the children of the rich often have everything money and ambition can fetch ; big cars, big houses, good food, luxury on all sides. They seem to have nothing to aspire to, while the children of the poor look on and desire to own those things in future.

Ohafia theory: When youths lose culture, they embrace cultism

Port Harcourt by Boat With

IGNATIUS CHUKWU

ultism with its related violence seems to sweep across the youth population in Nigeria. What is spared by this seems to be eaten up by drugs addiction with greater danger to Nigeria’s future through the enthronement of what many now call the ‘Tramadol’ generation; the speedy wheelbarrow pusher aiming at your feet, the bike rider flying like a bat out of hell, the reckless drivers on the road, the blinded robbers that no more bother to hide their faces who kill before they demand anything, and

the rapists that now devour the most innocent girl around. Many say violence seems to be the opium of a new generation of youths seeking adventure and bravery. They toast the ladies around with whiff of cult bravery and the exploits of drawing gun faster than the next person. They seem to test their manhood status by hairsplitting acts of violence and weirdo. Now, the Ohafia kinsmen in Port Harcourt say they have found the link between receding cultures and new cultism. According to Stone Kalu, the president of Ohafia Improvement Union (OIU) in Port Harcourt, when you deny the youth the valour in culture, they would pounce on the heroics in cultism. What did culture offer? Wrestling contests that tested muscular feats, dance contests in village squares, hunting expeditions where young men raced after antelopes and other speedy animals and rodents, swimming contests which afforded

young men opportunity to showcase their glistening torso and hairy legs to attract the tapering legs of the opposite sex, etc. What do you get now? Young men and women sentenced into volumes of books written by strangers,

life hidden in air-conditioned rooms and cars from home to school and back, leaving behind a generation peeping at the world through tinted glasses (in homes, cars, or even goggles). A generation tasked to either first class or nothing; a Harvard orientation checked

only by Oxford, but caught between receding African values and evasive expatriate imagery. The Ohafia kinsmen, according to Kalu, want a way to restore the opportunities that culture offered without denying the children the best that civilization offers; probably something as oriental as the Chinese culture of taking the best from two worlds (Europe and Asia). In medicine, they allow acupuncture to grow side by side with syringes; on the diner table, they allow chopsticks to play equal sound with forks and knifes. The two meet in science and technology that still retains kung-fu and ninja kicks to defeat the enemy. Valour is still in your hands, bravery is still within your definition; that is what Kalu and his Ohafia kinsmen want to create. Hear Kalu, an educationist and administrator who seems hungry for more academics despite his Masters; “The ancestors of Ohafia people

(also known as Mben) were renowned mighty warriors. This is borne by the fact that they fought so many wars before the finally settled down in the present place of abode. Hunting for human heads was an acceptable norm and a way of life among the people. It was mandatory for every male from adulthood to fetch a human skull as a testimony of having attained manhood. The founding of Ohafia in its present abode is therefore the outcome of the victory of concord, love and brotherhood over forces of dissidence, fear and hostility in their long search for a peaceful spot to pitch a permanent place called their own. Bravery is part of us “This custom which was acceptable has disappeared with the advent of Christianity and civilization. However, this aspect of our history in addition to our rich culture still remains the people’s sense of identity till today. The Ohafia people are kind, hospitable to strangers and very religious.

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Thursday 08 November 2018

Investing in Rivers State Rivers: Another 25,000 graduates benefit from employability training Innocent Eteng

or the Rivers State government, it seems that until the negative numbers from the National Bureau of Statistics (NBS) point elsewhere, it would amount to crass economic irresponsibility playing cool. The state then seems to be reasoning that if the employability training given some 900 graduates few months back was beginning to help many get jobs, then why not scale up the training figures so that NBS’ 2017 unemployment ranking that placed Rivers State top at the worst at 41.8 per cent could be stemmed down? It was to this end that, between October 9 and 12, the state government organized employability training for 25,000 graduates. But far from the testimonies from former trainees, what could warrant the quantum leap in the training numbers amounting to 2,778 percent increase? “It was inspired by the number of job seekers we found on our database (RivJobs platform), which is on the range of 107, 000.” Employability means attitude to job interview and the rest of it, and so we were inspired by that number (107,000) and we decided to target 25,000 persons for this Bootcamp,” explained Lawson Ikuru, the Permanent Secretary at the

Governor Nyesom Wike

Ministry of Employment Generation and Empowerment. The RivJobs platform (www.rivJobs.ng) is a web portal where job seekers register, get scheduled for employability training, and afterwards get linked up with perspective employers in the public and private sectors. The training of the 25,000 took place at the Obi Wali Cultural Centre with 5000 participants trained daily -

2,500 in the morning and 2,500 in the afternoon. They are taught to garner soft skills beyond their university certificates. The training then mirrors in on how to build a winning profile (curriculum vitae, CV), face an interview panel confidently, and observe excellent work ethics and attitudes. And just in case one is wondering why only 25,000 were chosen out of 107,000 and where the fate of the rest would lie, the perm sec said it was for

the sake of space. So, t is in phases, Ikuru stated. Expected economic impact Besides fighting the negative statistics, Rivers State is looking at preparing its citizens for competitive employability instincts for long term survival in the marshy waters of Nigeria’s labour market. Subsequently, it aims to create an atmosphere where the state would never again find itself in such infamous unemployment rating, especially since it is one of Nigeria’s resourcerich states. “They (trainees) can be absorbed and they can compete with their contemporaries from elsewhere and be better placed because as I speak with you, I am not sure any other state is doing this. So, subsequently, at the long run, there would be a reduction in the (number of the) unemployed and people will get good jobs as a result of this programme,” Ikuru said. He advised those that are yet to take advantage of the portal to do so as the opportunity is one that is hard to come by. He aid the facilitators were not just theoretical but practical ones with a whole lot of human resources management experience. “So if you come and sit here for two, three hours; you will know what it takes to do a good CV. You will know what it takes to have a good job attitude. You will know

what it takes to present yourself to an interview board.” Tani Ifediora, a human resource consultant working with the RivJobs team, agrees with Ikuru: “You don’t just say ‘I want a job, I want to be getting a salary’. But (ask), ‘really, how much value am I going to put unto the organization? What are my skills? What are my competencies? Do I need to improve? Do I need to engage myself in some learning to benefit the company?” Ifediora told participants that even with their academic qualifications and soft skills, sometimes it is necessary to take the available low-paid job as a starting point, as against waiting for white collar job to expand your thinking and gain confidence. “It’s not easy not to have a job, but then (what about) the little jobs? We are not just looking at being employed, but understanding that you should do something to add value because if you get there and you are an asset to an organization, then it also means increased productivity, expansion and that means more jobs for other people. But if the person goes there and is lousy, then he has shortcircuited the whole process.” As Rivers State continues on its efforts, it remains to be seen if the employability training can vastly turn the face of NBC’s shaming statistics to another direction.

How data integrity issues and terminology may have excluded Rivers in N3Bn flood control fund

lood is ravaging parts of Rivers State again and visits to Ahoada West, Ogba-EgbemaNdoni and parts of Ahoada East and Abua-Odua Local Government Areas will leave no one in doubt with the remarks of Sylvia Plath when she asked: “What ceremony of words can patch the havoc”. Yet, the state was not listed as one to benefit from a FG N3Bn support fund. It is on record that at least five persons have died in Ahoada West alone while thousands have been displaced from their homes in about 71 Communities that make up the Local Government Area. This is applicable to the three ethnic nations of Engene, Ekpeye and Ogbogolo of Ahoada West. Similar death toll and displacement have been recorded in Ogba Egbema and in particular Ndoni axis of the Local Government Area. To this end, the means of livelihood of the rural folks have been destroyed living them as destitute persons in their communities. This is not to undermine water and sanitation and its associated health challenges, mandatory closure of schools and worship centres as

churches, mosques including juju shrines for other traditional worshipers. Security concerns have arisen in make-shift tents and displacement camps, dearth of cassava grinding machines to convert cassava to garri flour arising from uprooting premature cassava. In Ahoada West three camps have been established at Mbiaina, Townhall Akinima and Community Secondary School Ukobe among others. Speaking in an interview with chairman, Ahoada West Local Government Area, Hope Ikkiriko said they informed stakeholders how the flood would affect their farm lands. He concluded thus: “In no distant time, we began to see the flood but I must confess that the flood got to Ahoada West earlier than envisaged”. The paramount ruler of Akinima Afuashi Belema Richard and Chief Eniata Abieba, as well as Welcome Kelegbu and Gift Ade of Osusu Joinkrama condemned Government attitude to disaster, pointing out that they were now living as refugees in their land. Afuashi Richard further remarked that those whose houses were not yet flooded stand the risk of being overtaken soon. The situation is the same in Ekpeye Communities of Odieke Igbuduya, Odiereke Ubie, Ikodu, Odiokwu Enito one and two, Olokuma, Ombo and Akalaolu. Both chairmen of Ahoada West Hope Ikiriko and Ifeanyi Odili of OgbaEgbema Ndoni Local Government Areas have commenced distribution of relief materials to internally displaced persons. In fact, Ikiriko stated categorically that the challenges emanating from the flood disaster have become overwhelming beyond the capacity of the Local Government Area alone.

On the other hand, while many displaced persons expressed chagrin at the response of National Emergency Management Agency (NEMA), the NEMA officials denied report of neglect and negligence explaining that they conducted Need Assessment exercise early enough but new cases arose thereafter. Head of NEMA’s Emergency Operation centre, South-South, Thickman Godwin, confirmed leading Need Assessment exercise in Ahoada East and West and admitted that new cases arose thereafter. Be that as it may, one major challenge that has arisen since the 2018 flood began is the challenge of data integrity and use of language otherwise referred to as terminology in earlier scientific report that heralded the flood. For instance, Nigeria Hydrological Services Agency (NIHSA) had in May 2018 released its Annual Flood Outlook (AFO) for the 36 states of the country. Accordingly, the outlook projected that Sokoto, Niger, Benue, Anambra, Ogun, Osum, Cross River and Yobe States would have high risk of “River Flooding”. It also indicated that Lagos, Bayelsa, Rivers, Delta and Ondo states might experience “coastal flooding”. Worse still, on September 18, 2018 the Federal Government through the Head of NEMA declared the ongoing flood in Kogi, Niger, Anambra and Delta a national disaster. The Federal Government subsequently allocated N3Bn to cater for the medical and relief support for persons affected in part of the country. Rivers State is not found in the list of states to benefit from the N3B for medical and relief support for persons affected, a development that has attracted a mo-

tion from Rivers State House Assembly condemning exclusion of Rivers State from the list. As if that was not enough, European Union also donated three million pounds to Nigeria’s flood affected states for which Rivers State is not among states NEMA earmarked for disbursement. The non-inclusion of Rivers State to share in the flood largesse meant has attracted divergent views. Some attributed this to political motives which they say is grand design to starve the state of any found that the Governor Nyesom Wike-led Government might use to prosecute electioneering campaign. There are those who described attempt to starve the state fund ratter too simplistic and opine that the fault came from the report of Nigeria Hydrological Services Agency when in 2018 Annual Flood Outlook published in May classified Rivers State under those that might experience coastal flooding and not River flooding. A professor of Applied Meterology and Environmental Management of the Institute of Geo Sciences and Space Technology Rivers State University, Akuro Gobo, was taciturn in condemning terminology but stressed the need for professionals to be careful with the words they use in describing things. “Is there a coast without a river and a river without a coast” he asked? In his words, an environmental manager Mishak Uyi, outrightly described NIHSA’s report erroneous by classifying Rivers State under coastal flooding instead of river flooding and called on NIHSA to immediately correct the misleading report; contending that Rivers State has had problems with river flooding arising from overflow of the Niger and its major tributaries like Orashi River as was the case in

