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Buhari vs Atiku: Issues that could shape outcome of the contest CHRIS AKOR & OWEDE AGBAJILEKE

n Sunday afternoon former vice president Atiku Abubakar emerged as the candidate of the People’s Democratic Party (PDP) and will be the main challenger to president Muhammadu Buhari who also secured his party’s nod to fly its flag in next year’s election. Atiku polled 1, 532 votes, more than double that polled by his clos est challeng er, Aminu Tambuwal, who had 693 votes. Senate President, Bukola Saraki came a distant third with 317 votes. Amidst the rejoicing and back-slapping, especially as all his challengers pledged to remain in the party and work with him to capture power back from the APC, we consider the credentials of the two main candidates and what Nigerians Continues on page 46

Nigeria’s risk premium reaches year high amid rising political uncertainty EMEKA UCHEAGA & DAVID IBIDAPO

Inside Kano to host 1st Agric Quality Excellence Awards P. 2

fgn bonds

Treasury bills

L-R: Gerald Ilukwe, managing director, Knowledge Resources Ltd; Osaro Eghobamien, managing partner, Perchstone and Graeys LP; Okechukwu Enelamah, minister of industry, trade, and investment, and Vice President Yemi Osinbajo, at the 2018 Technology As A Catalyst Conference (TAAC) for ease of doing business in Lagos, weekend. Pic by Olawale Amoo

he spread between the 10 year federal government of Nigeria (FGN) bond and the US 10 year bond rose to its highest level this year, as it reached 12 percent. The FGN 10 year bond yield closed Friday at 15.2 percent versus the US 10 year treasury yield which closed at 3.2 percent. Analysts say the widening spread observed can be attributed to rising political and economic uncertainty in the country which is causing investors to demand a higher risk premium to remain invested in local currency bonds. Ayo Akinwunmi, Economic and Investment Analyst, FSDH Merchant Bank told BusinessDay that, “the higher spread currently witnessed can be linked to rise in economic uncertainties, the need to maintain exchange rate stability in Nigeria, and the Continues on page 46

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Kano to host 1st Agricultural Quality Excellence Awards TELIAT SULE

ano State Government has concluded plans to host the 1st Agricultural Quality Excellence Awards. The awards, being promoted by the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), and Vertical Inspirations Organisation in collaboration with the Federal Ministry of Agriculture and Rural Development, will take place on the 20th of November 2018 at the famous Coronation Hall, Government House, Kano State. The project is supported by the Bank of Agriculture (BOA), Federal Ministry of Industry, Trade and Investment; the Raw Materials Research and Development Council; the Bank of Industry; Nigeria Incentive-Based Risk Sharing System for Agricultural Lending( NIRSAL); Nigerian Agricultural Insurance Corporation (NAIC), OLAM Nigeria and Ecologistics. The objectives of the awards include to create national awareness on the importance of quality and standards as the best global practices for acceptable agricultural commodities and value added agricultural products as well as to align with the international standards and pro-

cedures the minimum conditions for meeting local consumption and exportable value-added agricultural commodities. Specifically, the awards seek to recognize and reward the painstaking efforts of established and upcoming farmers and other stakeholders involved in the value chain for attaining and sustaining various levels of manufacturing and marketing of agricultural products and services, and to appreciate the contributions of development partners, specialized agencies and the Organized Private Sector that demonstrated restraints and steadfastness in ensuring the best global practices. “The Nigeria Agriculture Quality Excellence Award seeks to recognize hard work, diligence, innovation, procedural efficiency, skills and enterprises in agriculture value chain. Success needs to be recognized not only to serve as encouragement for practitioners but also to draw national and international attention to globally accepted practices and procedures for both local consumption and export”, the Organising Committee says. The awards are coming at a time when the federal and state governments have made the diversification

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Businesses express confidence in CBN’s expectation survey for October ENDURANCE OKAFOR

igerian businesses expressed more optimism on the macro economy in October 2018 compared to the outlook for the previous month, the Central Bank of Nigeria’s (CBN) Monthly Business Expectations Survey Report released on Friday shows. The survey revealed that the respondent firms have positive outlook for October at 64.5 index points which is 39.7 points higher than the 24.8 index points overall respondents’ confidence on the macro economy in September 2018. The optimism on the macro economy in the current month was driven by the opinion of respondents from services (16.2 points), industrial (6.0 points), wholesale/retail trade (1.9 points) and construction sectors (0.6 points), whereas the drivers of the optimism for next month were services (38.3 points), industrial (18.8 points), wholesale/retail trade (4.9 points) and construction (2.5 points) sectors. Meanwhile, a breakdown of the survey report showed that businesses were more optimistic about the outlook of September than the 21.5 index point’s level recorded in August. The positive outlook by type of business in September 2018 were driven by businesses that are neither import- nor export-oriented (17.8 points), both import- and export-oriented (3.6 points) importoriented (2.8 points), and those that are export-related (0.6 points). “Respondent firms expressed more optimism on the macro economy in September 2018 when compared with the level recorded in the preceding month. Respondents’ outlook on the volume of total order, business activity and financial conditions (working capital) remained positive during the review period,”

the apex bank said in the report published on its website on Friday. Meanwhile, the September 2018 Business Expectations Survey (BES) was carried out during the period September 10-14, 2018 with a sample size of 1050 businesses nationwide. A response rate of 93.4 per cent was achieved, and the sample covered the services, industry, wholesale/ retail trade and construction sectors. The respondent firms were made up of small, medium and large organisations covering both importand export oriented businesses, the survey disclosed. Firms however identified insufficient power supply, high interest rate, unfavourable economic climate, financial problems, unclear economic laws, unfavourable political climate, insufficient demand and access to credit as the major factors constraining business activity in the current month, as compiled from the CBN report. The survey by the apex bank however revealed that the respondent firms expect the Naira to appreciate, inflation rate to fall and borrowing rates to rise in both the current month and next month. Latest figures from the National Bureau of Statistics (NBS) had shown that the rate at which the prices of goods and services are increasing (inflation) in Nigeria was 11.23 percent (year-on-year) in August 2018. While figures reported by FMDQ showed that for the reporting weekended September 21, 2018, the CBN official rate rose by N0.05 to close at $/N306.30, indicating a 0.02 percent depreciation when compared to $/ N306.25 recorded the previous weekended September 14, 2018. In the Bureau de Change (BDC) market, still at the end of the reporting week, the exchange rate remained unchanged to close at $/ N360.50.

L-R: Andrew Mashanda, executive director, corporate and investment banking, Stanbic IBTC; Elijah Ephraim Umanah, winner of Intellectual bravery Category; Nengi Ayomide Pepple, winner of Social bravery Category; Victor Olayiwola, winner of Physical bravery Category, and Pawan Sharma, CEO, Multipro Consumer Products Limited, at the 2018 Indomie Independence Day Awards (IIDA) in Lagos.

Prosecute defunct Skye Bank directors, finance minister orders CBN, NDIC ... NDIC remits N175bn under Fiscal Responsibility Act HOPE MOSES-ASHIKE

he Minister of Finance Zainab Ahmed, has directed the Central Bank of Nigeria (CBN), and the Nigeria Deposit Insurance Corporation (NDIC), to fully investigate and prosecute all the Directors and executive management who contributed to the collapse of the defunct Skye Bank plc as well as other Deposit Money Banks (DMBs) in liquidation. The Banks and Other Financial Institutions Act and the Central Bank of Nigeria Act empower the CBN to undertake such critical and

important responsibility as removing banks’ directors from their seats if their actions or inactions pose threats to the safety, soundness, stability and sustainability of the banks and/or the banking system. The Minister gave the directive during her familiarization visit to the executive management of the NDIC led by Umaru Ibrahim, managing director and Chief Executive. Also in the team that welcomed the Minister was the Executive Director (Corporate Services) of the Corporation Omolola Abiola-Edewor. The Minister expressed her serious concern about the spate of non-performing loans in the banking industry, adding that while the

bail-out of distressed financial institutions was necessary in the interest of the stability of the banking system, emphasis should also be placed on the investigation and prosecution of delinquent Board Directors and Executive management of financial intuitions who abused the trust placed on them by depositors. Tokunbo Martins, director, Other Financial Institutions Department (OFIDs) had told BusinessDay that “the normal process when CBN revokes licenses is that the depositors are paid by the NDIC. Where directors are guilty of break-

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Inside details of CBN’s counter affidavit against MTN DIPO OLADEHINDE & ENDURANCE OKAFOR

court document seen by BusinessDay has revealed the Central Bank of Nigeria’s (CBN) counter affidavit position on the MTN’s $8.1 billion repatriation saga and its plans to credit the telecom giant in local currency upon its payment in foreign currency. Counter affidavit is an affidavit responding to and contradicting the affidavit produced by an adversary. It is an affidavit made in opposition to one already made. Such affidavits are allowed in the preliminary examination of some cases. “A refund of the foreign currencies purchased by the telecom company will result in MTN being credited with the Naira equivalent of the foreign currency,” the CBN said through its lawyer. According to the court document seen by BusinessDay the CBN said it acted in good faith for the benefit of Nigeria and exercised its statutory functions over the foreign exchange market in the $8.1 billion MTN refund saga. CBN further affirmed that it shall before or at the trial, raise an objection to the propriety of the present suit against it in view of the foregoing

fact and prayed the court declared that this suit was brought in bad faith, without reasonable cause and ought to be dismissed with substantial costs in favor of the apex bank. “MTN has not disclosed any reasonable cause of action against it or any legal right to be protected in this application,” the apex bank cited. “At all material times the Plaintiff had sufficient notice of the investigation on the banks and that it were given sufficient opportunity to make representations and substantiates.” The lawyer responding to MTN’s suit disclosed that an article assessed on CBN website revealed that its total external reserves stood at $45 billion only and verily believed that the amount improperly purchased by MTN forms a large fraction of the external reserves of the CBN and indirectly the federal Republic of Nigeria. The lawyer for CBN noted that MTN must show that there is a serious question to be tried which implies that the applicant has a real possibility and not a probability of success at the trial. CBN’s lawyer admitted that MTN has not shown any serious question to be tried before the court or that it has a real possibility of success at the trial. “ First, there is no civil right, which

is actionable in the case formulated by the Plaintiff as contended in the argument in support of the 1st defendant’s preliminary objection to this suit which we urge this honourable court to first determine before considering MTN’s right to an injunction,” CBNs lawyer said. The lawyer for CBN noted that the regulatory decision directing MTN to refund the foreign exchange irregularly remitted out of Nigeria is not a determination of MTN’s civil right and obligation which can form the basis of any action or an allegation of a denial of fair hearing citing a 2013 case between Aboseldehyde laboratories Plc vs Union merchant Bank Limited and Anor 13 NWLR (pt 1370) at 131, Ariwoola, (J.S.C). CBN said the totality of MTN’s case in the suit was to protect its pecuniary interest in the sum of $8.1 billion which the Federal government has ordered them to refund. “Accordingly, there is no basis for an injunction where damages are an adequate remedy. We therefore submit that this is another reason why this application should be refused,” CBN said.

•Continues online at www.businessdayonline.com

Monday 08 October 2018

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Monday 08 October 2018

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6 BUSINESS DAY NEWS CBN boosts interbank forex market with $334m, CNY52m HOPE MOSES-ASHIKE

urther to its commitment to ensure stability in the interbank foreign exchange market, the Central Bank of Nigeria (CBN) on Friday, intervened in the Retail Secondary Market Sales (SMIS) to tune of $334,146,393.84. A breakdown of the forex intervention figures obtained from the bank weekend indicates that it also injected the sum of CNY 52,106,614.35 into the interbank forex market. The bank’s director in charge of corporate commu-

nications, Isaac Okorafor, said the bank continued to intervene in the interbank sector in order to ensure adequate liquidity in the market as well as to meet its obligation in the bilateral currency swap agreement with the Peoples’ Bank of China (PBoC). According to Okorafor, the dollar-denominated interventions were to meet forex requests for agricultural and machinery needs, while the Yuan denominated interventions were for spots and short-tenored forwards. He said the CBN management was pleased with

the performance of the naira against the US dollar and other major currencies around the world, given the fact that currencies of many other emerging economies were struggling against the US dollar. He expressed satisfaction that the bank’s intervention had largely eased pressure on the country’s foreign reserve, just as he underscored the determination of the CBN to sustain stability in the forex market through continued monitoring of authorised dealers in order to check incidences of sharp practices.

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Folasade Femi-Lawal, head, digital banking, e-business group, First Bank of Nigeria Limited and chairperson of the summit (centre) receiving the award of excellence in financial inclusion on behalf of FirstBank from Francis Wasa, deputy director, payments department, Central Bank of Nigeria (CBN), and Bolaji Lawal, executive director, GTBank, at the new age banking summit and awards in Lagos, recently.

Edo records lowest out-of-school children in Nigeria

do State has recorded the least number of out-of-school children in Nigeria, a recent survey by the National Bureau of Statistics (NBS) in collaboration with a number of international development partners, has shown. The verdict is contained in the Multi Indicator Cluster Survey 2016-17 released by NBS and signed by its directorgeneral and Statistician-General of the Federation, Yemi

Kale. The survey interpreted by Statisense, a data company, showed that Edo State had a total of 79,446 out of school children, the lowest in Nigeria, while Bauchi State with 1,239,759 leads the pack as the state with most out-of-school children in the country. The survey lends credence to the impressive efforts of Edo State in the education sectors. Some of the international agencies that partnered with

the NBS on the survey are United Nations Children Fund (UNICEF), Bill and Melinda Gates Foundation, the World Bank and World Health Organisation (WHO), among others. Other states where the figures of out-of-school children are high are Katsina with 873,633, Kano with 837,478 and Jigawa with 784,391. Other states at the end of the curve with Edo include Abia with 86,124 and Bayelsa with 86,778.

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Nigeria @58: Destiny of nation lies in the church - Osinbajo JOSHUA BASSEY & SEYI JOHN SALAU

… as Ambode urges religious leaders to preach unity, peace

ice President Yemi Osinbajo says the future of Nigeria as a nation lies with the church, most especially Christians across the nation. The Vice President stated that God had designed the redemption of nations around the sacrifices of the saints. Osinbajo spoke at the Lagos State Government 58th Independence anniversary interdenominational church service held at the Deeper

Life Bible Church (DLBC) headquarters in Lagos on Sunday, to mark Nigeria’s Independence Day celebration. According to Osinbajo, Nigerian Christians like Moses have come of age and should therefore refuse to participate in corrupt tendencies, reject tribalism and ethnicity, as they strive to obey God. “The message for our nation at the anniversary of the 58th anniversary of our nation is that we like Moses have come of age; and it is time for us to refuse

Visionscape to suspend Lagos operations over attack on trucks, staff CYNTHIA IKWUETOGHU

isionscape Sanitation Solutions, an environmental utility group contracted by Lagos State government, is set to suspend operations over claims of reported attacks on its staff and destruction of its vehicles and equipment as a result of political tension in the state. According to a statement signed by Simon Reading, chairman of the Board of Investors and obtained by newspeakonline.com, “we passed a unanimous resolution to formally notify you of our concerns in response to the volatility in Lagos.” The management of the company said it was given assurances “that the accommodations made to the ‘PSPs’ by the franchise team would be sufficient to appease those who felt that Visionscape had taken away their jobs.” Furthermore, the group stated in the statement that they hope for an uninterrupted continuity. “With these priorities in place, we had great confidence that we would continue operations in Lagos State in a safe and uninterrupted manner.” However, security reports brought to our attention contain details of a surge in violent attacks on the trucks/ equipment and, in some cases the operators. Of utmost concern are the recent developments surrounding the turbulent political environment, as stated by the company. The firm claimed that the opposition party in the gubernatorial race used subversive language about the residential collections contract and called it “a misadventure”. The group also requested that appropriate measures be taken by the Executive team to mitigate the risks to the safety of their personnel and assets.

and reject certain things that are offensive to God,” Osinbajo said. Osinbajo sai Moses rejected and stayed away from evil, and because of the obedience of Moses the Israelites by faith crossed through the red sea as though it was a dry land. “Our country has also come of age; as we reject what God hates, we too will walk across the red sea. All the things troubling our national lives will be as easy as walking on dry land,” he said. On his part, Lagos State governor, Akinwunmi Am-

bode, urged religious leaders to see this period as a time to preach the message of peace, unity, integrity and religious tolerance and intensify prayers for God’s intervention and restoration of hope in the future of Nigeria Governor Ambode, who spoke at a special Independence Interdenominational service, held at the headquarters of the Deeper Life Bible Church, Gbagada, Lagos, said he was optimistic that the best of Nigeria and the state was yet to come, urging Nigerians to continue

to pray, hope and work for a better future for all. “My brothers and sisters in the Lord, at this auspicious period in the history of our nation, the church and indeed everyone who believes in the efficacy of prayer have a responsibility and patriotic duty to pray for the wellbeing and progress of our nation. I believe strongly that the best of our nation and our State is yet to come. Let us continue to pray, hope and work for a better future,” he said. According to Ambode, as

the nation prepares to go to the polls next year, all hands must be on deck to sustain and deepen the process that will result in sustainable growth and good governance for all, just as he urged Nigerians to eschew all tendencies that may aggravate the challenges being experienced at the moment. “As we celebrate our 58th independence anniversary, I urge us to remain steadfast and continue to uphold those values that have been passed down from our heroes who sacrificed so much to liberate us from the yokes of colonial rule.

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COMMENT

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Kachikwu and his refinery dreams

ANTHONY OSAE-BROWN Osae-Brown is the editor of BusinessDay @osaeB

ust about seven months to end of his tenure, Minister of State for Petroleum Resources Ibe Kachikwu is still talking about getting the country’s refineries working again. At the ground breaking ceremony of a 5,000 barrels per day modular refinery in Imo State on October 3, Kachikwu was quoted as promising that the government is committed to making the country’s refineries functional again by the end of 2019. He has been making the same promise since he was first appointed Group Managing Director of the Nigeria National Petroleum Corporation (NNPC) in August 2015 and later as Minister of State for Petroleum in July 2016. Few weeks after his appointment as NNPC GMD in 2015, Kachikwu, during an on-site inspection visit to Kaduna refinery on September 10, 2015 promised that the country’s four refineries would be fully functional within ‘90 days.’ It is already more than 1,095 days after the 90-day promise, and instead of ‘fully functional refineries,’ we are getting another promise of 365 days to get the refineries functional again. The NNPC just recently released

its May 2018 monthly performance report which puts the combined capacity untilisation of the country’s four refineries at 20.12 percent, up from a combined average capacity utilisation of seven percent in the previous month of April. In the 12 months to May 2018, the highest capacity utilisation recorded by the four refineries is 26.99 percent, which was achieved in December 2017 while the lowest capacity utilisation was achieved a month before at 5.81 percent. In the last three years that Kachikwu has been at the helms of the oil ministry reporting directly to the President Muhammadu Buhari, who is the Minister of Petroleum, the refineries have continued to overwhelmingly under perform. The refineries are not only underperforming but they are also making losses. In May 2018, the combined ‘operating loss’ of the four refineries stood at N20 billion. In the month before, it was a marginal operating surplus of about N928 million but before then, the refineries had incurred nine consecutive months of operating losses amounting to N90 billion. It does not take a legal degree to know that the country’s refineries are bleeding and costing billions to keep them running. If the refineries were private businesses, they would most likely have filed for bankruptcy by now or would have been forced to close down by their creditors. In more than 1000 days, Kachikwu and his immediate boss, President Buhari combined have definitely not been able to find a solution to make the country’s refineries functional. It is difficult to see how

‘

Few weeks after his appointment as NNPC GMD in 2015, Kachikwu… promised that the country’s four refineries would be fully functional within ‘90 days.’ It is already more than 1,095 days after the 90-day promise, and instead of ‘fully functional refineries,’ we are getting another promise of 365 days to get the refineries functional again

’

they will find that formula in less than 210 days to the end of their tenure. The truth, which Kachikwu knows but which he and President Buhari have refused to admit, is that there is no magic wand to make the country’s refineries work, especially as long as they remain under the management of the government. The refineries have not worked for more than two decades and they would not, if given another two decades. And that is because, the challenge is not necessary with the refineries, the challenge is with the manage-

ment of the refineries, in this case the Nigerian government. As long as the government is in charge of the refineries, they will remain comatose and bleeding pipes on the country’s increasingly lean treasury. It is quite ironic and sad that while the government is currently borrowing to repay interest on the debts that it is piling up, and while we struggle to release funds to build roads and bridges, fund education and healthcare, the government stands by and watches the refineries bleed it of more than N110 billion in 10 months. This is enough money that could have been used to complete the Lagos-Ibadan expressway, or fund basic education to take away from the streets some of the 13.2 million children that are now said to be out of school, and roaming the streets. For the comfort of a few refinery staff, millions in the country are suffering. Kachikwu had in May 2017 promised to resign in 2019 if the country does not stop importing petroleum products by that date. It is already 10 months into 2018 and there is no sign that the country will stop importing petrol by 2019. Instead of declining imports, what we have actually seen is a spike in imports of petroleum products. In the first five months of 2018, NNPC imported 8.24 billion litres of petrol. This figure is almost equivalent to the total petrol imports of 8.81 billion litres in the 12 months of 2015 imported by the NNPC. The NNPC is doing more importation of petrol products three years on than they did before Kachikwu was appointed. Meanwhile, total productions from the country’s refineries have not changed significantly in the last three

years. The four refineries produced 476 million litres of petrol in the first five months of 2018. Even though this is 23 percent more than the 384 million litres of petrol produced by the same refineries in the first five months of 2015, as a proportion of total imports, it is negligible. This is not surprising because the combined capacity utilisation of the four refineries have not changed much from the position they were in 2015 even though, production has been a bit more consistent over the period. Perhaps, Kachikwu should prepare that resignation letter now. Definitely, petrol imports is not going to stop in 2019. There is nothing on ground to make that happen. I am aware of the Dangote refinery but that is not a government initiative and besides it is located in a free trade zone which makes products coming from there into the country imports ‘technically.’ Kachikwu knows the long term solution to the refineries is to sell them. I sympathise with him knowing very well that if the decision were his to be made, the refineries would perhaps have been handed over to the private sector by now. But he is working with President Buhari, who obviously believes in state control of such assets even when they are more of a liability than an asset. However, it is the job of Kachikwu to convince the president of the non-workability of the refineries rather than keep making promises, which in his quiet time, when alone, he knows will never come true.

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The sustainability of renewable energy sources: A holistic perspective for policy makers

OKAFOR AKACHUKWU Akachukwu is a Mandela Washington Fellow (Public Management, University of Maine) and a Science Policy Research Unit (SPRU), University of Sussex trained Energy Policy, Innovation and Sustainability Expert. Email: akachukwu_ okafor@yahoo.com

hatham house published a report in February of 2017, which stirred a controversy among researchers, policy makers and practitioners within the wood fuel – biomass sector of the ‘renewable energy’ industry. It highlighted the different arguments on the debate about production of electricity and heat from wood, using non-traditional, modern technologies. One side of the debate argues that the use of wood fuel for generation of electricity and heat is relatively cheap and flexible, compared to other renewable energy sources which help to contribute significantly to global climate change. The other side of the debate argues that an increased use of wood fuel for generation of electricity and heat especially at industrial scale, for commercial purposes, releases more greenhouse gas emissions into the atmosphere

than the fossil fuels that the wood fuels replace. There have been extensive arguments on either side of the debate, however. Chatham house concluded that wood – biomass for energy purposes cannot be automatically carbon-neutral under all circumstances. The reality is that wood fuel biomass generally emits higher levels of carbon dioxide and methane than fossil fuels during its combustion, and from its supply chain of harvesting, collecting, processing and transportation. While not trying to go into the technicalities of the arguments, the simple point that the Chatham House report was making was that the rate at which forest resources are exploited for energy purposes cannot account for carbon neutrality even with afforestation programmes to replace the forest resources that are so exploited. To my mind, what is most obvious is the disregard for the principles and pillars of sustainability by that section of the debate that argues that it is okay to burn wood at any scale for electricity and heat production; and that this is carbon neutral and helps in achieving reduced carbon emissions. It is quite a skewed way of looking at solutions and justifying unsustainable practices and processes that continuously disrupt the ecosystem and biodiversity. It is interesting to note that while cities such as London, New York, and countries such as China, India, Pakistan, Kenya and Nigeria have embarked on very ambitious tree planting programmes to replen-

ish lost forests and grow new ones which will help keep cities healthy, ecosystems rich, and provide needed carbon sinks for our earth, other actors are interested in the cutting of trees elsewhere for electricity and heat production. Sometimes a section of the argument blames the land use system - agricultural and development processes for the activities that provide some of the wood for use wood to the electricity sector. While this may be true, unregulated use of wood biomass for commercial electricity generation at industrial scale would create an increase in demand for technologies and wood resources which will also lead to indirect and direct pressure on forest resources. It is not surprising that there is still a lot of appetite for forestry exploitation and lack of responsibility to do the right thing to protect our environment. Rather, blame techniques and solutions that lead to social injustice are employed. The politics of management of wood biomass especially in sub Saharan Africa and other developing countries took an interesting turn in 1974 during the global fuel crisis. A World Bank and Food and Agriculture Organization (FAO) report of the United Nations concluded that the poor populations that were using wood fuel for domestic purposes were responsible for dwindling forest resources in sub-Saharan Africa. Meanwhile, the industrial use of the same wood fuel for drying tea, tobacco, brick making, bread and charcoal making was not considered to have equal or even more responsibility for the over-exploitation of forest resources.

The use of land for agriculture and other development activities was equally not to blame, rather it was the weak, poor and vulnerable of the society that were blameworthy. This led to measures that reduced demand for wood resources for use in domestic purposes, but not for industrial purposes. It therefore encouraged advancements in technologies used for industrial burning of wood biomass for commercial purposes as renewable energy, without adequate regard to sustainability. Unless the primary definition and understanding of renewable energy resources are resources that can be replenished continuously through natural processes, which in reality, is how renewable energy is defined and perceived by most of the actors in the sector. Holistically, renewable energy resources should also be perceived from sustainability perspectives of social, economic, environmental, cultural, political and technological concerns that border on where the energy resource is generated, where it is utilized, its impact on the supply and demand spaces, and its global impact. This should be a fine holistic balance/ equilibrium that must be reached. For instance, hydro power is highly regarded as a renewable energy resource, however, at closer examination of its trade-offs and impacts, it is clear that it usually creates significant environmental and sociocultural challenges. Hydro power normally leads to destruction of important biodiversity and ecosystems, social injustices – abuse/denial

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of the ancestral rights of local communities, especially if policy makers and project developers are not sustainability orientated and driven. Equally, the increasing interest in the use of agricultural food crops to produce biofuel is a thing of concern, especially when millions of people go hungry and there are concerns about a future food crisis. The production processes for these biofuels are highly energy intensive, and contribute significantly to carbon emissions and entrenchment of certain unjust and unfair sociocultural, economic practices including land ownership and management practices that are not sustainability oriented and do not lead to sustainable development. The point being made is that the renewability of an energy resource is not the only attribute or factor that policy makers and practitioners should consider in formulating policies, plans, rules and regulations that govern the utilization of certain energy resources especially wood biomass, water, agricultural and food crops to produce energy services – electricity and heat. Proper guidance should be put in place to ensure that utilization of energy resources that can be replenished naturally also meet important environmental, social, economic, technological, political and cultural sustainability standards. Use of resources, especially energy resources, must strive to lead to sustainable development as much as possible.

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COMMENT LARS MORATIS Moratis is a Professor of Sustainable Business, Antwerp Management School, Belgium

n his article ‘The ordeals of sustainability professionals’, professor Kenneth Amaeshi lays bare several aspects of the sustainability profession that can make working in sustainability quite an ordeal. A lot of these aspects are undoubtedly recognizable to many of us working on a better world – whether it is within business, government, the non-governmental sector, or education. In the final part of his contribution, professor Amaeshi points at the “extra care and psycho-social balance” it requires to be an effective sustainability professional and writes about the risk of “exhaustion and burnout” that may come with the job. It is especially this latter part of professor Amaeshi’s article that I think sustainability professionals should take note of. While many sustainability professionals would arguably say that they love their job and feel it is important, it is equally important that they are able to ‘sustain’ themselves in the job. An important source

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Sustainability: When the professional becomes personal of this ability to sustain oneself professionally stems from the recognition of what the sustainability profession shares with other professions that have caring for people or planet as their focus: that the personal values of the professional fully align with the values he or she holds as a person. There is no light between one’s professional and personal identity – they coincide and have fuzed. Professional development and personal growth then become two sides of the same coin, promising a virtuous circle of development. This symbiosis is admittedly a characteristic of jobs that people generally would find attractive and many people perhaps even long for. In fact, it may be fair to say that too many jobs lack such a characteristic and that this feature of modern organization is central to understanding the lack of engagement many people experience in their working life. Many of us working in sustainability have heard other people say something like “Wow, you have managed to make a living out of sustainability!” and “you must feel like you have the best job in the world” at least once in our careers. However, aligning your professional and personal

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I have asked myself over the years…: Does what I do make a difference? Does sustainability make a difference? Do I make a difference?

