BusinessDay 09 Aug 2018

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news you can trust I **THURSDAY 09 AUGUST 2018 I vol. 15, no 114 I N300 DIPOOLADEHINDE

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ata is powering MTN Nigeria’s revenues to new highs in the country even as the company affirms its plans to list on the Nigerian Stock Exchange (NSE) before the end of 2018.

In the half year interim released by the company yesterday, MTN announced that the number of new subscribers on its network increased by 2.9 million in the sixmonth period ending June 2018 to close at 55.2 million, accounting for approximately 25 percent of global subscriber base of 223 million as at June 2018.

However, the number of active data users on the company’s platform rose by 800,000 to 14.9 million. While the company’s data revenue rose by 63.7 percent within the period, voice revenues

FMDQ Close

Everdon Bureau De Change Buy

Sell

$-N 357.00 360.00 £-N 469.00 477.00 €-N 408.00 416.00

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Foreign Exchange

Market Spot ($/N) 3M 0.00 I&E FX Window 362.08 CBN Official Rate 306.00 11.26

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0.23 12.88

13.77

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10 Y 20 Y 0.04 -0.02 14.41

MTN Nigeria data revenue up 63.7% Active data users now 14.9m, 55.2m total subscribers Reiterates plans to list limited stake on NSE by year end

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ursley Resources Limited (Pursley), a Company owned by the wife of A.B.C Orjiako, Chairman of Seplat Petroleum Development Company Plc has paid about N639.9million for the purchase

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MARKETS

Sell-off leaves NSE 30 Index P/E at lowest since 2009 BALA AUGIE & Abdullateef Eniola-Giwa

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he recent equity market selloff has left the benchmark NSE 30 index trading at the lowest price to earnings (P/E) multiple in a decade.

Investors use earnings multiples to judge whether a stock looks overvalued or undervalued.

The P/E ratio for the NSE 30 which captures 96 percent of equity market capitalisation was at an all-time high of 21.68x in 2009, according to data from the

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Pursley Resources pays N640m for 900,000 units of Seplat shares Iheanyi Nwachukwu

NGUS OCT. NGUS JAN. NGUS JUL. 30, 2019 24, 2019 31, 2018

g

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…gets voting interest of 0.15%

Currency Futures ($/N)

fgn bonds

Treasury Bills

Inside National Assembly may reconvene next week to approve N242bn 2019 P. 2 election budget L-R: Bola Onadele. Koko, CEO, FMDQ OTC Securities Exchange; Zaheera Baba-Ari, MD/CEO, Nigeria Commodity Exchange; Oscar Onyema, CEO, Nigerian Stock Exchange; Abimbola Ajomale, CEO, NASD plc, and Ayodeji Balogun, country manager, AFEX Nigeria, all members of board of trustees (Oscar as chairman) of the Association of Securities Exchanges of Nigeria (ASEN), during the official launch of the association in Lagos, yesterday.

PicbyPiusOkeosisi

Subsidy scam : FEC approves $47m to P. 2 track petrol imports

Assault on opposition continues as EFCC freezes Akwa Ibom, Benue states bank accounts ANIEFIOK UDONQUAK, Uyo & Tony Ailemen

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he same day that former Senate Minority leader, Godswill Akpabio of the People’s Democratic Party (PDP), formally defected

to the All Progressives Congress (APC), the Akwa Ibom State government confirmed that the Economic and Financial Crimes Commission (EFCC) has frozen its bank accounts.

The EFCC declined to confirm

the news reports but the State Information Commissioner of Akwa Ibom state, Charles Udoh told the media yesterday that the state government just found out that all its bank accounts have been frozen.

News of the state government’s accounts being frozen broke as Akpabio announced his defection from the PDP to the APC in the midst of the national leaders of

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National Assembly may reconvene next week to approve N242bn 2019 election budget … Presidency, APC confused, overburdened by guilt - PDP OWEDE AGBAJILEKE, Abuja

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he National Assembly may reconvene next week to consider the N242 billion 2019 election budget of the Independent National Electoral Commission (INEC). This was the outcome of a meeting between the leadership of the National Assembly and that of the Commission in Abuja on Wednesday.

Speaking to journalists after the meeting, INEC chairman, Mahmoud Yakubu, said the National Assembly leadership had assured of speedy consideration of the elections budget.

“The most important thing to say was INEC was invited to meet with National Assembly leadership on how the proposed budget for the 2019 elections can be speedily considered and appropriated by NASS. We have been assured of speedy passage of the budget perhaps as early as next week,” he said.

Save for the Speaker of House of Representatives, Yakubu Dogara, our correspondent observed all Principal Officers at the meeting with INEC leadership are members of the PDP, as other APC Principal Officers were conspicuously absent.

The Presidency had appealed to the National Assembly to cut short its two-month break to consider an approval for N242 billion budget estimates from the Independent National Electoral Commission (INEC) for conduct of the 2019 election, which is just seven months away.

Lawmakers had embarked on annual recess on July 24 and adjourned till September 25, 2018.

President Buhari in the letter dated July 17, 2018 explained that out of the proposed N242,445,322,600 estimate for the 2019 general elections, N164.104 billion should be appropriated through virement this year, while the balance of N78.340billon should be provided for in 2019.

The meeting of the leadership of the National Assembly with the Commission’s top management earlier scheduled for Tuesday, was postponed due to invasion of the Complex by operatives of the Department of State Services (DSS).

Answering questions from journalists earlier, Senate President Bukola Saraki blamed the Executive arm of government for late submission of the 2019 elections budget.

He wondered why the Executive could not present the proposal alongside the 2018 budget which President Muhammadu Buhari presented to a joint session of the National Assembly on November 7, 2017.

The nation’s Number Three Citizen who doubles as Chairman of the National Assembly, also hinted that the Legislature may reconvene to consider the 2019 elections budget.

Saraki said: “On the issue of INEC request, it is amazing why nobody is asking. Is it the day that we were leaving that INEC realised that they had a budget? There was January, February, March, April, May, June.

Nothing came from the Executive to say we need money for INEC until July when we were leaving. But be that as it may, we are ready to support the Executive at all times.

Continues on wwwbusinessday online.com

NIRSAL, CIAT sign pact to address climate risks in Agric sector …. facilitates $375m funding for agribusinesses Onyinye Nwachukwu, Abuja

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he Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) and International Centre for Tropical Agriculture (CIAT) on Wednesday signed an agreement to adequately dimension and address all climate risks that can jeopardize the future of the the country’s agriculture sector.

The Project is aimed at providing an overview of climate risk issues and other vulnerabilities across agro-ecological zones in the country as well as indications of how climate change will potentially impact agricultural production, water resources, energy and human health.

At the agrrement signing in Abuja, NIRSAL’s Managing Director/CEO Aliyu Abdulhameed said the project was coming at a very strategic time and is in sync with the corporation’s mandate of derisking agriculture and facilitating agri-business.

NIRSAL, a US$500million NonBank Financial Institution and wholly

owned corporation of the Central Bank of Nigeria (CBN) has facilitated some US$375million funding from commercial banks for Nigeria’s agribusinesses across the value chain from inception to date.

According to him, NIRSAL’s partnership with CIAT is in line with its commitment to contribute to the realization of Nigeria’s Nationally Determined Contribution (NDC) targets as ratified at the twenty-first session of the Conference of the Parties (COP22) of the UN Framework Convention on Climate Change (UNFCCC) and consented to by President Buhari, and in its push for the adoption of climatesmart agricultural practices in Nigeria.

He explained that the profiles derived from NIRSAL’s work with CIAT would be used to improve the operations of smallholder farmers through NIRSAL’s existing engagement structures that stretch from Commodity Endemic Areas within Agroecological zones, down through Agro Geo-clusters, Agro Geo-cooperatives, to individual smallholders in Agro Geocooperative Cells of 50 hectares each.

L-R: Austin Egwuche, project manager, Bank of Industry Solar Energy Programme; Adam Nuru, managing director, First City Monument Bank (FCMB); Olufemi Olanrewaju, director, School of Sustainability Lagos, and George Ogbonnaya, group head, business banking/SMEs, FCMB, during the Sustainable Energy Finance Workshop organised by FCMB in Lagos, yesterday.

Subsidy scam: FEC approves $47m to track petrol imports TONY AILEMEN, Abuja

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he Federal Executive Council (FEC) yesterday approved spending of N17 billion ($47 million) to create an automated tracking system for gasoline imports that will give precise data on volumes imported and distributed.

“This will enable us track refined petroleum product movement from the point of letter of credit opening for the vessels that come into Nigeria until the point where they are discharged into tanks,” Minister of State for Petroleum Resources Emmanuel Kachikwu told reporters Wednesday in Abuja.

“From the tanks into trucks in Nigeria, we will monitor the trucks till they deliver the products into the storage tanks for the filling stations and they are discharged and sold.”

The tracking system will help ascertain daily gasoline consumption within a year and volumes illegally smuggled to neighboring countries offering higher retail prices, Kachikwu said.

... $150m loan for Polio It will also help determine exact amounts due for subsidy payments.

Africa’s biggest oil producer relies on fuel imports to meet domestic demand due to lack of refining capacity. Four ill- maintained, stateowned refineries that can process 445,000 barrels of crude per day currently operate at a fraction of their capacity.

The Federal Executive Council, FEC Wednesday also approved the sum of $150m for tackling Polio in twelve states from the World Bank.

The Finance Minister, Kemi Adeosun in her presentation at the FEC Meeting, said the World Bank’s $150 million credit facility in support of the Polio Eradication and Contract for the supply and installation of 3 Units of Rapiscan Mobile Cargo ScannerEagle M60 were approved.

This include 30 months onsite service/support and maintenance, training of120 officers and integration of Rapiscan Eagle M60 Scanners into Nigeria

Integrated Customs Information System.

The Minister said the proposed World Bank’s U S$150 million credit facility in support of the Polio Eradication , is third additional financing to support substantial past investments.

The investments, she said have paid off handsomely with the country now on the verge of polio eradication.

“The objective of the project is to assist the Government of Nigeria, as part of a global polio eradication effort, achieve and sustain at least 80% coverage with Oral Polio Vaccine (OPV) immunization in every State in the Country and improve Routine Immunization,” Adeosun said.

The project will be coordinated

by National Primary Health Care Development Agency (NPHCDA) at the Federal level and implemented in the 12 lagging States of Adamawa, Bayelsa, Gombe, Jigawa, Katsina, Kogi, Nasarawa, Niger, Plateau, Taraba and Zamfara.

Nigeria FX reserves fall to 4-month low as capital outflows continue David Ibidapo

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igeria’s external reserves have fallen to a 4 months low of $46.9 billion against a previous balance of US$47.01 billion, according to data from the Central bank of Nigeria (CBN) website.

The dollar reserves fell by 0.31 percent week on week.

“What is typically driving the foreign reserve down is foreign portfolio investors leaving the markets as a result of increasing political tension and risk attributed to election periods. However, the foreign reserve decline is nothing to worry about as it is quite expected that periods like this could result to some decline in external reserves,” Johnson Chukwu, CEO cowry Continues on wwwbusinessday online.com asset management limited told

BusinessDay by phone.

Also, the selloff in the stock market continued due to increasing political tension in the economy. The Nigeria stock exchange all share index (ASI) further declined by 0.09 percent yesterday to close at 36299.80 points from 36333.80 points according to data collated from Bloomberg.

BusinessDay analysis shows also the possibility of decline in Nigeria external reserve due to declining crude oil production.

Data gotten from Opec reveals that average crude oil production in Nigeria in Q2 2018 declined by 5 percent quarter on quarter. Nigeria crude oil production stood at an average of 1.6 million b/d in Q2 2018 from 1.8 million b/d in Q1 2018.

During this period, oil price rallied by 17 percent during the same period from about $67p/b

to $79.44pb. A large percent of Nigeria’s foreign reserve is proceeds from crude oil exportation; therefore, declining crude oil production may lead to a decline in the foreign reserves of the country.

Due to relatively stable FX markets witnessed in the first half of 2018, importation of goods and commodities increased driving import levels up as export levels declined due to declining crude oil production.

Ayodele Akinwunmi, head of research and strategy at FSDH merchant bank ltd explained that Nigeria recorded the lowest foreign inflow in July 2018 since August 2017 in the I&E window, therefore the drop in inflows have led to the decline in the nation’s gross reserve within the same period. In July 2018 total inflows amounted to US$1.6 billion.

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8 BUSINESS DAY NEWS Freight growth slowdown continued in June IFEOMA OKEKE

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nternational Air Transport Association (IATA) released data for global air freight markets showing that demand, measured in freight ton kilometres (FTKs), rose 2.7 percent in June 2018, compared with the same period the year before.

Thiscontinuestheslowdownin aircargogrowththatbeganearlierin 2018.Growthforthefirsthalfof2018 stands at 4.7 percent, less than half the growth rate in 2017.

Freight capacity, measured in available freight ton kilometres (AFTKs),roseby4.1percentinJune 2018.Capacitygrowthhasnowoutstripped demand growth in every month since March.

The restocking cycle, during whichbusinessesrapidlybuiltupinventoriestomeetdemand,endedin early2018. There was a marked fall in air cargo volumes from March.

There is now a structural slowdown in global trading conditions as indicated by the fall in the Purchasing Managers Index (PMI) to its lowest level since 2016.

Factory export order books have turned negative in China, Japan and the US. The temporary grounding of the Nippon Cargo Airlines fleet in thesecondhalfofJuneexaggerated the slowdown by shaving up to 0.5 percentage points off June growth.

“Air cargo continues to be a difficult business with downside risks mounting. We still expect about 4

percent growth over the course of the year. But the deterioration in world trade is a real concern.

“While air cargo is somewhat insulated from the current round of rising tariff barriers, an escalation of trade tension resulting in a ‘re-shoring’ of production and consolidation of global supply chains would change the outlook significantly for the worse. Trade warsneverproducewinners.Governments must remember that prosperity comes from boosting their trade, not barricading economies,” Alexandre de Juniac, IATA’s director-general/CEO, said.

AllregionsexceptAfricareportedayear-on-yearincreaseinfreight volumes in June 2018, but the slow growth in Asia-Pacific, which accounts for nearly 37 percent of the entireaircargomarket,draggedthe global growth rate down.

African carriers saw freight demand contract 8.5 percet in June2018comparedwiththesame month last year. Capacity also fell by 1.4 percent. It is difficult to be positive about the current picture in Africa.

International FTKs fell at the fastest pace (-8.6%) for nearly nine years. Although the year-on-year growth rate for the first half of 2018 was 3.0%, in seasonally-adjusted terms,FTKsaretrendingdownward at an annualised rate of almost 20% over the past six months, and demand conditions are weak on all the main markets to and from the continent.

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Fragile investor confidence under threat as Buhari’s ‘change’ gets messier CHUKA UROKO

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he fragile investor confidence the Nigerian economy has garnered in the last 12 months from both domestic and foreign investors, despite its slow and vulnerable recovery, is under serious threat as the change President Muhammad Buhari and his party, the All Progressives Congress (APC), are offering Nigerians is increasingly getting messier by the day.

The invasion and subsequent siege on the National Assembly Complex Tuesday by faceless security operatives who admitted members of only APC into the complex, but denied members of other parties, including the main opposition People’s Democratic Party (PDP) entry, is an aberration in a democratic system.

This, plus the senseless and mindless killing of innocent citizens of this country by jihadists masquerading as herdsmen or the so-called armed bandits, are aspects of the Buhari and APC ‘change’ that have put the country not only in the theatre of the absurd, but also on reverse gear economically and politically.

Experts say that Nigeria, by virtue of its demography, large market and citizen’s strong buying-power, is a compelling investment destination. But no sane investor is ready to put his money in an economy that does

not guarantee him safety of his investment.

“Between now and the second half of next year, there won’t be any major investment coming into the country because of the political risk associated with the February 2019 general election,” the experts state.

According to the experts, no investor is going to take the risk in spite of the huge opportunities in the country in virtually all sectors of the economy that are crying for investments, especially in the real estate sector where the value of the opportunities available for investors is estimated at N56 trillion.

Already, investors in this sector are contending with a myriad of challenges ranging from high cost of funds, where available, very unfriendly regulatory environment, long, expensive and tortuous property registration process, and above all, what Paul Onwuanibe, CEO, Landmark Group, calls “the scourge of an emerging economy where there is huge regulatory limits that is very little enabling.”

The same applies to other sectors, but investors have been contending with all of that because, one way or another, they can recoup their investment.

But the events of the past few months are too bizarre for any investor to take the risk.

How does Nigeria and its economic managers explain to the outside world that masked security operatives could invade

the hallowed chambers of the National Assembly, where there are supposed to be soldiers, police and other security apparatus all of whom seemed to be helpless?

Political analysts describe what happened on Tuesday at the National Assembly as the height of desperation by a political class that has failed the people, but wants to cling on to power at all cost by doing what is despicable and unimaginable in sane society where political leaders have values to protect.

These are reflections of what William Shakespeare saw in the English society of his time that made him think, “it is either there is civil strife in the skies, or the earth too saucy with the gods incenses insurrection”.

But unlike the situation in Shakespeare’s society, which

had to do with the gods, Nigeria’s case is human. It is a case of man inflicting pain on Nigeria and Nigerians, meaning that it is in the power of Nigerians to resist their tormentor(s).

The country is passing through desperate moments and the citizens should not, as the same Shakespeare warned, blame “their stars but themselves that they are underlings”.

The invasion of the National Assembly by faceless security operatives is one absurdity too many in a beleaguered country that has seen all manner of anti-democratic acts that are threatening its continued existence.

But as Ben Murray-Bruce stated in his Twitter handle, @ benmurray, “we will forever defend this hard fought democracy; illegality will never stand”.

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A review of the Financial Reporting Council’s Nigerian Code of Corporate Governance 2018 EMMANUEL ADEGBITE Prof. Adegbite is Professor of Accounting and Corporate Governance at the University of Nottingham, UK, and a Visiting Professor of Governance and Management at James Cook University, Singapore.

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he Financial Reporting Council (FRC ) has issued a draft of the Nigerian Code of Corporate Governance 2018. Times like this provide an opportunity to reflect on corporate governance and its regulation in Nigeria, given the history of corporate scandals despite the multiplicity in the existing regulatory framework.

Indeed existing codes of conduct include those issued by the Nigerian Communications Commission; the Central Bank of Nigeria; the National Pension Commission; and the National Insurance Commission to regulate their different industry operators. Also, there is the Code of Corporate Governance for Public Companies in Nigeria 2011 issued by the Securities and Exchange Commission (SEC) (which replaced the 2003 SEC Code). One is therefore tempted to ask what the need for the new FRC code is, especially as there is research evidence that cast doubt on the success of existing regulations.

A 2016 research study published in the Journal of Business Ethics by Osemeke and Adegbite suggests the presence of conflict among the various codes, which contributes to reduced compliance by firms and ineffective enforceability by regulatory agencies, both impeding good corporate governance in Nigeria.

The authors note that while the problem of non-compliance is part of a wider problem of lax regulation, weak institutional framework and corruption in corporate Nigeria, the regulatory multiplicity and associated conflict further undermines enforcement, indicating incoherence in notions of how to regulate corporate governance and promote good behaviour. As the authors argued, the Financial Reporting Council should put together a frame work to unify the existing codes into a single applicable code for the corporate sector.Is this what the FRC has done or does the draft 2018 FRC code simply adds to the existing multiplicity and superfluous complexity in regulation?

No doubt, the FRC code seeks to institutionalise the highest standards of corporate governance best practices in Nigerian companies, particularly among those companies that are not covered by sectoral regulations.

However, the presence of sectoral codes continues to threaten the uniformity of good practices in Nigeria, as this could lead to differentiations within the corporate governance sphere, with consequent implementation and coordination problems for the industries/companies and their regulators. This is worsened by the code’s aim to induce voluntary compliance with the highest ethical standards; with the increasing multiplicity of codes, it is questionable whether such approach to implementation can be achieved, after all. Alternatively, one can argue that by retaining the sectoral codes alongside the FRC code, it is expected that flexibility – the ability to apply the Code in a wide range of circumstances – and scalability – the ability to apply to

While the code is still based on a ‘comply or explain’ approach, companies should avoid box-ticking but rather seek to justify non-compliance where necessary companies of differing sizes, will be achieved.

In addition, the code will be based on the ‘apply and explain’ basis. This is to ensure that all principles are applied, without exceptions.

This approach rather than the typical ‘comply or explain’ approach should prevent deliberate non-compliance by companies. As envisioned in the code, this mode of implementation will also assist in preventing a ‘boxticking’ exercise by ensuring companies deliberately consider how they have (or have not) achieved the intended outcomes. In this vein, it is expected to promote a better quality in compliance, as companies can apply the principles in their own way, taking into account their contextual realities and circumstances, rather than merely following guidelines to comply which is usually the case with the comply or explain based codes. For example, the UK Financial Reporting Council published her Corporate Governance Code recently in July 2018. The revised Code recognizes that it needs to ensure that it is not operated as a rigid set of rules but encourages flexible and appropriate application.

While the code is still based on a ‘comply or explain’ approach, companies should avoid box-ticking but

rather seek to justify non-compliance where necessary. Clearly, the Nigerian code appears to be in line with international developments in corporate governance monitoring and regulation, which will enable Nigerian firms to gain better integration with global financial markets, including obtaining listing statuses on international stock exchange markets.

The ‘apply and explain’ approach also assumes application of all principles. This philosophy requires companies to take responsibility for demonstrating how the specific activities they have undertaken best achieve the intended outcomes of the corporate governance specifications in the principles. This basis of implementation may be burdensome for some companies, especially small and medium-size companies, in justifying the recommendations of the code. These SMEs might also incur a disproportionately high cost in engaging the level of corporate governance expertise and mechanisms required, in this respect. Also, even though the provided transition period of on or before January 1, 2020, may provide a useful time frame and needed opportunity for gradual, rather than a sudden change or adoption for large firms, this grace period may not be enough for SMEs, who may be new to corporate governance compliance.

The code also requires the boards of companies to promote stakeholders’ interest alongside shareholders’ interests. This is important, given the incessant menaces of a singular focus on shareholder value maximisation by firms. Notwithstanding the stakeholder mention, the emphasis of the code in relation to the role of the board has to do with their duties to

shareholders, in the main. Indeed, no principle of the code explicitly provides for stakeholders of the respective companies. The establishment of the principle on business conduct and ethics (principle 24) and Sustainability (principle 21), demonstrates a conscious effort to promote awareness not only with respect to good governance but also around business sustainability, an increasingly topical issue that corporate governance regulatory systems across the world must seek to address. The code also states that the board should be composed of ‘an appropriate mix of Executive, Non-executive and Independent Non-executive members such that majority of the Board are Non-executive Directors.’

The use of the word ‘appropriate’ might leave room for discretionary judgement by management, which may pose problems of comparability with regards to levels of compliance. The distinction between Non-executive directors and Independent directors in the code is also rather ambiguous. However, the inclusion of the corporate governance evaluation process should promote a regular review of board activities and facilitate shareholder engagement. In sum, the draft code has some merits and areas that could be improved. The foregoing has highlighted some of these areas which should be considered in revising the code, even though the situation in Nigeria may not be a matter of “lack of codes/regulations”, but that of the institutional capacity and the will to ensure enforcement, otherwise the FRC Code will simply be another costly addition to the existing regulatory infrastructure.

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Restructuring of Western Economic Power

DAN STEINBOCK Dan Steinbock is the founder of Difference Group and has served as research director of international business at the India, China and America Institute (US) and a visiting fellow at the Shanghai Institute for International Studies (China) and the EU Center (Singapore). For more, see http://www.differencegroup. net/

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ecently, the 10th BRICS Summit took place in Johannesburg, South Africa.

As the international focus has been on the BRIC prospects in the future, it is often forgotten that when the first BRIC reports were published in the early 2000s, they also featured projections about the likely growth of major advanced economies.

How have the leading Western economies fared in terms of those past expectations and current realities? In order to answer to that question, let’s use the largest economy,

the United States, as a benchmark to compare the original BRIC analysis assumptions (dashed line) in the early 2000s with the advanced countries’ real economic development in the past two decades and the coming decade.

Japan’s lost decades Of the largest advanced economies, Japan’s economic agony has been the most painful one. Between 1980 and 1990, its share of the U.S. economy soared from 38% to 53%.

However, after Tokyo conceded to Washington’s demands in trade and currency disputes in the ‘80s, it was soon forced to cope with a huge asset bubble and the consequent secular stagnation.

Despite massive monetary injections, Japanese economy remains stagnant and government debt continues to soar (it’s now almost 255% of GDP).

Furthermore, the worst is still ahead in the next decade, as Japan must soon cope with a declining population.

In 2010, Japanese economy relative to the US had shrunk to a level where it had been in 1980. It is likely to decline further to 23% of the US economy by 2030 (some 5% more

than the original BRIC estimate).

European erosion What about the European economies?

In 1980, Germany represented 30% of the US economy. Yet, the post-Cold War German unification did not bring the expected economic expansion, although it has fostered German leverage within the EU. After unification turmoil, Chancellor Angela Merkel has steered her nation cautiously, smartly and shrewdly.

However, now German economy is slowing, while political friction is increasing and the country has been targeted by Trump’s trade hawks. By 2030, German economy might prove to be just a fifth of the US economy (still about 2% more than expected).

Originally, BRIC projections assumed UK’s economic role to be nearly at par with Germany over time.

Through Prime Minister Cameron’s reign, the UK was still pretty much on track with that scenario. However, the Brexit is likely to penalize Britain’s economic future by 2030 (- 2% relative to original projection).

In turn, the French economy was presumed to catch up with that of the UK in the future. In the early 2010s, it was still on track. However, the growth trajectory slipped toward the end

of President Hollande’s reign. And despite great initial hopes, President Macron has not been able to restore France’s potential output scenario.

In Brussels, leading policymakers preferred center-right Berlusconi or center-left MatteoRenzi to BeppeGrillo’s radical-left Five Star Movement, which is now led by Luigi Di Maio, and radical right Northern League, which is steered by MatteoSalvini. The coalition government of the two is shunned in Brussels because it is euro-skeptical, against austerity and for debt relief (Rome’s sovereign debt is nearly 135% of its GDP). By 2030, Italy is likely to account less than a tenth of the US economy (-2% relative to original projection).

Expansive US, implosive Japan and EU What’s amazing in this narrative about the absolute rise and relative decline of the G6 economies is that, in 1980, Japan (38%) and major European economies (16%-30% each) still accounted a major share of the US economy. However, if the current trends prevail, the relative proportion of each – Japan (23%) and EU economies (10%-19%) – will shrink significantly relative to the US GDP.

That is a story of extraordinary relative economic decline, which is often explained on the basis of misguided austerity, aging demographics and other policy failures.

Yet, intriguingly, productivity levels among US, Europe and Japan are not that different and in innovation Japan is actually ahead of the US. Furthermore US sovereign debt now exceeds US economy (105% of GDP) and is thus close to the Italian level in 2008.

What is worse, if the Trump administration will keep moving away from the postwar trading regime that Washington once created, bilateral and multilateral trade and investment conflicts will broaden, which has potential to deepen secular stagnation in most G6 economies, but particularly in Europe.

Perhaps it is not entirely without reason that euro-skeptics question the assumption that what’s good for America is good for Europe. That’s not the case in the early 21st century.

• This is the second commentary based on Dr Steinbock’s recent briefing on the changes in G6 and BRIC growth trajectories.

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Godswill Akpabio: Defecting to deflect vindictive political arrows

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

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ha d g re at re s p e c t f o r Godswill Akpabio because I had seen him as a brilliant leader of men and a progressive politician until it started becoming evident that he was defecting to deflect some pointed political arrows. To conceive the idea to defect from a political party that brought him into public reckoning is ruthless, cruel, cold and miscalculating.

This is tragic for someone once considered a splendid politician whose sense of manhood could be relied upon to bring sanity to the political space. He was worshipped as a god in his own state.

This is, no doubt, a leap into political oblivion. He will certainly disappear into the silent hallway of political history.

I listened to him recently on the television while talking about those who defected to PDP. I guess he was referring to the APC when he said “Warsaw saw war” and “war saw Warsaw.” I

INWALOMHE DONALD Inwalomhe Donald writes from Benin City, inwalomhe.donald@yahoo.com

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he World Bank has hailed the Godwin Obaseki administration in Edo State for economically developing the state through the implementation of its people-oriented policies and programmes. The World Bank scored the state high on its projects execution and implementation of social investment programmes. It described the programmes as most laudable, impactful and commendable in the democratic history of the country.

The World Bank has given a positive verdict and thrown its weight behind the ongoing developmental drive of the Godwin Obaseki-led administration in Edo State, urging other states in the country to replicate the Edo model. Country Director of World Bank, Nigeria and Co-ordinating Director for Regional Integration Programme in West Africa, RachidBenmessaoud, who led the bank’s delegation on a visit to the governor at the Government House, Edo State, said: “Obaseki has established a flagship effort that has resulted in the Edo Azura Power Plant where he brought the World Bank Group together and we are ready to replicate the model and build more Azura projects in Nigeria and West Africa.”

Benmessaoud explained that the strong partnership between Edo State Government and the World Bank is

believe he has himself seen war for being loquacious following the defection of some of his colleagues. What a tragedy! Anyway, anything can happen in a polity where corruption and bribery are the order of the day.

To have a complete change of mind to defect to APC after meeting President Buhari in London shows that he has not been a politician at heart but a political merchant. In order to keep the sanctity of his prestigious job as president and demonstrate sanity and skills worthy of his exalted office, I expected President Buhari to have had the courage to ask him: Akpabio, on whose invitation are you here in London? Is it Godswill that you plan to defect to APC? What makes the visit inauspicious in Nigeria? Rather, Akpabio was received into the open and waiting arms of the president. Knowing Akpabio as the minority leader in the Senate was enough to stop the president from acquiescing to whatever demands he came to make. The questions persons have asked are: whose interest is Akpabio’s defection likely to serve and why would he choose to move against the tide? Remember, “there is a tide in the affairs of men, which, taken at the flood, leads on to fortune” (Julius Caesar). Akpabio’s case will not be an exception.

The answers to these questions are not farfetched. The EFCC has shot two pointed arrows at Akpabio. Even though no blood was spilled therefrom, he has, however, had his psyche bruised; and like the prodigal

In order to keep the sanctity of his prestigious job as president…,I expected President Buhari to have had the courage to ask him: Akpabio, on whose invitation are you here in London?

Is it Godswill that you plan to defect to APC? What makes the visit inauspicious in Nigeria? son, the time to return home is now. He understands what it is to have one’s feet firmly lodged in the quicksand of prosecution by EFCC. It is a question of ‘if defection is wrong, I don’t want to be right.’

And as you and I know, no one would allow an arrow visibly seen roaring to hit one and cause blindness. Everyone tries to escape from an invading arrow whether it be physical or spiritual. Even though arrows from the EFCC may not have been very effective, but they could in the case of Akpabio be like the stone from David which killed the once insurmountable Goliath.

So, the earlier he sought asylum in the sinking political bunker of the

APC, the ‘safer’ for him, at least, in the short run. In the long run, the result would be so calamitous that he would wish he neither contemplated nor took the action.

There are three issues that have come to light in the political unfaithfulness of Akpabio – the erosion of truth in the political life of politicians in Nigeria; the erosion of individual freedom of politicians and the lamentable faltering of faith in the political process. First, the truth has lost value in Nigeria following the activities of the political nonentities that adorn our political space. As the political train drifts, values such as truth have been impaired. There is hardly any politician today in Nigeria who has truth planted in his heart and upon whose veracity one can rely.

They have become allergic and continue to walk away from the truth as though it is leprous. The erosion of individual freedom is the second issue of concern.

This has become so pronounced that politicians suffer indigestion from the inability to extricate themselves from the whims and caprices of political godfathers whose stock in trade remains malfeasances of unimaginable dimensions. In Nigeria, anything can be traded-off for great wealth that does not guarantee happiness or joy. Even for those whose ability to create wealth is natural and with a modicum of effort, happiness is not guaranteed. The wealth permits them no sleep. So, you can be sure that the situation is worse for those who steal our public inheritance.

The effect of all of this is the loss of faith in the political process in the country. There are political darkness and lawlessness everywhere. Those we expect to demonstrate bold leadership, coolness in battle and readiness to endure hardship and pain for and on behalf of the people they represent, now have daggers in their tongue.

They want to continue to enjoy the wages of unrighteousness at the expense of the masses. The question, then is, where lies the political future of the country? It should be evident to all and sundry that in abusing the commonwealth of the nation by the political he-goats, religion or ethnicity are no critical variables. The glue is simply the ability to be callous, unrepentant, boisterous, mean, amusing and weak-willed. As far as the political class in Nigeria is concerned, everything and anything they conceive and execute is right and, therefore, evil has no existence.

I weep for the masses whose wellbeing has been impaired by the political class. The time to rise in unison and thunder, not in violence, but in prayers against the callous and great deal of abuses of the political class is now. This is a crusade that should not admit of any political, religious or ethnic divide. The crusade in mine, yours and ours. If we do not legitimately fight our way into freedom, no one else will; not the political class.

I trust God that the current political class will surely depart into oblivion without being celebrated.

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Obaseki and the verdict from World Bank highly cherished by his institution, and commended the insistence of the Obaseki administration on transparency and accountability. “I want to assure the governor that the World Bank will help in addressing the human capital needs by pulling her resources together to support the Edo State government,” he pledged.

In his response, Obaseki expressed the gratitude of the Edo State government to the World Bank for finding the state a worthy partner in their commitment to bring development to all Edo people and residents.

He showcased the achievements of the government in agriculture to his guests and said that one of his goals is to replace crude oil with oil palm, as aggressive effort is being made to make Edo State the oil palm hub in the country and beyond. He highlighted some of the challenges faced by his government, including illegal migration and human trafficking, explaining that 60 per cent of returnees to Nigeria are from Edo State.