2012 and now 2018. Interestingly, NEMA has in the second week of October 2018 included Rivers State in the list of flood disaster states describing flood in the state as National Distate. Should this be a polite way of correcting the mistake of NIHSA since NEMA relies on scientific report of NIHSA for planning? Truly, the flood is here in Rivers as it was in 2012 arising from the overflow of the Niger and its tributaries. Believing that the non-inclusion of River State in the first instance is not politically motivated, it is pertinent for strategic organization such as Nigeria Hydrological Services Agency to attach premium to data integrity and avoid improper and ambiguous terminologies in its scientific reports. It is germane for flood-prone states to have local government and state emergency management agencies to facilitate prompt emergency response by NEMA. As a professor, Akuro Gobo, posited in an interview, there must be collaboration between federal and state government in desilting the waterways as well as synergy by different professionals in engineering, environmental and Geo-sciences in the construction of road and drainages. Religious organizations such as churches and mosques must demonstrate love for humanity by leading in providing succor to flood affected persons. As Nigerians prepare for 2019 Presidential Elections the electorate must task politicians on what their political parties would do to address the challenge of flooding in the state. The time to act is now! (BARIDORN SIKA is a public affairs analyst)

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BUSINESS DAY

Thursday 08 November 2018

WWW creator tasks world leaders on web contract to address online violations FRANK ELEANYA, Lisbon

Google unveils AI functionalities to transform everyday life CALEB OJEWALE, Amsterdam

Public voting opens in $2mn Google Impact Challenge Nigeria CALEB OJEWALE

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

BUSINESS DAY

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Politics & Policy 2019: INEC, stakeholders lament increasing voter apathy …Commission says l.5million PVCs uncollected in Lagos Iniobong Iwok

head of the 2019 general election, the Independent National Electoral Commission (INEC) and other stakeholders have lamented the increasing voter apathy among Nigerians. Lagos State Resident Electoral Commissioner, Sam Olumekun, who made the observation at a stakeholders’ meeting held at the Lagos Chamber of Commerce, Alausa Ikeja, said that recent bye-elections conducted in the state by the commission witnessed alarming poor turnout of voters. Olumekun charged political parties in the state to sensitise their members on the need to participate in the electoral process, stressing that democracy would have no meaning without full citizens’ participation. “With 62 registered parties in Lagos State it has become necessary for stakeholders to

pay attention to the issue of voter education to enable their voter cast their votes correctly in next year’s election. “Equally, the impact of voter turnout would improve considerably. Since after the 2015 elections the Commission has conducted two bye-elections in lfako ljaye federal constituency held in December 2016 and Etiosa state constituency held in September both elections recorded abysmal turnout,” Olumekun said. Several stakeholders, who attended the event, equally blamed the increasing voter apathy in the country to poor governance over the years, stressing that the trend could be checked if government was more accountable and responsive to the electorate and INEC conduct a free and fair election. The state chairman of the Action Democratic Party (ADC), Uduak Achibong, stated that only 30 percent of

registered voters in the country often participate in elections in recent times, adding that the increased violence during elections in the country has participation. Meanwhile, the State Electoral Commissioner has disclosed that about 1.5 million Permanent Voter Cards (PVC’s) were yet-to-be collected in the state. Olumekun, who stated this in his address at the event, disclosed that the uncollected PVCs were the ones whose registration were carried out prior to the 2015 general election and in the recently concluded Continuous Voter Registration Exercise (CVR) in the state. The INEC Commissioner warned that the commission would not issue PVC on proxy, stressing that it was currently fine-turning measures to encourage the speedy collection of the PVC cards before next year’s general election in the state.

Imo 2019: N-APGA adopts Independent Democrats ...Ibe remains governorship candidate CHUKS OLUIGBO

he New All Progressives Grand Alliance (N-APGA) in Imo State has adopted Independent Democrats (ID) as the political party through which to prosecute the governorship and other elections in the state in 2019. N-APGA, which emerged as a pressure group within the All Progressives Grand Alliance (APGA) following the party’s bungled primary elections in October, said in a statement, Tuesday, that Independent Democrats would be the political vehicle to actualise its vision of liberating Imo State and creating a state independent of the open brigandage that has been the fate of traumatised Imo people over the recent years. “With the recent consensus gubernatorial mandate given to Ike C. Ibe by majority of N-APGA aspirants and

supported by the legislative aspirants and many leaders in New APGA, we have given our consent that he pursues his gubernatorial aspiration alongside our legislative aspirants under the banner of ID. Together, we shall succeed in not only bringing our dear Imo back to life, but set her once more on the path of the development we truly deserve,” said the statement signed by Chinedu Ukawuilu, media aide to Ike C. Ibe. “N-APGA remains a strong and potent force not only seeking the recovery of the APGA spirit but also the preservation of the independence of our people from the shackles of anti-democratic forces. We will not disappoint our people because we have all been traumatised. We must succeed. We will succeed. We have no other option but to succeed,” the statement said. Independent Democrats was registered as a political party by the Independent National Electoral Commission

(INEC) on August 16, 2013, alongside the People’s Democratic Movement (PDM). Confirming the development in a Facebook post on Tuesday, Ibe, who was elected the N-APGA consensus governorship candidate on October 23 in a meeting that had about 12 aggrieved APGA governorship aspirants in attendance, said despite the unfair treatment he and other aspirants received at the party’s primaries, the desire to bring true development to Imo State through people-oriented plans and programmes remains intact. “After serious prayers and political consultations, we have decided to continue the pursuit of our governorship campaign under the platform of Independent Democrats (ID). This decision was arrived at after considering so many factors, including the fact that majority of my colleagues in the guber race in APGA elected me as their consensus candidate.

Why we are erecting 21-storey property - Akwa Ibom commissioner ANIEFIOK UDONQUAK, Uyo

kwa Ibom government has given reasons why it is a 21-storey property in Uyo, the state capital saying it is to attract multinational oil companies to facilitate their relocation to the state. There have been several attempts to persuade oil com-

panies with operational bases in Akwa Ibom State to relocate to the state but they have often cited lack of facilities and absence of suitable property that would meet their standard. One of the oil companies, Mobil Producing Nigeria, the second largest oil producing company in the country has its base in Ibeno, Akwa Ibom State but maintains its corpo-

rate head office in Lagos. Akan Okon, commissioner for special duties and aviation development said in an interview in Uyo, the state capital that the state government decided to invest in the development of the 21-storey property to forestall excuses by oil companies that Akwa Ibom State does not have the required infrastructure.

Thursday 08 November 2018

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NNPC records $470m from crude oil, gas export sales - report HARRISON EDEH, Abuja

he Nigerian National Petroleum Corporation (NNPC) said crude oil and gas export sale by the corporation in August 2018 was $470 million, indicating an increase of about $78 million in relation to July oil and gas export figures of $391.91 million. NNPC Monthly Financial and Operations report for August 2018 released on Wednesday in Abuja by the corporation’s group general manager, group public affairs, Ndu Ughamadu, indicated that crude oil export sales contributed $337.62 million, representing 71.83 percent of the dollar transactions compared with $283.43 million contribution in the previous month. The report said export gas sales during the period amounted to $132.38 million, adding that the August 2017 to August 2018 crude oil and gas transactions involved crude oil and gas export worth $5.26 billion. It further explained that based on the above sales figures, a total export receipt of $450.24 million was recorded in August 2018 as

receipt against $382.65 million in July 2018. According to the report, the contribution from crude oil during the period amounted to $336.43 million, while gas and miscellaneous receipt stood at $101.33 million and $12.48 million, respectively. A further breakdown of the figures showed that out of the export receipts, $142.31 million was remitted to the Federation Account, while $307.93 million was remitted to fund the JV cost recovery for the month of August 2018 to guarantee current and future production. Total export crude oil and gas receipt for the period August 2017 to August 2018 stood at $5.23 billion out of which $3.74 billion was transferred to JV Cash Call as first line charge and the balance of $1.49 billion paid into the Federation Account. On naira payments to the Federation Account, the report informed that NNPC transferred N128.40 billion into the account for the month under review. It was also explained that from August 2017 to August 2018, the Federation and JV re-

ceived N879.02 billion and N651.4billion, respectively. Providing insight into the corporation’s remittances to the national treasury, the NNPC explained that the Federation Crude Oil and Gas Revenue, Federation Crude Oil and Gas lifting, were broadly classified into Equity Export and Domestic crude, which were lifted and marketed by the corporation and the proceeds remitted into the Federation Account. It informed further that Equity Export receipts, after adjusting for JV Cash Calls, were paid directly into the Federation Account domiciled in Central Bank of Nigeria (CBN). The corporation explained that domestic crude oil of 445,000bopd was allocated for refining to meet domestic products supply, and payments were effected to the Federation Account by NNPC after adjusting crude and product losses and pipeline repairs and management costs incurred during the period. The August 2018 NNPC Financial and Operations Report is the 37th in the series, the corporation’s report noted further.

33 NEWS

BUSINESS DAY

CBN reviews operations of indirect participants in payment system HOPE MOSES-ASHIKE

... issues exposure draft

entral Bank of Nigeria (CBN) on Tuesday issued exposure draft on the regulation for the operation of indirect participants in the payments system. The aim is to standardise the operations of ‘Indirect Participants’ in the payments

system, given their critical role in driving Financial Inclusion and in consideration of their operational risk. Indirect Participant in the payments system constitutes Merchant Banks, Primary Mortgage Banks (PMB), Micro-Finance Banks (MFBs), Development Finance Insti-

tutions, Mobile Money Operators and any other financial institutions as may be approved by the CBN. In a circular signed by Sam Okojere, director, payments system management department, the CBN expects comments from stakeholders to be forwarded in hard copy to the department on or before November 26, 2018.

Hausa-Fulani community begins biometric verification to fish out criminals ... lauds governor for commitment to peaceful coexistence

ausa-Fulani community in Edo State, led by the Sarkin Fulani, Muhammed Sossa, has commenced the biometric verification of its members in the state to fish out cattle rustlers and other criminals that hide in their community to perpetrate crimes. Sossa, who disclosed this at a courtesy visit to the state governor, Godwin Obaseki, at the Government House in Benin City, the state capital, said his group had been having meetings with security agencies in the state to ensure the Obaseki-led administration enjoyed the desired peace to deliver the dividends of democracy to the people. He commend-

ed the governor for the prevailing peaceful atmosphere in the state under his watch. “We have started the biometric verification of people in our communities to ascertain genuine businessmen and women in the state. The process will help us fish out bad elements,” the Sarkin Fulani said. In his remark, Governor Obaseki said his administration would continue to collaborate with the Hausa-Fulani community in the state to maintain peace and ensure that people were living harmoniously with one another. He commended the Sarkin Fulani for providing leadership among the Hausa-Fulani community in the state, especially

during trying times. “We need to sustain and build on the existing relationship to maintain the peace through information gathering and management,” the governor said. “We have set up committees at different local government areas to support in tackling crimes. We need to have a meeting to review the activities of these committees in all the local government areas. In reviewing their activities your contributions will be needed,” he said. He explained, “It is in the interest of the government to give the Sarkin Fulani all the support to help fish out the bad elements in the state. We will continue to collaborate with you to enjoy peace in the state.”