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values is not without danger. In fact, bringing your values to your job may seriously backfire and come at a serious cost, which may manifest itself in various shapes and forms. For instance, there have been climate scientists that have fallen victim to depression as they have realized that they are constantly working on an issue that may look too big to grapple with and may feel as a dead-end road despite the urgency for societies to deal with it. This resonates in my experience with many fellow sustainability professionals recognizing that despite the activities they have been working on in the course of their careers and the sustainability initiatives that they

have seen emerging globally not delivering on promise, notably because these are frustrated by the values and design of our socio-economic system – the exact thing they want to change. Many sustainability professionals may be working zealously on a better world without seeing the impact of this work that the world needs and they themselves desire. And it is true: disappointingly, when we look at the state of our world, on many accounts the world is worse than, say, 10yearsago. You do not have to look very hard to see the entire sustainability profession and many of the initiatives taken by professionals and organizations struggling with the vested interests of current regimes – and that may be rather dissuasive. Perhaps most importantly, aligning your personal values with your professional values implies that, even when you are able to celebrate your successes well, every failure counts as two. In other words: professional failure becomes personal failure. That may hurt, especially when you realize, as professor Amaeshi contends, that failure, a lack of recognition, and ungratefulness are an integral part of the sustainability professional’s job.

As a sustainability professional in business and academia myself, I have had my trials and tribulations with these issues on several occasions as well. Perhaps the most poignant questions that I have asked myself over the years in this regard are equally wellintended and mean spirited: Does what I do make a difference? Does sustainability make a difference? Do I make a difference? Such questions represent a struggle that, in my experience, returns now and again in a somewhat unsettling, almost existential way, urging deep reflection at those times, and are at the same time always present as some kind of permanent undercurrent. While this may be one of the biggest ordeals in the sustainability profession, it is difficult to imagine a professional life without sustainability for many of us. Perhaps the main thing to do for sustainability professionals to deal with such an ordeal is to keep connecting with each other, share our experience sand try to look after each other – and recognize that that, too, is part of the joy of being a sustainability professional. Send reactions to: comment@businessdayonline.com

Non-executive director compensation: A balancing act

BISI ADEYEMI Bisi Adeyemi is the Managing Director, DCSL Corporate Services Limited. Kindly forward comments and reactions to badeyemi@dcsl.com.ng.

n general, directors have three main roles – viz – monitor and provide leadership to management on behalf of shareholders; provide strategic direction and policy support; acquire resource for the company. These roles presuppose that through the expertise, wisdom, experience and information available to individual directors, the board will provide the required direction to the enterprise and would identify and acquire tangible as well as intangible resources required for sustainable performance. The monitoring role includes protecting and assuring the integrity of internal controls; the audit function; appraising and measuring management performance etc. Today directors are clearly spending more time on their board roles with full board meetings, committee meetings, teleconferences, shareholders meetings and director develop-

ment programmes among other commitments. They also need to make out time to attend to board and individual director performance evaluation. With more stringent corporate governance expectations, reputational risk is included to an already timeconsuming job. Given the vital importance of the responsibilities assigned to non-executive directors, it is expected that they will devote signiﬁcant time and effort to their boardroom and non-boardroom duties. Boards are expected to have non-executive director compensation policies that seek to attract and retain highly qualified directors; align directors’ interests with those of the longterm owners of the corporation; provide complete disclosure to shareholders regarding all components of director compensation and seek to provide for long-term stewardship of the corporation (International Corporate Governance Network). Although non-executive director compensation is generally immaterial to a company’s bottom line and insignificant when compared to executive pay, it is an important aspect of a company’s governance. Since director’s pay is set by the board and has inherent conflicts of interest, care must be taken to ensure that there is no appearance of impropriety. In setting director’s pay, the board should take cognizance of the following:

Peer groups – As directors are recruited from many industries, the board should consider competitive data both pertaining to the industry in which the company is operating and across a broader group of size-appropriate companies. In addition, it is important to assess total director compensation, and not pay by component since companies tend not to offer all components to directors. Thus, a periodic benchmark of what comparators are paying is good practice and a useful guide to the board in fixing and reviewing director compensation. Workload – It is nearly impossible to determine the actual number of hours a director will put into the role. While number of meetings is an imperfect way to determine workload, and more importantly, to determine the value that a director will bring to the board, it nevertheless serves as a useful information when benchmarking pay packages. Consideration should also be given to other time commitment required of directors in the discharge of their responsibilities. The merit and timing of pay increases – boards generally feel a bit awkward about approving an increase in their compensation. However, it is suggested that an increase may be justified if the company is doing well and where a peer review suggests that the company’s directors’ pay lags the market. (http://www. farient.com/2010/12/directors-

compensation) Section 267 of the Companies and Allied Matters provides that a company is not bound to pay remuneration to directors but where the company agrees to pay, directors shall be paid such remuneration out of the funds of the company and such remuneration shall from time to time be determined by the company in general meeting. The CBN Code of Corporate Governance provides that director remuneration shall align with the long-term interest of the bank and its shareholders and the levels of remuneration shall be disclosed to the shareholders in the annual report. The code limits non-executive director compensation to sitting allowance, directors’ fees and reimbursable travel allowance. The decision on non-executive director compensation should not be that of management. This is to ensure that the board is able to maintain its independence of management and not feel beholden to the CEO for his/her “benevolence”. The board governance/remuneration/nomination committee, armed with appropriate data, should make recommendations to the board, mindful of the company’s ability to pay and sustain the compensation package as well. Increased demands coupled with the unique requirements of each board means that nonexecutive director pay should be fair, but not enough to tilt

the balance of independence required of an effective board. Section 14.6 of the SEC Code of Corporate Governance provides that compensation for nonexecutive directors should not be at a level that could compromise their independence. It is also not good practice for the board to use executive compensation as a benchmark for determining non-executive director remuneration. In addition to their statutory responsibilities, executive directors have day-today responsibilities to which they are expected to devote all their time and attention. Just as executive compensation is heavily scrutinized today, so is non-executive director compensation. Opaque and “off radar” remuneration that cannot stand the test of scrutiny should not be paid to directors to avoid compromising their independence. The board should continue to strive to strike the right balance and ensure that appropriate disclosures are made in the interest of transparency and accountability. On Thursday, 25th October 2018, DCSL will be hosting a master-class themed “Beyond Compliance - The Role of the Internal Audit & Compliance Function in Business Sustainability”. Kindly contact ntaiwo@ dcsl.com.ng or 08037699347 for registration and further details.

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BUSINESS DAY

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Frank Aigbogun EDITOR Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya

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

Bashir Ibrahim Hassan GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

Monday 08 October 2018

Still on election financing in Nigeria

n oth er ele ction season is upon us in Nigeria and political parties and candidates will begin campaigns to win the hearts and minds of voters before the 2019 elections. We have written severally on the imperative to legislate workable election financing laws in Nigeria like that of the United States, but the political class have been reluctant if not unwilling to do anything about how elections are financed in Nigeria. We still consider it pertinent to talk about how elections are financed in Nigeria because it is key to the institution of an accountable governance system in any country. The world over, elections are very expensive events. Besides the huge financial outlay required by the electoral management body and security agencies to organise and ensure smooth and secure voting, candidates and parties contesting elections expend huge sums of money in campaigns across the length and breadth of their constituencies. In the United States of America, for instance, in 2008 alone, candidates for offices, political parties, and independent groups spent a total of $5.3 billion on federal elections. For the office of the president, candidates spent a total of $2.4

billion. In the 2010 midterm election cycle, candidates for office, political parties, and independent groups spent a total of $3.6 billion on federal elections. It was estimated that the average winner of a seat in the United States House of Representatives spent about $1.4 million on his or her campaign while the average winner of a senate seat spent $9.8 million. Similar data exist for other developed societies but not Nigeria. Generally also, monies for campaigns in the United States for federal offices come from four broad categories of sources: small individual contributors (who contribute $200 or less); large individual contributors (who contribute more than $200); political action committees (PACs); and self-financing like in the current case of Donald Trump. Quite sensibly, federal laws in the US also restrict how much individuals and organisations may contribute to political campaigns and political parties. The law also requires candidate, committees and PACs to file periodic reports fully disclosing all monies they raise and spend. The aim of these campaign financing laws is to ensure full transparency in electoral contests and to prevent the hijack of the electoral process by money bags, which will defeat the essence of democracy. However, Nigeria, which modelled its presidential democracy

after that of the US, did not deem it necessary to copy the campaign funding laws of the United States. Although Nigeria’s electoral laws often contain campaign spending limits, neither the electoral commission nor any body in Nigeria is capable of monitoring campaign spending to know whether the candidates keep within or exceed the limits. For instance, the 2010 Electoral Act put the spending limit for candidates for presidential election at N1 billion and those for governorship positions at N200 million. Curiously also, the electoral act did not specify how these monies are to be raised. Enter godfathers and political merchants who specialised in bankrolling candidates elections for huge profits and returns. With a largely unregulated election financing environment, candidates and electoral merchants now see elections in Nigeria as simply a matter of investments and returns. This is not helped by an unhealthy culture of expectation and entitlement in Nigeria where the people expect politicians and the government to provide jobs, roads, hospitals, education, water, electricity, etc. at little or no cost. Also, many Nigerians expect and look forward to receiving money from politicians during and after campaigns. Is it any wonder then that the notion of government accountability is alien to Nigerian

public officials? Once elected into office, public officials’ main task is to recoup and make huge returns on the money spent during the elections. That is even for self-financed candidates. For those financed by godfathers, both the official and his/her godfather are locked in battle on who takes the largest share from the investment. It should therefore come as no surprise that despite the hues and cries from Nigerians, salaries, allowances and other emoluments of elected public officials continue to be so high – and justifiably so. A Nigerian legislator once complained that he gets inundated daily with financial requests from his constituents and that if he were to attend to all of them his entire salary/allowances won’t even be enough to take care of 50% of such requests. It is clear that Nigerians’ clamour for accountability in governance cannot be achieved without a thorough review of election financing laws. We call on the federal government, the Independent National Electoral Commission (INEC), the National Assembly and all concerned stakeholders to initiate moves to sanitise the laws governing elections financing in Nigeria to rescue elections from electoral merchants and god-fathers who see elections as an investment opportunity where they stand to make huge profit from.

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Monday 08 October 2018

BUSINESS DAY

Monday 08 October 2018

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Geopolitics and investment

Gun town Sex and power

China has designs on Europe. Here is how Europe should respond

Why Cape Town’s murder rate is rising

One of the world’s most beautiful cities is also one of the most violent T’S going to be crazy tonight,” sighs Craven Engel, a pastor in Hanover Park, a township on the fringes of Cape Town. A few hours earlier gunmen had killed a high-ranking member of the Laughing Boys, a gang. Mr Engel is on his phone, trying to dissuade its leaders from vengeance, which is just hours away. “Everyone has a violent vibe going on.” Since the advent of democracy in 1994, South Africa as a whole has had less of a violent vibe. The murder rate—the best indicator of violent crime, as most cases are reported—

As Chinese investment pours into the European Union, the Europeans are beginning to worry UROPE has caught China’s eye. Chinese investments there have soared, to nearly €36bn ($40bn) in 2016—almost double the previous years’ total. Chinese FDI fell in 2017, but the share spent in Europe rose from a fifth to a quarter. For the most part, this money is welcome. Europe’s trading relationship with China has made both sides richer. However, China is also using its financial muscle to buy political influence (see Briefing). The Czech president, Milos Zeman, wants his country to be China’s “unsinkable aircraft-carrier” in Europe. Last year Greece stopped the European Union from criticising China’s human-rights record at a UN forum. Hungary and Greece prevented the EU from backing a court ruling against China’s expansive territorial claims in the South China Sea. Faced with such behaviour, it is only prudent for Europeans to be nervous. And not only Europeans. The terms on which the emerging undemocratic superpower invests in the outside world are of interest to all countries—particularly if other things, such as foreign policy, may be affected. Americans, increasingly consumed by fears that China poses a commercial and military threat, should be mindful of competition for the loyalties of its oldest ally. For everyone’s sake, it matters that Europeans gauge their welcome to China wisely. Just now, they do not. Many of China’s plans in Europe are just what you would expect of a rising economy. Some investments are private, profitseeking and harmless. Acquiring technology by buying innovative firms, including in Germany’s Mittelstand, is reasonable, too, so long as deals are scrutinised for national-security risks. There are also things that China, unlike Russia, does not want, such as to undermine the EU or sow chaos by furtively supporting populist, xenophobic parties. It would rather Europe remained stable and open for business. On issues such as climate change and trade, China has acted more responsibly than the Trump administration, seeking to uphold global accords rather than

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chuck grenades at them. Some Europeans take this to suggest that China is a useful counterweight to an unpredictable Uncle Sam. That is misguided. Europe has far more in common with America than China, however much Europeans may dislike the occupant of the White House. Moreover, China has used the EU’s need for unanimity in many of its decisions to pick off one or two member states in order to block statements or actions of which it disapproves—as with human rights. Other Europeans seize on such examples to jump to the opposite conclusion. They fear that Chinese lucre will one day undermine Europe’s military alliance with the United States. Fortunately, that is a long way off, as the French and British navies have shown by joining America and Japan to challenge China in the South China Sea (see article). Until China itself becomes a democracy, of which there is no sign, Europe will surely remain closer to its traditional allies. Europe thus needs to take a path that avoids the extremes of naivety and hostility. It should avoid mimicking Chinese protectionism. It might sound “fair” to subject Chinese firms in Europe to the restrictions European firms face in China, but it would be a mistake. The permeability of European societies and economies to ideas and influences is a strength. But such openness also makes them vulnerable. Hence, govern-

ments should vet investments case by case. Montenegro should not have allowed its debts to China to become so perilously vast. Hungary and Poland should have looked harder at certain Chinese infrastructure projects that offer poor value for money or were never properly completed. Europeans could do more to substantiate their talk of “reciprocity”, or the mantra that the EU and China should treat each other as each wishes to be treated. They could, for example, introduce new instruments to make it clearer who is buying stakes in firms and thus whether they are doing so fairly. They should also increase funding for impartial China research. Transparency should be demanded from political parties, universities, think-tanks and lobbyists. Sometimes Chinese cash buys unsubtle happy talk. More often, it leads to self-censorship and punch-pulling from even prestigious academies. And Europe should aim to speak as one. None of its states alone can face down China but, acting together, they could do so for decades to come. The EU could, for example, use qualifiedmajority voting (QMV) rather than unanimous votes on some subjects sensitive to China, such as human rights. This would not work for everything—most EU nations would balk at giving Brussels a veto over how they deploy their military forces. But QMV would make it

harder for China to paralyse the EU by picking off one small member at a time. The EU could also co-ordinate investment-screening processes by member states. And it could take better care of those southern and eastern countries particularly vulnerable to China’s influence and provide alternative sources of investment for the projects they deem important. A little more intra-European solidarity would go a long way. America has a role to play, too. Ideally the Trump administration would stop treating Europeans as free-riders on American power who deserve a good kicking. On trade, especially, the EU is a powerful potential ally in getting China to abide by global norms. America should also work more closely with European governments to set up common standards of transparency, graft-busting and the prevention of influence-peddling—which would make it harder for China to impose its own rules on small countries. At a time when standards for IT and artificial intelligence risk splitting into a Chinese camp and an American one, Europe can help find a middle path. As China rises, the benefits for the world of an independent, open and free Europe will only increase. Conversely, a Europe weakened and divided by the world’s most powerful authoritarian regime would exacerbate problems far beyond the EU’s borders. Europe must not let that happen.

has fallen by almost half, from 69 per 100,000 people in 1994/95 to 36 in 2017/18. International data are patchy, but they suggest that since the end of apartheid South Africa went from being the world’s third-mostmurderous country to the seventh. Nevertheless, its murder rate has recently ticked up, from a low of 30 per 100,000 in 2011/12. The jump last year was the biggest since 1994. Cape Town’s murder rate has risen from 43 to 69 per 100,000 between 2009/10 and 2017/18, calculates Anine Kriegler of the University of Cape Town. Last year’s rise was the biggest since comparable data became available in 2005/06. Today its rate is more than twice that of Johannesburg (see chart) and higher than in any large city outside the Americas, according to the Igarapé Institute, a Brazilian think-tank. That may surprise those who associate Cape Town with beaches and Table Mountain. But a short drive from some of the priciest property in Africa are the Cape Flats, a patchwork of townships. Many were dumping grounds when the apartheid regime removed “Coloureds” (people of mixed race) from the inner city in the 1960s. Unemployment and poverty are endemic. Most children grow up fatherless. In one precinct, Philippi East, 93% of households were victims Continues on page 15

Monday 08 October 2018

C002D5556

BUSINESS DAY

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Pigs to market

Why Cape Town’s murder...

China grapples with trademark infringement—of its own brands A few foreign firms there are winning larger trademark-related awards, too

EPPA PIG was the target of China’s online censors earlier this year when the pink porcine character for toddlers was co-opted by unruly Chinese teenagers as a subversive symbol. But the popular piglet is also the object of another sort of unwanted attention: the registration of trademarks related to the brand by foreign “squatters”, who hope to benefit as counterfeiters or competitors, or to extract a hefty fee when its true owners lay claim to it. The cartoon character’s British owners said last month that more than 100 Chinese firms have put in applications for Peppa Pig trademarks, some made years ago, thus in effect blocking its own. China’s “first-to-file” trademark law (as opposed to the “first-to-use” rule in America and Britain, based on the sale of the good or service in question) means that speedy filings by locals can stop original brand-owners selling in China. Because registrations are cheap, trademark “trolls” file by the hundred. Dozens of foreign firms have been stung, from Apple (which paid $60m in 2012 to retrieve the right to use its iPad trademark in China) to Viagra, for which Pfizer, its American manufacturer, still does not own the Chinese-character mark by which it is best known to Chinese. Now Chinese brands are find-

ing that they too are increasingly targets of foreign squatters. An investigation commissioned by the China Trademark Association (CTA), a lobby group, into around 300 of its bestknown members found that the trademarks of around a third had been squatted, each in around four countries on average. The 98 brands owned by Vivo, a smartphone-maker, were the most widely affected, in 53 countries and regions including America, Brazil, and the EU. Another victim was Hunan China Tobacco Industry, a cigarette brand squatted in 21 places, from Panama to Indonesia. The practice is not entirely new: the trademark for the biggest brand of traditional Chinese medicine, Tong Ren Tang, has been owned by others in Japan, South Korea, America and Europe since the 1980s. But the CTA claims that malicious squatting of Chinese brands, which are increasingly valuable, has become “professional and large-scale”. In one case last year dozens of toymakers, chiefly from the Chenghai district of Shantou, in southern Guangdong province, learned that an IndianChilean toy merchant in Chile had registered over 300 of their trademarks there, resulting in the blocking of some of their products at customs. Tianjin Wanda Tyre Group, a tyre firm, had refused to give exclusive distribution rights to a Finnish reseller, then discovered that its

partner had registered Wanda’s trademark for its own use in the EU in 2011. Since 2014, a Chinese food-and-beverage giant has fought to invalidate the registration of its trademark in Britain by a British citizen of Chinese descent. Like their Western counterparts, however, Chinese firms are finding registrations by others hard to overturn. Jani Kaulo of Kolster, a Finnish intellectualproperty firm that represented Wanda, says that is partly because they have been slipshod in storing files to prove a first-touse right. This should have been easy: Wanda had been selling its tyres in Europe since 2006. But it failed in its appeal at the European Union Intellectual Property Office, thus losing its main brand in the EU market. Trademark offices approach complaints from Chinese brands with an attitude shaped by the relentless squatting by Chinese trolls on European ones, adds Mr Kaulo. Compounding this is the weak position of Chinesecharacter trademarks abroad. In the EU only their visual component is recognised in trademark law, not their pronunciation or their conceptual meaning. That makes them easy to copy, for example with homonyms that could fool Chinese-speaking buyers abroad. China is stepping up efforts to defend its brands. After the CTA set up a committee to protect trademarks abroad in April,

Nantong, a coastal city, established its own office and nearby Shanghai announced that it would, too. The Chilean toy case was among the first set of brand-infringement warnings released by the Chinese government in 2017. Ning Lizhi, a legal expert who worked on the dispute in Chile, terms the case an “unusual and significant” one, which was resolved when the Indian-Chilean businessman agreed to become a reseller for the Shantou toymakers in Chile. Given the ease and speed of the settlement, Mr Kaulo reckons that China’s government must have intervened. Might greater concern for its own brands prod China into playing fairer with those of others? Its leaders have already been threatening tougher intellectualproperty protections. Last year three Chinese shoemakers were told to pay 10m yuan ($1.5m) to New Balance, an American footwear company, for copying its logo. In August the Lego Group won a case against Lepin, a Chinese toy manufacturer and copycat of its colourful brick sets, which was made to pay damages of 15m yuan to the Danish firm. It was one of the largest trademark-related awards ever made by a Chinese court. And in the same month two Chinese firms were ordered to stop making products using the image of Peppa Pig, in what the court called a landmark case. Swine beats swindler, then.

Continued from page 14

of crime in 2016. The Flats also contain gangs. In few cities globally are they so deeply rooted. The “numbers” prison gangs have such complex rules that they speak their own language. They trace their history back more than a century. Street gangs were present before forced removals but, over the past five decades, have become entrenched. A higher share of young people are affiliated to gangs than in cities such as Baltimore. One member who lives in Hanover Park explains his initiation into the Americans, probably the largest gang. At 13 he was given a knife with which he had to stab someone before two peers, then wipe the blood on an American flag. Membership gave him an identity, food, clothes—and a way to impress girls. But it meant killing. “The brotherhood is real even if the way we show that love is wrong,” he says. Gangs are not the only source of murder in the city. But they have caused a “substantial portion” of the recent surge, notes Mark Shaw, a criminologist who runs the Global Initiative against Transnational Organised Crime. Since 2011 every police precinct in a known gang area has seen a rise in the murder rate. “We have become desensitised,” says a resident of Manenberg, another township. She no longer covers dead bodies so that they are not seen by children coming home from school. Today about 100,000 people on the Flats belong to more than 130 gangs, in an unstable patchwork of alliances. As members pass in and out of jail, lines blur between prison and street gangs, creating new rivalries. As members age, intergenerational friction appears. Pastor Engel recalls a school gang, the Spoiled Brats, set up by children of Americans gang members. The offspring got too uppity, so their fathers, and another gang, turned on them. Just two of its 22 members are still alive. These gangs are increasingly sophisticated and commercialised operations, which use a mix of street muscle and assassinations to amass power. The biggest street gangs are fronts for vast mafia-like enterprises, complete with links to policemen and politicians. When changes take place in the markets they are involved in, it can encourage new entrants and battles for turf, leading to surges in violence.

BUSINESS DAY

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The old man and the insurgency

Africa’s oldest president, campaigns for another term in Cameroon But parts of the country are rising up

N THE campaign trail Paul Biya’s motto is “La Force de l’Expérience”. It is a slogan that few would dispute. Since Robert Mugabe was tossed off Zimbabwe’s throne last year, the 85-year-old Mr Biya, Cameroon’s president since 1982, has been Africa’s oldest head of state. Still, as he tours his country ahead of presidential elections on October 7th, two corners of Cameroon are unlikely to hear his pitch in person. In the English-speaking south-west and north-west regions, where separatists are waging an insurgency, the violence is so intense that it would not be safe for Mr Biya to visit. Militias there have threatened to attack the president. They have also told fellow Anglophones to boycott the election. Armed mainly with home-made rifles, cutlasses and juju (black magic) charms, the guerrillas have limited power to carry out their threats. Yet much of the popula-

tion already backs the boycott. Come election day, it may be a brave person who ventures out of his house at all. Thousands of people have already fled the two regions ahead of the poll. This will probably be Mr Biya’s last election—he will be 92 if he stands for another seven-year term. Critics say that the blame for the violence surrounding the poll rests largely with the president, an aloof leader with

scant regard for human rights or Anglophones. For decades English-speakers have complained of government neglect of their regions. When they protested two years ago over plans to increase the number of French-speaking judges in their British-styled courts, Mr Biya responded with bullets and tear gas. Today, a smouldering civil war afflicts much of English-speaking Cameroon, with tit-for-tat atroci-

ties by security forces and separatists. Some 160,000 people have been displaced and 600 killed, 160 of them members of the security forces. Reports from Bamenda, the north-western capital, say the hospital morgue is now filled to capacity with unidentified corpses. Last week separatists staged a mass jail break, freeing more than 100 prisoners. Amid mounting pressure from Britain, France and America, Mr Biya has responded with some belated concessions, including a cabinet reshuffle to increase the number of English-speakers, and creating a clunkily titled National Commission for Bilingualism and Multiculturalism. But diplomats worry that the president and his ageing inner circle have yet to grasp the scale of revolt. In February Mr Biya said the crisis was “stabilising”. That was not the view of Cameroonians in the city of Calabar on the Nigerian side of the border, where 25,000 are refugees. Ulrika

Naseri, who had just arrived after a two-day trek through the forest with her children, said soldiers had rampaged in her village, killing her neighbour. “It is too late for dialogue now,” says a former fighter with one of the separatist militias. “Too many lives have been taken.” Yet it is hard to see the separatists getting their own state. Regional and Western governments are wary of backing them, mindful of how newly minted South Sudan has collapsed into civil war. The crisis could still be defused if Mr Biya made the right moves, including, perhaps, devolving more power to the restive regions. Once he is re-elected— which seems likely, since the vote is sure to be rigged—he may feel free to make magnanimous gestures. But that would mean swallowing his pride. Doing so would not be easy for a president who has adopted the nickname “lion man” to symbolise his tenacity and ruthlessness.

Obelisk diplomacy

Egyptians are upset by Britain’s disregard for a gift London’s ancient obelisk is popular among pigeons, but not people

OR two millennia Europeans have prized ancient Egyptian obelisks. Roman emperors placed captured obelisks in temples in Rome. Pope Sixtus V unearthed one and placed it in St Peter’s Square, the Vatican’s forecourt. Ottoman sultans redesigned Istanbul around them. King Louis Philippe of France made one the centrepiece of the world’s most elegantly planned city. Not so the British. Muhammad Ali Pasha, the founder of modern Egypt, gave Britain a 3,500-year-old obelisk as a gift in 1819. But efforts to honour the bicentennial have fallen on deaf ears. The office of London’s mayor, Sadiq Khan, refers requests for an Anglo-Egyptian festival to a website for frequently asked questions. Follow-up inquiries go unanswered. The snub has not gone unnoticed. Egypt’s press protests against this ingratitude and calls for the obelisk’s return. Visiting Egyptian officials are shocked

of a pair. The other was given to America—and has also been largely forgotten. It sits in a lonely corner of Central Park in New York. But America, at least, placed an obelisk on its dollar bill and erected a bigger one in Washington, DC. Britain seems more enamoured of columns.

that it is hidden by trees on the banks of the Thames, covered in pigeon droppings and bereft of helpful signs. “If the mayor of London isn’t interested in the obelisk, he does not deserve to have it, and it should come back,” says Zahi Hawass, a former head of Egypt’s Supreme Council of Antiquities.