Edo State Fiscal Improvement and Service Delivery Development Policy Operation Program is the first in a series of two programmatic development policy operations that supports Edo state medium term strategic plan focused on inclusive growth, employment creation and poverty reduction. Edo is one of 36 states in Nigeria’s federal structure,like the average Nigerian state. The World Bank has supported Edo with a number of different operations during this period. From 2012, the collaboration deepened with

budget support in the form of a programmatic series of three development policy operations, each for the sum of US$75 million. The Bank began to provide Edo with development policy support due to the progress Edo had made on its own in implementing its development strategy and its commitment to undertake policy and institutional reforms to support its development agenda. The first operation, which was approved in March 2012 and closed in June 2014, supported Edo’s earlier development strategy articulated in the 2009 Edo Vision 2020, which identified high poverty, unemployment, flooding and dilapidated infrastructure as main development challenges. Edo also suffered from weak governance structures, particularly in the management of public finances. The state made appreciable reform gains under that operation in the areas of building a stronger public financial management system, improving institutional arrangements for land registration and strengthening the delivery of technical and vocational education.

Following the successes recorded in executing major infrastructure and social development projects in the state, especially the Edo-Azura Power Project, the World Bank has said that Edo State has become a model for development financing at the subnational level in developing countries.

World Bank Executive Director, Angola, Nigeria and South Africa sub-group, Ms. Bongi Kunene, gave the verdict during a lunch organised for 10 visiting World Bank Executive Directors, at the Government House, Benin City,

the Edo State capital. She said that the Bretton Woods institution is impressed with the level of work done through its various projects as well as the partnership that birthed the Edo-Azura Power Project.

Noting that the state is among the two sub-national governments that accessed its budget support instruments, she said the projects executed in the state are not just impressive but meet the expectations of the visiting delegation. She added that the World Bank is willing to “partner with the state on future projects, as long as the projects are in line with the Bank’s focus.” On the Edo-Azura Power Project, she said, “The project is transformational. It gives us a scope of what we can do together. We are delighted to see solutions. We would want to commit ourselves to projects that make sense and are in line with our focus.” She said more of such projects can be executed if governments are willing to cooperate with the bank in granting necessary approvals, allowing for thorough impact assessment and are open to multilateral financing arrangements. Edo State Governor, Mr. Godwin Obaseki, on his part said that with the 450MW Edo-Azura Power Project now on stream, the state wants more investors for the Benin Industrial Park and technology innovation hubs. He said the enabling environment to host diverse investors is now available, especially with the provision of power by companies like Edo-Azura Power. According to the governor, “Power is the key to industrialisation and development.

We need to extend the benefits of this investment. Now that we have power, what are we going to do with it? The next set of projects are those that have to rely on this key infrastructure we have just created. So, we would be looking at the Benin Industrial Park, building infrastructure to encourage and support manufacturers to come in. We are looking at innovation hubs; we want to use the factor and advantage of 24/7 electricity to encourage technology groups and companies to be located in Edo State.

World Bank predicates Edo’s positive outlook on Obaseki’s steady reforms. The interplay of a positive disposition of the Edo State government to reforms and best practice, her willingness to open her financial books to domestic and international partners for developmental projects that will impact on the largest number of people, and a growing culture of transparency across sectors of the state, explain investors’ attraction to the state, the World Bank Vice President, Africa, Hafez Ghanem has hinted.

At a Dinner reception in Abuja, the Governor of Edo State, Mr. Godwin Obaseki, said his administration is committed to deepening relations with development partners, portfolio investors and long-term investors for the overall transformation of the state.

Note: The rest of this article continues in the online edition of Business Day @https://businessdayonline.com/

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Thursday 09 August 2018

A bizarre directive from the CBN

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ecently, the Central Bank of Nigeria called on banks and large corporate organisations to issue new debt at single digit in an investment environment where the risk-free rate is around 13 percent.

Sp e cifically, G o dwin Emiefele, CBN governor asked banks to provide loans to institutions in employment elastics sectors of the economy looking to fund new projects at 9 percent interest rate while he also called on corporate institutions to issue long dated commercial papers with interest rate below 10 percent.

This request was formally communicated to these institutions through the CBN communiqué of the monetary policy committee (MPC) meeting held last month, the same meeting where the MPC chose to hold its own monetary policy rate at 14 percent. The monetary policy rate is the rate of interest at which CBN lends to commercial banks to sure up liquidity in the banks.

In a rational investment environment, it is virtually unthinkable for investors to invest in risky securities that provide a negative risk premium or in simpler terms nobody will invest in things that cannot at least match the Treasury bill rate. But the Central Bank has a plan to ensure this new policy

succeeds.

CBN told banks that as a way to incentivise them to increase lending to the manufacturing and agriculture sectors, a differentiated dynamic cash reserves requirement (CRR) regime would be implemented, to direct cheap long term bank credit at 9 per cent, with a minimum tenor of seven (7) years and two (2) years moratorium to employment.

Emiefele explained further that when banks create these loans for the real sector, the Central Bank will reduce the bank’s reserve requirement, thus channelling cash that would have ordinarily earned nothing parked in the vaults of CBN to interest earning loans for the real sector.

Banks will be very careful in taking up this invitation as earning nothing on reserved cash may be better than lending at a single digit rate in a country where 2017 industry non-performing loans was as high as 15.1 percent according to World Bank.

CBN is yet to provide full details on how this new lending policy will work but analysts expect it to increase the industry credit risk when the policy takes effect as the fragile economic recovery still poses risks to lending to the real sector.

More disturbing is the request for large corporate institutions to sell long dated commercial papers with tenure of 5-7 years at single digit interest rates when the 5 year and 7 year federal government

bond yield is currently at 12.75 percent and 13.53 percent respectively.

It will virtually be impossible for such commercial papers to float successfully in the money market where average issue yield on commercial papers is currently 15.96 percent.

No sane investor will buy uncollaterized or even collaterized 5 year commercial papers at a rate lower than the FGN 5 year bond yield. Investors will rather invest the money in risk free assets which will allow them earn decent returns above inflation than assume a default risk without any form of compensation.

CBN stated in the communiqué that credit constrained businesses, particularly the large corporations are encouraged to issue commercial paper to meet their credit needs and the Central Bank of Nigeria may, if need be, buy these commercial papers.

In effect, CBN is saying it is open to starting quantitative easing in a market where it has chosen to hold rates as high as 14 percent. Central Bank did not state the maximum limit of how much they will be willing to invest in a commercial paper or if they will also be willing to participate in buying these bills in the primary market. Since investors won’t put a dime in buying up commercial papers at single digit when opportunities for riskless higher yields are bountiful in the money market, these corporate institutions will have to

depend on CBN buying up 100 percent of these commercial papers in the money market.

If this happens, CBN will be in direct competition with the deposit money banks it regulates. Since the banks won’t be able to match the single digit interest rate Central Bank is willing to accept on the commercial papers, banks and institutional investors will be competed out of the commercial paper space by the apex monetary authority.

This could significantly distort financial markets if both policies take effect in the current investment environment considering where the monetary policy rate, Treasury bill rate and FGN bond yield are currently sitting. The larger the amount CBN invests in both policies, the more distorted will be the financial market at the end of the day.

In spite of the request by CBN on single digit commercial papers, it appears the market isn’t listening. Only last week, Sterling Bank completed the issuance of its new commercial paper which it raised at 12.7 percent, far off from CBN’s single digit interest rate prescription.

If the CBN want rates in Nigeria to go below 10 percent, it needs to start by bringing down its own monetary policy rate to single digit first. The MPR is the key benchmark rate for all interest rate. If it stays in single digit, it is unlikely interest rates will fall to single digit.

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Thursday 09 August 2018

BUSINESS

COMPANIES & MARKETS

DAY

13

Conoil result out, after one day suspension at NSE

Pg. 14

C Co om mpa pan ny y n ne ew ws s a n a ly s i s a n d i n s i g h t

Rak Unity profit drops over rising cost of sales Sobechukwu Eze & Emeka Ucheaga

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he first half (H1) financial statement of Rak Unity Petroleum Plc released on Monday to the Nigerian Stock Exchange (NSE) revealed that the company’s profit margins are experiencing a tight squeeze as a result of its persistently high cost of sales and dwindling revenue.

Gross profit margin for the company fell from 5 percent in first half of 2017 to just 3 percent in first half 2018.

This implies that cost to revenue ratio of the firm reached 97 percent during the first half of the year, up from 95 percent during the same period last year. This was even as the company’s revenue reduced by 8 percent as its revenue fell from N5.7 billion in H1 2017 to N5.3 billion in H1 2018. The tight squeeze on profit margins had serious repercussions on the bottom-line of the company.

The downstream petroleum company’s Profit Before Tax (PBT) and Profit After Tax

(PAT) both fell by 110 percent as the company’s PBT fell from N82 million in H1 2017 to a negative return of N8 million.

The PAT fell from N56 million in H1 2017 to a negative PAT of N6 million in H1 2018.

Analysis by Businessday on the profitability of the company also revealed that the company’s net margin fell from 1 percent in H1 2017 to (-0.16) percent in H1 2018. The firm’s asset turnover which tells us how well the company utilizes its asset in generating its revenue also fell from 4.3x in H1 2017 to 1.3x in H1 2018.

This drop in earnings could be attributable to the current situation prevailing in that sector.

Emmanuel Afimia, CEO of Afimia Consulting said that “the cost of sales of oil companies especially the downstream companies has always been on the high side and was one of the reason many marketers hoarded their products last year December to cause artificial scarcity and benefit from the temporary increase in the petrol price”. He also added that “the high cost of sales could be attributed to the rising high crude oil price and the cost of transportation of these products”.

Looking further, we discovered four things that accounts for the company’s revenue and Cost of sales which are; automatic gas oil (AGO), premium motor spirit (PMS), dual purpose kerosene (DPK) and lubricants (LUBES). The firm generates much more from

F

BNQuest Asset Management, a subsidiary of the FBN Holdings Plc group, has shown interest to offer investment opportunities to Nigerians in Diaspora, as a way to unlock the potentials of the country’s citizens living abroad, which will be a source of economic development.

This call for Nigerians in diaspora to take advantage of the numerous investment opportunities available in Nigeria was made at the just concluded Nigerians in Diaspora (NIDOA) Global Development Conference in London.

The conference presented a rare opportunity for them to engage in constructive and interactive sessions with key decision makers across different industries in Nigeria, encouraging stakeholders to partner and collaborate on investment schemes.

Ike Onyia, Managing Director of FBNQuest Asset Management said FBNQuest

Asset Management is open to partnerships that will unlock the potential of the Nigerian diaspora community as a source of economic development.

“We provide bespoke solutions to organizations and individual investors looking to set up structures that can help them achieve their investment goals. As a trusted advisor and credible partner with sound local knowledge and a rich pedigree, we will help them navigate through opportunities in the homeland’’.

A major highlight of the event was the pre-launch of the $20 Million Diaspora Housing Investment Fund - a closed end investment fund to be privately placed and constituted under a Trust Deed with a suitable Commercial Trustees to be selected.

The fund will be established through the issuance of the similitude of a real estate investment trust scheme which will provide opportunities for individual and institutional investors to participate in the Nigerian real estate

the same view on the persistent high cost of sales for these companies, he said that “out of all the product that these downstream companies sell when it comes to petroleum the price is fixed and the cost is far higher than the price and if not for the subsidy of the government the

L-R : Chioma Mbanugo, category marketing manager, PZ Wilmar; Adewole Ekundayo, trade partner PZ Wilmar; Ngozi Arah, trade partner PZ Wilmar; Kayode Akinsanya, trade partner PZ Wilmar and Ufuoma McDermott, promo draws show host during the live draws event in Lagos.

FBNQuest offers opportunities for Diaspora Nigerians to spur economic development Endurance Okafor

it’s AGO operations but it also spends much more on its sales.

The cost of sales to revenue for AGO increased from 92 percent in H1 2017 to 96 percent in H1 2018, and this could be said for the other components in the company.

Dolapo Ashiru also shared

sector.

As one of the major sponsors of the conference, FBNQuest Asset Management called on Nigerians in Diaspora to offer strategic expertise in their various endeavours to impact the country with knowledge and financial capacity, especially by way of investment.

“We want to partner with the Diaspora community through NIDO and its members. As a member of one of the leading financial services groups in Africa, we are wellpositioned to serve the diaspora community professionally and to ensure their aspirations in the area of maximising investment returns are fulfilled,” Onyia concluded.

Meanwhile, the asset management arm of the FBN group is one of the leading asset managers in Nigeria for individual and institutional investors, which guides clients through Africa’s dynamic markets, while identifying the best opportunities to shape portfolios in line with specific investment goals.

price of the product will be far higher than what we see now”.

“Where some of these companies actually get their money is in the sales of white product such as diesel, cooking gas which they have some level of price control. The margin is higher for these white products than the petroleum product” he cited 11 Plc as an example whose main source of revenue is its rental income.

The company’s share price has not moved from N0.40, its low of the year when it fell from 0.42 in July.

On the outlook for the company, Afimia foresees higher crude oil prices, which would translate to higher cost for the downstream sector as the United State just recently imposed a sanction on Iran which could reduce the supply of crude thus pushing up the price of oil.

He ended by saying that some of the ways in which the company and the sector in general could be helped would be government intervention on the restoration and support of local refineries such as Dangote’s refinery and other local refineries with other incentives given to marketers of these product.

CBN urge youths to channel resources to agriculture, manufacturing IDRIS UMAR MOMOH, Benin

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he Governor of Central Bank of Nigeria (CBN), Godwin Emefiele has advocated for the channeling of youths resourcefulness and vigour to selected value chains such as agriculture and manufacturing sectors.

Emefiele who made the remarks in his keynote address at the 4th LAPO Institute Conference on Microfinance and Enterprise Development, with the theme, “Indigenous Technology and Value Chain Development” held in BeninCity, said the bank will continue to implement policies that promote creativity among Nigerians. The CBN boss, represented

by Amagwu Frank, deputy director, Micro, Small and Medium Enterprises Development Fund (MSMEDF) department, Abuja noted that the policy was part of the Youth Entrepreneurship Development Programme (YEDP) targeted at youths who are the engine room of vibrancy and innovation.

He said to support Micro, Small and Medium Enterprises (MSMEs), the apex bank is working on the use of other instruments including equity, quasi-equity and Shariah- compliant products to ensure wider outreach and impact along various value chains and sectors.

He also disclosed that the bank has provided single-digit interest rate to small-scale machine producers and machinists under the Micro, Small and Medium Enterprises Development Fund (MSMEDF) while under the Anchor Borrowers’ Programme, the bank simultaneously promotes linkages between fabricators and farmers as well as between farmers and processors to create markets for indigenous technology and improve yields, output and productivity of farmers.

Earlier, in his welcome address, Godwin Ehigiamusoe, the chairman, governing council, LAPO Institute noted that in the 21st century indigenous technology and value chain development remain fundamental for poverty reduction, economic growth, economic

recovery and environmental sustainability.

Ehigiamusoe, opined that indigenous technology and value chain development contributes to economy such as economic growth, industrial development, economic catalysts, sources of services as well as a contributing factor to peace and stability by providing employment to the growing population of restive youth.

He however, promised that the organization will continue to partner with relevant authorities and agencies of government at all levels on the transformation drive of the economy and other stakeholders to improve access to finance by MSMEs to reduce poverty in the country.

He listed relevant government agencies, non- governmental organizations and international bodies, the institute is already partnering with to include LAPO Microfinance bank, Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Bank of Industry, Industrial Training Fund, Centre for Management Development.

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COMPANIES & MARKETS Conoil result out, after one day suspension at NSE David Ibidapo

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onoil Plc, operator in the downstream sector on Tuesday released its first quarter result for 2018; a day after it shares was suspended for trading at the Nigerian’s Stock Exchange (NSE). The result however shows a 21.8 percent increase in its earnings as for the first quarter 2018 as against Q1 2017. Analysis reveals that the company’s earnings were boosted by a surge in its operating income by 212 percent from N30.9 million in Q1 2017 to N96.4 million.

Critical look into the company’s book shows operating income was beefed up by service income and interest from bank deposit received the Conoil plc. Service income and interest from bank deposit amounted to N55.04 million and N10.5 million respectively.

Service income represents commissions received from dealers for the use of the Com-

pany’s properties at service stations. The dealers use the properties for the sale of Conoil’s products.

Profit after tax (PAT) of the company increased from N173.5 million as recorded in Q1 2017 to N211.3 million in Q1 2018.

The company’s cost of sales increased by 33 percent from N21.16 billion in Q1 2017 to N28.3 billion in Q1 2018. This drove down its gross profits despite higher revenue of N31.3 billion in Q1 2018 against N24.5 billion recorded in 2017. Gross profit depreciated by 8 percent from N3.3 billion in Q1 2017 to N3.1 in Q1 2018 billion due to high cost of sales.

Conoil plc incurred higher cost of sales in the sale of White products which amounted to N27.3 billion of total cost of sales. Sales of lubricants attracted a cost of N953.3 million during the same period.

The White products segment is involved in the sale of Premium Motor Spirit (PMS), Aviation Turbine Kerosene (ATK), Dual Purpose Kero-

sene (DPK), Low-pour Fuel Oil (LPFO) and Automotive Gasoline/grease Oil (AGO).

Lubricant products included Lubricants transport, Lubricants industrial, Greases, Process Oil and Bitumen.

Conoil plc earlier today released its Q1 result after delaying for so long which led to the suspension of trading its shares on the Nigeria Stock Exchange Market (NSE).

However, a report about lifting its suspension has not been released by the NSE after prompt action by Conoil plc.

According to the memo passed by the NSE, the suspension of Conoil Plc will only be lifted upon the submission of the relevant accounts and upon satisfaction of the exchange in the compliance of accounts in line with all applicable rules.

According to Paul Uzum, a Lagos based stock broker at the NSE, explains to BusinessDay, “The NSE should probably lift the suspension this week following the prompt action by Conoil. However, he doesn’t see the market reacting to

FCMB emphasises importance of tourisms in cultural and economic development

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irst City Monument Bank (FCMB) Limited has urged Nigerians to sustain the country’s cultural heritage in order to boost tourism and its associated benefits. According to the Bank, this will go a long way to educate and inspire generations about the history of Nigeria, the people and values, while also fast-tracking the ongoing efforts of the government to diversify the economy.

FCMB stated this at a press conference in Ijebu-Ode, Ogun State to flag-off activities to celebrate this year’s Ojude-Oba Festival, scheduled to hold on August 24, 2018. The Bank has over the years been a major sponsor of the Festival and has continued to play a significant role in ensuring its success.

For this year’s Festival, FCMB has assured its stakeholders of an exciting and rewarding experience, including excellent products and services on offer, for the thousands of people within and outside the country that would grace the fiesta.

The Ojude Oba (which in Ijebu dialect means, the king’s fore-court or frontage) is a major festival in Nigeria that began over 100 years ago. It brings together all sons and daughters of Ijebuland in Nigeria and diaspora for a carnival-like celebration of the traditional, cultural, spiritual accomplishments and other values of the Ijebu

nation. During the Festival, various age groups (popularly known as the Regberegbes), indigenes, their friends and associates from far and near all in their colourful costumes and riding on horses - throng the palace of the Awujale and Paramount Ruler of Ijebuland to pay homage to him amidst prayers and other fun-filled activities.

In a goodwill message to the Awujale of Ijebuland, Sikiru Adetona on the occasion of this year’s Festival, the Founder of FCMB Group who is also the the OloriOmo-Oba AkileIjebu, Olasubomi Balogun, expressed his gratitude to the Awujale of Ijebuland, especially considering the paramount ruler’s selflessness in attending to the different requests and yearnings of the people of Ijebuland.

In a message delivered on his behalf by the Group Head, Corporate Affairs of the Bank, Diran Olojo, OtunbaBalogun commended Oba Adetona for his, ‘’distinguished and exemplary leadership over the years which has continued to endear you to all of us’’.

He stated that, ‘’I sincerely appreciate the amazing grace of the same Almighty God we share together, much more for sparing our lives to celebrate yet another Ojude Oba Festival. The Festival provides us- all your children and subjects, the period when we gather to pay you homage and demonstrate

our affection for a very unique monarch, an exceptional father figure and the Paramount Ruler who has continued to endear himself to his people.

Apart from being the OloriEbi (the head of the family, by the grace of Almighty God and interestingly not in contest by all who admire the grace of our God), as your OloriOmoOba (the head of princes and princesses), I will continue to lead the way in showing our appreciation by being very close to you and showing my total loyalty to you’’.

While congratulating the entire indigenes of Ijebuland, the FCMB Founder also prayed that the monarch’s reign would, ‘’continue to be filled with many more years of joy, good health and satisfaction in all that you endeavour to do for your people both at home and in the diaspora’’.

In the same vein, the group chief executive of FCMB Group Plc, Ladi Balogun, congratulated the monarch for upholding the values of Ijebuland and raising the status of the event over the years. He reiterated the commitment of the financial institution to the longevity of the Ojude Oba Festival. ‘’For all true sons and daughters of Ijebuland, the Ojude Oba Festival is more than an event for us. It has become a long-standing yearly tradition we look forward to as a unifying platform and a tourist attraction.

L:R: Adegoke Kazeem, winner, Star United We Shine Millionaires Promo and Patrick Olowokere, corporate communications/brand public relations manager, at a regional presentation in Lagos on Tuesday, 7th August, 2018.

Conoil’s suspension as some investors naturally skeptical about Conoil due to their delay in releasing their financials”.

YTD analysis reveals that

Conoil’s share price reached its climax of N41.38 as at the 22nd of January, however, dropped to N23.00 as at the last trading day before its suspension.

This represents a 44 percent drop in its share price and an 11 percent YTD decline from N28 during opening trading day in 2018.

Dangote raises support for state’s industrilisation

A

frica’s industrial giantDangote Group-said its sponsorship of the ongoing Niger State Trade Fair was part of its commitments to support states toward the industrialization of Nigeria.

In partnership with states’ Chambers of Commerce, the Group has, over the years, sponsored most of the Trade Fairs across the country, a statement from the Group’s Corporate Communications Department said.

It said Niger State has vast arable land, mineral resources and great potentials for industrialization, adding that Governor Abubakar Sani Bello has taken the path to industrialization and job creation through his government’s partnership

with the private sector.

Dangote Group had last year signed a landmark Memorandum of Understanding (MoU) with the Niger State Government for the establishment of a state-of–art and fully integrated sugar complex that will generate over 15,000 jobs.

The Trade Fair, which opened on Saturday July 29, is expected to close on Thursday July 9, 2018.

The theme for the 16th Niger’s National Trade Fair which is holding in the state’s capital, Minna is: ‘Exploring Agriculture and Solid Minerals as Panacea for Nigeria’s Economic Growth and Development.’

Director General of Niger Chamber of Commerce Industry, Mines and Agriculture (NCCIMA), Adamu Salihu, said

the partnership between the Dangote Group and his Chamber is robust as the conglomerate is the biggest promoter of agriculture and solid minerals in Nigeria.

He said about 10 states, 12 Federal agencies and not fewer than a thousand traders were participating in this years’ fair.

Our reporter said the Dangote pavilion at the Trade Fair is a Mecca of a sort as participants thronged the pavilion to have a glimpse of its innovative products, while others want to be distributors for the company.

Some of the products with pocket friendly prices on display include the recently improved pasta (Slim spaghetti and macroni), cement, Dan-Q Seasoning, sachet sugar, salt among others.

Experts task business executives on leadership Josephine Okojie

B

usiness executives and managers have been given a mandate to rethink leadership and imbibe core values that will transform the business landscape, workforce ecosystem and governance across boards in the organisational structure.

According to the experts, critical among the leadership values that will transform any organisation is the mindset of service and the desire to create an enabling environment for a thriving workforce.

The experts made the call during a two-day mentorship

programme tagged ‘Niyi Adesanya Leadership BootCamp’ organised by Fifth Gear Consulting in Lagos and was wellattended by business leaders and senior management executives from different organisations across the country.

“There is a wrong cultural influence on leadership in Africa that starts from our homes and families. That thinking that being a leader makes you superior to followers is something we have held on to for too long and it must change,” Sam Adeyemi, an expert on leadership and renowned clergyman in Lagos said.

Adeyemi charged organisations to position themselves for the coming oppor-

tunities that Africa is set to witness as a result of renewed interest in the continent as the next big thing.

Similarly, Richard MofeDamijo, an actor noted that the entire failure of governance in Africa is a reflection of who we are as a people. He drew parallels between how people are responsible for their families but when elected into public office become irresponsible to the electorates.

While noting that the dynamics of the workspace is changing with the influx of millennials in the system, Ivie Martins Ogbonmwan, human resource manager, charged employers of labours to embrace new cultures.

Thursday 09 August 2018

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HBSAN Lagos members’ forum

H

arvard Business School Association of Nigeria (HBSAN) held its second Lagos Members’ Forum for 2018 on Wednesday, July 25, at the Lagos Oriental Hotel.

Professor Caroline Elkins, founding Director of Harvard’s Center for African Studies, was present at the forum which featured an Economic Outlook Briefing for the second half of the year led by Muyiwa Oni, Regional Head - Equities Research, West Africa, Stanbic IBTC Bank.

Muyiwa reviewed the economic reforms over the past 12 months and highlighted key trends to be closely monitored ranging from reform agenda to drivers of the emerging markets, and the dynamics between the market and political cycle.

He further highlighted that the nation’s economic recovery is dependent on the oil sector. The questions raised after Muyiwa’s presentation reflected the profile of members made up mostly of entrepreneurs and corporate leaders who run some of

the leading companies that drive the Nigerian economy. The forum was brought to a close after members got treated to refreshments served in such manner as to foster networking.

HBSAN is the HBS alumni group of Nigerians and resident non-Nigerians driven by a primary objective to provide members with resources, relationships and opportunities to enable them build and lead organizations that will create transformational impact in Nigeria and beyond.

BUSINESS DAY

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Business Event

L-R: Grace Amurun , area sales manager, Business-To-Business, Honeywell Flour Mills Plc; Modinat Sanusi, best customer, Business-To-Consumer, and husband, Kazeem Sanusi of Opeyemi Baking Industry Limited, and Wale Aregbesola, sales officer, Business-To-Consumer, Honeywell Flour Mills Plc, on their way to Dubai for Honeywell-sponsored trip to Dubai and Ghana, at the Murtala Mohammed International Airport Lagos.

L-R: Collins Onuegbu, Communications Secretary, HBSAN & EVC Signal Alliance; Fola Laoye, Director, Investments Fund for Health in Africa; Fola Ogunsiakan, President, HBSAN & MD Cedar Capital; Caroline Elkins, Founding Director Harvard’s Center for African Studies; Hakeem Belo-Osagie, Chairman, Metis Capital Partners; Prisca Ndu, Treasurer, HBSAN & ED - RRCL, AMCON; and Ladell Robbins, VP, HBSAN, and Capital Alliance, Nigeria.

L-R: Ben Chuks, second runner up, Pen Down For Friendship Competition, Emmanuel Agu, portfolio manager, mainstream lager and Stout Brands, NBPlc, Ikeogu Chinemerem Chibuikem, star prize winner of “33’ Export Pen Down For Friendship Competition Raw Material Development Manager NB Plc ,Uzodinma Onuoha, And First Runner Up, Pen Down For Friendship Competition, Adeoye Emmanuel Aanu, , at the “33” Export City Of Friends Concert in Lagos

L-R: Ladell Robbins, VP, HBSAN, and Capital Alliance, Nigeria; Collins Onuegbu, Communications Secretary, HBSAN & EVC Signal Alliance; Muyiwa Oni, Regional Head - Equities Research, West Africa, Stanbic IBTC Bank; Prisca Ndu, Treasurer, HBSAN & ED - RRCL, AMCON; and Fola Ogunsiakan, President, HBSAN & MD Cedar Capital.

L-R: Olanike Jagun, Channel Development & Special Projects Manager at MTN Nigeria, and Collins Onuegbu, Communications Secretary, HBSAN & EVC Signal Alliance.

L-R: Akin Osutoki, CEO, Richardson Oil and Gas Limited; Muyiwa Oni, Regional Head - Equities Research, West Africa, Stanbic IBTC Bank; and Ajibola Abudu, MD, FieldCo Ltd.

L-R: Afolabi Otufowora, Globacom regional head, marketing communications, Lagos/Ogun, Wahab Osinusi (right), chairman, 2018 Ojude Oba Festival Committee, and Bisi Osibogun, committee member, at the world press conference at the Awujale palace, Ijebu Ode to announce activities for Glo-sponsored 2018 Ojude Oba Festival.

Yomi Badejo-Okusanya , president, African Public Relations Association, during a courtesy visit to the chief of air staff, Air Marshall Abubakar Saddique at the Nigeria Air Force headquarters, Abuja .

16

BUSINESS DAY

Wednesday 08 August 2018

Thursday 09 August 2018

BUSINESS DAY

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Investor

17

In association with

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

Year Open

38,243.19

Market capitalisation

N13.609 trillion

NSE Premium Index

The NSE-Main Board

NSE ASeM Index

2,564.13

1,713.69

1,087.32

Week open (27 – 07–18)

36,636.97

N13.272 trillion

2,659.58

1,614.64

810.39

Week close (03 – 08–18)

36,499.67

N13.322 trillion

2,644.37

1,611.58

809.92

Percentage change (WoW) Percentage change (YTD)

-0.37 -4.56

-0.57 3.13

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

330.69

2,560.39

1,975.59

1,379.74

856.75

297.58

2,526.94

1,782.73

1,376.05

848.13

317.70

2,501.15

1,773.21

1,363.91

NSE Banking Index

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

1,746.68

475.44

139.37

1,642.22 1,643.87

457.89

146.73

461.68

145.30

NSE 30 Index

-0.19

-0.06

0.10

-5.96

-25.51

-5.89

0.83 -2.89

-0.97 4.25

976.10

-1.01 -13.11

6.76

-1.02

-0.53

-0.88

-3.93

-2.31

-10.24

-1.15

Zenith: H1 scorecard validates analysts ‘buy’ rating HEANYI NWACHUKWU

E

arly this week, Zenith Bank Plc released its audited interim report for the half-year (H1) ended June 30, 2018 posting mixed performances across major line items.

The bank’s gross earnings thinned by 15.3percent to N322.20billion as against N380.44billion recorded in the corresponding first-half period of 2017.

The tier-1 lender’s financial scorecard for the H1 period shows it made a profit before tax (PBT) of N107.35billion in H1’18 period against N92.18billion in H1’17 representing an increase of 16.5percent.

Profit After Tax (PAT) increased by 8.5percent to N81.73billion, from N75.31billion in the corresponding first-half period of 2017.

In the review first-half period, the bank’s Cost to Income Ratio (CIR) went up to 49percent from 45.2percent in H1’17; while Loan to Deposits declined to 73.1percent, from 75.5percent in first-half of 2017.

Loans & Advances decreased by 10.9percent to N2.313trillion from N2.596trillion in H1’17; while deposits decreased by 7.9percent to N3.165trillion in H1’18 from N3.437trillion in H1’17.

The bank’s Interest Income de clin e d by 12. 8p e rc e nt to N228.670billion in H1’18, down from N262.257billion in H1’2017.

Loan Loss Expenses decreased by 77.1percent, to N9.72billion in H1’18, from N42.39billion in H1’17 The bank proposes to pay an interim dividend of 30kobo per share which amounts to N9.4billion from the retained earnings account as at the review period.

In H1’ 2017, the bank paid

interim dividend of N7.85billion being 25kobo per share. The proposed interim dividend for H1’2018 represents about 9 percent of a record N107.358billion pre-tax profit for the review first half.

Zenith Bank offers its clients wide range of corporate, investment, business and personal banking products and solutions across over 500 branches, predominantly in Nigeria, with subsidiaries in the UK, Ghana, Sierra Leone and Gambia, as well as representative offices in South Africa and China.

In line with some investment analysts’ feelings about the stock of Zenith Bank, some equity buyers are raising wagers on the bank’s shares.

In their take on Zenith Bank H1’18 result, Cardinalstone Research analysts said they are encouraged by the bank’s asset quality “as impairments charges fell during the period. Based on our last review, our price target for the firm

is N35.23 (BUY).”

In addition, investment analysts at Lagos-based Afrinvest who expect a bullish stock market performance this week “as investors anticipate positive H1:2018 earnings of bellwethers” are positive on the performance of Zenith Bank stocks on their equity watch-list.

Zenith Bank plc ranks in the list of a few banks with low non-performing loans. “Lower impairment and interest expense are expected to boost the company’s bottom-line going for ward,” according to GTI research analysts in one of their notes on “Top-5 Stock Picks”.

They had ahead of the H1’18 numbers review target price for Zenith Bank stock to N33, representing an upside potential from the current price. The analysts’ investment horizon is 12 months.

Also, Vetiva Capital equity research analysts who target price of N35.11 for Zenith Bank stock from last

Monday’s level of N23.95 want investors to ‘Buy’ the stock.

The analysts ‘Buy’ rating for Zenith Bank stocks is because they consider it highly undervalued, but with strong fundamentals. It is also assigned to a stock where potential return in excess of or equal to 15percent is expected to be realised between the current price and the analysts’ target price.

In their equity note titled “Earnings lag marginally as weak interest income weighs” which follows the release of Zenith Bank Plc first-half financials, Vetiva analysts said, “Although bottom line came in behind our estimate following a much weaker secondquarter (Q2) 2018 performance, the bank declared a 30kobo per share dividend for the half year period beating our 25kobo per share estimate”.

“Following an impressive start to the year, we had expected Q2’18 to come in modestly strong – albeit at a

slightly weaker run rate. The second quarter performance however came in much weaker than we estimated. In line with the trend observed across a few banks that have released H1’18 result so far, Non-Interest Income came in much stronger within the second quarter following a ramp up in volume of transactions as well as an increase in E-business income.

“More importantly, asset quality continues to improve as the bank reported a loan loss provision of N9.7 billion – in line with our estimate and significantly better than the N42.3 billion recorded in the corresponding period of 2017,” Vetiva analysts stated.

The analysts have updated their model and revised their estimates to reflect the bank’s earnings deviation in the first-half of 2018.

Overall, they revise their Target Price (TP) to N35.11 (previous: N34.22); noting that Zenith Bank trades at forward P/E and P/B ratios of 3.8x and 1.0x versus Tier I averages of 5.1x and 1.0x respectively.

