BusinessDay 09 Oct 2019

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news you can trust I * * WEDNESDAY 09 OCTOBER 2019 I vol. 19, no 411

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L-R: Ikechukwu Nnamani, vice president 1, Association of Telecommunications Companies of Nigeria; Mohamad Darwish, CEO, IHS Nigeria; Ngozi Chimdi-Ejiogu, assistant director, Bilateral Funds, Rural Electrification Agency Nigeria, and Babagana Digima, assistant director, special duties, Nigeria Communications Commission, at the Power and Telecommunications Synergy conference supported

by IHS Towers in Lagos.

Pic by Pius Okeosisi

Again, FG fixes unrealistic Questions for Nigeria as ExxonMobil awards $33bn revenue targets for 2020 budget LNG contract for Mozambique proposes revenue generation of N8.155trn

MICHAEL ANI, DAVID IBIDAPO, Lagos, SOLOMON AYADO & JAMES KWEN, Abuja

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igeria’s President Muhammadu Buhari on Tuesday presented a N10.33 trillion 2020 Appropriation Bill to the National Assembly, with an ambitious revenue target aimed at funding it.

The draft proposal pegs the Federal Government revenue target at

an all-time high of N8.155 trillion, 7 percent higher than the N7.594 trillion the government planned to generate in the 2019 budget.

Africa’s largest economy has over time been confronted with ballooning budget deficit owing to revenue shortfalls.

According to the draft proposal, the Federal Government plans to generate N2.64 trillion as oil revenue, N1.81 trillion from non-oil, and N3.7 trillion from other revenue sources.

Analysts say this calls for concern as Nigeria has for years failed to meet the revenue target projected in the budget and, in fact, the variance between the budgeted and actual revenues has widened within the past five years, forcing the government to resort to huge borrowings to meet its planned expenditure.

For example, as of June this year, the Federal Government had

Continues on page 38

ISAAC ANYAOGU, STEPHEN ONYEKWELU & DIPO OLADEHINDE

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S oil giant Exxon Mobil is investing $33 billion into two liquefied natural gas projects in Mozambique, a country of 30 million people with less than 50 percent of Nigeria’s gas reserves, at a time when investment into the continent’s biggest oil producer is drying up.

This development raises

questions about why investment dollars are fleeing Nigeria for smaller African countries and what will be Nigeria’s ability to remain competitive in a

Continues on page 38

Inside Nigeria risks bleak future as investment to GDP lags peers P. 2

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BUSINESS DAY

news NDIC begins sale of defunct Fortis MFB’s assets Hope Moses-Ashike

T R–L: Dakuku Peterside, DG, NIMASA; Ibok-Ete Ekwe Ibas, vice admiral, Chief of Naval Staff; Zubairu Dada, minister of state for foreign affairs; Gbemisola Saraki, minister of state for transportation; Nuratu Jimoh Batagarwa, representing minister of defence; and other naval representatives, at the Global Maritime Security Conference in Abuja.

Nigeria risks bleak future as investment to GDP lags peers LOLADE AKINMURELE & OLUWASEGUN OLAKOYENIKAN

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igeria’s inability to stimulate private investments paints a bleak future for a country tipped to become the world’s third most populous nation by 2050.

As a percentage of GDP, private investment in Nigeria will probably fall to 13.81 percent in 2019, according to the World Bank.

That compares poorly with peer countries with a similar population like Indonesia, as well as African peers from South Africa to Egypt.

Indonesia’s investment to GDP ratio is projected to hit 33.6 percent in 2019 from 33.4 percent in 2018, according to World Bank data.

In Ethiopia, investments as a percentage of GDP will probably hit 39 percent while investment in Egypt is expected to be equivalent

to 16.81 percent of GDP. In South Africa, the figure is 17.9 percent.

Perhaps most telling is the fact that while investment seems to be rising in other countries, it is falling in Nigeria, declining from as high as 35 percent of GDP in 2000.

The dry-up in investments has dire consequences for economic growth and job creation.

“The fore-runner of GDP growth is the Investment/ GDP ratio. If there are little or no investments today, then there will be little or no growth in a couple of years’ time,” said Atedo Peterside, founder, Stanbic IBTC Bank plc.

“The double-digit growth of 2002 came on the back of the very high Investment/ GDP ratio of 35 percent recorded in year 2000, which was the first full year following the restoration of democracy,” Peterside said in a keynote speech at dinner

marking the 25th Nigerian Economic Summit in Abuja.

“Thereafter, the longterm trend for Nigeria’s Investment/GDP ratio has been a near-continuous downward slide. By 2012, the Investment to GDP ratio had slid all the way to below 15 percent and so GDP growth rates were bound to fall sharply after 2013,” he said.

Nigeria’s GDP growth has collapsed in recent years on the back of a prolonged plunge in crude oil prices that started in mid-2014.

After the recession in 2016, GDP growth has failed to match previous growth rates and has been consistently come in lower than population growth.

In the first half of 2019, the economy expanded by 2 percent, according to the National Bureau of Statistics (NBS). That’s barely enough to scratch the surface in a country that produces people at an annual average

of 2.6 percent.

Aside from low economic growth, the investment to GDP trend can be used to explain why poverty is on the rise and unemployment is expanding, according to Muda Yusuf, an economist and director-general of private sector advocacy group, the Lagos Chamber of Commerce and Industry (LCCI).

“The private sector is the driver of job growth anywhere in the world, so if private investment is declining, it constrains job creation,” Yusuf said.

The numbers establish that countries with high investment to GDP ratios tend to have lower unemployment rate.

Unsurprisingly, of the countries analysed by BusinessDay, Nigeria not only had the lowest investment to GDP ratio but also the highest unemployment rate after South Africa.

•Continues online at www.businessday.ng

Why Nigeria can’t produce enough food despite billions from FG ODINAKA ANUDU & HARRISON EDEH, Abuja

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armers and manufacturers have given explicit reasons why Nigeria cannot feed its 200 million people despite an array of government interventions running into billions of naira in the last two decades.

The Central Bank of Nigeria (CBN) has pumped over N190 billion into the Anchor Borrowers’ Programme to ramp up production of crops from rice to cassava. Previous administrations have also spent billions in various agricultural transformation schemes, but food inflation is still high and production low, as Nigeria is not self-sufficient in almost all the crops and exports little food to earn foreign

exchange.

“In order for you to have food in the right price and quality, you must have the right infrastructure,” Paul Gbededo, CEO, Flour Mills of Nigeria, told BusinessDay on the sidelines of the 25th National Economic Summit in Abuja on Tuesday.

“Power infrastructure is one of the biggest challenges in the food value chain, and it is increasing the cost of food.

Road and rail infrastructures are important because we need route to market. If your roads are bad, and there is no rail infrastructure, then your turnaround time with your logistics will be higher,” he said.

Nigeria needs to feed 200 million mouths, which will grow to 410 million by 2050.

Much of the production is www.businessday.ng

subsistence and only little technology is employed in the industry dominated by rural farmers. Post-harvest losses are between 20 and 40 percent in many crops, according to experts.

“Do you know how much banana, plantain and other crops that get rotten during their seasons? In Philippines, they dry mangoes and send to China, and China buys everything, but what do we do here?” said Oyetunde Solaja, managing director, Crestar Group.

“First, we need to have enough data that show what kind of products we have, the available markets, as well as the linkages between the farm and the markets,” he said.

Nigeria’s food inflation is high at 13.17 percent in Au-

gust 2019, with rice prices rising on border closure, despite being the highest beneficiary of CBN’s Anchor Borrowers’ Programme.

Data from the Ministry of Agriculture show that Nigeria is the largest producer of yam with 40 million metric tons per annum, but yam demand in the country is 60 million metric tons per annum (MT), leaving a gap of 20 million MT. Nigeria produces 42 million MT of cassava but has a demand of 53.8 million MT of the crop, leaving a gap of 11.8 million MT. National supply for Irish potato is put at 900,000 MT per annum but with a demand of 8 million MT and a

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Continues on page 38

he Nigeria Deposit Insurance Corporation (NDIC) on Tuesday commenced the sale of assets of closed Fortis Microfinance Bank plc by public auction and competitive bid.

Fortis MFB was licensed by the Central Bank of Nigeria (CBN) in 2007 and listed on the Nigerian Stock Exchange (NSE). However, in 2016, the shares of the bank were suspended due to failure to submit its 2016 audited accounts.

The items listed to be auctioned include furniture, fixture, fittings, equipment, generators, and motor vehicles, among others.

A statement from the director, NDIC Lagos office annex, said that the public auction for the furniture, fixture, fittings, and equipment will take place from October 8 to 12, 2019.

“The NDIC, in exercise of its right as liquidator of failed Microfinance banks hereby invites the general public to buy the assets (furniture, fixture, fittings, equipment, generators, and motor vehicles etc) of the Fortis MFB by public auction and sealed bids for motor vehicles and generators, at the following branches,” the statement read.

The auction will take place at different locations in the Federal Capital Territory, Abuja. A top operator who chose to be anonymous said this is

good development as it signals to investors that bad MFBs are not allowed to run in the country leading to more confidence in the sub-sector.

The operator was pleased with the regulators on the manner in which they handled the closure and liquidation of the defunct microfinance banks.

In a February statement, the NDIC noted that the various examinations and supervisory interventions of CBN and NDIC revealed that the bank was being run in an unsafe and unsound manner leading to huge non-performing loans, high cost of funds (foreign and domestic borrowings, and fixed/term deposits), exorbitant administrative and personnel costs (especially high emoluments to successive CEOs), and poor corporate governance practices, all of which impacted negatively on its financial condition. As a consequence, the bank was illiquid, could not honour its obligations to its depositors, and became insolvent.

The unhealthy condition of the bank degenerated to the extent that the CBN removed the management of Fortis MFB plc in February 2018 and appointed a four-person Interim Management Committee (IMC) to take over the control and management of the bank.