34 BUSINESS DAY NEWS Inside details of NNPC’s struggle to keep... Continued from page 1

Group Managing Director of the

NNPC, who reports only to the board of the NNPC, legally chaired by the Minister of Petroleum Resources. In this administration, the Group Managing Director of the NNPC is Maikanti Baru and the Minister of Petroleum Resources is President Muhammadu Buhari. Between them, they wield a powerful capacity to dish out political patronage in the oil and gas sector because of the control they have on who gets to participate in these oil- lifting contracts deals. Winning an oil lifting deal is seen as winning the ‘Nigerian lottery.’ Only the politically connected often do. The last set of winners announced for the crude oil lifting contracts had the names of ‘who is who’ in the oil and gas sector in the country as well as top players in the international oil and gas industry who are compelled to partner with the local players. A total of 50 companies were selected, including 20 local companies, and were given a mandate to lift a

combined total of 950,000 barrels of crude oil per day, which is approximately US$72 million of crude every day, or US$26 billion per annum. The deals covered a period of two years. The local companies, with each given the mandate to lift about 33,000 barrels of crude per day, include; Total, Oando, Masters Energy, Sahara Group and NNPC’s subsidiary, Duke Oil, MRS, Matrix Energy, Aipec, AMG, Arkleen, Augusta, Barbedos, BB Energy, Bono Energy, Calson, Cassiva, Cepsa, Cratos, Eterna Oil, Gladius Commodities, Hinstock, HPCL, Leighton, Levene, Litasco and Mocoh. Other companies include; Emadeb, a fast-growing Nigerian oil trader, AA Rano, North West, Ocean Bed (Sahara), Petraco, Petrogras, Propetrol, Prudent, Sacoil, SEER, Setana Energy, Setraco, Shoreline, Socar, Sonara, Ultimate Gas, Voyage, West African Gas, Zitts and Lords, ZR Energy (Trafigura) and Obat Oil & Gas. A good example of how political patronage takes pre-eminence in the oil-lifting contracts is seen in the DSDP contract signed by the NNPC on November 1, 2018 with BP and a local

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oil company, AYM Shafa. In announcing the deal, Maikanti Baru described AYM Shafa as a local company “with over 150 retail outlets, depots as well as a good network of trucks nationwide.” On its website, the company claims to have been “incorporated on 12th July, 1996 and licensed by the Department of Petroleum Resources (DPR) in 1998 to engage in the trading of Petroleum Products and Other Oil and Gas Services.” However, on the online database of the Corporate Affairs Commission (CAC), when BusinessDay searched for AYM Shafa, the only name that appeared was AYM Shafa Restaurant with RC number 2531187 with an office address at Number 1, Shafa filling station. It also showed that the company was registered on August 18, 2017. Other searches for AYM Shafa did not show up on the database, which could indicate that the company is either not registered or is the same one registered as a restaurant. However, Ndu Ughamadu, Group General Manager, Group Public Affairs Division told BusinessDay that AYM Shafa is a reputable player in the downstream oil and gas sector. “Have you not seen their filling

Kayode Fayemi (l), governor, Ekiti State, with Herbert Wigwe, group managing director/CEO, Access Bank plc, during a courtesy visit by the Access Bank management to the governor in Ado-Ekiti.

Telcos to form subsidiary platform for... Continued from page 1

Association of Licensed Telecom-

munications Operators of Nigeria (ALTON) told BusinessDay. Gbenga Adebayo, President of ALTON told BusinessDay in a telephone interview that the telecommunications industry is excited about this new policy guideline which allows Telco’s play in the agent banking space as it is strongly believed that they can contribute significantly to financial inclusion in Nigeria. Service Level Agreements (SLAs) and agent banking contracts have also been signed. “I can confirm to you that already, a number of our members are participating and a sub-committee has been formed to ensure that the CBN guidelines for the regulation of agent banking relationships in Nigeria are strictly adheredto,”AwonugatoldBusinessDay in a telephone conversation. The mobile operators had in September 2018 revealed their commitment to deepening financial inclusion and providing Nigerians with access to a range of affordable financial services. Current financial exclusion levels stand at over 40 percent. It is argued that the significant gap could be covered to meet Nigeria’s target of 20 percent financial exclusion by 2020 if Telco’s are allowed to access mobile

money licences directly under current guidelines and are given a level playing field as in the case of most Sub-Saharan African markets. Industry watchers however believe that it will take a while before the implementation of the agent banking policy, as wider stakeholders need to input before it is fully implemented. Also, the CBN guideline obligates that due diligence assessment be carried out on the subsidiary when formed. Section 5 which talks about suitability assessment of an agent states that the financial institution must ensure that the entity has an existing, well established commercial activity which has been operational for at least 12 months immediately preceding the date of the suitability assessment. Section 5.3 of the guideline states that “the financial institution (FI) shall establish efficient and thorough Agent Due Diligence procedures to mitigate risks. Sub section ii of the policy guideline further states that “the FI shall institute clear, well documented Agent Due Diligence policies and procedures. Minimum contents shall include, methods of identifying potential agents, initial due diligence, and regular due diligence checks to be performed at specified intervals and check list of early warning sig-

nals and corrective actions to ensure proactive agent management.” Olusola Teniola, President, Association of Telecommunications Companies of Nigeria (ATCON) told BusinessDay that; “We hope that the guidelines, though not comprehensive and exhaustive, will form a first step in the direction to increase financial inclusion. However, it must be stressed that agents offering money services do exist and that the Payment Services Banks will complement and supplement these agents,” he said. First Bank is one of the big players with an established Agency Banking network of about 11,794 agents which it plans to ramp up to 20,000 agents next year. First Bank currently does 5 million Agent Banking transactions a month valued of N84.3 billion, according to the bank. The banks agents banking points have also been upgraded to accommodate account openings, supported by First Banks over 700 branches and plans to soon offer micro-loans to customers. The bank has 6.3 million active USSD subscribers and it is also a channel that does some 60 million transactions a month valued at N300 billion. “We are working on positioning ourselves, whether it is Telco led model or otherwise,” a First Bank insider told BusinessDay.

•Continues online at www.businessdayonline.com

stations all over the place? The Department of Petroleum Resources has been dealing with AYM Shafa and we know this partnership will help sustain supply especially during the Yuletide. They may not have updated the data they sent to CAC but they are a reputable organisation,” Ughamadu said. In the new deal signed with AYM Shafa,whichisseparatefromtheexisting DSDPdealswithothercompanies,Baru said that AYM Shafa will account for 20 percentofNNPC’stotalPMSsupply.For the 12 months ending May 2018, NNPC supplied16.6billionlitresoffuelthrough the DSDP programme. This means that AYM Shafa could be supplying up 3.3 billion litres of PMS worth more than N663 billion (at an average landing cost of about N200 per litre) over the next 12 months to the NNPC. Sources have told BusinessDay that NNPC signed the deal with AYM Shafa after some of the current suppliers of PMS under the DSDP programme complained about the terms and conditions of the deal when the NNPC offered them an extension of their contract until June 2019. “The DSDP prices have left us deeply underwater, so no one has signed an extension agreement at these levels,” one of the DSDP suppliers is said to have complained. NNPC is said to be offering a group of suppliers, which includes Swiss Petrocam, Trafigura and Mocoh, ‘that for current specification 1,500 parts per million sulfur gasoline it will pay a premium of $12 per metric ton to Rotterdam barges for winter, now defined as October to February. For the summer season, it is willing to pay barges minus $5/ton’ while at the same time, as with last year, it continues to offer different prices to different groups (IOD May22’17). Sahara and Oando are being offered $3/ton more than the trio above, while Vitol and Total are offered $2/ ton less according to an Energy Intelligence report by International Oil Daily, seen by BusinessDay. It is understood that the NNPC has refused to allow prices to adjust despite an increase in the price of refined petroleum products in the international markets. The result is that those holding current DSDP contracts are refusing to supply. Sources have told BusinessDay that the NNPC is refusing to raise prices because it is running out of money to sustain the subsidy. It is understood that the corporation has sometimes had to take part of federation crude to support its subsidy schemes, and this often translates into lower remittances into the federation account which the state governors often complain about. “Right now, their January supply is hanging on the ropes. And even though prices have fallen, NNPC could find suppliers defaulting or pushing for distillate allocations instead,” Gary Still, executive director of African downstream consultancy Citac is quoted to have told International Oil Daily. NNPC is said to opt for so-called “intervention” cargoes, which carry a higher price tag than the DSDPs, when faced with potential shortfall in supplies from its regular DSDP suppliers. The corporation reportedly paid ‘$35-$42/ton over barges for spot cargoes to be delivered in January.’ NNPC is doing everything to sustain cheap fuel because the federal government cannot afford to allow petrol prices rise in a pre-election year. The AYM Shafa deal is seen to have been done to boost supply ahead of an election period when the NNPC cannot afford shortfalls in supply. It is not clear at what price NNPC is doing the deal but players in the oil and gas industry believe that NNPC could be paying a higher premium since it is a deal being done outside the regular contracts. Oil industry sources have also ques-

Thursday 08 November 2018

tioned why the NNPC will enter an oil supplydealoutsidetheonethatwaswell advertised. It is not clear on what basis AYM Shafa and BP were selected in the new deal and what duration of contract has been given to the company. Already, the National Assembly is raising questions about the source of funds that the NNPC is using to oil its supply of cheap fuel to Nigerians throughtheDSDPprogramme.Analyst estimate that the landing cost of PMS in the country is about N200 equivalent but the NNPC is able to sell it to Nigerians at N145 per litre. The NNPC calls the difference ‘Under-recovery.’ According to NNPC May monthly report, from May 2017 to May 2018, it reported an Under-recovery of N390 billion, while from January 2018 to May 2018 it recorded an Underrecovery of N301 billion, an average of N60.1 billion a month. While the NNPC claims it has set aside only a US$1.05 billion fund that it withdraws from to fund this under recovery, the Senate insists that the figure is around $3.5 billion. The NNPC math does not add up as the under recovery incurred in the 12-month period to May 2018 is already more than the US$1.05 billion fund they claim to have set aside. Wumi Iledare, a Professor and President of the Nigerian Association for Energy Economics said the calculation of how NNPC funds Under-recovery is complicated because there is no transparency and accountability in the sector. “It is not whether the figures are adding up or not, the major question we should be asking is why have they used the dividends from NLNG without appropriation from the National Assembly?” Iledare asked. NNPC claims the $1.05 billion ‘under recovery fund’ was sourced from dividend accruals to it from its investment in the NLNG Limited in which NNPC holds a 49 per cent stake, while Shell; Total; and ENI hold 25.6 per cent, 15 per cent and 10.4 per cent shares in the liquefied natural gas business respectively. “It means they are spending government money on behalf of the government because the Federation account is the Board of Trustee (BOT) of the NLNG funds so why should NNPC waste money on subsidy funds when the country’s social infrastructure is in bad state?” Iledare asked again. Luqman Agboola Head of energy and infrastructures at Sofidam Capital limited said all the money generated from crude sales that NNPC was supposed to remit into the federation account is being pinched to take care of subsidies. “In its own monthly record, most of its subsidiaries are running at a loss so how have they been plugging those negatives or funding those losses?” Agboola told BusinessDay. “You can’t be a regulator or an arbitratorandstillwanttoremainacompetitoratthesametime;othergovernment agencies like Department of petroleum Resources (DPR) and PPPRA who should checkmate the NNPC are also quiet because just one man controls all the agencies,” Agboola said. Nigeria is largely dependent on imported fuel because it has been unable to make its three refineries with a nameplate capacity of about 445,000 barrels per day to work. The refineries have a combined capacity utilization of less than 20 percent and have been making losses for more than two decades. Industry players also believe private investors would not come in to establish refineries as long as there is subsidy or under-recovery as the federal government prefers to call it. At the inception of the Buhari administration in 2015, Ibe Kachikwu, Minister State for Petroleum Resources had promised to revamp the refineries in 90 days.

Thursday 08 November 2018

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35 NEWS

BUSINESS DAY

NDIC to pay insurance coverage to failed 154 MFBs, 6 PMBs soon HOPE MOSES-ASHIKE

he Nigeria Deposit Insurance Corporation (NDIC) will soon commence the payment of insurance coverage to verified depositors of 154 failed microfinance banks (MFBs) and six primary mortgage banks (PMBs) in fulfilment of its core mandate. Umar Ibrahim, managing director/CEO, who disclosed this in Lagos at the Corporation’s special day at the ongoing Lagos International Trade Fair, said the corporation had commenced verification of insured depositors. The CBN recently revoked the licences of 154 MFBs and six PMBs due to their insolvency. The action became necessary due to erosion of their capital base, poor liquidity, inept management, as well as some insiders helping themselves with loans they never intend to pay back, and further worsened by boisterous life style of management that remained at variance with the

philosophy of microfinance banking operations. “From the record obtained so far, majority of the depositors, especially in the MFBs, have less than N200,000 in their accounts, which implied that the NDIC will hopefully cover 100 percent of the deposited funds in the MFBs,” Ibrahim said. He said the Corporation would continue to work closely with the CBN to ensure effective supervision of the banks so as to ensure strict adherence to rules and regulations guiding banking operations. This is with a view to protect depositors in the domestic financial system against fragrant disregard of extant rules by management of financial institutions in terms of stalling the occurrence of unlawful insiders’ dealings, weak internal control and overall non-compliance to prudential guidelines. The NDIC, in collaboration with other stakeholders, will continue to promote good corporate governance in the nation’s banking system.