If the proposed dividend is paid, Zenith Bank will be liable to pay income tax in advance totaling N2.83 billion representing, 30percent of the interim dividend of N9.42billion.

Only the shareholders whose names appear in the register of members as at close of business on August 17 will qualify for the proposed interim dividend as the bank closes its register of shareholders on August 20, to enable the Registrars prepare for payment of the interim dividend on August 24.

Jim Ovia owns 2.946billion units or 9.38percent of Zenith Bank shares while Stanbic Nominees Nigeria Limited accounts for 6.5billion units. The bank’s total market capitalisation is N751.946billion w i t h s ha re s o u t s t a n d i n g o f 31.396billion units.

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Thursday 09 August 2018

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Helping you to build wealth & make wise decisions

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Market bears overturn the bulls ...NSE-ASI down 0.5% w/w

T

he Nigerian bourse pared the prior week’s gains as the NSE-ASI ended the week to 3rd of August 2018 in the red territory as investors reacted to the influx of corporate earnings released during the week.

Though the benchmark equity Index trended northwards on 3 of the week’s 5 trading days, the magnitude of losses recorded in 2 days wiped off all the gains recorded.

Thus, the NSE-ASI was down 0.4percent week-on-week (w/w) to 36,499.7points while yearto-date (YtD) return stood at -4.7percent.

H o w e v e r, m a r k e t capitalisation was up by N50.7billion to end the week at N13.3trillion, largely due to the listing of Notore Chemical Industries Plc (NOTORE) - a fertilizer and Agro-Allied company with market capitalisation of N100.8billion, during the week.

Sectoral performances were mixed with a bearish skew as 3 of the 5 sectors under coverage declined w/w. The Insurance and Consumer Goods Indexes led the losers’ camp, down 1.0percent w/w respectively on the back of w/w price declines in MANSARD (-9.4percent), CUSTODIAN (-5.6percent), INTBREW (-17.6percent) and NB (-1percent), while the Industrial Goods (-0.2percent) Index also trailed, consequent on w/w loss recorded by DANGCEM (-2.1percent).

On the other hand, the Oil & Gas (+6.8percent) Index led gainers, owing to gains in SEPLAT (+13.6percent) and OANDO (+6.7percent) on account of their positive Q2-18 earnings releases, while the Banking (+0.8percent) Index followed, due to buying interest in GUARANTY (+1.1percent) and ZENITH (+0.6percent), even as the wait for their Q2-18 earnings publication continues.

I n v e s t o r s’ s e n t i m e n t remained underwhelming as market breadth closed the week at 0.7x (previously 0.6x); 26 stocks advanced while 37 declined w/w. Activity level was mixed as average volume traded declined 1.8percent w/w to 278.3million units while average value traded advanced 21.4percent w/w to N4.1billion.

This week, we expect the release of GUARANTY, ZENITH, UBA and ACCESS Q2-18 earnings scorecard to shape investors sentiments. Also, we do not rule out the possibility of a further downtrend as investors continue to interpret and study the recent H1-18 earnings reports, to rebalance their portfolios.

Money Market: Liquidity deluge keeps rates at singledigits Liquidity conditions were robust for most parts of the week as money market rates averaged 6.1percent (compared to 8percent in the preceding week), thanks to inflows FAAC disbursements and OMO maturities to the tune of N539.9billion which trumped efforts by the CBN to regulate liquidity levels via an OMO auction carried out later in the week. Average stop

rate at the auction remained at the previous week’s average of 11.6percent.

During the week, the Apex bank conducted its bi-monthly Nigerian Treasury Bill (NTB) auction, wherein it successfully re-financed N215.6bn. Demand was modest with a bid-to-cover ratio of 1.3x compared to 1.0x in the previous auction. Notably, the 364-day tenor was mostly demanded (with a bid-cover of 1.7x compared to 1.0x at the 91-day and 182-day tenors).

The auction was carried out at the following stop rates: 91-day (10percent versus 10percent at the last auction), 182-day (10.4percent versus 10.5percent at the last auction) and 364-day (11.3percent versus 11.5percent at the last auction). Looking into the new week, a sizeable maturity to the tune of N452.0bn is expected to hit the system, we expect money market rates to track this trajectory, barring any sizable mop-up by the CBN Yields: Liquidity sentiments guide proceedings Liquidity sentiments guided proceedings in the week ending 3rd August 2018. Consequently,

expected to remain tied to the spate of CBN’s intervention in the spot and forward market, as well as the better price discovery in the I & E FX window.

US stocks largely bullish despite the escalation in USChina trade concern In the week that ended 3rd August 2018, the trade tension between the US and China further escalated as President Trump threatened to raise tariffs from 10percent to 25% on $200bn of Chinese imports while the Chinese President Xi Jinping equally responded in retaliation, threatening to impose new tariffs on $60bn of US goods ranging from small and medium-sized aircraft and liquefied natural gas to SoyaBean oil and auto parts.

No t w i t h s t a n d i n g t h e above, equities in the US market trended northwards, as the S&P 500 Index added 0.8percent w/w, extending its recent bullish trend to the fifth consecutive week. Also, Apple Inc. (APPL) dominated business news headlines as the tech giant became the first US company to achieve a $1.0tn

RSA fund price of PFAs as at August 3, 2018 S/N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

PFAs CrusaderSterling Pensions Premium Pensions ARM Pension Mgrs.

Stanbic-IBTC Pensions Legacy PFA NLPC PFA PAL Pensions First Guarantee Pension Trustfund Pensions SigmaVaughn Pensions AIICO Pension Managers Leadway Pensure PFA APT Pensions Fidelity Pensions AXA Mansard Veritas Glanvlls Pensions OAK Pensions Investment One Pension Mgrs.

IEI Anchor Pension Managers Radix Pension NPF Pensions

average T-bill yield inched lower by 19bps w/w to close the week at 12.1percent (91-day (down 9bps to 11.2percent), 182-day (down 30bps to 12.4percent) and the 364-day (down 17bps to 12.5percent). In the bonds space, movement on average bonds yield was very fractional, edged higher by 1bp to end the week at 14percent. In the week ahead, we expect fixed income players to trade sentiments around CBN interventions, as well as liquidity sentiments given the N452billion maturity that is expected to hit the system.

Furthermore, the bonds space may witness some bearish activity on the backdrop of the recent bearish sentiments from offshore clients.

Currency Market : Movement across FX windows remain muted In the Foreign exchange market, the naira continued to experience stability as movements across FX windows remained muted. The parallel market traded sideways to settle at N358.5/1$. Elsewhere, the domestic currency saw a 2bps and 11bps downtrend in the Investors & Exporters FX window to finish at N306.0/$1 and N362.7/$1. Looking ahead, the outlook of the naira is

CURRENT PRICE 3.9820 3.9805 3.9034 3.7542 3.6384 3.4638 3.4618 3.3070 3.2793 3.1244 3.0571 3.0502 2.7911 2.7460 2.7331 2.6680 2.5785 2.4792 2.3461 2.0434 1.4670

market capitalisation. This buoyed the tech-laden NASDAQ Composite Index higher by 1percent w/w even as the DJIA Index , which tracks US 30 largecap companies, recorded 5bps marginal gain w/w.

In Europe, trade tensions between the U.S. and China once again spooked investors as the region’s equities closed the week bearish. In addition, the Bank of England (BoE) raised its key short-term interest rate from 0.50percent to 0.75percent at the end of the week, amid Brexit uncertainties. Thus, Germany’s DAX (-1.9p erc ent), Pa n European STOXX (-0.7percent), France’s CAC (-0.6percent), and UK’s FTSE (-0.5percent) all trended southwards w/w respectively.

Emerging markets indices were also largely bearish. Save for Brazil’s IBOV (+2percent), and India’s Sensex (+0.6percent) which trended northwards w/w, China’s SCHOMP (-4.6percent), Russia’s RTSI (-0.6percent), and South Africa’s JALSH (-0.1percent) all ended the week in the red territory.

This week, barring an eleventh-hour diplomatic breakthrough, US sanctions are set to descend again on Iran starting Monday.

•Have you been shabbily treated by your registrar, stockbroke r or other capital market operators?

Let us know and investor will help you investigate and report back.

E-mail: iheanyi.nwachukwu@businessdayonline.com

Forte Oil declares N7.9bn profit after tax in H1’18

F

orte Oil Plc has announced its unaudited results for the half year (H1) ended June 30, 2018.

The first half of 2018 witnessed a more stable operating environment with higher oil prices, foreign exchange (FX) availability and improved petroleum product supply across the country.

Forte Oil Plc H1’2018 financial highlights show its revenue increased by 32percent to N61.8billion compared to N46.7billion recorded in the same period in H1, 2017.

P ro f i t a f t e r t a x f ro m continuing and discontinued operations increased by 93percent to N7.9billion compared to N4.11 billion recorded in the same first-half period of 2017.

Earnings per share grew by 47percent to N1.54 compared to N1.05 recorded in H1’2017 period. Total Assets grew by 4percent to N153 billion, compared to N147 billion

recorded for the same period in H1 2017.

“A s a c o m p a n y , w e commenced our strategic plans and initiatives to re-examine our business model and optimizing our balance sheet through asset disposal and expansion of our downstream operations in Nigeria”, Forte said in a statement following its first-half scorecards.

In May 2018, Forte Oil Plc obtained the approval of the board and shareholders at the company’s 39th Annual General Meeting to pursue divestment initiatives and the company commenced the process to divest its interest in Power, Upstream Services and Marketing in Ghana (APOG).

As at 30 June 2018, these subsidiaries were classified as disposal groups held for sale and as discontinued operations.

Despite the operational challenges and discontinued operations, the company recorded 32percent growth in

revenues, translating to N61.8 billion, compared to N46.7 billion in H1’2017 as a result of improved product supplies.

The company’s administrative e x p e n s e s d e c re a s e d b y 9percent, from N3.82billion recorded in H1’ 2017 to N3.48 billion in H1’ 2018.

The business suffered from huge interest cost occasioned by the non-payment of subsidy, interest and foreign exchange differential. This, the company believes would be reduced or eliminated with the disposal of the subsidiaries and eventual payment of the subsidy.

Looking ahead, Forte Oil Plc said it shall focus on the continuing operations –the Nigerian downstream business “as we continue to drive growth through our expansion drive, backward integration, cost optimisation and the injection of capital through the asset sale to shore up working capital and reduce finance cost.”

Sterling Bank raises N35bn through Commercial Paper

T

ier two lender, Sterling Bank Plc has raised the sum of N35billion through issuance of series 6 and 7 respectively of its N100billion commercial paper programme. The bank raised N15 billion through series 6 and N20billion through series 7.Commercial Papers (CPs) are unsecured money market instruments issued in the form of promissory notes. They are short-term, discounted instruments issued primarily by corporates.

T h e b a n k ’s S e r i e s 6 commercial paper has a tenor of 177 days at a discount rate of 12.7percent. Series 7 has a

tenor of 268 days at a discount rate of 12.6percent. The offer for both issues opened on Tuesday July 31, 2018 and closed on Friday August 3, 2018. The allotment date was Monday August 6, 2018 while

Tuesday August 7, 2018 was the settlement date. The minimum subscription was N5 million.

Sterling bank closed Tuesday’s trading session on the Nigerian Stock Exchange at N1.4, up 4kobo.

FGN Savings Bond offer closes tomorrow

S

ubscription for the Federal Government of Nigeria (FGN) Savings Bond which guarantees quarterly coupon payments re-opened on August 6, 2018. The Debt Management Office (DMO) issues the Savings Bond on behalf of Federal Government of Nigeria (FGN).

The offer,

according to the Debt Management Office (DMO) circular will remain open for five days till Friday August 10, 2018.

The 2-Year FGN Savings Bond due August 15, 2020 is offered at a coupon rate of 10.668percent, while the coupon for 3-Year FGN Savings Bond due August 15, 2021 is 11.668percent.

Savings Bond is an investment vehicle offered by the Sovereign that will ser ve to meet the investment needs of low-high income citizens in the economy by enhancing our savings culture whilst also acting as an efficient debt management tool for the Nigerian Treasur y.

Thursday 09 August 2018

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C&I Leasing assures investors of dividend payment IHEANYI NWACHUKWU

A

n d re w O t i k e Odibi, Managing Director/Chief Executive Officer of C & I Leasing Plc has given assurance that the company will pay dividend at the end of current financial year. The company has not paid dividend for the part years. Otike-Odibi spoke during the company’s ‘Facts Behind the Figures’ presentation at the Nigerian Stock Exchange (NSE) on Tuesday. He explained that the company had focused on growing the business, hence no dividend was paid. According to him, the business is stronger now and is in a better position declare a dividend.

“We appreciate the fact that the business has not paid dividend in the past two years.

Last year, we were all very expectant for that to happen but it did not happen. One of the things we did last year was to set aside money to grow the business. It did not make sense for us to raise fresh capital and then begin paying dividend.

“We needed to plough back funds as much as possible.

But that said and done, our plan is to pay dividend by the end of this financial year.

L – R: Tony Ibeziako, Ag. head, listing business division, The Nigerian Stock Exchange (NSE); Bola Adeeko, head, shared services sivision, NSE; Andrew Otike-Odibi, managing director/CEO, C&I Leasing plc; Alex Mbakogu, executive director /CFO, C&I Leasing plc and Ikechukwu Duru, director, C&I Leasing plc, during the Facts Behind the Figures presentation at the Exchange.

The business is stronger now and cash flows are better.

Shareholders have been more than magnanimous because with the patience they have exercised so far, we will definitely want to reward them with dividend and given the way our share price is moving, they will also enjoy capital appreciation,” OtikeOdibi said.

Speaking on the company’s performance for the half year ended June 30, 2018, the CEO said gross earnings of N12.8billion was recorded, showing an increase of 11 per cent above the same period in 2017. He explained that the gross income was driven by

growth in the company’s rental income on the back of volume increase in its fleet and marine business.

“Profit after tax of N682.2 million, up 17.6 per cent, was achieved through a combination of cost reduction initiatives and optimal utilization of assets. We successfully raised a N7 billion bond, the largest ever raised in the company. The funds will be used for debt refinancing and business expansion,” he said.

The company has projected a turnover of N26.319 billion at the end of 2018, N30.268 billion in 2019, N36.321 billion in 2020 and N45.401 billion in 2011. Profit after tax has been

projected to be N1.522 billion in 2018, N1.750 billion in 2019, N2.1 billion in 2020 and N2.625 billion in 2021.

Looking ahead, the MD/ CEO said the company would improve on implemented cost optimization initiatives; maintain operating expenses growth rate below inflation rate; seek opportunities for growth to improve visibility to customers and potential business partners; digitize operations and entrench collaboration across all units; diversify the outsourcing business to business process outsourcing and expansion of marine business to Ghana.

PFAs’ predominant holdings of FGN paper –FBNQuest Capital

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he assets under management (AUM) of the Nigerian re gulate d pension industry increased by 21percent year-on-year (y/y) in May to N8.14trillion ($26.6billion).

They are growing at a reasonable rate yet, at just 7.2percent of 2017 gross domestic product (GDP), are running well behind many emerging markets. Nigeria was relatively late (2004) in introducing legislation creating a sound structure for regulated pensions. If the industry is to come close to realizing its full potential, forward-looking leadership from the regulator and new products to extend coverage across the economy are required.

The industry’s holdings of FGN paper amounted to 69.3percent of their AUM in May, compared with 73.1percent one year earlier.

The beneficiary has been domestic money market securities, which gained a 2.7percent share over the period.

The role of the PFAs in local debt markets remains pivotal. Their holdings of FGN bonds at end-May represented 44.2percent of the stock of the instruments at end-March.

PenCom’s latest data do not point to a surge of investment in domestic equities. The NSEASI rose by 29.2percent in the 12 months to end-May while AUM in

the asset class increased by 26.7percent over the same period.

Revised Pencom regulations stipulate that retirement savings accountholders under the age of 49 must have at least 10percent exposure to equities by end-2018.

If we add foreign equities to domestic, we arrive at a total of 9.2percent at end-

May in aggregate (that is accountholders of all ages including those with a smaller or zero requirement to hold equities). Those aged 50 or above represented 25.7percent of the total.

PenCom data as at end-May show a total of 8.08 million scheme memberships, implying an average portfolio of N1.01billion.

Introduction to Green Bonds (Part 2)

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his edition of FMDQ Spotlight focuses on the second of a two (2)-part series on an ‘Introduction to Green Bonds’.

The first part, published in the June 2018 edition of FMDQ Spotlight, focused on green bond principles, use of green bond proceeds, management of green bond proceeds, benefits of green bond to issuers and investors, amongst others.

This edition concludes the 2-part series on the ‘Introduction to Green Bonds’ and will focus on parties involved in a green bond issuance, green bond taxonomy and the importance of green bonds to the Nigerian debt capital markets.

By way of a reminder, green bonds are fixed income securities issued to raise capital specifically to support climaterelated or environmental projects. Ideally, bonds categorised as ‘green’ imply that proceeds raised from their issuance will be tagged for projects intended to benefit the environment.

Green bonds could be issued by financial, nonfinancial and/or public entities.

Parties involved in a Green Bond Issuance Issuer: Any company, government agenc y or financial institution that develops, registers. and sell bonds to finance green projects that generate climate or other environmental benefits. The issuer usually selects a financial institution as an underwriter to administer the issuance of the bond.

Investors: Are individuals, companies, institutional investors (e.g. hedge fund managers, insurance companies, asset managers, investment companies, investment trust companies, mutual fund managers, pension fund managers, sovereign wealth fund managers, endowment fund managers, etc.) who buy green bonds with the expectation of a financial return.

Credit Rating Agencies and Auditors: Are institutions responsible for verifying compliance with the standards for green bonds or established credit standards Regulators: Financial authorities responsible for regulating capital markets; they examine the qualifications of underwriters as well as the securitisation of credit assets and bonds’ custodial arrangements; and regulate the issuance, clearing and settlement provisions.

Regulators include securities commissions and other regulatory bodies, including exchanges and central banks.

Credit Guarantors and other Intermediaries: Creditor guarantors are institutions that provide credit guarantees and credit enhancement products in secondary markets, thus modifying the risk profile of the underlying bond. A wide range of financial intermediaries offersavarietyofintermediation and credit enhancement services, including raising investor capital, establishing special purpose vehicles etc.

Green Bond Taxonomy The aim of the green bond taxonomy is to provide broad guidance to prospective green bonds issuers and investors.

The green bond taxonomy helps to break down green bonds projects into categories which relate to what is being financed rather than the industrial sector classification of the issuer.

Importance of Green Bonds Green bonds have grown rapidly in recent years and emerged as an effective investment tool to finance critical infrastructure needs such as railways, roads, airports, buildings, energy and water, and at the same time, achieve positive returns for the environment and society. Investors in the green bond markets have become increasingly interested in holding green bonds within their own portfolios.

The appeal of green bonds to investors includes: making investments with an environmental impact; being at the forefront of climate finance; sending a signal to stakeholders of their commitment to responsible investment; and aligning their investing activities with their own principles.

However, the developing green market must deal with several challenges such as clear definition of what is considered “green”, procedures on how the green bond proceeds should be used, tracked, managed and reported, and the lack of verification requirements over the information reported.

Given that green bonds are long-term financing vehicles, the reputational risk to issuers extends for many years across the life of the bond and beyond.

However, being an investment instrument for sustainable projects, green bonds present an opportunity for sustained and better returns in future.

The introduction of the first green bond into the Nigerian DCM, by the FGN, provides an alternative means of financing capital intensive green infrastructure projects in Nigeria, and presents opportunities to fund solutions to environmental and climate challenges, invariably contributing to Nigeria’s development.

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INTERVIEW

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Nigeria’s growth prospects impeded by power sector – World Bank Vice President …needs to move away from growth model that is too dependent on oil Following his appointment in June, Hafez Ghanem, the new World Bank Vice President for Africa visited Nigeria a few days ago and held talks with government authorities, private sector operators as well as civil society groups on how the Bretton Woods Institution can further assist the country in dire need of development. In this interview, Ghanem tells Onyinye Nwachukwu, BusinessDay’s Abuja Bureau Chief that Nigeria’s growth prospects, largely impeded by the Power sector is slowing down Africa’s rising project as he discusses the outcomes of his three days visit....Excerpts Can you give us insight into your visit to Nigeria? started my new position as the vice president for the Africa region of the World Bank about a month ago and of course I wanted to come as early as possible to Nigeria because Nigeria is a big and important country in Africa. At the World Bank, our mission is to fight poverty, to support economic growth and development, that is what we are trying to achieve in Africa. And obviously given the size and importance of Nigeria, if you want to fight poverty in Africa, drive economic growth in the continent, you need growth and development in Nigeria. And so I wanted to come here to listen to our Nigerian counterparts about their views about how the World Bank can serve them best, how the bank can contribute to the growth and development and poverty reduction in Nigeria.

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Who did you meet and what conversations did you have with them?

Well, I met with a large number of people, I met with the Vice President, minister of finance, minister of power, minister of health, I met with the representatives of civil society, representatives of the private sector, the think-tanks, the minister of budget and national planning. I met with several governors and the conversations were all about the types of projects and programmes that the World Bank can do to support Nigeria’s development. We focused on some specific questions that were raised. The first question was how we can support human capital development in Nigeria. You know

in today’s world, the best investment for development is human beings.

So for example we talked with the minister of health and the Vice President about how we can improve nutrition, to eliminate stunting in the country. We talked also about the projects for fighting malaria, for ending polio, so those are the projects and programmes that we are working on, we have nutrition project and malaria project and we are very involved in polio vaccination. We also discussed education, essentially in today’s world how to develop the digital economy in Nigeria, how can the World Bank do to support development of the digital economy in Nigeria. Nigeria is a very young society with a lot of promise, a lot of energy, a lot of imaginations, a lot of capacities among the youths and how can we channel all of this energy and capacity towards development through more use of modern technology. So those were the kinds of issues we were discussing. Today, for example with the governor from the North East, we were also discussing what can a development Organization like the World Bank contribute to this instability in the North East.

You also met with the finance minister, what did you discuss with her?

The meeting went very well, with the finance minister, she is very much focused on how to accelerate growth, she is very much focused on not just fast growth but stable and sustained growth, meaning that we can look into the future and see lasting impact. So we had this discussion about how the World

Bank can contribute to sustained growth, one of the big bottlenecks for growth in Nigeria is the power sector and we had a discussion on that and how the World Bank can support that sector. We already have two projects that were approved last June, one for rural electrification and one for transmission and we discussed more on how we can attract more private sector investment in the power sector and so that was the discussion we had with the minister of finance and I’m looking forward to continuing this dialogue and discussion, so it is a very positive outcome.

The World Bank has given so much assistance in Nigeria’s power sector, particularly the power sector recovery programme, just wondering whether the Bank is planning additional support to help the struggling sector.

Right now, there are two projects that we are going to start implementing soon, the first one is on rural electrification, and that is linked by the way to the digital economy that we are talking about, leapfrogging into new technologies using power all over the country to help the economy. It’s a $350million to finance electrification in rural areas. The other project is for the transmission lines. We are happy to do more work in the power sector because it is so important, and especially now, all over the world, we see more and more private investments in the power sector, so we have been discussing and we had our colleagues from the International Finance Corporation which is the private sector arm of the World Bank who were with us in all of the meetings and we are trying to see how we can, using a whole World Bank group, that is, the World Bank itself and also the other arms, the international finance corporation and the Multilateral International Guarantee Agency to attract more investments in the sector. It is very important and we believe that we are on the right track, and we will be happy to do more.

The World Bank seems to be encouraged by Nigeria’s economic growth rebound after a difficult recession. What is the bank’s growth projection for Nigeria in 2018 and what do you see as major risks to your projection?

Our growth projections in general for Africa have remained typically the same around 3 percent. I think growth in Nigeria has been around 2 percent. What we have seen in the

Hafez Ghanem

past both before and after recession is that growth in Nigeria has been very much linked with oil prices and that is really what everybody, the government and all its partners is trying to diversify the economy to the point where it will not be so affected by oil prices. As we look in the short run for Nigeria, we see is slow improvement in the growth rate but of course those projections will change if oil prices change. So that is really what is going on right now. We see a rebound as you just said, you were in recession, but now you have growth, it is still 2% which is very low, our hope is to reach more than 5% over the next two - three years.

Are you saying that our over dependence on what happens in the oil market is a major risk?

The oil market continues to be a major risk for Nigeria and it is not Nigeria, many countries in Africa. We are very dependent on commodity exports where there is oil, coffee, cocoa or copper, so that is really the challenge for all of us, for all of our continent and Nigeria obviously. The challenge is how can we reduce the dependence on commodities and how can we leapfrog into the fourth industrial revolution today, how can we leapfrog into the digital economy, where our youths deploy the use technology to create revenue, to create opportunities, to create income. To do this we need to invest in three things, the first area is obviously the infrastructure that is needed for technology, you need power, you need telecommunications, you need good quality at reasonable prices, you need to have competition in that area. Second, you need people, that is the need to invest in people who are able to use the technology, the human capital quality,

whether it is health or education, it is really critical to getting growth. And the third area is to get a regulatory framework that encourages entrepreneurship, that encourages young people to move into this area.

We need to move away from growth model that is too dependent on commodities to a model that more dependent on people and on the use of technology. I think that this is the only way that we can insulate our growth rate from changes and fluctuations in the commodity market.

Is the bank concerned that Nigeria’s growth is still fragile and what does this concern means for the region?

One of the main areas for the region, like I said, if you want to maintain faster growth in the short to medium term, you will need to raise investments. The region needs a very huge amount of investments especially infrastructure. We are facing those concerns

and the governments are not been able to finance all the infrastructure needs. So one of the areas that we are working on with all the countries in the region is what we call mobilising finance for development, how can we attract more private sector investments into those infrastructure sector. We have seen a lot of successes in attracting investments in energy for example, in transport, in telecommunications obviously, so what we see for the future is trying to get more and more private investment into the region in infrastructure especially and other sectors.

We also focus a lot of our public resources on human capital development, on health, education and also on social protection. One of the projects that we discussed with the Vice President is the project of cash transfers, to support social protection programmes and sections of the society. So this is really the challenge today, to invest on human capital, in social protection and to put in place a system that attracts private investments in the infrastructure and technology sectors.

Also, when you talk about growth, it is not just any growth but inclusive growth, growth that affects everybody. Inclusive growth means expanding the middle class, getting people out of the low classes into the middle class, for this to happen, you need to empower women, to have gender equality and I tell you why.

If you look around the world, most middle class families in the Asia, in Latin America, in Europe have two edged sword - a man and a woman, so unless we empower our women, and give them opportunities to go and work and develop themselves whether in the labour market, in commerce, in business, we will never be able to have really inclusive growth unless our men are twice as efficient than the other men around the world which is not the case. So

Generally we see that Nigeria has made a lot of improvement in the ease of doing business, a lot of reforms and we have seen Nigeria‘s rank improving

this an important challenge, and I ask myself, is it possible to empower women who are always having children. Today the fertility rate in northern Nigeria is 7 percent and the rate in southern Nigeria is 4 and half percent, which means that women are having babies every year. How can women who are having birth every year be fully empowered to participate in the economy, this a real problem, so we need to focus on how to achieve growth rate and get women to seize more opportunities in the labour market and that will require investments in the female reproductive health and child nutrition. We are having a fertility rate problem, we also have stunting of Children, 40% of our children are stunted, they are malnourished, how can we work to provide these female reproductive service and also work to provide nutrition for children, these are the areas that we need to focus our energy on if we want to achieve rapid growth in Africa.

Can you speak to the progress made by Nigeria in the ease of doing business and what more the government can to create a business friendly environment?

Generally we see that Nigeria has made a lot of improvement in the ease of doing business, a lot of reforms and we have seen Nigeria‘s rank improving. But we still see sort of bottlenecks, if you have to get more businesses and investments into Nigeria, one of bottlenecks is the power sector, access to finance also is an issue and I have to say also that given the size of Nigeria, and given the dynamism in Nigeria, it should be able to attract a lot more investments. It’s a country that is very attractive for investment, so in general, we have seen a lot of improvement over the last couple of years, I think that you still need to do more, especially in the area of access to electricity and the cost of finance.

The World Bank has expressed concerns on rising debt levels in majority of low income and developing economies. How do you access Nigeria’s debt levels and do you foresee any vulnerabilities?

There are two aspects to that. As I was saying before about maximizing finance for development, we believe that we should do our best to try to finance these investments without incurring debt. And it is by getting the private people to finance investments. Most governments around the world today are facing very tight budget constraints, but

at the same time, we have financial markets that are quite liquid. So, let us attract private sector to finance those investments without governments having to borrow. So instead of me borrowing to build an airport, I can get an investor to build the airport and run it, I get the service without running into debt. So this is the one way that we are looking at effectively funding development.

The other aspect that when we look at the whole financial sustainability

and the capacity of countries is domestic resource mobilsation, how can you mobilize more resources domestically through your tax system rather than increasing debt. So those are the two areas that we have been working on with the countries in the region, attracting investments so that governments do not have to spend and also helping governments put in place systems so that they can raise more resources domestically without incurring debts.

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GARDEN CITY BUSINESS DIGEST Rotary lays out N35m plan in Port Harcourt as bone marrow transplant tops list IGNATIUS CHUKWU

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Rotary club in Port Harcourt, Rivers State, has laid out N35m plan of execution in the next 12 months, and this is topped by an ambitious project to send at least one sickle cell patient for bone marrow transplant. This is said to be the only cure available for the many victims in the oil rich state.

This plan was unveiled last weekend when Tamunoibim Semenitari (Ibim) was installed as the second president of the Rotary Club of Port Harcourt Cosmopolitan (9141) at the Trans-Amadi area of the Garden City. Top on the list is a plan to send at least one sickle cell patient to have bone marrow transplant which costs a minimum of N10m.

The former commissioner of information in Rivers State, former managing director of the Niger Delta Development Commission (NDDC), a renowned journalist, and the publisher of a business news magazine (Business Eye), named the projects to be executed by the one year old Rotary Club of Port Harcourt Cosmopolitan (District 9141) to also include training of one health worker on sickle cell costing N3.224m.

Other projects listed by Ibim (as she is popularly called) include provision of automatic air

Ibim Semenitari (middle) being decorated as 2nd governor of Rotary Club of Port Harcourt Cosmo-

dryer to neo-natal and intensive care units of Braithwaite Memorial Specialist Hospital (BMSH) and the University of Port Harcourt Teaching Hospital (UPTH) at N3.6m; training of traditional and faith-based birth attendants at cost of N6.682m, and cancer screening and immunization (with HPV vaccine) at N1.5m.

She also named complete Human papillomavirus (HPV) vaccines for 100 persons at N2.46m, fight against drug abuse and mental health awareness campaigns at N1.68m, water and sanitation campaign N1.5m, basic education and back to school for 250 children

at N3.5m, and micro loans to 30 women at N50,000 each, totaling N1.5m, totaling N34.62m. HPV is indicated as ‘the most common sexually transmitted infection.

It is usually harmless and goes away by itself, but some types can lead to cancer or genital warts.’

Calling for support to raise the funds, the new president said; “In front of you is a leaflet with a pledge form attached.

In it you will find details of our projects for the year. Please join us as we improve pregnancy outcomes and ensure safer deliveries by training traditional and faith based Birth Attendants. Kindly join us protect our

women through the screening for cervical pre-cancers and help provide HPV vaccines for at risk young females in inner city areas.

“Partner with us to provide automatic air dryers to neo natal and Intensive care units or help us support bone marrow transplant for at least one indigent patient.

“Let us together address issues of drug abuse and mental health awareness or help us teach proper sanitation to our children. Our communities would be better when each of us drops a penny in the basket.”

The first president, Iyalla

Harry, former CEO of Rivers Micro Finance Agency (RIMA), who handed over to Ibim on the glittering night, admitted that wearing the presidential crown of Rotary was scary, but said the woman coming after him was a ‘volcano in diplomacy, energy and right temperament’, attributes he said were needed to lead people and raise funds to do public good.

He said the club had to delist 18 members out of the initial 35, saying economic hardship was at the back of all the troubles. He however said District 9141 raised many donors and executed many projects winning Rotary’s presidential citation in just three months of existence. He named some of the achievements as breast cancer awareness, peace initiatives, campaign against soot in the state, war against polio, etc.

He called for more partners to save humanity, saying that the world was full of challenges at global level that could only be tackled with humanity.

In his address, the guest lecturer, a royal father from Ethiope West local council area of Delta State, Noble Eshemitan, recounted the goodness in Rotary and revealed his service to humanity bounced back to boost his hotel business. “My hotel which started with 12 rooms without a hall or board room, now occupies a larger land space, has 52 rooms, a hall and a boardroom”

Where to find real governors and presidents? Rotary!

Port Harcourt by Boat With IGNATIUS CHUKWU

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ts not in APC, its not in PDP! People of the world (especially Nigerians) are usually obsessed with their governors and presidents probably because the lives of the citizens seem to revolve around these rulers. Christian believers may not agree with this view because they think their kingdom is in Heaven and their affairs are directed from above. To them, they have ministers of God and must not be disappointed.

So, while the governor of a Nigerian state or the president of Nigeria is daily under insult, disrespect, and disregard, the presidents of Rotary clubs around Nigeria and the District Governors ahead of them enjoy unprecedented reverence. When you are in

their environment (event), as we were last weekend for Ibim, you will find genuine love, respect and admiration for the president. People dress to the hilts. The best robes any machine or hand could make would be on display; class would be on display; decency and etiquette would be on display, and nobility would flow.

Come and see hugging. You do not need to wear your own perfume if you can’t afford the topmost. Just hug round and your associated aroma would go with you for days. A Rotary planet may be a summit or confluence of perfs.

Now, what does the regular governor of your state or president of your country do to you? He causes violence to get into office, he cons you into voting for him, he sits over a budget you do not see or understand, he controls billions of your naira and essence of your living, he gives you projects that collapse soon after he leaves office, he chooses who to give jobs but gives misery without discrimination, he sends the police to injure you, he goes with jackboots that crush your feet along the hihway, he blares

siren and drives you off the road, he allows ponds on the roads, he allows thieves on the highway, and encourages hunger to diminish you. He allows diseases to ravage you.