•Continues online at www.businessday.ng

N7trn oil loss: Senate begins amendment of Production Sharing Contract Act ...Tasks FG on development of Oloibiri oil, gas research centre SOLOMON AYADO, Abuja

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he Senate on Tuesday commenced the amendment of the Production Sharing Contract (PSC) Act following consideration of the bill.

The Senate had last Wednesday resolved to investigate the sum of N7 trillion oil revenue lost by the Federal Government over a period of 20 years due to nonreview of the PSC Act. PSC is a contractual arrangement for petroleum exploration and production whereby the Federal Government as owner of petroleum resources engages a contractor to provide technical and financial services for an agreed share in profit oil after payments of royalty, coat and tax oil.

The bill titled “Deep Offshore and Inland Basin Production Sharing Contract 2004 (amendment) Bill 2019” passed second reading in the Senate on Tuesday.

The bill was consequently @Businessdayng

referred to the Senate Committees on Petroleum (Upstream) and Finance for further legislative action.

Sponsor of the bill, Albert Bassey Akpan (PDP, AkwaIbom North East), in his presentation said the bill “seeks to amend section 5 of the PSC Act to bring the provisions of that section into conformity with the generality of the provisions of the Act and into congruence with the intendment and essence of Production Sharing Contracts”.

“The PSC arrangement was offered by the Federal Government of Nigeria as a contractual arrangement for the exploration and production of petroleum in the 1991 licensing round,” Akpan said.

He said the fiscal incentives from the PSC arrangement are distinct and absent from the provisions of the Petroleum Act and the Petroleum Profit Tax Act which regulate the fiscal regime of other types of petroleum exploration and production arrangements.

•Continues online at www.businessday.ng

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Enterprise development: Understanding efficiency and productivity (1) SMALL BUSINESS HANDBOOK

EMEKA OSUJI

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he survival of any institution – production and services, microfinance programmes inclusive – be it donor-supported or commercially driven, is in the ability of its operators to understand and internalise what gives the bottom-line its colours, red or black, and then learn to respect it. Microfinance institutions, including commercial microfinance banks, are generally constrained by the challenge of Double bottom lines (DBL). On one hand they need to demonstrate financial sustainability while on the other, they must operate in a way to meet their social mandates and mission statements of supporting the underprivileged.

There is therefore a dilemma of the DBL but even at that, they still need to operate efficiently.

Generally, informal credit market operators and by extension exist to make small loans, especially to micro, small and medium enterprises. This point needs to be well understood by operators, some of whom often pretend to be commercial banks but we know a butterfly is not a bird. For the avoidance of doubt, and at the risk of saying what ought to be a truism, the making of

jumbo loans to single obligors, or anybody at all, is an aberration in that market, including microfinancing. That is not the tested way to reach the poor and underserved; nor is it a way to grow that industry.

The managerial attributes and culture for handling jumbo loans in the hands of a few clients is different from and not akin to the demands of effective microfinancing.

As manufacturers of consumables cannot assume higher market knowledge than their key distributors, so should the distributors not claim better knowledge of the retail market than the retailers.

However, we must acknowledge that covering operating costs from making small loans, especially to clients located far and wide, especially in geographically large areas, such as those in the agricultural sector, is not an easy task. Highly spatially distributed clientele imposes additional cost on operators. This is why the knowledge of efficiency and productivity has become even more compelling.

There are other reasons. First, regulatory concerns have increased, as deposit-taking microfinance institutions face harder challenges, and higher risks of failure, due mainly to the general southward direction of the economy.

Secondly boards and management of these institutions are also becoming more enlightened and therefore more competent in their roles as leaders who owe their institutions a duty to enforce good corporate governance standards.

Thirdly, investors have always had difficulty understanding what goes on in the opaque recesses of MFBs, and indeed, any operator

in the informal sector. These days, investors and donors no longer take things for granted or resign to fate. They ask real hard relevant questions, and insist on answers because there are competing alternative uses and destinations for their money.

More so, weak institutions are not good for the system. The danger of contagion is ever hanging, like the Sword of Damocles, over an industry with sick and dying institutions. They must be revived or removed. Such institutions must be repaired through regulatory support if possible or outrightly removed, because they do not serve anybody’s purpose – not their investors nor the industry. This validates the current recapitalisation action of the regulators.

While innovation is important, we are not to lose sight of the core principles of the microfinance industry, which is not completely green. There are success stories, and those of failures too, that we can learn from, including the Grameen Bank in Bangladesh, K-REP in Kenya and several failed efforts at canalising finance to the informal sector in Nigeria in particular and elsewhere (Read: People’s Bank of Nigeria and lots more), to mention just a few.

The point needs to be made therefore that operators in the microfinance industry must be efficient and their productivity must be high, if we are to attain respectable levels of outreach, and achieve sustainability. In this regard, efficiency and productivity, anchored on competence of staff and management, is inalienable, and must be clearly understood as the bedrock of survival, not only by

‘

While innovation is important, we are not to lose sight of the core principles of the microfinance industry, which is not completely green. There are success stories, and those of failures too, that we can learn from, including the Grameen Bank in Bangladesh, K-REP in Kenya and several failed efforts at canalising finance to the informal sector in Nigeria in particular and elsewhere

operators but also by regulators. It is even more important for regulators to be fully abreast of these concepts, if they are to avoid the perennial challenge of being always a few steps behind operators – like the police playing catch up with criminals and never catching up.

Recent reports from the deposit money banking sector indicates that the level of Non-Performing Loans (NPL) is coming down. Indeed, a three-year low figure was reported.

This should be good news for both regulators and operators, notwithstanding the fact that we are still far from best practice thresholds.

Improving performance is key to attaining the goals of the any institution. One of the best ways to achieve and sustain a downward trend in such variables as the NPL is to promote efficiency and performance management.

By prioritising operational efficiency and performance management, and keeping them very high on the agenda of the enterprise, both in boom and lean times, the enterprise stands to record considerable progress in achieving its objectives, especially with regard to earnings and profit. Productivity and efficiency data provide information for decision-making. By computing and comparing efficiency and productivity ratios we can validly comment on the performance of any entity regarding its performance.

Note: The rest of this article continues in the online edition of Business Day @https:// businessday.ng Dr Emeka Osuji is head of the department of Economics at Pan Atlantic University Lagos. eosuji@pau.edu.ng @Emekaosujii

China and Hong Kong: the ultimate test of authoritarian rule

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s the Dongfeng 41 — a new Chinese missile capable of delivering 10 nuclear warheads to anywhere in the US — rumbled along Beijing’s main avenue this week in China’s biggest ever military parade, Hu Xijin did not attempt to conceal his glee. “Don’t mess . . . with the Chinese people or intimidate them,” tweeted Mr Hu, editor of the popular state-owned tabloid, Global Times, which often articulates the feelings of senior officials.

Just hours later in Hong Kong, which returned to China’s rule in 1997, a very different scene played out. Hundreds of thousands of pro-democracy protesters thronged the streets, some clashing violently with police. In one location, a crowd gathered to throw eggs at a portrait of Xi Jinping, the powerful Chinese leader who led the parade in Beijing. Every time an egg hit Mr Xi’s face, a cheer surged up from the crowd.

Such were the polarised narratives that vied to define China on the 70th anniversary of Communist party rule this week. But how should the world read them? Was Mr Xi’s missile-packed pageantry indicative of an emerging superpower or a brittle, paranoid regime?

Are the demonstrations in Hong Kong a last redoubt for democratic aspirations on Chinese soil or the start of something new? What are the implications of Beijing’s assertiveness for the wider world?

These are big questions at a time when the creed of western liberalism that has held sway over global affairs since the second world war is in retreat. For some, China’s advancing power represents an attractive alternative to the struggling west, a model of state-capitalist poise. But to others — especially in the west and

Beijing’s immediate neighbours — China’s vision and influence is to be challenged, resisted or balanced.

In the absence of direct elections, the popularity of authoritarian regimes is hard to gauge.

But the outpourings of pride on Chinese social media this week suggested that Mr Xi’s parade was a genuine hit with ordinary Chinese.

“Most Chinese viewed the parade with enormous pride and euphoria,” says Yu Jie, senior China research fellow at Chatham House, a UK think-tank. “It is not just that the Communist party told them to celebrate but rather that most parts of the population willingly celebrated their own staggering success through hard work and resilience over a span of just 70 years.”

In a government report called “China and the World in a New Era” released in the run-up to the anniversary, Beijing did not underplay its progress. “In just a few decades, China has completed a course that took developed countries several hundred years,” it said.

The report set forth key aspects of China’s transformation: the country’s annual gross domestic product growth rate averaged 8.1 per cent between 1952 and 2018; some 770m people living in rural China have been raised from poverty since 1978; and life expectancy has risen from 35 in 1949 to 77 today. More than $2tn in foreign direct investment entered over the past 40 years.

In an important regard, China’s success seems to stand as an advertisement for authoritarianism. Ruchir Sharma, chief global strategist at Morgan Stanley, has found that since 1950 there have been 43 cases in which

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an economy grew at an average annual rate of 7 per cent or more for a full decade. A full 35 of these booms — or 81 per cent — took place under an authoritarian government.

The story does not end there. Mr Sharma also found that over a longer timeframe, autocracies tended to lose their way either through sudden policy reversals or the leaden hand of the state.

Democracies, by contrast, generate stabilising effects that produce slower but more dependable growth.

“The stabilising effect of democracy . . . accounts for a simple fact: every large economy that has seen average per capita income grow to more than $10,000 is a democracy,” says Mr Sharma. “China, with an average income approaching $10,000, is trying to become a large, rich autocracy but it would be the first.”

Beijing has no intention of abandoning its political model. “Due to China’s vast territory and complicated national conditions, the governance of China is uniquely difficult,” said the government report. “Without centralised, unified and firm leadership, China would have tended toward division and disintegration and caused widespread chaos beyond its own borders.”