Senate probes alleged corruption in NHIS OWEDE AGBAJILEKE, Abuja

he Senate on Wednesday directed its joint committees on Primary Health Care and Communicable Diseases to investigate allegations of corruption in the National Health Insurance Scheme (NHIS) and the National Primary Health Care Development Agency (NPHCDA). Specifically, it asked the panel to carry out thorough investigation into the matter and other infractions and report back within two weeks. The resolution was sequel to a motion on the growing crises in the two agencies sponsored by Mao Ohuabunwa (PDP, Abia State) at plenary. Presenting the motion, Ohuabunwa informed the Senate, “Major crises have

been brewing at the NHIS over allegations of high-handedness, budget distortion, fraudulent cost manipulation, illegal investments and unprofessional manipulation of the human resources of the agency.” He said all these issues had pitched the management of NHIS against its employees and the governing board, noting that this had been jeopardising the interests of the general public. The lawmaker lamented that same situation was also applicable in the NPHCDA where the executive director had been accused of highhandedness, reckless spending in the purchase of unwanted vehicles, intimidation and unwarranted transfer of senior staff members without regards to due process.

L-R: Apekhade Idogho, chief marketing officer, Renmoney; Leo Stan Ekeh, founder, Zinox Computers; Stephen Jennings, founder, Renmoney; Oluwatobi Boshoro, CEO, Renmoney, and Kieran Donnelly, executive chairman, Renmoney at the official commissioning of the new Renmoney corporate headquarters in Lagos, yesterday. Pic by Pius Okeosisi

Minimum wage: Governors will pay what’s affordable - NGF’s spokesman … as Atiku blasts Presidency for denying Buhari’s pledge to pay N30,000 JOSHUA BASSEY & INNOCENT ODOH

he Nigerian governors are not certain to pay N30,000 minimum wage if approved by the Presidency. Abdulrazaque Bello-Barkinde, head, media and public affairs of the Nigerian Governors’ Forum (NGF), stated this position on a live interview monitored on Channels Television, in Lagos. According to Bello-Barkinde, the governors are ready to shift ground from the initial N22,500 agreed to in their last meeting, but not a figure around N30,000 submitted to President Muhammadu Buhari by the national minimum wage tripartite committee, on Tuesday. Bello-Barkinde, who said the NGF would be meeting

this month to deliberate on the issue, insisted that payment of any minimum wage was dependent on the resources available to each state. “There is no how all the states will pay N30,000 because the tripartite committee says so. The governors have made it clear that they can deplore 50 percent of their resources to payment of salaries while the remaining 50 percent will be committed to other areas. “The labour is making the governors look scandalous, as people who are not interested in the welfare of Nigerians, and this is not going to help their cause,” Bello-Barkinde said. Each state will pay what it can afford. Not all states have the same revenues, and so the governors will not be bullied into paying what is not affordable.

However, Emmanuel Ugboaja, head, department of international and industrial relations of the Nigeria Labour Congress (NLC), said the governors would have no choice but to pay any amount signed into law as a new minimum wage. Uboaja, who also spoke on Channels Television’s Sunrise Daily, on Wednesday, argued: “The issue of national minimum wage is an Act of Parliament. It is not a Father Christmas gift from governors. Once it becomes a law, it becomes legally binding on employers in the formal sector and government to pay.” Ugboaja added that the minimum wage Act provided for how and when it was to be reviewed. Conversely, in a twist of event, former Vice President/ presidential candidate of the

People’s Democratic Party (PDP), Atiku Abubakar, has condemned the Presidency over their statement that denied earlier pledge by President Buhari to pay the new N30,000 minimum wage. A statement issued on Wednesday by the Atiku Presidential Campaign Organisation, said, “Our attention has been drawn to a statement from the Presidency denying President Buhari’s earlier pledge to pay the new minimum wage of N30,000 agreed with the Nigerian Labour Congress and other labour affiliates in a signed communiqué.” Atiku lamented that this approbation and reprobation was characteristic of the Buhari administration and was evidence of the lack of leadership at the very top, putting our economy in peril.

Senate takes N242bn from power, water, education ministries to fund 2019 budget Senate probes alleged diversion of Special Intervention fund for Buhari’s re-election OWEDE AGBAJILEKE, Abuja

hree months to the 2019 general elections, Nigeria is still battling with the funds to be used in conducting the exercise. Although both chambers of the National Assembly approved the virement/ supplementary budget for the Independent National Electoral Commission (INEC) and security agencies for the INEC budget on October 17, 2018, lawmakers rescinded their approval on Wednesday and changed the sources of funding the poll. In a motion moved by Danjuma Goje (APC, Gombe) and co-sponsored by 18 others, the Senate changed the source of fund-

ing the budget from solely Service Wide Vote and deducted across 30 ministries, departments and agencies (MDAs). Specifically, the Senate resolved that 50 percent of the N242 billion election budget (representing N121bn) be deducted from Service Wide Vote while the other 50 percent be slashed from the affected MDAs. Consequently, the Ministry of Power, Housing and Works was the biggest casualty as it lost a whooping N25.5 billion of its N714.6 billion 2018 budget to election budget. The ministry is now left with N689.1 billion. Other affected federal ministries are: Water Resources, which is to forfeit N12.9 billion; Agriculture and Rural Development

N11.05 billion; Education N10.2 billion, Science and Technology N7.4 billion, Trade and Investment N7.08 billion, among others. Deduction from the Education Ministry is coming at a time Nigerian university lecturers on the aegis of Academic Staff Union of Universities (ASUU) are currently on indefinite strike over government’s poor funding of public universities. While the sole recommendation of the Goje-led committee was unanimously adopted, an additional prayer was adopted to allow Senate Committee on Police Affairs investigate how the Nigeria Police Force had utilised previous allocation for election purposes in the 2011 and 2015 general elections.

OWEDE AGBAJILEKE, Abuja

he Senate has commenced investigation into an allegation that the Special Intervention Programme of the present administration is being diverted to fund President Muhammadu Buhari’s re-election bid. The ad-hoc committee is also mandated to investigate the application of the Subsidy Reinvestment and Empowerment-Programme (SURE-P) of the immediate past administration of Goodluck Jonathan. This followed a motion by the Senate minority leader, Biodun Olujimi (PDP, Ekiti State). She claimed that the money might have been diverted to promote President Buhari currently

seeking re-election in the 2019 presidential election. According to Olujimi, the funds are being used for votes buying for the President. She said officials disbursing the fund - meant for ordinary Nigerians - were circulating forms on which potential beneficiaries were asked to provide their data, including details of their Permanent Voters Card (PVC). The cards are designed specifically for accreditation of eligible voters on election day. The PDP senator said such forms were accompanied by another from Access Bank containing details of payment; displayed the two forms to back up her claims. She said: “One of the forms is here with me and it is being disbursed by the spe-

cial intervention body. They are now using the fund that is meant for all Nigerians for political reasons.” However, the motion was opposed by Senate majority leader, Ahmad Lawan, who insisted that the funds had been judiciously utilised. The session became rowdy for more than 20 minutes, as the Senate president, Bukola Saraki, found it difficult to control the situation. While APC senators insisted that the panel be asked to probe SUREP, members of PDP in the legislative chamber maintained that the SIP had been politicised. As of the time of filing this report, Saraki is yet to announce the names of members of the ad-hoc committee.

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Oil rises to $73 on report of Russia, Saudi output cut talks STEPHEN ONYEKWELU with agency report

il rebounded to $73 a barrel on Wednesday after falling to its lowest since August, supported by a report that Russia and Saudi Arabia are discussing oil output cuts in 2019. Russia’s TASS news agency, citing an unnamed source, reported that the two countries, the biggest producers in an Organisation of Petroleum Exporting Countries (OPEC)-led alliance that has been limiting supply since 2017, have started bilateral talks on the issue. Futures in New York gained 0.6 percent. Ministers from OPEC gathering in Abu Dhabi this weekend will discuss options for 2019 including the scenario of supply curbs, delegates said.

That would mark an abrupt end to six months of output increases, reflecting the prospect that US sanctions on Iran won’t be deep enough to prevent another surge of American shale oil creating a new surplus. “I think this is a little bit of verbal intervention, trying to get some speculative length back into the market,” analyst Olivier Jakob of Petromatrix, said, saying, “The global supply and demand balance does not look very tight next year.” Supply concerns that drove crude to a four-year high last month have faded on speculation President Donald Trump’s administration will soften the blow of its sanctions on Iran to lower pump prices at home. OPEC, led by Saudi Arabia, also pledged to offset any supply gaps, while the US has forecast that its own oil output

will increase at a record pace this year. “The Saudis want to stop the price decay,” Giovanni Staunovo, an analyst at UBS Group AG in Zurich said. “There are many moving variables until the OPEC meeting in December, like Iran and U.S. production growth. But as the Saudis say they aim for market stability, if the data suggests an oversupplied market next year the probability of a cut is high.” Brent crude LCOc1, the global benchmark, rose 91 cents to $73.04 a barrel by 1304 GMT. The contract hit $71.18 on Tuesday, its lowest since August 16. US crude CLc1 rose 58 cents to $62.79. While Iranian oil exports are expected to fall because of U.S. sanctions that took effect on October 5, reports from OPEC and other forecasters have indicated that the global market could see

CBN to create non-interest window for development financing interventions HOPE MOSES-ASHIKE

a 2019 supply surplus as demand slows. A ministerial committee of some Organisation of the Petroleum Exporting Countries members and allies, including Russia and Saudi Arabia, is due to meet on Sunday in Abu Dhabi to discuss the market and outlook for 2019. Any return to limiting supply would follow a June decision by the OPEC-led group to relax output curbs in place since 2017, after pressure from US President Donald Trump to cool prices and make up for losses from Iran. Supply from countries such as Saudi Arabia has risen sharply since June. In addition, having initially talked of cutting Iranian oil shipments to zero, Washington gave waivers to eight customers, raising the prospect of more Iranian oil in the market than expected.

R-L: Vice President Yemi Osinbajo; Akinwunmi Ambode, governor, Lagos State, and Babajide Sanwo-Olu, APC governorship candidate in Lagos State, receiving the Vice President, at Presidential Lounge of Murtala Mohammed Airport, Lagos

Ebonyi boosts SME operations with N4bn soft loans TELIAT SULE

mall and medium enterprises (SMEs) in Ebonyi State recently heaved a sigh of relief following the disbursement of N4 billion soft loans to entrepreneurs in the state by the state governor, David Nweze Umahi. The disclosure was made during the Ebonyi Day at the ongoing 32nd Lagos International Trade Fair at Tafawa Balewa Square (TBS) in Lagos. In his address, Governor Umahi, who was represented by the commissioner for commerce and industry, Ugo Nnachi, rolled out the different projects the administration in the state had done that had so far made the state an investor’s haven.

The event also had in attendance, the president of Lagos Chambers of Commerce and Industry, Babatunde Ruwase, the permanent secretary, Ebonyi State Ministry of Commerce and Industry, and Valentine Okike-Uzo, a member from Ebonyi State House of Assembly. “Following the premium posture of placing industrialisation and commercialisation of Ebonyi State on the world map, His Excellency, Governor David Umahi radically and boldly opened up the state to an international level; make it an economically viable state, conducive for foreign and local investors; a cosmopolitan state where everybody would happily and freely carry out his or her legitimate trades.