He causes your young ones to flee to lands unknown in search of greener pastures that often turn dry yellow and often land them into terrorist cells in Libya-like enclaves.

Then, after four years, he puts it to you that you were made happy, that he has done very well, so well that you should be glad to vote him back. You are so confused because when a lie is told a thousand times, they say, it sounds true. You look at options but you see only evils to choose the lesser.

You vote, just to get done with it, or you find they voted on your behalf. Then, above all other bitters, the governor or president wants to sit tight, to serve one term, two terms, and imaginary/illusive third term or must install his successor/ in-law/next-of-kin.

But, what do you find at Rotary? A reluctant president as Innocent Iyalla Harry (first president of PH Club Cosmopolitan) would call himself. He or she is allowed

to pick his/her team, they draw their programme and raise their budget. They are credible, popular, and well loved. Everybody is helping them, hugging them. They are attacking the very heart of the problems of the society, diseases, rare infections such as sickle cell and cancer or polio; they are looking for the very needy, those who have no voice, those who have been forgotten by the other (political) governors and presidents with our budgets. The more you have nobody, the more you have Rotary. By the time you have been touched by Rotary, any time you hear that a governor or president was passing by, you would wave and wave. You will pour tears of joy and admiration. That is how a governor or president should be trusted and loved.

Above all, the Rotary governor or president serves for one year and is happy to bow out.

Now, can we exchange the two governors and presidents?

Can the Rotary governors and presidents move over and govern us for one year and the government governors govern at Rotary for one year and learn? Don’t ask what

they need to learn: how to put society above self, how to understand public interest and national interest, how to be voice for the voiceless, how to work without reward (not like one governor that refused to take salaries but ended up swallowing the entire treasury), how to love those you serve and how to serve those you love, how to be prompt in office, etc. They would learn the essence of ‘A Profile in Service’ as HRM Noble Eshemitan has learnt.

These thoughts flowed freely on Saturday when Ibim Semenitari was installed as President of Rotary Club of Port Harcourt Cosmopolitan 9141. Her Dad is a deep Rotarian and once a District Governor even though he was also a Deputy Governor of the political world. We saw a meeting point. So, now, Ibim is president. If you are bruised by the other president, go get some love, some balm, and some soul from our own president in Rotary. If you want to find real governors and presidents, those who can rule our hearts, its not in PDP or APC, it’s in Rotary.

Rivers indigenes disrupt activities at NDDC office IGNATIUS CHUKWU

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ctivities at the headquarters of the Niger Delta Development Commission (NDDC) in Port Harcourt were, last week Thursday, disrupted by some indigenes of Rivers State. Carrying banners and wearing t-shirts inscribed “Kalabari Indigenous Movement (KIM)”, the protesters were mostly from the Kalabari ethnic group.

They said the protest, which started at eight o’clock in the morning and terminated at about 12 noon, was meant to peacefully air their displeasure over lack of NDDC-instituted development projects in Kalabari.

“We came to protest to NDDC for noncompliance and lack of development in Kalabari nation. We came for the government to listen to us and start development in our place,” said Charles Warmage, one of the key protest leaders. “They promised us trans-Kalabari healthcare centre, yet up till now we have not seen it. We also want pipe-borne water and scholarship for our brothers and sisters.”

However, the protest took a grim outlook when security operatives consisting of mobile policemen and those of the Nigerian Security and Civil Defence Corps (NSCDC) began dispersing the crowd using teargas.

But, it was until an assistant to the NDDC managing director, Nsime Ekere, called and separately addressed the leadership of the group that the protest came to a halt.

“We came for a peaceful demonstration and we entered peacefully. While we were inside, we saw some policemen and (other) security men. We don’t know who sent them to come and destroy our peaceful protest. They even hit me and started to shoot teargas at our people.

“The people calmed down and received the teargas; not one teargas, not ten. They (police) pursued them (protesters) up to GRA junction shooting them teargas, yet they were peaceful.

“But the office promised us that they are going to invite us based on the communiqué we presented on what we want from government. It was the SA on youths that received us on behalf of managing director of the board,” said Sepiribo Douglas, the president of KIM.

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Investing in Rivers State As NLNG creates jobs:

Rivers seeks collaboration for youth capacity development Ignatius Chukwu & Innocent Eteng

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t is the belief of the Rivers State government that nourishing citizens to peak capacity without collaboration, especially with the private sector, is near impossibility.

This partly informed the reason it called on private companies operating in the state to partner with government in increasing youth capacity and general development in the state.

“If every company is doing this (collaborating with government) we would have no youth on the streets,” the governor, Nyesom Wike, said.

The governor made the call in Port Harcourt, last week, through the Commissioner for Social Welfare, Damiete Herbert-Miller, during a graduation ceremony organized by the Nigeria Liquefied Natural Gas (NLNG) for 84 beneficiaries of its Youth Empowerment Scheme (YES) who were trained in areas ranging from farm management to catering, automotive/ mechanical electrical, filmmaking and advanced welding.

“We therefore call on other companies operating in the state to collaborate with the state government for job creation for our youths,” adds Lawson Ikuru, the Permanent Secretary at the Ministry of Employment Generation and Empowerment.

NLNG’s YES project is part of its corporate social responsibility programmes where indigenes of host communities are trained for between three to six months and equipped with requisite tools (“starter packs”) - depending on their chosen vocations - to start off as self-employed.

Each participant received a

Governor Nyesom Wike

starter pack worth not less than N500,000 excluding N15,000 monthly allowance throughout the training period.

“They gave me minipro HP laptop, an 800D Canon camera for photography and video coverage, a tripod stand and other accessories like extra batteries and extra lenses.

“When I checked the price, about N500,000 was the cost of everything. It is wonderful because they even gave us N15,000 monthly allowance for our transportation.” I am happy because I hope to be like Steven Spielberg (famous American filmmaker).” said 21-year-old Candace John-Jumbo who was trained in filmmaking.

Ikuru said by partnering with government to equip youths this way, youths’ values and attitudes change, leaving them with no excuse for success. He said the training and empowerment has given them a standing point.

“Let me use the words of Archimedes; ‘Give me a place to stand, and a lever long enough, and I will move the world. Today you have been given a place to stand. Our expectation of you is that you move your world having been given a place to stand as your successful graduation from this programme brings you to becoming an entrepreneur and manager of your own enterprise,” he said.

Meanwhile, the YES programme

has, between 2004 and 2014, trained and empowered 900 beneficiaries over a period of 10 years.

“In 2004, when Nigeria LNG Limited launched the Youth Empowerment Scheme, the company clearly demonstrated a commitment to sustainable human development and alleviation of high rate of poverty in our host communities and nation.

“We had within this period trained youths of 18 to 35 years in hairdressing and cosmetology, catering and events management, fashion designing, photography and video production, welding and fabrication, woodwork and furniture making. Over 900 youths were trained across our 110 host

a and pipeline communities in Rivers State and some of them are employers of labour,” said Sadeeq Mai-Bornu NLNG’s deputy managing director.

But for efficiency and sustainability, Mai-Bornu, who spoke through Akachukwu Nwokedi, the company’s general counsel and secretary, said the scheme was refocused in 2014, accommodating partnership with expert training institutions.

“In 2014, we refocused the Youth Empowerment Scheme towards equipping the youths with skills in relevant industries that will enable them compete favourably for jobs anywhere in the world. For the 2017 scheme, NLNG signed a contract with five training centres to offer training opportunities to 267 youths in 110 host and pipeline communities over a period of three years.

“The centres are Plantgeria Nigeria Limited for automotive training, Topearl Catering Institution for catering and hospitality management, JB Multimedia Limited for video production and photography; Lincoln Continental Limited for advanced welding; and Farmers’ Business School for farm management.

“They (beneficiaries) are now poised to forge ahead; to conquer poverty and wants and build a new world of self-sustenance and self-sufficiency; to contribute to (the) development of their communities, state and nation. I say a hearty congratulations to you all!”

Mai-Bornu said.

“I was looking for a job, even a minor job to take care of myself.

But now I have hope because after selling the fish, I will expand it. They gave me 1000 fingerlings, but I am expecting to increase it to 2000,” said excited 26-year-old Diema Abbey who was trained as a fish farmer.

Rule of law is biggest catalyst for investment – Wike

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overnor Nyesom Wike of Rivers State recently warned that there would be no real progress and development in Nigeria with clear obedience to the rule of law. He has often cried out against attempts to ignore court orders or application of Gestapo methods in getting the will of the government of the done.

When he granted a special interview to BusinessDay team in his office last month prior to his award as Governor of the Year in the States Competitiveness and Good Governance Award which held at Congress Hall of Transcorp Hilton in Abuja, the governor revisited the worry of rule of law.

He said: “All things are predicated on the rule of law. You can-

not have good governance when you do not have rule of law. They go together. If we get the opportunity, we continue what we are doing.

Even if you get 20 years, it will not be enough because the state is expanding. If you do roads, you cannot say it is enough.” Rule of

law, to him, is the unseen canvas upon which you write your development memo.

Now, on Tuesday, August 7, 2018, news broke that the National Assembly, the Fountain of Law for the good governance of the land, was sieged by operatives from the Department of State Service (DSS).

Gov Wike was one of the first to react in defence of democracy.

He said; “All well meaning Nigerians should stand up against this dictatorship. All over the world this has never happened.

“Nigerians should not stand aloof and watch what is going on. This will consume so many people if we don’t rise against it.”

Governor Wike called on National Assembly members to stand

firm in defence of the nation’s democracy. “All members of the National Assembly should resist that anti-democratic attempt and stand-up to defend our democracy “.

The governor berated his colleagues who are happy with the anti-democratic plots of the APC Federal Government.

“Those governors happy with what is happening today should know that it will be their turn tomorrow. The same cabal will turn against these governors.

“This is condemnable and unacceptable to us. You must follow setdown rules.

You cannot talk about fighting corruption and refuse to respect the rule of law. “

Innovation

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

Broadband Infrastructure

24 BUSINESS DAY

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World Cup fans dominate mobile app downloads in Q2 FRANK ELEANYA

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ootball fans around the world that followed the recently concluded FIFA World Cup in Russia contributed largely to the dominance of sports based mobile applications in the second quarter of 2018.

The mobile apps in that category had a lion share of the total $18.5 billion consumers spent across iOS and Google Play stores. This represents 20 per cent more than any quarter before.

The global app market data was released by AppAnnie, a leading app business provider, in August, 2018.

The data showed that there were over 28.4 billion apps download globally across the iOS and Google Play in the second quarter, up 15 per cent year-on-year.

The growth is remarkable largely because it was driven by new downloads that do not include reinstalls or app updates.

Google Play widened its download gap with 25 per cent growth year-on-year over Apple’s iOS. It exceeded 20 billion in the second quarter of 2018, represent-

tuned in around the globe on their mobile devices to live stream matches, check stats and share commentary on social media,” AppAnnie noted.

Although Google Play had the most mobile apps download, consumers spent more in the iOS App Store making its revenue to spike 20 per cent year-on-year.

Sports also dominated growth of consumer spending in the quarter-overquarter on iOS. Sports mobile apps accounted for the

third largest contributors to absolute growth in consumer spend and the third largest growth in market share of consumer spend quarter over quarter in second quarter of 2018.

Games shared the spotlight on Google Play with social, music and audio apps seeing the largest absolute growth in downloads quarter over quarter. Social and Music and Audio also ranked first and second for growth in market share quarter over quarter.

Nokia introduces ‘Snake’ to Facebook’s new camera AR platform CALEB OJEWALE

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he classic snake game, which many old Nokia users may remember, has been updated with augmented reality, now having Snake Mask and Snake Real World filters, as the phone maker attempts to bring the iconic game to a new generation of fans.

H M D Gl o ba l , w h i ch currently makes Nokia phones, said in a statement, that “the addictive premise of the game remains the same, but with a fun AR twist fans can now be the apple munching Snakes. Snake Mask utilises new Facebook AR technology to bring Snake to the widest audience possible.”

The all new Snake Mask uses the front-facing camera of Nokia smartphones running Android™ to allow players to turn themselves

Thursday 09 August 2018

Design Like Apple!

EUCHARIA AMANAMBU Amanambu, a technology enthusiast is the CEO of KariXchange, a technology start-up geared towards building scalable empowerment platforms. She is on twitter as @ euchariAmanambu and can be reached via email; eucharia@ karixchange.com

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ing a 160 per cent rise in the same quarter.

Partly buoyed by the recently concluded FIFA World Cup in Russia, Games, Video Players & Editors and Sports apps drove growth in Google Play downloads quarter over quarter in the second quarter.

Sports downloads had the most effect on iOS where they were the largest attractions for new users.

“The World Cup presented a unique opportunity for app marketers as soccer fans

into the iconic Snake character, reacting to the motion of the player’s face.

Snake Real World activates the rear facing camera.

To celebrate the release of the updated Nokia classic, comedian and YouTuber Matt Keck, the man behind the accidentally hilarious viral sensation “I’m a Snake” which received 23 million hits on YouTube, tested out Snake on Facebook camera. Matt has recreated his own viral hit, this time using the Snake Mask filter to show off the brilliant new features.

Pekka Rantala, chief marketing officer and executive vice president of HMD Global said: “The world famous game snaked its way back into people’s hearts at MWC in 2017, when we announced Snake for Facebook Messenger.

It was designed for a new social generation; fans could invite friends to play

and share scores making it even more playable than first time round. This was the first time in Snake’s history that it went onto a universal channel, rather than a device preload, and it gained 121 million play-

ers around the world.

Now we launch an even more immersive experience to fans by allowing them to be the snake itself and eat the apples with filters available on Facebook camera – here at HMD Global we are bringing the much-loved gaming icon to a new AR era” he said.

The camera effect can be accessed via the Facebook camera and is universally available, not just to Nokia smartphones, but also available on Android and iOS. HMD Global is encouraging players to share the most unusual places they play the game using the hashtag #imasnake2.

How to play 1. Open the Facebook app 2. Click the camera Icon top left to open Facebook Camera 3. Scroll to the Snake Mask 4. Start to play!

Bank IT Security

ust last week, Apple hit the $ 1 trillion capitalization mark and for Apple’s shareholders, it was a great day! Tim Cook did rightly call it a milestone and not a focus. Apple is soaring towards another trilliondollar mark.

Apple is not the first company in the world to reach this mark. A few companies had met or surpassed it if the valuation as at today is taken into consideration, and with inflation adjusted. Most of these companies rose through material wealth, especially by oil trading.

However, the 20th and 21st century ushered in new ways of wealth creation. Apple and other tech giants have proven that knowledge creates immense wealth, and it is indeed the future.

How do we create knowledge-based wealth for ourselves, and for the economy?

One of the many reasons Apple is winning is because it perfected product design and user experience. Like Apple, how then do we leverage on these in order to excel? I will take three-product design areas all centered around user experience.

1. Aesthetics/Ease of use: It was Leonardo DaVinci who said, “Simplicity is the ultimate sophistication” and Steve Jobs held this close to his heart. Apple products are beauties to behold, yet their design look very simple. A lot of work goes into their products to achieve the “simple, yet sophisticated look”.

When it comes to aesthetics, a product owner must connect a product to its intended audience. The design quality of a product says a lot about the business and its attention to user experience.

When designing a product, an app for instance, it must be easy on the eyes, have simple but excellent color blends-two color blends are usually enough.

Functionalities should be very easy to navigate and must work as intended.

When inside an Apple platform, for example, Apple Music, one does not need a manual to know what to do.

Apps should be easy to use, buttons strategically placed for users to feel at home. If for any reason, users need a

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

manual to navigate through an app, then the business has failed on design.

2. The Chicken & Egg Problem: Apple needed to revolutionize their business, so Steve Jobs and his team provided other valuable services for their users by creating platforms-a multiuser arrangement that links users to services or service providers; Apple Music, App Store, Uber, Airbnb. These platforms provide value for both suppliers and users.

Importantly, before Apple Music took off, the platform had almost all genres of the top music in the world, thus it attracted a lot of users and became widely successful. Of recent, I looked at a platform that was launched in Lagos.

The product owner made a most fundamental error.

The app was to link users to needed services. However, these listed services which are the main attraction of a platform were so limited in number that the app did not hold my interest for over a minute. There was nothing in there to attract users. The product owner must go back to the drawing board. To launch a business like that, one needed to ensure that the services people are accessing are varied, in relative abundance and easily available to the target market.

3. Monetization: Monetization must never be a design afterthought; in some cases, it drives the design.

Though Apple Music was created to curb the copyright issue in the American music industry and provide easily accessible music to consumers, Apple also sought to make money for its effort. So, the ultimate design of creating value for both suppliers and consumers whilst making money for the company was forged. Monetization must be at the forefront of innovation. Once a business adequately creates value, then it must with care, design monetization around it. Another great company that has perfected this art is, Amazon. As an Amazon Prime member, you pay to shop and gladly so.

Great Product design and exceptional user experience are business strategies entrepreneurs, and businesses should focus on if they intend to win; after all, these products are not intended for private use. Why would users care so much about products that were not designed with them in mind?

If any business intends to stand out in the long run, then it has to make these strategies priority just like Apple did.

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BUSINESS DAY

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BUSINESSTRAVEL Nigerian pilots, engineers call for local content capacity development in aviation Stories by IFEOMA OKEKE

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igerian pilots and engineer under the aegis of National Association of Aircraft Pilots and Engineers (NAAPE) have called on the federal government and airline operators to implement the executive order five, which encourages indigenous professionals to use their expertise to develop Nigeria.

Speaking at the dinner, awards and the unveiling of the NAAPE compendium of 50 outstanding pilots and engineers in Lagos, Abednego Galadima, president of NAAPE said the issue of unemployment of Nigerian pilots and engineers is predominantly among the young ones which poses a challenge.

“Some of our operators are being unpatriotic, instead of engaging the Nigerian hands and giving them opportunities to practice, they bring foreigners and expatriate and sadly, most times these expatriate they bring are equally learning on the job.

“I am calling on the operators to engage the young ones and give them opportunities. This event is aim at creating opportunities for mentoring. This is our own contribution, so that the older ones will bring up the younger ones and have social networking.

“We are talking to the minister to ensure full monitoring on compliance of the executive order number

five to ensure that expatriate quotas are not abused. We will continue to sensitise our members in terms of adhering to best practice in flying and maintenance,” Galadima said.

On Nigeria’s achievement of Accident Free Aviation in 2017, the president of NAAPE said NAAPE ensures standard and best conduct among professionals.

He noted that safety consciousness is what the association always instil, which is always reviewed from time to time.

“Nigerian pilots fly all over the world. Accident free aviation is not coming as a surprise to us because it is something we worked hard in ensuring that the rules are adhered to.

Also speaking during the event, Idris Wada, former governor of Kogi state said aviation stakeholders

should endeavour to find solution to the frequent collapse of domestic airlines in the country in order to ensure their survival in business.

Wada noted that domestic airlines hardly last for more than a decade stressing that there was the need for experts to find a way out of this frequent collapse.

According to the EAS airline boss, the aviation industry remained a very consuming endeavour, stressing the need for full dedication by stakeholders towards the survival of the industry in the country.

The former Kogi state governor maintained that there was a need to continue working hard in the aviation sector adding that pilots and engineers should be doing things according to procedures and courses as their trainings demand.

Summer travels: Peacock unveils discounted fares, incentives

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s the summer travels season kicks into high gear, Peacock Travels Limited, in collaboration with some of the world’s leading airlines, has announced a package of promotional fares and incentives to ensure hassle-free travels.

The heavily discounted fares, some as low as N319, 999 for return trips, have been carefully selected to cover a wide range of routes such as London, New York, Houston, Washington, Istanbul and Dubai – all very popular with Nigerian travellers. Incentives package includes extra baggage, visa assistance and free first date change on some selected airlines and routes.

Aare Segun Phillips, Peacock Travels executive chairman, who broke the news in Lagos, said the promotional package and incentives were not limited to the peak summer travel season but will run till next year on the Agency’s various online platforms and its 15 travel centres across Nigeria and in the United Kingdom. Its office in Twickenham, southwest London, is also providing logistical support such as bus and taxi services to all parts of the UK to its passengers.

Aare Phillips said the firm made the conscious decision to work with airlines to reduce fares after successive years of observing

the difficulties Nigerians have to contend with in order to travel, especially during summertime.

His words : “Nigerians go through a lot just to travel during summer. They are confronted with high season, high traffic, high fares; it need not be so. Nigerian travellers deserve better. That is why Peacock is teaming up with some of the most reputable partner airlines in the world to alleviate their suffering. Throughout this summer and subsequent ones, we are putting smiles on the faces of our customers; we want them to have peace of mind.”

Aare Phillips also disclosed that the discounted fares and incentives were designed forleisure, business as well as student travelers.

He added: “At Peacock, we offer bespoke services across board, which means everything is tailormade to fit into your budget, your status and your travel goals. This promotional package gives this a good coverage. And this is made possible by our experience, professionalism and partnership with leading world carriers.”

According to the travel management guru, Peacock Travels, with its reputation of 25 years in operation, also facilitates passenger travels through its office in Twickenham, London-to other destinations around the world.

Overland Airways commences Cotonou, Lome flight services August 12

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verland Airways, one of the country’s domestic carriers connecting hinterlands will from August 12, 2018, commence its regional flight services from Lagos to Cotonou, the republic of Benin and Lome in Togo republic.

This is said to be part of the airline’s plans to stimulate economic activities and provide integration in the West African sub-region as it also plans to participate actively in the regional socio-economic activities, boost interconnectivity and regional unity.

Speaking during a press conference at the airline’s office in Lagos, Aanu Benson, chief operating officer Overland said the airline will fly Lagos-Cotonou- Lome four times a week, on Sunday, Monday, Tuesday and Thursday.

According to Benson, the flight will be departing Lagos at 19:00 to arrive Cotonou at 19:25 and depart again for Lome at 20:00 and arrive at 20:30. The flights will also depart Lome at 21:00 to arrive Lagos at 21:45.

She said the airline is poised to offering customers the best choice in air travel with its new flight services.

“Overland Airways operations to Cotonou and Lome are to offer

choices to customers as our contribution to regional integration in West Africa. We want air travellers in the region to team up and discover each other while enjoying the excellent services we offer. It is an expression of Nigeria’s aviation renaissance in West Africa”, she said.

Speaking on the need for the regional services, she said, “One of the most important missing factors facing sustainable economic transformation in West Africa is smooth interconnectivity. Over the coming years, Overland Airways will facilitate a new environment for business, leisure travellers, families, students and more essentially bolster that bonding amongst the peoples and groupings in the region. There is need to reinforce unity and prosperity at the regional level.”

Besson added that the new venture is part of the business model of the airline ‘to give access to remote and underserved routes’.

The COO, who disclosed that the airline will deploy its ATR-42 and ATR-72 aircraft, those that are suitable for the type of operations, to the new routes, added that Overland Airways has the track record of consistency

and will sustain the market despite the number of players currently operating into the west coast.

“We believe the sky is wide enough for all or as many airlines as possible so every new airline is welcome, the more the airlines; the more the services to the passengers.

For Overland, we are offering safe, reliable and affordable flights and at the end of the day the passenger has more choices and more options.”

Speaking on the Time Performance (OTP) and aircraft type Bello said, “We take this very importantly, it is a key factor and we will work hard to do that. In terms of our fleet, what is most important is that they are wellmaintained and our aircraft type fit well into our business model.”

Also speaking on the airline’s focus and drove, Aduke Atiba, executive director, Overland said the airline is poised to service the sub-region and was receiving all the support they desired for the operations in terms of regulation from government of both countries through their agencies.

The commencement of regional scheduled flight services marks the take-off of Overland Airways’ drive to participate actively in regional socioeconomic activities and integration.

Ethiopian airline rolls out stopover packages to promote tourism

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thiopian Airlines has rolled out stopover packages without any additional airfare that cater for all leisure needs with a view to promote tourism into Ethiopia.

Passengers traveling through Addis Ababa and continuing their journey to one of the destinations on Ethiopian network can now take advantage of stopover offerings from Ethiopian Holidays, the tour operator wing of Ethiopian Airlines, enabling them to discover and experience the many historical, cultural, religious and natural treasures of Ethiopia, Land of Origins.

An online e-visa service for processing stopover visa is available for all international visitors to Ethiopia.

The packages range from sightseeing in Addis Ababa, the dip-

lomatic capital of Africa, to visits to the pre-Christian era obelisks of Axum, the stunning medieval rock-hewn churches of Lalibela, the amazing 9th century mosques of Harar, the majestic castles of Gondar, the stunning source of the Blue Nile, the jaw-dropping Simien Mountains, the splendor of the lake side resorts of Hawassa and Arba Minch, or the unique coffee farms of Kaffa, birth place of coffee, and much more.

Tewolde Gebremariam, group CEO of Ethiopian Airlines, said: “Ethiopian is working with all stakeholders in the tourism chain to make Ethiopia a tourism destination of choice. With its many riches, the world has yet to truly discover Ethiopia and tourism has the potential to become the main foreign currency generator for the country and a mass job creator for the youth.”

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BUSINESS DAY

Luxury

Malls

Companies

Deals

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Thursday 09 August 2018

Spending Trends

There’s a fierce battle over your bed: Industry goes to the mattresses

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he frenzied competition to get Americans into bed is flipping the mattress industry into upheaval.

As the nation’s largest mattress retailer reels from declining sales and the threat of bankruptcy amid financial scandal at its parent company, mattress companies are waking up with a hangover.

Meanwhile, bed-in-a-box e-commerce companies — now numbering in the dozens after many sprouted in recent years — are planning brickand-mortar locations. But they’re facing their own set of existential challenges in this highly competitive environment.

Overexpansion is at the heart of the industry’s troubles. There are now more places to buy a mattress in the U.S. than places to buy a Big Mac. Consumers could be the ultimate winner as the furious competition for their business generates deals, price transpar-

ency and improved customer service. But the downside is a flurry of store vacancies — and the threat of more.

Facing declining sales, No. 1 U.S. mattress retailer Mattress Firm is closing hundreds of stores and scrambling to bolster its digital business. At the same time, the retailer’s parent company, global conglomerate Steinhoff International, is entangled in an accounting scandal involving billions of dollars in balance-sheet errors that has led its stock to plummet to less than a quarter.

The company is now considering bankruptcy, according to Reuters. A company spokesperson was not immediately available to discuss that report Tuesday.

“I don’t see this ending in a liquidation, but with that said, you could see a filing,” said Kyle Owusu, a senior distressed debt analyst at Reorg Research, who tracks Steinhoff’s crisis. “I wouldn’t even rule out a filing of just the Mattress Firm entity in the U.S. to try to implement a restructuring plan.”

The fallout of Mattress Firm’s sales decline and the industry’s heightened competition is leaving a trail of wreckage. Industry leaders say damaging discounts are rising, while expenses — especially commodity costs and marketing — are also increasing.

“There’s bound to be some

sort of a fallout, whether it’s the smallest companies end up leaving or the original ones end up leaving the space,” said IBISWorld retail analyst Meghan Guattery.

Online sellers have provoked much of the upheaval, for better or worse. Companies like Casper are offering

popular no-haggle pricing, easy ordering, free shipping, months-long trial periods and new technologies like advanced memory foam.

David Wolfe, CEO of online mattress firm Leesa, said online sellers are aggressively bolstering digital marketing spending and discounts. He warned that some sellers are compromising quality for the sake of cutting costs.

“The craziness that was in traditional retail has moved online right now,” Wolfe told USA TODAY. “It’s all a big mishmash at the moment.”

In response, Mattress Firm is engaging in “irrational promotional activity” that is “a folly and not sustainable,” Scott Thompson, CEO of mattress maker and seller Tempur Sealy International, told investors in late July.

“We are seeing more competition in bedding by several new entries that are focused on growing sales at any cost and are willing to lose significant money,” Thompson said in an emailed response to USA

Shared leadership Bengaluru-based e-commerce major Flipkart has hired five senior executives at the level of vice president in an effort to strengthen its top management. The move is significant as the web retailer has been trimming down its senior management in the past.

Pressing ahead McDonald’s has opened more than 300 new stores in China and is also investing in digital technology with more than 75% of its stores now offering kiosk ordering and payment facilities. The food service giant is eyeing further expansion into smaller Chinese cities.

Fighting waste Portuguese supermarket chain Pingo Doce has partnered with an environmental services provider on a joint recycling campaign. In an initial pilot, consumers will be able to exchange their used packaging for discounts in the stores.

Sustainability accelerator Drinks giant AB InBev will be sourcing start-ups that can assist with its sustainability project. The Budweiser parent says that it will ‘support, mentor and fund successful applicants so they can incubate, experiment, refine and ultimately amplify their solutions at scale’.

Beer deal Heineken has agreed to take a 40% stake in China Resources Beer, the country’s largest brewer, in a USD 3.1 billion deal. The partnership will give the Dutch brewer, which entered the Chinese market in 1983, a greater access to one of the world’s fastest-growing premium beer sectors.

More partnerships Germany’s Infineon Technologies has signed an agreement with Chinese powerhouse Alibaba to jointly promote uses of the Internet of Things. Meanwhile, US start-up Standard Cognition teamed up with Japanese drugstore wholesaler Paltac

TODAY. “I guess that will last as long as investors are willing to fund losses.”

The market instability comes at an inopportune time for struggling strip malls and mattress suppliers that had celebrated the industry’s recent growth while other retailers were flailing. The number of U.S. stores selling mattresses increased by 32 percent to 15,255 from 2009 to 2017, according to IBISWorld.

McDonald’s, by contrast, has 14,079 U.S. stores.

Casper CEO Philip Krim predicted that a wave of store closures is coming for the mattress industry. But he said his company will capitalize by opening “hundreds” of its own locations.

“Absolutely there will be a retail shakeout, and what you’re seeing is a lot of those dollars are going online,” Krim said. “That’s because there’s going to continue to be a very large dislocation in traditional retail mattress sales.”

to introduce Amazon Go-style operations to 3,000 stores in Japan.

Fighting plastic New Zealand retailer Foodstuffs announced that all its banners will no longer offer plastic checkout bags from 2019.

Across the Tasman, hapless supermarket giant Coles has flipped again and will start charging for reusable bags instead of supplying them for free as promised before.

Achievements in Russia Despite a quarterly drop in profit and sales, German wholesaler Metro sees ‘tangible improvement’ in its operations in Russia, which has sent its shares soaring.

Meanwhile, Russian hard discounter Svetofor has announced plans to launch in Romania with the aim of opening 100 stores.

Rescue struggle Britain’s House of Fraser is at risk of collapsing into administration after Chinese conglomerate C.Banner pulled out of a rescue deal. The struggling department store business has placed accountancy firm EY on standby to handle the collapse as it desperately tries to find a new investor.

Waste reduction push Lidl has launched a food waste reduction initiative in the UK which will see it sell slightly damaged fruit and vegetables at a discount. If the trial is successful, the German discounter says that it will consider a national roll-out across its entire estate.

Culled from USA TODAY

Global retail update

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artnerships are surely a way to thrive in the competitive retail industry. UK’s Tesco and its French counterpart Carrefour have officially ratified their strategic alliance.

Fellow Brit and health store operator Holland and Barrett is on the lookout for potential foreign acquisitions, and across the Atlantic, Walmart teams up with a meal kit provider.

Food partnership in United States In a move to further differentiate itself from competitors, Walmart is teaming up with San Francisco start-up Gobble to sell their signature meal kits via the big-box retailer’s e-commerce platform.

The offered dishes can be prepared in 15 minutes or less and require only one pan.

The service targets specifically busy parents and their needs.

Top replacement Snack and soft drink giant PepsiCo announced that Indra Nooyi would step down as its longtime chief executive officer, handing over the reins to company veteran Ramon Laguarta. In other news, it was revealed that the PepsiCo Foundation will donate USD 10 million to the Recycling Partnership.

Under pressure Mattress Firm, the largest US mattress retailer, and National Stores, the parent company of discounter Fallas, are the latest casualties to succumb to financial pressures as more people shop online. The for-

mer is considering a potential bankruptcy filing, while the latter already filed for Chapter 11.

Anticipated alliances While French giant Carrefour and UK’s Tesco expect their previously-announced global purchasing collaboration to become operational in October, British competitor Sainsbury’s faces some headwinds from its employees about its planned merger with supermarket operator Asda (paywall, in German).

Ambitious target UKheadquartered international health food chain operator Holland and Barret aims to treble its business within 10 years and generate a revenue of GBP 2 billion. To expand internationally, the company, which is under new ownership since last year, is set to acquire some businesses.

Digital decisions Carrefour Belgium is starting to sell local products on a new online sales platform. Saudi Arabian e-commerce company Noon has announced the launch of a service to deliver groceries to customers’ doorsteps “with just a few clicks”. Founder Mohamed Alabbar is looking to expand into the grocery sector.

Payment fines in Asia China’s central bank is stepping up its scrutiny of payment organisations to prevent financial risks and irregularities and protect consumers. Alibaba’s payment unit Alipay and several other payment organisations have been fined for breaching regulations.

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GM to drop monthly U.S. vehicle sale reports

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eneral Motors Co (GM.N) said on Tuesday it will stop reporting monthly U.S. vehicle sales, saying the 30-day snapshot does not accurately reflect the market and the company will, instead, issue quarterly sales reports.

GM will also no longer report monthly sales in China, its largest market. The company will provide monthly data to the U.S. Federal Reserve, industry associations and government agencies across the globe but that data will not be made public.

Other major automakers indicated on Tuesday that they would not immediately follow GM’s lead on switching to reporting sales on a

quarterly basis “At this time, we are maintaining our reporting of sales on a monthly basis,” said a spokesman for Fiat Chrysler Automobiles NV (FCHA.MI) (FCAU.N).

On a conference call with analysts and reporters, Ford Motor Co’s (F.N) U.S. sales chief Mark LaNeve said the automaker would assess GM’s move but a “decision is not imminent” on whether to report sales quarterly.