This leaves China aiming at an unprecedented goal; a durably successful autocracy.

But some scholars do not bet against it. JeanPierre Cabestan, for one, describes in a recent book, China Tomorrow, how Beijing is building a “new authoritarian equilibrium” that could sustain its dictatorship for decades to come.

All this explains why Hong Kong, where authorities invoked emergency powers against the demonstrators on Friday, is so crucial. It shows

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JAMES KYNGE the limits to China’s autocratic vision.

“Hong Kong is another data point illustrating the same troubling trend of a government that believes might is right and is totally dismissive of the enormous risks and potentially catastrophic consequences of its actions,” says Minxin Pei, professor at Claremont McKenna College in the US. Hong Kong illustrates how trying to impose elements of China’s “centralised, unified and firm” system upon a cosmopolitan population with an average per capita income of $39,000 — four times more than the mainland’s average — can create a powerful backlash.

The animosity is deep and sometimes personal. Protesters have made posters likening Beijing to a Nazi regime, burnt the Chinese flag and defaced images of Mr Xi. In one frequent protester taunt, mainlanders are described as “caged birds” too scared to emerge from behind their bars.

The current cycle of protests, which have lasted four months, is heir to the “Occupy Movement” of 2014. Then Hong Kong people took to the streets against Beijing’s attempts to curtail democratic freedoms protected under the “one country, two systems” formula through which Beijing reassumed control over Hong Kong in 1997.

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

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BUSINESS DAY

Wednesday 09 October 2019

COMMENT CHARACTER MATTERS WITH DAPS

DAPO AKANDE

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uccess. What does this word actually mean? Maybe a more appropriate question to ask is, what does it mean to you? There’s a plethora of definitions of success and many are arrestingly profound but there’s one by Jelly Wong that most aligns with my understanding of it. It’s not even a definition as such but more of an admonishment: “Life is the most difficult exam. Many people fail because they try to copy others, not realising that everyone has a different question paper.”

We’re all here as individual souls with unique purpose to fulfil. It would amount to foolishness if having just gained employment, I’m instructed to resume at the office in Ikeja on a Monday morning but decide it would be better for me to resume in Ikorodu where the company doesn’t even operate, just because that’s where all my friends work. True success requires you find yourself where God has ordained you to be. True success or as the good book calls it, “good success” is attained when you discover and subsequently fulfil your purpose.

In my opinion, God is not inter-

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A successful life ested in our fame and fortune as they hold no inherent value to him.

What does interest Him is that we utilise the gifts, skills, ability and even material resources he has given us for the purpose for which he gave them to us. He wants us to use every platform he has blessed us with, including fame, position, wealth or even the most mundane of occupations to propagate his very essence. This we do by sharing his love, touching lives and influencing the world positively; showing the world what it means to “love thy God and to love thy neighbour as thyself.”

Thereby, harmonising our lives with our professed ideals.

I mentioned in an earlier message that the very fact God used the term ‘good success’ means it isn’t synonymous with success. God picks his words carefully and isn’t superfluous with them either. Success is when we triumph in our plans but ‘good success’, I believe, is when we thrive in God’s plan for our lives.

Through this, our soul experiences total satisfaction and a degree of fulfilment previously unknown to it. That is soul prosperity, true prosperity and good success.

It’s quite unfortunate that in our society now and particularly among the younger generation, success is almost entirely measured by material wealth. This generation’s perception of success appears to be defined by the image’s music

videos bombard them with. Scantily covered damsels cavorting over a gleaming Mercedes G-wagon, conspicuously parked in front of a monstrously large mansion, while the Don himself shames the almighty US dollar by spraying it around, as if it’s going out of fashion. To many of this generation, anything short of this is not success and so they aspire to it as the ultimate.

This is a notion which desperately needs to be corrected if we want our society to move in the right direction. Materialism has taken dangerously deep root in our society and to uproot this will undoubtedly require us to shift the focus from ourselves to others. A herculean task I admit but necessary nonetheless.

Having said this though, if we’re to give our musical celebrities some credit, success wasn’t by any means attained overnight but is the culmination of often unimaginable commitment, patience and untiring effort. They put in countless hours to hone their talent and many of them get to become genuinely good at what they do; whether you find their genre of music agreeable or not. Our youth see the glamour of the end product and crave it but how many of them can put in the grind?

How many can face push back after push back and still move forward with utmost belief in their dream?

I want to assure you that I have

‘

It’s quite unfortunate that in our society now and particularly among the younger generation, success is almost entirely measured by material wealth. This generation’s perception of success appears to be defined by the image’s music videos bombard them with

no objection whatsoever to someone enjoying the luxuries of life as it’s a beautiful thing for one to be able to enjoy the rewards of his labour. My objection comes when all manner of vices are committed to get them. Not when it’s by hook or by crook, hence the wise counsel and stern caution, “desire without knowledge is not good and whoever makes haste with his feet misses his way.

In my estimation it would be a mistake to measure a person’s success by material possessions and personal accomplishments alone for these in themselves are not the goals of life. God has a unique plan for every one of us but the underlying purpose of each and every plan is for us to be a blessing to others.

You can only serve God if you serve others. It’s important our children are made to understand that material wealth is just a by-product of God’s true blessings as it’s a small aspect of the joy, love, creativity, compassion and kindness we were sent to this world to receive and share. Sharing these gifts, to me, is undoubtedly a clear demonstration of a successful life.

Changing the nation...one mind at a time.

Akande is a graduate of the University of Surrey, UK, author of the acclaimed book: “The last fight: A personal journey to discovering values.”

Contact: dapsakande25@gmail.com

Abba Kyari and the fifth columnists

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he suggestion that the chief of staff to the President, Mallam Abba Kyari, has taken over the role of the President represents a classic demonstration of crass ignorance about the inner workings of government in presidential democracy and is therefore pure fiction.

There is a vast conspiracy to cause chaos in the Buhari presidency through a systematic and sponsored campaign of calumny, character assassination and creation of crisis of confidence.

It is quite worrisome that some people are always ready and willing to lend themselves to be used as pawns, petty agents and purveyors of lies for a mesh of porridge and crumbs from the table of vested powerful interests. These vested interests are the fifth columnists who had gone to work as soon as the President Muhammadu Buhari administration was first inaugurated in 2015.

It is rather pathetic and unfortunate that some so-called critics could take cheap jabs at public officials without any care in the world about facts, and instead make desperate fictional conjectures which expose them as working at the behest of powerful vested interests who feel that the nation is a fiefdom they must control at all costs.

I have read a few diatribes directed at Abba Kyari and all were fatally flawed in logic, common sense and objective reality. Its intended consequences are clear: to smear and impugn the hard-earned reputation of Abba Kyari, cause disaffection between him and the president with the ultimate aim of removing him from office. The constant allusion to some power cabal with omnipotent powers and a very weak president as puppet is a gratuitous insult to the president and the Nigerian people.

It represents a withering attack on everything Buhari stands for: his lifetime service to our nation in different capacities, in which he

acquitted himself with distinction. At different times, our president was a General in the armed forces of the Republic, minister of petroleum, military head of state and now a democratically elected president in his second tenure in office.

To posit that a phantom cabal has so overwhelmed a battle hardened general to the extent that they now govern in his stead without any shred of evidence, is not only libellous and insane, it represents an irresponsible gambit of power hungry political predators desperate enough to spew conspiracy theories and manufacture lies in furtherance of their selfserving agenda.

For the avoidance of doubt, our president is not the dunce that these critics and their pay masters would like Nigerians to believe. He is an accomplished statesman, patriot; a consummate and strong-willed leader who continues to serve the nation with distinction and to the best of his ability. He is not and has never been anyone’s lackey.

The suggestion or notion that he is a captive to a cabal is not only insulting but is the height of crass ignorance and irresponsibility. Through the weaponization of lies and falsehood, the fifth columnists have demonstrated frightening ignorance and lack of knowledge about the workings of government in a presidential democracy.

The position of Chief of Staff is a key component of government in the US from where we borrowed our system of government. The responsibilities of the Chief of Staff are both managerial and advisory. Apart from protecting the interests of the president, it is the responsibility of the Chief of Staff to control the flow of people into the seat of power.

Abba Kyari continues to live up to the responsibilities of his office and for this he has become a fair game for his detractors and a

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corrupt political class. Even in those dark days when our president was down in health, Kyari was an oasis of support and inspiration; he had to contend and contain with the manoeuvres of over ambitious powerful vested interests who plotted to take over the reins of government.

It is the same interests that have procured the services of these fifth columnists to denigrate and force the removal of Kyari from office.

During the period of president Buhari’s ill health, it was the same vicious powerful interests surreptitiously pushed and sponsored stories that Buhari was too ill to govern. When this effort failed, they now came up with the propaganda that our president had died and that his body double was now in Aso rock. Of course, discerning and patriotic Nigerians saw through the hollowness of this blatant falsehood and rejected it.

Like the axiomatic lion who cannot hide his colours, these self-serving individuals are at it again. Their game plan is simple: where there is no scandal, invent one. Pursuant to this scorched earth strategy, they manufactured a phantom statement without any shred of evidence that Abba Kyari’s appointment as Chief of Staff in 2015 was resoundingly rejected by numerous Nigerians. I am unaware of any scientific survey detailing the rejection of Kyari by numerous Nigerians in 2015. By the admission of one Umar-Bashir, one of such faceless critics, prior to his appointment in 2015, Kyari was a strong critic of Buhari. His appointment could only mean that the president set aside whatever differences they may have had to appoint a highly capable Nigerian in furtherance of higher national interest. This to me is the hallmark of selflessness and statesmanship.

Again Umar-Bashir’s petulance and crass ignorance was on full display when he alleged without any shred of evidence that it was

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OLUCHI JOSEPH Kyari who inserted, “a paragraph in president Buhari’s speech to ministers at the end of the recent retreat to the effect that all issues and requests for appointments by ministers should be passed through him. This function has traditionally been performed by the SGF.” As is self-evident, Umar-Bashir is sufficiently ignorant about the workings of government. He needs to be well schooled and conversant with the role and responsibilities of Chief of Staff, he would have known that as gatekeepers, the Chief of Staff defines every presidency.