“The Salt of the Nation is a major and lucrative city and a strategic in-road into the Central African markets, thus giving a good exposure to the state’s major crops, natural and minerals resources, including the very lucrative numerous tourist and hospitality centres, infrastructural developments and general services, ultimately attesting to the industrial and commercial readiness of the state,” the state said through notes distributed to stakeholders at the event. The Ebonyi government further justified why the state was ready for business, indicating factors such as pro-business policies, dynamic and vibrant business environment and the proximity to Akanu Ibiam

A1 NEWS

BUSINESS DAY

International Airport Enugu, which makes Ebonyi readily accessible to local and international investors. According to Ugo Nnachi, the Abakaliki International Ultra Modern Market located along the Ogoja highway stands out as one of the major achievements of the current administration in the state. The complex has about 7,000 lock-up shops, 15 storey buildings, trade centres and banks. Others are the Ebonyi State Pipes Production Company, which produces according to global standards; Ebonyi State incubation centres, among others. “The strategic thrust of agriculture in the state is anchored on three pillars-professionalism, mechanisation and commercialisation.

s part of efforts towards achieving the financial inclusion target of 80 percent by 2020, the Central Bank of Nigerian (CBN) is working toward the creation of a noninterest window for development financing interventions. This will assimilate a large section of the population excluded due to their aversion for interest and interest-based products, into the financial system. Godwin Emefiele, governor, CBN, said this while delivering a keynote address at EFInA’S 10th year anniversary held in Lagos. Represented by Osita Nwanisobi, deputy director, development finance department, CBN, Emefiele reaffirmed the bank’s commitment to sustaining collaboration with other relevant stakeholders, including government ministries, departments and agencies (MDAs) and development partners, to drive the financial inclusion in Nigeria to its logical conclusion. “Let me also thank you all for the support so far extended and kindly remind you that increased collaboration should be a motivation for MDAs to demonstrate greater commitment,” he said. This, he said, will demand an appropriate structuring of public sector priorities to ensure inter-MDA synergy and the optimisation of public resources for the implementation of the revised Financial Inclusion Strategy. “We are poised as a bank to

ensure that we reach the target of 20 percent exclusion rate by 2020,” he said. He said this will be supported by massive agent roll out under the Shared Agent Network Expansion Facility, implementation of the approved national identity management framework as well as the micro-insurance and micro-pension services, collective investment schemes and extensive collaborative programmes with government and development partners, amongst others. The CBN governor reiterate that there is still much to be done, if “we are to achieve our target of 20 percent exclusion rate by 2020. I am optimistic that this can still be achieved with the recent policy measures we have taken”. Emefiele outlined five priorities that emerge from the recent review of the Strategy as most crucial to increasing financial inclusion in Nigeria in future years. These include creating a conducive environment for the expansion of digital financial service, supporting the rapid growth of agent networks with nationwide reach, and addressing KYC hurdles to opening and operating a bank account, among others. Prior to the introduction of the Nigeria Financial Inclusion Strategy, the CBN had implemented various policies and programmes targeted at enhancing financial access to a large share of economically active Nigerians as well as integrating citizens into the mainstream financial system.

Nosak Group partners Edo on jobs creation

osak Group, a Nigerian Industrial Conglomerate with diversified interests in the Nigerian economy, over the weekend, hosted a team of Edo State Govt officials led by the Secretary to Edo State Govt, Osarodion Ogie. The Chairman of Nosak Group, Toni Ogunbor, took the officials of Edo state on a facility tour of the company’s business outlets in Apapa and Amuwo Odofin local government. The facilities include Nosak Farm Produce Ltd, Nosak Distillers Ltd and Grand Petroleum Ltd. The company offers services in various sectors of the economy which includes: retails, manufacturing, logistics, finance, agriculture, haulage, real estate and petroleum. Speaking during the tour, the Chairman of Nosak Group stated that the company is seeking partnership with the Govt of Edo State in the area of investment. The company intends to open some business offices in Edo State as a way of supporting the Edo State Govt in the area of job creation. With unemployment rate rising in the country, Nosak Group hopes to play its own part by replicating its successful business venture in Lagos to Edo state.

Speaking further, Ogunbor stated that Nosak Group has a total direct investment of about N30 billion, mostly in Lagos and partly in Edo state. In his words “In the past three years, the Group has finetuned its investment strategy and wants to focus more on the agro allied sector”. Consequently, the Group has chosen to rapidly grow three of its subsidiaries: Nosak Farm Produce Limited – Palm Oil Plantation, Milling and Refining, Saturn Farms Limited – Palm Oil Plantation and Milling and Premier Plantations Limited/ Nosak Distillers Limited – Cassava Plantation and Conversion to ethanol. On the projects being undertaking by Nosak Group, Ogunbor stated that it requires land for plantations. According to him, “Nosak Group has negotiated with three communities for land leases and crop compensation at mutually agreed terms. They are: Obagie Community - 10,000 hecters, Igieduma Community – 7,000 hecters and Evbueghae in Orhionmwon local government – 5,000 hecters”. He further stated that the leases are for about 60 years and the businesses that will be located in the communities will bring development closer to the people.

A2 BUSINESS DAY Financial Inclusion

& INNOVATION

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Thursday 08 November 2018

Supported by:

Balancing KYC with need to accelerate inclusion LOLADE AKINMURELE

ne of the quandaries at the heart of the financial inclusion agenda is how to approach the issue of the standard Know Your Customer (KYC) requirements for customers at the bottom of the pyramid. Wherever you look in the world, not just in Nigeria, there is a level of resistance and distrust in the ‘system’ amongst the poorest communities that acts as a block to registration. The most vulnerable more often than not, struggle to provide the documentation required. In recognition of the ne e d to make it easier for these groups to access banking, or mobile money services, the CBN introduced what it calls ‘tiered KYC’ in early 2013, designed to reduce KYC requirements for the most basic accounts. The transaction limits and deposit allowances on these accounts have evolved over the years but the basic KYC rules have not. The current guidelines are summarised in the box below. These tiers make perfect sense. At the entry level, the KYC requirement for account opening is simply your name, and your telephone number, with the telephone number being the unique identifier. If a customer graduates beyond a cumulative balance of N300,000 then they are required to do partial KYC, and

if they move above N1 million then they are required to do full KYC. The point being that as you become more active, the system needs to know more about you, and so the requirements increase. The limits are kept to a level that means abuse of the system will have limited effect. This line, between easy access and the ability to prevent manipulation, is the balancing act the regulator has to tread. But, in 2015, and as part of the solution to a wider problem that Nigeria faces, the lack of a national identity system, the Central Bank began to roll out the BVN number for all bank customers. Issuance of a BVN requires that you have a valid ID. Either an international passport, national ID card,

drivers licence, or other valid means of identification. You must also provide a photograph and biometric data, and complete a form with your personal information including your personal address and your National Identity Number (if you have one yet). Identity, and the ability to identify Nigerians with a unique number of some kind (whether BVN, NIN or another) has been a core challenge for years, and it must be solved. The question is, what is the most effective way to do this? If we require a BVN and NIN number prior to opening the most basic bank accounts, how much of an impediment will this be on the wider objective to accelerate financial inclusion?

The BVN was introduced to enhance the growth of etransactions in the economy even as it reduces the associated risk of fraud, making it one of the most important innovations in the Nigerian financial system. However its enforcement needs to be balanced against the economic imperative to increase financial inclusion and the existing initiatives, such as tiered KYC, which have been put in place to achieve that. There are currently 35 million registered BVNs in Nigeria (NIBSS October 2014) versus 68 million unbanked adults (World Bank Global Findex Database report 2017), a ratio of roughly 1:2. Innovative measures and flexible regulatory environment are

required to close this gap. The Central Bank has made significant progress on the road to increasing financial inclusion. Tiered KYC was one of the first steps in the right direction, followed by other innovations like mobile money and agent banking licensees. However the financial inclusion target of 80% by 2020 is still a distance off and payments banks licenses have now been introduced to further accelerate the process. Insisting on BVNs for Tier I accounts (for which an important check already exists in the form of transaction and cumulative balance limits) immediately raises the question of how the registration process for this category

of account holders, and especially those in the rural areas, will be achieved. Banks are expected to address this problem, and considering the capital intensive nature of BVN registration, especially the biometric capture, it is reasonable to apply a moratorium of two to three years on the enforcement of the BVN requirement for Tier 1 accounts operated by these banks, allowing them time to establish trust with the intended customers. A contrary position which immediately enforces BVNs for Tier 1 accounts, risks making it significantly more difficult for banks to expand their customer base, and ultimately reversing the progress made towards achieving financial inclusion.

illustrates the potential for cross-industry collaboration for establishing harmonised identification systems as a financial inclusion driver. In Kenya, the Integrated Population Registry Service (IPRS) was established to mitigate the challenge of identity as a barrier to inclusion, risks of identity theft and fraud, for the verification and crosschecking. A National Digital Registry system was built on the pre-existing IPRS[6] and aimed at facilitating data sharing amongst institutions and industries. Kenya’s M-Pesa – a leading national mobile money transfer, financing and micro-financing service – made use of photo registration systems on mobile devices to create a database of its 28 million customers, in an effort to establish a digital database for the organisation. However, what is critical is that the verification of these

individuals’ identities is conducted through a link to the government’s IPRS.[7] As rural network coverage increases, and mobile phones and tariffs become more affordable, the mobile industry is expected to contribute extensively to the implementation of digital identity systems. The power of efficient and inclusive identification systems do not only drive inclusion, but in some cases, accelerate the process. However, what these global examples further highlight is how well these digital systems are strengthened by a supportive national identity system. Without any attempts to merge or synchronise efforts, we may find ourselves slowing the process to a financiallyincluded Nigeria down.

Identification: A barrier to financial inclusion Usoro Usoro

critical aspect of introducing new entrants to the Nigerian financial system requires an established confirmation of their identities. The primary purpose of identity requirements in this process is to manage AML/CFT issues (Anti-Money Laundering / Counter Financing of Terrorism); it also helps to check fraud, prevent identity theft, and ensure the safety of deposited funds. However, this presents a significant challenge for achieving financial inclusion, as majority of these unbanked Nigerians lack any formal means of identification. This introduces both a barrier to entry for customers without a means if identification as well as the cost to service for providers of financial services.

In 2013, the Central Bank of Nigeria (CBN) revised the Know-Your-Customer (KYC) policy to include multiple tiers. Now, with customer accounts divided into three categories – low-, medium- and high-value accounts – identification and account use requirements vary according to socio-economic statuses.[1] To further strengthen this policy, and to prevent an increase in money laundering and financial terrorism activities, the Bank Verification Number (BVN) was introduced in 2014. The BVN is a single numerical identity assigned to every account owner within the national financial system using biometric information. It therefore provides a formal means of identification for the unbanked to be included in the financial system.[2]This, combined with the removal of a minimum deposit amount for socially- and financially-

disadvantaged Nigerians, makes the process of financial inclusion easier and more attractive for these individuals. These efforts at countering identification challenges, while increasingly accommodating, still lack the holistic approach required. The most critical issue with establishing a new structure of capturing national identities is the lack of harmonisation with preexisting identity management initiatives. The National Identity Management Commission (NIMC) was established by the Nigerian government in 2007 to create and manage a national identity database for Nigerians. The process of identity registration has been underway for years now, albeit with occasional stalls in progress, but remains separate from the BVN registration process, and the customer registration process of telecommunication companies,

thus creating the potential for information inaccuracy. The Indian model presents a much stronger example of identification efforts as a measure for increased inclusion. In 2014, the government established a plan to provide all residents with unique biometric-linked identity numbers – the Aadhaar. This electronic ID initiative and efforts at digital financial inclusion are further strengthened by the government’s directive to switch social transfer payments from cash to electronic payments.[3]As a result of this model, the country has been able to register over 1.2 billion identities, and more than three-quarters of new bank accounts in three Indian states were linked to the Aadhaar.[4] Furthermore, this this Aadhaar is also be linked to mobile numbers, which enhances easier access to digital payments systems[5] and

Usoro Usoro is the General Manager for Mobile Financial Services at MTN Nigeria.