Jack Hollis, Toyota Motor Corp’s (7203.T) North American head of sales and marketing, said there is “no change planned on our side.”

Analysts and investors rely on monthly U.S. vehicle sales to track the performance of individual automakers, and also use the data

as a barometer of the health of the world’s second-largest auto market and an indicator of consumer confidence in the U.S. economy overall.

Jeff Schuster, a senior executive at forecaster LMC Automotive, said GM’s decision to release fewer sales reports was “not that big a deal.”

“As an industry, we’ve gotten used to the monthly sound bites and have focused too much on the ‘noise,’” Schuster said. “Maybe we should focus more on the ‘why.’”

GM and its Detroit rivals have relied heavily on sales of high-margin pickup trucks and SUVs to boost profits.GM’s total U.S. sales, its second-largest market, are down 3.2 percent for the first two months of 2018, reflect-

BUSINESS DAY

27

Rite Foods backs African athletics championship ing a 6.8 percent drop in retail sales to individual customers, the company reported last month.

Executives at GM have expressed frustration that comparisons of monthly U.S. sales results among rival automakers are distorted by short-term discount programs, and by differences in strategy for selling vehicles in bulk to rental car fleets.

“Thirty days is not enough time to separate real sales trends from short-term fluctuations in a very dynamic, highly competitive market,” Kurt McNeil, U.S. vice president for sales operations said in a statement.

G M ’s a c t i o n s c o u l d prompt other automakers to also switch to quarterly U.S. sales reports. Major automakers report March U.S. new vehicle sales on Tuesday.

Until the early 1990s, most U.S. automakers released sales results every 10 days.

The former Chrysler Corp, a forerunner of today’s Fiat Chrysler Automobiles NV (FCHA.MI), stopped reporting sales on a 10-day basis in 1990, and rivals followed suit over the next three years.

GM executives are betting that investors will quickly adapt to receiving U.S. sales data every three months, as investors in other retail sectors already have. Retailers such as Walmart Inc (WMT.N) report sales on a quarterly basis.

R

ite Foods Limited makers of Bigi Carbonated Soft Drinks, CSD and sausage rolls has thrown its weight behind the 2018 youth African Athletics Championship, AAC. The championship which was held in Asaba, Delta State was tagged, ‘‘Champions of the Niger’’ Speaking at the championship which the company tagged ‘‘Refreshment for the Champions’’, Seleem Adegunwa, managing director of Rite Foods Limited said the company is committed to supporting good sports initiative. ‘‘We believe sports can unite nations, and bring out the best in our youths,’’ said Seleem. ‘‘We are creating an atmosphere for peace.’’

According to the managing director, the company

L-R: Seleem Adegunwa, managing director of Rite Foods Limited, an official of AAC Asaba Y2018, and winners of 400m Women Hurdles during the African Athletics Championship in Asaba, Delta State.

was fully in manpower at the Championship to activate and ensure everyone present experiences the spirit of sportsmanship through their ISO certified products. ‘‘We believe that ordinary people are capable of delivering extraordinary things,’’ he said. ‘‘So, we always get involved with such, through sponsorships, Corporate Social Responsibilities.’’

He also said the company supported the African Athletics Championship with over millions worth of products which they shared among athletes and spectators to support sports in Nigeria and Africa.

Bukola Olopade, a member of the championship planning committee, said they have enjoyed the partnership with Rite Foods Limited, the official beverage sponsor of this year’s African Athletics Championship. ‘‘Rite Foods must be showered accolades for sponsoring this event. A lot of brands do not understand what it takes to be part of an event of this nature and magnitude,’’ he said. ‘‘When we approached Rite Foods Limited for partnership, it was seamless. The company has been actively involved in this sponsorship.’’

He disclosed that the company fed thousands of children and adults at the opening ceremony with soft drinks and sausages. ‘‘We look forward to future partnership with the company “. Olopade added.

Living under poverty line How Nigerians are struggling to survive

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

Barber needs help to fund dialysis Name: Onigbinde Adetunji Oluwaseun State of Origin: Oyo Age: 31 years Dependents: Siblings Occupation: Barber I was managing the little resources I got from my barbing business until I was diagnosed with kidney disease on May 2, 2018. I was initially rushed to a nearby hospital at Oke Ado Ibadan on May 1, 2018 before been referred to Molly specialist hospital at Idi Ape Ibadan the next day were I was diagnosed of this sickness.

Prior to this, I had been admitted severally in different hospitals because I often collapse and blackout. On every hospital admission, I was given drugs and drips.

Sometimes, I received blood transfusion.

During these times, my family especially my elder sister would run around to raise funds for my treatment. Sadly, none of those hospitals diagnosed anything. All they said was that I had high blood pressure and shortage of blood.

The doctor said I need kidney transplant but I am presently undergoing dialysis pending the time we raise funds for the transplant.

I have been undergoing dialysis once or twice weekly depending on the amount of money we raised. I also receive blood transfusion in addition to drugs prescribed by the Neurologist How have you been coping with the sickness?

It has not been easy financially because we struggle to raise between N70,000 and N82,000 weekly for my dialysis and blood transfusion.

We have spent all we have and had to borrow from those who were kind enough to lend us some money. My elder sister had to sell the taxi which brought in little money for the family upkeep to fund

Analysts: Chinwe Agbeze, Stephen Onyekwelu, David Ibemere, Graphics: Fifen Famous

my treatment.

I can no longer work at my barbing shop because of my condition and we have even sold almost everything in the shop. We have nothing and nobody to turn to. My father is late and my aged mother is extremely poor. My relatives and friends have done all they could to help me.

Challenge: I constantly express severe pain. My legs, face and stomach are swollen. I have discomfort when I breathe, can’t urinate and defecate as I should. Sleeping at nights is also a huge problem. I appeal to wellmeaning and kind spirited Nigerians to help me.

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Global Business Perspectives Connec ting

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Popular culture and Putin’s legitimacy Marlene Laruelle

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he analytical tools of political science, which describe the Russian regime as undemocratic, illiberal, authoritarian or patronal, fall short of providing an understanding of legitimacy mechanisms at work in the Russian society. Popular culture, often seen as reflecting the values of the overarching political system, can also be an engineer of ideological content and may help explain President Vladimir Putin’s success.

Putin’s re-election to a fourth presidential term in March — by a margin of 76%, with a 70% turnout — was a success for the Kremlin, one that was needed to strengthen the regime’s legitimacy in order to face forthcoming challenges, including stagnating growth and wages.

Observers report that the level of falsification of the poll may have been lower than in 2012, but still amounted to several million votes. To this should be added about 7 million votes secured through administrative and corporate enforcement.

Even without these manipulations, however, the Russian president would likely have received 70% of the vote with just over 50% turnout — a good result that many Western politicians would envy.

There are multiple reasons for this success: the rally-aroundthe-flag effect of the annexation of Crimea, which boosted Putin’s popularity to a massive 80%; the general feeling that Russian citizens must back the regime in its confrontation with the West; the lack of genuine political opponents; the population’s need for stability and predictability; and the widespread impression that no one can do better than Putin under current conditions.

Tools of political science tend to look for top-down dynamics, exaggerating the regime’s capacity to shape public opinion with powerful media strategies. The realm of bottom-up interactions and the regime’s impressive abil-

President Donald Trump meets with President Vladimir Putin of Russia in Helsinki, July 16, 2018. The White House rejected a proposal by Putin that would have allowed American officials to question 12 indicted Russians in exchange for getting access to American citizens. (CREDIT: Doug Mills/The New York Times).

ity to adapt and capture existing symbolic reservoirs remain largely understudied. The study of nostalgia for the Soviet Union offers insight into that realm.

Another path is to look at popular culture — understood as the cultural habits and consumption patterns of ordinary citizens and ithe working class in particular.

This approach was launched in the 1960s by the University of Birmingham Centre for Contemporary Cultural Studies, examining how cultural products are “consumed” and how average consumers may also produce meanings.

Popular culture also shapes political ideology and this is the case in Russia, where many of the ideological schemes of the Putin regime were already present in 1990s pop culture. Unlike cinema and television series, often funded wholly or in part by state institutions, Russian pop music develops almost entirely based on the logic of profit and commercial success. Interactions between music and politics are neither new nor unique to Russia — think of the role of country

music in connecting the rural American working class to the Republican Party, for instance.

One group from the 1990s that advanced an ideological repertoire for the Putin regime that followed was Lyube, one of Russia’s most popular bands — and reportedly Putin’s favorite. The band combines several styles: Russian rock and romance, songs from the criminal world, Russian folk music, Soviet retro and Soviet military songs.

The group, which emerged during “perestroika” — the reform movement within the Soviet Communist Party — derived its name from the Lyubertsy, an underground youth movement in the Moscow suburbs linked to an urban criminal subculture that practiced boxing, bodybuilding and martial arts. In the early 1990s, the group experimented with new sounds and ideological topics in tune with the contemporary rediscovery of Russia’s early 20th century, especially the civil war years (1918-1922). One of their first albums, for instance, featured the band dressed like Red Army soldiers. In 1994, the

album “Lyube Zone” and film of the same name celebrated the “zona,” the jail world. Rehabilitating the culture of the criminal underground has since then been a major theme for the band.

In 1995, for the 50th anniversary of the end of the Second World War, Lyube revisited songs from the war, such as “Combat,” which strongly resonated with the war in Chechnya. At precisely the same time, President Boris Yeltsin, a weakened liberal, decided to reinvest in the cult of World War II as one of the cornerstones of the social consensus. Lyube was invited to play its war songs at a Victory Day concert in Moscow.

Since the 2000s, Lyube has emphasized patriotic lyric songs, often used as soundtracks for blockbuster miniseries about the army, the security services, the special forces and the navy.

All celebrate male courage and romanticize the military way of life. In recent years, Lyube has become ubiquitous in statesponsored concerts. The group does not hide its intimate relationship with the Kremlin. Soon

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after arriving in power, Putin appointed the group’s lead singer, Nikolay Rastorguyev, now 61, to the position of cultural advisr to the government. A member of the presidential party, United Russia, Rastorguyev has since been elected to the Duma several times and displays his support for the president whenever called upon.

Yet Lyube should not be seen as a product of state-sponsored ideology. The band is genuinely popular and commercially successful, with tens of millions of albums sold and views on YouTube. It tours concerts all over Russia, uniting several generations of fans.

Lyube succeeded in musically embodying the main ideological schemes and themes of the Kremlin. Its trajectory echoes that of the Putin regime: The late Soviet-era fashion for martial arts and bodybuilding inspired the regime’s virile body language. The rehabilitation of the early 20th century and of the Soviet criminal subculture — its language, values, hierarchy and heroes — has become part of the state-sponsored search for cultural consensus. Nostalgia for Soviet retro, and a progressive move toward a militarized patriotism exalting human sacrifice for the motherland, became a successful tool for the regime.

State narratives and Kremlinbacked media may distribute these fundamental units of ideology. Yet what makes ideologies relevant to a large part of the society is that they are produced by a grassroots culture that is mainstream, not by top-down pressure. This popular culture does not follow “the Kremlin’s orders” in deciding what is meaningful.

On the contrary, the presidential administration tries to coopt popular culture to secure its cultural hegemony. Lyube is just one of many examples of how understanding pop culture can help in pinpointing a genuine “Putin consensus.”

Marlene Laruelle is a research professor of international affairs at George Washington University’s Elliott School of International Affairs.

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LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

INSIDE Power sector crises: the faults, intrigues and way forward

We have a binding duty to contribute to the development of the Bar – Augustine Alegeh, SAN In this chat with BusinessDay Law Editor, THEODORA KIO-LAWSON immediate past president of the Nigerian Bar Association, Augustine Alegeh, SAN provides some insight into the leadership of the Nigerian bar, developments, bar elections, universal suffrage, electronic voting, among other things. EXCERPTS…

30 Why lawyers are calling for a cancellation of the NBA elections

31

JEE Sector Chat with Abidemi Ademola

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LEADERSHIP he Bar is ours. We cannot run away from it, neither can we leave to others. No country can function effectively or make a success of its democracy without a vibrant bar association. To this end, we all have a binding duty at all times to continue to contribute to the development of the bar - more so for me as a past president of the association.

In the Nigerian Bar Association, as in all things, when a new leader/ president assumes office, he begins to pursue his own vision, set objectives for the bar in line with his manifesto or outlined programmes. You cannot impose on a sitting president any sort of demand to pursue the agenda of a past president or any other person. If he must do that, then it must one that he believes in. And the truth is that, whether you see this vision or not, you must accept that he is pursuing his own vision as he believes it to be.”

It is only when he leaves office that his scorecard will come to play.

I went into the office of the president of the Nigerian Bar Association with a clear vision. I promised to introduce e-voting and I worked with members of the bar to achieve it. I promised universal suffrage and that, we also achieved. I promised stamp and seal and we also got that. Today Stamp and Seal is generating revenues for all our branches. Branches can now un themselves unassisted. Foreign

“

Augustine Alegeh, SAN

lawyers can no longer tout effectively in Nigeria.

We promised to give every lawyer an insurance policy and we did. We met a ‘Bar House’ on the basement floor and we took it all the way to the last floor (The 11th floor) – completed and commissioned. The only aspects pending were payment for transformer, generator and a number of other electrical works.

Everything else was fully paid for and sorted by our administration. By my last National Executive Committee (NEC), everything I promised in administration was fully delivered.

So while you may not appreciate the visions of an incumbent president during his tenure, when he leaves, you can raise questions about

his achievement while in office.

When I assumed office as the President of the NBA, my vision and goals for the development of the bar were clearly set. From my inaugural remarks, I set up a constitution drafting and amendment committee and by my next AGM, we had passed this constitution. 120 days before this constitution was ratified by NEC, we had circulated the draft not just to the members of NEC but to all members of the association also placed it on the NBA website for comments to come in.

To this end, I’d reiterate, each president has his own vision for development and we must allow him see it through.

ON ELECTIONS AT THE BAR

We are in an election season and this is a critical time for the bar. The bar must vote for a candidate that has the leadership qualities to drive the profession forward at this time. Let us forget about our internal issues of the NBA. The next president has a huge task ahead of him. He will be President during country’s election of a new president as well as other elections across the country. If we do not have a president with integrity and foresight, then the NBA would lose its relevance at the national level. These are very critical issues relating to the election of our next president.

NBA ELECTORAL PROCESS AND CLEARANCE OF CANDIDATES No one candidate at any election can be absolutely perfect. So if we are to vote, then we must at the very least vote for a candidate that has basic rudimentary understanding of what the association truly stands for.

At the moment, we have candidates who have no clue whatsoever about the provisions of the NBA constitution. So from where I sit, I strain to see how we can move the bar forward with what we are presented with.

“We need a bar where the seniors are respected; juniors are respected; and all ideas are put together into one plate to move the profession forward.”

ZONING The current NBA constitution Continues on page 32

Osinbajo calls on health professionals to adhere to Patients’ Bill of Rights Theodora Kio-Lawson

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he Vice President of Nigeria, Professor Yemi Osinbajo, SAN has called on medical and healthcare professionals to adhere strictly to the Patients’ Bill of Right (PBoR) Osinbajo who made this call at the launch of the Patients’ Bill of Rights in Abuja, stated that the bill would translate into better quality for healthcare practice in Nigeria.

He said, “This Bill of rights is a significant contribution in establishing one of the most important rights of all humanity: the right to life in which inheres the right to adequate healthcare. Today, we are setting and committing to a new standard that both acknowledges and commits to uphold some of the most fundamental principles of our common humanity.

“It is a remarkable effort at con-

sensus and common purpose, in the face of the many challenges of our healthcare system in Nigeria. It cuts out the noise and distractions, and focuses on what is truly most important: putting people first. It serves as a code of accountability, constantly reminding us of the primary purpose of the healthcare system, and of the obligations of every player and stakeholder in that system. It helps clarify consumers’ expectations of providers and the providers’ responsibilities to consumers.

Osinbajo also reiterated the need to maintain the universal principle of respect for human dignity, stating that people never forget how they are treated, particularly when they are at their most vulnerable.

“And there are not many scenarios of vulnerability that are as compelling as the ones that put a

person in search of healing. It is, I think, fair to say that one can tell a great deal about how a country values its citizens from the attitudes prevalent in its healthcare systems and institutions.

“While of course the ultimate goal is to ensure that the patient stays alive and in good health, it is just as important that the journey to that realization of the final goal is underpinned by the full preservation of human dignity. Indeed, the foundational ethos of the medical profession, embodied by the service charter that is the Hippocratic Oath, and its recent iteration of the Declaration of Geneva, fully recognizes the pre-eminence of the comfort and dignity of the patient,” he said.

Commending the Federal Ministry of Health and the Consumer Protection Council (CPC) for the initiative, the Vice President also affirmed that the Buhari adminis-

tration was committed to ensuring universal health coverage for all Nigerians.

“The champions of this groundbreaking initiative deserve our heartfelt commendations and I encourage all stakeholders in the healthcare ecosystem to take advantage of the momentum and consensus that this effort creates, by focusing on the singular objective that is an improved level of patient care.

“In terms of policy and funding, we, as a government, are acutely aware of the challenges of Nigeria’s health sector. And that is why we are single-mindedly pursuing the attainment of Universal Health Coverage for all Nigerians. For the first time ever, our 2018 budget allocates 1% of the Consolidated Revenue Fund towards the funding of key health initiatives, in compliance with the National Health Act,”

Osinbajo said.

He noted that the Patient’s Bill of Rights was a timely complement to these policy and funding interventions, as it would ensure that the increasing funding that is coming into healthcare in Nigeria translates into a direct improvement in the quality of the final output at what one might call the ‘last mile’ phase of healthcare delivery, the very personal arena of interaction between health personnel and the beneficiaries of the healthcare.

“Our aim must be to develop a standard worthy of emulation, by ensuring strict compliance with the enforcement of the Patient’s Bill of Rights. We must hold ourselves - professionals and patients - accountable to the rights that this document enunciates, and when we see others who should, but do Continues on page 32

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BDLegalBusiness power perspective with AYODELE ONI Power sector crises: the faults, intrigues and way forward

Proem There have been crises in the electric power sector for several decades and despite the privatization of most aspects of the value chain, the crises seem to be on a never- ending spiral. Specifically, the indebtedness in the sector is in excess of N1Trillion. Thus, this write up considers the challenges (particularly relating to illiquidity) and some of the remote and immediate causes of the crises together with practical ways forward.

The Privatization of the Nigerian Electricity Supply Industry ost people are aware that there are eleven (11) ‘traditional’ electricity distribution companies (“Discos”) in Nigeria operating across the thirty-six (36) states and the Federal Capital Territory Abuja. Apart from the Eko Distribution Company Plc. and the Ikeja Distribution Plc., about every Disco operates franchise areas which cut across three (3) to four (4) states. Each distribution network comprises of overhead lines, cables which are largely 11kV and 33kV, transformers, switchgears, service lines, meters, control equipment and other apparatus to support the distribution of electricity to industrial, commercial and domestic users.

Please note that the writer has used the term ‘traditional’, above, because apart from the eleven (11) Discos, a few companies have been granted distribution licences outside of these eleven companies hived off the now defunct Power Holding Company of Nigeria (“PHCN”).

The Discos are strategic because, characteristically, they serve as the mid-point between the power generators (who expect payment from the Discos) and final consumers who are supposed to make the payment expected from the Discos, by the generators.

The Writer is not unmindful of the Nigerian scenario where there is the Bulk Trader which serves as a pass-through to primarily provide payment guarantee of some sort (when the Nigerian electricity market matures into a more competitive electricity market, the role of the Bulk Trader would fall away and there would be direct bilateral relations between the power generator and the Discos).

Nonetheless, commercial challenges (including poor collection and low tariff rates) together with illiquidity amongst the Discos still affect the entire electricity supply value chain.

Where the Discos are unable to bill for electric power received or indeed receive payment for the volume of electricity made available to final consumers, then, on-grid power generation will not be profitable. The domino effect of such deficiency is that on-grid power generators would be unable to pay the gas suppliers therefore creating cash illiquidity across the value chain.

The effect of the foregoing, is that there would be no private sector investment, because every investor wants to make a decent return on investment and no one

M

Ayodele Oni

would want to engage in a business that would be operating at a loss, no matter the effort or investment put into it. In other words, Discos play a tactical role because, through their ownership of almost all of the sector’s entire on-grid customer base, they are the prime sources of all the revenues that drive the Nigerian Electric Supply Industry’s value chain.

To improve the Nigerian Electricity Supply Industry (“NESI”) from the state of decay and operational underperformance flowing from governmental control of the power sector, the National Council on Privatization (“NCP”) and the Bureau of Public Enterprises (“BPE”) approved the sale of sixty per cent (60%) equity (the “Sale Shares”) in the eleven (11) ‘traditional’ Discos to private investors.

The approved preferred bidders posted Letters of Credit amounting to twenty-five per cent (25%) of the Sale Share purchase price of the relevant Successor Company. This was then followed by the completion of payment for the Sale Shares.

On November 1, 2013, these Discos and the generation companies were handed over completely to the new owners/concessionaires. However, since handover, it has been a blame game in the power sector for a while now with almost every participant in the sector blaming the other for the lingering illiquidity crises, in the NESI. The Sectorial Problems The Privatization Mistake- Upfront Government ReceiptsDespite the privatization of the Discos and the successor generation companies, the desired improvement (although, there has been some) is yet to be really impactful in the electric power sector. The Discos have not been able to make substantial improvements to the distribution networks within their jurisdiction, due to the paucity of funds and this writer is of the view that the transaction approach, for the privatization, especially for the Discos should have been structured in a way that the core investors should have been required to deposit funds in

escrow for the five (5) year period upon which they undertook to reduce Aggregate Technical Commercial and Collection Losses (“ATC&C Losses”). In return, the government should not have received any upfront payment but should have waited to see these companies become profitable and then receive a portion of their profits.

The government should simply have had ‘some skin in the game’ by deferring its receipt of a substantial portion of the payment and utilizing the received funds to settle labour claims and other matters (considering that the government at that time stated that the funds received from the privatization were used to settle labour matters). What should have happened ideally was that an escrow agent should have kept the money in interest yielding accounts and over the five (5) year period, the Discos together with the requisite government agency would have funds channeled towards achieving the post-privatization plan already set out and agreed to by the parties in their respective Performance Agreements. Thus, instead of the about $3.2 billion received by the federal government, upfront, some or all of same should have been kept for the upgrade of the facilities of the power utilities through a joint management system with funds released to vendors after a through process and assurance that funds were utilized for equipment, facility and infrastructural upgrades.

With the foregoing, then arrangements could have been made, to have vendor financing arrangements for materials, equipment and infrastructure such as meters, cables, transformers etc. with the likely impact being that the sector would have improved much more than it currently has. Vendor financing was more likely to have succeeded because the vendors, particularly the reputable ones would have been aware that there was cash available in one or more dedicated accounts thereby increasing the credibility or the credit worthiness of the value chain. They also would

have been able to provide the requisite equipment and infrastructure knowing that they would be paid at a premium. Further, there would have been more funds that could have been used to deploy technology to reduce electricity theft as is the case, elsewhere in the world.

The Challenge of Frozen and Inadequate TariffsAnother issue is that promises (regulatory and otherwise) have not been kept in terms of ensuring that tariff reviews take place when they ought to. Specifically, the Multi Year Tariff Order (“MYTO”) requires that there is a bi-annual review of the tariff and same should change where there is, amongst others, a 5% change in foreign exchange rates, gas prices, inflationary rate and actual daily generation. Also, the exchange rate has changed substantially since the last benchmark

by NERC. Apart from the foregoing, there have been challenges around political interference by and with NERC, especially during the last administration when on March 17, 2015, NERC issued a notice stating that “henceforth, collection loss, which is defined as the ‘amount billed but not collected’, will not be automatically passed on to consumers of electricity.

Consequently, the collection loss for all Discos is set at zero”. NERC then specified that the removal of collection losses from customer tariff had reduced tariff by more than 50 percent in some places The setting of losses at zero did amount to changing the rules mid-way into the game, especially considering that the Discos had only recently been privatized with agreements largely hinged on the MYTO provisions. Questions which bordered around fairness, legitimate expectation (which may be a good cause of action in dispute resolution) and investor confidence that may be adversely affected from NERC’s action in that regard, were raised.

Further, it is pertinent to note that there was a strong argument that if NERC went on with its changes (with the concurrence of BPE), the federal government was effectively reducing its equity interest in those distribution companies. As things stand, it will appear that the tariffs have been frozen for thirty (30) months.

The Power Ministry/Disco Brouhaha- Disco Inefficiencies and Government’s Failed PromisesDespite the federal government of Nigeria’s proposed bailout of the NESI with over a Trillion Naira, the NESI remains almost insolvent with debts of over a trillion Naira.

Specifically, Discos have been accused of rejecting power due to poor collections and dilapidated distribution assets. The Discos, on the other hand have complained that they lose an average of N48/ kwh of electricity due to the deliberate non-implementation of a new tariff regime for over thirty (30) months. In the view of the Discos, electricity tariffs should be over N80/kwh of electricity and not the N32/kwh of electricity currently being paid. The Discos further claim that the frozen tariff

review has stalled capital investment in a capital-intensive sector like the electric power sector.

On the other hand, the Discos haven’t appeared financially disciplined and have been consistently accused of deliberating refusing to meter consumers contrary to the Performance Agreement executed among the Disco, the Federal Government and the core investor.

They have also apparently failed to enhance their distribution networks whilst also not supporting NERC’s initiatives to open up the power space even where they can still benefit such as where they can have their facilities and infrastructure serve as conduit and get paid tariffs for same. The approach appears to be that, if we can’t succeed, we will not let anyone else to!

There have been accusations and counter-accusations on all fronts.

No proposed solution has seemed to work.

The Way Forward Increased Tariffs (Electricity Cannot be Cheap in the Short Term) and Less Political ConsiderationsIt is rather sad that the average politician has no desire to increase utility tariffs even in the face of reality as any increase is seen to be putting any re-election bid (of that government officials or his political party) in jeopardy; even where increasing prices/ tariffs, is crucial or critical to the well-being of the relevant sector of the economy and this is the fate of the NESI, too.

Rather than fix such pricing issues by usually allowing market prices reign, such politicians and government officials still attempt to lure investors; usually unsuccessfully, except of course their friends and cronies who are unlikely to make any progress in such sectors.

The foregoing, is particularly the case, with the NESI, as it is clear that cost reflective tariffs are necessary to ensure sufficiency of tariffs across the power sector value chain. In the highbrow areas of Lagos State and other States in Nigeria, many of the residential estates have resorted to their own captive generation to address their power needs. Many of these estates charge as much as N80/kwh of electricity to provide 24 hours of power to the residents of these estates. This suggests that not all Nigerians would be unwilling to pay for power even if much more expensive; provided that it is available.

Consequently, NERC must consider the current tariffs in the MYTO and update the indices in line with current realities. Nigerians must realize and accept the fact that the provision of constant electricity would be at a reasonable cost. The argument that subsidy or low prices is for the benefit of the poor is no longer sustainable as most beneficiaries of such subsidies and low prices are the rich and middle class who can afford to pay these prices- the poorest people in the villages and rural areas are hardly ever connected to the grid and where they are, such grid infrastructure just do not function. Thus, government ends up subsidizes the life styles of the rich and middle class.

Off-Grid Power- Part of the Continues on page 32

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BDLegalBusiness bar watch Why lawyers are calling Why lawyers are calling for a cancellation of the NBA elections: for a cancellation of

the NBA elections

Theodora Kio-Lawson

I

t is almost three (3) weeks since the Nigerian Bar Association (NBA) elections was first scheduled to hold, yet it would seem that after three postponements and over seven attempts at voters’ verification, the problems of the Electoral Committee of the NBA (ECNBA) are far from over, as it has yet again announced a new schedule for verification and voting.

In a statement released by the electoral committee on Monday August 6th, 2018 the body for the umpteenth time announced an entirely new schedule for verification and voting. It read: “In the last couple of days, the Electoral Committee Nigerian Bar Association (ECNBA) received various complaints over the inability of members to verify their names on the verification portal deployed by the service provider. In response to the complaints, the ECNBA held series of consultations with different stakeholders to resolve the unfortunate difficulties.

“It is against this backdrop that the Committee deemed it necessary to modify the activities and adjust the timelines for the 2018 NBA National Officers Elections.”

The release, which was jointly signed by the Chairman of the committee, Prof. Auwalu Yadudu and Secretary, Bolaji Agoro, ended with a plea to members urging them to be patient with the process.

“We apologise for the inconveniences experienced in the course of this exercise and solicit for the cooperation and understanding of members,” it said.

However, as at press time, the disposition of members of the Nigerian Bar have gone from nearexasperation to outright fury, with many describing the situation as an “absurdity”.

A member was heard saying, “What is this? I take it that there is a deliberate plan by the NBA ExCo and the ECNBA to scuttle this election so as to cast a dark shadow on Universal Suffrage. The current

Abubakar Balarabe Mahmoud, San

“

Members of The Electoral Committee of the nba (ecnba)

“IMPORTANT NOTICE: The ECNBA, after consultation with National Officers, Stakeholders and Representatives of Candidates, considered it expedient to issue the following new timelines: The Election process will commence with verification exercise on Tuesday 31st July 2018; the verification portal will be deployed latest by 8:00pm on Tuesday 31st July; a call center to provide assistance to members who may have challenges with the verification exercise and subsequently the voting exercise will be ready and deployed by Tuesday 12:00 noon. The details including the telephone numbers will be issued; verification will end at 10.00am on Thursday August 2nd, 2018; the formal transfer of the verified data to the e-portal service provider will take place on Thursday 2nd August; accreditation and voting will commence by 10:00 pm on Thursday August 2nd and end Saturday 10:00 am August 4th, 2018 with results being announced immediately afterwards.”

The Bar which has been wrought

with various forms of crises in the weeks leading up to its election was at the beginning of this week awakened to another round of fresh drama when a supposed ‘Letter of Resignation’ emanating from the Chairman of the ECNBA, Prof Auwalu Yadudu to the President of the Nigerian Bar Association surfaced on a number of online legal platforms.

In the said letter, Yadudu expressed a wish to discontinue his service on the electoral committee for the purpose of “maintaining his integrity’.

For many, this seemed like an affirmation of their suspicions/ accusations of foul play leveled against the ECNBA and the National Secretariat of the NBA. However, Yadudu has since come out to deny the existence of such a letter, stating that not only was the letter fake but his signature was also forged.

As the drama unfolds and the plot thickens, several members of the bar are confused and continue to wonder where all of these will eventual end. We, on the other hand will keep watching and reporting.

CRENET not responsible for verification hurdles – Kehinde Olateru

Artificial Intelligence (AI) solution, which assessed eligible voters using enrolment numbers across various NBA-based datasets. All of these corrective steps were achieved within the span of 5 - 6 days.

“It is imperative to point out that, although there have been several attempts by persons of shady character to hack our systems and create the impression that our system is unsecure, we have at all times intercepted and rebuffed such attacks and retained the security of the application,” the Projects Head, said.

The company thus assured the legal community, that while there may still be lapses with the process information distribution between Crenet TechLabs, the ECNBA, staff/volunteers of the ECNBA and the branches, Crenet’s Application remains secure and continues to maintain its integrity.

“The current challenges are predominantly generated by third-party service providers to the ECNBA who are responsible for delivering access codes and emails to eligible voters. However, we are consistently working with the teams involved in resolving issues such as missing information that have risen due to incorrect provision of data from the NBA branches. These issues are being addressed primarily by ECNBA with

president, AB Mahmoud, SAN had made his intentions known right from day one that he preferred succession to election. Even IBB never maneuvered elections the way this administration is doing,” Said Obioma Ezenwa.

Another member, Silas Onu, disclosed that the ECNBA’s mandate to conduct election has elapsed.

“All the rescheduling presently done without the approval of the National Executive Committee (NEC) is a total waste of time. Section 6 (2) Of the NBA constitution clearly states that ‘Failure’ to conduct an election in July, for any reason including emergencies, ends the tenure of the EXCO,” he said.

Onu goes on to explain that Article 2.3 (a) of the 2nd Schedule envisaged a situation where it is the 10-member caretaker committee that can approach the NBA NEC for ratification of any other new date outside July.

It would be recalled that last Week, the ECNBA put out a similar announcement, which read,

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ollowing developments arising from the NBA voters’ verification process, the association’s ICT partner, Crenet Techlabs has disclosed that it is not responsible for the woes the association is currently experiencing with regards to preparation for its 2018 elections.

The head of Projects and Products at Crenet Techlabs, Kehinde Olateru, who made this known in an exclusive chat with BusinessDay, explained the modalities of the ongoing verification process and proposed use of electronic voting in the 2018 Annual General NBA Elections.

According to him, Crenet TechLabs Limited was on June 12, 2018 invited to make a bid presentation to the ECNBA for the provision of technology services required for the Elections. During this bid presentation, the latter highlighted several potential issues and challenges that might arise and proposed various ways to mitigate these issues.

“However, a few weeks following our presentation, we became aware that a preferred vendor had been selected to provide the technological

Olateru

services for the Election end-to-end.

We understand that the initial verification process application put in place by the preferred vendor had encountered some issues, which generated a perception of data compromise. Following concerns about the integrity of the process and petitions from eligible voters, the ECNBA was compelled to make a decision to split the service process into three phases – Phase 1: Verification of Voters, Phase Two: Voting & Phase 3: Audit of Votes -together referred to as

the Election Exercise,” Olateru said.

Seven (7) days to the elections, which was scheduled to hold on July 23rd, 2018 Crenet TechLabs Limited was again invited by the ECNBA to proffer solutions to the pending challenges that threatened the integrity and credibility of the voter verification process.

He continued, “Based on the ECNBA’s request, we proposed certain technological solutions and were thereafter engaged by the ECNBA to specifically troubleshoot the voter’s verification process.