One of their basic responsibilities is to control the flow of people into the seat of power and this function includes scheduling appointments for government appointees and dignitaries. If we may ask: what is wrong with the Chief of Staff to the president discharging his official functions? Does scheduling appointments for the president amount to the usurpation of the office of the president?

Having sponsored a motley of rented crowd to protest his inevitable re-appointment and failed, these charlatans led by a certain loquacious leader of the ruling party from the South -South incensed by his diminished sphere of influence will stop at nothing including dancing naked to actualise their dubious agenda.

Already, the South-South leader has earmarked millions of naira and a group of paid writers and pro -democracy groups with which he hopes to prosecute the campaign against Kyari.

Umar-Bashir is his first salvo in a long-drawn campaign of calumny, propaganda and misinformation.

Joseph writes from Abuja

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

Bashir Ibrahim Hassan

Nigeria and the scourge of mediocrity

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hrough years of lowering standards and accepting bad service, we as a country and a people have come to develop an abysmal tolerance for mediocrity and low standards that has eaten into the core of the Nigerian mentality.

The result, from governance to societal relations, is the shocking level of poor service, bad and downright irresponsible governance, corruption, breakdown of virtually all social and economic infrastructure never seen before in a peaceful and functioning society.

So entrenched is the culture that what we expect from ourselves, from our colleagues, subordinates, leaders, relatives and friends is couched in different euphemisms : “I can’t come and kill myself ”, “he tried” and “manage like it that”, perhaps the most popular phrase that describes this phenomenon.

In his book, “The Trouble

with Nigeria” Chinua Achebe refers to it as the cult of mediocrity and traces its emergence to the early days of independence and the corrupt tendencies of politicians: “By the time the Third Republic arrived, we found ourselves in the grip of former military dictators turned ‘democrats’ with the same old mind set but now donning civilian clothes.

So, Nigeria following the first republic has been ruled by the same cult of mediocrity – a deeply corrupt cabal – for at least forty years, recycling themselves in different guises and incarnations. They have then deeply corrupted the local business elites who are in turn often pawns of foreign business interests,” the literary icon surmised.

From politicians, the mindset percolated to the society and every fabric of the society is now corrupted so much so that very few people have regards for standards, process and quality.

Of course, there are Nigerians, at home and abroad, wag-

ing a consistent battle against this plague. Two Nigerians, Chigozie Obioma and Bernadine Evaristo are on the shortlist for the 2019 Booker prize, one of the most prestigious literary awards in the world. The Famished Road by Ben Okri was the first novel by a Nigerian to win the award in 1991.

That is not all. There are Nigerians in different professions who don’t, won’t and aren’t settling for less. They are competing with the best globally and standing out for excellent work.

Sadly, this culture of hard work and excellence is the exception and not the norm in Nigeria. As Kingsley Moghalu puts it, “the Nigerian way is to manage... We are constantly under pressure to lower our standards in every area.” This can be seen more clearly in our vocational and artisanal spheres where poor quality of work and service is the norm and everyone learns to ‘manage it like that.”

Because of that kind of mindset, nothing really works in the country. Somehow, we have learnt to cope with poor or

absent infrastructure, services, injustice and just manage it. We manage everywhere; at home, at work, in hospitals, at conveniences, at airports, and places of worship.

But like a perceptive Nigerian quipped, “every single time we accept to manage something, we pass up the opportunity to fix a problem. Nigeria is now the poverty capital of the world because we failed to fix millions of problems.”

If Nigeria is to attain prosperity, in Moghalu’s words, “we must learn to stop managing.

We must learn to stop making excuses for one bad leader after another because of where they come from or how much money they have or whether we like them personally.”

We need to decrease our tolerance level for bad governance and learn to hold our leaders accountable, to compel them to deliver good governance and solid infrastructure.

Perhaps, that could be a starting point for changing the culture of “managing it like that” in the country.

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The network of corruption in Nigeria and how the syndicate operates ZUHUMNAN DAPEL

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iscal-related” in the title, means corruption that is directly linked to public finance, i.e., government revenues, expenditure & public debt. The terms “fiscal” is wider than that of “tax” as it includes royalties, which are not taxes but still contribute to the state’s overall fiscal take. This type of corruption would not exist in the absence of any government to collect revenue and make expenditures.

Our focus is therefore on those who have access to the public till: directly, e.g. politicians and bureaucrats; and, indirectly, their associates – lawyers, bankers and businessmen. As per the above, we identify inter alia five professional groups contributing to the flourishing of corruption in Nigeria. Taking these in turn: First on the list is politicians (not all politicians, only those who are corrupt).

These are the principal agents of corruption. Their motivation for seeking political office is not with the intention to help the governed but to have easy access to and steal from public till. The abundance of oil rents (i.e. supernormal levels of profit that are over and above “normal” levels of profit obtainable in other industries, whereby the “rent” is this difference which is driven not by the industrious entrepreneurship of the company/ individual in question but rather by that firm’s or individual’s access to the valuable petroleum in the first place) has become the focus for greed that determines the highly competitive political contests in the country.

Why are they so desperate to amass wealth? There are two likely reasons: to reinforce their hold on power; and

the fear of what tomorrow brings. It is said, if there is uncertainty about future income, today’s consumption likely to be depressed. How is the stealing possible? Please follow the story (or the discussions).

Also, bureaucrats (not all bureaucrats, only the corrupt ones). This refers to civil servants working in financerelated agencies (or ministries) of government. e.g. the Federal Inland Revenue Service, the Nigerian National Petroleum Corporation, the Federal Ministry of Finance, the Central Bank of Nigeria, Nigerian Custom Service, etc.

Because they understand the workings of the system and the civil service terrain, they are able to collude with and assist politicians in stealing public funds.

They also get their share of slush funds as they help draw up plans for false or inflated contracts through capital expenditures and ghost workers through recurrent expenditures.

Meanwhile, commercial bankers are not excluded (not all of them, only the fraudulent ones). After the above stated professional groups, the bankers help the politicians launder the stolen funds, transfer some abroad, breaching protocols (applicable to commercial bankers) and burying the traces. They also arrive at secret understandings, conspiring with top bureaucrats and other politicians to delay the payment of salaries/allowances of public servants. The gain to them is the interest generated (by investing in short term securities) between the point when workers are due their entitlements and when they are actually paid.

Of course, businessmen/contractors (not all of them, only the fraudulent ones). There is a strong symbiotic relationship between politicians and businessmen. One direction of the relationship is that the businessmen fund the campaigns of the politicians and if they win, they (the politicians) uses

‘

Some people steal because of lack; they want to meet some financial obligation, e.g. to defray the costs of accommodation, school fees, and food, their debts, some other basic needs, etc.

While this is not a plausible justification for stealing, it can be countervailed with a pay rise or other form of emolument

his office to compensate the businessmen through inflated contracts. The other direction of the relationship is that businessmen may not have contributed to the victory of the politicians but they have business ideas. These ideas are then funded by politicians. Businessmen sometimes fronts and runs the business on behalf of the politician without disclosing the identity of the true owner of the business.

They also transform the proceeds of crime or corruption by politicians into ostensibly legitimate money or other assets through inflation of cost of government contracts/procurement. I’m in strong concord with what the former Chairman of EFCC, Nuhu Ribadu once said: “…many Nigerian businesses are being finance with dirty money.” In my opinion, a large percentage of businesses in the country were and still are being financed by such monies.

Dismissing the myth that “corruption proceeds can fuel economic growth.” It is often argued that stolen funds can be used finance businesses and thus, create more jobs and generate growth if invested back into the source (or originating) country. But this is a depiction, in terms of social equity, of potential deadweight losses, that such a view propagates. That is, the diversion of resources away from the provision of public goods (e.g. roads) main for common good, to the provision of private goods.

Here is one example, a quote from the former Chairman of the House of Representatives Committee on Power in Nigeria, Hon Godwin Ndudi Elumelu, “there is no reason, after spending $13.2 billion, as it were, we are still talking about 3,500 megawatts. In Brazil, they spent only $12 billion and they have 12,000 megawatts of electricity; so why can’t we have the same?”

We need infrastructure on ground to attract foreign direct investments, but corruption diverting away the resources

main for this.

Corruption seems to channel substantial amount public resources to senior bureaucrats and politicians who have direct access to (and deliberately refused to retrace their “filthy fingers”) from the public till.

However, one believes there is hope for Nigerians: but for a few in the shortrun and perhaps for many in the long run. But if there is no sweeping intervention between the short-run and the long-run, then, as Keynes will say, “...in the long-run, we are all dead” We shouldn’t also forget the lawyers (not all of them, only the twisters). “When a politician steals N20 billion (£68.62 million), he keeps N5 billion (£17.15 million) for litigation. He hires a Senior Advocate of Nigeria (SAN)... Judges then accuse us of not conducting proper investigation in order to Compromise,” Ibrahim Magu, the head of EFCC. The lawyers provide incentives for politicians to be more corrupt. In that, in the process of litigation, they find ways around the constitution to exonerate/ extricate the accused politician from the grip of the law and justice. They often do this because of the huge amount which they get from such corrupt clients.

Some thoughts on addressing corruption Is it possible for this network to be broken, smashed and killed? Some have suggested capital punishment. But I see this as a despondent approach. Why? When a corrupt person is found guilty and killed, there is always another to take his place. Former President Obama once said, “you cannot bring an end to terrorism because you cannot erase evil from the heart of men” (I add, only God can do that). What then is the way out?

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

How you can also help achieve the Sustainable

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his past week, world leaders and stakeholders in both the private and public sector gathered in New York for the United Nations (UN) Sustainable Development Goals (SDGs) summit (one of the high-level political forums of the UN general assembly) to appraise progress made so far in the implementation of the 17 SDGs adopted in 2015 against 2030.