Britain has never seemed especially fond of the obelisk. Its prime minister in 1819, Lord Liverpool, decried the expense of shipping the 200-tonne icon. So it sat in Alexandria for decades. The boat that collected it in 1877 nearly lost it in a storm off the Bay of Biscay. When it finally sailed up the Thames it was left

on the riverbank, contemplating mudflats. Like the Paris one, it was given the homely title of Cleopatra’s Needle. The pink granite turned black in the smog and was later dwarfed by Art Deco mansions. Bomb damage in the second world war was never repaired. The London obelisk is one

Monday 08 October 2018

BUSINESS

COMPANIES & MARKETS

DAY

Enhanced pension as cushioning effect of non implementation of GMP

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C o m pa n y n e w s a n a ly s i s a n d i n s i g h t

BoI disburses N2.8bn to SMEs, MSMEs in Kaduna T

Truecaller launches chat feature for better service

HARRISON EDEH, Abuja

ank of Industry (BoI) said it has disbursed N2.8 billion intervention fund to over 280 SMEs and 20550 Micro Small and Medium Enterprises MSMEs in Kaduna State alone. Olukayode Pitan, managing director of the bank disclosed this on at the 20 edition of National Micro, Small and Medium Enterprises (MSMEs) Clinic in Kaduna, stating that the move was part of efforts to boost ailing businesses. He added that thousands of businesses have benefited from the agency’s intervention. “As of today, BoI has supported thousands of SMEs

across the country and is aiming to do more. In Kaduna State, we have disbursed to 280 SMEs and 20550 Micro Enterprises to the tune of N2.8bn” he said. The BoI boss further disclosed plans to establish shared facility in partnerships with Federal, state government, and other relevant agencies in Kaduna, where several MSMEs can take advantage for easy and enhanced productivity. According to him, the shared facility will be fully equipped with machinery so that the financial burden of buying equipment or renting space would be lifted off the shoulders of the entrepreneurs. Earlier in his remarks, Vice President Yemi Osinbajo ex-

plained that the MSME Clinic is part of federal government’s efforts to bring relevant government agencies to MSMEs for ease of doing businesses. He said since the event was instituted, entrepreneurs are better informed on issues of regulations and incentives available for their businesses. “The MSMEs Clinic is government’s way of paying attention to MSMEs. The one-stopshop initiative is where regulatory agencies are brought together under one roof for easy assessment for MSMEs, where all the MSMEs can go and get all of their relevant approvals without having to travel around the country” he said. The Vice President com-

Wema Bank expands branch network to boost customer service

ema Bank has opened three new branches including Town Planning Way ilupeju, located in Lagos; Lafenwa in Ogun State and ABUAD in Ado Ekiti targeted at enhancing consumer access and better service. Ademola Adebise new managing director of the bank stated that the opening of the new branch will help strengthen Wema Bank’s presence

competitively at the various locations to easily provide make its producst and services readily available to the residents and business owners in these areas”. The new Lafenwa branch now located beside Oando Filling Station, Bridge Street was relocated from 1, Lagos/Abeokuta road while the ABUAD branch Opposite Afe Babalola Teaching Hospital, Ado Ekiti was relocated from

the Talent Recovery Centre, Afe Babalola university Ado Ekiti. The bank assures that the managers and their teams are available Monday through Fridays from 8 a.m. to 4p.m to assist existing customers as well as those who would like to learn more about Wema Bank products and services. All branches are also fitted with ATM galleries that are accessible 24/7.

mended BoI and other financial institutions that have continued to provide support to MSMEs, stressing that the move is in line with federal government’s ease of doing business policy. Earlier, the BoI boss visited two companies, including Nikoyi Nigeria Limited, and Northern Cable Company, to monitor how the intervention funds provided by the agency have impacted on their performance. Olawale Oyedele, managing director of Nikoyi Nigeria Limited, expressed appreciation for the fund provided by BoI, stressing that it has made the operations easier. Oyedele said that apart from the loans which are far cheaper than what any bank can give, BoI provides professional guidance with exceptional customer service that is quite uncommon in public sector.

ruecaller has announced the launch of its instant messaging (IM) platform ‘Truecaller Chat’. With the aim to make communication safer to prevent fake news from circulating. The IM platform will allow users to report links, ensuring that fake news is not circulated unchecked by users. With social media’s rapid adoption globally, the menace of fake news has been on the rise. Even the resident of Nigeria, Muhammadu Buhari, in his Independence Day speech, advised that information spread via social media should be scrutinized. Truecaller has helped erode spam calls faced by users through Caller ID and also strengthened SMS inboxes by filtering unwanted messages. As a step to curb the spread of erroneous information, Truecaller, with help from its community, has launched this service as a shield against viral messages sent on its instant messaging platform Users will be able to mark website links as spam if they suspect them to have incorrect information, which will then

help chatters make a more informed decision about what information is false. With time, Truecaller also plans to apply machine learning and use the aggregated spam reports to predict any upcoming viral trends. Additionally, ‘Truecaller Chat’ is bundled with interesting features such as, auto-switch between SMS and Chat, which will help users keep conversations in one place. Other features include full media support and more that will provide its users a polished and enjoyable experience. Commenting on the launch, Rishit Jhunjhunwala, vice president, Product at Truecaller, said: “As a one-stop communication platform, our IM service will help our users connect and also collaborate to combat the issue of spam. We’re confident that this foundation stone will help build a strong spam-free community.” By providing a messaging service with capabilities to tackle fake links, Truecaller is taking a big step towards curbing the problems caused by spam and false information going viral.

BUSINESS DAY

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Monday 08 October 2018

COMPANIES & MARKETS

International Energy fingers petrochemicals as largest driver of global oil demand MIKE OCHONMA

study undertaken by the International Energy Agency (IEA) has revealed that petrochemicals are becoming the largest drivers of global oil demand, ahead of cars, planes and trucks, Petrochemicals, which are components derived from oil and gas that are used in all sorts of daily products such as plastics, fertiliser, packaging, clothing, digital devices, medical equipment, detergents and tyres, are set to account for more than a third of the growth in global oil demand by 2030, and nearly half the growth to 2050. This, the study pointed out, will add nearly sevenmillion barrels a day of oil demand by then. The study, titled ‘The Future of Petrochemicals’ is part of a new IEA series focusing on “blind spots” of the global energy system, namely issues that are

critical to the evolution of the energy sector but that receive less attention than deserved. It is among the most comprehensive reviews of the global petrochemicals sector, according to the IEA, and follows other reports in the series, including the impact of air conditioners on electricity demand, the impact of trucking on oil demand and the role of modern bioenergy in the renewables sector. Petrochemicals are particularly important given how prevalent they are in everyday products, the IEA noted. According to IEA executive director Fatih Birol, “Our economies are heavily dependent on petrochemicals, but the sector receives far less attention than it deserves”. “Petrochemicals are one of the key blind spots in the global energy debate, especially given the influence they will exert on future energy trends. In fact, our analysis shows they will

L-R: Omotola Bamigbaiye-Elatuyi, marketing manager, Malta Guinness and APNADS; Folusho Phillips, executive chairman, Phillips Consulting; Michael Omolayole, and Jodi Samuels-Ike, marketing and innovations director, Innovation, Lager, Consumer Connections and APNADS, at the 34th Omolayole management lecture with the theme, ‘ Human Capacity Building: Imperative for Economic Recovery and Transformation’, in Lagos.

have a greater influence on the future of oil demand than cars, trucks and aviation.” Meanwhile, the demand

First Bank promotes financial inclusion, launches xplorefirst savings promo

n alignment with its financial inclusion drive, First Bank of Nigeria Limited has announced a promotional campaign aimed at rewarding its youth segment customers for using their FirstBank XploreFirst Savings accounts whilst also encouraging healthy savings habit. The promo which kicked off on October 1, 2018 is scheduled to run for 6 months to March 30, 2019. XploreFirst is a FirstBank savings account variant designed specifically for students between the age range of 18 – 29 years. A minimum amount of N1, 000 is required to open the account and account holders are to maintain a minimum balance of N200 to run the

account. To participate in the promo, XploreFirst customers are encouraged to save or maintain a minimum amount of N10, 000 in their accounts during the promo period to be eligible for the scholarship raffle draw. Incremental deposits of N10,000 in the account entitles the account holder to multiple tickets for the raffle draw. A total of 198 winners would emerge from the promo with 18 account holders (3 from each of the six geopolitical zones) being rewarded with scholarships of N150, 000 in a grand finale raffle draw and N5,000 airtime as consolation prizes to 180 account holders (5 from each of the six geopolitical zones)

Abiodun Famuyiwa, group head, Products & Marketing Support said “FirstBank recognises the impact of a healthy savings culture in promoting financial inclusion amongst individuals, especially the youth. And with the saying, the youth are the leaders of tomorrow, we believe that with XploreFirst account, the youths are well positioned to take the lead in their financial activities through the exciting benefits the account offers.” So, if you are a student between the ages of 18 – 29 years, take a walk into any FirstBank branch near you to open an XploreFirst account. Start your journey to financial freedom today with Firstbank”.

AXA Mansard celebrates customer service week

XA Mansard, a member of AXA, the global leader in insurance and asset management joined in the celebration of the just concluded Global Customer Service Week. Customer Service Week, which is observed globally every year during the first full week of October, celebrates the culture of service and excellence by recognizing those who serve our customers. The event was created to reward and recognise people who deliver exceptional customer service as the main part of their work. The

2018 Customer Service Week is themed “Excellence happens here”. Speaking on the celebration, the Head of Strategy & Marketing at AXA Mansard Insurance Plc, Emeka Muonaka stated “This year’s theme “Excellence happens here” is in line with the company’s passion to consistently provide quality products and services to our esteemed customers, and is a key part of our strategy to deliver exceptional customer experience” He further noted “The Customer Service Week is not only a time to reflect on our promise to

our customers to deliver superior service, it is also a time to appreciate our front line representatives. We are taking this opportunity to say thank you to our customer facing staff for their selfless effort to meet our customers’ needs and be exemplary ambassadors of the AXA Mansard brand. I commend your hard work and celebrate you this Customer Service Week. With your dedication to the AXA Mansard brand, I can confidently continue to promise customers excellent service and let them know we are here when they need us”.

for plastics as the key driver for petrochemicals from an energy perspective has outpaced all other bulk materials, such as steel,

aluminium or cement, and has nearly doubled since 2000. Advanced economies currently use up to 20 times

more plastic and up to ten times more fertiliser than developing economies on a per capita basis, underscoring the huge potential for global growth, the IEA stated. The dynamism of the petrochemicals industry is also driving new trends around the world. After decades of stagnation and decline, the US has re-emerged as a low-cost location for chemicals production as a result of the shale gas revolution, and is now home to around 40% of global ethane-based petrochemicals production capacity. The Middle East remains the lowest‑cost centre for many key petrochemicals, with a host of new projects announced across the region. Petrochemical products provide substantial benefits to society, including a growing number of applications in various cuttingedge, clean technologies critical to sustainable energy systems.

PwC trains Journalists at annual Capability Enhancement Workshop

eading professional services firm, PwC Nigeria has again hosted its annual Capability Enhancement Workshop for journalists. The one day workshop, which held in Lagos had as participants from across both traditional and new media platforms. It featured insightful presentations on various topics by subject matter specialists with the aim of building the capacity of journalists and enhancing their ability to execute their duties effectively while also better positioning themselves to take advantage of future opportunities. The annual workshop which is now in its fifth year, with over 300 journalists benefitting from the training over the years, is a major component of PwC’s Corporate Responsibility strategy. It was instituted in recognition of the very important role of the media in society and in particular, the role that the media in Nigeria has and continues to play in informing and educating the public. “Our support for the media through this workshop and the media excellence award is in line with our purpose which is to build trust in society and solve important problems. Itis a demonstration of our strong belief that for the Nigerian people to enjoy good governance, the media must

perform its role optimally and professionally and this is reflected in the quality of reporting, in the capacity of individual journalists to carry out research and investigations, in the independence of editorial judgments, and in their ability to use technology as an enabler.” Said Taiwo Oyedele, partner and head of Tax and Regulatory Resources, PwC Nigeria in his opening remarks at the session. This year, the organiser took a poll of the workshop participants at the point of registration, to come up with the topics discussed at the session. The presentations at the workshop included a session on “Technology & Data Journalism: Using Data to transform story telling” facilitated by Victor Olorunfemi- Manager and Tax Technology lead, PwC Nigeria. The session demonstrated the power of technology and data in enabling journalists tell insightful stories including the tools and sources of relevant data. Editor of BBC Pidgin, Adejuwon Soyinka, facilitated a session on “Investigative Journalism” during which he shared his experience on recent reports including Sweet-Sweet Codeine and the unravelling of killings by Cameroonian troops in northern Cameroon.

The two other sessions included one by Esiri Agbeyi, a partner at PwC Nigeria’s on “Preparing for the future: Savings & Investments Strategies”. She shared with participants tips that would help them rise above their meagre remunerations, save and make investments that will enable them live a better life while securing their future. The last session on The Press Council Bill which was facilitated by Moshood Olajide, Partner and PwC Nigeria’s general counsel discussed implications of the provisions of the proposed law on journalists and the practice of journalism in Nigeria. The capacity enhancement workshop precedes the award galanite for the announcement of winners of this year’s PwC Media Excellence Awards, which is held Friday in Lagos. At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 158 countries with more than 250,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us atwww.pwc.com PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc. com/structure for further details.

Monday 08 October 2018

COMPANIES & MARKETS Business Event

L-R: Vice President Yemi Osinbajo; Nasir el-Rufal, governor, Kaduna State, and Toyin Adeniji, executive director, micro enterprise, Bank of Industry (BoI), during the launch of TraderMoni, at Central Market, Kaduna.

L-R: Rotimi Oladokun, public relations officer, Nigerian Prisons Service, Lagos State Command; Layo Ilori Olaogun, head, benefits administration & client services, Stanbic IBTC Pension Managers Limited (SIPML); Itanrin John Ilesanmi, assistant controller of prison, Nigerian Prisons Service, Lagos State Command; Steve Elusope, executive director, operations, SIPML, and Beyioku Segun Stephen, second in command, Badagry Prison, during the commissioning and handing over ceremony of Corporate Social Investment projects and installations at the Badagry Prison by SIPML’s Benefits Admin Unit in Lagos.

L-R: Olubunmi Adeniola, key distributor, Ibadan; Ipsit Chakrabarti, sales director, PZ Wilmar; Adeyoola Theresa Olaitan, permanent secretary, ministry of education, Oyo, and Chioma Mbanugo, category marketing manager, PZ Wilmar, at the official trade launch of the Mamador and Devon King’s seasonings at Jogor Centre, Ibadan.

L-R: Iziren, controller of labour River State; Basil Adimorah 2nd vice president, HuCaPAN; Umar Yahaya, director, Employment & Wages, Federal Ministry of Labour; Aderemi Adegboyega, president, HuCaPAN, and Olusegun Mojeed, 3rd vice president, HuCaPAN and executive consultant, BezaleelConsulting, at the 5th Annual National Joint Workshop of the Federal Ministry of Labour & Employment and the Human Capital Providers Association of Nigeria (HuCaPAN), South East/South South edition in Port Harcourt

BUSINESS

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BUSINESS

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Monday 08 October 2018

COMPANIES & MARKETS Lagos mulls partnership with FBRA to rid environment of PET waste CHUKA UROKO

orried about improper disposal of post-consumer poly-ethylene terephthalate (PET), leading to the blocking of drainages and canals in the environment, Lagos State government says it is interested in partnering with the Food and Beverage Recycling Alliance (FBRA) for the eradication of those wastes. Lagos, a sprawling city in Nigeria has, in the past three years, been overrun by wastes of different descriptions. The issue of waste is, therefore, of great con-

cern to the government which is why any initiative to eradicate it, like FBRA’s waste collection and recycling scheme, is welcome and appreciated. “Government has created an enabling system for organisations working through a Producer Responsibility Organisation (PRO) like FBRA to thrive in order to attain a common goal of keeping the environment clean”, Babatunde Durosinmi-Etti, the state’s commissioner for the environment, explained at an environment event recently. The state’s environment ministry is very much concerned about the sustainability of the environment and has always urged

residents to join hands in the cleaning, segregating and properly disposing of waste, especially PET bottles, to avoid environmental and health hazards. “We have lots of materials that we use daily that get into our waste stream due to industrialisation and commercialisation. And because of the poor attitude of companies, wastes are being disposed indiscriminately, particularly plastics and PET bottles. “Considering the havoc this cause during the rainy season in several parts of the state, the government has made giant strides in combating waste and is very much eager to collaborate with private sector in ensuring a cleaner and

healthy environment,” the commissioner affirmed. Adeyo commended FBRA for its laudable role in ensuring that used PET bottles are mopped up through its partner, Recycle Points. FBRA, founded in 2013 to operate as a self-regulatory initiative for the recycling of used PET bottles into synthetic fibre, is the PRO of companies in the food and beverage sector. With Recycle Points as collection partner, FBRA has made preparations towards recovery of PET bottles from the environment as well as advocacy campaigns focused on creating awareness on responsible waste management. On the eve of the World

Cleanup Day on September 15, volunteer staff of FBRA memberfirms led traders and other users of Arena Market in Oshodi, Lagos in the recovery of post-consumer PET bottles and other packaging materials towards a cleaner and healthier trading environment. “This campaign is used to enlighten traders, shoppers, as well as members of Nurses of-air Foundation on crucial issues relating to proper disposal and separation of waste, recycling, healthy lifestyle and other measures aimed at curbing environmental pollution”, explained Folasade Morgan, FBRA chairman. The Alliance has been adhering to the Extended Producer

Responsibility (EPR) policy of government, which transfers significant responsibility to producers for the entire life-cycle of their products, especially at the post-consumer stages. It has membership drawn from responsible and forwardthinking companies, including Nigerian Bottling Company Limited, The Coca-Cola Company Nigeria, Nigerian Breweries Plc, Seven-Up Bottling Company Limited and Nestle Nigeria Plc. FBRA has received commendation from NESREA, the regulator of the environment, for its significant progress towards EPR compliance.

Monday 08 October 2018

BUSINESS DAY

Monday 08 October 2018

CityFile

Edo police worry over incursion of criminals from other states IDRIS UMAR MOMOH, Benin

he police in Edo have expressed concern over the incursion of criminals from neighboring states of Kogi and Delta Johnson Kokumo, the Commissioner of Police (CP), Edo command, who decried the development, described it as unacceptable. He spoke while parading 76 arrested suspects in Benin. AKokumo, who said some of the criminals have been arrested, however, warned others to relocate from the state in their best interest. He also disclosed that several secondary and tertiary institutions students were arrested in connection with various crimes in the state. “It will surprise you that several of the suspects are students of various schools from secondary and tertiary institutions. Also several of them are not even students but people who made incursion into the state from the neighbouring states of Kogi and Delta to perpetuate evils. “I want to sound a note of warning that resident criminals in the state by now should know there is no place for them to hide. It is high time they left and to those criminals who are making incursion from neighbouring states, we are battle ready for them,” he said. Kokumo disclosed that a total of 76 suspects were arrested, 47 arms, 8 live ammunitions, live cartridges 951 and 26 expended cartridges recovered from the suspects. He said the suspects were involved in various offences ranging from armed robbery, kidnapping, cultism, murder among others.

12 victims of human trafficking rescued in Edo

do command of the Nigeria Security and Civil Defence Corps (NSCDC) has rescued about 12 victims of human trafficking and child labour. Makinde Ayinla, state commandant of the corps, disclosed this in Benin during a one day workshop on the menace of human trafficking and illegal migration, on Friday. The workshop with the theme: “Sensitisation of students on the menace of human trafficking and illegal migration was organised by the Edo command of the NSCDC. Ayinla said that it has become imperative for the corps to sensitise students on the ills of human trafficking in view of the danger victims were being exposed and subjected to. He said trafficking has claimed the lives of many Nigerian citizens, making early sensitisation of students imperative.

Bizman bags 4 years for over 380g of cocaine

federal high court in Lagos has sentenced a 42-year-old man, Chris Ani, to a term of four years imprisonment for trafficking 380g of cocaine. Ani was arraigned by the National Drug Law Enforcement Agency (NDLEA) before Justice Ayokunle Faji on a charge of drug trafficking. He pleaded not guilty to the charges when he was first arraigned on May 24, but later opted to change his plea. Consequently, he was re-arraigned on July 2, and pleaded guilty to the charge, after which the court adjourned the case for review of facts and sentencing. Delivering judgment on Friday, Justice Faji held that section 11 (a) of the NDLEA Act stipulates a maximum punishment for the offence, but owing to the fact that the convict was a first offender, same ought not be imposed on him. Faji, therefore, found the accused guilty of the offences as charged, and sentenced him to a term of four years imprisonment, beginning from the date of arraignment.

L-R: Fabian Akagha, executive director, operations; Ladipo Nureni; Awa Onyema; Adeola Obisesan, head human resources; Francis Nwachukwu; Uwadie Moses, and Oghenevwoke Ighure, executive director, digital services, all of BusinessDay, at the send forth ceremony for its retirees held recently at the premises of Businessday Media Limited.

Peace returns to A’Ibom towns as militants surrender arms ANIEFIOK UDONQUAK, Uyo

elative peace has returned to the troubled two local government areas of Etim Ekpo and Ukanafun in Akwa Ibom State as militants have surrendered their arms under the supervision of security operatives to pave way for their rehabilitation. This was the fallout of a peace and reconciliation meeting organised at the instance of the state Commissioner of Police (CP), Adeyemi Ogunjemilusi with the repentant militants, stakeholders and people of Ukanafun and Etim Ekpo local government areas at Central Primary School, Ikot Akpa Nkuk, Ukanafun local government headquarters. Addressing the youths numbering about 207, Governor Udom Emmanuel commended them for heeding the clarion call to denounce cultism and surrender their arms, reiterating his resolve to pardon and urged them to show remorse and pray for forgiveness over the atrocities they had committed. Emmanuel, who appealed to other cult members to come out of their hiding and embrace the amnesty programme, used the occasion to persuade their kingpin nicknamed “Overcomer” to surrender his arms and ammunition to the police, noting that security of lives and property of every citizen was the primary concern of his administration. He warned them to resist attempt of being

lured back to crime especially as the 2019 elections draws closer, maintaining that their acts have slowed down the development strides. He directed the CP to mobilise them for proper interaction on a convenient date at Government House, Uyo. The CP, Ogunjemilusi said that the youths voluntarily surrendered their arms to the security agencies with assurance of bringing lasting peace to the two communities. He said that his interaction with the youths has shown they were yearning for capacity building and empowerment and called on government to extend it development programmes to the area, assuring that peace has returned to the two communities. Ogunjemilusi said that the police combed the hideouts of the criminals and recovered rifles and other ammunition, adding that recovered arms will be sent to the armoury of the security operative and directed others yet to embrace the peace and reconciliation process of the state government to do so immediately, assuring them of their safety. The police boss recounted that the youths had wrecked havoc on the society through their indulgence in rape, murder, arson, kidnapping as well as committing other heinous crimes and expressed gratitude that they have decided to turn a new leaf, thanking Governor Emmanuel for

initiating the peace in the area. Leaders of other cult groups who spoke using their nicknames like Faith Friday Benson alias Fine Face thanked the state government for accepting them back to the society through the amnesty programme. He regretted the pains he visited on the people over the years and prayed for forgiveness, asking the state administration to empower him and his group members to enable them start their lives all over again. The cultists who spoke in quick succession narrated how they became enemies of the state, saying that their grievances came about because of neglect, poor social amenities, lack of government attention in their communities, lack of good public schools and lack of employment opportunities. They stated that politicians abandoned them after they had been used for their political aims without good Jobs and their frustrations drove them into criminal activities and appealed to the Governor to redress their condition. Other repentant cultist who bared their minds were Utomobong Aniekan Sunday AKA Small Money, Good Luck Emmanuel aka Small DPO, Ifiok Ukpong, AKA Gymnast and Faith Friday Benson aka Fine Face. Checks however showed that many of the people who were displaced by the crisis have yet to return to their homes as the area is still deserted.

Driver earns death sentence for killing FRSC official

state high court sitting in Birnin Kebbi has sentenced to death one Usman Aliyu, who carelessly knocked down and killed Muhammad Babangida, Road Marshal Assistant (RMA III) with the Federal Road Safety Corps (FRSC). Bisi Kazeem, the corps public education officer said at the weekend that Babangida was serving in Kebbi sector command when he met his untimely death. According to Kazeem, the incident occurred along Ahmadu Bello Way in Birnin Kebbi on April 3, 2017, while the officer was performing his statutory responsibilities. Kazeem said that Aliyu, the sentenced

culprit, fled the scene of the incident after knocking down his victim, but later arrested along Kalgo road by men of the Nigeria Police Force after an intelligence tip off. He said that from available reports Usman Aliyu drove a black Toyota Corolla saloon car with registration number, KLG 342 AA on the said day and initially attempted to knock down Marshal Inspector (III) Abubakar Garba Abubakar of the same patrol team and the deceased. “Noticing he couldn’t knock Garba down, he recklessly headed for the deceased and ensured that he knocked him to death as his first target, Inspector Garba narrowly escaped the hit,” he said.

It would be recalled that Boboye Oyeyemi, the corps marshal recent decried the incessant killing of FRSC personnel, saying the corps had lost 74 personnel in the country to reckless drivers in the last 18 months. According to Oyeyemi, the corps will not stop at ensuring the prosecution of those erring drivers. “It is my responsibility to ensure the safety of my personnel on the highway, so if you knock my personnel and you are running away, I will go after you,” he said. Oyeyemi warned drivers to desist from such unlawful and inhuman act and always ensure that they were operating within the ambit of the law.

Monday 08 October 2018

C002D5556

BUSINESS DAY

Live @ The Exchanges Top Gainers/Losers as at Wednesday 26 September 2018 GAINERS Company

LOSERS Opening

Closing

Change

N180

N181.1

1.1

N20.45

N21.4

0.95

GUARANTY

N37

N37.5

UBN

N5.1

UAC-PROP

N1.7

TOTAL ZENITHBANK

Market Statistics as at Wednesday 26 September 2018

Company

Opening

Closing

Change

N210

N205

-5

BERGER

N6.3

-0.7

0.5

STANBIC

N44

N43.3

-0.7

VOLUME (Numbers)

N5.3

0.2

NASCON

N19.6

N19

-0.6

VALUE (N billion)

N1.87

0.17

CUSTODIAN

N5.44

N5.04

-0.4

MARKET CAP (N Trn

DANGCEM

ASI (Points)

32,963.27

DEALS (Numbers)

2,866.00 172,196,327.00 2.052 12.034

Stanbic, Rencap, CSL, seven others trade N1.37trn worth of stocks in 9 months Stories by Iheanyi Nwachukwu

n nine months to September 28, stocks valued at about N1.37trillion were exchanged for investors by only ten stockbroking firms. This record value represents 68.38percent of the total value of stocks traded on the Nigerian Stock Exchange (NSE) from January 2 to September 28, according to broker performance report seen on Friday October 5. Top on the list are

Stanbic IBTC Stockbrokers Limited which accounted for N394.9billion or 19.66percent; Rencap Securities (Nigeria) Limited (N253.5billion or 12.62percent); and CSL Stockbrokers Limited which traded stocks valued at N204.04billion or 10.16percent. Within the same period under review, the stocks valued at N182.5billion were traded by EFCP Limited, representing 9.08percent of the total value of stocks exchanged on the Bourse in the review nine months. Other stockbroking firms and the value of

stocks they exchanged within the period are: FBN Quest Securities Limited (N98.3billion or 4.89percent); Chapel Hill Denham Securities Limited (N66.5billion or 3.31percent); and Cordros Securities Limited (N50.2billion or 2.50percent). Also, United Capital Securities Limited traded stocks valued at N48.9billion or 2.44percent to make the top-10 list while Cardinalstone Securities Limited accounted for N44.1billion or 2.20percent; and Meristem Stockbrokers Limited (N30.51billion or 1.52per-

Capital market stakeholders want major Govt owned assets privatised, listed

takeholders in Nigeria’s capital market have called on the Federal Government to privatize all major Government owned assets and list them on the nation’s Bourse. This is even as they want any company receiving Government concessions or subsidies to route for Initial Public Offering (IPO) within three day. Bolaji Balogun, Chief Executive Officer, Chapel Hill Denham disclosed these as ‘MUST’ for the Federal Government in his presentation at the 22nd annual stockbrokers’ conference of the Chartered Institute of Stockbrokers (CIS) themed “the Nigerian economy and capital market: exploring the next frontier for growth”. In his presentation titled “Evolution of the Nigerian Capital Market Structure: Exploring the Next Frontier for Growth” Balogun noted that Nigeria must leverage several opportunities in the capital market to achieve all of its key objectives and lift the economy. Federal Government must “make all government owned companies issue bonds for financing; and all intervention/ government assisted funding to be issued in bond/note

form and listed on FMDQ or NSE”, he said. For the capital market regulators and Exchanges, they are expected to accelerate issuance process, build capacity, and raise the standard, he said; adding that among others, the Issuers should be forward thinking on regulation –example Basel III and used the capital markets to restructure debts and recycle equity and raise capital. “Capital Markets, in the right hands, can be the ‘Strategic Weapon’ for sustainable growth. Capital markets can finance Nigeria’s infrastructure, housing, create jobs and alleviate poverty,” Balogun said. He said, “The markets reward those who use them effectively and those who recognize the power of the markets, end up as winners”. Speaking at the conference, Adedapo David Adekoje, President and Chairman of Council, Chartered Institute of Stockbrokers noted that “Despite our successes in our primary responsibility of training and certifying practitioners in the capital market, the Institute has always made it a cardinal responsibility to bring its rich intellectual re-

sources to bear and serve as a strong advocacy platform to guide policy makers at all levels of government and the organized private sector in forging a strong and robust economy, especially from the perspective of the financial services sector.” “As we prepare for another national election which will usher in a new term of office for elected office holders in our country; it is of utmost importance that we begin to talk about the critical next steps for the Nigerian economy” Adekoje added. In his presentation tilted “Regulatory Role in Building the Market Architecture”, Emomotimi Agama, Head, Registration and Market Infrastructure Department, Securities and Exchange Commission (SEC) disclosed the next frontier for market growth. For instance on derivatives the SEC has exposed draft rules on derivatives and central counterparty clearing house. “We are currently reviewing stakeholder comments”, he said. For commodities, Agama disclosed that an implementation committee is currently implementing the report on Commodities Trading Ecosystem; among others initiatives.

cent). This comes on the heels of ten stockbroking firms

trading 78,608,588,504 units of listed equities, representing 47.28percent of the total

volume of stocks traded on Nigerian Stock Exchange in same period.