Thursday 08 November 2018

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Financial Inclusion

& INNOVATION

BUSINESS DAY

Supported by:

Banking the underbanked: Formal vs informal, does it matter? Banking the underbanked requires collaborative interventions from formal, informal industries Olayinka David-West and Ibukun Taiwo

ollaborative interventions and solutions hold the key to banking the underbanked. In this article, we explore ways in which this underbanked segment, which consists of millions of people, could be rapidly moved into the formal financial service ecosystem in a relatively short time. The financial inclusion discourse revolves around three customer segments, namely the banked, the unbanked and the underbanked. The banked segment refers to consumers with bank accounts or digital wallets in deposit money (or microfinance) banks and mobile money operators respectively. The unbanked segment refers to consumers without a bank account or digital wallet who conduct all their financial transactions independently. The underbanked segment, which is the focus of this article, refers to financial service consumers who use informal and unregulated financial services provided by savings groups (like the Alajos and Esusu) and cooperatives. It could also refer to

consumers who may have a bank account to their name, but rarely if ever, use it, opting to empty their accounts once they receive any funds in them. EFinA’s 2016 Access to Finance Survey pegs the number of these underbanked adults at about 9 million. These 9 million people are low hanging fruit for financial inclusion efforts, provided the formal financial service industry can explore interventions and solutions for the informal financial service sector which would enable them to deliver their services better. How? First of all, most, if not all, consumers in the underbanked segment are already banked by proxy. Everytime they opt to save with a local savings group or cooperative, their funds eventually end up within the formal financial service ecosystem, usually via the cooperative’s bank account. Secondly, banks have been known to develop and deploy solutions which help their customers do business better within different industries education, engineering, oil and gas, and so on, as well as bring in more deposits. However, we are yet to witness key solutions specifically targeting the informal financial service industry.

This is a big opportunity for both formal and informal providers and creates exciting possibilities for financial inclusion. The informal financial service sector is a 9 million customer market, currently being served by diverse and unregulated financial service providers. We have informal savings clubs and cooperatives who have carved out a niche for themselves, targeting select groups and individuals. There’s also the rotating savings clubs that are near ubiquitous among Nigerian

market traders. Then the local creditors and loan sharks. For several reasons, these informal providers are attractive to a lot of people, especially people who operate majorly within the informal economy (which is estimated to constitute about 60 percent of the entire Nigerian economy according to the International Monetary Fund). The informal financial services sector would be a lucrative vertical for the formal financial service sector because these informal providers have

done a lot of the heavy lifting of financial inclusion. They have the networks, the market knowledge, the customer base and a system that works. Through collaboration and partnerships, formal providers can leverage these strengths and resources, towards a common goal. For example, a program led by CARE International across sub-Saharan Africa with over 5,000 informal savings groups provided linkages to banks while supporting the development of products that met the needs of the group members. These partnerships enhanced the benefits of the informal providers and reduced their risks while helping thousands of women attain greater financial security and access other financial services including insurance, mobile banking and others. In Ghana, Tanzania and Zambia, Savings at the Frontier (SatF), a multi-year partnership between Mastercard Foundation and Oxford Policy Management, helps formal financial service providers to find ways to link with informal savings mechanisms (ISMs) in a mutually beneficial partnership that leads to better service delivery to consumers. By joining forces, actors within the two ecosystems

have been able to reach more customers and provide better products and services to them. At the end of the day, financial inclusion is advanced while creating winwin partnerships. Evidence has shown that financial inclusion requires significant collaboration between all ecosystem actors. The burden of driving financial inclusion cannot be borne solely either by the formal or the informal sector, due to their respective weaknesses and blind spots. However, through collaboration, these weaknesses and blind spots can be mitigated. There’s a school of thought that says banking will change through collaboration and not just the disruptive power of fintechs. We agree, especially where the underbanked are concerned. Collaboration would be a more optimal needle moving strategy. In fact, the evolution of Nigeria’s financial service industry rests on how fast or how soon the two ecosystems - the formal and informal - can foster collaborative relationships. Olayinka David-West and Ibukun Taiwo are members of the Sustainable and Inclusive Digital Financial Services initiative of the Lagos Business School

sion in Nigeria. “Financial inclusion is on the rise globally, accelerated by mobile phones and the internet, but gains have been uneven across countries,” the World Bank said in a statement. According to the report Nigerian adults who have bank accounts reduced by 5 percentage points from 49 percent in 2014 to 44 percent in 2017. While the financial inclusion gap between the banked male and female also widened in the period from 20 percentage points in 2014 to 24 percentage points in 2017. This is despite the efforts by the country’s apex bank to include about 80 percent of the country’s population by the year 2020. The impediments to achieving the set target are ascribed by CBN to economic constraints, insecurity issues in the north-

ern part of Nigeria, obsolete strategies, among others Although, in a key note address by Godwin Emefiele, the CBN governor who was represented by Osita Nwanisobi, the Deputy Director, Development Finance department of CBN, at the EFInA conference, he said “the set 20 percent exclusion target is still achievable.” On how the target will be attained Nwanisobi said “what we want to do to include more Nigerians into the financial sector, especially through the shared agent network facility and the whole essence of that to incentivizes and allow some of these super-agent and mobile money to roll out agent network across 774 local governments in Nigeria and the whole essence is to see how we can bring in more stakeholders into the space.”

India points way for financial inclusion in Nigeria ...as Indian expert urges FG to fix power, KYC, payment system platform Endurance Okafor

igeria has a worthy role model in India if it must boost financial

inclusion. Bridging the country’s wide financial exclusion rate lies is dependent on four factors, according to Manoj Sharma, Managing Director of MicroSave, a financial inclusion consulting firm. “There are four things Nigeria needs to work on to increase financial inclusion rate, first one is digital platform, and this could be working on identity because right now there are quite a number of identities that exist, so only if they create it into one,” Sharma told BusinessDay. This was disclosed at the just concluded 2018 EFInA financial inclusion confer-

ence with the theme; The Business case for Financial Inclusion where the industry expert, Sharma was a key note speaker who delivered a presentation on the topic; Financial Inclusion In IndiaKey Lessons. Meanwhile, Sharma said India reported an 80 percent financial inclusion rate as at the end of 2017, this is compared to its 35 percent inclusion rate recorded in 2011. While Nigeria, Africa’s most populous nation on the other hand has about 41.6 percent financial exclusion rate. Meaning about 40.1 million of the country’s total adult population do not have access to financial services and products. “The second thing is to create the right payment system platform, the one created in India is a unique identity payment platform, where irrespective of device

and whether you have an account or wallet it operates, it is an interoperable platform,” Sharma said. The third area he suggested was the need to create strong use skills “a reason, a value preposition for the people to adopt financial service. Like the one that was created in India is the social benefit transfer.” “The fourth and the last thing is to concentrate on the digital infrastructure that is required, so like mobile phones, the network, the transmission lines as well as power. I think those four things, if they are worked on, people will definitely get into the financial inclusion cycle and like EFInA has been saying it will lead to economic growth,” Sharma assured. Meanwhile, Sharma’s point can almost be linked to the 2018 World Data Lab report which revealed the

number of Nigerians living in extreme poverty crossed the 83 million mark in the period under review, surpassing India’s number of extremely poor at 73 million. This means that almost one out of every two persons living in Africa’s largest economy is now living in extreme poverty than India, and this is despite the latter having more population at 1.35 billion than the former at about 200 million people. The high financial inclusion rate reported in India aligns with the country’s economic performance, considering it left the spot of extremely poor country to Nigeria, whose financial inclusion rate has been on the decline since 2014. The World Bank’s Global Findex Database released 19, April 2018 revealed a slump in the level of financial inclu-

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World Business Newspaper

Merkel’s favoured successor declares chancellor’s era is over Annegret Kramp-Karrenbauer pledges to preserve German leader’s political legacy Guy Chazan

ngela Merkel’s favoured candidate to succeed her as leader of Germany’s Christian Democratic Union has declared the Merkel era to be well and truly over, while promising to preserve the chancellor’s political legacy. “An era has ended, and now we must start a new chapter, and achieve new strength with new themes and a new style,” Annegret Kramp-Karrenbauer told journalists who gathered on Wednesday to witness the launch of her campaign to be CDU boss. While she stressed the need for a fresh start, Ms Kramp-Karrenbauer, who is currently CDU secretary-general, also promised a degree of continuity with the past. “You can’t just continue such an era as long as you like, but you also can’t undo it,” she said. Ms Merkel last week shocked Germany by announcing she would stand down as CDU leader, following a disastrous showing by the party in elections in the western state of Hesse. Ms Kramp-Karrenbauer, known as “AKK”, is one of 12 candidates who are set to stand for the leadership at a party conference in Hamburg in December, making this the most unpredictable and democratic election for the job in the party’s history. She is seen as the continuity candidate at a time when large parts of the CDU are eager for change and want a decisive break with the Merkel era. Ms KrampKarrenbauer’s performance on Wednesday reflected the dilemma she faced: she must stress her loyalty to the chancellor while still

Annegret Kramp-Karrenbauer addresses journalists on Wednesday at the launch of her campaign to head up the Christian Democratic Union in Germany © AFP

shaking off her image as a Merkel clone. Her strongest rivals are Friedrich Merz, a rival of Ms Merkel who used to be the CDU Bundestag leader, and health minister Jens Spahn. Both are conservatives strongly supported by those in the CDU who resent the way Ms Merkel moved it to the centre-ground of German politics. Mr Spahn was one of the most outspoken critics of Ms Merkel’s decision to keep Germany’s borders open during the refugee crisis of 2015-16 when more than 1m migrants arrived in Germany. Mr Merz withdrew from politics in 2009, seven years after losing a power struggle with Ms Merkel who replaced him as head of the CDU parliamentary group. Since then he

has been active in business and is chairman of BlackRock Germany, an asset manager. Ms Merkel has said she would like to stay as chancellor until her fourth term officially ends in 2021. But experts in Berlin believe her chances of staying in the job will be close to nil if either Mr Merz or Mr Spahn is elected party boss. In contrast to the two male candidates, Ms Kramp-Karrenbauer is seen as a Merkel-loyalist who shares her liberal views. She said on Wednesday that Ms Merkel should remain as chancellor as long as she enjoyed a majority in the Bundestag. Ms Kramp-Karrenbauer, the former prime minister of the tiny state of Saarland on the French border, was plucked by Ms Merkel to be-

come the CDU’s secretary-general in February. The 56-year-old quickly embarked on a major listening tour of the country, holding more than 40 meetings with local CDU associations and working on a new political manifesto for the party. She has the backing of moderates in the party who fear a victory by Mr Merz or Mr Spahn would send the CDU firmly towards the right. The latest to join the fray was Peter Altmaier, Germany’s economics minister, who said anyone wanting to unilaterally change the party’s course “or reduce it to a single issue, will find it very difficult”. “The vast majority of Germans don’t want a fundamental change of course,” he told Bild Zeitung. Mr Altmaier said there was, for

example, no need for a change of policy on immigration, since the number of immigrants arriving in Germany had “drastically declined” and procedures accelerated. He acknowledged, however, that the authorities were still failing to deport failed asylum-seekers and foreign criminals in the necessary numbers. Ms Kramp-Karrenbauer echoed that point on Wednesday. “What happened in 2015 is a reality and a fact and can’t be reversed,” she said, adding that people wanted answers to concrete problems — such as how to send back refugees who turn to crime. “They don’t expect another three years of debate about what we did right in 2015, what was less right and what was wrong.”