These goals, also known as global goals adopted by all UN member states are a call to action to address issues that affect all people. These goals are targeted towards advancing inclusion, ending poverty, protecting the planet and ensuring that every person on earth enjoys peace and prosperity.

Although favourable trends show that considerable progress has been made so far, the pace is reported to be slow considering the task at hand. Several impediments account for this relaxed progress. For one, frequent conflicts in many parts of the world have led to instability which has consequently inhibited or reversed growth.

The poverty rate is projected to rise against set targets by 2030 with issues of disasters, unemployment, unfavourable economic policies and lack of social protection systems for the vulnerable. In spite of health interventions targeted at increasing life expectancy and promoting general wellbeing, millions of mortality deaths recorded are preventable due to the gap in skillset. Gender-based violence is still prevalent, particularly in developing

countries. Billions of people still do not have access to clean water. Global material consumption, as well as greenhouse gas emission, is rising at a rapid rate, posing risks to the environment.

While member states have been challenged to drive these goals with a sense of urgency, the task of creating a sustainable world is both our individual and collective responsibility. So, here are three simple ways you too can assist!

The first step to supporting sustainability is by getting acquainted with the right information, hence, educate yourself. Thankfully, there are official online courses designed to teach the basics of these goals. The SDG Academy, backed by the UN in partnership with accredited online platforms, curates’ free educational courses on sustainable development. These courses are taught in an interactive manner by experts who have both subject matter and field experience. You will be learning alongside other students from all over the world, thereby deepening your insight.

One of these courses is the “Age of Sustainable Development,” offered by Coursera. This course will help you understand the global challenges and what it takes to achieve them. It covers topics from inequality, human rights and education to health, hunger, climate change, and biodiversity.

The course is delivered in short videos along with assignments to aid solidify your learning.

There are also books that thoroughly

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explain the genesis and need for the SDGs. For example, “Achieving the Sustainable Development Goals: Global Governance Challenges,” a book by Simon Dalby, Susan Horton and Rianne Mahon is one. You can also gain invaluable information from news sites that cover these goals like devex.com.

Another compelling way you play your own part is by applying what you have learned in your personal space. Our actions and inactions affect the realisation of these goals. When we do not give our voice to issues concerning gender inequality, human trafficking or stand up against injustice as it happens within our social circle, we create a bigger problem.

Our lifestyle choices are also a threat as reflected in the way we litter the environment and do not recycle items. When we do not empower local suppliers by patronising them, thereby helping to fight poverty; or press for policies and favourable conditions to promote quality education so that children who should be in school are not exposed to vulnerabilities, we do more harm.

Also, with your skills, experience, and connections, you may connect with organisations pursuing any sustainable development because that interests you. There are partnerships of the UN here in Nigeria you can work with. There are also notable volunteer-driven non-profits working to realise some of these goals. For instance, Slum to School focuses on the issue of education for underprivileged children in

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OSAYI ALILE

Nigeria while Women at Risk International Foundation (WARIF) and Pathfinder Justice Initiative targets issues of sexual violence and human trafficking.

E-waste Producer Responsibility organisation Nigeria (EPRON) and Wecyclers, are solving the problems of environmental waste and pollution. Women in Management and Business and Public Service (WIMBIZ) and Fate Foundation are tackling issues of women empowerment and economic growth. By engaging with these organisations, you play a very significant role in making the world a better place for all.

The work of individually pursuing SDG is a noble idea that holds valuable rewards.

You will gain new skills and eventually tap into your real purpose as you work towards creating lasting change.

Alile is the CEO ACT Foundation and consultant for Access Bank Plc on its CSR projects, Ms. Alile was the Executive Director of FATE Foundation, a leading private sector led not-for-profit organisation in Nigeria

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Wednesday 09 October 2019

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Nigeria’s agriculture @ 59 years JOSEPHINE OKOJIE

S

ince the collapse of global oil prices at the international market w h i c h p l u ng e d t h e Nigerian economy into a 25-year-low in 2016, there has been a renewed focus on the agricultural sector as the country attempts to diversify its economy away from oil.

Agriculture, which was neglected, became an option for diversification owing to its vast potentials that can drive a more sustainable economic growth in Africa’s most populous nation in terms of job creation and revenue diversification.

As a result, the government devoted a lot of energy to deepening agriculture with initiatives such as the Anchor Borrowers Programme (ABP), placing a ban on importation of some agro commodities and shutting down the borders, for the attainment of self-sufficiency in the production of major crops.

Th e a d m i n i s t rat i o n a l s o increased allocation to the sector as trend of budgetary allocation for the agriculture sector over the last few years shows that the allocation to agriculture, as a percentage of the overall annual budget to all sectors increased from 1.25 percent in 2016 to 1.82 percent in 2017 and 2.23 percent in 2018.

However, the allocation to the sector as a percentage of the overall budget declined in 2019 by 1.56percent.

But the government has failed to address some of the fundamental problems that are inherent in its quest for diversification. Some of which are; Infrastructural gaps One of the greatest problems confronting rural farmers and communities in Nigeria is the absence of critical infrastructure such as ‘motorable’ roads.

Nigeria continues to suffer low levels of agricultural productivity due to infrastructural deficit across the country. Due to the deplorable state of roads, farmers have to grow only what they can eat or the extra they can carry on their heads to nearby markets.

Most times, the surplus gets rotten in storage in the villages or during transit as a result of many hours or days spent in transporting the foodstuffs to where they are needed due to bad roads.

Meanwhile, urban dwellers have to spend a ver y large percentage of their income to buy food. This is because the food that

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gets to the towns and cities are far more expensive than what the poor struggling farmers would have sold them.

The high prices of these commodities are blamed on the middlemen but they are also quick to point out that they incur huge costs transporting the food as a result of bad roads.

“The roads are bad; it takes me two to three days to transport my yam produce from Benue (located in the middle belt, of Nigeria) to Lagos (located in Southwest). I lost more than 300 tubers of yam on my last trip to Mile Twelve market in Lagos because the trailer got spoilt on the road and my yam produce was stolen since the trailer slept on the road for a night,” according to Godwin Apak a yam farmer in Benue state.

“There are times our yams get spoilt on the road; the sun will burn part of it even before we get to Lagos. This usually makes me sell cheaper than I was supposed to sell. If the roads were better, the goods will get to the market on time for me to sell without it getting spoilt” Apak said.

Herdsmen attacks/Kidnapping Apart from the impact of Boko Haram in the North-East, which has displaced thousands of agrarian communities, farming activities have also come under threat in the middle belt region and other regions in Nigeria due to conflicts between farmers and herdsmen.

This was evident in the country’s 2019 second-quarter GDP as the sector’s growth slowed.

“The crisis has implication for the agricultural sector and employment generation. It is a major risk to the growth of the sector,” said Muda Yusuf, directorgeneral, Lagos Chamber of Commerce and Industry.

“This is also a threat to raw materials for industries. The agric www.businessday.ng

sector provides the raw materials that feed on industries especially the food and beverage industries.

This conflict is happening in a period of FX shortage,” said Yusuf.

hectare for soybeans is 1.1MT, Ethiopia’s soybean average yield is 2.3MT, Kenya average is 1.6MT and South Africa’s average is 2.1MT per hectare.

Low yields per hectare Despite growing concerns over food security and a food import bill that gulps $5 billion annually, Nigeria has failed to make appreciable efforts in increasing its farm yields, as Africa’s most populous nation still records the lowest yields per hectare amongst its peers.

Data from the Food and Agricultural Organisation (FAO) shows that Nigeria has the least average yield per hectare of five selected crops, among its African peers like Ghana, Kenya, South Africa, and Ethiopia.

For tomatoes, the average yield per hectare in Nigeria is 7 metric tons (MT), Kenya’s average yield for the crop is 20MT, Ghana tomato yield is 8.6MT and South Africa’s average yield for the crop is 86.8MT. Similarly, for maize, which is the most consumed grain on the continent, Nigeria, Kenya and Ghana have the same average yield of 2MT per hectare, while Ethiopia’s average yield for the crop is 3.8MT per hectare and South Africa’s average yield is 6MT per hectare.

Also, for groundnut, which is widely grown on the continent, Nigeria’s average yield for the crop is 1.2MT, Ghana groundnut average yield is 1.4MT, South Africa is 1.6MT, Kenya’s average yield is 1.8MT and Ethiopia with the highest average groundnut yield among countries compared to 2.4MT. For potatoes, which is the most well rounded and nutrient root in all of Africa, Nigeria’s yield per hectare for the crop is 3.7MT, Ethiopia potatoes average yield is 15.1MT, Kenya average is 15.5MT and South Africa average yield for the crop is 38.8MT. Nigeria’s average yield per

Low use of technology Low level of agricultural mechanisation on farms across the country has continued to limit the capacity of farmers to expand their cultivation areas, perform timely farming operations and achieve economies of scale in food production.

Available statistics show that Nigeria is one of the least mechanised farming countries in the world with the country’s tractor density put at 0.27 hp/ hectare which is far below the Food and Agriculture Organisation (FAO)’s 1.5hp/hectare recommended tractor density.

With the continual drift of the young population from the rural to urban centres in search of whitecollar jobs and away from the drudgery of manual farm labour, self-sufficiency in food production is becoming a herculean task.

“Currently, more than 70 percent of farm labour is provided b y h u m a n p o w e r ; ov e r 2 0 percent is provided with draft animal power and less than 10 percent by mechanical power,” Elesa Yakubu, national president, Tractor Owners and Operators Association of Nigeria (TOOAN), told BusinessDay. In Nigeria, a significantly higher proportion of the farming area is still cultivated by hand tools.

The International Food Policy Research Institute (IFPRI) reckons that Nigeria is still at the early stage of agricultural mechanisation.

But experts acknowledge that mechanisation of power-intensive operations have been slow.