NDIC says followed due process in establishing Polaris Bank

he Nigeria Deposit Insurance Corporation (NDIC) has said that it undertook a vigorous due process in the establishment of Polaris Bank Limited as a bridge bank to take over the defunct Skye Bank Plc. Umaru Ibrahim, Managing Director, Nigeria Deposit Insurance Corporation (NDIC) said the establishment of Polaris Bank was in line with the corporation’s core mandate of guaranteeing deposit and resolving bank failure and illiquidity. According to him, although the establishment of Polaris Bank Limited immediately before the revocation of the operating license of Skye bank may appear spontaneous to the uninformed, the processes leading to the establishment of the bridge bank was actually very thorough and exhaustive as provided for under Part VIII, Section 39 of the NDIC Act (2006) as amended. He outlined that while the corporation has other bank failure resolution measures such as Purchase and Assumption, provision of liquidity support, assisted merger, take over and management of ailing banks, outright liquidation, the bridge bank option allows unhindered operations of the bank while continuing efforts to source for investors and address other fundamental issues. He noted that the key objectives of the bank failure resolution include maintaining public

confidence, enhancing market discipline and minimising the use of tax payers’ funds as well as minimising disruption to the banking system among others. He pointed out that a bridge bank is incorporated by the NDIC to take-over the loans and advances, fixed assets, other assets, deposits and other liabilities of a failed or failing bank on and managed until the bridge bank is in such a state that it becomes viable to be sold to credible investors. However, where the bridge bank remains unviable after the stipulated period for its existence, the Deposit Insurer could resort to its liquidation. “The first step involves series of consultations between the NDIC and Central Bank of Nigeria (CBN) after which the name and bridge bank is incorporated and registered with the Corporate Affairs Commission (CAC) as a limited liability company with the objective of assuming the deposits and other liabilities of the failing bank along with the acquisition of its assets. “After incorporation, the CBN issues operating licence to the bridge bank to the enable it commence operations as a fully licenced bank. At the third stage, the NDIC transfers the entire assets and liabilities of the failing bank (that is Skye Bank Plc) to the bridge bank (i.e. Polaris Bank Limited) under a ‘Purchase and Assumption’ (P&A) Agreement executed between

the NDIC and the Bridge bank. Under the P & A Agreement, all or some of the assets and all or some of the liabilities of the failing bank which are transferred to the bridge bank to enable it carry out the business of the failing bank, which, in this instance, happens to be the defunct Skye Bank Plc. The biggest advantage of this arrangement is that the depositors of Skye Bank Plc are able to access their deposits at the Polaris Bank Limited (i.e. the bridge bank) without hindrance”,he said. “The fourth process involves the withdrawal of the operating licence of the Skye Bank Plc by the CBN, upon which the closed bank is effectively handed over to the NDIC being the provisional liquidator, as provided for under the NDIC Act, 2006, as amended. The NDIC commences the liquidation process by filing appropriate applications at the Federal High Court. The NDIC operates the Bridge Bank and appoints Directors to manage the bank until suitable investors are found for its acquisition. In the course of all these, the NDIC enjoys forbearances from Regulatory Authorities in the operations of the bridge bank as it strives to return it to the path of profitability. The final act in the process is that once investors acquire the bridge bank, it is no longer a bridge bank. It becomes a regular bank”, Ibrahim noted.

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25 SPECIAL FOCUS BUSINESS DAY

How Coronation Merchant Bank is making a difference in investment banking sector HOPE MOSES-ASHIKE

n 2010, the Central Bank of Nigeria (CBN) ringfenced ‘banking’ from non-banking business, in a bid to ensure the safety of depositors’ funds as well as to redefine the licensing model of banks and minimum requirements for operations, among other objectives. Consequently, the CBN, in compliance with the statutory provisions in the Banks And Financial Institution Act (BOFIA), repealed universal banking licence but restructured the industry to perform the several types of business including commercial banking (regional, national and international authorisation); Merchant banking; Specialised banking (Microfinance banking, Mortgage banking, Noninterest banking), (regional and national) and Development Finance Institutions); prohibit banks from undertaking non-banking activities. Prior to this period, the CBN, in 2002, through the universal banking guidelines, had authorized banks to engage in non-core banking financial activities either directly as part of banking operations or indirectly through designated subsidiaries. Today, there are 24 licensed operating deposit money banks, five merchant banks, 882 microfinance banks, 35 primary mortgage banks, 63 finance companies and 4,345 Bureau De Change (BDC) operators in the county. Nigeria’s economy slid into recession in the second quarter of 2016 as result of sharp drop in the prices and production of crude oil. This resulted in a general decline in economic activities and the banks, merchant banks and other financial institutions were not left out. Interestingly, with various policies and interventions of the CBN and a rebound in oil production and prices, the country exited recession in second quarter of 2017. Looking at merchant banking business, Merchant banks first arose in the Italian states in the Middle Ages, when Italian merchant houses (generally small, family-owned, import-export, and commodity-trading businesses) began to use their excess capital to finance foreign trade in return for a share of the profits. Globally, merchant banks play a vital role in the financial services sector. They provide the much needed corporate finance mainly in form of eq-

Abu Jimoh, managing director, Coronation Merchant Bank

uity stakes and subordinated facilities for companies and trade finance. In Nigeria, Coronation Merchant Ban Limited is one of the leading players in the industry. The bank commenced operation in 2015 as a merchant bank, with a vision to become Africa’s premier investment bank and mission to be the engine room of the continent’s financial market. The bank was last week named the ‘Best Investment

Bank in Nigeria’ at the 2018 World Finance Investment Banking Awards in the United Kingdom (UK).This is coming on the heels of the bank’s recorded 66 percent growth in its gross earnings to N25.5 billion in its 2017 financial year. The total assets of the bank increased by 28 percent to N136.7 billion in 2017, up from N106.6 billion in December 2016, and shareholder’s funds increased to N29.5 billion, up from N25.9 billion.

Coronation Merchant Bank has managed to stand out from the crowd. Its investment banking business provides bespoke solutions and an enviable network of partners to corporate organisations across a variety of industries. “We are delighted to be recognised as the Best Investment Bank in Nigeria. Our successes and achievements over the years reflect the hard work and commitment of our staff, management and board in ensuring we maintain our core values of integrity, innovation and excellence in service delivery”, Abubakar Jimoh, managing director/CEO, said. The bank last week, graduated some young Nigerians at the second graduation ceremony of its annual banking and finance academy. This is in a bid to foster continuous human capital development within the organization. The annual banking and finance academy is a graduate trainee programme for investment banking analyst which takes place over a period of 8 months. During that time, budding analyst are trained across various areas of banking and financial services by exposing them to a broad based organizational learning function, 3-months internship programme, community development projects, corporate/soft skills development and a culture management programme. “The graduate trainee programme is our key way of resourcing the bank. It provides us with a platform to make meaningful contribution to the development of our host communities through the opportunities it provides to

Graduands at the second graduation ceremony of Coronation Merchant Bank Limited

young people in the form of human capital development. Our strategy is to attract the best and brightest from across the world and immense them in our culture at a very early stage. We believe this strategy will help us in leadership sourcing as well as ensuring a well-diversified workforce that will serve the organization in the years to come”, Jimoh said. Also speaking at the ceremony, Onayimi Aiwerioghene, head, enterprise management, said the bank’s goal is to build the future of the banking group around these set of young and dynamic people. “As they commence their journey towards becoming leading investment bankers in Nigeria, we are committed to providing them with the tools, resources and skills they need to make their career with us very successful”. Coronation Merchant Bank currently generates over 80 percent of its revenue from its corporate banking and global markets business. “Over the past three years, however, we have seen a significant uptick in contributions from our subsidiary businesses. Since December 2017, our asset management business recorded over 230 percent growth in profits before tax (PBT), while our securities business recorded a PBT growth of 206 percent. Overall, revenue contributions from our non-core banking businesses have increased from about four percent in 2015 to approximately 12 percent in 2017. We expect this to reach around 20 percent in the next five years”, said Jimoh. Although the bank is still very young, he said “we believe we are on a journey towards becoming Africa’s leading investment bank. Personally, I believe we have made considerable strides in this direction, especially when you consider where we are now compared with where we were a few years ago. We remain committed to this vision and we are confident that we have the requisite people and resources to convert this vision into a reality. In the meantime, we will focus on the Nigerian market and leverage our robust distribution network and strategic alliances to provide high-quality services across West Africa and beyond. The sub-Saharan region retains significant potential for growth, as well as favourable long-term macroeconomic and demographic factors”.

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This is M NEY A daily guide to your Personal Finance

Monday 08 October 2018

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

Breast Cancer? It can’t happen to me!

hen last were you screened for Breast Cancer? October is “Breast Cancer Awareness Month,” an annual campaign to increase awareness of this dreaded and devastating disease. It provides an opportunity for us all to focus on this dreaded disease and its impact. Breast cancer is becoming more and more prevalent in Nigeria. According to the World Health Organisation (WHO) estimates, “over 100,000 Nigerians are diagnosed with cancer every year; about 80,000 die from the disease. Nigeria’s cancer death ratio of 4 in 5 affected persons is one of the worst in the world.” Sadly, in spite of the increased awareness, many women still neglect to actually take the necessary steps to try to detect breast cancer in its early stages, when there is a far greater chance of survival. In our society, it is seen as a taboo to even consider the possibility that one could become really ill let alone the fact that one could die; it is often seen as tempting fate. Here is what happened to the Johnsons. In July 2017, The Johnson’s were celebrating their first son’s graduation. Deji graduated with a 2nd Class Upper degree and was proceeding for his NYSC. Their daughter Ella had just completed her A Level examinations with a string of A Grades.

She gained admission into an excellent private university. Their youngest Tolu, recently won a 50% scholarship to an outstanding school. A year ago, Lydia Johnson walked out of a wellpaying job in anger as she had missed an “expected” promotion. She had a side fashion business and decided to focus on it fulltime. This wasn’t ideal for the family as it was very useful having at least one steady income whilst her husband built his architecture practice. Gboyega Johnson’s business had gone through a really bad patch and was just beginning to come out of it. Things were beginning to look up, but their rent and school fees ex-

penses put a huge strain on an already stretched family budget. Lydia was quite meticulous about checking her breast for any changes so her heart sank when during a routine check in September, she felt something wasn’t quite right; there was definitely a lump that wasn’t there before. She visited their family doctor the same day and he referred them to the Teaching Hospital. A biopsy confirmed that Lydia had an aggressive Stage 3 breast cancer. Lydia had surgery to remove the lump at a cost of N200,000, and she is now receiving treatment including chemotherapy which is costing the family 260,000 each month. She will need six sessions in the first instance. She will require a second operation in due course, followed by radiotherapy for which a down-payment of N250,000 is required. The treatment costs run into millions of Naira. Beyond this, she was told that she will require treatment for at least five years for ultrasound scans, blood tests, kidney and liver function tests, chest x-rays, and so on; some of these will have to be repeated. She and Gboyega have also been told that a mastectomy cannot be ruled out, but she is very reluctant about losing her breast. The Johnsons had kept

No one wants to prepare to get sick, but it is important to be realistic and proactive. Whilst you can’t plan for cancer, you can be prepared for some of the unexpected costs of a serious illness

putting off plans for family insurance so there was nothing to fall back on. Members of the extended family rallied round as best they could but the exorbitant costs kept mounting and after a time, the sums they were able to give dwindled significantly. Gboyega had to put the land they had purchased to build their first home up for sale to release badly needed funds to try to save her life. With rent due and no funds left, the family moved in with Lydia’s parents so that they could at least save money to help with the medical bills. How healthy are you? If you or anyone in your family were to ever become gravely ill, could you cope financially? Could you afford the best medical treatment available? Do you

have health insurance in place? Health insurance covers some of the cost of treating the insured person’s illnesses or injuries. You pay the premiums to purchase coverage and the insurer is obliged to pay some or all of your healthcare costs, based on the terms of your contract. Some policies pay for preventive care, such as annual checkups and diagnostic tests. At some point in time, you might need to call upon some form of insurance. Whilst insurance will not eliminate the risk of loss or damage to property, injury, illness or death, it does relieve the insured of at least some of financial losses these risks bring. The cost of coverage of all these scenarios is far lower than if you were to have to service them if they do indeed arise. Critical illness cover is a relatively recent addition to the life insurance industry. It was never intended to replace health, life or disability insurance. Instead, its purpose is to fill the gap in existing medical insurance coverage to pay for illness and specific kinds of treatment not ordinarily covered by traditional insurance. Generally, critical illness insurance pays a lump sum on diagnosis of a serious illness. It may cover hospital charges, an Intensive Care Unit stay, organ transplants, ambulance fees, or transportation and lodging. Ideally a policy should cover doctor appointments, mammograms, chemotherapy, mastectomy, and breast reconstructive procedures. A comprehensive health insurance policy will give you a higher chance of overcoming breast cancer with early detection through regular mammograms and clinical breast exams. Far too many people are like the Johnsons; they totally ignore the need for insurance until a major mishap or setback occurs; it is only then that the impact of inadequate insurance coverage is glaring. No matter how meticulous

you are with your finances, failure to purchase adequate insurance can impair your financial future and put you or your loved ones in a desperate situation in an instant. A cancer diagnosis can be devastating, but equally so is not having the means to pay for it. The truth is one nasty illness such as breast cancer can decimate a lifetime of savings and investing. We all pray for good health. No one wants to prepare to get sick, but it is important to be realistic and proactive. Whilst you can’t plan for cancer, you can be prepared for some of the unexpected costs of a serious illness. If you don’t have the necessary insurance cover, do make this one of your financial priorities before the end of this year. Since breast cancer is a disease that affects thousands of women, all women and the men that care about them, should make sure that they have regular screening to improve their chances of early detection. Take the necessary precautions, protect yourself and encourage the women in your life, to do the same.

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

Monday 08 October 2018

BUSINESS DAY

Monday 08 October 2018

BUSINESS DAY

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LegalPerspectives

With

Monday 08 October 2018

Odunayo Oyasiji

Case Review

Bala James Ngilari –V- National Insurance Company of Nigeria (1998) LPELR-SC.72/1992

hat to note: This is a review of a matter that had been concluded at the Supreme Court of Nigeria. The matter bothers on insurance law. The case deals with formation of a valid insurance contract and the effect of premium on insurance contract. Facts The plaintiff/appellant is the administrator of the estate of a deceased person- Jesse Jame Ngilari. The deceased died intestate (without a will) on August 17, 1985. The defendant/respondent’s agent (S.A Onuh) approached the deceased on March 1, 1984 in the plaintiff ’s office and convinced the deceased to take out endowment/life insurance policy with the defendant (National Insurance Company of Nigeria). The deceased completed a proposal form that was given to him by the agent in the presence and with the help of both the agent and the plaintiff. The agent also requested for a typed statement from the deceased. The deceased submitted both the typed statement and filled proposal form to the agent at the same time. The agent being satisfied with the documents submitted by the deceased requested for N449.05 from the deceased as premium. The deceased did not have the requested amount and the plaintiff had to issue his cheque for the said amount on behalf of the deceased. Due to the fact that the deceased wanted to travel, he arranged and paid the sum of N2694.30 representing the premium till December 31, 1985. This sum was collected in cash by the agent and he acknowledged the receipt of the various sums on a plain paper and signed. He promised to return with official receipts and policy certificate after three days. He never returned with any and the defendant did not issue any. The defendant wrote a letter to the deceased on November 29, 1984 to inform him that the agent (S.A Onuh) no longer represents the company and that the deceased should pay future premiums directly to the defendant at its office in Maiduguri. The deceased replied the said letter on December 15, 1984 and informed them that he had paid till December 1985 and that he is

expecting official receipts and the policy certificate. The deceased died on August 17, 1985 while the insurance contract was still subsisting. The plaintiff informed the defendant of the death of the deceased and the defendant through the letter dated April 2, 1986 denied any contractual relationship with the deceased and refused to pay what is due under the contract. Due to the failure of the defendant to pay, the plaintiff instituted this action at the High Court of Bornu State claiming the following reliefs“a. N50,000.00 being the agreed sum payable as death benefit under the contract of insurance between the deceased and the defendant. b. N5,000.00 as 10% interest payable on the agreed sum of N50,000.00 covering the period 21st April, 1986 to 21st April, 1997. c. Payment of a further interest at the court’s rate of 10% per annum on the above total sum of N55,000.00 with effect from the date of judgment until final liquidation.” The High Court gave judgement in favour of the plaintiff. The defendant appealed to the Court of Appeal and the appeal succeeded in part. The plaintiff being dissatisfied appealed to the Supreme Court. Issues for determination The appellant submitted three issues for determination i.e. “(1) Whether the learned Justices of the Court of Appeal were right in setting aside the

findings of the trial court on the N2,694.30 paid to the respondent as premium and on Exhibit I (respondent’s letter to the deceased) when there were no grounds of appeal challenging these findings. (2) Was the lower court right in holding that the respondent successfully denied receiving the sum of N2,694.30 from the deceased? (3) Considering the pleadings and evidence, was there a valid contract of insurance before the death of the deceased between the parties?” The court adopted the third issue as the first and second issues will be taken care of while addressing the third issue. Submission/Argument The plaintiff stated that “That the deceased at all materials times believed the agent to be defendant’s agent, whose duty it was to prospect for clients for the defendant and that the deceased dealt with the agent as such. That the agent suggested and the deceased agreed that the deceased should take out a life policy for 30 years with effect from 1/3/84. That should the deceased die before the maturity date of 2014 A.D., the defendant would pay his estate the benefit of N50,000.00 with profit and should the deceased survive to maturity date, the said sum would be paid to him with profits.” It was submitted that there was a valid insurance contract between the parties and the court should give effect to the contract. The defendant on the other

hand admitted that it received the deceased’s completed proposal form, medical report and statutory declaration of age from its Maiduguri agent. It further admitted the payment of the first instalment of premium but denied the receipt of the sum of N2,694.30 representing upfront payment of premium till December of 1985. The defendant stated that it sent a letter to the deceased on October 15, 1984 requesting the deceased to do a chest x-ray test and complete financial questionnaire form to enable the defendant to assess the deceased’s financial position. How ever, no response was received from the deceased (this was denied by the plaintiff ). The defendant submitted that there is no valid contract of insurance with the deceased as no policy document/certificate and no letter of acceptance was issued by the defendant- since it sought to get more information from the deceased without success. Judgement of Court The court after weighing the evidence of the parties gave judgement in favour of the plaintiff/appellant. The court held that “that all elements of a valid contract were present in the case. The deceased made his proposal when he completed the application form (now proposal form) on the fateful day. 1/3/84. He also gave additional statement. The respondent’s agent read them and after satisfying himself demanded payment of the first

premium ofN449.05 which the deceased immediately paid. In addition on 2/3/84 another premium of N2.694.30 was paid up to and including December, 1985. I must stress here that a contract of insurance like any other contract is created where there has been an unqualified acceptance by one party of an offer made by the other, as in this case.” The court held that any act that shows intention to create a contract is enough to establish acceptance- the acceptance of premium is a good example in this case. The court stated that “the premium may be paid by the assured to the insurers or to an insurance agent acting on behalf of the insurers, If the agent has authority to receive it the payment binds the insurers. The authority need to be an express authority: it may be implied from circumstances.” Belgore JS C (as he then was) captured the above when he said that “There is no rule of insurance law which makes a contract invalid simply because not all the premium has been paid or that no premium has been paid at all. What is important is that there is a contract of insurance. In cases however whereby the insurer demands payment of premium before the contract can become operative that is a valid exception to the general principle I explained earlier… Once the rate of premium is fixed and the insured has paid the sum after the advice of the insurer’s agent, a valid contract of insurance has been completed. The agent is presumed to have not only the express authority bestowed upon him by his principal but also impliedly the further authority to do all things necessary in the ordinary course of selling insurance policy by making sure that he presented correctly the terms and conditions of the insurance before accepting payment of premium from the insured”. Conclusion The contract of insurance follows the normal principle that guides the creation of a valid contract i.e. a party must make an offer while there must be unqualified acceptance of the offer made. A valid insurance contract can be created even where the premium hasn’t been paid except for where the insurer makes it a condition precedent to the creation of the contract.

REAL SECTOR WATCH C002D5556

Monday 08 October 2018

BUSINESS DAY

Non-oil export struggles as outstanding EEG payment exceeds N1.2trn

more promptly to enable exporters have access to the relief the grant is meant to give. The Export Development Fund has taken off. Through the CBN, there is N500bn that can be accessed through NEXIM Bank. All these benefits to exporters are still at their early stages. “The EEG has taken off, but we are yet to see a real movement that shows that the grant will be paid and the backlog taken care of,” Dafinone said. He said significant damage to the non-oil export

was done in 2015/16 when access to foreign exchange was difficult, adding that the level of export today was a result of that damage. “We, exporters, are yet to recover from that damage. Although the foreign exchange is now available and the economy has stabilised a little bit, it is not enough for the recovery to start as yet. The grant was not paid when exporters borrowed from banks to support their business.” He stressed that the competitiveness of the export sector was determined by cost of production locally. “I would like to see more incentives from the government. We need to improve our competitiveness in terms of infrastructure available for exporters, in terms of power costs, in terms of delays at the ports,” he said. Dafinone pointed out that where the margin between the official and unofficial exchange rate was significant, there was always an incentive for exporters not to declare their proceeds. “Previously, the EEG encouraged exporters to make declarations to benefit from the grants. More exporters were doing their export through formal channels. But with the grant not being in operation, FX being scarce, and the gap between official and unofficial rates being huge, more and more exporters may be choosing not to declare,” he added.

ry of unsold finished products, inadequate electricity supply, frequent increases in electricity tariff in the face of poor services from distribution companies and abnormally high interest rates. Nana Addo Dankwa Akufo-Addo, president of Ghana, who was the keynote speaker, said Africa’s biggest challenge had been its inability to transform the abundant natural resources into opportunities for creation of jobs and wealth. “The continent boasts of young, determined and highly educated people across all sectors and yet we have not been able to get the right mix of policies

to fully unearth and develop the entrepreneurial talents that abound in Nigeria in particular and on the continent,” Akufo-Addo, who was represented by Yaw OsafoMaafo, senior minister in Ghana, said. “We need to ensure that we have the capacity to support effective value- addition to enhance our revenues position on the international market. This calls for policy harmonisation, coordination, and effective collaboration between the public and private sectors to drive effective and time tested industrial framework to fully utilise our natural resource to the best of international expectations.”

ODINAKA ANUDU

igeria’s nonoil export sector has not earned enough foreign exchange that can support the economy as exporters have an outstanding Export Expansion Grant (EEG) totalling over N1.2 trillion. The EEG is an incentive meant to cushion the effect of high production cost for exporters. It was paid through the Negotiable Duty Credit Certificates (NDCCs) but was suspended in 2013, with the Federal Government promising a review within the shortest possible time. The government of Muhammadu Buhari came in 2015 and promised, in 2016, to pay the grant with promissory notes. But two years after, this is yet to happen. Speaking at the annual general meeting of the Manufacturers Association of Nigeria Export Promotion Group (MANEG) in Lagos, Olusegun Awolowo, CEO of the Nigerian Export Promotion Council (NEPC), said the current government was committed to paying the outstanding debt. “The EEG has been what many of the exporters leveraged on to expand their export. In the absence of that very important incentive, you discover there was dwindle in the non-oil

export data. We are agitating and canvassing that the EEG should be revitalised and exporters should be given access to it because it will expand non-oil export activities,” Awolowo, who was represented by Abdullahi Sidi-Aliyu, director in charge of policy and strategy ,said. He said government had done its part but inability of the National Assembly to reconvene was delaying the process. “Government has done all that is necessary for the take-off of the programme.

Right now, we are waiting for the National Assembly to reconvene so that they can grant approval to the use of promissory notes. It is not only the EGG that is affected. There are other debts—domestic debts by the Federal Government— that come under the promissory notes. Hopefully, if the National Assembly can reconvene before the end of the year and grant approval, the government will definitely implement the decision,” Awolowo said. He said the value of the outstanding notes was at

over N1.2 to N1.3 trillion. Nigeria’s non-oil export value in 2017 posted by the NEPC was below $1.4 billion. This is against $3 billion obtained in 2013. Ede Dafinone, chairman, MANEG, said government had started the process of bringing the EEG back on stream. Dafinone said inability to pay exporters’ outstanding debts had hit the players hard. “Essentially, the benefits of the EEG to exporters have been reduced. It is hoped that these reduced benefits will be distributed

MAN commends FG for dumping AfCFTA,EPA

rank Udemba Jacobs, outgone president of the Manufacturers Association of Nigeria (MAN), has, in his farewell speech, commended the Federal Government for not rushing to sign the Economic Partnership Agreement (EPA) and the African Continental Free Trade Area (AfCFTA). The EPA is a free trade agreement between the 15 countries of the Economic Community of West African States (ECOWAS) and the Europe, seeking to enable West African countries access the European market and vice versa, without paying tariffs. Europe is committing £ 6.5 billion every

five years beginning from 2015 to 2019, including during the 20-year transition period that will end in 2035. On the other hand, the AfCFTA is a trade treaty among African countries targeted at removing barriers to trade on the continent. Jacobs, who has vehemently opposed the EPA and canvassed more time before signing AfCFTA, said Buhari deserved an applause for maintaining the position of most private sector stakeholders by not signing the EPA. “As has been rightly established, EPA runs counter to our industrial aspirations as a nation, as clearly

enshrined in the Nigeria Industrial Revolution Plan (NIRP) and the Economic Recovery and Growth Plan (ERGP) and will dismantle the industrialisation headways already made in Nigeria. We hereby recommend that this stance be maintained in the best interest of our economy and the over one hundred and eighty million Nigerians,” he said at the 46th annual general meeting of MAN in Lagos. Jacobs commended Nigeria’s president for not signing this trade treaty in March 2018 in order to have a wider consultation on issues involved in the AfCFTA.

“With the conclusion of the Nigerian Office for Trade Negotiations nationwide, sensitisation programme on AfCFTA and the ongoing consultations with stakeholders, we are looking forward to a robust study that will empirically reveal the potential impact of the Agreement on the Nigerian economy, guide the negotiating team in the negotiation of the protocols and annexures to the Agreement and generally reveal its compatibility with our industrial aspirations and overall economic development agenda.” He said that manufacturing challenges still manifest in the form of high invento-

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Monday 08 October 2018

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Monday 08 October 2018

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Snapshot of Hotel firm’s H1 performance ..Transcorp, and Ikeja Hotel retain industry leadership Hotel firm’s Half year Financial Highlights Cross Profit Margin

Debt to Equity Ratio

P.E

SHORT TAKES 15 pct Nigeria’s central bank is asking a Lagos court to make South Africa’s MTN pay 15 percent annual interest on the $8.1 billion it claims was illegally moved abroad, according to court documents seen by Reuters. The bank also asked the court to dismiss MTN’s case seeking to stop the monetary authority’s order for the telecoms firm to repatriate the funds back to Nigeria, the documents showed.

N3.9trn

BALA AUGIE AND CYNTHIA IKWUETOGHU

otel firms quoted on the floor of the Nigerian Stock Exchange (NSE) are operating in a tough and unpredictable macroeconomic environment. Poor corporate governance, inexperienced management, financial mismanagement, and deteriorating financial conditions bedevilling some firms, have hindered foreign investors from investing in the sector. However, some firms are thriving amid these challenges as evident in strong margins, solid working capital position, and a positive cash

flow position. For instance, Transcorp Hotel Nigeria Plc, the most capitalized hotel operator in Africa’s largest economy, saw gross profit margin increase to 73.15 percent in June 2018 from 27.40 percent as at June 2017. The gross margin of 73.15 percent beat industry average of 38.64 percent, based on data gathered by Markets and Intelligence. While Ikeja Hotel Plc, Tourist Company of Nigeria (Corp) Plc, and Capital Hotel recorded growth at the top lines (Sales), their gross margins fell, and the margins were below the industry average. See Table. Tourist Corp is grappling with huge debt that left it in precarious situation, as it has

a debt to equity ratio of 106 percent as at June 2018. Tourist Corp is technically insolvent as its total liabilities of N20.52 billion in the period under review, exceeded total assets of N9.65 billion. This resulted in a negative shareholders’ fund of N10.86 billion. Analysts say the firms like Trancorp, Ikeja Hotel, and Capital Hotel could attract foreign investors because of their track record of profits, solid balance sheet, and aggressive expansion plans. It will be recalled that InterContinental Hotel brand ha d e x i te d t h e c ou nt r y while investors terminated management agreement of Ibom Hotel and Golf Resort by Starwood Group. There

EM equities eye worst week since February

t’s not just US equities that are seeing red. Emerging market stocks are eyeing their worst week in eight months following another big drop on Friday as the heavy sell-off in government bonds reverberated across other asset classes. The MSCI Emerging Market stock index fell 1.1 per cent on Friday, with losses from Brazil’s and Mexico’s benchmark indices adding to declines on Asian bourses. The drop comes a day

after the index suffered its worst day since February. It also takes the gauge’s losses for the week to 5.3 per cent — its worst performance since the week of February 3. A surge in Treasury yields, a stronger dollar and higher oil prices have all weighed on sentiment for emerging market assets this week. Yield on the benchmark 10-year note has climbed more than 16 basis points since Monday to hit a sevenyear high of 3.24 per cent as a

batch of upbeat US economic data — including Friday’s solid jobs report— reinforced expectations that the Federal Reserve will stick to its forecast for one more rate rise this year and three more in 2019. Rising US interest rates and bond yields tend to dampen enthusiasm for higher-yielding EM assets by making dollar denominated assets look more attractive. That also heightens the fiscal burden of some EM countries

was also the termination of management and branding agreement by Marriott International on Renaissance Ikeja Hotel that was eventfully rebranded Radisson Blu, foreign brands. “It is easy to know which hotel company is doing well and which is not by checking their performances at the exchange. Among all the four hotel companies that are listed on the Nigerian Stock Exchange, Transcorp Hotel Plc has performed exceptionally well,” said Ade Akande, a hotelier and member of Lagos Chamber of Commerce and Industry. “An investor will be willing to partner such companies in their expansion plans across the country because his/her

investment is secured,” said Akande. Hotel operators are spending money on the construction of new rooms with a view to increasing the share of the market and growing revenue. For instance, by 2022, Transcorp Hotel plans a further upgrade of its Transcorp Hilton Abuja and expand the conferencing facility within the Hotel. It will also commence the construction of 320 room Hilton branded hotel, Ikoyi and Construction of 250 room Hilton branded hotel in Port Harcourt. Transcorp’s cash flow from operations of N4.50 billion as at June means it has the financial strength to execute its future expansion plans.

by pushing up the costs they pay for funding and making it costlier for them to rollover their dollar-denominated debt. Compounding investors’ risk-off mood has been the surge in oil prices to fouryear highs and the ongoing trade tensions between the US and China. While higher oil prices are a boon for exporters like Colombia, it adds pressure on importers like India, Indonesia and Turkey. However, some analysts argue the sell-off may be overdone given strong US

growth is a positive for global growth. “We suspect the fact that the bond market is taking what amounts to a more positive view on the prospects for US economic growth is a positive for the world economy, emerging markets included,” said Will Hobbs, head of investment strategy at Barclays Smart Investor. “With this in mind, we actually added to emerging market equities this week in our tactical portfolio, taking profit on our long held overweight position in US stocks.”