Donald Trump now faces an almighty battle with Congress

Energy industry scores victories in US midterm elections

Control of the House will empower the Democrats to investigate the president

Ed Crooks

Edward Luce

he biggest feat of Donald Trump’s first two years as US president was a huge tax cut. The remaining two will probably start off with an almighty battle over whether his personal tax returns will be made public. The difference between a unified US federal government and a divided one is always immense. This time, the contrast will be like night and day. Mr Trump repeatedly pilloried Democrats as a party of crime on the campaign trail for the midterm elections. On Tuesday night they gained control of the House of Representatives, which means they now have the majority’s power to investigate criminal allegations against his administration. They will make full use of it. The next few months will be a golden age of congressional subpoenas.

The runes for the next presidential election in 2020 are increasingly legible. Having passed an almost $2tn tax-cut stimulus, Republicans ran on the strongest economy so far this century. It was not enough to prevent Democrats from retaking the House for the first time since 2010 and several governorships. The next few months will be a golden age of congressional subpoenas Right now, congressional district boundaries strongly favour Republicans. Had the election been held with neutrally drawn lines, the result would have been a landslide, rather than a modest win. Democrats led Republicans by 8 percentage points in the popular vote. Given the circumstances, that must qualify as a repudiation of Mr Trump. Continues on page A7

Voters reject proposed carbon tax in Washington and oil production curbs in Colorado

he US oil and gas industry scored important victories in the midterm elections, defeating proposals for what would have been the country’s first-ever carbon tax in Washington state and new restrictions on production in Colorado. Overall, the election results were favourable for the US renewable energy industry, which will receive a boost from Democrat victories in several key races for governor, including in Nevada, New Mexico and Maine. Much of US energy policy is set at the state level, and control of governorships and legislatures can have significant effects on critical regulations and tax incentives. There were setbacks for the oil industry, including new offshore drilling restrictions in Florida and failure to repeal a petrol tax increase in California

However, oil companies were successful in fending off threats in two high-profile votes. One of the most watched ballot propositions on Tuesday was Washington state’s revived attempt to introduce a carbon tax, an idea that was put forward by a bipartisan campaign backed by leading companies, including ExxonMobil, as way for the US to address climate change. The plan faced strong opposition from oil companies with refineries in the state, including BP. By early Wednesday morning it seemed clear that it had failed. The Western States Petroleum Association, backed by oil companies and business groups, raised $31.6m to fight the measure, a record for the state. It said its members believed that climate change should be addressed at national and international levels. “State-level policy in Washington would have a negligible impact on mitigating

climate change but could have a significant negative impact on our state’s businesses,” it warned. There was another important victory for the industry in Colorado, which is the fifth-largest oil producer and sixth-largest gas producer in the US. Proposition 112 would have forced all new wells drilled and brought into production to be set back at least 2,500 feet from occupied buildings, a rule the industry said would “devastate” the state’s economy. By early Wednesday the proposal was poised for defeat. Chip Rimer, chairman of the board of the Colorado Oil and Gas Association and a senior vice-president at Noble Energy, said: “We appreciate our fellow Coloradans’ support for responsible energy development. This measure was an extreme proposal that would have had devastating impacts across the state on jobs, education and numerous other programs important to each of us.”

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Donald Trump now faces an almighty battle...

Tanzania disowns gay witch-hunt plan by city administrator

Continued from page A6

Another Democratic priority will thus be to restore voting rights to the millions of Americans struck off the electoral registers in Republican-held states and to use their power in statehouses to redraw district lines after the 2020 census. But the results are not as clean cut as Democrats had been hoping. For a start, Republicans have increased their majority in the Senate. That means Mr Trump can shove through many more judicial appointments, including another possible Supreme Court nominee to add to Brett Kavanaugh and Neil Gorsuch. America’s top court is now safely in conservative hands for decades. Moreover, Democrats made almost none of the inroads into the south that they were hoping for. The crucial swing state of Florida remains decisively, if narrowly, Republican red. Georgia will not get its first black governor. And rural and exurban America came out for Republicans almost as strongly as the suburbs and cities went Democratic. The 2018 result confirmed that America is as demographically divided as was feared after Mr Trump’s 2016 victory. For the first time Congress will have more than 100 female representatives, two of whom are Muslim, many of whom are millennials. Almost all of them are Democratic. The Republican party looks even more white and male than in the last Congress. History tells us that Washington gridlock is usually good for the economy. This time is likely to be different. Democrats take control of the House at a moment of peak economic growth. It is likely to slow sharply next year as the tax stimulus fades. Mr Trump will blame the Democrats for the slowdown. He will also chastise the US Federal Reserve for taking the monetary punch bowl away. Mr Trump will need no invitation to switch the focus to non-economic themes as the 2020 campaign hots up, which will happen almost immediately. A record field of up to 30 Democratic presidential hopefuls have been straining at the leash for the midterm campaign to end. Mr Trump has given a preview of his re-election platform in his recent rallies in which he appealed almost exclusively to his white base in rural and small-town America. Tuesday night reinforced the reality of an increasingly racialised US partisan divide. That suits Mr Trump well. The next few months will offer a spectacle rarely glimpsed in US politics. One branch of government will be looking for evidence to argue that the president is a criminal. He, in turn, will seek to brand his accusers as un-American. In the midst of this, Robert Mueller, the special counsel, will be finalising his report into allegations that the 2016 Trump campaign colluded with Russia. Many things are possible: an impeachment process against Mr Trump; the firing of Mr Mueller; a Supreme Court siding with Mr Trump against publication of his tax returns; and so on. If you thought the past two years were interesting, you ain’t seen nothing yet.

Campaigners welcome statement but express concern for long-term safety of country’s LGBT community

Tom Wilson

Goldman chief: 1MDB accusations against former staff ‘distressing’ Two former bankers have been charged in connection with 1MDB scandal Don Weinland

oldman Sachs’ new chief executive David Solomon has said the blatant manner in which two former employees allegedly broke the law in their work with Malaysian fund 1MDB was “very distressing.” The US Department of Justice said last week it had indicted two former Goldman Sachs bankers — Tim Leissner and Roger Ng — accusing them of conspiring with a Malaysian financier to launder billions of dollars siphoned from the fund. On Tuesday, Anwar Ibrahim,

who is expected to be Malaysia’s next leader, called Goldman’s role in the 1MDB scandal “ inexcusable.” Mr Solomon, who took over as Goldman chief in October, said in an interview with Bloomberg TV on Wednesday: “It is obviously very distressing to see two former Goldman Sachs employees went so blatantly around our policies and so blatantly broke the law.” The indictments against the two bankers were filed in the eastern district of New York and alleged that more than $2.7bn was misappropriated from 1MDB in a scheme that involved bribes paid to highranking government officials in

Malaysia and Abu Dhabi. Former Malaysian prime minister Najib Razak, who founded 1MDB in 2009, was ousted from power in an election earlier this year and has been charged with corruption by the new government, led by the 93-year-old Mahathir Mohamad. Mr Najib has pleaded not guilty. Mr Leissner, who was arrested in June, according to court records, pleaded guilty to two counts of conspiracy to launder money and violate the Foreign Corrupt Practices Act. Mr Ng, who was arrested in Malaysia, has not entered a plea, and could not be reached for comment.

Russian lenders wrestle over capital rules drive Banks have difficulty meeting capital needs and paying profits in dividends to state Max Seddon

ussia’s central bank wants state banks to improve their capital position But the finance ministry demands they pay big dividends to fund the budget A failed attempt to clean up Russia’s inefficient state banking sector has highlighted a clash between the country’s central bank and powerful Kremlin-backed interests. Elvira Nabiullina, Russia’s central bank governor, has won broad praise for a crackdown on the country’s troubled banking sector that led to hundreds of small lenders being shut down and three top 10 private banks nationalised. However, even Ms Nabiullina — who enjoys strong support from president Vladimir Putin — has struggled with her latest move to shake up the state banks. At issue is a push to make the top 11 “systemically important” banks create a buffer of 1 per cent of risk-weighted assets to comply with Basel III capital adequacy regulations. At the same time, the finance ministry demands state-run companies pay 50 per cent of profits in dividends to fund the budget. VTB and Gazprombank, the largest state banks after Sberbank, remain below some of those Basel III requirements. The banks say regulation is already onerously strict: Russian risk-weighted assets are 91 per cent of total, one of the highest ratios worldwide. Without Sberbank’s near-monopoly on retail, VTB and Gazprombank are more vulnerable

to risks from lending to Russia’s corporate sector, which itself is state-dominated and frequently inefficient. They argue that their inability to raise capital from the market because of US and EU sanctions on long-term debt makes meeting the double requirements impossible. “A German bank can give three times as many loans with the same capital as VTB in Russia, because when it lends to Volkswagen, I’m lending to [Russian carmakers] AvtoVAZ or KamAZ — we have completely different capital contributions,” VTB chief executive Andrei Kostin told state TV last week. Russia’s technocrats were forced to back down at a meeting in midOctober under pressure from the state banks, according to four state bankers. VTB will not have to meet its Basel III requirements until the end of next year, while it will only pay about 30 per cent of profits in dividends, three of the state bankers said. Rather than set terms across the board, the finance ministry will continue to demand 50 per cent of profits in dividends from Sberbank while reaching individual deals with the other banks based on their capital structure, said two of the state bankers. “It’s a complete double standard,” said one of the state bankers. Some bankers argue that the move essentially amounts to a bailout. Anton Trifonov, a spokesman for Gazprombank, said the bank had already optimised its capital distribution and raised enough new capital to allow it to meet its Basel III requirements by the end of 2018. Gazprombank would continue to

do so next year if granted an extension, he added. “The bank has not held any negotiations with the government about dividend payments and their amount,” Mr Trifonov said. London-listed VTB has received Rbs1.2tn in state funds since the 2008 financial crisis, easily the most of any Russian bank. The most recent crisis in 2014 saw the ministry allot VTB 30 per cent of its recapitalisation programme — even though VTB only accounted for 15 per cent of the sector’s assets. “2008 nearly killed them. They never recovered from that,” a senior banker close to VTB said. Finance minister Anton Siluanov said after the meeting that the government would not repeat the last bailout programme, which entailed Moscow giving VTB rouble bonds in exchange for preferential shares now held by a Kremlin welfare fund. That would likely force the central bank to apply Basel III requirements “creatively” and allow banks to use funds allotted for dividends to increase their capital, Mr Siluanov said. The compromise highlights a gulf in the regulation of banks such as VTB against Sberbank, the only state bank that is consistently profitable without state support. The government is pushing Sberbank to meet the 50 per cent target next year, a year earlier than the bank plans. Sberbank has said it may increase payments earlier after the planned sale of Turkish subsidiary DenizBank; investor reaction to better than expected earnings last week was muted after news the deal may not be finalised until 2019.

ampaigners have given a cautious welcome to comments from Tanzania’s government that disown a plan by the administrator of the country’s biggest city to hunt down and punish members of the gay community. The regional commissioner for Dar es Salaam, Paul Makonda, last week called on Tanzanians to report gay people living in the city, saying that a specially convened team would start rounding up gays and lesbians from Monday. A few days later — following an international outcry — the foreign affairs ministry issued a statement “to inform the public that those sentiments are individual and do not reflect the government position”. It added: “[The government] will continue to respect all international agreements on human rights that have been signed and ratified.” Local and international campaigners welcomed the government’s statement, while expressing concern for the long-term safety of the gay community in Tanzania. “The statement will provide cold comfort to LGBT people in Tanzania if the authorities continue to subject them to arbitrary arrests and discrimination,” said Neela Ghoshal, senior LGBT rights researcher at Human Rights Watch. Angelo Denzel, an activist working with LGBT people in Dar es Salaam, said the statement was useful but that the future for the gay community remained uncertain. “There is still a lot of fear and anxiety because no one knows what it is going to happen next,” he said. “The government needs to come with another statement to clarify the way forward.” The threat against LGBT people was the latest in a series of controversial policies and public statements made by President John Magufuli and members of his administration, since he came to power in 2015. Last year Mr Magufuli told a political rally that girls that fall pregnant should not be allowed to return to school. In September, he railed against contraception and said there was no need for birth control if people work hard enough to feed their children. Mr Magufuli, nicknamed “the bulldozer”, has attacked corruption and foreign investment while restricting government criticism. The government has banned some opposition rallies, shut down news organisations and jailed activists. In February, two opposition politicians were sentenced to five months in prison for insulting the president. On Friday, opposition leader and parliamentarian Zitto Kabwe was charged with sedition after he said clashes between police and the local population had left more than 100 people dead in the district of Kigoma in the west of the country.