When measured in 2003, 12 years ago, Nigeria had only 30,000 tractors. Africa’s largest economy is currently adding 1,000 new ones each year, which is still not

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considered sufficient in replacing the aging, worn out, and broken down ones.

This means on a per capita basis, Nigeria ranks 132nd out of the 188 countries worldwide measured by FAO / United Nations in terms of the number of tractors in the country. Nigeria has fewer tractors than minnow countries like Serbia & Montenegro, with 400,000, Pakistan with 320,000, or Uzbekistan with 170,000 tractors.

Way out For agriculture to effectively diversify the Nigerian economy from oil, the government must address the fundamental issues hindering productivity, experts say.

Experts noted that the country must increase its mechanisation scale to meet the ever-increasing population needed to be fed before the country can talk about earning foreign exchange through the sector.

They added that the government must provide the needed infrastructures such as motorable roads, effective and efficient rail transportation linking where the food are produced in the north and markets in the south as well as irrigation facilities to aid all-year farming.

R o t i m i Fa s h o l a , s e n i o r partner, OIT Fash Consults, told BusinessDay that agriculture can only diversify the economy when there is higher productivity and investments.

“Until there is an aggressive increase in production, we would not see the effect yet. This will require us to do a lot more in terms of increasing productivity per unit area and increasing our land areas.

We must increase our yield per hectare, which means we must use more fertilisers than we are now.

It means we must increase our tractorisation, it means we must increase our water management system and introduce more irrigation,” Fashola said.

Wednesday 09 October 2019

BUSINESS DAY

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‘We want to list Coscharis Farms on the Nigerian Stock Exchange in five years’ COSMAS MADUKA is the chairman of Coscharis Group - a parent company of Coscharis Farms Limited. In this interview with JOSEPHINE OKOJIE, he speaks about his organisation’s diversification into the agricultural sector and the reforms the country needs implement to attain self-sufficiency in rice production. Excerpts:

W

e have always known Coscharis to be a major player in the automobile industry. What informed y o u r i nv e s t m e nt i n Nigeria’s agricultural sector?

Unfortunately, lots of people thought that Coscharis derives its position of success from the auto industry. We have been around for 46 years and our experience in the auto industry is barely 20 or 22 years. Our core business can be regarded as the pharmaceutical of the automobile.

Anybody that drives a car in Nigeria is our customer and that is what is keeping us going. The automobile industry is growing but it is subjected to lots of variables such as government policy among others. It will be a surprise and a shock if I tell anybody that from January to date that I have not sold up to 30 Jaguar Land Rovers and 30 units of BMW. Our principals can testify because they ship the cars and would tell you how many they have shipped. That is why when we heard the story of smuggling, it can be another company and not Coscharis because I did not see what benefit it would be for me to smuggle less than 30 cars as a business to jeopardise the overall interest of our organisation.

Our involvement in agriculture is not an accident as Cosharis has been playing a critical role in every sector of the economy.

We are involved in pharmaceutical, medical equipment, information technology, mobility services and even the production of sachet water, as long as it is a legitimate business. Our rice farm has been a longterm plan. The piece of property where we are growing our rice is 32 years old. Emeka Omeruah was the governor of Anambra State - as a military administrator - when we purchased the land and got the certificate of occupancy. We have always known that this is what we are going to do. We only waited for an opportunity to present itself and when it was ripe to move, we did. We ensure that we built enough equity within the company and leveraged on borrowed funds to go into the integrated agro-industry from seed production to mechanised farming, processing, and packaging. It is a fully integrated farm.

O n c e you d o s o m e t h i ng o f t h e international standard it attracts the attention of the international community.

We have had an international investor in the name of Sahel who has brought in a lot of things to the board. Working with Sahel has helped us understand the need for compliance with how to run these plants.

They brought new ideas to the board and how to ultimately make the business a success. We desire that in another four years or five, Coscharis Farms will be listed on the Nigerian Stock Exchange and people will see the performance and the result that will come out. Our idea is to get Nigerians to share from the wealth we are creating.

capacity is built continuously, prices of a bag of rice will be drastically reduced and it will address smuggling.

Why is Coscaris rice not available in major rice markets in Lagos as the state consumes over 70per cent of rice in the country?

Many traders are re-bagging our rice into foreign brands because they say our rice is not of local quality and this is why you do not see them in the markets. We have stopped two of our distributors because of this.

Anambra state has a comparative advantage in vegetable production so why rice production in particular?

I think we have a more comparative advantage in rice production than vegetables, because if you look at the density of the population in Ebonyi, Imo, Delta, Abia, Enugu states that are surrounding Anambra and you understand that rice is wheat that grows on a mud. All you need to do is get a muddy area in which Anambra state has lots of river basin area for it. Rice grows well and better in Anambra than it can grow anywhere. We need to grow and mill rice in Anambra to service the eastern region. If you produce rice in Kano and bring it to Anambra there will be a difference of about N1,500 to N2,000 on transportation. Rice is as heavy as cement and the cost of transportation plays an important role in the ultimate cost of it. In the future, we will do something in Lagos or the southwest area to target those markets.

Once we perfect our first mill and rice farm in Anambra, we would move to other states and regions. We have been given 20,000 hectares of land in Kogi state and we would take them one step at a time. We would take the business where they belong and where value can be added. Our first goal is to solve the food problem in Anambra State and the eastern axis. Once we do that we have the opportunity and experience to replicate it in other parts of the country. www.businessday.ng

Do you think the recent border closure is the right way to go in tackling the smuggling of food items?

The government has reasons for whatever they do and it will be wrong for me to say if it is a wrong decision. Until you hear their reasons behind it then you will know whether there are merits to it or not. But I think that as a country we should work hard to foster the economic cooperation of West Africa because Nigeria will benefit more than in other countries. The Germans and France were behind the European Union and these are the two strong economic producers in Europe that galvanise the others to form the EU to be able to sell their products and have free trade. If we continue to close the border, whether it ultimately benefits us or not I do not know but I will tell you that it is value-added like everything in life there are positives and negatives.

The positive of it today is that rice smuggling has reduced but it does not stop people from smuggling rice. What we need to do is to support farmers to grow capacity. As capacity grows, prices will drop; as prices drop it becomes uncompetitive for smugglers. As a farm, there are many things we have done which ordinarily should be the government doing. Take for instance; we spent N3 billion providing irrigation for our farms. Irrigation should be a government project to support the farms. If these infrastructures are given and

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What type of reforms would you want to see the government come up with to ensure that Nigeria attains self-sufficiency in rice production?

There are lots of policies the government has put in place today that are working. They are supporting out-growers farmers; they are providing funds for serious investors like us. We have access to a N6billion loan from the central bank at 9percent which is still better than borrowing at 20 percent to do farm. I think the government should not ask for more than 5 percent because this is a way to support the farm. If we can spend so much amount of money on petroleum subsidy that we do not eat, then we should give farmers loans at zero interest rates as this is a way to counter competition for foreigners. No nation grows without feeding its people. The government should do more in agriculture and education. They should realign their priorities.

In your assessment, how would you evaluate the Anchor Borrowers Scheme?

I understand it is not working in some states but it is working in Anambra state. The programme in Anambra will be a model that other states can emulate. What we are trying to do now is to further partner with the farmers by giving them a high-yielding seed variety. We do not want to give them our seeds to double their yield and they sell to other millers, and then we have worked in futility.

What are the problems with Nigeria’s rice industry?

Flooding is a big problem in the industry.

Last year, our farm was overtaken by the flood. The Vice President visited to see the extent of the damage. We suffered a loss of over N2billion; some of our tanks collapsed because of the water level. The Vice President promised that we would be compensated but we never got anything. We later read in the newspapers that the Executive Council budgeted and approved N7billion but Coscharis did not get anything and we are still wondering who the beneficiaries were.

There are also community issues but we have experienced peace in Anambra with our host communities.

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COMPANIES & MARKETS

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COMPANY NEWS ANALYSIS INSIGHT

BANKING

CIBN drives financial literacy, through young bankers club … to expand examinations to other parts of Africa HOPE MOSES-ASHIKE & DAVID IBIDAPO

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ptimistic that the Nigerian banking s y s t e m is on its path to a bigger and stronger/more resilient banking sector which will stand to compete adequately with African peers in market share and sizes, also, improve its functions in channelling funds from the surplus sector to the deficit sector of the economy and driving financial inclusion, the Chartered Institute of Bankers of Nigeria (CIBN) on Thursday, organised a career talk for secondary schools with the aim to boost financial literacy amongst students.

Speaking at the career talk themed “Banking as a career choice: Taking the first step,” Seye Awojobi, registrar and chief executive of CIBN explained the programme was set up as a “catch them young” initiative aimed at driving and deepening financial literacy and inclusion among the young ones.

“A career in banking is

open to everyone regardless of the race gender, age, physical capability etc which many believe,” he mentioned, hence, “there is an urgent need to reform the education sector in order to nurture the young ones and prepare them for an excellent future in banking,” which he termed a noble profession.

In contrast to countries like China, Singapore etc to mention but a few – with huge chunk of their budgeted funds diverted into boosting the educational system of the economy – Nigeria’s education sector still suffers from lack of adequate funding amongst other factor, hence, putting the country in the low human development category – positioning it at 157 out of 189 countries and territories at a value of 0.532 as at 2017.

With technology disruptions across the world, students at the occasion raised concerns over the possibility of technology taking away jobs from them when they come of age and ready to take up challenges in the banking sector.

In a Forbes report on why robots will not take over hu-

man jobs, it said of a study

by Gartner research that while 1.8 million jobs will be lost by 2020, 2.3 million new ones will be created.

However, with Nigeria grossly lagging behind in the flight of the fourth industrial revolution in modern day coupled with the fast pace in technology growth across the world, Nigerians seem to be well

positioned to suffer job loss by 2020 to Artificial Intelligence (AI) inventions if not adapted to.