The Federal Government has generated N3.9 trillion in tax revenue this year, according to Tunde Fowler, the Chairman, Federal Inland Revenue Service. The Chairman, who spoke at the meeting of the African Union High Level Panel on Illicit Financial Flow from Africa in Abuja on Thursday, said the generated revenue is higher than the N2.9 trillion realised in the same period of 2017. According to the FIRS boss, the improvement was due to the organisation efforts at recovering all monies due to the government and the insurance of tax notification to companies not complying with Company Income Tax. So far, a total of 2,672 demand notices have been issued, out of which 653 of the companies are now filing their returns and paid N2.98 billion already.

36% The Nigerian National Petroleum Corporation on Thursday announced total crude oil and gas export sale of $416.07m for June 2018, which was 35.78 per cent higher than what was recorded in the previous month. Details of the figures contained in the just released June 2018 edition of the NNPC Financial and Operations Report also indicated that the crude export sale contributed $274.95m, which translated to 66.08 per cent of the dollar transactions compared with $244.72m contribution in the previous month. The gas export sale for the month was $141.12m, the report stated. It added that the corporation recorded some ruptured pipelines that supply gas to thermal electricity generating plants across the country.

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

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

BUSINESS DAY

C002D5556

Monday 08 October 2018

Markets Intelligence ECONOMY

Investors sell in May and “run” away EMEKA UCHEAGA & DAVID IBIDAPO

emember the old market saying, “sell in May and go away,” well investors took it a little too seriously this year. The Nigerian stock market suffered its worst monthly performance in May as the All Share Index fell 7.67 percent which was above the 5.97 percent decline recorded in September and 5.86 percent meltdown recorded in August. January now seems like forever ago for many investors who have gotten burnt this year holding on to their stocks in Nigerian capital market. In January, the market rallied 15.95 percent. The only other month with positive returns this year was June when the stock market returned 0.46 percent. Sell in May and go away is a well-known trading adage that warns investors to sell their stock holdings in May to avoid a seasonal decline in equity markets. If a trader follows the sell-in-May-and-go-away strategy, the trader sells stock holdings in May and invests again in the equity market in November to avoid the typically volatile May to October period. Some investors find this strategy more rewarding than staying in the equity markets throughout the year. Many analysts were astounded that May was the worst performing month with very few attempting to provide rational explanation for the unexpected selloff in May. Dolapo Ashiru, a Lagos based Stockbroker told BusinessDay that the deep selloff in May was a big surprise. He opined that the selloffs may have been caused by foreign investors who waited to receive dividends from their stockholdings before exiting the Nigerian market. Many of them must have received payments around that time and figure it was the best time to leave before the expected selloffs

in the second half of the year due to rising political risk as the general elections draw closer. “The significant drop in stock prices in May can be linked to the markdown of shareprices after the companies declared dividends. The Nigerian Stock Exchange typically marks down stocks around May by exactly the amount declared in dividends. This might explain the market rout observed in May,” said Paul Uzum, a Lagos based Stockbroker. September turned out to be the second worst performing month this year with analysts believing that the selloffs in September was induced by the heightening in regulatory

Saudi crown prince says Opec working to keep oil prices down Prince Mohammed bin Salman also gives new timeline for possible Aramco IPO

pec and its allies have been responding to requests from the US for increased oil production and doing what they can to prevent prices rising, Saudi Arabia’s Crown Prince Mohammed bin Salman has said. Opec member states and their allies including Russia “did our job and more” in raising output by about 1.5m barrels a day, Prince Mohammed said in an interview with Bloomberg published Friday. This would more than offsetting an estimated 700,000 b/d taken off world markets as a result of the US decision to reinstate sanctions on Iran over its nuclear programme. The crown prince also gave a new timetable for the proposed initial public offering of a stake in Saudi Aramco, the national oil company, saying the plan was to sell the shares in late 2020 or early 2021. He also confirmed that he was still expecting a valuation for the company above $2tn, with a sale of a 5 per cent stake intended to raise $100bn. The target date for the IPO, originally planned for 2018, has been slipping, delayed by legal and regulatory concerns as well as growing doubts about the ambitious valuation. While Saudi government said in August that it remained committed to the sale, it did not set any timetable and those close to the process said at the time that it had been postponed indefinitely. In recent months US President Donald Trump has repeatedly

attacked Opec for pushing up oil prices. At the UN General Assembly last month, he accused Opec members of “as usual ripping off the rest of the world”, adding: “And I don’t like it”. Prince Mohammed, however, insisted that Opec was helping to keep prices down. He also suggested that the upward pressure on crude prices was not caused by US sanctions on Iran, because of the offsetting increase in production coming from Opec and its allies, blaming instead other countries including Canada, Mexico, Libya and Venezuela. The crown prince confirmed the recent statement from Khalid al Falih, the Saudi energy minister, that the country was producing 10.7m barrels a day, and said it had spare capacity to increase production by 1.3m b/d without any additional investment. He also gave his view of the outlook for oil supply and demand in the long term: oil demand would continue rising until at least 2030 and could start to decline at some point after that. But on the supply side, Prince Mohammed said, there would be “a lot of producers disappearing”. For example, he said, “we believe that China will be decreased sharply if not disappeared after five years from today”, and Russia “will have declined heavily if not disappeared”. He concluded: “We don’t believe that there is any risk in that area for Saudi Arabia.”

risk in Nigeria. On August 29, CBN announced that it had sanctioned four banks around N5.67 billion and asked MTN to return $8.1 billion which the company had allegedly improperly repatriated the said amount from the country through the banks. In the first two weeks in September, banks and multinational companies lost around N550 billion, pulling the entire market loss to around N1 trillion by mid-September. The market picked up some of the losses during the tailend of the year after news that MTN had taken the CBN and Attorney General to court helped restored the bruised investors’

confidence. The short rally at the end of the year helped September to avoid being the worst performing month this year. Analysts told BusinessDay that they have been observing large capital outflows from the stock market by foreign investors who feel uneasy about the growing political and economic uncertainty in the country. The observed selloffs in equity market are expected to continue till next year general elections in February. Hopefully by next March investors who sold and went away in May will find their way back to the equity market.

Law firms’ fightback: financial services As tech-focused newcomers and management consultants muscle in on legal services, law firms plan their responses

he emergence of two phenomena has left law firms in a state of existential angst. First, there is the rise of artificial intelligencebased services, such as data-miner Lex Machina, helping companies win cases and close deals. Second, consultancies such as Deloitte have been launching legal management consulting arms. Eugene McNamee, head of the school of law and executive director of the Ulster Legal Innovation Centre at Ulster University, says the pressure stems from a critical tension increasingly felt around innovation in legal technology. On the one hand, law firms want to hold on tightly to the legal services they have offered for decades. On the other, they believe that to survive and compete against management consultancies and tech start-ups encroaching on their space, they must innovate in areas of business operations where they might feel less comfortable, such as financial technology. “Law firms feel they need to do something big with technology and analytics, but they’re not exactly sure what,” says Prof McNamee. Add to that a sense that other law firms are doing exciting things that will give them an edge, mix in some confusion from an inundation of new product suppliers “promising to deliver the next big thing” and, says Prof McNamee, law firms are concerned they may be left behind. “Everyone is looking over their shoulder at everyone else, and over

their other shoulder are the big insurance and accountancy firms that are holding themselves out as able to do a lot of the work that lawyers have traditionally done,” he says. Two law firms stand out for tackling the situation head-on in the financial services sector, and producing innovations seemingly at odds with the ageold business model of charging billable hours for legal services. Allen & Overy has made a modest equity investment in fintech start-up Nivaura, which is registered with the UK’s Financial Conduct Authority. The law firm helped the company design a platform for issuing financial instruments. The platform can service bonds for the instruments’ lifetime, then redeem them at the end of their life cycle. The process is completely automated and could arguably do away with much of the lawyering in the traditional transaction process. Then there is Linklaters: it partnered with the bank UBS, which is leading a consortium of banks, and financial technology company Clearmatics to develop a digital representation of money, dubbed the utility settlement coin (USC). The system is a blockchain-based interbank payment system that can settle transactions instantly. The law firm gave initial advice for free and was paid once the project went ahead. Paul Lewis, global co-head of innovation at Linklaters, says the USC project is one of a significant number of blockchain-related mandates on which the firm is working. In such

instances, it often works with other partners in a consortium rather than simply charging billable hours. “Blockchain is looking to disrupt areas where the legal framework has evolved over hundreds of years and in a different paradigm,” says Mr Lewis. “Current financial law often looks to where an asset or a person is located in order to determine various legal rights, such as who owns the asset, who can transfer it, and so on. With blockchain, where there is no single location, existing approaches simply do not work.” Whereas many see blockchain as a natural enemy of lawyers, Mr Lewis says Linklaters is busy coming up with “groundbreaking legal structures” designed to put blockchain-use cases on a sound legal footing. This, he says, is because it will enhance the firm’s ability to take advantage of the way some clients are using the technology. “It is like traditional legal services, but with everything being done for the first time and breaking new ground,” says Mr Lewis, referring to the way law firms need to adapt the way they provide services to clients. At Allen & Overy, senior associate Richard Cohen foresees a time when law firms will need to change their method of remuneration and types of services they offer. “Capital markets are likely to see much greater use of technology and automation,” he says. “We will be there to advise on the legal implications of that and how you can manage the introduction of the technology in a way that complies with existing regulations — which invariably do not keep pace with the technology.”

BUSINESS DAY

Monday 08 October 2018

Start-Up Digest

In association with

Small businesses Nigerians can start in Q4 More so, you can sell photos (including old and memorable photos), start your own Podcast, create your own eCommerce store or write articles and get paid. The internet is not just meant for chats but also for searching information that can improve people’s lives.

ODINAKA ANUDU

number of Nigerians may not have realised their dreams for the year. If you fall into this class, do not despair. The last quarter of 2018 can still open a new vista of opportunity. There are still some businesses that you can start this quarter. Start-Up Digest articulates some of these businesses. Laundry This business is often neglected but it still provides food on the tables of many. As long as the entrepreneur is ready to offer quality and timely services, laundry is still a great business, which can be started with about N50, 000 or even less. Nowadays, there is even what is called mobile laundry that anybody can start. You can start with family and friends. Here is a testimony of the Kwara State-born Abubakar Sodeek Arekemashe, a 28- year- old student, who is the chief executive officer of a laundry outfit called Sky Limit. “When the idea came to my mind, I discussed it with my friends. I told them I wanted to start a laundry business. They called it an inferior business (Alagbafo in the local parlance). But I let them realise that the mocking was nothing to me and I started it on 24th February, 2017 with just N200.00. It was easy for me because I had an iron, a laundry basket, regular water supply and electricity. Out of the money, I bought soap and starch, then started with three clothes. To-

day, I am getting a number of people who patronise me,” Arekemashe told Start-Up Digest. Fashion Without being overly optimistic or unrealistic, fashion and design requires funding. In fact, in some cases, N10 million may be insufficient to set up a full-fledged fashion outfit. However, to start at a micro level after apprenticeship, N50, 000 is enough to buy a sowing machine. Many fashion designers do their work at home, so the issue of rent is not always a limitation. This also applies to other areas of fashion such as the makeup and designing. Yejide Elugbaju, founder and CEO of Rivah Beauty Limited, told StartUp Digest that she started her outfit

in January of 2016 with N50,000. Crystal Omotosimi, who is today the chief executive of HC Vestimenta Enterprise, a fashion and designing outfit, started in June of 2014 with just N9, 000 and has grown more than 40 times than that today. You can play locally and internationally. Good designs sell across Africa today and West Africa is still a good market for fashion designers, irrespective of competition and challenges from China. Online Business Nigeria is still a goldmine. Many digital businesses that you find in Europe, China, India and USA are still not here. Many Nigerians are raking in millions through online sales, and payment platforms,

among others. Bamidele Onibalusi is the founder of Deloni Enterprise, an online business. Onibalusi started the business with N15, 000, which he used to register his website and purchase hosting. Hear his testimony to Start-Up Digest: “I mainly deal with clients and customers in Europe, America and other parts of the world. I also earn my income in dollars and convert at the current exchange rate. This ensures that the recession in Nigeria has little or no impact on me.” There are many things you can do online. You can start a YouTube channel, grow a blog, start an online tutorial, begin product reviews, do email marketing or do Facebook/ Twitter marketing.

Cashew processing Next on the list is cashew processing. If you do not have a cashew farm, get one. However, you can liaise with a cashew farmer who will supply you with raw cashew nuts for onward processing. Export of cashew is now one big business. Many a time, Vietnam, world largest cashew exporter, experiences drought and the world then relies on countries like Nigeria for the nuts. Cashew sells like cakes in the United States, India, Spain and many parts of Europe. Apart from helping to maintain a healthy heart and bones, cashew also helps in weight loss and reduction of cholesterol. Cashew nuts are used in producing chemicals, paints, varnishes, insecticides and fungicides, electrical conductress, and several types of oil. Cashew exporters in Nigeria made $250 million in 2015, $300 million in 2016 and $402 million in 2017, according to Tola Faseru, president, National Cashew Association of Nigeria (NCAN), said. If you wish to process for the local or international market, then be ready to procure machines such as boiler, sheller or cracker, dryer, and packaging machine. Two good things about cashew are that its return on investment is as high as 55 percent and its payback time is just 12 months, say experts.

NNEW calls for more support for women entrepreneurs …set to hold annual conference JOSEPHINE OKOJIE

he NECA’s Network of Entrepreneurial Women (NNEW) has called on the Federal Government and stakeholders in the micro, small and medium enterprises (MSMEs) space to provide more support in the areas of finance and mentorship to women businesses in the country. NNEW made this call during a press briefing in Lagos to highlight programmes for its upcoming annual conference schedule for 11th and 12th October, 2018. “We need more support from the Federal Government and other stakeholders in the area of access to finance and mentorship to help us upscale our businesses,” Modupe Oyekunle, president, NNEW said. “Access to finance is very critical to any business. The government is doing something now, but much more still needs to be done. Women need to be able to access loans easily at single-digit interest rate,” Oyekunle said. She identified mentorship as

a major challenge facing womenled businesses, saying that it is difficult for women to mentor each other in business. She noted that NNEW is positioning itself to bridge the gap by changing the mind-set of women to embrace each other especially in the area of business.

Speaking on NNEW upcoming conference ‘United Women Collaborating for Growth’, Oyekunle said that the event will provide the platform for women entrepreneurs to learn from entrepreneurial leaders and influencers, while also having the opportunity to network and connect with each

L-R: Evelyn Bigha, committee member; Olakitan Wellington; chairperson-2018 summit planning committee; Modupe Oyekunle president; Funmilayo Arowoogun, chairperson -Ogun chapter and Aisha Ime-James, committee member all of NECA’s Network of Entrepreneurial Women (NNEW) during a press brief in Lagos recently.

other. Olakitan Wellington, chairperson, NNEW 2018 summit planning committee, said that the conference will provide the platform for women entrepreneurs to share their challenges and success stories with each other to promote collaboration and learning for scale up of businesses. “To focus on agriculture, experts will be on ground to help us identify areas of opportunities in the sector and help existing businesses upscale,” Wellington said. Wellington stated that MSMEs in attendance will benefit from the line-up of experienced entrepreneurs and industry experts who would be speaking at the conference. Similarly, she said that participants at the conference stand a chance of winning an all- paid building capacity trip to Turin, Italy, headquarters of the International Labour Organisation (ILO). “There will be a raffle draw to select a female entrepreneur for an all-expense paid trip to Italy, courtesy of our partner – ILO,” she said. Expected to speak at the confer-

ence are Adenike Ogunlesi, CEO, Ruff ‘n’ Rumble; Aisha Abubakar, minister for state for Industry, Trade and Investment; and Timothy Olawale, director general designate, NECA, among others. Also, specific institutions that are relevant to MSMEs in the areas of tax, finance, digital marketing, strategy, communication, law and HR among other are expected to be on ground during the conference to assist entrepreneurs.

Start-Up Digest Team ODINAKA ANUDU Editor

odinaka.anudu@businessdayonline.com 08067478413

Reporters Josephine Okojie Angel James Joel Samson Graphics

BUSINESS DAY

C002D5556

Monday 08 October 2018

Start-Up Digest

‘Our target is provide students with 21st century skills’ Boma Walcott Braide is the country manager and business development director of Africa of FoundersClick Inc., a Silicon Valley business that operates in the entrepreneurial ecosystem. In this interview with Angel James, she talks about the ‘Apprentice to Profit’ initiative for students and fresh graduates. What motivated the ‘Apprentice to Profit’ programme? he alarming number of Nigerian students and graduates begging for hand-outs and telling a lot of pathetic stories on the social media were the major reasons for the ‘Apprentice to profit’ programme. I strongly feel that these students and graduates should be taught how to fish by themselves and understand that until they try and fail, they would never be perfect at anything. They need to forget about the general perception in our society of getting things without having to work for them. On a more serious note, the idea came from God. I was instructed by God to do it because I have had such a past experience of being taught how to fish for the work environment and not rely basically on what I learnt at university. In hindsight, when I now look back, I realise that it was actually God preparing me for a time like this where I would be able to share my knowledge and experience with others. I have been reading John 16: 12 – 14 recently and I just realised that the ‘Apprentice to Profit’ project must have actually been born while I was meditating. When I returned to Nigeria from the UK, there was a time that I was praying for a breakthrough idea to solve some of the issues that I mentioned earlier and also, I didn’t want most of my skills I had acquired over the years to go to waste. ‘Apprentice to Profit’ is the perfect project to be able to bring all of them together under one roof to solve people’s real problems. As much as that sounds like a cliché, it is true. Most of

my structured work experience and work skills were further developed while I was in the United Kingdom and on coming back to Nigeria, I realised that a lot of people suffered from lack of such opportunities. I woke up one morning to actually realise that I could help a lot of people from my wealth of experience. Somebody gave me an opportunity too at one time in my life even though I had to work hard for it. I believe strongly that our young people should be given the same opportunity and they would excel despite our country’s challenges. I would like students and fresh graduates to learn how to fish for themselves early enough than begging, selling their bodies or resorting to social vices to survive. All the people that they think are successful are all going through their own individual problems that no one knows anything about except they share the details with them. What is the objective of the programme? Our objective is simply to attempt to reduce unemployment in Nigeria to tens of thousands, from its current millions and counting, in 10 years’— at a scale of one person at a time. Who is the programme basically targeted at? It is targeted at students and fresh graduates. That is, students who just graduated from secondary school; students who are in tertiary education and those who are currently undergoing master’s degree. Fresh graduates include those that just finished; those who are currently serving through the National Youth Service Corps in Nigeria and those

Boma Walcott Braide

who are searching for jobs but have not been out of school for up to three years since graduation. We are seriously working on another project that is focused on graduates who have graduated more than three years ago and those who have some form of experience and above. There are lots of other businesses, recruitment agencies and initiatives all trying to solve this unemployment problem in Nigeria. So what do you intend to do differently to achieve results? What we have set out is to carve out a niche in a crowded marketplace like Nigeria. We are not operating with a winner-takes-all approach. When the target market is small, there will always be clients for you. I do not really spend time thinking about staying ahead of any other initiative, because it is more important to focus on building your own vision. As a start-up, playing catch up is a losing game. The fact is, if you are build-

JSAID to empower interior designers, SMEs BUNMI BAILEY

enniez School of African Interior Design (JSAID), an approved interior decoration educator in Africa, will empower interior designers, skilled workers, creative manufacturers and small to medium enterprises in the fashion design industry through its blueprint conference. The conference is an annual event, which is set to take place on the 10th of No-

vember 2018 in Lagos state. According to the organizers, the Blueprint Conference is designed to empower creative businesses with smart business skills to run successful businesses in the design industry and enable them to grow dynamically and be more commercialised. Jennifer Chukwujekwe, founder, JSAID said, “It is a unique conference involving expert design professionals and business experts who come together to empower

interior designers, skilled workers, creatives, manufacturers and small to medium enterprises in the design industry, to become successful in the business of design through practical tools, guidance and motivation, which help in taking their businesses to the next level.” The design industry is one of the fastest growing communities in the creative sector. Although emerging talents have learned and developed creative skills, many

ing an unemployment solution, you have built something that anyone else can build. It is not that complicated, so anything that you create, anyone can copy, whether it’s new or not. The Apprentice to Profit programme is a social enterprise initiative, which is a cross between business and charity? How have you been able to help students and graduates charitably? We were able to help Nigerian students and fresh graduates initially through the social media. We offer a lot of resources which should be normally paid for free through our channels on the social media. We are working on the details to expand this from social media to offline channels to offer free resources to our target groups.

would teach students and fresh graduates on the steps to take when embarking on any venture. Venture can be job or business or any other thing that one wants to attain. For it to make accurate sense to the recipients, we would be putting them on a real-life community build project to make all their mistakes and learn how to build a community with extremely easy milestones. We have put in milestones that they must achieve to be able to qualify for the internship stage and only those who successfully complete their project stage would be allowed to continue in the internship. The internship is a US-based community project and the stipends would be in US dollars or its equivalent and it is open to Africans, not only Nigerians. The internship is for three months and can be extended depending on the performance of the student. So we are looking for the first 1,000 African students and fresh graduates to be positioned to learn a lot from this community building training with the best in class transferable skills that can be used in any industry.

controls to put them in check. Where do you see the programme in five years’? In the next five years, we intend to have achieved 50 percent of our targeted goal, which is to help 500,000 Nigerian students and fresh graduates become excellently skilled, with 21st century employability skills, and be able to face the global employment market rather than be restricted by their location and race. You mentioned FoundersClick during your introduction. Can you share more light? FoundersClick is a focused business to business-based web platform based in the heart of Silicon Valley in Cupertino, California, USA. FoundersClick has opened its website to Africa through Forterun Global to offer business to business interaction between Africa and other geographies where we are currently located in the world.

What progress has the programme made so far since starting? We are currently working on Community Build Training and Live Project. The training

What challenges have you faced since initiating the programme? The challenges have to do with reaching out to the true people that need this solution, and not everybody. We are very specific in our target market and we want it to remain so for now. We are presently working on more experienced professionals’ project which has a different direction and approach. We are very niche specific in our approach. To combat our challenges to a minimum, we have been able to create

How can businesses and professionals in Nigeria take advantage of FoundersClick? The general problem of a lot of businesses, domain experts and service providers in Nigeria is qualified leads. FoundersClick is an opportunity that the above focused groups can take advantage of by joining via our link and getting the basic pro service for free to find leads that would patronise their businesses. Professionals and students can also find jobs on FoundersClick’s website because decision makers and recruiters are on the site as well looking for available resources to fill in their vacancies.

have limited knowledge and experience on how to run a business. The Blueprint Conference is an opportunity to empower them with the necessary business skills, organisers say. “This premier annual conference is the only programme that brings design industry partners together once in a year to share business ideas and design issues. It will also help in developing healthy and positive associations amongst industry

partners. At the Blueprint Conference, we expect lots of industry partners from all over the country,” Chukwujekwe also added. Titi Ogufere, president of Interior Design Association of Nigeria (IDAN); Steve Harris, a sort after business strategist ; and Keia McSwain, president of the Black Interior Designers Network (BIDN) will be keynote speakers at the event. Chukwujekwe stated that her reason for the event was

that she realised that most design professionals had the design skills but do not know how to run a successful interior design business. She recently launched an online course ‘The Pro Designers Blueprint’, which teaches interior designers what they were never taught in design school. Also, there will be panel talks ranging from guaranteed business strategies to effect immediate changes in businesses.

BUSINESS DAY

Monday 08 October 2018

Start-Up Digest

How 2 Nigerian entrepreneurs make money from food business ODINAKA ANUDU

k i n w u m i Ad e s i n a, president of the African Development Bank (ADB), recently echoed the sentiment of other agriculture experts that Africa will feed the world by 2050. By the virtue of its geography, climatic conditions, arid land and availability of crops of competitive advantage, Nigeria is expected to play a significant role in this respect. The country has a crop of young entrepreneurs in the food chain who are making money from feeding the populace. Start-Up Digest looks at two female entrepreneurs that are increasingly finding their feet in food business in the country. Oluwatomisin Adewumi-John She is the founder and head chef of Regalo Kitchen and Confectionery. A graduate of Sociology from Bowen University Iwo, Osun State, Oluwatomisin started this business in December 2015. Regalo Kitchen is a fully Nigerian company with a goal to help clients eat right in line with their health needs. The firm’s vision is different from any other. This is because it does not just bake, cook and train, but it does these as part of its contribution towards Sustainable Development Goals (SDG) 1, 2, 3 and 8. The United Nations’ SDG 1 focuses on ‘No Poverty’, while SDG 2 targets ‘Zero Hunger’. More so, SDG 3 is targeted at ‘Good Health and Wellbeing’, whereas SDG 8 is all about ‘Decent Work and Economic Growth’. These are Oluwatomisin’s vision. She has trained about 100 young graduates and undergraduates since inception. The entrepreneur says she is also empowering others with 21st century skills. “The training part came from a mind-shift to empower people around me to be self-reliant and independent in line with Sustainable Development Goal 8. I believe we all have a role to play towards nation -building, especially if we intend to achieve the SDGs by year 2030,” she states.

Oluwatoyin Onigbanjo

“My line of business only needs you to get someone who trusts you to deliver,” she explains, adding that “you get part payment and on delivery get your balance.” She is not underestimating the importance of capital, but believes that one can always start little and grow big. For her, food is a necessity and not a luxury, which is why the industry is thriving. “If we should look at Abraham Maslow’s Theory of Need/Want, we would find out that food forms the basic need of man. “Apart from the fact that you can see the direct impact of your activity, you get instant feedback from your clients and build sustainable relationships over time. Food business is highly lucrative and can never be over saturated as different food vendors have different target markets,” she says. The entrepreneur says she has been privileged to serve individuals and corporate organisations at various levels ranging from Guaranty Trust Bank and Stanbic IBTC Bank to Stanbic IBTC Asset Management Limited , Stanbic IBTC Pensions Mangers, Fidelity Bank and many others. She says the market has been good, especially in Lagos, where people have a problem of having time to cook. “We also offer families and homes ready-made pot of soups and stew in different sizes and

Oluwatomisin Adewumi-John

combinations,” she reveals. How did Regalo Kitchen kick off? Oluwatomisin provides an explanation. “I noticed that cooking wasn’t just another chore but a passion. I started cooking as early as when I was eight and have since developed capacity to upscale by attending various trainings to ensure I am at the top of my game. Oluwatoyin Onigbanjo She processes baby foods and exports them. Toyin, as she is fondly called, is the founder and head cook of August Secrets, which produces baby foods such as Veggie Beans, Nutty Meal, Fish Powder and Crayfish Powder. Toyin is a journalist, but her achievement shows that men (no ‘woman’ in journalism) of the pen profession can do well in other areas of endeavour. Toyin exports packaged baby foods to Ghana; New York and Atlanta in the United States, and other countries, making her money in hard currency. Like all entrepreneurs, Oluwatoyin’s story is unique. After having a baby abroad, she returned to Nigeria only to notice that the child was reluctant to eat the locally available food. She started sharing her experience with neighbours and church members who offered different pieces of advice. But a matron in

one of the hospitals suggested two local foods she could give the child, and this worked. At the end of the day, she realised that a lot of children were allergic to certain types of food. For her, this was not a problem but an opportunity. “I said to myself, ‘Why not package all of these foods and give them to Nigerian children?’ In the process of doing that, I realised that a lot of mothers also had the same problem. A lot of them wanted foods that were natural and from the African soil. That was a lot of motivation for me,” she explains to Start-Up Digest. Toyin started this business officially in July 2016 and it has been a rewarding experience. The first raw materials she bought cost her N20, 000. She then spent between N200, 000 and N500, 000 on purchasing the next set of raw materials and setting up the factory. Two years plus down the line, this revenue of this firm (in the last 12 months) has exceeded $100,000. “We are selling in about 24 Nigerian cities and states of the country now. We sell in Ghana; we sell in Atlanta, and we sell in New York. We sell outside Nigeria. It is amazing that we now take our foods to places where we bring our foods from,” she says. Oluwatoyin has 24 direct and indirect staff members and 24 distributors across the country. “We decided to fill in the gap

when we realised that about 90 percent of what the Nigerian children ate were imported and were foreign goods. We are producing Nigerian foods, nutritious foods that are attractive and also nourish the Nigerian children across Africa,” she states. The entrepreneur has always been a good cook and loves children. In fact, before Oluwatoyin set up the food processing factory, she had established a kids’ store. “The interesting part for me is that I love coking and I love food. This is something I am passionate about, and right from time, I have always run a kids’ store. Even as a journalist, I run a children’s store for children that are malnourished. It is one thing to have a passion and another thing to do the right thing,” she explains. For her, there are more grounds to cover. According to her, a lot of produce from farmers is wasting away and need off-takers and people who will market them. “The link between the farmers and the market is very weak. There are still a lot of issues in logistics. We also have a lot of market gap, and there is a gap in warehousing.” Being a journalist, Oluwatoyin believes in the power of the digital media. Through various platforms made available by technology, she reaches 100,000 mothers at the moment. She is a strong believer in the made-in-Nigeria brands and wants the citizens to appreciate and buy locally made goods. She says cost of production is high, but her firm has adopted a strategy to cut it. Oluwatoyin says moving from journalism to manufacturing is not easy, adding that she needs funding to acquire more machines. She has some pieces of advice for the upcoming entrepreneurs. “I was not cut out to be an entrepreneur. I would rather be in my house and string stories together as a journalist. But I realised that people needed my services. If you know how to cook, cook it. Put it together and give it those who need it. Don’t just stay in your house. If anybody told me that I would be going out to speak in conferences and talk to people about entrepreneurship, I would not believe that,” she advises.