“Notwithstanding this extremely tight timeline, we deployed our best resources and developed a verification application to aid the eligible voter identification process, while simultaneously attempting to rectify the additional data challenge created by the failure of the respective NBA branches to forward details of eligible voters in line with the format stipulated. Also, in a bid to properly identify eligible voters without corresponding enrollment numbers, or other relevant detail, we were compelled to build an

M

y view is that what is worth doing is worth doing well. At this stage we don’t have to continue with this Election for want of transparency and preparation hence we now call for a Caretaker government that can commence a fresh process and conduct Elections within 3 months as provided in our ‘holy book’.

Those disqualified unjustly just by mere mortals playing God shall be given the opportunity to be tested.

Nothing short of this can guarantee credible transition and hence shall deprive the necessary legitimacy required in the leadership of the Bar. Please Pause and think about this.

The ECNBA is desperately looking for a ‘fall guy’ for its own failings.

It sought to go into an election with no plan and no credibility. Having been stopped, it then manufactured an election timetable that was clearly not feasible to anyone with any idea of what was required. Now it subjects us all to the electoral equivalent of the sighting of the new moon. This is incompetence on a rank scale.”

- CHUKWUMA EZEALA, LAGOS BRANCH ECNBA’s mandate to con“ The duct election has elapsed.

All the rescheduling presently done without NEC are a total waste of time.

Section 6 (2) Of the NBA constitution states that Failure to conduct an election in July, for any reason including emergencies, ends the tenure of the EXCO. Article 2.3 (a) of the 2nd Schedule envisaged a situation where it is the 10-member caretaker committee that can approach the NBA NEC for ratification of any other new date outside July.”

– SILAS JOSEPH ONU our full support,” Olateru said.

The representative of the company further stated that the need for this clarification had become expedient following a series of misleading materials and statements being disseminated across various social media platforms, lawyer groups and circles by unknown persons, with respect to services being rendered by the company Limited to the ECNBA – most of which seem to imply, howbeit wrongly, that Crenet TechLabs Limited was responsible for the challenges experienced by eligible voters with the accreditation process.

He said, “Given the nature of these misleading materials, it was necessary for us to address these issues.

“With respect to certain falsehoods being peddled about payments made to us, contrary to this misinformation, Crenet TechLabs Ltd has neither received any payment from the ECNBA nor invoiced the ECNBA for work done or payments due. Our primary occupation on this task remains the comprehensive accreditation of all eligible voters for the 2018 Annual General Elections. As with every project we take on, our core value is to provide solutions that guarantee satisfaction to the client.”

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Research & INSIGHT

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

BUSINESS DAY

research@businessdayonline.com

33

08106395676

Sustainable housing reforms set to bridge housing deficit in Nigeria Isaac Esowe

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lobally, there is a strong consensus that the development of the housing sector is essential for stimulating economic growth. Housing construction is one of the frequently used indices for measuring economic conditions worldwide. However, recent reforms in the mortgage industry is set to bring sustainable growth in the industry and bridge the housing deficit, which is estimated at 20 million.

Different measures had been put together by the government and organised private sector to create an enabling environment where housing will be made affordable and available to Nigerians at a relatively low-cost price. Consequently, numbers of factors have contributed to the rise in housing deficit, and the factors include a growing population. According to United Nations, Nigeria’s population stood at 196,189,141 as at 29 July 2018, with a growth rate of 2.61 per cent in the first half of 2018.

Urban population is 51.0 per cent, which implies that 99, 967, 871 people are residing in the Urban cities in Nigeria. The population growth has exerted significant pressure on the housing demand and deficit.

Ac q u i s i t i o n o f h ou s i ng through mortgage financing still remains a major impediment, hence, there is an urgent need to review the legal framework on which the industry is built, especially, the cost of perfecting a title and transaction cost. For instance, the cost of registering a property has immense effect on the cost of housing in Nigeria making it more expensive to access housing or landed property.

Housing delivery is subdued by limited access to finance, short mortgage tenors, slow legal procedures, and the high cost of land registration and titling. Particularly, the ownership rights under the Land Use Act (1978) vests the ownership of all land to state governments.

The huge housing deficit in the country signifies good prospects for the mortgage industry.

The housing gap can also create employment opportunities, especially in the course of trying to

Source: CBN Occasional Journal

bridge the housing deficit.

Mortgages can also promote the use of the mortgage insurance; embed risk management; develop the secondary market; standardize the process of mortgage underwriting; and encourage capacity building and professional development In the quest of addressing the country’s housing deficit, the Primary Mortgage Bank (PMB’s) came together to establish Mortgage Warehousing Fund Limited (MWFL), this is a special purpose company set to provide short term funding to its owner – mortgage banks in Nigeria, through the establishment of a multi – seller asset – backed commercial Paper Programme (CP), this programme provides short term liquidity by pre-financing Eligible Mortgage Loans (EWL’s) originated by MWFL’s member mortgage banks and accredited and licensed mortgage institutions.

Mortgage Warehousing Fund Limited (MWFL) Prefinancing Process According to the information gathered from MWFL, participating member Mortgage Bank (MMBs) assess prospective homeowners and book mortgage loans they intend to fund in advance of closing such mortgage loans. The process of conducting an assessment of the loans will run up to a cut – off date which is the end of the origination period in line with the

applicable MWFL Prefinancing timeline for the specific round of funding.

After aggregating the principal sum of all loans booked, the participating MMBs will send a request for prefinancing to MWFLs. MWFL will fund a maximum of 80 per cent of the aggregate loan amount booked ( or a maximum of 64 per cent of the property value) pursuant to the Master Purchase, prefinancing and Servicing Agreement (MPPSA).

All submissions of funding requests must be supported by all relevant pre – funding documentation for each mortgage loan booked in the proposed mortgage pool. The participating MMBs will also submit a Mortgage Factsheet which will contain details of the mortgagor and the mortgaged property along with an executed undertaking in respect of the information provided in the Mortgagor Factsheet which will indicate that each criterion under the NMRC Uniform Underwriting Standards has been complied with in creating each of the mortgage loans in the submitted portfolio.

Upon receipt of pre-funding documents from all participating MMBs, MWFL will review the Mortgagor Factsheets and all the pre-funding documents submitted for conformity with the NMRC UUS. Upon satisfactory review of all required pre-funding documents, MWFL

will issue qualifying MMBs with conditional approval of the funding request. MWFL will also conduct site visitation on randomly selected properties to be prefinanced from time to time.

Whilst still conducting its review of the pre-funding documents received from the participating MMBs, MWFL will forward the documents to NMRC for their review and subsequent approval. NMRC has sixty (60) working days to review the mortgage portfolio documents and approve same. Any non-conforming loans within the pool (if any) will be identified and sent to the relevant MMBs to substitute affected the loan(s) with eligible loan(s).

MWFL issues Commercial Papers (CPs) to money market investors equal to the aggregate funding request amount of the participating MMBs in the applicable prefinancing round. Upon the successful CP issuance, MWFL will provide all participating MMBs with their respective funding requests after all conditions precedent to prefinancing have been met, and all required pre-financing loan documentation have been completed, submitted, reviewed, and found acceptable. All prefinancing facilities provided by MWFL will be in strict adherence to its collateralisation policy as contained in both the MPPSA and MWFL Credit Policy Manual.

Upon receipt of the funding

from MWFL, each participating MMB will close all the prequalified Eligible Mortgage Loans, after which all post-funding documents as required in accordance with the MPPSA are sent to MWFL. Both MWFL and the participating MMBs will assemble all post-prefinancing documentation in respect of the eligible mortgage loan portfolio and deliver to NMRC within 14 days post-prefinancing, for commencement of final due diligence in readiness for refinancing at the end of the minimum six (6) month seasoning period.

NIGERIA MORTGAGE R E I N A N C I N G CO M PA N Y (NMRC) UNIFORM UNDERWRITING STANDARD (UUS) The Uniform Underwriting Standards outlines the standards under which a mortgage loan underwritten by a member mortgage lending institution of the NMRC will be eligible for refinancing by the NMRC. The goal of the NMRC Uniform Underwriting Standards is to: Promulgate mortgage lending standards and procedures within the Nigerian mortgage market, thereby facilitating improved access to housing finance; and Develop and promulgate the criteria for acceptable prime mortgage loans, including payment performance, financial terms, legal contract terms, mortgage loan product designs, mortgage loan underwriting criteria, and the contents of mortgage loan documents.

Lending standards promote efficiency and mitigate the legal and operational risks inherent in mortgage lending by ensuring quality collateral, adequate property title, proper registration, enforcement of legal mortgages, and maintenance of efficient collection processes.

The following primary mortgage banks constitute the current membership of MWFL : Abbey Mortgage Bank Plc, Brent Mortgage Bank Limited, Homebase Mortgage Bank Limited, Imperial Homes Mortgage Bank, Jubilee Life Mortgage Bank Limited, Lagos Building investment Company Limited, Mayfresh Mortgage Bank limited and Trustbond Mortgage Bank Plc.

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How Omoluabi Mortgage is treading on growth path, refocusing service offering Challenging macro-economic environment in Nigeria has put many businesses, especially those in the financial services sector, in neutral gear. But through efficient management of resources, creative and innovative products and services offering, some of them have not only stayed profitable, but also launched themselves onto growth path. And that has been the story of Omoluabi Mortgage Bank, one of Nigeria’s first generation primary mortgage institutions, writes CHUKA UROKO, Property Editor

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mid very difficult operating environment and poor understanding of its operation by a good number of potential depositors/ customers, the mortgage industry in Nigeria has continued to hold its space. With their low capital base and short term deposits, many primary mortgage banks (PMBs) remain in business, make profits and, in many instances, record growth.

Omoluabi Mortgage Bank is one of such PMBs. This is a first generation primary mortgage institution set up initially in 1992 in Osun State. The bank which is today a thriving and going concern has had what could be termed a chequered history.

It started operation in 1999 as Living Spring Savings and Loans.

This name was derived from the State of Osun which used to be known as Living Spring. In 2011, it was changed to Omoluabi Savings and Loans, and in 2014 when it was listed on the stock exchange and recapitalized to increase shareholders fund to N2.5 billion, it was licenced to operate as a state PMB and became known as Omoluabi Mortgage Bank Plc. After its recapitalization up to 2015, Omoluabi was everything but a profitable organisation.

This was before the new management of the bank came in.

The bank had about 69 percent of its portfolio as non-performing and about 50 percent of this was lost.In 2015 alone, the bank’s impairment stood at N354 million.

The bank’s financial performance and balance sheet were disappointing as total revenue for 2015 was N214 million and a loss after tax of N168 million; total customers’ deposit was N147 million and 86 percent of this was related to public sector.

Shareholders’ fund was depleted from N2.50 billion to N2.37 billion.

However, good management with creative and innovative ideas has changed these narratives such that the bank’s current portfolio size is N1.3 billion having grown by over 110 percent compared to 2015. Its nonperforming loan has dropped to11 percent from 69 percent in

Ayo Olowookere, MD/CEO

Adebayo Jimoh, chairman

2015 and is even adjudged low compared to industry average of over 30 percent.

Looking at the financial performance and balance sheet, total revenue increased to N305 million in 2016, representing about 207 percent growth, and then N518 million in 2017 which shows a further growth of 170 percent.

From a loss position of N168 million in 2015, the bank recorded profit before tax of N79 million in 2016 and then N187 million in 2017, thereby declaring dividend for the first time in its history in 2017. Total customers’ deposit has gone up to N1 billion and over 40 percent from the depositors are from the private sector.

With improved regulatory stand, the bank can now boast strong liquidity with capital adequacy of 92 percent and liquidity ratio of 169 percent. Also, the bank now has a rating of BB+ assigned by Agusto& Co. It also has guaranteed access to refinancing fund from the Nigeria Mortgage Refinancing Company (NMRC), giving it a stable and long-term fund for more loan creation.

When positive development is taking place and growth is seen, it means right decisions are being made and focused actions are being taken. It also

means new ideas are coming in and there are efforts at retooling, refocusing and repositioning.

These, exactly, are happening at Omoluabi Mortgage and they have set the bank on growth path.

The foundation for this growth was inauguration of a

When positive development is taking place and growth is seen, it means right decisions are being made and focused actions are being taken; it also means new ideas are coming in and there are efforts at retooling, refocusing and repositioning

new Board earlier on in 2016, sound corporate governance, efficient management and support of key stakeholders.

Continuing, he said, “with the recapitalization and bringing on board more shareholders, the bankneeds to be efficient and deliver results in a sustainable way. So, that makes us look inward and see how to reposition it, change the brand, the people’s perception and move forward.

The Bank over the last 2 years refocused its mortgage business and also aligned with local interests by creating products for local environment; growing service reach by re-tooling operations department and increased its number of branches.

Significantly, there was a change in approach to risk assets creation and management.

Enterprise-wide risk management processes was improved to ensure improved asset quality coupled with capacity building at post-disbursement and monitoring stages.

Through innovation and technology, a new and more robust banking software which helped to improve the bank’s services to customers were deployed along with the setting up of data center to drive the bank’s information technology, internet banking and e-business functions.

E-banking platforms were deployed and integrated with Interswitch; ATM infrastructure were acquired and installed at all branches to provide more flexible services to customers.

There was also strong focus on people that involved people-centred remuneration and training, holistic capacity development are on-going and these are being done through collaboration with regulators, training institutes and other partners.

“We have restructured the way we do business, refocused the company and also brought in new capacity. It has been a tough journey, I must say, especially being a state licensed mortgage bank”, Olowokere admits, but refuses to agree with people who classify Osun as a rural environment.

“Oshogbo, the state capital, is not rural. By population, Osun is a four-million plus state. In 2015, the state had the second highest human capital development index after Lagos and this classification was done by the World Bank. The state has the second lowest poverty rate based on the National Bureau of Statistics (NBS) rating of 2012, 2013 and 2014. It has the lowest unemployment rate, also confirmed by NBS in 2013”, he explains.

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Why we set three different prices for domestic gas – NNPC OLUSOLA BELLO, FRANK UZUEGBUNAM & STEPHEN ONYEKWELU

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igeria’s effort at attracting investors into its gas utilisation drive and creating value for the economy has been responsible for the different gas prices in the domestic market.

Currently, there are three different gas prices for various sectors of the economy. There is gas price for power, which is different from industries and gas-based industries such as fertilizers and petrochemical plants. With this, investors in various sectors of the economy are encouraged to take advantage.

Bello Rabiu, chief operating officer, upstream, Nigerian National Petroleum Corporation (NNPC), at Society of Petroleum Engineers, Nigeria Annual International Conference and Exhibition, said, “Part of the reason for the gas master plan is to make the domestic gas market viable and reduce entry barriers.

“As incentives, we have one gas price for power, another for industries, so that they can have cheaper energy. Also, there is

Obaseki inspects Ekiosa Market, promises improved business environment

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overnor Godwin Obaseki of Edo State has assured traders in Ekiosa Market in Oredo Local Government Area of the state of his administration’s commitment to revamp markets across the state.

Obaseki, who gave the assurance during a tour of the market, said plans were being concluded toensureregularelectricitysupply to the market, and disclosed that the claim of illegal ticketing in the market was being investigated.

He told the traders that modern toilet facilities would be providedinthemarkettoimprovethe sanitary condition of the market.

He maintained that there was need for the state government to improve the infrastructure in the market as the traders spend qualitytimedoingtheirbusiness,more than the time they spend at home.

“The inspection helps us to havefirst-handinformationabout the activities of traders and the condition of the infrastructure in the market, to enable us fix them,” he added.

The governor further said that hehas directed thatmarkets in the state should have management committees to take care of sanitation,security,andmaintenanceof infrastructure, particularly power infrastructureinthemarketsothat people can trade in comfort.

“Theotherreasonformycoming is to see for myself, those people that are harassing traders for ticket money. The provision of the law on who collects revenue is very clear.

“You will recall that we amended the local government law on markets and we are currently investigating the claim of illegal printing of tickets,” the governor said.

“We are going to work with Edo Development and Property Agency(EDPA) tosee howwecan create a sustainable financing modelforthemarket,”hesaid,and

a different price for gas-based industries such as fertilizers and petrochemicals. This is aimed at arriving at a willing buyer, willing seller model of pricing.”

The NNPC chief, who did not specify the exact amount for various categories of gas prices, said the end goal of this was so that Nigerian companies in these industries could compete favourably with companies that produce similar products around the world.

In this sense, a Nigerian fertilizer manufacturer should be able to compete with other fertilizers makers around the world.

To ensure there is willing buyer, willing seller model in the domestic gas market, the NNPC decided 5 billion standard cubic feet of gas daily would be able to sustain supply, and bring about sufficiency of gas to the domestic market.

“Gas is a big source of economic diversification. It can transform agro-based industries through the use of fertilizers. But to attract the needed investment, we need fiscal terms to incentivise investors.

Some companies have supplied gas but have not been paid.

We also need fiscal terms that encourage small and medium

term projects,” Jeffrey Ewing, chairman/managing director, Chevron Nigeria Limited, said.

Corroborating the views of previous speakers, Bayo Ojulari, managing director, Shell Nigeria Exploration and Production Company (SNEPCo), stated that for Nigeria to diversify its economy, it must leverage the low hanging fruits, such as agriculture, petrochemicals, which use gas as its feedstock, and more importantly, education and technology.

Ojulari emphasised the need for human capital development, without which every diversification effort would yield little result.

In Nigeria, 2 million people enter the labour market every year, and the biggest economies around the world are leveraging their population, “if your population is productive. It is a blessing. But diversification must be focused and not spread thin,” he said.

To reap the benefits of a diversified economy, an enabling environment is needed. This includes security, transparency and accountability, infrastructure (power, pipeline networks) and effective Public Private and Academia (PPA) partnerships.

Thursday 09 August 2018

Rural agribusiness: FG, IFAD kick off rehabilitation of farms connected to markets roads in 7 states HARRISON EDEH, Abuja

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ederal Government in conjunction with the International Fund for Agricultural Development (IFAD) had commenced rehabilitation of degraded rangeland cutting across seven states in the Savannah Belt of Nigeria, which will enhance rural agricultural business and support farmers.

Audu Ogbeh, minister of agriculture and rural development, at Madobi village in Katsina State, performed the flag off ceremony of erosion prone, farm connected market roads and rehabilitation of degraded rangeland cutting across seven states.

Altogether, the project, to be completed this year, will undertake 22 rural roads with support structures such as drainages, culverts, rails and drifts covering a distance of 59.09km across the participating states.

The benefiting communities of the project being implemented under the IFAD - Climate Change Adaptation and Agribusiness Support Programme (CASP) spread across the seven states, the

agric ministry said include: Borno, Jigawa, Katsina, Kebbi, Sokoto, Yobe, and Zamfara Ogbeh, in a statement issued on Wednesday, said the Federal Government was deliberately giving impetus to rural development because of the critical role that rural infrastructure play in unlocking the vast and enormous potentials of the rural areas.

“What we are witnessing today is part of a series of rural infrastructure build-up across the country under the present administration. Rural development such as this one is critical to the productivity of the rural people,” the minister said.

The minister enjoined the people to own the projects once completed in order not to allow them deteriorate, suffer disrepair or experience short life span.

“The road requires maintenance in order to extend its life span. In this connection, I will strongly urge the benefitting communities to form a road maintenance group which will assist in simple repairs such as filling of potholes, cleaning of drainages and other small repairs,” he said.

The minister announced that the ministry under the CASP programme would develop a total of 4,000 hectares of rangeland to cater for at least 3,000 herdsmen and carry out a total of 243km earthen roads targeted at 7 million rural dwellers beneficiaries across the participating states.

The intervention also includes provision of 997 solarpowered boreholes; apart from water harvesting, soil and water conservation infrastructure and establishment of 3,000ha of community woodlots, shelter belt and afforestation meant to stem fast depleting vegetations in the participating states and touch the lives of about 30,000 vulnerable women and men.

Highlights of the minister’s visit apart from the official flag off the programme is the distribution of Contract Award Letters to Contractors and the broadcast planting of improved fodder seeds in Madobi village, a development to be replicated in the seven participating states as well as concrete initiative of developing pasture for cattle thereby reducing farmers/ herders clashes.

EDPA opens new car park, seeks to decongest Sokponba Road

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do Development and Property Agency (EDPA) has opened a new car park in its premises to the public, in a renewed effort to decongest portions of Sokponba Road and Murtala Mohammed Way, by 3rd Junction in Benin City, the state capital.

The car park, which can take up to 60 cars, is an effort by the agency to repurpose its space and put it to productive use.

Executive chairman, EDPA, Isoken Omo, said the opening of the car park would decongest the road, provide a safe and conducive space for car owners to park their vehicles when they come visiting at the EDPA building, or to do business in the area.

According to Omo, the EDPA is intent on contributing to efforts to clear the notorious vehicular traffic on Sokponba Road, which is why it opened up the parking space, so that road users on the axis can have an option of a safe, conducive space to park their vehicles.

She said the move would ensure judicious use of the space, as efforts are in top gear to expand the facility and repurpose it to accommodate more vehicles.

“The car park is going to serve businesses at the busy 3rd East Circular Junction, by Ekiosa Market and others on Sokponba Road as well as visitors to the EDPA building, which houses a number of offices. The cost per parking is quite affordable,” she said.

L-R: Olukayode Pitan, managing director, Bank of Industry (BoI); Obaro Odeghe, head, corporate bank, Fidelity Bank plc, and Okezie Ikpeazu, governor, Abia State, at the official commissioning of a new secretariat donated by Fidelity Bank to the Leather Products Manufacturers Association of Abia State (LEPMAAS) in Aba, yesterday.

‘Charges at LADOL free zone are statutory’ AMAKA ANAGOR-EWUZIE

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ollowing media reports that firms are compelled to pay high charges at the Free Trade Zone of the Lagos Deep Offshore Logistics Base (LADOL), the management of the zone has faulted the claim, saying all charges levied in the free zone are statutory.

Amy Jadesimi, managing director of LADOL, told journalists on Tuesday in Lagos that all tariffs levied at the zone were mandated

by Federal Government policy and were subsequently issued within a transparent framework.

According to Jadesimi, the recently referred 1 percent charge on the Egina FPSO vessel currently being integrated at LADOL FTZ was also legal and initially agreed on by parties involved, at

the beginning of the project.

“There was nothing that was not known at the start of the project. For instance, within the approved tariff, we have 1 percent management charge which is statutory and it is the cost of the product when it leaves the Free Zone. Obviously, it cannot be calculated till the end of the project. It is not unique to the Egina project.

“No Enterprise operating in LADOL has ever been charged any amount by management or the authority, that was not on the Government approved tariff schedule for Free Zones,” she said.

Continuing, she disclosed: “Enterprises operating within LADOL Free Zone and their related parties have met and discussed these charges with

government in detail. This was not a unilateral action, and for any party to state otherwise is incorrect.

She however advised that to operate within a free zone, companies must meet certain legal criteria that include complying with FTZ regulations on employment, working conditions, as well as rules and laws of the Federal Republic of Nigeria.

On the benefits of operating in free zones in Nigeria, she said FTZ offered investors peaceful, safe and cost-effective environment, with minimal bureaucracy.

“By design, the benefits foreign companies enjoy in free zones far outweigh the statutory charges levied by the management of the zones. The charges are known and required to maintain the zones,” she said.

Under the Federal Government’s ‘Ease of Doing Business’ regime, according to Jadesimi, operating in LADOL results in real local content, which in turn means real cost savings for the companies in the free zone and the creation of thousands of jobs for Nigerians.

On the sailing of the vessel to the Egina oilfield, she said it was a technical matter, which Total would decide because it was not under the control of LADOL. “Egina is a massive project and all the work that was done in LADOL really exceeded expectations and has gone really smoothly. LADOL has almost completed her role in the project but obviously, we will have an on-going role in the maintenance and operation of the FPSO vessel,” she said.

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NEWS BoI commits to empowering 2m Nigerians to grow businesses KELECHI EWUZIE

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ank of Industry (BoI) says it is committed to empowering 2 million Nigerians to grow their businesses through various loan schemes.

Toyin Adeniji, executive director, BoI, said the organisation would not relent until every Nigerians willing have access to loan, irrespective of their status or level of education.

Adeniji, while speaking at the unveiling of ‘Trader Moni’ initiative at Ojuwoye Market in Lagos, said the programme, activated nationwide, would support 2 million Nigerians to grow their businesses.

Shesaidthegoalofthescheme was to take financial inclusion down to the grass root, whereby small business owners could access loan to expand their business without any collateral.

According to Adeniji, “This ‘Trader Moni’initiative is a mobile phone driven, after your details have been captured by agent and send to BOI system for validation, within 48 hours you will get cash notification in your mobile wallet account. You can either transfer the cash to your bank account or cash it out in any mobile money agent around.”

Uzoma Nwagba, chief operating officer, Government Enterprise and Empowerment Programme, (GEEP), said GEEP had

products such as, ‘Farmer Moni’ for farmers, which avail them opportunitytoaccessuptoN300,000 loan each.

“We have ‘Market Moni’ which target market women, traders and artisans that are little bigger and more structured, they get between N50,000 and N100,000. The whole initiative is available across the country,” Nwagba said.

Adeniji opines that president Muhammadu Buhari led administration recognised the contribution of petty traders to economic development and identified the fact that some of them may not have what the commercial banks may require to grant loan, so he supportthisinitiativetohelpthem grow their business.

“At the beginning you can access N10, 000 and pay back N10, 250 to qualify for N15, 000. Once you payback N15, 375 you will qualify for N20, 000 loan, when you pay back N21, 000 you will get N50, 000. All these stages have duration of six months interval to pay back.

“If you wish you can pay back before six month grace elapsed and access bigger loan. To pay back, just entered some of the backs we have partnered with such as Fidelity, Wema Bank, GT Bank, UBA, Heritage Bank, Stanbic Bank, Sterling Bank, Union Bank Jaiz Bank, tell them that you want to pay BOI-GEEP loan for PayDirect,” she said.

Strides Group sees end to UK’s rejection of Nigeria’s oil produce ENDURANCE OKAFOR

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hief Operating Officer, New RIVOC Limited, a member of the Strides Group, Nkem Joseph-Palmer, has said that the rejection of the nation’s produce especially vegetable oil would soon be a thing of the past once the company commences operations.

This followed the rejection of a large consignment of vegetables and other edibles exported from Nigeria by the United Kingdom (U.K.) at the weekend.

In a telephone interview, Palmer said the New RIVOC is determined to raise the bar for the vegetable oil industry with the acquisition of relevant local and international certification from accreditation bodies that would ensure quality that meets international standards.

Strides Group, owners of Strides Energy and Maritime Limited (SEML), in a multi-billion naira deal signed in Lagos,

by UBA Capital Trustees, on behalf of a consortium of four banks consisting Guaranty Trust Bank, United Bank for Africa, Zenith Bank, and Diamond Bank acquired the mortgaged assets of the Rivers Vegetable Oil Company Limited (RIVOC).

According to him, the company billed to commence operation soon would ensure the application of Hazard Analysis and Critical Control Points (HACCP) measures to determine critical control points and assure value is equivalent to best quality.

“It is an individual and strategic choice to obtain the relevant phytosanitary certificates for export. The Strides Group will achieve this with the relevant local and international certifica-

tions. “We are determined to ensure that quality systems focused on export in the mid to long term exist in Nigeria, so the U.K. rejection of Nigerian vegetable oil may soon be a thing of the past.

“For us at the Strides Group, we will focus on assuring that our private standards meet international sanitary and phytosanitary measures, and will raise the bar for the industry.”

Joseph-Palmer revealed that the lack of an ebullient quality management infrastructure is a current problem faced in Nigeria, which if resolved would bring the desired growth to the sector.

“We are currently poised to see that our vegetable oil plant meets ISO 9001:2015, ISO 22000:2015 and ISO 14001:2015 standards within the first six months of operations. Currently, we are applying HACCP measures to determine critical control points and assure value is equivalent to best quality.

“Looking down the value chain, we are constantly checking our suppliers to assure quality, from farm to fork. Quality speaks for itself, and the international community understands the language,” he assured.

Reacting to the rejection at the weekend, The Nigerian Agricultural Quarantine Service (NAQS), in a press briefing, said the produce were rejected on the ground that they were not accompanied with phytosanitary certificate, and not due to poor quality NAQS Head of Inspection, South West Zone, Moses Adewumi, said internationally, the Food and Agriculture Organisation (FAO) requires that in the movement of agricultural produce or commodities around the world, the commodities should be free from pest.

L-R: Godwin Obaseki, governor, Edo State; Blacky Omoregie, Edo State Market Women Leader, and Isoken Omo, executive chairman, Edo Development and Property Agency (EDPA), during the governor’s visit to Ekiosa Market, in Oredo Local Government Area, Edo State.

‘Entrepreneurial education is viable option to national growth’ KELECHI EWUZIE

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takeholders in the education space say deployment of entrepreneurship education across all levels in the education system remains the only strategic step to growing Nigeria’s national economy.

Theyobservethatyouthsrepresent over 70 percent of the population in the country and unemployment figure among this segment poses a challenge to the development of the country if not tackled.

A cross section of them who spoke with BusinessDay say reorientating undergraduates on the need to seek entrepreneurial skills while in school would go a longwaytosettinginmotionplans that would, in no distant time, boost the economic situation of the country.

Shoniyi Adeola, an entrepreneur, advises on the need for studentstolearntoemployagood time management technique in theirstudies,andtoalsohonetheir businesspotentialwhileinschool, so that when they graduate, they would be employers of labour rather than job seekers.

He points out that it is important for undergraduates to be determined and know the aspect

of their study that would help enhance their capabilities, while being smart enough to explore the opportunities of generating income around them.

“There is, therefore, no gainsaying that the anticipated growth and development of the Nigerian economy will be a little more realistic if majority of the youth are equipped with entrepreneurial skills,whichcanhelpthemtobeselfreliant, after graduation,” he says.

Adeyomi Olumide, also an entrepreneur, observes that entrepreneurship education should focus on developing understanding and capacityforpursuitofentrepreneurialbehaviour,skillsandattributesin widely different contexts.

According to Olumide, “Economics that embrace entrepreneurial skills in educational facets can be portrayed as open to all levels of development, and not exclusively the domain of the high-flying, growth-seeking business person.”

Olumide therefore, adds that when incorporated into the educational system, entrepreneurial skills would provide benefits to society, even beyond their application to business activities.

“Learn to manage your time well so as not to allow your training

suffer,” he advises.

The harsh economic realities in the country today notwithstanding, many education watchersarestillconfidentthatgiventhe right kind of training, the coming generation of graduates, if given proper orientation and entrepreneurial education, could become successful, here in the country.

Analysts disclose that it is an empirical fact that there is high unemployment rate in the country today, adding that entrepreneurship skill garnered in school is a practical proof that graduates with skills don’t lack employment because they are trained to become entrepreneurs who employ others.

They urge undergraduates hoping to build their careers in the any profession need to apply themselvesdiligentlyandbecome dedicated to it.

On his part, Patrick Okpah an entrepreneur opines that it is one thing for us to want to give young people education, to turn them intoprofessional,butwealsoneed peoplewhocanbetheconscience ofthesociety,weneedpeoplewho can share their creativity, their insights and enable us envision the kind of society we would like to live in.

Darkness looms as union shutdown Ikeja Disco OLUSOLA BELLO

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ustomers of Ikeja Electric (IE) may once again experience the dis comfor t of extende d darkness as members of the National Union of Electricity Employees have laid siege at the company headquarters in Alausa, Ikeja, and all its other offices across Lagos.

The Union members, who claim that the picketing of IE followed the disengagement of about 40 members of staff, have forcibly shut down operations at the offices thereby resisting access to IE personnel and customers who had attempted to gain access to the offices.

Ac c o rd i n g t o I E , t h e recent separation of staff was due to varying actions, which are not in furtherance of the overall company objectives.

This protest in coming at heels of the promotions of about 300 employees last week and the recruitment of over 500 new employees in the past one year. The promotion exercise cut across all cadres of staff, including members of the respective Unions in the organisation.

Nigerian hotel market to grow 12.6% over next 5 years - PWC JONATHAN ADEROJU

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he Nigerian hotel market, which grew by 11.7 percent in 2017, is expected to continue growth at a 12.6 percent compounded annual growth rate in the next five years, according to a PricewaterCoopers (PWC) projection.

Nigeria has the second fastest growing markets in terms of hotel room revenue with increases of 11.7 percent in 2017, slightly behind Mauritius, which had an increase of 12.7 percent in that same year.

Hotel room revenue in South Africa, Nigeria, Mauritius, Kenya and Tanzania rose 2.7 percent in 2017, down from the 10.6 percent increase in 2016, as declines in Kenya and Tanzania offset double-digit increases in Nigeria and Mauritius.

Nigeria, which depends prin-

cipally on domestic tourism, had been hurt by a weak local economy as falling oil prices led to an economic slowdown that began in 2015.

The PWC report forecasts that in the next five years, Nigeria is expected to be the fastest growing economy in Africa with 12.6 percent compound annual increase.

“We expect growth in guest nights to be the principal driver of room revenue in Nigeria during the next five years,” the report notes.

Though recession persisted through early 2017, the report notes that during the latter part of 2017, with oil prices becoming stable, the economy begun to pick up, guest nights improved, and room revenue accelerated, recording its largest increase during the past six years.

Guest nights rose 6.7 percent in 2017, the first increase since

2013, as economic conditions stabilised and confidence in business increased.

The domestic economy is the key driver of tourism in Nigeria, with 97 percent of tourist spending in Nigeria in 2017 having been generated by domestic travellers.

Tourism accounts for about 5 percent of GDP in Nigeria.

Over the past five years, the total number of available rooms rose to a cumulative 21 percent, and an additional 30 percent increase in available rooms is expected over the next five years, according to PWC. The PWC report projects that by 2021 there would be 13,200 available rooms in Nigeria based on planned openings.

With the present figure of 11,400 for the same year and for the projected year, the number of available rooms will rise from 9,700 in 2017 to 12,600 in 2022, a

5.4 percent compound annual increase.

With the economy improving, it is projected that guest nights will continue to increase over the forecasted period, with gains accelerating in 2021 and 2022 as forecasted economic growth accelerates.

Growth for the five-year forecast period would average 7.5 percent, compounded annually.

Also, according to the report, the occupancy rate, which averaged 45.2 percent in 2017, will climb to 50 percent or higher in 2021 and 2022.