“I do not see the advancement of technology taking away jobs as to every technology built, the must be people who will operate it. The onus lies on us to get familiarize ourselves with these innovations in other to make our skills

still relevant and needed in the banking space,” Peter Obasekin, chief operating officer FCMB group plc said at the symposium.

Awojobi explained further that, “the banking industry has in line with global practises moved from the brick and mortar age to the digital age. The banking industry has evolved drastically over the past years and

L–R: Ngozi Nkwoji, portfolio manager, non-alcoholic drinks, Nigerian Breweries Plc; Sound Sultan, Nigerian artist; Bolanle Austen-Peters, founder, Terra Kulture; Sade Morgan, corporate affairs director, Nigerian Breweries Plc, and Grace Omo-Lamai, H.R. director, Nigerian Breweries Plc, at the official handover ceremony of the Amstel Malta Box Office to Terra Kulture at Jungle Story 2

this has given rise to a more structured, challenging and intellectual roles.”

Mojisola Bakare, general manager and business executive, Sterling bank, spoke on the need for students to have a vision, run with it and see its actualisation. Using her self as a case study and her passion to have a career in banking, she advises that, “students who desire a career in banking must be willing to learn, unlearn and relearn.”

Described banking as a noble occupation, Awojobi announced that the CIBN has grown its membership profile to over 135 thousand after 53 years of its existence along with 54 universities and polytechnics.

He added that as a professional body, it has widened its horizon to conduct its examinations to other parts of Africa including Liberia.

Also battling education challenges, it is making moves to establish a direct entry programme for those who are unable to get admission to write the institute’s exam and gain admission. “CIBN to launch young bankers club,” he concluded.

REAL ESTATE

Opportunity for home-ownership as Metro & Castle opens phase II of residential buildings ENDURANCE OKAFOR

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new home ownership opportunity has just opened for potential home buyers as Metro & Castle Construction Company has commenced the selling of Phase II of its exquisite residential buildings located in the serene environment of Abraham Adesanya area, Lekki Phase IV of Lagos.

The fully serviced Estate is technically controlled with modern sophisticated facilities that include: Standard Gym, CCTV Sur-

veillance, Swimming pool, and 24-hour security with only phone access and 1824hour power supply.

Adekunle Abdul, who was recently decorated with an outstanding award by Just U Magazine, sits atop the Metro & Castle Construction Company, one of the fastest-growing in the industry, providing bespoke, exquisite and tastefully finished properties for residence in the country.

“We are guided by core principles of integrity and professionalism in delivering projects that are durable and sustainable by global

standards. We guarantee an unwavering promise of quality- we take it that we are building homes suitable for our families and not strangers,” Abdul said.

The phase II of the Metro Homes is coming after the success recorded during the first official sale of Phase I which was sold-out, the real estate firm said.

“While trying to sell phase I, we did a lot of surveys, and we found out that people were looking for two-bedroom apartment and so we factored that into our phase II plan and now we have properties that

are below N20 million,” the CEO said.

According to the UStrained constructor, Metro Homes is now selling: 4 Bedroom en-suite Semidetached, 3 Bedroom, and 2 Bedroom Terrace duplexes which boast of quality facilities.

The Metro & Castle brand is an eloquent evolution of white-glove service when it comes to the delivery of real estate projects in Nigeria. It’s a bold and tenacious story about seeking the best quality materials, adopting the best processes and wrapping these up in

an experience that exceeds the expectations of clients in an attempt to never be described as mediocre, as stated by the company.

“We came up with the idea of Metro and Castle to bridge the housing gap in the country while also meeting the need of the people.

I had to deliver good quality yet affordable housing to Nigerians,” Abdul told BusinessDay. According to the Association of Housing Corporation of Nigeria (AHCN), an umbrella organization for all federal and state housing agencies, more than

90 percent of new homes that are built in the country utilise funds from personal savings.

Since Metro & Castle started in 2015, the real estate company has been engaged in a total of 18 different projects- ranging from a block of flats to regular semi-detached apartments.

So last year, the property development company said it decided to slow down in doing high earn housingexpensive houses, to focus on producing properties that are affordable yet with great standards for the middle-income earners.

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: Samuel Iduh

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Wednesday 09 October 2019

BUSINESS DAY

COMPANIES&MARKETS

Business Event

ENERGY

Ikeja Electric creates jobs opportunities with commissioning of franchise centers OLUSOLA BELLO

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keja Electric Plc (IE), has commissioned seven franchise centres as part of its strategy to extend its customer footprint and provide ease of access to services to customers and also create employment opportunities for Nigerians.

The Ikeja Electric Franchise project, a business strategy aimed at facilitating improved engagements and customer experience for a spot on resolution of complaints, in partnership with its corporate partners will take-off at six (6) different locations within the Shomolu Business Unit network.

The centres which are located Olowora, Ikosi, Arepo, Bariga, Ketu and Ogudu, will

be extended across the company’s network coverage area.

Folake Soetan, IE’s Chief Operating Officer, while explaining the advantages of the franchising strategy,saidthe commissioned franchises will increase the Ikeja Electric brand visibility and also cater for the increasing customer base across the Business Unit as well as serve as data gathering centers for its customers.

“Ikeja Electric will work closely with the franchisees to ensure the standards set by the company to provide excellent customer service and satisfaction is maintained by the franchisees” she maintained.

Soetan also noted that the strategy is a veritable model for creating employment opportunities in line with the

company’s support for nation building, which ultimately translates to economic prosperity.

“We are also passionately positioning the company in providing corporate support to fulfil the government’s aspiration towards creating employment opportunities and this we believe is in line with our social responsibilities as a corporate entity”, he explained.

The deployment of the franchise connect touchpoints is phased, beginning with Shomolu Business Unit and to be replicated across the other Business Units. The centres are positioned to provide world-class customer services accessible to Ikeja Electric customers and also generate employment opportunities.

L-R: Emeka Oparah, director of corporate communications & CSR, Airtel Nigeria; Adewale Okusajo, Olumodi of Imodi-Ijebu; Olatokunbo Talabi, secretary to the State Government, Ogun State, at the commissioning of the fully equipped Imodi Ijebu ICT Centre donated by Airtel Nigeria under its CSR initiative, ‘Touching Lives’ in Imodi Ijebu, Ogun State.

Fidelity Bank launches GAIM Season 4 to promote savings culture ...N120m up for grabs

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s part of concerted efforts to promote the culture of savings amongst Nigerians, Fidelity Bank plc on Thursday announced the introduction of a new savings campaign in Lagos. The savings campaign which will ride primarily on digital technologies is one of the many initiatives of the bank aimed at rewarding new and existing customers for their unwavering loyalty and patronage.

Dubbed “Get Alert In Millions (GAIM) Season 4”, the savings promo is expected to run till April 2020, a duration of six months, and will see customers cart away a total of N120 million in cash prizes.

Speaking at a press conference heralding the commencement of the promo in Lagos, Nnamdi Okonkwo, Fidelity Bank’s MD/CEO, pointed out that the campaign is the

ninth in the series of savings promos organised by the bank in last 12 years to incentivise its customers.

Okonkwo, who was represented by Chijioke Ugochukwu, executive director, shared services & products (EDSS&P), Fidelity Bank, said the campaign seeks to reward customers for their loyalty and patronage.

Whilst the savings promo is targeted at a cross section of customers, he noted that the bank, apart from using traditional channels, would utilise digital platforms such as its Quick Response (QR) code and Virtual Assistant to reach unserved areas.

Giving insight into the rationale behind organising this initiative, Okonkwo said that savings promos remained an integral part of the bank. He asserted that the promo was focused on reaching out to the

unbanked population across the nation.

“We embark on campaigns like this to drive financial inclusion in line with the financial inclusion strategy of the Central Bank of Nigeria (CBN,” Okonkwo said.

“This savings promo allows us to take banking services to the nooks and crannies of Nigeria. It also gives us an opportunity to promote a savings culture which is critical to building up investible funds for individuals and companies and a key component of Gross Domestic Product (GDP) growth,” he said.

Stating that the lender remained on course to achieve its strategic objective of becoming a tier-one bank by 2022, he explained that building robust and solid saving volumes for the institution was a critical pillar to attaining the aforementioned target.

COMPANY RELEASE

FCMB celebrates customers, commits to excellent service delivery

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ouka Launches ‘Comfort a Home Initiative’ To Celebrate 60th Anniversary Celebrating a milestone in its business trajectory on Nigeria’s market, leading manufacturer of mattresses and other bedding products, Mouka, has launched an initiative geared towards bringing succour to many Nigerians.

Tagged Comfort-a-Home, the initiative which is part of the company’s Corporate Social Responsibility, seeks to comfort homes with free donations of Mouka branded mattresses in line with the firm’s plan to celebrate its 60th anniversary.

Under the initiative, the gen-

eral public is expected to nominate homes they believe deserve to be comforted with donations of free Mouka mattresses.

To send in nominations, participants are required to write a compelling essay of not more than 200 words stating why the family or home deserves the Mouka mattresses.

Name, phone number(s) and address of the home/family being nominated should be included in the entries.

According to Tolu Olanipekun, Mouka’s Senior Marketing Manager, entry window closes on the 31st October 2019, after which a panel will judge the nominationsandselect60homes.

Winners will be announced on

Mouka Social Media Platforms.

Terms and conditions apply.

The foundation of the Mouka brand was laid in 1959, when the scion of the Faiz Moukarim family started the Moukarim Metalwood factory in Kano to manufacture furniture and iron beds.

Through its 60 years of operating in Africa’s largest economy, Mouka has established over 1,000 branded outlets nationwide, and has remained first choice mattress brand for millions of Nigerians.