30,000 entrepreneurs in Enugu to benefit from FG’s TraderMoni— Osinbajo DANIEL OBI

t least 30,000 traders from Enugu State will benefit from TradersMoni, an initiative of the Federal Government designed to further enhance entrepreneurial opportunities for the rural poor, said Yemi Osinbajo, vice president, in Enugu. Osinbajo, who spoke recently at the 19th Micro, Small and Medium Enterprises Clinics for Viable Enterprises (MSME Clinics), highlighted the importance of

small and medium scale businesses in poverty eradication and value creation, adding that the Federal Government is seeking to enhance the MarketMoni initiative by introducing the TradersMoni programme, which specifically will target Nigerians at the bottom of the pyramid. Osinbajo, who said the MSME Clinics have been designed to support small and medium businesses, noted that the programme has become an inspiring example of how government can make a difference in the lives of entre-

preneurs by reducing regulatory bottlenecks and providing training and support systems necessary for business growth. He commended the creative energy of the Nigerian entrepreneur and promised that the Federal Government will continue to create the favourable environment needed for entrepreneurs to thrive. In his address at the event, Governor Ifeanyi Ugwuanyi noted with delight the positive results the state has derived from its strategic partnership with the Federal Government in the area

of employment generation, poverty eradication and the growth and development of small and medium businesses. Ugwuanyi noted that Enugu State has been able to train more than 35,000 MSME owners and aspiring entrepreneurs through the state-owned Enterprise Development Institute with more than 7,000 others benefitting from Government Enterprise Empowerment Program (GEEP), otherwise called ‘MarketMoni’. “ Under the CBN 220 Billion MSME Development Fund,

Enugu State is one of few states that have fully implemented the programme, funding over 2000 MSMEs. This has also returned about N400 million out of the first tranche of N500 million received from CBN. We wish also to commend, the CBN on the ‘Ose Nsukka’ (Nsukka Yellow Pepper) Anchor Borrowers Program as well as other initiatives of the Bank in Enugu State. Our counterpart funding with the Bank of Industry (BOI) has produced over 36 SMEs worth more than N399 million in project value,” Ugwuanyi stated.

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4 ways busy people sabotage themselves ALICE BOYES

ou’ve left an important task undone for weeks. It’s hanging over you, causing daily anxiety. And yet instead of actually doing it, you do a hundred other tasks instead. If you’re chronically tapped out of the immense amount of mental energy required for planning, decision making and coping, it’s easy to get lured into this kind of trap. Let’s unpack the problems in more detail and discuss solutions. 1. YOU KEEP PLOWING AWAY WITHOUT STEPPING BACK. When we’re busy and

stressed, we often default to working on whatever has the most imminent deadline, even if it’s not particularly important. The solution is to step back and work on tasks that are important but not urgent. Use the “pay yourself first” principle to do items that are on your own priority list first, before you jump to responding to other people’s needs. You might not be able to follow this principle every day, but aim to follow it for several days of the week. 2. YOU OVERLOOK EASY SOLUTIONS. When we’re stressed, we don’t think of easy solutions that are staring us in the face. To get out of this

trap, take a step back and question your assumptions. If you tend to think in extremes, is there an option between the two extremes you could con-

sider? 3. YOU KICK THE CAN DOWN THE ROAD INSTEAD OF CREATING BETTER SYSTEMS.

Remedies for recurring problems are often simple if you can step back enough to get perspective. Always forgetting to charge your phone? Keep an extra power cord at the office. Always correcting the same mistakes of others? Ask your team to come up with a checklist so they can catch their own errors. Travel for work a lot? Create a “master packing list.” Carve out time to create and tweak these kinds of systems. By gradually accumulating winning strategies over time, you can significantly erode your problem, bit by bit.

People who are overloaded will have a strong impulse to avoid or escape anxiety. If you want to deal constructively with situations that trigger anxiety for you, you’ll need to engineer some flexibility and space into your life so that you can work through your emotions and thoughts when your anxiety is set off. Be compassionate with yourself and aim to chip away at your patterns rather than expecting to give your habits a complete makeover or eradicate all self-sabotaging behaviors from your life.

4. YOU USE AVOID-ORESCAPE METHODS FOR COPING WITH ANXIETY.

(Alice Boyes is a former clinical psychologist turned writer.)

People who graduate during recessions earn less money — but they’re happier EMILY C. BIANCHI

hen the graduating classes of 2009, 2010 and 2011 hit the job market, their employment prospects were depressingly bleak. Unemployment rates were at historic highs and job openings were scarce. Many of those who did find work held jobs that were temporary, lacked benefits or did not require a college degree. These early career experiences appear to have lasting negative consequences for later career success. But while there is little doubt that recessions have lasting negative effects on salaries and occupational prestige, they appear to have some surprisingly positive implications for

other aspects of people’s working lives. For one, people who enter the workforce in a recession tend to be happier with their jobs, compared with people who gradu-

ate in better economic times. For instance, in one paper I examined the job attitudes of 1,638 people over a 15-year period. Even though they earned less money than people

who started their careers in better economic times, recession graduates were significantly happier with their jobs both early in their careers and years later. People who began their

careers in prosperous times, on the other hand, were more likely to be plagued by regret, secondguessing and what-ifs. One reason that recession graduates might be less likely to develop a grandiose sense of self is that narcissism seems to be tempered by adversity and setbacks. Many are forced to move back home, work in jobs that do not require a college degree, or cobble together part-time gigs. While these challenges can make it difficult to establish independence and build a career, they also appear to hamper the development of an overinflated ego. Not only were recession graduates less likely to regard themselves as su-

premely important and deserving of outsize attention and praise, but they were also less likely to engage in behavior that enriched themselves at the expense of their organizations. Many people who started their careers during the Great Recession still bear the scars of entering the workforce during that tumultuous and uncertain time. They may have gaps in their résumés and fewer zeros in their salaries. But these tough experiences may have helped shape them into happier, lessself-absorbed and moreethical employees.

(Emily C. Bianchi is an assistant professor at Emory University’s Goizueta Business School.)

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Blockchain technology, others have transformed businesses in Nigeria – Oracle

M L-R: William Kumuyi, general superintendent, Deeper Christian Life Ministry; Vice President Yemi Osinbajo; Akinwunmi Ambode, governor, Lagos State, and his wife Bolanle, at the 58th Independent Anniversary Interdenominational Church Service at the Deeper Life Bible Church Headquarters at Gbagada in Lagos, yesterday. Pic by Olawale Amoo

FG to curtail use of tobacco in Nigeria … tobacco-caused diseases kill 16,100 yearly CYNTHIA IKWUETOGHU

ith the high death rate from the use of tobacco, the Federal Government has decided to reduce the use of tobacco in Nigeria. Minister for state of health, Osagie Ehanire, made this known while speaking at the eighth session of the Conference of the Parties (COP8), saying efforts had been made towards the implementation of the National Tobacco Control Act of 2015, a national law that domesticates the WHO Framework Convention on Tobacco Control (FCTC). Ehanire also noted that the government had begun mass awareness campaigns on the provisions of the 2015 Act, to create the enabling environment for enforcement. “Government had reviewed the standard for cigarettes to include the

complete ban on cigarettes with characterising flavour, including menthol,” Ehanire said, saying, “Government of Nigeria had ratified the protocol to eliminate illicit trade in tobacco products. The instrument of accession would be finalised and deposited at the United Nations headquarters.” According to Ehanire, tobacco farming leads to deforestation and it also increases land and water contamination due to extensive pesticide use, among others. Nigeria has made progress on tobacco control in recent years. However, people continue to die and become sick needlessly, and the costs to society from tobacco use continue to mount. Although the economic cost of smoking in Nigeria are not known, the total economic cost of smoking globally amounts to $2 trillion, when adjusted for 2016 purchasing power parity (PPP). This in-

cludes direct costs related to healthcare expenditures and indirect costs related to lost productivity due to early mortality and morbidity. Satisfaction in the face of tobacco widespread protects the tobacco industry in Nigeria and ensures that tobacco’s death toll will grow every year. “Every year, more than 16,100 of its people (Nigerians) are killed by tobaccocaused disease. Still, more than 25,000 children (10-14 years old) and 3.5 million adults (15+ years old) continue to use tobacco each day,” according to The Tobacco Atlas. Figures from the National Bureau of Statistics (NBS) reveal that import of beverage and tobacco increased to N64.9 billion in 2017 from N49.1 billion in 2016. While export of cigarettes containing tobacco was N7.68 billion with about 0.2 percent share of total export in second quarter (Q2) 2018.

2019 polls crucial to Nigeria’s survival, progress - Mark

ormer Senate president, David Mark, weekend emphasised the importance of the 2019 polls to the survival and progress of the Nigeria nation. Mark addressed newsmen after a closed-door meeting with former President Olusegun Obasanjo in Abeokuta, the Ogun State capital. He said he was in Abeokuta to consult with Obasanjo over his (Mark) presidential ambition, saying Nigerians must get it right in the choice of leaders at all levels to move the nation to an enviable height. He described the 2019 polls as the “first major polls that the Peoples Democratic Party (PDP) would be contesting as an opposi-

tion party”. The former Senate President, a presidential aspirant on the platform of the PDP, therefore considered the elections as a test of the party’s strength, popularity and how well it had fared since the last general polls in 2015. Mark, who cautioned

other PDP presidential aspirants against unguarded utterances, dismissed rumours that he had stepped down for another aspirant. “Those who are afraid of contest have no business in the race. I came into the race well prepared after due consultation with various groups.

anaging director of Oracle Nigeria, Adebayo Sanni, weekend, said emerging technologies such as Blockchain, Artificial Intelligence (AI) Internet of Things (IoT) were driving business innovations in Nigeria. Sanni said this at the Oracle Impact Technology Summit in Lagos, aimed at driving awareness of emerging technologies and their impact on local businesses. He said the Nigerian economy was bolstered by a thriving small and medium enterprise (SME) community, with many SMEs engaging in businesses that could only be made possible by cloud technology. He said the adoption of cloud technology was imperative for any business and government organisation that desired to remain

relevant and competitive. According to Sanni, with blockchain, AI and IoT, businesses have the opportunity to focus on driving revenue streams as these solutions remove the risk of human error and are selflearning. “These technologies provide transparent and simple data validation to drive efficiency and predictable results, so that the businesses can focus on driving results and increasing revenue. “A recent example of blockchain’s impact is the Nigeria Customs Service (NCS) that piloted Oracle Blockchain Cloud Service to provide it with a trusted platform for the full automation of Customs Excise Trade business processes and procedures. “This technology allows NCS to document and track products that are manufactured locally, right from the source of licensing and

permits for manufacturing, to distribution and point of sale. “This proof of concept shows that the entire business environment of NCS can be migrated to blockchain to automate as many customs processes as possible, creating transparency and predictability,” Sanni said. The managing director said it was time to stop thinking about emerging technologies as scary or disruptive challenges businesses would have to overcome. Also speaking at the summit, assistant custom controller general, Benjamin Aber, said blockchain was radically changing the future of transaction-based industries. According to Aber, the adoption of blockchain has helped the Customs to build a world-class customer service.

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Edo, seven states sign OGP to strengthen governance, fight corruption IDRIS UMAR MOMOH, Benin

Zainab Ahmed, minister of finance (3rd l); Umaru Ibrahim, MD/CE, Nigeria Deposit Insurance Corporation (NDIC) (2nd r); Omolola Abiola-Edewor, executive director, corporate services, NDIC (l); Olubunmi Siyanbola, director, home finance, Federal Ministry of Finance (2nd l), and Mahmoud Isa-Dutse, permanent secretary, Federal Ministry of Finance (r), during the minister familiarisation visit to the agency in Abuja.

US push for OPEC spare capacity could upturn oil market ISAAC ANYAOGU

… Niger Delta, Libya crises, other geo-political risk threats loom

he United States of America is urging oil rich Saudi Arabia to dig into its spare capacity to augment shortages its sanctions on Iran is causing, but it leaves oil prices vulnerable to future spike should geo-political crises erupt, experts warn. “I think we have a big risk premium coming in that we’re going to run out of spare capacity amid considerable geopolitical disruption risk,” Bob McNally, a veteran OPEC watcher who heads the consultancy Rapidan Energy Group, said during an Atlantic Council event Thursday to SP Global Platts. “When we get this tight, the market wants to be assured that you’ve got cash in the bank, if you will.” A sustained militancy by a group calling themselves the Niger Delta Avengers

and the uprising from Libya cut off over a million barrels per day from global oil supply, only a bearish oil market kept prices low. As the 2019 election draws nearer in Nigeria, the risk to oil production is heightened. This time around, prices have reached four-year highs of $86 per barrel hence digging into spare capacity would eliminate the ability of OPEC’s biggest producers to respond to any future disruptions, raising the risk of a bigger price surge. However, this reality is lost on Donald Trump, US, president and his energy minister, Rick Perry, who are pressuring Saudi Arabia to force a 1.42 million bpd spare capacity into the market, either from itself or OPEC members. “The United States continues to engage with OPEC countries and we encourage

them to utilise their spare capacity to ensure world oil supply meets the demand,” the State Department said through a spokesperson last week. Saudi Arabia already feels stretched at the moment. It is now pumping about 10.7 million bpd and can add 1.3 million bpd, its crown prince Mohammed Bin Salman said last week. The prince also said the kingdom could push capacity beyond 12 million barrels a day with additional investment, and that extra supplies are also available from Saudi Arabia’s allies including Russia and other OPEC members. The United States is re-imposing sanctions on Iran after quitting an agreement on the country’s nuclear program, and the measures will take full effect in November. It is

Ezekwesili misses out of Noble peace prize award BUNMI BAILEY

ormer minister of education and coconvener of the #BringBackOurGirls campaign, Obiageli Ezekwesili, has missed out of the 2018 Nobel Peace Prize by the Peace Research Institute Oslo (PRIO). The prize was won by Congolese doctors Denis Mukwege, Yazidi campaigner, and Nadia Murad for their work in fighting sexual violence in conflicts around the world. Ezekwesili, who was nominated with other four laureates (Denis Mukwege, Nadia Murad and Tarana Burke for the World Food Programme); SOS Méditerranée, Doctors Without Borders and International Rescue Committee and Reporters Without Borders), has been vocal about various campaigns, including Leah

Sharibu, who is still held in captivity. Henrik Urdal, PRIO director, describing Ezekwesili, said, “Ezekwesili, former Minister of Education in Nigeria and Vice President for Africa in the World Bank and one of the founders of Transparency International, has been an international champion in the fight against corruption. “Ezekwesili was also the Federal Minister of Solid Minerals and the chairperson of the Nigeria Extractive Industries Transparency Initiative (NEITI), leading the first-ever national implementation of the global EITI standards. “Even though transparency and anti-corruption champions have not traditionally been considered as obvious candidates for the Peace Prize. A Nobel Peace Prize to the field of anti-corruption and transparency

would be a welcome boost now that key actors such as the US have abandoned the EITI by the wayside.” The Nobel Peace Prize, which was established in March 1901, is one of the five Nobel Prizes established by the will of Swedish industrialist, inventor, and armaments manufacturer Alfred Nobel, along with the prizes in Chemistry, Physics, Physiology or Medicine, and Literature. Mukwege is a Congolese gynaecologist who founded and works in Panzi Hospital in Bukavu, where he specialises in the treatment of women who have been gang-raped by rebel forces. He has treated thousands of women who were victims of gang wartime rape since the Second Congo War, some of them more than once, performing up to 10 surgeries a day during his 18-hour working days.

racing to avert a spike in oil prices, which will raise gasoline prices in the US and hurt chances of Republicans in the November midterm elections. Rystad Energy, an independent energy research and business intelligence company, observes that the Iranian crude exports dropped materially for the second month in a row in Sep-18. At 1.7 million bpd for September 18, Iranian crude exports are 450,000 bpd below pre-sanctions (average between May 2017 and February 2018) levels of 2.15 million bpd. The research firm sees increased likelihood of a larger cut in Iranian exports than its 900,000bpd loss estimate as it await news about the US decision on sanction waivers for Japan, India, and others.

s part of policy to promote open government, empower citizens, fight corruption, and harness new technologies to strengthen governance, Edo State government has joined other states in the federation that have signed up to the Open Government Partnership (OGP) initiative. The state governor, Godwin Obaseki, made the disclosure during the launch of Open Niger Delta Campaign in partnership with the African Network For Environmental and Economic Justice (ANEEEJ) in Government House in Benin City. Other states that have signed into the initiative are Anambra, Enugu, Abia, Ebonyi, Kaduna, Kano, and Niger, while states like Bayelsa and Delta have also indicated interest to key into the project. Obaseki, represented by Taiwo Akerele, chief staff, Government House, noted that the state had over the years committed to the general principles of openness and transparency in the conduct of business and procurement related issues. He said the state government had in partnership with the World Bank and other development partners in 2013 successfully piloted the open data in Nigeria. He explained that in strengthening the open data initiative, the government has ensured full involvement of the civil society ecosystem while implementing the State Integrated Financial Management Information System (SIFMIS) as well as deployed technological tools with continuous capacity building to improve

the efficiencies and output of workforce. The governor also disclosed that the state had been maintaining a disciplined accounting system by regularly publishing all contracts above the sum of N10 million, among others. While commending the management of ANEEJ for the partnership, he added that appropriate actions are being taken to co-ordinate anti-corruption activities by improving its integrity, transparency and accountability rating through the deployment of technology in driving processes. Earlier, the executive director of ANEEJ, David Ugolor, said the Open Niger Delta (OPENED) project is being supported by Bread for the World Protestant Development Service with the goal of mainstreaming open government partnership principles in the Niger Delta states. Ugolor said the project was as a result of ANEEJ’s response to the lack of openness and corruption which has resulted in resources meant for development being fritted away through the entrenchment of a culture of opacity in administration of the nation’s common wealth. He also disclosed that the organization is initiating a programme called Monitoring of Recovered Assets in Nigeria through Transparency and Accountability (MANTRA) project with support from UKAID. He posited that MANTRA is to strengthen the capacity of Civil Society Organizations (CSOs) to monitor the use of repatriated loot and advocate for the improvement of policy and legislative framework for asset recovery in Nigeria.

Edo Innovation Hub, MADE partner on hub’s management, youth training

n what has been described as a proactive move to ensure sustainability in its operational efficiency, Edo Innovation Hub, a brainchild of the Governor Godwin Obaseki-led administration in Edo State, has entered into partnership with the Market Development in the Niger Delta (MADE), which covers the hub’s management as well as capacity building for youths in the Niger Delta region. The partnership will see MADE, a project funded by the United Kingdom’s Department for International Development (DFID), support the hub with critical expertise required to ensure sustainability and other support structures to boost employability of youths. Speaking at the signing of the deal on the partnership at the Edo Innovation Hub in Benin City, senior special assistant (SSA) to Governor

on Skills Development and Job Creation, Ukinebo Dare, said the hub had reaped the first fruit of the partnership with the recruitment of the hub manager to manage the affairs of the hub, interface with investors, secure partnership deals, ensure sustained inflow of projects and engage with the state’s budding tech community. According to Dare, “We are very happy to have signed this partnership with MADE on the management of the hub. It is the first phase of ensuring a sustainability programme for what we are doing here, as the kinds of programmes and projects that happen at the hub can only find full expression if we get experts to do the job and engage with the tech community in Nigeria and beyond.” The partnership with MADE is one out of many of such deals the hub is willing

to enter into, to ensure that operations at the hub is not only seamless, but that those who will be using the hub will have confidence in the system, Dare said. Noting that the Obasekiled administration is keen on ensuring that youths find expression in the unfolding digital revolution sweeping through the world, she said, “We are very much in tune with what is happening across the globe, especially with the rise of digital innovation. So we are happy to work with partners such as MADE to bring this opportunities to our people in Nigeria.” She said the partnership had different components, some of which include support for Small and Medium Enterprises (SMEs), capacity building and market development for enterprises in different product value chains.

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Kano to host 1st Agricultural Quality... Continued from page 2

of the economy through agriculture a major policy thrust with different incentives put in place to attract both the local and international investors into the nation’s agricultural and agro-allied sub sectors. The project is also meant to maximise the opportunities in the export of agric produce. The nation’s agricultural sector is the largest employer of labour and currently accounts for 22.86 percent of the nation’s gross domestic products (GDP). in 2017, the sector grew by 11.29 percent and that momentum moderated to 10.64 percent at the end of the second quarter of 2018.

“A major factor contributing to the lack of real industrial growth and development have been the abysmal low quality ratings of the nation’s agro-commodities by reputable international food quality and standards regulating agencies due to non-adherence to certain intrinsic procedures, safety quality and standards specifications. “It is therefore imperative that measures, incentives and enabling environment be put in place to ensure these basics are encouraged by identifying with and adequately rewarding those who painstakingly follow the prescribed global rules and regulations to the later. In this

regards, the Federal Government has incentives aimed at encourage agribusiness, i.e. Anchor Borrowers’ Scheme (farmers), tax rebate, tax holidays and concessions (processors and exporters), amongst other commendable initiatives”, said the Organising Committee. The award categories include the All-Round Agro Excellence Award; Agribusiness Leader Award; Best Rising Farmer Award; Innovation in Agriculture Award; Best Agro-Processing Award; Best Agro Marketing Award; Best Agro Design and Fabrication Award; Best Use of Technology Award; Host State Award and Special Award for Excellence. The deadline for entry is Friday, October 31, 2018

L-R: Chris Ogbechie, professor of strategic management, Lagos Business School (LBS); Ijeoma Nwagwu, faculty strategy, LBS, and Yaw Nsarkoh, executive vice president, Unilever Ghana and Nigeria, at the Africa Responsible Business Forum, held at LBS in Lagos.

Nigeria’s risk premium reaches year high... Continued from page 1

fear of election causing foreign investors to pull back.”

Economic growth in Nigeria has slowed this year, growing at less than 2 percent which significantly underperforming economists’ expectation at the beginning of the year whereas in US economic growth is now above 4 percent for the first time in decades. The International Monetary Fund (IMF) which correctly predicted that Nigeria will grow its economy in 2017 by 0.8 percent has forecast economic growth for 2018 to be 2.1 percent. However, in the first quarter of this year, Nigeria’s economy expanded by only 1.95 percent and in the second quarter, the economic growth decelerated to 1.5 percent. The Central Bank of Nigeria during the last monetary policy meeting in September told journalists that they expect economic growth in 2018 to be around 1.75 percent. The sluggish performance in the economy is linked to late passage of the budget and lack of reforms. CBN Governor, Godwin Emiefele urgedthefederalgovernmenttospeedilybeginspendingthefundsallocatedin the budget to bolster economic growth in the second half of the year.

Other analysts tie the widening spread to a yearlong risk off trade in emerging markets which in Nigeria’s case is fuelled by higher levels of political uncertainty. “The wider spread between the FGN 10 year bond and the U.S 10 year bond signifies higher risk premium on the country from the investor perspective. This is largely due to the massive emerging markets and frontier markets selloffs which aren’t only peculiar to Nigeria. Although the wider spread in Nigeria could also be attributed to the increase in political risk premium as we approach the general elections,” said Omotola Abimbola, Fixed Income Securities Analyst at Ecobank. “We expect to see spreads widen further towards the tail end of the year and also the beginning of next year because we still expect more rate hikes from the Federal Reserve Bank of America that will continue to lead to risk aversion particularly for EM and FM markets. And for Nigeria, the election season with on-going primaries will weigh more on political risk premium.” The US Central bank has raised interest rate three times already this year, increasing the fed fund rate at

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ing the law, they are prosecuted”. In a statement issued by Mohammed Kudu Ibrahim, head, communication and public affairs, the Minister urged the CBN and the NDIC to use the recent failure of the defunct Skye Bank Plc as an opportunity to deal decisively with any of its Directors and Management found culpable in the course of the investigations, so as to serve

as a deterrent to other operators in the financial system as the federal government is no longer prepared to treat such serious infractions with levity. Earlier in his welcome address, the NDIC chief executive assured the Minister that the Corporation will do all it can to assist in the recovery of all the debts owed the defunct Skye Bank and other Banks in liquidation. He also

25 basis points in each of those occasions. This sent the US 10 year treasury from 2.4 percent at the beginning of the year to 3.2 percent on Friday. “Even though the US yields are also rising, the yields in Nigeria are currently rising at a faster pace,” Akinwunmi said. Higher levels of political uncertainty, regulatory sanctions and large flow of capital reversals have sent the FGN bond yield from 13.4 percent in January to 15.2 percent Friday. With Nigeria still looking to borrow externally to fund half of the 2018 budget deficit, it is expected that the country will be raising a $2.8 billion Eurobond later this year at a considerably higher cost than they did earlier in the year. Nigeria raised $2.5 billion through a 12 and 20 year series Eurobond in February at a cost of 7.14 percent and 7.69 percent respectively. US interest rate at the time was 1.5 percent. Today US interest rate sits at 2.25 percent which may make fresh external borrowings a lot more expensive if foreign investors demand a risk premium similar to the one they did in February. “The spread of sovereign and corporate Eurobonds are also widening due to heightened political risk in the country. This trend may likely continue till close to the election next year,” Abimbola concluded. expressed the Corporation’s determination to ensure that the Directors who perpetrated in insider abuse and other illegalities in running the affairs of the bank are investigated and prosecuted by appropriate authorities. The primary concern of the NDIC, he assured the Minister, is to ensure the safety of depositors’ funds and minimise the disruption of banking services.

•Continues online at www.businessdayonline.com

Monday 08 October 2018

BuharivsAtiku: Issues thatcould shape outcome... Continued from page 1

expect if any of them should

become president next year. President Muhammadu Buhari has been in power for close to four years and his approval ratings, according to polls conducted periodically by NOI polls, have dropped from an average of 67 percent in his first year in office to 38 percent in February 2018. Another poll, Buharimeter Opinion Poll, in its 2018 report, put the president’s job approval rating at 40 percent while 44 percent disapprove of his job performance. According to Idayat Hassan, the director of the Centre for Democracy and Development, which conducts the polls, “This implies that the president is rated below average by Nigerians.” Crucially, the poll also revealed that the “federal government received ratings below average on the three cardinal campaign promises – corruption, security and the economy.” But the president’s problem started with the quantum of promises made by his party during the 2015 electioneering campaigns. A check on the campaign promises revealed the APC made 81 concrete promises ranging from curbing corruption to stabilising the naira. However, the president has virtually disowned those promises. To be fair to the president, as Ogho Okiti, CEO of Times Economics consulting firm, based in Abuja, argues, “The president did not make promises. Indeed, there is no record of him promising Nigerians what he would do as their president. It was the Vice President and the wing of the APC in Lagos that felt and was convinced that they needed to make promises in order to garner support for the president.” For the few minutes that President Buhari was allowed to speak during the campaigns, what he talked about often were fighting corruption, revamping the economy and improving the security situation in the country. Even the president confirmed that recently when he said: “We campaigned on three fundamental issues: security, reviving the economy, and fight against corruption. It’s the reason we got elected, and we can’t afford to let our people down.” Although the campaigns have not started, the President has summarised his promise to Nigerians –to do his best for Nigeria and to continue to fight corruption. Crucially, on his economic policy, there was a noticeable mismatch between his ideological bent and his promise in 2015 to allow the private sector dictate the pace of the economy. Indeed since 2003 when he began his quest for public office, he has always voiced his opposition to the surrendering of the “commanding heights of the economy” to the private sector and specifically, the privatisation of the largely inefficient and wasteful State Owned Enterprises that became established conduits for the siphoning of public revenues. This can be seen in how the president talks about the privatised SOEs in very nostalgic tones and never fails to excoriate past administrations for mortgaging Nigeria’s common patrimony to private and selfish individuals. Once in power, the president began to push to claw back the economy from the private sector, re-establish state dominance and control over the economy and position the state as the largest play-

er in the Nigerian economy. In response to a question in 2016, that mindset came out clearly: “We are averse to an economic team with private sector members” because such persons “frequently steer government policy to suit their narrow interests rather than the overall national interest”. Buttressing the president’s position further, the media adviser to the vice president, Laolu Akande further explained that the exclusion of private-sector actors from the President’s economic team was mainly because the presidency considers economic management as purely “a government affair”. That is why, for instance, the government has refused to end the fuel subsidy regime and it is pushing for the setting up of a national carrier and shipping line. Atiku Abubakar, on the other hand, is expressly pro-business and pro-private sector. Indeed, he chaired the privatisation council as Vice President from 1999 until the quarrel with Obasanjo when he was stripped of virtually all his powers and functions. Atiku, a serial presidential aspirant since 1992, has seen his views evolve to include the contentious topics of fiscal federalism and restructuring. He signalled his departure from the political elite’s apathy towards restructuring by weighing in on the side of proponents of restructuring, arguing that it “will help devolve powers to state governments”. “I support restructuring for three main things. It will help to devolve powers to state governments, allowing the federal government to focus on a few nationally critical things and become more efficient and lean,” the former Vice President said last year at a book launch. “This will then reduce the focus on the federal government and federal power. It will bring us more in line with federal systems that actually work well. And it will result in a greater sense of justice, and peace and unity”, Atiku concluded. His economic agenda includes emphasis on power, private sector, security, education, economy, job creation, ICT and the nation’s currency. For instance, on jobs, the former vice president correctly diagnosed the problem of jobs on lack of growth in the economy and the undue reliance on the oil sector. “As long as growth of the economy is driven by the oil sector, job creation is bound to suffer. To tackle the job and poverty challenges bedeviling the economy, we shall focus on four areas. “First, we shall stimulate the growth of those economic sectors which are considered the domain of the poor – i.e Agriculture and Micro & Small Enterprises. “For the MSE sector, we shall set up a Venture Capital Fund to enhance their access to finance and hence their ability to grow and employ more hands. “Second, we shall set up a National Innovation Fund to support budding entrepreneurs, especially young men and women with brilliant ideas. “Thirdly, we shall promote a Special Apprenticeship Programme that will support the training of up to 1,000,000 youth (including the NYSC) each year in diverse fields, by local master crafts persons. While they undergo the training, we shall match them with potential employers.”