CHANGE OF NAME

I, formerly known and addressed as Catherine Jessica Isioma Obiazor now wish to be known and addressed as Catherine Jessica Isioma Okigbo. All former documents remain valid.

General Public please take note.

38 BUSINESS DAY NEWS

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MTN Nigeria data revenues up 63.7% Continued from page 1

was up only by 17.3 percent, an indication that data revenues is now the main strength of the company’s growth in the country.

Data traffic on its network also rose by 52 percent in the six-month period end June 2018. Active data users on the MTN Group stood at 71 million as at June with Nigeria now accounting for approximately 21 percent of the its global active data users, second only to Iran which accounts for 27 percent.

The MTN half year report also shows that the company is increasingly getting involved in the Mobile Money market with MTN Mobile Money which is now active in 14 different countries.

Called “MoMo” MTN reports that its mobile money platform now has 24 million active users in its 14 operational countries with US$6 billion transactions every month. Ghana (33 percent) and Uganda (22 percent) are its biggest markets with Nigeria accounting for just nine percent of MTN Mobile money market despite the fact that the country has the MTN Group’s biggest subscriber base.

For the half year ended June 2018, MTN Nigeria reported total revenues of 21 billion rand or (N567 billion), up 17 percent.

The company also reported Earnings Before Interest, Taxation, Depreciation and Amortization (EBITDA) of 9.09 billion of N246

billion with an EBITDA margin of 43 percent up from 38.3 percent in June 2017.

MTN Nigeria yesterday reiterated that it expects to list on the Nigerian Stock Exchange before the end of 2018, subject to regulatory approvals and appropriate market conditions. The MTN Group expects that any reduction in its ownership of MTN Nigeria will be limited.

“We made good progress on our plans to list MTN Nigeria on the Nigerian Stock Exchange. We do not expect any material cash inflows to the group from the IPO,” MTN Group president and CEO, Rob Shuter said during an investor’s conference call for H1 2018 financial results.

“We resolved some key regulatory issues in Cameroon and Benin, launched the initial public offering (IPO) of MTN Ghana and made progress on the IPO of MTN Nigeria. As part of our on-going portfolio review.”

In first half of 2018, MTN Group reported revenue of 62.8 billion Rand (N1.7 trillion), while Service revenue increased by 10.2 percent, supported by growth in MTN Nigeria which was up 17 percent while MTN Ghana increased by 27.9 percent, MTN South Africa increased by 2.9 percent and MTN Uganda increased by 8.8 percent.

“MTN had an encouraging first half of 2018, with acceleration in the second quarter, supported by an improved operational perfor-

mance across many markets which were led by Nigeria, Ghana and South Africa,” Shuter said.

MTN Nigeria performed ahead of expectations, with double-digit growth in voice revenue driving accelerated service revenue growth and the further widening of the EBITDA margin with increased usage and growth in data subscribers supported data revenue growth; however Digital revenue declined as a result of further optimisation of its VAS business.

“Towards the end of the second quarter, net additions and revenue growth slowed in line with economic activity, as well as some seasonality,” MTN Group said.

“We expect this trend to continue in the third quarter, with an improved performance expected in the fourth quarter as MTN Nigeria subscriber base expanded by 5.6 percent from December 2017 to 55.2 million.” Despite sanctions imposed on Tehran by the United States this week which already led to banks and many companies around the world divesting from Iran, MTN Group also said it is sticking to its 2018 dividend target by continuing operations in Iran.

“Despite continued challenges in repatriating funds from MTN Irancell, the board remains committed to plans to declare a total dividend of 500 cents per share for 2018 and is targeting growth of 10 percent to 20 percent over the medium term,” MTN Group said.

Continues on wwwbusinessday online.com

Thursday 09 August 2018

Sell off leaves NSE 30 Index P/E at lowest ...

Continued from page 1

Bloomberg terminal.

The full year (FY) ratio was 13.94x in 2010; 18.18x in 2011; 11.58x in 2012; 14.51x in 2013; 11.84x in 2014; 11.46x in 2015; 12.47x in 2016, and 10.67x times in 2017.

It currently trades at a low of 9.01x, according to Bloomberg data. Analysts say the mispricing could be a great bargain and will prompt investors to buy before the market corrects it.

Share prices are falling so the ratio will fall and this is due to massive sell off we have seen since December, according to Bunmi Asaolu head of equity research at FBN Quest Capital.

Some firms have seen earnings growth as share prices fall further compressing valuations.

The introduction of the Importers and Exporters (I and E) policy last year combined with relative peace in the Niger Delta region and a rebound in crude oil price resulted in corporate earnings growth in 2017.

The NSE – 30 index has shed -6.47 percent year to date (YTD), compared to a -5.08 return for the broader all share index.

A breakdown of the NSE 30 index shows the banking 10 index price to earnings ratio is currently trading at 5.36, this compares with 7.15 in 2017. Bloomberg’s estimate for price to earnings is 4.37 times in 2019. Lenders recorded earnings growth through 2015 and 2017, fuelled by the devaluation

of the currency and high interest rate environment.

For the year ended December 2017, after tax profits for the 10 lenders that have reported results spiked by 44.28 percent to N693.92 billion from N478.19 billion the previous year (2016).

However, analysts are of the view that precipitous drop in yields on short term securities will squeeze future margins.

Margin deterioration has the potential to terrify bulls.

The low P/E ratio may mean it is time to buy. Earnings for banks are under pressure because of the low interest rate environment, according to Dolapo Ashiru, an investment analyst.

“Consumer good stocks have been affected because earnings are slowing down due to pressure on consumer wallets,” said Ashiru.

The Consumer Goods 15 Index’s- the names of largest firms in the sector- price to earnings ratio is currently at 19.80, this compares with 27.87 in 2017. Bloomberg estimated industry price to earnings ratio to fall further to 15.98 in 2019.

Analysts say most consumer goods firms are unable to hike prices of key products this year even as sales are growing at a slow pace which will undermine future margins.

The Oil and Gas index price to earnings ratio currently trades at 4.17 times, this compares with 12.18 times in 2017.

Continues on wwwbusinessday online.com

Pursley Resources pays N640m for 900,000...

Continued from page 1

of 900,000 units of Seplat.

Seplat notified the Nigerian Stock Exchange (NSE) about this bulk sale in letters signed by its company secretary, Mirian Kene Kachikwu. The notification was made in accordance with Rule 12 of the Amendments to the Listing Rules of the Nigerian Stock Exchange and Article 19 of the EU Market Abuse Regulations.

Listed on the Premium Board of the Nigerian Stock Exchange, Seplat Petroleum Development Company Plc which is also listed on the London Stock Exchange (LSE) is a leading L-R: Khadija Abba Ibrahim, minister of state for foreign affairs; Kemi Adeosun, minister of finance; Babatunde Raji Fashola, Nigerian indigenous oil and gas minister of power, works and housing, and Lai Mohammed, minister of information and culture, during the Federal Executive company.

Council (FEC) meeting presided over by Acting President Yemi Osinbajo at the Aso Chambers, State House, Abuja, yesterday.

Following the purchase of 900,000 units of Seplat shares, Pursley now holds a direct interest in 900,000 ordinary shares in the Company Continued from page 1 that the EFCC has frozen the state ing with the Acting President, Yemi which equates to a voting interest of accounts in three different banks. Osinbajo yesterday condemned the the party at Ikot Ekpene township Chief Press Secretary to the State freezing of Benue State government 0.15percent based on Seplat’s issued share capital of 588,444,561. stadium Wednesday.

Governor, Terver Akase confirmed account and promised to do someThe equity transaction was conA source close to the state the action to the media. Samuel thing in his capacity as Chairman of summated in Lagos on June 11, 2018. executive council confirmed the Ortom, the governor of Benue State the NGF to address the issue.

The share price of Seplat has risen freezing of the state government’s recently announced his defection “The freezing of any account by 3.8percent this year based on its account but did not give details from the ruling All Progressives of the state government whether closing price of N650 as at Tuesday about when it occurred and the Congress (APC) to the PDP. Shortly Benue or anywhere is unconstitu- August 8, 2018. reason why the account has been after his defection, the EFCC re- tional and is not right. That is shutBusinessDay’s check on directors’ leased a report to the media that ting down government” frozen. interest in shares of the company as Citing security exigencies, Yari at February 2018 shows 16,151,325 Sources close to the governor claimed that the governor has been believe the freezing of the state ac- linked with mismanagement of N22 said “government must spend, most ordinary shares of Seplat Petroleum counts might not be unconnected billion in security funds, an allega- especially Benue that is facing inse- Development Company Plc are held curity challenges”. “Well, we don’t directly by A.B.C. Orjiako and Shebah with the arm twisting tactics of the tion the state government denied.

The freezing of the bank ac- know why the EFCC took the action. Petroleum Development Company federal government mainly being applied in opposition states while counts of both states have sent panic But if indeed EFCC froze the account, Limited; 18,500,000 ordinary shares turning a blind eye to states gov- through the camp of the PDP gover- from my point of view, it is wrong.” are held by Vitol Energy Limited for He said that the government of the benefit of Shebah Petroleum Denors who are now wondering if this erned by the APC. The commissioner for finance, trend is going to continue from the President Muhammadu Buhari will velopment Company Limited, which not sit down and oversee unlawful is an entity controlled by A.B.C. OrLinus Nkang did not pick his calls security agencies.

But Chairman of the Nigeria operation from the security agencies, jiako and members of his family; and neither did he response to a text message sent to his phone number. Governors Forum NGF, Abdulaziz citing the example of the sacking of 12,600,000 ordinary shares are held Similarly, the Benue State gov- Yari while speaking with State the former DG DSS, Lawal Daura. directly by A.B.C. Orjiako’s siblings. ernment also raised alarm yesterday House Correspondents after meetAlso, 27,217,010 ordinary shares Continues on wwwbusinessday online.com

Assault on opposition continues as EFCC freezes Akwa Ibom, Benue states bank ....

are held by Professional Support Limited and 1,920,000 ordinary shares are held by Abtrust Integrated Services Limited, each of which is an entity controlled by Austin Avuru.

Furthermore, 44,160,000 ordinary shares, are held by Platform Petroleum Limited, which is an entity in which Austin Avuru has a 23percent equity interest and 1,249,730 ordinary shares are held by Austin Avuru.

At 1 February, 2018, the Company’s issued share capital increased by 25millions shares in furtherance of the Company’s Long Term Incentive Plan. Seplat’s share capital now consists of 588,444,561 ordinary shares of 0.50kobo each, all with voting rights.

On March 6, 2018, the Nigerian Stock Exchange was notified about the purchase of 10,000 ordinary shares of Seplat by Michael Alexander, a senior independent nonexecutive director of the Company.

The transaction made Alexander have direct holding of 20,000 ordinary shares and indirect holding of 95,238 ordinary shares of Seplat Petroleum Development Company Plc through Lexican Consulting Limited.

Also, following the sale of a portion of the shares registered in the name of Charles Okeahalam,

an Independent Non-Executive Director of the Company, who held a direct interest in 597,238 ordinary shares of Seplat Petroleum Development Company Plc representing approximately 0.10percent of the voting rights of the Company’s issued share capital, Okeahalam now holds a direct interest in 495,238 ordinary shares in the Company.

Continues on wwwbusinessday online.com

Politics & Policy Thursday 09 August 2018

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BUSINESS DAY

Oshiomhole condemns 16 years of PDP’s looting, as Akpabio defects …FG freezes Akwa Ibom state account ANIEFIOK UDONQUAK, Uyo

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ormer Senate Minority leader, Godswill Akpabio of the Peoples Democratic Party (PDP), has formally defected to the All Progressives Congress (APC), with Adams Oshiomhole, national chairman of the party, taking a swipe at the People’s Democratic Party (PDP).

Akpabio dumped PDP in the presence of the Oshiomhole, BoLa Ahmed Tinubu and Nsima Ekere, managing director of the Niger Delta Development Commission (NDDC) and other stalwarts of the party.

The Acting President was represented by the Secretary to the federal government, Boss Mustapha.

Addressing a capacity crowd at the Ikot Ekpene Stadium shortly before Akpabio’s

Akpabio

defection, Oshiomhole, the national chairman of APC praised Akpabio for joining the APC but berated the PDP for having mismanaged the economy of the country for 16 years. He said the PDP was dead and buried.

“We have often felt lonely in the south-south region of the country that it is only in

Lagos ‘19: Why Epe is gunning for East senatorial seat OLUGBENGA THOMAS

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s preparations for 2019 general election hot up t h rou g h ou t t h e country, aspirants are showcasing their high points that they consider effective political tools that can earn them their electoral success at the polls.

While individuals are intensifying their efforts through mobilisation, sensitisation and consultations towards achievement of their goals, some groups have also sprung up as campaign mouthpieces either for some particular aspirants or for their catchment areas in their various divisions.

In this game of ‘It is our turn’ (Awa L’okan) game, Epe Division in the Lagos Senatorial District is not also left out.

Investigations have revealed ways things are done “politically” in the district and one has realised that Lagos East Senatorial District comprises five separate divisions- Ibeju-Lekki, Somolu, Kosofe, Ikorodu and Epe. And in the spirit of justice, fair play and rotational principle, the senatorial slot has been moving from one division to the other. The record

clearly shows however that while a particular division has benefited from the arrangement twice, Epe division is yet to have the taste of the senatorial pudding.

Here is how they stand since 1979 till date: Senator Adebanjo (IbejuLekki) -1979 to 1983; Anthony Adefuye (Somolu) – 1992 to 1993; Adeseye Ogunlewe (Ikorodu) -1999 to 2003; Olorunnimbe Mamora (Kosofe)-2003 to 2011, and Olugbenga Ashafa (Ibeju-Lekki) -2011 till Date.

From the above, while Ibeju-Lekki division is enjoying its second chance, Epe division is yet to have a chance to occupy the coveted seat, hence, the advocacy for ‘It’s Our Turn’ by the people of that division.

This must have informed the decision of the division to present a formidable, highly experienced and eminently qualified politician to occupy the seat from next year, 2019. Kamorudeen Lanrewaju Mabadeje (KLM) Razak, a chieftain of the All Progressives Congress (APC), former state Commissioner for Public Transportation, a philanthropist, business mogul and astute politician, has been chosen as the choice of the people in the division.

Edo State that we have a APC governor. People had given the impression that Akwa Ibom belonged to PDP, but today what my eyes have seen is different,” he said.

He thanked the Senate for giving Akpabio the opportunity to serve as minority leader, adding that he had to surrender the crown of the PDP

to join the APC. “You have shown that we can stand up and be counted in the south-south. When we have a senator like Akpabio standing by me; can we be afraid?

“Let me assure you that on behalf of our national leader; on behalf of all the leaders and APC in all the states, we welcome you whole-heartedly to the APC. This afternoon, we have an uncommon rally. I say Akwa Ibom is united under the leadership of Godswill Akpabio. Akwa Ibom should be united for the purpose of change. Welcome on board,” he further said.

In his address, Akpabio said he would be part of the solution to bring development to the people; to solve the problem of the country, adding that uncommon transformation has come to Akwa Ibom State.

He said he was ready to sweep away poverty and that the Niger Delta belongs to the APC.

Two members of the state House of Assembly- Nse Ntuen, who represents Essien Udim state constituency, where Akpabio hails from as well as Gabriel Toby representing Etim Ekpo state constituency in the same senatorial district- also defected with Akpabio.

Others who also defected include two members of the House of Representatives, Emman Ekon representing Abak, Ika, Etim Ekpo federal constituency and Emmanuel Akpan who represents Ikot Ekpene/ Obot Akara State constituency.

Meanwhile, Akwa Ibom State government has confirmed that its accounts have been frozen by the Federal Government.

A source close to the state executive council confirmed the freezing of the state government’s account but did not give details about when it occurred and the reason the FG took the action.

Crisis rocks Accord Party, as Federal lawmaker, others defect to APC INIOBONG IWOK

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major crisis has erupted in the Lagos Chapter of the Accord Party (AP); this is just as Dauda Kakoare, a member of the House of Representatives, representing Mushin Federal Constituency 1, has concluded plans to defect to the All Progressives Congress (APC), along with several members of the party in the state.

Accord Party in Lagos State has recently been locked in internal power tussle between the federal lawmaker and some chieftains of the party in the state.

Kakoare was said to have frowned at the alleged misappropriation of funds meant for the running of the party, while further accusing some leaders of the party of creating divisions in the structure of the party in some local government areas across the state, insisting that some leaders in the outgoing state executive of the party should not seek re-election because they had been suspended by the national leadership of the party.

However, a source in the party revealed to BusinessDay that Kakoare is seeking a new platform to enable him secure his re-election into the House of Representatives. The source

further revealed that the deal had been struck before the recent wave of defection from the APC in the country, adding that his recent lukewarm attitude toward issues in the party had justified the claim.

“He has signed an agreement with the APC to dump the party and it is because a lot of us have refused to go with him that all these issues are coming up. But the Accord Party would remain; he is not funding the party, unlike what is being speculated that he is our financier. All this is because he wants to go back to the House of Representatives and I can say that we would remain resolute,” the source said.

Ineligibility: Court clears PDP candidate, Adeleke, for September 22 Osun guber poll BOLADALE BAMIGBOLA, Osogbo

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n Osun State High sitting in Osogbo, the state capital, has dismissed a suit challenging the eligibility of Senator Ademola Adeleke as the candidate of the People’s Democratic Party (PDP) in the September 22 governorship election in the state.

Two members of PDP, Rasheed Olabayo and Oluwaseun Idowu, had dragged the federal lawmaker before the court, alleging that he did

not posses WAEC certificate and urged the court to restrain PDP from presenting him to the Independent National Electoral Commission (INEC) as candidate of the party.

They also urged the court to restrain INEC from accepting Adeleke from PDP as its candidate because he was not qualified to stand election, relying on Section 177 (d) of the 1999 Constitution.

In his judgment, however, Justice David Oladimeji, who presided over the court, said the claims of the plaintiffs that

Adeleke did not possess school certificate cannot disqualify him from contesting the election because the constitution does not state that a candidate for the office of the governor must possess a certificate.

Justice Oladimeji said that the constitution only stipulated that the candidate must be educated up to secondary school level and that with the acknowledgement of the plaintiffs that the Senator attended Ede Grammar School, the senator was deemed to be educated up to the stipulated level.

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FG urged to sack IGP as NASS siege opens new ‘war’ fronts ahead 2019 INNOCENT ODOH, Abuja

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ollowing Tuesday’s failed siege by men of the Department of Security Services (DSS) to allegedly effect an illegal change of leadership at the National Assembly that led to the sack of DSS Director, Lawal Daura, some Nigerians have demanded that the Inspector-General of Police, Ibrahim Idris, should also be relieved of his job over the Benue impeachment saga.

The DSS Director, Lawal Daura, became the major casualty of the ugly event of Tuesday as Acting President Yemi Osinbajo sacked him for the unathorised invasion of the federal legislature, which was roundly condemned by Nigerians and the international community.

The devious act may have been foiled but the ripples are spreading and the political wind is said to have some foreboding signs to come if appropriate and sweeping actions are not taken. At the moment the All Progressives Congress (APC) has denied any involvement in the unconstitutional act yet maintains a veiled threat to the position of the President of the Senate, Bukola Saraki and his deputy Ike Ekweramadu, who the APC is said to be restrategising to impeach.

An analyst, who preferred anonymity, told BusinessDay on Wednesday that the APC is thoroughly upbraided over the incident at the National Assembly, but warned Saraki and the PDP, including those who defected from the APC, not to be too euphoric about the ‘temporary’ success they scored against the ruling party.

He added that the APC chairman Adams Oshiomhole and his henchmen are back to their cocoon to launch a fiercer assault against the PDP. According to him, “the APC is apprehensive that if the PDP returns to power in 2019, principal members of the current government including President Buhari will not be spared in a looming war on anti-corruption that will be very vengeful. The APC leadership is swimming in an ocean of corruption despite all the rhetoric of war against corruption.

“They have also failed to manage the economy and provide security leading to widespread poverty and death and destruction by the Boko Haram and the Fulani herdsmen. That is why the APC and some elements in the Presidency are losing sleep over the defections and they are ready to even commit more constitutional breaches to ensure that President Buhari wins in 2019.”

Thursday 09 August 2018

BUSINESS DAY

NEWS Inadequate agric research funding undermines Nigeria’s food security JOSEPHINE OKOJIE

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igeria smallholder farmers have continued to lag behind their peers in terms of yield per hectare, and this is owing to the inability of agriculture research institutes in the country to provide them with technology that will boost their productivity.

Nigeria’s agricultural research institutes have continued to be the weak link in the country’s drive to diversify the economy through the sector and make exponential gains by way of earnings, employment and other spin-offs.

The agric research institutes across the country are, however, falling grossly short in providing the technologies that would drive growth in the sector, and are lagging behind smaller peer nations, where agriculture is of less priority.

Experts have attributed this to poor funding. They identify poor research funding as the major challenge among others limiting the institutes to provide vital research that would impact farmers’ productivity.

The institutes were establish by the Federal Govern-

ment in its efforts to increase agricultural productivity, improve the lives of rural communities and make Nigeria sufficient in food production.

The institutes where mandated to provide technologies that will increase farmers’ productivity and boost food production through the science of research.

But today, the dream has become dead, the vision blurred and the mission a mere statement of expression as majority of the institutes are mere shadow of themselves. “ We h av e a t o t a l o f 13,000,000 staff and 90 percent of the yearly allocation goes into salaries and emoluments. Only 10 percent goes into research. This is why the institutes have not been able to improve farmers output,” Baba Yusuf Abubakar, former executive secretary of the Nigerian Agricultural Research Council (ARCN), told BusinessDay. “We cannot conduct effective research with such stipends. Research plays a pivotal role in transforming the agricultural sector, and that is why we must take it very seriously,” Abubakar said.

Data obtained from budget allocation to the agricul-

tural ministry show that the research institutions got an average of N28 billion yearly ($78m) in the last five years.

Comparing Nigeria’s annual spend on its agric research institutes with that of India’s $2 billion, Brazil’s $1 billion and China’s $700 million, shows that research is still grossly underfunded in the country.

According to Michael Oluwole Ajala, professor of Seed Technology, Federal University of Agriculture Abeokuta (FUNAAB), the agric research institutions in the country are underfunded and lack basic facilities needed to conduct research.

Ajala said most of the equipment was obsolete and cannot be used for modern research work.

Similarly, a 2015 ActionAid report states that for every $100 of agricultural output, Nigeria invests only $0.42 into agricultural research, as compared to $0.94 and $1.40 in Ghana and Uganda, respectively.

Despite the country’s large size of agriculture in relation to other African nations, Nigeria lags behind its peers in the sector in terms of research funding.

Int’l Youth Day: Edo, Oxfam stake N500,000 for best tech, agric ideas

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do State and Oxfam, an international non-governmental organisation (NGO), have staked a N500,000 seed fund as well as incubator and accelerator packages for top three business ideas at a pitch competition taking place at the Edo Innovation Hub. The pitch is part of activities lined up for the International Youth Day commemoration at the technology hub on August 10, in Benin City.

The Governor Godwin Obaseki-led administration has pioneered a youth-centric programme that prioritises capacity building in technology and technical fields for young people in an effort to drive industrialisation and wealth creation.

Speaking on the partnership with the state government on the International Youth Day commemoration, project lead/ Small and Medium Enterprise (SME) programme coordinator, Oxfam, Michael Adeola, said the event provided a space for youths to engage with policymakers on their peculiar challenges.

He said top technology companies such as Hotels.ng, Andela and Facebook were billed to be at the event, themed Safe Spaces for Youths, to educate youths on their capacity building initiatives and how Edo youths could leverage such training for personal development and wealth creation.

According to Adeola, “We designed the event in such a way that it gives young people the opportunity to express themselves and let policymakers know about the challenges they face.

It is an open space for them to discuss their challenges and the policymakers are there to listen to them. They will go back and design programmes and policies

to serve the young people better, because nobody can talk about the challenges of youths better than the youths themselves.”

On the pitch competition, he said, “We are calling on young people who have business ideas that can solve a social problem and make social impact. All they need to do is to send us a two minutes video. The innovations should be in Information and Communication Technology (ICT) or agriculture.

“There will be a pre-pitch, where we will select the best five, who will then pitch to the audience at the International Youth Day event. We will select the best three, who will get seed fund and incubator or accelerator packages. The first place winner will get N250,000; second place gets N150,000 and the third place gets N100,000. Each of the prize winners will get either an incubator or accelerator package depending on the stage of their idea.”

He said Edo state is one of the project states for Oxfam’s Workin-Progress project, focused on youth employment, noting that the interest in the state is as a result of the progressive nature of the Governor Godwin Obasekiled administration.

“In Edo, we have been conducting employability training for young people. The training involves building their Curriculum Vitae, preparing them for the workplace and others. At the end of the training, the trainees often ask, what next? So, we organise job fairs where we invite private and public sector organisations that are interested in recruiting these young people.

“Usually they have a direct opportunity to get interviews, they would have been applying and didn’t get a face-to-face interview with a potential employer.

During those job fairs, private and public companies attend and we are able to place them on jobs.

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Ohio race too close to call but Trump claims Republican victory Razor-thin margin suggests president’s party will face tough midterms in November Demetri Sevastopulo & Courtney Weaver

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S president Donald Trump has claimed Republicans have won an Ohio congressional seat, but the vote was still being counted on Wednesday morning and was too close to call.

The razor-thin margin suggests the president and his party face strong headwinds just three months before critical midterm elections.

Troy Balderson, a Republican state senator, was leading Danny O’Connor, a young Democrat, by 50.15 per cent to 49.29 per cent in the early hours of Wednesday in a special election in Ohio’s 12th district with all precincts reporting.

Mr Balderson’s total of 101,574 votes compared with Mr O’Connor’s 99,820 — a margin of little more than 1,700 votes.

Reuters reported that a final result would be delayed until more than 8,000 provisional and absentee ballots were counted.

The Republicans have held the district since 1980 and the Democrats have only won three times over the past century.

“Congratulations to Troy Balderson on a great win in Ohio,” Mr Trump wrote in a tweet on Tuesday evening.

“I’m going to do everything I can to make America great again,” Mr Balderson said in a victory speech, even though Mr O’Connor had not conceded.

Ohio mandates a recount when candidates are separated by less than 0.5 per cent of the total vote.

Charlie Dent, a Republican congressman, said on CNN before the result that it “should not have even been a contest” given that it had long been a Republican stronghold.

“We’ve seen six special elections in safe Republican seats where Republican candidates

have significantly underperformed,” said Mr Dent.

Republicans are desperate to protect their majority in the House of Representatives, while the Democrats need a net gain of 23 seats to take control of the chamber. According to an average of recent polls compiled by Real Clear Politics, voters prefer Democrats over Republicans by 7 percentage points.

Mr Trump is also concerned about Republican prospects in the House because of concern that the Democrats may use a majority to impeach him. The president, who campaigned with Mr Balderson in Ohio, has been aggressively raising funds to help Republican candidates before November.

“President Trump will claim his intervention saved the seat and will argue he will do the same in November to save the House,” said David Caputo, president emeritus of Pace University. “Who is right?

Wait till November.”

In a sign of the energy propelling the Democrats, who are united in their desire to punish the president despite internal divisions in the party, Mr O’Connor was able to spend much more on TV advertising than his opponent. That forced the Republicans and outside groups to spend millions of dollars to help Mr Balderson.

Mr Trump was hoping Ohio would avert a third high-profile defeat in a special election. In December, Douglas Jones became the first Democrat to win a Senate seat from Alabama in 25 years when Roy Moore, a former judge accused of harassing young women, lost despite strong backing by the president.

In a special congressional race in western Pennsylvania in March, Conor Lamb, a relatively unknown Democrat, beat the Republican Rick Saccone in a district that Mr Trump had won with a big margin in 2016.

Saudi Arabia sells off Canadian assets as dispute escalates Ottawa’s criticism over the arrest of female activist sparks strong reaction Simeon Kerr

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audi Arabia is selling Canadian assets as the kingdom escalates its response to Ottawa’s criticism of the arrest of a female activist.

The Saudi central bank and state pension funds have instructed their overseas asset managers to dispose of their Canadian equities,

bonds and cash holdings “no matter the cost”, two people with direct knowledge of the orders said.

Third-party managers are estimated to be mandated to invest more than $100bn of Saudi funds in global markets, executives say.

While the proportion of that figure invested in Canadian holdings would be “fairly small in absolute Continues on page A4

Danny O’Connor speaks to supporters at an election-night rally in Westerville, Ohio © Getty

Rightwing commentator named as director at India’s central bank

Appointment sparks accusations of state interference in RBI’s independence Kiran Stacey

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controversial rightwing commentator who is close to Narendra Modi, the Indian prime minister, has been appointed as a director at India’s central bank, prompting criticism that the government is interfering with the bank’s independence.

Officials announced on Tuesday night that S Gurumurthy, who has been credited by some as the intellectual force behind Mr Modi’s demonetisation experiment two years ago, would join the bank on a part-time basis for the next four years. He will be joined on the board by Satish Marathe, a banker and the founder of a non-governmental organisation that supports cooperatives, whose appointment was also announced on Tuesday.

The move sparked accusations that the ruling Hindu nationalist Bharatiya Janata party is trying to sway decision making at the bank, which sets interest rates, regulates banks and oversees the country’s bankruptcy code.

Paranjoy Guha Thakurta, a journalist and political commentator, said: “[Gurumurthy] is clearly a Hindu nationalist ideologue, and that is the reason he has been appointed.”

Mr Gurumurthy did not respond to a request to comment on his appointment. But after he was named he wrote on twitter: “This is [my] first directorship ever. Never accepted any private or PSU [state-owned company] directorship. Not even audit of PSUs or Pvt cos. Wanted to be free to speak. But when pressure built up I am needed to do

something in public interest I had to accept.”

The Reserve Bank of India declined to comment on whether Mr Gurumurthy’s appointment would undermine the bank’s independence.

In his new role, Mr Gurumurthy will have oversight over how the bank is run, and a vote at its board meetings, but will not be part of the monetary policy committee which decides interest rates.

In the past he has often argued against RBI policy, and was one of the most prominent critics of Raghuram Rajan, the previous bank governor. Mr Rajan, a former International Monetary Fund economist, stepped down in 2016 after sustained criticism by some on the right that he was not sufficiently “Indian” in his thinking.

Pimco’s CIO strikes cautious tone on US corporate debt Ivascyn says underwriting standards have deteriorated ‘moderately’ and issuance is ‘high’ Adam Samson

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imco’s investment chief has said the fund manager’s income strategy, which encompasses its flagship bond fund, is “diversifying away” from US corporate debt as it prepares for a more turbulent investment landscape.

Daniel Ivascyn, group chief investment officer, said on Tuesday the income strategy is shifting away “from sectors that we think are prone to overshooting to the downside” as it becomes “a bit more defensive” in its investment approach.

“The major central banks are trying to step away from the accommodation that they have provided to the markets for many years, and

their influence is being quickly replaced by that of politics,” he said.

The comments came as part of a broad-ranging Q&A posted to Pimco’s website, in which Mr Ivascyn warned that both stock and bond investors will face “lower returns and, unfortunately, higher volatility” over the next five years. His remarks echoed Pimco’s “secular outlook”, that cautioned in May of a “rude awakening” in global markets.

As Pimco’s income strategy shifts to a more defensive posture, he pointed to the US corporate credit market as an area “where issuance has been high and underwriting standards have deteriorated moderately.”

Mr Ivascyn manages Pimco’s $114bn Income Fund, an unconstrained strategy with a broad man-

date to shift weightings among different assets. His views are closely watched since Pimco is the world’s largest bond manager.

US corporate debt rated at investment grade has posted negative returns, including price changes and coupon payments, of 2.4 per cent so far in 2018, according to the ICE Bank of America Merrill Lynch indices. That has underperformed the broad market for highly rated US bonds, which has seen a 1.6 per cent fall in total returns over the same period.

Junk-rated bonds, which represent a much smaller slice of the overall market than their IG peers, have generated positive returns of 1.6 per cent. This has come as juicy coupon payments have offset a fall in prices.

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FT Saudi Arabia sells off Canadian assets as...

N Korea not making efforts to denuclearise, says John Bolton

Continued from page A3 terms,” the asset sale sent a strong message, one of the people said.

The sell-off began on Tuesday and underlines how the Gulf monarchy is flexing its financial and political muscle to warn foreign powers against what it regards as interference in its sovereign affairs. “This is severe stuff,” said one banker.

Saudi Arabia has . . .

Begun a sell-off of Canadian holdings Expelled the country’s ambassador Frozen new trade and investment with Ottawa Suspended a student exchange programme to Canada Halted Saudi Arabian Airlines flights to the North American country Ended all medical treatment programmes in Canada The row between Riyadh and Ottawa erupted after Chrystia Freeland, Canada’s foreign minister, called for the release of Samar Badawi, a prominent Saudi women’s rights activist who has family in Canada. Ms Badawi and another activist were arrested last week as part of a government crackdown against dissenting voices, human rights groups said.

In response to Ms Freeland’s criticism, Saudi Arabia expelled the Canadian ambassador, froze new trade and investment with the G7 member, suspended a student exchange programme and halted flights by state-owned Saudi Arabian Airlines to Canada.

Riyadh also said it was suspending medical treatment programmes in Canada and working to transfer Saudi patients out of the country.

Adel al-Jubeir, Saudi foreign minister, told a press conference on Wednesday that there would be no new Saudi investment in Canada until the crisis was resolved, but added that existing trade and investment would not be affected.

However, one financier confirmed that Canadian securities had been sold on explicit instructions from Riyadh.

“Canada made a mistake and they know what they need to do to correct it,” Mr Jubeir said.

The kingdom’s actions carry echoes of the measures Saudi Arabia and its regional allies have taken against Qatar since imposing a regional blockade on the Gulf state a year ago.

The Saudi Arabian Monetary Authority, the central bank, had foreign assets of $506bn in July, most of which are invested in US Treasuries. Pension funds such as the General Organisation for Social Insurance and the Public Pension Agency manage additional assets.