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NEWS YOU CAN TRUST I THURSDAY 08 NOVEMBER 2018

Opinion The argument for restructuring Nigeriaâ&#x20AC;&#x2122;s laggard federation

CHRISTOPHER AKOR Chris Â Akor, Â a Â First Â Class Â graduate Â of Â Political Â Science, Â holds Â an Â MSc Â in Â African Â Studies Â from Â the Â University Â of Â Oxford Â and Â is Â BusinessDayâ&#x20AC;&#x2122;s Â Op-ÂEd Â Editor Â christopher.akor@businessdayonline.com

iven the nature of the Nigerian federation and the role of the central government as the revenue-collector of the federation the issue of revenue sharing will be of utmost importance to all stakeholders in the Nigerian federation. Since the wave of state creation started in 1966, and especially, since the oil boom began in the early 1970s, the military has arrogated to itself the right to determine h ow c e nt ra l l y c o l l e c t e d revenues would be shared and usually gave to itself the largest pie. At present, the sharing formulae gave the federal government 52 per cent, states 26.72 per cent and local governments 20.60 percent. To determine how the 26.72 per cent

THE PUBLIC SPHERE

CHIDO NWAKANMA Nwakanma Â is Â a Â Visiting Â Member Â of Â the Â BusinessDay Â Editorial Â Board Â and Â serves Â on Â the Â Adjunct Â Faculty Â at Â the Â School Â of Â Media Â and Â Communication, Â Pan Â Atlantic Â University, Â Lagos. Â Email Â chidon-Â wakanma@gmail.com. Â

ootie aficionados have been celebrating the remarkable comeback victory of Enugu Rangers over Kano Pillars to clinch the Federation Cup at the Stephen Keshi Stadium, Asaba on October 24.Analysts compare the outcome with the Miracle of Damman when the Super Eagles came back from four goals down to defeat their Russian hosts in the city of Damman. As many have noted, it was also the first time in 35 years that the beloved team of the South East would win the Federation Cup. There are many more significations from this victory worth exploration. Before then, congratulations once again to the Management, Coach and Players of Enugu Rangers International Football Cup. The victory revives memories and images. The story is a simple yet complex one. Rangers Interna-

meant for the states would be shared, various criteria had been adopted ranging from population, land mass, minimum responsibility, balanced development of the federation, and lately, derivation. This structurally imbalanced federal arrangement had created a financially hegemonic centre and weak/fiscally impoverished states that have to rely on, and lobby the centre for economic patronage. There are many difficulties with this kind of federal arrangement. First, it turned the principle of federalism right on its head by creating a federation where revenues flow from t h e c e n t re t o t h e u n i t s instead of the other way round. Secondly, it ensured a federation that, by design, cannot be productive and exist only to share centrally collected revenues. Thirdly, and most importantly, by creating a nation that depends largely on rents from the sale of crude oil for its revenues, the architects of the Nigerian federation created a federation where the governments cannot be accountable to their people. Extant literature on political economy â&#x20AC;&#x201C; and supported by real world expe-

rience â&#x20AC;&#x201C; is clear that there cannot be accountability in systems where the govern-

â&#x20AC;&#x2DC;

In majority resource-exporting countries however, rent revenues are linked with dictatorship or have antidemocratic effects largely because the governments do not rely on the people for their revenues and are therefore not accountable to them

ment is not funded by its people but through what some scholars refer to as â&#x20AC;&#x2DC; u n e a r n e d re n t sâ&#x20AC;&#x2122; â&#x20AC;&#x201C; t h a t is revenue not derived from the people but gotten f ro m m i n e ra l re s o u rc e s or large aid inflows. The p ay m e nt o f t a x i s a ke y and central element in the development of a real social contract where the people directly fund the

government and the government in turn, remains accountable or is forced to be accountable to the p e ople b e caus e g overn ment revenue is peoplesâ&#x20AC;&#x2122; or more appropriately â&#x20AC;&#x2DC;taxp a y e r sâ&#x20AC;&#x2122; m o n e y . T h a t i s perhaps, the most effective connection between the government and the people. That is the main reason why, of all the oil exporting countries, perhaps only Nor way has a truly accountable government. To be sure, Norway exports roughly 2 million barrels of oil per day and rakes in billions of dollars in annual revenues. With a population of just under 5 million people, it could have afforded the luxury of using the revenues from oil to finance the state and provide the infrastructure and other needs of its citizens, but decided against it. It rather maintained its high tax rates â&#x20AC;&#x201C; one of the highest in the European Union â&#x20AC;&#x201C; so as to ensure the existence of a social healthy contract and ensure government accountability to its people. Its government is therefore fully financed by the taxes of its citizens. It deposits 100 percent of its oil and gas revenues into its sovereign

wealth fund â&#x20AC;&#x201C; worth about $840 billion â&#x20AC;&#x201C; the largest such fund in the world. It then withdraws an average of 4 percent a year to help pay for public services. It can also withdraw a large sum in times of economic depression. In majority resource-exporting countries however, rent revenues are linked with dictatorship or have anti-democratic effects largely because the governments do not rely on the people for their revenues and are therefore not accountable to them. That is also the case with Nigeria and that is why despite the agitations and the hues and cries, the government, by nature, is unaccountable to the people. The structure of the Nigerian federation is such that both the governments and the people are perpetually in competition for the sharing of the â&#x20AC;&#x2DC;national cake.â&#x20AC;&#x2122; That appears to be the raison dâ&#x20AC;&#x2122;ĂŞtre of the Nigerian state. An implicit but unstated logic of the Nigerian state also is that the state or the federation, at the very least, will cease to function without oil rent. And that is why virtually all the states have gone bankrupt with the collapse of oil

prices. It is easy to advise the states to focus on internally generated revenues like Lagos and learn not to depend on federal allocation. While it is tr ue that the states c ou l d d o m o re t o b o o s t revenue generation, anyone familiar w ith the nature of the states â&#x20AC;&#x201C; deliberately created small, fragmented, weak, and incapable of selfsupport - knows that such ambitious plans and exhortations may not work for all of them. The reasons for Lagosâ&#x20AC;&#x2122; revenue-generating capacities are well known and very few states possess the kinds of advantages that Lagos possesses. The hard reality, which many are unwilling to countenance, is the fact that the states are unviable and u n p ro d u c t i v e a n d m u s t be restructured if we ever hope to get them productive and viable. What is wrong with having, say, six strong regions and a federal government make up the federating units of Nigeria? This will not only reduce the cost of governance, it will make the regions or states large enough and capable of generating its own revenues and ensuring its survival outside of the federal government.

Enugu Rangers and the significations of a victory tional came from three goals down to equalise against Kano Pillars and then defeat them in the penalty shootouts to clinch the 2018 Aiteo Federations Cup. The comeback happened in the dying minutes after many fans had lost hope. Not the determined players and their coach. It was a victory prepared well ahead unbeknownst to the team and their fans. Many coincidences. Rangers played their semi-finals against Nassarawa United at the Sani Abacha Stadium in Kano. They had earlier defeated the defending champions Akwa United. Rangers came from two goals down to disunite the Nassarawa team by four goals to two. The Kano team played in Lagos and recreated their game in Asaba but with a different outcome. Kano Pillars did valiantly against Katsina United. They sacrificed a twogoal lead but won the penalty shootout in Lagos. The run of luck ended in Asaba against Rangers. Aiteo Federation Cup 2018 is the sixth that Rangers would win. It recreated the buzz of the â&#x20AC;&#x153;Holy, Holy, Holyâ&#x20AC;? heydays of the champions that I grew up watching and joining crowds as a teenager to view at the National Stadium, Surulere. The results the team posted fired the imagination. Stories at the family hearth added to the allure and mystique.

Formed in 1970, Rangers International FC was integral to the restoration of the dignity of the South East from the depredations of the war. It provided a psychological anchor and booster. There is no psychological measuring rod to state the effects of their back-to-back victories in the Challenge Cup and the National Leaguebeginningin 1974on the psyche of the Igbo person. I just knew that it gave mydad and his peers more than a kick! Each victory by Rangers boosted the Igbo man. When they won the continental trophy, Osadebe released a number to join the celebrations. Rangers FCwas more than a football club. Rangers was a statement of intent and a movement. From 1971, the intense competition and rivalry of the Enugu team with their Ibadan opponents, the Shooting Stars, began. Rangers lost to Shooting in the FA Cup that year. There were more battles subsequently. The Winnersâ&#x20AC;&#x2122; Cup tussle settled in Kaduna remains a legend in the annals of Nigerian soccer. For most of its history, the outstanding rivals of the Enugu Rangers have been Shooting Stars FC, Mighty Jets of Jos, Bendel Insurance FC and the cousin-rivals, Spartans FC of Owerri (later renamed Iwuanyanwu Nationale),Enyimba FC of Aba and Vasco Da Gama (later

P&T) of Enugu. The competition with Shooting Stars had several dimensions of football artistry and competence, management capability and ethnicity of the My-Mercedes-

â&#x20AC;&#x2DC;

Ogunbote and his likes in the South East provide positive proof that the relationship between the two major southern ethnicities is not and should not be one-way traffic. The professors and young scholars at the University of Nigeria who followed the traditions of Profs Sam Aluko and Babatunde Fafunwa attest to this fact. It is Handshake across the Niger in praxis. The task is to enlarge the pool

is-bigger-than-yours variety. It ran deep: Igbo versus Yoruba! Then 35 years after its last victory against a Northern side, DIC Bees of Kaduna 5-4, also via penalties, Rangers wins again. The standout person in the re-emergence of Rangers International as winners of the Federations Cup is an uncharacteristic name. Coach Olugbenga Ogunbote led the Rangers team to this significant victory after just one season at the club. Not surprisingly, â&#x20AC;&#x153;Rangers Management Corporation, owners of Rangers International F.C, have extended the contract of Aiteo Cup-winning coach, Olugbenga Ogunbote for another season,â&#x20AC;? the club declared in a statement. Olugbenga Ogunbote in the recent past would have associations with the Ibadan bete noire of Rangers rather than be operating from Enugu. An Ogunbote leading Enugu Rangers to victory is a significant development in the history of ethnic relations in Nigeria. It speaks to so many narratives. One of the narratives is the falsehood on the streets of most parts of Nigeria that Eastern Nigeria is a hostile terrain for non-natives. We have argued in social media and live debates on the matter that it is an untruth based on ignorance. The SouthEast lacks many non-indigenes only because of a deliberate lack of the large-scale federal

projects the Federal Government executed post-civil war and planted anywhere but in the East. There was no incentive for non-indigenes to visit and stay. Ogunbote stayed. The other narrative is that the South East welcomes talent and is unafraid of competition. It is the added message of Ogunboteâ&#x20AC;&#x2122;s presence and results in Enugu. Therefore, Ogunbote deserves more rewards than a fresh contract. Governor Ifeanyi Ugwuanyi of Enugu State understands symbolism. Reward Olugbenga Ogunbote with the honorary citizenship of Enugu State, dear Sir. The Igwe of Nike should do further honours to the man. Place a red cap on his head at a ceremony soon. Ogunbote and his likes in the South East provide positive proof that the relationship between the two major southern ethnicities is not and should not be one-way traffic. The professors and young scholars at the University of Nigeria who followed the traditions of Profs Sam Aluko and Babatunde Fafunwa attest to this fact. It is Handshake across the Niger in praxis. The task is to enlarge the pool. Congratulations and well done, Coach Ogunbote, for leading the rebirth of our darling Enugu Rangers International FC. May the years in Enugu be full of more ups than downs and bring mutual benefits.

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