Politics & Policy Monday 08 October 2018

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Presidential candidate of the People’s Democratic Party, Atiku Abubakar in a handshake with the national chairman of the PDP, Uche Secondus, and flanked by other aspirants and party leaders after receiving certificate as winner of the PDP primary held in Port Harcourt, Rivers State.

BUSINESS DAY

Atiku Abubakar flanked by Senate President Bukola Saraki (l) and Governor Ibrahim Dankwambo of Gombe State after winning the People’s Democratic Party (PDP) presidential primary.

What does Atiku’s emergence mean for 2019? …His Northern origin, religious bent, experience, rich contact make him a formidable contender ZEBULON AGOMUO

ad any other aspirant emerged Sunday as the candi date of the People’s Democratic Party (PDP), many Nigerians would have considered the return of President Muhammadu Buhari a fait accompli, BusinessDay can authoritatively report. The reason is simple. They believe that no other of the 12 aspirants possesses the astuteness and political wherewithal that Atiku Abubakar, a former vice president possesses. An analyst, who spoke with BusinessDay shortly after the result was made public on Sunday, said: “That was a brilliant outcome. If it went otherwise it would have been Nunc dimittis or ‘to your tents O Israel’. PDP behaved well; they behaved maturely; nobody (among the contestants) pushed the other; they contested like brothers; I am so happy it went that way.” According to the pundit, who craved anonymity, “Atiku’s emergence means a lot for 2019. The rate of literacy is much more lower in the north than in the south. The attitude of illiterates generally is to have somebody they think they have affinity with. In that case, if a southern candidate had been presented, Buhari would have had their votes enbloc, but now with Atiku’s emergence, the northern votes would be split on the basis of ethnic and religious

affinity.” Reacting to the development Sunday, an observer said: “The die is cast. Now we have a perspective, it would be a straight battle between the incumbent, President Buhari and Atiku who controls one of the best political machinery within the Nigerian isle, the People’s Democratic Movement (PDM), an organisation founded by the late Shehu Musa Yar’ Adua.” According to him, “Alliances would be formed; horse-trading would start in earnest. The electoral battle would be in the North. The ‘Wazirin’ needs help from others. He needs the Kwankwansiya movement in Kano; those five million votes must be shared. He needs the Governor in Sokoto; he must have a piece of the Northwest pie. He needs the North Central and the strategic inputs of Saraki. Benue, Plateau and Taraba must tilt towards his favour. He must realise it’s not a winner takes all. It’s team work that would create the winning strategy. In July, Rabiu Kwankwaso, a former governor of Kano State and senator, had advised the PDP to field a candidate from any of the three ‘K’ states of Kano, Kaduna and Katsina. It was his belief that “PDP needs someone from any of the ‘3K states’ to win the next election. That’s where the votes are. It would be difficult to win if they pick someone from any other zone…” Tayo Oni, a statistician with a firm in Ibadan, Oyo

State, said that with the seamless convention held in Rivers, the PDP could still win the 2019 presidential poll if all those who contested with Atiku should team up with him. “My take is that with all that we have seen so far, PDP has a bright chance to win the election in 2019. If all the other 11 aspirants could team up with Atiku and deliver their states or divide the states and regions where the APC is known to exercise control, then you will be sure that victory is sure. Don’t forget that the sympathy is no longer with the APC as it was in 2015; things have considerably changed. I think where we are right now was the point we were when people lost interest in President Goodluck Jonathan administration and decided to vote him out. I am very sure that the APC is jittery over the outcome of the convention,” Oni said. “If you ask me the significance of the development in Rivers, I would say that it has made 2019 interesting. Atiku is strong, popular and well known. He speaks the language of the people, which is money and because he is from the north, a lot of people will not see it as a religious or ethnic thing. I think that Nigerians should expect a serious contest this time around,” he further said. Some months ago, Cromwell Gaius, an Abuja-based policy analyst, had, while describing the chances of Atiku Abubaker to clinch the

PDP ticket, said: “I sincerely think, without belabouring the matter that Alhaji Atiku Abubakar is the best bet for the PDP in the circumstance. Why did I say so? Atiku is well-received in many parts of the north; he has the money to run his campaign without relying so heavily on his party; he has friends and allies across the country. In fact, I must tell you that the man has more friends in the south than he has in his own region of north. If you are talking about or looking for a detribalized Nigerian, Atiku fits the bill.” The emergence of Atiku may have enlivened the race for 2019 general election. Before the National Convention of the PDP in Port Harcourt, Rivers State, Saturday, apprehension was high that the main opposition party was going to make a serious mistake. Pundits had argued that Atiku was the best candidate and raised the alarm that if the selection went any other way, PDP may have played into the hands of the ruling All Progressives Congress (APC). Those who raised the concern based their insinuation on the rumours that made the rounds that Aminu Tambuwal, governor of Sokoto State, may have been anointed as the preferred candidate. Atiku had a few days before the Convention lamented the role of the elite in depriving him the opportunity to serve the country in that capacity as president.

He had said that the elite conspiracy had made it impossible for him to emerge president. “It (reason why I have not been elected President) is what I call the conspiracy theory of the political elite; if you are not going to be used, if you are not going to satisfy their personal aspiration. Part of the problem they (elite) have with me, is that they say I am independent, principled and so on. Unfortunately, the Nigeria public is not politically sophisticated to override the conspiracy of these political elite,” he said. So, when he made the observation, some analysts said it must have emanated from a “possible gang-up” and “determination in certain powerful quarters” to ensure he did not emerge the PDP candidate. Recall that Atiku had allowed emotion to take the greater part of him recently when he wept openly while speaking to his supporters who had purchased the PDP nomination form for him. The former Vice President had looked into the condition of the country and wondered why some powerful individuals in the country would not allow him to administer his antidote. “I have been in politics for the past three decades and in those three decades I have only been on the ballot for the presidential election only once and that was in 2007. But not once in those three decades have I received this much love from the people as you have

done today by choosing to purchase nomination forms on my behalf,” he said. According to him, “By this action, there is a pact between you and me that we are going to do this work together. Just as you gathered here together, we shall enter the race for the PDP nomination together and together also into the general election and by the grace of God and through your hardwork; I believe that we are going to win together.” But in Port Harcourt, the 12 governors on the PDP platform decided there was not going to be any consensus, preferring that the 12 aspirant should test their popularity at the delegate convention. The governors had asked all delegates to go and vote for candidates of their choice. There were horse-treading, wheeling and dealing, in the end however, sanity prevailed. Analysts speak in tandem that the former vice president may have invested more than any other aspirant to the presidential ticket. They noted his journeys across the country, visiting some states more than once; travelling abroad to sensitise Nigerians in the Diaspora, among other engagements. He had spoken passionately about restructuring of the country, a sensitive subject that many prefer to keep quiet on; he has talked about what he would do with the nation’s unviable refineries and his approach to the economy generally.

Monday 08 October 2018

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Monday 08 October 2018

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Monday 08 October 2018

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A5 NEWS

BUSINESS DAY

Bank of America sees Nigeria selling $2.8bn Eurobond in Q4 MICHEAL ANI

he federal government’s plan to raise as much as $2.8 billion in Eurobond to finance the 2018 budget, might materialise this quarter (Q4) of the year, according to a statement by New York based investment bank and financial services company, Bank of America. “We now expect Nigeria’s $2.8b Eurobond issuance in Q4, subject to Senate approval,” Bank of America said on Friday. Recall that in June this year, the Director General of Debt Management Office (DMO),

CBN plans payment service banks with N5bn capital requirements HOPE MOSES-ASHIKE

entral Bank of Nigeria (CBN) is planning to introduce and license Payment Service Banks (PSBs) in the country with a minimum capital requirement of N5 billion. The Capital Adequacy Ratio (CAR) (capital/risk weighted assets ratio) for the PSBs is fixed at 10 percent, while they are required to maintain not less than 75 percent of their deposit liabilities in treasury bills and other short-term Federal Government debt instruments at any point in time. The reason for the new phase of payment banking is to promote financial inclusion and enhance access to financial services for the low-income earners and the unbanked segment of the society through leveraging technology. In a circular to all banks, telecommunication companies, mobile money operators, banking agents and Nigerian Communication Commission (NCC), signed by Kevin Amugo, director, financial policy and regulation, the CBN on Friday issued an exposure draft guideline for licensing and regulation of payment services banks in Nigeria for comments. The key objective of setting up payment services banks is to enhance financial inclusion in rural areas by increasing access to deposit products and payment/remittance services to small businesses, low-income households and other entities through high-volume low-value transactions in a secured technology-driven environment. The payment service banks are going to operate mostly in the rural centres and unbanked locations, with not less than 50 of physical access points in rural areas as defined by the CBN from time to time.

Patience Oniha, disclosed that the federal government plans to tap debt offshore and will explore all options to lower costs, even though interest rates are rising in the United States which could see Africa’s largest economy pay a higher premium on this occasion compared with its most recent debt sale in February. Oniha noted also that the DMO has sent requests to banks for bond offerings pending approval from the Nigerian House of Assembly. “We will explore all options keeping in mind our twin objectives of extending the tenor of the debt stock and lowering costs,” Oniha said while an-

nouncing the plan. Nigeria issued its biggest Eurobond ever in November last year, when it successfully raised $3 billion in a 2-part international bond sale. The first part will yield 6.5 percent for a 10 year tranche, while the second part, which is for longer notes, will yield 7.625 percent for a 30 year period. Most of that money went into funding the 2017 budget, while the rest was used to refinance maturing local-currency bonds. Nigeria also raised $2.5 billion in Eurobonds in February this year, selling a 12-year note at 7.1 percent to raise $1.25 billion and a 20-year tranche

at 7.7 percent. The last Eurobond issuance means the country now has 23 percent of its outstanding debt coming from foreign borrowing. This is despite several warning from global rating agency Fitch and the International Monetary funds on the high refinancing cost that comes with Eurobond issuance especially for countries with a weak local currency. “Borrowing in foreign currency in international markets, exposes sovereigns to Foreign Exchange (FX) refinancing risk and a potentially higher debt service/ GDP burden in the event of

local currency depreciation,” Fitch said. “Although it can appear cheaper if domestic interest rates are high, as in Nigeria, which used the proceeds of its February issue to refinance more expensive nairadenominated debt, it generally involves a net increase in risk,” the global rating agency added. The IMF has advocated for the country to generate more revenue through domestic means. “Nigeria’s debt stock figure, which is 20 to 23 per cent of Gross Domestic Product, is still quite low by any standard. The issue is capacity to repay

the debts. So, interest payment to revenue is an issue,” said the IMF Mission Chief for Nigeria, Amine Mai, in Mary. President Muhammadu Buhari in June, signed a record N9.12 trillion budget for 2018 into law, aimed at fostering growth in Nigeria after the budget held the record of being the most delayed in the country’s history, due to power tussle between the executive in one hand and the legislature on the other. Buhari has also sought reelection in which he emerged as the sole candidate of his party ahead of the country’s general elections, scheduled to hold in February next year.

BUSINESS DAY

Monday 08 October 2018

BUSINESS DAY

A8 BUSINESS DAY NEWS International Energy identifies petrochemicals largest driver of global oil demand MIKE OCHONMA

study undertaken by the International Energy Agency (IEA) has revealed that petrochemicals are becoming the largest drivers of global oil demand, ahead of cars, planes and trucks, Petrochemicals, which are components derived from oil and gas that are used in all sorts of daily products such as plastics, fertiliser, packaging, clothing, digital devices, medical equipment, detergents and tyres, are set to account for more than a third of the growth in global oil demand by 2030, and nearly half the growth to 2050. This, the study pointed out, will add nearly seven million barrels a day of oil demand by then. The study, titled ‘The Future of Petrochemicals,’ is part of a new IEA series focusing on “blind spots” of the global energy system, namely issues that are critical to the evolution of the energy sector but that receive less attention than deserved. It is among the most comprehensive reviews

of the global petrochemicals sector, according to the IEA, and follows other reports in the series, including the impact of air conditioners on electricity demand, the impact of trucking on oil demand and the role of modern bioenergy in the renewables sector. Petrochemicals are particularly important given how prevalent they are in everyday products, the IEA noted. According to IEA executive director, Fatih Birol, “Our economies are heavily dependent on petrochemicals, but the sector receives far less attention than it deserves. “Petrochemicals are one of the key blind spots in the global energy debate, especially given the influence they will exert on future energy trends. In fact, our analysis shows they will have a greater influence on the future of oil demand than cars, trucks and aviation.” Meanwhile, the demand for plastics as the key driver for petrochemicals from an energy perspective has outpaced all other bulk materials, such as steel, aluminium or cement, and has

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Monday 08 October 2018

‘Restrict visa to looters from Africa to discourage illicit financial flow’ FELIX OMOHOMHION, Abuja

ttorney General of the Federation and Minister of Justice, Abubakar Malami, has called on the international community to help fight against illicit financial flow from the African continent through visa restriction of identified looters, tracing and repatriation of stolen money to countries of origin. The minister said when looters were denied visa they would have been blocked from enjoying their stolen wealth outside their countries. This will discourage the elite from stealing the people’s wealth to be enjoyed outside their countries of origin, he said. He stressed that there was need for African countries to collaborate with other na-

tions of the world to block those who have stolen from the African countries from enjoying the loot. Speaking at the two-day Thabo Mbeki High Level Panel (HLP) on Illicit Financial Flows, chaired by former South Africa President, Thabo Mbeki, in Abuja, on Thursday, Malami said there was need for African countries to collaborate with the international community to fight illicit financial outflow from Africa to free funds for developmental needs of African countries. He said illicit financial outflow from the continent was not only Africa’s war but also that of all nations of the world. He reiterated that Nigeria was determined to fight corruption to logical end, adding through legislation and commitment of the

President Muhammadu Buhari-led administration, corruption was being fought to a standstill. He said the political will of the President had also helped in stopping illicit flow of funds from the country. Various policies adopted by this government had helped in no small measure to stem the tide of financial outflow from the country, he said. Policies like Treasury Single Account (TSA), Biometrics Verification Number (BVN), whistle blowing, are all geared towards ensuring that corruption is reduced to the barest minimum, he explained. “We have gone a long way in stopping financial flow through quality decisions. Above all there is need for collaboration with international community in the fight against

illicit financial outflow. “Nigeria has built institutions through quality legislation to curb this. We have created the EFCC, ICPC, , Code of Conduct Bureau, Code of Conduct Tribunal, Financial Intelligence Unit, among others to stem the tide of illicit financial flow. There is also Proceeds of Crime Act, Terrorism Act, they are targeted at financial crimes and in support of these other institutions. “Biometrics Verification Number (BVN) is also a policy introduced by this government to trace ownership of bank accounts of illicit funds. “TSA was also introduced to identify movement of funds. By way of this administration’s desire to block the flownof illicit funds , according to the Minister, this government has encouraged the policy of whistle blowing.

New tech-based revenue collection system throws up 5,000 job openings in Edo

do Internal Revenue Service (EIRS) says no fewer than 5,000 new jobs will be created in Edo State with the planned deployment of

the innovative technologybased Edo Revenue Administration System (ERAS). Chairman/CEO of EIRS, Igbinidu Inneh, said the technology-driven revenue collection scheme would automate revenue collection process from data capture, profiling, assessment generation and notification to cashless settlement. He said it would require the deployment of persons to serve as distributors, sub-distributors, retailers, and enumerators across the 192 wards in the state. According to Inneh, “The ERAS will boost Internally Generated Revenue (IGR) for the state by expanding the tax net and enhancing payment convenience for citizens.” On the jobs that the initiative will throw up, he said, “The deployment of innova-

tive technology-based revenue administration scheme will require the services of dealers, sub-dealers, retail personnel of the dealers and enumerators as partners for collection of taxes, levies and charges from residents, business premises, operators of heavy vehicles which include trucks, buses, taxis, tricycles, among others.” He explained that over 5,000 direct and indirect jobs will be created across the value chain that has card producer, super EIRS, dealers, sub-dealers, taxpayers, banks, amongst other participants in the 18 local government areas of the state. He noted that associated revenues to be collected will include: haulage, waste management, log control, presumptive taxes, and produce, adding that the in-

novative solution system is delivered as part of the strategic institutional transformation of the EIRS and feeds off the governor’s objective to transform the state into an innovation hub. The EIRS boss said enumerators have been engaged and deployed as they are going around to collect data of tax payers in the 18 local government areas of the state, adding that, “the current tax base which grew within weeks of testing ERAS from just about 190,000 to over 250,000, will double within the first six months of operations and to one million within two years.” He said: “The following revenue streams, Personal Income Taxes (PAYE and Direct Assessment), Withholding Tax, Land Use Charges, Consumption Tax,

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FINANCIAL TIMES Nigeria’s Atiku Abubakar to challenge Buhari for presidency

Migration: the riddle of Europe’s shadow population

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World Business Newspaper

UK would be welcomed to TPP ‘with open arms’, says Abe Japanese prime minister talks Trump, trade and North Korea in FT interview LIONEL BARBER AND ROBIN HARDING

apan would welcome Britain to the Trans-Pacific Partnership trade deal “with open arms”, said prime minister Shinzo Abe, as he urged compromise to avoid a nodeal Brexit. Speaking in an interview with the Financial Times at his official residence in Tokyo, Mr Abe said the UK would lose its role as a gateway to Europe after Brexit, but would still be a country “equipped with global strength”. His remarks will encourage Brexit supporters in the UK who see new opportunities for free trade outside the EU while turning up the pressure on Brussels and London to strike a timely exit deal. The TPP is a wide-ranging trade agreement between 11 Pacific countries, including Japan, Vietnam, Malaysia, Canada, Mexico and Australia. It originally included the US, but one of Donald Trump’s first acts as president was to withdraw from the pact. Joining would be a way for Britain to strike new free-trade deals with a large and fast-growing chunk of the world economy. However, it would only be possible if the UK were to leave the EU’s customs union, and gains the power to set its own tariffs. “I hope that both sides can contribute their wisdom and at least avoid a so-called disorderly Brexit,” said Mr Abe, arguing that a transition period was essential for Japanese business. Manufacturers such as Toyota and Nissan helped to revive the UK economy in the 1980s by using the country as their base in Europe. But they have grown frustrated by the lack of clarity on Brexit. Several banks are shifting operations to the EU while Panasonic has cited Brexit as a reason for moving its European headquarters from the UK to the Netherlands. “I truly hope that the negative impact of Brexit to the global economy, including Japanese businesses, will be minimised,” said

Mr Abe. Mr Abe also hailed a “very fruitful” summit with Mr Trump 12 days ago where the two men agreed to negotiate a new trade agreement on goods. He said the US had promised not to increase car tariffs while the talks were in progress, nor ask for greater agricultural access than Japan had given in other trade deals. But in a sign of Japan’s vulnerability, Mr Abe conceded he was not asking the US for reciprocal tariff reductions. “I don’t feel there are excessive tariffs on so many sectors when it comes to trade between Japan and the United States,” he said. In the original TPP, Washington agreed to reduce its 2 per cent tariff on Japanese automobiles to zero over 10 years, and its 25 per cent tariff on Japanese trucks to zero after 30 years. The Japanese prime minister has gone to extreme lengths to cultivate Mr Trump — meeting him nine times and holding 26 phone calls — because the US alliance is so fundamental to Japan’s security. Mr Abe said he opposed any withdrawal of US forces from the Korean peninsula as part of a deal to scrap North Korea’s nuclear weapons. “It is my understanding that there is no such idea in the minds of the US side nor in the mind of President Trump,” he said. “The presence of US forces in Korea is, I believe, a very important element for the peace and stability of East Asia.” Mr Abe repeated his willingness to meet the North Korean leader. “I feel that I must personally have a face-to-face talk with chairman Kim Jong Un and both of us must be ready to break the shell of mutual distrust,” he said. Fixing Japan’s economy After almost six years in office, with a maximum of three left to go, Mr Abe’s thoughts are turning to his legacy. If he can stay in place until November 2019, he will become the longest-serving leader in Japan’s democratic history.

Kavanaugh becomes rallying cry for left and right Supreme Court appointment marks new flashpoint in already bitter US midterms wrest control of the House and Senate

COURTNEY WEAVER, AND KADHIM SHUBBER from Republicans.

he bitter battle over Brett Kavanaugh’s confirmation to the Supreme Court ended on Saturday when the Senate voted along narrow, partisan lines to place him on the highest court in the land. But the recriminations will continue to play out in the weeks ahead of the November 6 midterm elections, where the Democrats are trying to

Both parties are using Mr Kavanaugh’s confirmation to rally their voters and increase turnout for their candidates in November. For Democrats, the appointment of the strongly conservative justice has been a reminder of the consequences of losing elections. Meanwhile, Donald Trump Continues on page A10

Strong global growth conceals emerging market fragility Tiger index points to strains as IMF set to warn against escalating trade conflict CHRIS GILES

he global economy’s continued strength is concealing fragility in emerging markets and a lack of firepower to deal with future shocks in advanced nations, according to the latest update of a tracking index compiled by the Brookings Institution think-tank and the Financial Times. Momentum in the global economy remains strong, if a little weaker than hoped at the start of the year, but severe strains have already been seen in Argentina and Turkey and these are beginning to ripple out to other emerging economies. Professor Eswar Prasad, a senior fellow at Brookings, said: “While conventional growth indicators look relatively healthy for most countries, weakening business and consumer confidence bode poorly for growth prospects in many of them, especially the major emerging markets.” The Tiger index, which tracks a wide range of official economic data, financial market prices and confidence indicators and compares them with their historical values for the largest economies, suggests that global growth has come a little off the boil.

Christine Lagarde, managing director of the IMF, indicated last week that the fund’s growth forecasts were likely to be revised down this week at its annual meetings in Bali, Indonesia. The composite Tiger index has similarly come off its recent highs, reflecting slightly weaker data in Europe and emerging economies. With the US economy notably strong, pushing unemployment to its lowest level in almost 50 years, and other advanced economies still growing faster than long-term sustainable rates, the short-term concern in the global economy is centred in emerging economies. These have hit a rough patch, Mr Prasad said, suffering from outflows of money, depreciations of their currency and therefore an increase in the burden of foreign currency denominated debt. “As in the past, their domestic and external vulnerabilities tend to get exposed when global financial conditions tighten and the US dollar strengthens,” he added. “Other countries such as Indonesia and South Africa that share some of these vulnerabilities have also been subject to capital flow and currency volatility.” While China’s economy has re-

mained reasonably robust, its policymakers have faced the difficulty of deciding whether to stimulate credit growth again in response to a mild slowdown with the dangers that this would further increase already dangerous debt levels or accept a weaker outlook. Evidence of the impact of trade war on economic momentum is, as yet, hard to see, Mr Prasad said, but it has added to policy dilemma by damping growth in the largest Asian economy. India is now the world’s fastest growing significant economy, but it too is caught up in the concerns about confidence in emerging economies as a result of the postponement of many reforms. In advanced economies, the long upswing has been welcome in lowering unemployment to pre-crisis levels in most economies, but that has not repaired all of the damage of the crisis, leaving them vulnerable to a new shock. “Policymakers may be left with little room to respond aggressively to a slowdown in growth as the expansionary phase of the global business cycle winds down amid an increase in economic, trade, and geopolitical uncertainties,” Mr Prasad said.

China cuts banks’ reserve requirement to fuel growth

Central bank says decision will free up $109bn to counter economic slowdown TOM HANCOCK

hina’s central bank has moved to inject more cash into the banking system by cutting reserve requirement ratios for most commercial banks, freeing up Rmb750bn ($109bn) of capital as it seeks to assuage concerns about slowing economic growth. The easing measure follows weak investment and manufacturing data, and comes as a deepening trade war with the US increases pressure on growth in the world’s second-largest economy. Christine Lagarde, managing director of the IMF, warned last week that the global economic outlook was turning for the worse, as she called on countries to resolve

their trade disputes to counter any slowdown. The People’s Bank of China said that the one percentage point reserve ratio cut was “reasonable and moderate, and will not lead to depreciation pressure”, adding that its overall monetary policy had not changed and overall liquidity in the banking system was stable. The step also came a day before trading in China’s onshore renminbi resumes following a weeklong national holiday. The market reaction is expected to test how much Beijing is willing to support its currency following a weakening of the renminbi last week in offshore trading. China’s foreign exchange reserves fell $22.7bn in September

from the previous month to $3.09tn, PBoC figures released on Sunday showed, as Beijing intervened in currency markets last month to support the renminbi. Growth in China’s manufacturing sector stalled in September after more than a year of expansion, with export orders falling the fastest in more than two years, according to the privately run Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) released last week. The pace of expansion of Chinese investment in houses, factories, railways and other fixed assets, a key driver of growth in China, has fallen to a historic low, official figures showed last month, while growth in retail sales has also trended down this year.

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NATIONAL NEWS

Kavanaugh becomes rallying cry for left

To fight the illegal wildlife trade, disrupt its business model

Continued from page A5 has used the attacks on Mr Kavanaugh to energise his base with warnings of the “leftwing mob” that will control Congress if Republicans lose in the midterms. “You don’t hand matches to an arsonist, and you don’t give power to an angry leftwing mob. Democrats have become too EXTREME and TOO DANGEROUS to govern,” Mr Trump tweeted over the weekend. “VOTE REPUBLICAN!” For much of the year, there has been a sizeable enthusiasm gap in favour of Democrats, out of power and furious at Mr Trump, over Republicans, who control both the White House and both houses of Congress. Democrats are expected to win back the House, but face an uphill struggle to win the Senate, where most of the seats up for grabs are already blue. Susan MacManus, a Florida political scientist, characterised the Kavanaugh confirmation battle as a potential “October surprise” for the midterms, riling up the Republican base and narrowing the enthusiasm gap between Democrats and Republicans, as seen by the tightening poll numbers both in Florida and across the country. The heat generated by the confirmation battle has been on display on the campaign trail. In downtown Tampa on Thursday morning, supporters of Ron DeSantis, the Republican candidate for Florida governor, chanted “We believe Brett! We believe Brett!” as they faced off against a rival group of Democratic protesters. In Florida’s Sarasota County, Joe Gruters, the county’s GOP chairman, said his party was starting to see recovering poll numbers in the area after being in a “slow death spiral” for most of the summer, due to the national mood. Since Christine Blasey Ford came forward with her allegations against Mr Kavanaugh, internal polling numbers showed a 10-point uptick for Republicans, all but narrowing the gap between the two parties in a county which traditionally leans Republican. The changing poll numbers suggested that Republicans were now more motivated to get out and vote “because of the increased awareness of the importance of the Supreme Court”, Mr Gruters said. “The numbers I had two weeks ago were very concerning.” Mitch McConnell, Republican Senate leader, on Sunday predicted Mr Kavanaugh’s confirmation would lead to a Republican surge during next month’s elections and said it was his proudest accomplishment in the Senate. “We stood up to the mob,” he said. Much of the increase in Republican enthusiasm was inevitable as the midterms came closer, said Charlie Cook, author of the Cook Political Report. But he said Mr Kavanaugh’s confirmation may have decreased Democratic chances of winning back the Senate. “Whatever their chances were a month ago, they’re probably a little lower now,” he said. Several Democratic senators who opposed Mr Kavanaugh are facing re-election in red states that voted for Mr Trump in 2016. Heidi Heitkamp, the senator from North Dakota, is considered particularly at risk with recent polling showing her trailing her challenger. With Democrats already angry about issues like tax cuts, separation of immigrant children from their families at the border, and healthcare, the Kavanaugh fight has added to expectations that a “blue wave” will sweep the House but may subside in the Senate.