The Public Investment Fund, the Saudi sovereign wealth fund, also has $250bn of assets under management, including stakes in global companies such as Tesla and Uber, as well as local assets.

Since Crown Prince Mohammed bin Salman became heir apparent last year Riyadh has adopted an increasingly assertive approach to achieve its foreign and domestic policy aims. He has pledged to open up the conservative kingdom, but has also displayed a decreasing tolerance for criticism.

Thursday 09 August 2018

Trump defends approach to Pyongyang and calls for patience Demetri Sevastopulo

T Donald Trump speaks to business leaders on Tuesday at theTrump National Golf Club in Bedminster © AP

US to add tariffs on $16bn of Chinese imports Latest data show trade war has so far done little to dent exports from China Tom Hancock, Alice Woodhouse & Edward White

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he US is pushing ahead with plans to impose additional 25 per cent tariffs on $16bn of annual imports from China later this month, even as new data show the escalating trade war has so far done little to dent Chinese exports.

US trade officials released a final list of 279 product categories that would be subject to the higher tariffs on August 23. It follows the first round of tariffs on $34bn of imports that went into effect on July 6. The two tranches of tariffs mostly focus on China’s industrial products rather than consumer goods.

The new measures come as US President Donald Trump last week announced he might increase duties to 25 per cent, from 10 per cent, on $200bn of Chinese imports. That has prompted Beijing to threaten tariffs on $60bn of US exports in retaliation, in addition to duties on $34bn of imports such as soyabeans it imposed in

July.

Products in the new US tariff list included motorcycles, several varieties of electric motors, industrial chemicals and railway carriages, the US Trade Representative’s office said. The duties were in response to Beijing’s “large-scale technology transfer”, it added.

Beijing in June vowed to match the US’s $16bn tariff round with equal duties of its own. The US had a $376bn goods trade deficit with China last year.

The duties would mostly hit Chinese companies, with “collateral damage” for some US groups that manufacture in China, said Professor John Gong at the University of International Business and Economics in Beijing.

The tit-for-tat battle has done little curb to Americans’ appetite for Chinese goods, however. The dollar value of China’s exports to the US rose 12.2 per cent in July compared to a year earlier, according to figures from China’s customs administration. But China’s trade surplus with the US fell slightly in July to $28.09bn from a

record $28.97bn in June, largely as a result of a 27.3 per cent jump in Chinese imports from the US. The US bought 19.3 per cent of China’s exports in July, down from 19.7 per cent in June. “Shipments to the US did weaken slightly, which suggests the tariffs had some impact. But this was offset by stronger exports to the rest of the world . . . buoyed by the weaker renminbi,” said Julian EvansPritchard, an analyst at Capital Economics.

Three causes of China’s stock market plunge “These figures show that the trade war has not truly started . . . but they don’t show what will happen after it really begins,” said Professor Zhang Jun at Fudan University in Shanghai. “The trade war is still mainly in the consultation phase and many tariffs have not been enacted.”

Beijing still hopes that talks with Washington can avert duties on an additional $200bn in exports that may go into effect next month. But Mr Trump damped those hopes by threatening to levy duties on all Chinese imports.

California battles biggest-ever wildfires Mendocino Complex fire revives debates over climate change and water management Tim Bradshaw

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pair of wildfires in northern California have combined to become the state’s largest ever, beating a record set further south only eight months ago.

The Mendocino Complex fire, made up of the Ranch and River fires, has consumed close to 300,000 acres since it began on July 27.

That makes it larger than the Thomas fire which started last December around Ventura and Santa Barbara in southern California, which burnt through almost 282,000 acres and caused more than $2bn worth of damage.

Almost 4,000 firefighters and other personnel are tackling the Ranch fire, the larger of the two in Mendocino, which is still only 20 per cent contained. “All fighting like hell, facing tough

conditions and high temps,” Mike McGuire, state senator for California’s North Coast region, said in a Facebook post on Tuesday morning.

So far, one firefighter has been injured in the Mendocino fires but no residents have died.

About 11,300 structures are believed to be threatened, with 75 homes already destroyed. The cause of the outbreak has not yet been determined.

Mendocino County is about three hours’ drive north of San Francisco. Further north from there, last month’s big outbreak around Redding, known as the Carr Fire, has now burnt through more than 167,000 acres, destroying more than 1,000 homes and putting it too among the state’s dozen largest. More than 35,000 residents were evacuated and seven people have died, including two firefighters.

The increasing intensity of

wildfires has revived longstanding debates about how to manage forestry and water at a time when drought has created ideal conditions for outbreaks. While the Mendocino Complex and Thomas fires are the state’s largest by area, last year’s fires in the wine-growing regions of Napa and Sonoma rank among its most deadly, claiming dozens of lives and costing billions of dollars.

Last week, California governor Jerry Brown declared a state of emergency and called for federal help to tackle the fires, which have also raged in Yosemite National Park and Orange County.

“Battling these relentless fires requires a Herculean effort,” Mr Brown said on Saturday. “Additional federal assistance is needed immediately to reduce the direct threat to public health and safety.”

he White House national security adviser has accused Pyongyang of not adhering to the deal reached by Donald Trump and Kim Jong Un in June, in the latest sign that the US president was premature in saying North Korea no longer posed a nuclear threat.

John Bolton, on Tuesday, said North Korea was to blame for the lack of progress towards denuclearisation since the leaders met. His comments came just two weeks after Mike Pompeo, the US secretary of state, rejected suggestions that Mr Kim had hoodwinked Mr Trump in Singapore.

“The United States has lived up to the Singapore declaration.

It is just North Korea that has not taken the steps that we feel are necessary to denuclearise,” Mr Bolton told Fox & Friends, a US television programme. “What we really need is not more rhetoric, but performance from North Korea on denuclearisation.”

Mr Trump on Tuesday evening, defended his approach to North Korea. Speaking before a dinner with business leaders at his golf club in Bedminster, New Jersey, Mr Trump said his team was “doing well” and suggested that his critics should be patient.

“They’ve been working on this thing for 40 years. I left three months ago,” Mr Trump said, in an apparent reference to the landmark summit in Singapore with Mr Kim. Mr Trump repeated his line that North Korea had not tested a missile or nuclear weapons for some time. “We have a good relationship with North Korea.

So, we’ll see how it works,” the US president said. “I have a feeling that China now is not happy, and maybe they’re doing a little bit of a number, but we’ll figure that out.”

The comments from Mr Bolton, a long-time hawk who has previously called for US military action on North Korea, underscored the view of many critics that Pyongyang has no intention of abandoning its nuclear and missile programmes.

Mr Bolton was asked about the talks with Pyongyang after the regime slammed the approach being taken by Mr Pompeo, who briefly met his North Korean counterpart Ri Yong Ho at a regional forum in Singapore last week. At the Association of Southeast Asian Nations event, he urged other countries to maintain pressure on North Korea.

Mr Bolton told Fox television that the US would not lift sanctions until North Korea had abandoned its nuclear programme. “The idea that we’re going to relax the sanctions just on North Korea’s say-so is something that isn’t under consideration. We’re going to continue to apply maximum pressure to North Korea until they denuclearise.”

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Tesla board says Elon Musk raised take-private idea last week Directors say they have met several times to discuss plan and evaluate next steps Richard Waters & Jessica Dye

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esla’s board of directors said chief executive Elon Musk had “opened a discussion” last week about the take-private plan that he unveiled to the world in a post on Twitter on Tuesday.

The statement on Wednesday, from six of the electric car maker’s independent directors, appeared to add to the weight of Mr Musk’s assertion that he had been working on a buyout plan.

However, the statement pointed to board discussions that were at an early stage, and appeared to contradict some of Mr Musk’s claims on Twitter on Tuesday. The Tesla boss claimed that financing was in place for a buyout and that the “only reason this is not certain is that it’s contingent on a shareholder vote”.

In their statement on Wednesday, the Tesla directors said: “Last week, Elon opened a discussion with the board about taking the company private.” It added: “The board has met several times over the last week and is taking the appropriate next steps to evaluate this.”

Mr Musk asserted on Tuesday that “investor support is confirmed” for his proposed deal, and that “funding [is] secured”.

But the directors — Brad Buss, Robyn Denholm, Ira Ehrenpreis, Antonio Gracias, Linda Johnson Rice and James Murdoch — left open the question of backers for what would be the biggest-ever buyout, valuing the company at more than $70bn.

Commenting on the discussions with Mr Musk, they said: “This included discussion as to how being private could better

serve Tesla’s long-term interests, and also addressed the funding for this to occur.”

Shares in the electric carmaker, which closed nearly 11 per cent higher at $379.57 on Tuesday after Mr Musk’s Twitter intervention, were down more than 1 per cent in early trading on Wednesday.

Mr Musk first publicly raised the possibility of buying out shareholders at a price of $420 in a series of Twitter posts that prompted chaotic trading in Tesla shares. The limited detail provided in the tweets, and a follow-up email to Tesla staff later on Tuesday, raised questions about how far advanced Mr Musk’s plan really was.

The abrupt disclosure has thrown a spotlight on the role of Tesla’s board in restraining the company’s impulsive chief executive. Any plan is likely to require consideration by a committee made up of independent directors — the process followed

by Michael Dell when he took his PC company private in 2013.

While Wednesday’s brief statement came from some of the company’s independent directors, they did not indicate that any formal process had been launched to review Mr Musk’s proposal, let alone back the plan.

The question of whether Tesla’s board is sufficiently independent from Mr Musk has been a past source of complaint from some shareholders, who have claimed that several of the directors have ties to to the company’s chief executive due to previous business or investment relationships. The issue came to the fore two years ago, when Tesla made a takeover offer for Solar City, a company in which Mr Musk was also involved.

Lawyers of Paul Manafort accuse Rick Gates of stealing Trump campaign deputy chairman also questioned about plea deal with special counsel’s office Kadhim Shubber

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he US government’s star witness in its case against Paul Manafort, the former Donald Trump election campaign chairman, admitted an extramarital affair and was accused of stealing from the president’s inaugural committee in cross-examination on Tuesday afternoon.

Rick Gates, a former protégé of Mr Manafort who worked for him in Ukraine and later on the Trump campaign, was cross-examined by an attorney for Mr Manafort for more than two hours of tough questioning about his own conduct and crimes.

Mr Gates, 46, who is married with four children, said he had a relationship with another person a decade ago. He separately conceded that it was “possible” that he submitted false expense claims to the Trump inaugural committee, where

he worked after his role as deputy chairman on the Trump campaign.

The remarkable exchanges came as Kevin Downing, an attorney for Mr Manafort, aimed to show that Mr Gates was an untrustworthy witness. Mr Gates, who worked for Mr Manafort from 2006 to 2016, is a key part of special counsel Robert Mueller’s case against the former Trump campaign chairman. The case resulted from the Mueller investigation into links between the Trump campaign and the Russian government.

Mr Manafort is accused of failing to disclose income he earned in Ukraine and foreign bank accounts in Cyprus and elsewhere.

The government has alleged he lied to obtain bank loans after his income from Ukraine dried up following the ouster of his client, Viktor Yanukovich, the pro-Russia former president.

Tesla chief Elon Musk had claimed that financing was in place for a buyout © Reuters

Samsung outlines $160bn investment plan to underpin profits South Korean group to focus on new technologies including AI over next 3 years Bryan Harris

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amsung has announced a $160bn three-year investment in new technologies, with the aim of ensuring profitability in the face of stiff competition from Chinese rivals.

The announcement came days after Samsung Electronics, the lucrative technology division of the South Korean conglomerate, reported its first drop in profits for seven quarters, raising investor concerns about its long-term trajectory.

On Wednesday, the company spelt out its priorities. Samsung will, over the next three years, plough more than $22bn into technologies including artificial intelligence, automotive electronics components and biopharmaceuticals. Samsung Electronics will account for the bulk of the spending.

The remaining $138bn will go towards investment in crucial semiconductor and display manufacturing facilities as well as fostering external start-up projects, creating up to 40,000 jobs in South Korea.

By far the country’s largest conglomerate, Samsung is a bulwark of the economy. Samsung Elec-

tronics alone accounts for almost 20 per cent of the value of the main Kospi Composite stock index and last year it briefly moved ahead of Apple as the world’s most profitable technology company.

But, like its home nation, Samsung faces headwinds that do not bode well for growth.

Chinese technology groups such as Xiaomi and Huawei are eating into Samsung’s position as the world’s largest smartphone maker, while Beijing-backed companies are increasingly targeting Samsung’s mainstay memory chip business.

Sanjeev Rana, an analyst at brokerage CLSA, said the investment plans come at a critical time.

“Samsung needs to find new growth areas as their existing businesses are saturated. They are a little late to areas such as artificial intelligence, but they don’t need to start from scratch. With that money, they can do M&A,” he said.

That sentiment was echoed by a Samsung executive: “We know technologies are changing and we can’t keep doing what we were doing. It is about time [to change].”

With the announcement, Samsung has indicated it is willing to employ serious financial firepower to maintain its edge. The

investment plan eclipses a pledge made by Apple in January to divert $30bn to expand its US operations.

Samsung was already making more gradual increases to capital spending and research and development. Last year, it spent almost $55bn on capex and R&D, up from more than $35bn in 2016.

Its last announcement of longer-term investment plans was in 2010, with a figure of just over $20bn over a five-year period.

The situation the company now faces is complicated by growing pressure from the government, which is desperate to boost an economy that has been plagued by high youth unemployment.

On Monday, Kim Dong-yeon, the finance minister, met Lee Jaeyong, Samsung’s de facto head and heir-apparent, and urged the billionaire to create more jobs and spearhead South Korea’s efforts to nurture “innovative growth” based on new technologies.

For its part, Samsung has been at pains to demonstrate that it is a good corporate citizen. Wednesday’s announcement comes almost a year after Mr Lee was convicted of corruption in a case that set swaths of South Korean society against the powerful conglomerate.

China’s Belt and Road projects drive overseas debt fears Ambitious programme dogged by doubts over ability to pay or high price tags James Kynge

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hina’s leader, Xi Jinping, has called it the “project of the century” and said it will usher in a “golden age” of globalisation.

With Beijing-backed projects in 78 countries, the “Belt and Road Initiative” (BRI) is one of the world’s most ambitious development programmes. But critics fear it could become the conduit through which some of China’s debt problems are transmitted overseas.

A series of controversies that have flared in countries as far

apart as Pakistan, Sri Lanka, Laos, Malaysia, Montenegro and others are all related to debt sustainability — either because of the perceived inability of countries to handle outsized debts to China, or because some Beijing-funded infrastructure projects do not appear likely to justify their price tag.

“Disconnects between the creditworthiness of a project or a country and the size of the loans that China offers have led to project delays, political turmoil and allegations of wrongdoing in contract award procedures,” said Andrew Davenport, chief

operating officer at RWR Advisory Group, a Washington-based think-tank.

Some mismatches are baked in to the BRI’s design. A Financial Times study shows that the 78 countries selected by China to participate include many of the world’s most risky economies, according to OECD rankings of country risk.

Out of a scale on which seven represents the highest level of country risk, the BRI countries show an average of 5.2, considerably worse than the 3.5 average for emerging markets, according to the FT study (see map).

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Live @ The Exchange Top Gainers/Losers as at Wednesday 08 August 2018 GAINERS

LOSERS

Company

Opening

Closing

Change

REDSTAREX

N5.35

N5.7

0.35

N14

N14.25

0.25

N12.8

N13

0.2

GUARANTY

UAC-PROP

N1.7

N1.8

0.1

DANGFLOUR

N8.2

N8.3

0.1

PZ UACN

Market Statistics as at Wednesday 08 August 2018

Company

Opening

Closing

Change

TOTAL

N195

N190

-5

CUTIX

N4.25

N4

-0.25

N39.15

N39

-0.15

OANDO

N5.7

N5.6

-0.1

VALUE (N billion)

UBA

N9.6

N9.5

-0.1

MARKET CAP (N Trn

ASI (Points)

36,305.40

DEALS (Numbers)

2,535.00

VOLUME (Numbers)

111,503,651.00 710.947 13.251

Lagos Bourse shelters 15 companies with locked-in shares

NSE opens registration for 5th Corporate Challenge to fight cancer

…A.G Leventis, Transcorp Hotels, Union Bank get till 2020 to comply Stories by Iheanyi Nwachukwu

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he Nigerian Stock Exchange (NSE) is currently sheltering fifteen (15) listed companies with shortage in the free float of their stocks.

Free float represents the portion of shares of a company that are in the hands of public investors as opposed to locked-in stock(s) held by the promoters, company officers and controlling-interest investors.

At the Lagos Bourse, these companies’ shares are deficient in their free float: AG Leventis Nigeria Plc, Capital Hotel Plc, Caverton Offshore Support Group Plc, Champion Breweries Plc, Ekocorp Plc, e-Tranzact International Plc, Great Nigeria Insurance Plc, and Infinity Trust Mortgage Plc. Others are Interlinked Technology Plc, The Tourist Company of Nigeria Plc, Transcorp Hotels Plc, Union Bank of Nigeria Plc, Portland Paints & Products Nigeria Plc, Global Spectrum Energy Services Plc, and Computer Warehouse Group (CWG) Plc. In order to ensure that there is an orderly and liquid market for their securities, listed companies on the Nigerian Stock Exchange are required to maintain a minimum free float for the set standards under which they are listed.

L-R: Yusuf Tajudeen, chairman, House Committee on Capital Markets and institutions; Patience Oniha, director general, Debt Management Office (DMO); Bola Onadele Koko, Trustee, ASEN, CEO, FMDQ OTC Securities Exchange; Zaheera Baba-Ari, Trustee managing director/CEO, Nigeria Commodity Exchange; Oscar N. Onyema OON, chief executive officer, The Nigerian Stock Exchange (NSE); Mary Uduk, Ag. director general, Securities and Exchange Commission (SEC); Bola Ajomale, Trustee, ASEN, chief executive officer, NASD Plc and Ayodeji Balogun, Trustee, country manager, AFEX Nigeria Limited during the official launch of the Association of Securities Exchanges of Nigeria (ASEN) at the Exchange.

The free float requirement for companies on the Alternative Securities Market (ASEM) Board is 15percent of their market capitalisation; for companies listed on the Main Board, their free float is 20percent of their market capitalisation; while free float of companies on the Premium Board is 20percent of market capitalisation or above N40billion on the date The Exchange receives the Issuer’s application to list.

Most of the earlier said companies with free float deficiencies have applied for waivers from the Quotations Committee of the NSE management and specifically provided compliance plans with tentative timelines to

support their requests.

A.G. Leventis Plc with 11.64percent shares free float has till October 19, 2020 to comply with the NSE rules. Capital Hotel Plc, a company under regulatory watch has just 2.99percent of its shares in the hand of the public. It was given till October 31, 2017 to comply.

Also, Caverton Offshore Support Group Plc which has only 17.30percent of its shares in the hands of the public was given till October 31, 2017 to comply. Champion Breweries Plc has obtained Quotations Committee approval and is currently restructuring.

The company had 17.17percent of its listed

stocks in the hand of investing public. Others are Ekocorp Plc with just 11.84percent of its shares in the hands of the public was given till October 31, 2017 to comply; while e-Tranzact International Plc which has 10.06percent of its shares in the hands of investing public has till May 17, 2019 to comply. Great Nigeria Insurance Plc has 16percent free float and was given till May 18, 2020 to comply.

The Company had concluded the first leg of the transaction and the NSE management had engaged the Company on the next stage. Interestingly, the shareholders of Great Nigeria Insurance Plc at its Extra-

Ordinary General Meeting (EGM) held on Wednesday July 25, 2018 approved for the company to voluntarily delist its shares from the Nigerian Stock Exchange.

Infinity Trust Mortgage Plc has just 3.50percent of its share in the hands of investing public; the NSE gave it till May 17, 2021 to comply. Only 14.50percent of Interlinked Technology Plc shares are in the hands of investing public and the Exchange had given the company till October 14, 2017 to comply.

Another free float deficient company is The Tourist Company of Nigeria Plc with just 3.58percent of its shares in the hands of investing public. The Company is under Regulatory Watchlist and it is currently in the process of delisting its shares from the Nigerian Bourse.

Other companies with deficient free float include Transcorp Hotels Plc which has 6percent of its shares in the hands of the public; it has till May 18, 2020 to comply with the Exchange’s rules; Union Bank of Nigeria Plc has 14.94percent shares free float and has May 18, 2020 to comply while Portland Paints & Products Nigeria Plc has just 14.57percent of its shares in trading by the public and the NSE did not provide any answer on the company’s compliance due date. Same applies to Global Spectrum Energy Services Plc (7.01percent) and CWG Plc (15.97percent).

T

he Nigerian Stock Exchange (NSE) has opened registration for the 5th edition of the annual NSE Corporate Challenge which is scheduled to take place in Lagos at 7:00a.m on Saturday September 15, 2018 at the Muri Okunola Park, Adeyemo Alakija Street, Victoria Island, Lagos.

Started in 2014, the NSE Corporate Challenge is a one-day competitive and fun-filled 5 kilometre walk, jog and run event, primarily designed to raise awareness on the early detection and funds to support the fight against cancer in Nigeria. . The day’s activities will also include dance, aerobics, music and entertainment. Winners in the various race categories will be recognized as part of an awards ceremony at the end of the race.

This year’s event will bring together participants from listed and non-listed companies, dealing member firms, non-commercial organizations such as Federal, State and Local Governments, Quasi-Governmental Organizations, Educational Institutions and Non-Governmental Organisations; as well as celebrities and other notable Nigerians to support the fight against cancer.

Interested participants are encouraged to register online at www.nse.com/ corporatechallenge​with a fee of N200,000, N400,000 and N500,000 per team of up to 5 members for dealing member firms, listed companies and non-listed companies/non-commercial organizations respectively.

NSE lifts suspension placed on trading in shares of Conoil

T

he Nigerian Stock Exchange (NSE) has lifted the suspension it placed in the trading of Conoil Plc shares with effective from Wednesday August 8, 2018, according to a notice signed by Godstime Iwenekhai, Head, Listings Regulation Department.

Conoil Plc has submitted its unaudited financial

statements for the periods ended March 31 and June 30, 2018 respectively.

“In view of the submission of its accounts and pursuant to Rule 3.3 of the Default Filing Rules, which provides that; “The suspension of trading in the issuer’s securities shall be lifted upon submission of the relevant accounts provided The Exchange is

satisfied that the accounts comply with all applicable rules of The Exchange.

The Exchange shall thereafter also announce through the medium by which the public and the SEC was initially notified of the suspension”, the Exchange stated.

Recall that on August 6, 2018 the NSE notified the public of the suspen-

sion of Conoil Plc for noncompliance with Rule 3.1, Rules for Filing of Accounts and Treatment of Default Filing, Rulebook of The Exchange (Issuers’ Rules) (“Default Filing Rules”).

The Rules provide that; “If an Issuer fails to file the relevant accounts by the expiration of the Cure Period, The Ex-

change will: (a) Send to the Issuer a “Second Filing Deficiency Notification” within two (2) business days after the end of the Cure Period; (b) Suspend trading in the Issuer’s securities; and (c) Notify the Securities and Exchange Commission (SEC) and the Market within twenty- four (24) hours of the suspension.”

BUSINESS DAY

C002D5556

NEWS YOU CAN TRUST I THURSDAY 09 JULY 2018

INSIGHT LEO LEWIS, FT

W

hen The 100-Year Life first appeared in mid-2016, the book about longevity and societal change sold only modestly in the west. Some took it as an inspiring road map, some as a warning, some as a niche-interest read for human resource departments or pension specialists.

But when the translated version was published in Japan a few months later, it hit the world’s most aged nation like a jolt of electricity.

To Japan, the book’s central thesis — that individuals, institutions, government, finances and infrastructure need urgent preparation for a time when millions can reasonably expect to live for a century — touched the rawest of nerves. It became a huge bestseller, transforming the public debate and crystallising what had been a murky discussion of demography-themed hopes and fears.

That clarity has spurred the country, where 27 per cent of the population is over 65, half is over 50 and deaths have exceeded births for more than a decade, into a grand show of action.

107

Japan begins to embrace the 100-year life Tokyo waking up to the implications as well as opportunities in healthcare, finance, housing and technology of an ageing population suffering from cognitive decay.

But the potential upsides are also now receiving attention. In 2017, consumption expenditure rose most strongly in the over-59 age group. Young Japanese may husband their yen carefully; seniors are spending more on meat, cars, smartphones and package tours.

Brokers have identified three related “buy” calls: companies that run nursing homes or dispatch caregivers, manufacturers of robots to help or replace Japan’s greying workforce, and fitness centres that focus on gym fanatics in their latter decades.

Japan’s decision to embrace the 100-year life, joke brokers, is the call of the century: it remains to be seen whether it can ever pay off.

Florian Kohlbacher, an author of extensive research on Japanese demographics, is one of many experts struck by how late this burst has come. Japan is very clearly at the global forefront of ageing, he says,

3.36m

taken? One reason is, we still, today, look at ageing as a problem, rather than an opportunity,” said Mr Kohlbacher.

The negative take is compelling. A 2017 book called Future Chronology also sold extremely

when the immediate postwar baby boomers turn 75, social security expenditures will surge under a scheme that patients become responsible for a smaller ratio of theirmedicalcostsastheygetolder.

But the purely doomsaying

well and paints Japan’s future as a yawning chasm between “the coming reality and the current state of public and private-sector planning”. Masashi Kawai’s grim vision of millions of crumbling, vacant homes and tower blocks

approach to ageing may have shifted slightly as policymakers see the idea of an army of healthy elderly citizens who actively want to work as a blessing.

Business leaders, bureaucrats, educators and swaths of the general public have absorbed the warnings in the The 100-Year Life (which was published under the name LifeShift in Japanese) but also welcomed its conviction that there can be opportunity in longevity, given the right policies.

The book emboldened the Japan Gerontological Society to call for the definition of “elderly” to be revised from “over 65” to “over 75”. The phrase hyakunen jinsei (100-year life) has bustled into corporate vocabulary; big companies in financial services and construction say they are using the idea to drive fundamental shifts in their business models.

In some cases, such as manufacturing, it is driving new technology investment in robotics and exoskeleton suits for

40%

Number of JapaAge expected to nese men and wombe reached by 50% en aged of Japanese citiover 69 who were zens born in 2007 still working in 2016

Population of senior Japanese employees who say they want to work as long as they can

Sceptics maintain that it is no more than that — a show.

But like a grandfather finally admitting that he needs bifocals, Japan has embraced the idea of the 100-year life as an overarching policy directive.

It has long seen the more terrifying implications of that in surging healthcare costs and the emergence of “dementia towns”, where a fifth of residents are

becoming “nursing homes in the sky” suggests the number of annual births falling below 1m in 2016 should have rallied people sooner. He guesses that technology cannot address the shortfall and predicts a time when Japan is not only short of crematorium space, but lacks the monks to administer the last rites.

In terms of the public purse, the risks are clear: by 2025,

and should be a clear leader in developing the policies and products that demands.

“Most of the future we don’t know, except for demographics . . . so [if] we know what is going to happen, why don’t we act? [Japan’s] population has peaked out, it’s shrinking— you’d assume this is the number one topic that you address. But why do we not see more action

older workers. In others, such as regional banking, where 50 per cent of lenders lost money in their core business in the financial year ending March 2017, it is one of the key considerations behind 15 mergers since 2008 and several more now in negotiation.

Lynda Gratton, the London Business School’s professor of management practice and the book’s co-author, has become an adviser to Japan’s top leadership, informing ministers last year that it was likely that half the children born in Japan today will live beyond 100. This month, in a rare honoursharedbytheworksofKarl Marx and John Maynard Keynes, the book will be released in manga comic format to ensure it reaches an even wider readership.

Not long after it hit Japanese bookshelves, an executive summary of The 100-Year Life landed on the desk of prime minister Shinzo Abe — struggling at the time to reignite public faith in his “Abenomics” reform programme.

Japan already knows better than anyone how quickly 100year lives can proliferate even as the general population shrinks.

Fifty years ago Japan had just 327 centenarians; in 2017 it had 67,824, and the largest per capita ratio of them in the world.

But Mr Abe, say senior officials close to him, knew a galvanising narrative when he saw one. The book’s blueprint, of people working much later into their lives, remaining in better health, continuing to gain skills and investing for a long stay on earth, had a note of optimism he desperately needed.

107 Age expected to be reached by 50% of Japanese citizens born in 2007 3.36m Number of Japanese men and women aged over 69 who

were still working in 2016 40% Population of senior Japanese employees who say they want to work as long as they can He saw too that it fitted in with other policies he has pushed — critics say unsuccessfully — such as making more nursery spaces available for the children of working parents, and workplace reform aimed at narrowing the pay and benefits gaps between regular and non-regular workers.

It also offered the opportunity to slacken some of the barriers to foreign workers — a segment of the workforce that Mr Abe and others recognise will be critical for securing the necessary army of elderly caregivers that Japan’s demographics demand.

Within a year of the book’s publication, the Cabinet Office had assembled a diverse group of ministers, academics, business leaders and union representatives into the Council for Designing the 100-year Life Society. In a signal that Mr Abe, who chaired and attended all nine of the committee’s meetings, was open to all ideas, its ranks included a former footballer, Masako Wakamiya — an 83-year-old woman who designs iPhone games apps to keep the elderly stimulated, and Haruka Mera — a 30-year-old entrepreneur whose crowdfunding app has helped found a number of childcare businesses.

“I think that the 100-year life phrase made it easier for people to understand all the issues. The idea focuses people on the possibilities — it makes them realise that they could continue living for decades, and it makes it easier to imagine what needs to be done and how they need to plan their lives,” says Ms Mera.

Note: the rest of this article continues in the online edition of BusinessDay@ https://businessdayonline.com/

Communication collision, phariseesm and the management of change

IK MUO Ik Muo, PhD. Department of Business Administration, OOU, Ago Iwoye, Ogun State muoigbo@yahoo.com

O

ne man visited the native doctor (NDr) and while trying to sit down, he embarrassingly farted, and loudly too. When the baffled NDr asked him which kin business be dis, he responded: well, it happened in your very before; that is why I am here. On 26/11/13, a group of rebel governors, led other nPDP members to join the APC and the great Lai described the defection as a strategic merger that would give Nigeria and Nigerians a new lease of life. 5 years down the line,

the same group of rebels formed the rAPC and decamped mostly to PDP and the same Lai declared that Today is a special day. God has answered our prayers by exposing our political traitors.

God has removed stones from our rice. The first act of political harlotry was strategic while the second was divinely ordained to de-stone the APC rice. About the same time, his Imperial Majesty, the Chairman and Chief Executive of APC and former Comrade, Adams Oshimhole, threatened to sack Ngige from APC and from the government. Ngige immediately gave it back to him: you err because you do not know! (Mt, 22:29; Hosea, 4:2). As an aside, if Adams had inquired about the fate of the hen that perches on an Ngige, (the rope used to hang clothes) he would have been more careful! Anyway, that is what this treatise is all about; the tendency to say opposing things depending on the time and circumstances or political brethren contradicting each other in the market square Communication collision

occurs when what one said previously collides with what the same person says presently or when two people, supposedly in the same camp publicly contradict or lambast each other. It involves one contradicting himself, contradicting his comrade or contradicting the past with the present. Phariseesm is the height of holier than thou tendency, when somebody with a beam in his eyes is worrying about the speck in the eyes of another (Mt., 7:5) or says one thing and does another (Mt, 23:3) Phariseesm is the same thing with hypocrisy and as Christ had warned a hypocrite is more dangerous than a dishonest man because a dishonest man just deceives and cheats while a hypocrite betrays and swindles. In Nigeria, these are in the character of our politicians, but we have not seen this tendency at the level we have witnessed it in the past 3 years of change.

I will start as the spirit directs.

On 7/6/16, the President was jetting out on his usual medical tourism. He had heard so much groan-

ing from Nigerians that his ears became troubled and he decided to seek medical attention abroad.

At the departure lounge, PMB told Nigerians that there was nothing wrong in a president being sick because he was human. But at the same airport and at the same time, Femi Adesina, told a bewildered world that Buhari was not sick! In any case, Candidate Buhari had decried medical tourisim and swore that he would patronize our general hospitals with us! He had also outlawed foreign medical treatment for government officials and despite the pledge of transparency refused to tell us what his medical treatment costs because it was/is a security issue.

On 26/4/17, Lai Mohammed, who used social media with disastrous consequences against Jonathan publicly complained that his job was being frustrated by these same social media operatives, who serve the people with incredible menu and unbelievable tales. He further discovered that fake news and misinformation were the biggest obstacles to 2019

elections (25/10/17) and before long, the FGN started clamping down on the social media because they were threats to national security while legislations against hate speech and false news surfaced. If only he had thought along these lines 4 years ago!

In terms of lambasting and contradicting each other, we still recall the war between Kachikwu and Amaechi on the issue of Maritime University, the same subject matter on which Shehu Sani reminded Amaechi that a town hall meeting was not a meeting of illiterates.

Shehu Sani later told the triple Minister that Nigeria had moved from power epilepsy to power paralysis. He also made the famous statement that while those enmeshed in corruption in the executive arm of government are refreshed with deodorant, others are treated with insecticides. But it was on the issue of subsidy that government officials really spoke in tongues. As at now, we are told that there is no petroleum subsidy, even though there is

under-recovery, or something like that, amounting to billions. But before now the communication on fuel subsidy has been nothing short of disastrous. When the APC government increased the price of fuel by 70%, Kachikwu, who had declared that subsidy removal was unrealistic at his confirmation hearing, boldly said that subsidy has been removed (11/5/16) while Amaechi said we are not saying that subsidy has been removed (15/1/18) and Lai added that removal of subsidy would create 200000 jobs (14/5/16) and that fuel price was hiked because Nigeria was broke while Tinubu described removal of subsidy as a bold move (13/5/16) while Osibanjo professorially declared that subsidy has not been removed, that what we had was just a price hike (14/5/16).

PMB had earlier washed his hands off the matter when he declared before all this cacophony of voices that he did not understand what subsidy meant (24/5/15).

Note: the rest of this article continues in the online edition of BusinessDay@ https://businessdayonline.com/

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