Monday 08 October 2018

This trafficking is a transnational organised crime that impoverishes communities DAVID FEIN

W Atiku Abubakar hails from the north-east of the country and served as deputy from 1999 to 2007 to then president Olusegun Obasanjo © AFP

Nigeria’s Atiku Abubakar to challenge Buhari for presidency Former vice-president and businessman wins main opposition party’s nomination NEIL MUNSHI

tiku Abubakar, Nigeria’s former vice-president and a serial contender for the top job, has won the main opposition party’s nomination to challenge President Muhammadu Buhari in February’s elections. Over the next five months, the pair will battle for control of Africa’s largest crude producer and most populous nation amid rising oil prices and a sluggish economic recovery. Mr Buhari, a former military ruler with a cult-like following in the country’s predominately Muslim north, was thought all but unbeatable as recently as a few months ago. But recent state level elections have offered stark warning signs for his All Progressives Congress party. Mr Abubakar, who is also Muslim and hails from the north-east of the country, served as deputy from 1999 to 2007 to then president Olusegun Obasanjo, with whom he had stormy relations. A wealthy perennial candidate with political allies across the country, he has pitched himself as a successful businessman ready to jump-start the economy and attract foreign investors.

Results from primaries at the weekend, showed him to be the overwhelming victor in a crowded field of other candidates. Mr Buhari in 2015 became the first opposition candidate to defeat an incumbent president in Nigeria’s history. His victory also marked the first time the ruling People’s Democratic party had been out of power since the restoration of civilian rule in 1999. Mr Abubakar was one of the first of many high-profile politicians to defect from Mr Buhari’s party in order to challenge. Mr Buhari campaigned to crack down on corruption and “decimate” Boko Haram, the jihadi group that at the time of his election controlled territory across north-east Nigeria. He has been credited with cutting down on graft, though some of his allies have been ensnared in corruption scandals. But his record on security is mixed. Boko Haram, while significantly diminished, still wreaks havoc. Meanwhile, security crises — from deadly clashes between farmers and nomadic herders in the middle of the country to widespread banditry in rural areas — plague swaths of Nigeria. Mr Buhari has also come under

fire for his economic record. After entering office just as the oil price crash hit Nigeria’s crude-dependent economy, his administration took action that critics say made the ensuing recession worse. The economy has since inched toward recovery, with GDP growth forecast at 2.3 per cent this year. Unemployment has soared to 18.8 per cent from 7.5 per cent just before he took office. The administration has defended its record, citing significant infrastructure investment; higher foreign reserves and a drop in inflation. The electoral calculus of Nigerian politics is complicated. An informal system rotates the presidency between the predominantly Muslim north and the largely Christian south, while the winner must win at least a quarter of the votes in 24 of the country’s 36 states, in addition to the popular vote. The parties, meanwhile, are fluid because they are largely based on patronage rather than ideology. Mr Buhari, 75, is out to prove he still has what it takes to govern Africa’s largest economy. He spent more than three months in the UK last year for an undisclosed ailment and has returned frequently for check-ups.

Banksy painting ‘self-destructs’ on podium in auction prank Activist street artist’s ‘Girl with Balloon’ sells for £1m at Sotheby’s — then gets shredded JAMES PICKFORD

Banksy painting has “selfdestructed” on the auction podium at Sotheby’s in London after being sold for over £1m, in one of the most audacious art pranks thought to have been carried out by the street artist. With an estimate at £200,000£300,000, “Girl With Balloon” was subject to brisk bidding at the Contemporary Art Evening Sale on Friday night until the hammer went down on the winning bid of £860,000, given by telephone, at around 9pm. With buyer’s premium, the sale came to £1,042,000. Shortly after sale concluded, however, the canvas was shredded by a mechanism apparently hidden within the base of the frame, with most of the work emerging from the bottom in strips. “We’ve just been Banksy’ed,” said Alex Branczik, senior director at Sotheby’s, speaking after the incident. “We have not experienced this situation in the past . . . where a painting spontaneously shredded, upon achieving a [near-]record for

the artist. We are busily figuring out what this means in an auction context,” he said. The last lot of the evening, Sotheby’s described the work ahead of the sale as “authenticated by Pest Control”, the handling services organisation that acts on Banksy’s behalf. It was signed and dedicated on the reverse and had been acquired by the vendor directly from the artist in 2006, the auction house said. Depicting a girl losing or letting go of a red, heart-shaped balloon, a common subject for the activist and street artist, the spray-painted canvas was contained in the artist’s frame, which staff surmised contained a remotely activated shredding mechanism. It was not clear whether the artist had attended the auction in person to deliver the coup de grâce to his work. Where a work suffers damage while in the care of an auction house, it would not normally expect any buyer to honour the purchase and may cancel a sale. However, there was speculation after the Banksy sale as to whether the shredded painting would have

risen in value, given its status as the subject of one of the greatest pranks to have been played on the art market. Sotheby’s said in a statement: “We have talked with the successful purchaser who was surprised by the story. We are in discussion about next steps.” Banksy has previously made clear his feelings about the art market in a work entitled “I Can’t Believe You Morons Actually Buy This Shit”. The 2007 picture shows an auctioneer in front of a packed saleroom, overseeing bids on a framed work that displays nothing but the words of the title. In an irony that is unlikely to have escaped it, Sotheby’s subsequently put two prints of the work up for sale. The Banksy sale was not the only work to make news at the auction house on Friday. Jenny Saville’s “Propped”, a nude selfportrait that launched the British artist’s career in 1992, broke the world auction record for a work by a living female artist, selling for £9.5m from an estimate of £3m-£4m.

hen it comes to the fight over illegal wildlife trade, the criminals have been winning. This brutal business has become the world’s fourth most profitable criminal trafficking enterprise, generating revenues of between $7bn and $23bn a year. Conservation gains are being reversed and species pushed to the edge of extinction. Tigers have become so rare that there are more of them living in US captivity than in the wild. The killing of rhinos for their horns has exploded. In 2006, 60 of them were killed on the African continent; now four are killed on average every day. This has been exclusively a conservation issue for too long. Now banks are making it theirs. This week, more than 20 global financial institutions are coming together to form the Royal Foundation’s United for Wildlife Financial Task Force, chaired by former UK foreign secretary William Hague. We want to bring to bear what we’ve learnt in tackling human trafficking and terrorist financing to take the fight to wildlife traders’ doors. This illegal trafficking is not just a threat to biodiversity. It is a transnational organised crime with links to modern slavery, narcotics and the arms trade. It fuels corruption, impoverishes communities and inspires violence. It reaches from the savannahs of east Africa to the megapolises of east Asia. The attraction for criminal gangs is obvious: the trade has high profit margins and a comparatively low risk of getting caught. We cannot seize and arrest our way out of the problem. If one shipment is stopped, another follows. We need to rethink our game plan. That means disrupting the business model. The Achilles heel of the illegal wildlife trade is the very thing that motivates it — the money. The need to move, store and realise proceeds gives governments and the financial sector the power to identify networks via their financial footprints and close the net. Yet such trafficking has received barely any attention as a financial crime. According to the UN Office on Drugs and Crime, only 26 per cent of jurisdictions look at the finances behind the trade and a meagre 11 per cent investigate the wider criminal networks beyond poachers and couriers. To crack down on the trafficking, we need to do three things. First, enable conservation activists to deliver intelligence right to the heart of the financial sector. Too little has been done to map the monetary flows, so the banking industry is not well enough attuned to the activity that courses through the system. A key first assignment for the task force will be to work with government and nongovernmental organisations to develop a set of “red flags” for the crime. Second, banks must apply the armoury of tools that they use to fight other financial crimes. At Standard Chartered, we will be training bank branch tellers in source countries to spot the signs, making illegal wildlife trade a focus for our financial crime investigators, and enabling those efforts through new artificial intelligence and machine-learning tools. We are also sharing what we have learnt with our correspondent banking clients around the world.

Monday 08 October 2018

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ANALYSIS US opens door to further funding of IMF

Treasury says financing needs of global lender after 2022 need ‘careful evaluation’ SAM FLEMING AND JAMES POLITI

T Migration: the riddle of Europe’s shadow population The number of undocumented migrants in the EU is unknown but some cities are realising that ‘get-tough’ policies do not work

MICHAEL PEEL AND JIM BRUNSDEN

ennys fled her native Venezuela a decade ago as trouble brewed during the later years of former president Hugo Chávez’s rule. Her father died at the hands of a criminal gang as a full-blown economic and political crisis loomed. She travelled to Barcelona on a tourist visa to join a friend, and never returned. Now in her mid-forties, Lennys has lived in what migration experts call “irregular” status ever since, without official permission to stay. Once a human resources manager in her homeland, she has worked in the Catalan capital mainly as a maid, boosting her income of about €700 a month with piecemeal jobs paying €35-€40 a time. She is not alone. Lennys — not her real name — is part of a shadow population living in Europe that predates the arrival of several million people on the continent in the past few years, amid war and chaos in regions of the Middle East and Africa. That influx, which has fuelled Eurosceptic nativism, has if anything complicated the fate of Lennys and other irregular migrants. Now she is using a service set up by the Barcelona local administration to help naturalise irregular migrants and bring them in from the margins of society. She is baffled by the anti-immigrant rhetoric of politicians who suggest people like her prefer living in the legal twilight, without access to many services — or official protection. Chart showing rising trend of asylum applications outstanding in the EU “I think there is a minimum as a human being you should be entitled to,” she says, in an interview in the local administration offices, a stone’s throw from the tourist throngs of Plaza de España. “I suggest the leaders of these parties try living as an irregular migrant in another country some time.” The fate of Lennys and other irregulars is likely to take an ever more central role in Europe’s deepening disputes on migration. They are a diverse group: many arrived legally, as Lennys did, on holiday, work or family visas that have since expired or become invalid because of changes in personal circumstances. Others came clandestinely and have never had any legal right to stay. The most scrutinised, and frequently demonised, cohort consists of asylum seekers whose claims have failed. Their numbers are growing as the cases from the surge in migrant arrivals in the EU in 2015 and 2016 — when more than 2.5m people applied for asylum in the bloc — work their way through the process of decisions and appeals. Almost half of first instance claims failed between 2015 and 2017, but many of those who are rejected cannot be returned to their home

countries easily — or even at all. The question of what to do about rejected asylum applicants and the rest of Europe’s shadow population is one that many governments avoid. Bouts of hostile rhetoric and unrealistic targets — such as the Italian government’s pledge this year to expel half a million irregular migrants — mask a structural failure to deal with the practicalities. The last thing they want to admit to is that there is a population of people who are not only undocumented, but also uncountable and often unreportable. The management of migration has come to dominate national elections and the EU agenda. It will be discussed again at a gathering of leaders in Brussels on October 18, even though fewer than 100,000 people have arrived in the EU via the Mediterranean Sea this year, compared with more than 1m in 2015. That fall is partly due to a 2016 deal under which the EU agreed to pay Turkey an initial €6bn to take back people who travel from its territory to the Greek islands. Many governments have sought to deny irregular migrants services and expel them — policies that can create their own steep human costs. But authorities in a growing number of cities from Barcelona to Brussels have concluded that the combination of hostile attitudes and bureaucratic neglect is destructive. These cities are at the frontline of dealing with irregular status residents from Africa, the Middle East and elsewhere. Local authorities have, to varying degrees, brought these populations into the system by offering them services such as healthcare, language courses and even legal help. The argument is part humanitarian but also pragmatic. It could help prevent public health threats, crime, exploitative employment practices — and the kind of ghettoisation that can tear communities apart. “If we provide ways for people to find their path in our city . . . afterwards probably they will get regularisation and will get their papers correct,” says Ramon Sanahuja, director of immigration at the city council in Barcelona. “It’s better for everybody.” The size of Europe’s shadow population is unknown — but generally reckoned by experts to be significant and growing. The most comprehensive effort to measure it was through an EU funded project called Clandestino, which estimated the number of irregular migrants at between 1.9m and 3.8m in 2008 — a figure notable for both its wide margin of error and the lack of updates to it since, despite the influx after 2015. A more contemporaneous, though also imprecise, metric comes from comparing the numbers of people ordered to leave the EU each year with the numbers

who actually went. Between 2008 and 2017, more than 5m non-EU citizens were instructed to leave the bloc. About 2m returned to countries outside it, according to official data. While the two sets of numbers do not map exactly — people don’t necessarily leave in the same year they are ordered to do so — the figures do suggest several million people may have joined Europe’s shadow population in the past decade or so. The cohort is likely to swell further as a glut of final appeals from asylum cases lodged since 2015 comes through. Chart showing how many asylum appeals in the EU fail This partly helps explain why the EU is focused on improving its return rate of irregular migrants to their home countries, which officially fell from 46 per cent in 2016 to 37 per cent last year. While the obstacles to repatriation are sometimes legal — because some countries of origin are deemed unsafe — they are more often practical. People’s countries of origin often refuse to accept them, because they have no documents or authorities dispute whether their papers are genuine. The migrants can neither move forward into the EU nor go home: they have nowhere to go. “The volume of people who are in limbo in the EU will only grow, so it’s really problematic,” says Hanne Beirens, associate director at Migration Policy Institute Europe, a think-tank. “While the rhetoric at a national level will be ‘These people cannot stay’, at a local community level these people need to survive.” When Serge Bagamboula travelled to Brussels on a student visa in 2009, he never imagined that 10 years later he would be living in the country illegally. The 56-year-old came to Belgium from his native Congo-Brazzaville to study for a masters degree at the Université libre de Bruxelles. But, once his course finished, a deteriorating political situation and few job prospects at home convinced him to stay. Now he is part of an organised movement of Belgium’s undocumented workers — known as sans papiers — who are seeking more rights and greater recognition of their economic contribution. “The powers that be cannot simply ignore us,” he says, speaking in a coffee shop at Brussels’ Gare du Midi station, from where train routes fan out across Europe. “We need regularisation.” The Belgian government does not release estimates of the number of undocumented migrants in the country, but non-governmental organisations put the figure in the hundreds of thousands. Brussels is a focal point. Its status as a highly international city — one of its 19 districts records people from more than 100 countries — contributes to making it a natural destination for young people looking for opportunities.

he Trump administration has left the door open for a US funding boost to the IMF, calling for a “careful evaluation” of the global lender’s finances to make sure it has enough money to rescue struggling economies. In a statement to the Financial Times ahead of the IMF’s annual meetings in Bali, Indonesia, where the Fund’s future lending capacity will be informally discussed, a US Treasury department spokesperson said the “current level” was “more than adequate to address the potential demand for its emergency financing”. But he also noted that some of the IMF’s funding would expire in the period between 2020 and 2022 — a reduction in resources that would have to be closely examined. “[This ] will require a careful evaluation to ensure that the IMF has sufficient funds to fulfil its mission,” the US Treasury said. As the Trump administration has turned its back on multilateralism on everything from defending human rights to prosecuting war criminals and settling trade disputes, concerns have risen that the IMF might also fall victim to the US president’s “America first” policies. The IMF — led by Christine Lagarde, a former French finance minister — is hoping to get its members to increase the fund’s permanent reserves — in tandem with an upgrade in governance — next year, with initial conversations set to gather pace among officials this week on the margins of the Bali meetings. The IMF has about $1tn in available reserves for lending, but more than half of that war chest is due to expire by 2022, depleting its resources unless members decide to put in new money or renew existing arrangements.

This year, the Trump administration has been among the most enthusiastic supporters of the IMF’s $57bn loan package to Argentina— its largest in history — which has brought the IMF and the White House closer. The experience has shown US officials that the Fund can be helpful in stabilising countries in the western hemisphere that have friendly relations with Washington, as Argentina does under centreright president Mauricio Macri. Any boost to IMF funding from US taxpayers would have to pass Congress, which has been a cause for delay in the past, and could bring new hurdles this time as well. The US is for now suggesting that it would not support any new IMF interventions in advanced economies, particularly in Europe, where eurozone countries have set up a separate government bailout fund to deal with crises in the single currency. “All IMF members have a right to the Fund’s emergency financing,” the US Treasury spokesman said. “However, the European members have now established their own emergency financing capability at the EU and eurozone level and have announced that they will no longer seek IMF financing in the event of a crisis,” it added. The IMF Bali meetings, held jointly with the World Bank, are expected to be dominated by concerns about mounting risks in emerging markets, as well as the trade war unfolding between the US and China, which are the biggest clouds on the global economic and financial horizon. “To be clear, we are not seeing broader financial contagion — so far — but we also know that conditions can change rapidly,” Ms Lagarde said in a speech previewing the Bali meetings last week. “If the current trade disputes were to escalate further, they could deliver a shock to a broader range of emerging and developing economies,” she added.

Leading US companies predicted to continue strong profit growth Reporting season expected to show robust economy underpinning third-quarter earnings NICOLE BULLOCK

all Street analysts are predicting another round of strong profit growth for US blue-chip companies in the third quarter of this year underpinned by a robust economy, corporate tax cuts and share buybacks. Consensus estimates point to a 19.2 per cent jump in earnings per share for the three months to the end of September versus the same period a year ago, according to FactSet. That would follow about 25 per cent growth in each of the first two quarters of 2018 and, if it proves true, would be the strongest three-quarter stretch since 2010. The upcoming reporting season will heat up at a time when investors are grappling with a sharp uptick in yields on US Treasury bonds, which sent equities lower late last week. “As long as earnings expectations come through in the third quarter, stocks are likely to continue to do OK,” said Michael Arone, chief investment strategist at State Street Global Advisors. The prevailing trend over time is that analysts reduce their estimates as the quarter progresses. Companies then ideally beat the lower bar. Estimates fell by 1.1 per cent over the course of the third quarter, but

at a lower rate than the five, 10 and 15-year average, FastSet said. “Historically, when the economy is robust as it is today, companies tend to beat expectations by a wider margin,” said Jonathan Golub, chief US equity strategist at Credit Suisse. “Over the past three months, earnings estimates, which typically fall before reporting season, have held up especially well. This is also likely the result of economic strength.” Working off a consensus estimate of 21 per cent growth in the quarter, Mr Golub calculated seven points of that coming directly from lower taxes and two points from stimulative government policies, neither of which are likely to repeat themselves over the next several years. Some two points can be attributed to buybacks, but he argued that given strong cash flows at companies, repurchases are likely to be sustained and should not be treated as one time in nature. Energy companies are expected to deliver the largest earnings gain in the third quarter with a 95 per cent jump driven largely by higher oil prices. Financials were next, with EPS seen up by a third helped by flattering comparisons for insurance companies, which faced losses from devastating hurricanes in 2017.

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BUSINESS DAY

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news you can trust I monday 08 october 2018

fivethings

Insight Nigeria is a one-party state. The party is the political class GLOBAL perspectives

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

he party conference season has just ended in Britain. This is the period of the year when the UK’s major political parties hold their annual conferences. The Liberal Democrats kicked the season off with their conference in Brighton from 15-18 September, followed by the Labour Party in Liverpool from 23-26 September. Last week, from 30 September to 3 October, the Conservative Party closed the season with their conference in Birmingham. The conferences were a spectacle of value-laden and conviction politics, the kind of which Nigeria is acutely bereft. As you would imagine, the dominant issue at the conferences was Brexit, a shorthand for the decision of the UK to leave the European Union, which has really caused deep divisions between and,even more so, within the parties. Like war, Brexit is a matter of conscience for British politicians, who see it as existential national issue that transcends party interests. And the Brexit divisions were played out at each of the party conferences. However, once you take out the Brexit issue, the party conferences were the usual tribal gatherings, with deep party loyalty and primordial affinity on display. Any member of the Liberal Democrats would be deeply offended to be called a Conservative or Labour, just as any Conservative politician would feel insulted if referred to as Lib-Dem or Labour. Ah, don’t provoke a Labour Party member by daring to call him or her a Tory or Lib-Dem. Now, none of this mutual exclusivity is due to personal hatreds or animosities. Not at all. It’s just that these politicians have strong political values, which they believe the party they belong to predominantly embodies and the other parties don’t. For instance, broadly speaking, you are Lib-Dem because you believe in liberal values and the reform of traditional institutions; you are Conservative (or Republican in the US) because you are pro-business, pro-markets and pro-aspiration and individual achievement;and you are Labour (or Democrat in the US) because you believe in greater state intervention, social justice and workers’ rights. Although political parties often have the same agenda, i.e. to reduce poverty, improve the economy and fight corruption, they differ in their preferred solutions to them. After all, if parties have the same solutions to the same problems, why are they not one? Different parties exist, or should exist, because they offer alternative solutions to the same problems. It is such philosophical differences, such alternative approaches that make politics competitive, contestable and valuable.

In many electoral democracies, citizens make an intelligent choice of a party or a candidate based on differences in orientations and programmes. A multi-party system does not enrich politics or enhance democracy unless it is based on alternative visions, philosophies and ideas, and gives the citizens real choice. So, what do we have in Nigeria? Well, let’s start with a brief historical overview. In the pre-independent and immediate post-independent periods, there was a clear distinction between the forces of conservatism and forces of progressivism in Nigeria. Ahmadu Bello’s Northern People’s Congress (NPC) was in the conservative, feudalist camp, while Obafemi Awolowo’s Action Group, Nnamdi Azikiwe’s National Council of Nigeria and the Cameroons (NCNC) and Aminu Kano’s Northern Elements Progressive Union (NEPU) belonged to different strands of progressivism. The pattern was replicated in the early 1980s, with Awolowo’s Unity Party of Nigeria (UPN), Azikiwe’s Nigerian People’s Party (NPP), Ibrahim Waziri’s Great Nigerian People’s Party (GNPP) and Aminu Kano’s People Redemption Party (PRP), again with different colourations, congregating in the progressive camp, while the National Party of Nigeria (NPN), a reincarnation of the old NPC, was aconservative party, although the NPC/NPN conservatism was not of tax cuts, free markets or small state, but of entrenched privilege, feudalism and a static social order, as is today’s progressivism! In the early 1990s, the military regime of General Ibrahim Babangida, a strong advocate of the

two-party system,decided that Nigeria should have two parties with alternative or different ideological orientations. So, the regime established the National Republican Convention (NRC), described as “a little to the right”, and the Social Democratic Party (SDP), dubbed “a little to the left”.Babangida decreed that anyone interested in politics must join either of the two parties, and, of course, the politicians, being without scruples, rushed into the parties. Only few perceptive politicians, such as Bola Ige, saw through the chicanery and decided not to be part of the charade. MKO Abiola, a staunch NPN member and leader, suddenly became a centre-left politician and joined the supposedly centre-left SDP, which gave him a platform to run for president. But if the politics of con-

venience and opportunism was birthed, or first reared its head prominently, under Babangida’s crude, self-serving political contrivance, which ended in tears with the annulment of the presidential election of June 12, 1993, it has now become commonplace, the defining feature of Nigeria’s political system. Nigeria is an ostensibly multiparty state, but not a genuine one; rather it has all the features of a

‘

Although, in theory, Nigeria is a multi-party state, in practice, it is a one-party state. There is no real choice between the parties and what they stand for. But Nigerian politics and democracy will continue to fail the people unless the personalised style of politics and party formation in Nigeria is replaced by a genuine multiparty system that is based on values, principles and ideas

one-party state. Think of it, in a one-party state, you may change personalities but approaches to politics do not change. But election in a multi-party state means a real choice between parties and policies. As Denis and Ian Derbyshire point out in their book Political Systems of the World, “The opportunity of voting for a complete change of policy, and even philosophy, is a vital element in a democratic political system”, adding that “without it

genuine choice is limited”. But where is the real or genuine choice in Nigerian politics today? What is the difference between the All Progressive Congress (APC) and the People’s Democratic Party (PDP), for instance? The politicians use both parties interchangeably as a vehicle for political power. So, when Nigerians vote for APC or PDP, they do so not because of what the party stands for because it is a vehicle being used by the politician they support. And when that politician joins another party, they vote for that new party. Of course, when parties are not anonymous, i.e. based on overriding values and rules that trump the cult of personalities, anything is possible. Recently, Remi Sonaiya, presidential candidate of KOWA, tweeted the following words: “Big-

Party politics in Nigeria: No ethics, no morality, no honour, no principles, no truth, no decency, no respect, no integrity, no honesty. Just a wild, mercantile, calculating, opportunistic, shameless charade”. Can anyone really disagree with these horrid but accurate descriptions of the state of the Nigerian politics? Take one high-level example: the recent presidential primaries in the APC. President Buhari is his party’s sole candidate for next year’s presidential election. But why did he need to go through a primary? Well, because, like one-party states do, he wanted to demonstrate popular support for himself and legitimise the behind-the-scenes decisions already taken within the party machine. But the results of the primaries, which showed millions of APC ‘members’in some states purportedly voting for Buhari, with 1.9m in Lagos and 2.9m in Kano, for instance, robbed the whole exercise of any credibility. Yet, this did not stop Buhari’s spokesman, Garba Shehu, from gloating that “It is significant that President Buhari has won a major victory, fair and square, through direct nationwide primary, a system that seeks to break the mould”. Breaking the mould is, of course, the key mantra of Buhari’s supporters. But the truth is that no mould has been broken. I mean, you haven’t broken the mould when the party machine prevents any serious candidate from standing against you in a presidential primary. You haven’t broken the mould when a faceless and unaccountable group purportedly paid N45m to buy a nomination paper for you because you are supposedly indigent. And, of course, you haven’t broken the mould when, as a president fighting corruption, you openly welcome to your party defectors, who have publicly been accused of corruption by the state anti-corruption agency. Indeed, you haven’t broken the mould when you sent your party’s leaders and governors to do a deal with someone that even your party accused of corruption and other criminal charges in order to overturn a state election that your party lost. Few politicians in Nigeria have been so hounded, besmirched and ostracised than Iyiola Omisore on a myriad of accusations, including the alleged killing of Chief Bola Ige. Yet, all those did not matter to Buhari’s party when the choice was between losing Osun State or doing a deal with Omisore. But the truth is that this game of amorality and end-justifies-themeans is played by all the parties. After all, PDP tried to do a deal with Omisore and was only outsmarted by the APC, using its power of incumbency. So, the Nigerian politics is dysfunctional. It is monolithic and devoid of values and principles. Although, in theory, Nigeria is a multi-party state, in practice, it is a one-party state. There is no real choice between the parties and what they stand for. But Nigerian politics and democracy will continue to fail the people unless the personalised style of politics and party formation in Nigeria is replaced by a genuine multi-party system that is based on values, principles and ideas. Nigeria is current a one-party state dominated a monolithic and self-serving political class. That must end in the national interest!

for your new week

Fascinating business facts

200,000

il is heading for the longest run of weekly gains since January on concern that higher Saudi and Russian output may not ease a supply crunch as impending U.S. sanctions squeeze Iranian exports. Futures in New York climbed as much as 0.8 percent, on course for a fourth weekly gain. Prices may hit $100 as soon as this fall given all the uncertainty over Iran, Russian Energy Minister Alexander Novak told radio station Business FM. Russia, which already broke its post-Soviet production record last month, could add another 200,000 to 300,000 barrels a day of supply within a “few months.

40%

mazon.com Inc. is eliminating monthly bonuses and stock awards for warehouse workers and other hourly employees after the company pledged this week to raise pay to at least $15 an hour. Workers whose pay was already above $15 per hour will get hourly raises of $1, according to two people familiar with the matter who asked not to be identified discussing the company’s compensation practices. Warehouse workers for the e-commerce giant in the U.S. were eligible in the past for monthly bonuses that could total hundreds of dollars per month as well as stock awards, said two people familiar with Amazon’s pay policies. Some long-time workers expressed frustration that their raises are small compared with newly hired workers who will see hourly pay bumps of as much as 40 percent.

$1.3bn

imbabwe’s budget deficit swelled to $1.3 billion in the first half of 2018, nearly five times the initial target after government spending spiraled ahead of an election in July, a Treasury document showed. Before a tight election on July 31, President Emmerson Mnangagwa’s government distributed free seed and fertilizer to rural voters, upgraded roads and dams, and injected fresh capital into struggling government-owned companies. Mnangagwa went on to win an election that was marred by a deadly army crackdown on opposition protesters and allegations of vote rigging. Treasury’s quarterly report to June showed the government overshot its budget deficit of $266 million after spending $616 million on farm inputs for the rural poor and grain imports.

275,000

outh African President Cyril Ramaphosa announced a package of reforms on Thursday which he said would create 275,000 more jobs a year, in a bid to bring down sky-high unemployment and improve his own track record on the economy. More than two decades after the end of white minority rule, South Africa still has one of the highest jobless rates among major global economies, with more than a quarter of its work force unemployed. Ramaphosa, who took over from scandal-plagued Jacob Zuma in February, has made boosting job creation a cornerstone of his reform drive. But his efforts were dealt a blow last month when data showed the economy had fallen into recession for the first time in a decade.

$230m

arry Culp, the new chief executive of General Electric, could be given a payment in shares worth more than $230m if he succeeds in turning the company’s performance around to the point that its share price rises above $31 in four years’ time. GE disclosed in a regulatory filing that Mr Culp was being set a target of raising its share price by 50-150 per cent by September 2022. If he achieves that, he will be given shares on a sliding scale from 2.5m if he hits the lower end of that range, up to 7.5m at the top end. GE said in a statement: “Larry is a proven executive with a long track record of superior execution, and the Board’s package to attract Larry is overwhelmingly tied to performance. Nearly 90 per cent of his annual pay will be at risk”.

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