Since then, the company has also grown to become Nigeria’s leading manufacturer of mattresses and other bedding products.

www.businessday.ng

L-R: Chiamaka Efulu, brand manager, Maltina; Kenny Blaq, Nigerian comedian; Gbenga Adeyinka, Nigerian comedian and actor, The First, and Omobaba, Nigerian comedian, as they celebrate Kenny Blaq’s Birthday at Laffmattazz with Maltina on Independence Day

L-R: Denola Grey, style Enthusiast; Jenifer Oseh, creative director, Wildkulture; Olaoluwa Babalola, brand manager, Heineken Nigeria; Uti Nwachukwu, media personality, and Akin Faminu, fashion blogger, at the Heineken Lagos Fashion Week press cocktail.

L-R: Babatunde Ashafa, representative of Baale of Ajah; Temitope Wilcox, client engagement manager, commercial banking, Ecobank Nigeria; Hafeez Olakunle Badru, Elejigbo of Lamgbasa; Titi Olarinde, head, branch network, Ecobank Nigeria; Abudeen Lawal, chairman, Eti Osa Indigenous Forum, and O’tega Odjegba, regional head, Lagos Island, Ecobank Nigeria, at the flag off of Ecobank’s customer service week, at Ado Badore branch, Ajah, Lagos

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cityfile Kaduna auto dealers pledge to pay duties ABDULWAHEED OLAYINKA ADUBI

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Members of the Nigeria Labour Congress (NLC), and Trade Union Congress (TUC), during a rally to commemorate 2019 World Day for Decent Work, in Lagos on Monday. NAN

New technology needed to tackle waste challenge, Sanwo-Olu, Bamidele JOSHUA BASSEY

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overnor of Lagos State, Babajide SanwoOlu and Opeyemi Bamidele, a senator and former commissioner in Lagos, say frontier technologies were required in tackling waste and other environmental challenges arising from climate change.

They spoke at the 2019 World Habitat Day, with the theme, “frontier technologies as innovative tool to transform waste to wealth,” organised by the Lagos State ministry of physical planning and urban development.

The World Habitat Day is marked annually on first Monday in October and aimed at supporting the UNHabitat’s mission towards transformative change in cities and human settlements without leaving a single individual and place behind.

Bamidele, in a lecture he delivered at the event, listed

climate change, urbanisation, urban poverty, growth of slums, inefficient waste management as some of the major challenges facing Nigeria’s attainment of vision 2020 goals.

“According to the World Economic and Social Survey 2018, frontier technologies hold immense potential to improve how people work and live, as well as to significantly accelerate efforts to achieve the SDGs and address climate change.

“It is a globally acknowledged that frontier technologies, such as automaton, robotics, electric vehicles, renewable energy technologies, bio-technologies and artificial intelligence, have the capacity to possibly transform the social, economic and environmental spheres.

“They offer the potential of better, cheaper, faster, scalable and easy to use solutions for daily problems, including waste management. They also present opportunities for develop-

ing countries to leapfrog towards less efficient technologies and implement social innovations.

Sanwo-Olu on his part said his administration was stepping up efforts to tackling the challenges of waste management.

“The task ahead is to harness frontier technologies to achieve sustainable development, while mitigating their adverse economic, social and political consequences. Without any doubt, the place of technology and best practices in ensuring effective and efficient waste management in a mega city like our cannot be over emphasized” he said.

Represent by his deputy, Obafemi Hamzat, Sanwo stated that effective management of waste was a priority, adding that it was important to view “waste” as a valuable resource that could be turned to wealth through technology, which offers better, cheaper, faster, scalable and easy-to-use solutions for everyday problems.

“This innovative approach will address all areas of the waste hierarchy, including reduction, reuse, recycling, recovery and disposal.

“With innovative and technology-driven waste management system, cities can resolve not only challenges, but also create employment, promote economic growth, improve health and ecosystems which in turn contributes to happier, greener and healthier cities,” he said.

The urged all residents of the state to embrace and spread the message of the Blue Box programme and the Community Clean-up campaign recently launched as an innovative way of strategically managing solid waste in the state.

Idris Salako, commissioner for physical planning and urban development, said that Lagos State was blazing the trail in “innovative approaches to urban management, not limited to the waste sector.”

Customs vehicle kills student in Ogun AMAKA ANAGOR-EWUZIE

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he Ogun State command of the Nigeria Customs Service (NCS), on Monday allegedly killed a student of Ojomo Community High School, Ihunbo while conveying seized struggled vehicle.

The school located at Ihunbo town, in Ipokia local government, is a border town between Nigeria and the Republic of Benin.

Rasheed Biliamin, resident of the town, alleged

that the student was killed

by Customs officers. Biliamin, who was furious about the incident, said Customs should be mandated to stay at the border and not to be roaming the town killing innocent Nigerians.

“The innocent boy has been cut dow n by overzealous Customs officers.” Adesola called on the Federal Government to restrict the activities of the service to borders to check avoidable deaths of Nigerians. www.businessday.ng

“The youths of Ipokia local government had an Independence walk and wrote to all security agencies stationed in Ipokia.

The men of the Nigeria Cu s t o m s S e r v i c e w e re informed but they refused to solidarise with us while all others showed respect.

According to him, when Ali visited the border, he did not pay homage nor did he listen to the stakeholders, who accommodated his officers at the border area.

“Now dare devil of-

ficers had shot and killed an innocent soul while shooting sporadically,” he lamented.

Reacting, Abdulahi Maiwada, the public relations officer of Ogun Customs command, said the incident was an accident. According to him, the patrol vehicle of the service had head-on collision with a motorcycle (Okada) while conveying seized vehicle. He denied that the boy was killed by a stray bullet.

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aduna State auto dealers have ple dg e d to remain law-abiding and continue to pay statutory levies, including Customs duties to the government.

C h a i r m a n o f Mo t o r Dealers Association, Kad u n a c h a p t e r, A h m e d Abdullahi gave the pledge in reaction to the recent face-off between the motor dealers in the state and the Nigerian Customs Service. Abdullahi said “what transpired was a misunderstanding” which had been resolved.

Recall that the Nigerian Customs Service recently sealed off auto markets in Kaduna on the allegation of none payment of duties and struggling in of vehicles via the land

borders.

Abdullahi described the sealing off of their premises as an unfortunate development which affected their businesses negatively. He assured that the association would not compromise governm e nt ’s p o l i c i e s i n t h e effort to reposition the economy.

He said that the association has directed all members to comply with the directive of the Customs to pay necessary levies on all vehicles.

A member of the association, Ahmad Magaji, whose company was also s e a l e d a n d re o p e n e d , h o w e v e r, d e n i e d t h e claim that motor dealers in Kaduna were not paying Custom duties and that vehicles were smuggled into the state by the motor dealers.

Igbo in Gombe honour Kela, others

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gbo community in G ombe State is to confer chieftainc y titles on Santaya Ke l a, a p ro f e s s o r, a n d other friends of Igbo in the state.

The event will take place on Saturday, October 12, 2019 during the celebration of 2019 Igbo Day in Gombe.

In a letter nominating as special guest and conveying the message of the conferment of chieftaincy title addressed to Kela, the president general of the group, Ben Araonu, and chairman of the planning committee, Ngozika Amadi, stated that it was

in recognition of Kela’s contributions to humanity.

According to the letter, the professor would b e h o n o u re d w i t h t h e title ‘Ezi Enyi Ndi Igbo in Gombe State’.

Araonu and Amadi said the Igbo Day cultural celebration was an annual event for Ndigbo in G ombe State to appraise and display Igbo rich culture.

Reacting to the recognition, Kela said he was hu mb l e d a n d t hat t h e honour “shows the deep re l at i o n s h i p” b e t w e e n him, the state and Igbo people in general.

Obaseki seeks innovative solutions to waste mgt

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d o S t a t e g o vernor, Godwin Obaseki, has stated that the threat of climate, which has resulted in rise of sea levels and flooding across cities, would require a pragmatic approach to tackle.

He said Edo State government was ready to work with stakeholders in the sector to come up with innovative solutions to redefine environmental governance and proffer solutions to the chal@Businessdayng

lenge of waste and water management.

Obaseki said this in commemoration of the World Habitat Day, marked every first Monday in October each year.

He urged experts to c o m p l e m e n t g ov e r n ment’s efforts in repositioning the state’s environment to better serve Edo people and residents, by coming up with innovative approaches that will lead to effective waste and water management.

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Wednesday 09 October 2019

BUSINESS DAY

MARITIMEBUSINESS SHIPPING

LOGISTICS

MARITIME e-COMMERCE

NPA acquires new marine platforms to enhance efficiency in Onne, Rivers Ports AMAKA ANAGOR-EWUZIE

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ith minds set on decongesting Ports in Lagos by opening up Eastern Ports for business, the Nigerian Ports Authority (NPA) has perfected plans to acquire a set of new marine platforms that would aid safe shipping and efficient port services in Onne and Rivers Ports.

The marine platforms include pilot cutters, tug boats and ballistic patrol vessels that would be deployed for the patrolling of the nation’s waterways towards reducing piracy and sea robbery in Nigerian waters.

It was gathered that due to lack of functional tug boats, the NPA presently made an arrangement with third party contractor to bridge the gap by ensuring that ships are towed as required.

However, as it stands, the authority has also discovered that it is presently losing revenue by subletting towage services to third party contractors.

Speaking at the combined second and third quarter stakeholders’ meeting held in Port Harcourt last week, Hadiza Bala Usman, said the NPA has discovered the need for pilot cutters and additional tug boats in Onne and Rivers Ports.

According to her, the NPA is in the advanced stage of procurement for the acquisition of these platforms because the authority is indeed on the part

of ensuring that the ports are competitive.

It is said that safety and security are very paramount to shipping vis-a-vis the port business; to that extent, Usman said the NPA is working with the Nigerian Maritime Administration and Safety Agency (NIMASA) and Nigerian Navy to secure the waterways.

“We are also procuring ballistic patrol vessels, which upon acquisition would be handed over to these agencies

of government to aid patrol of our waters to enhance security of the channels and vessels at berths. This is of paramount importance to the Authority,” Usman said.

Stating that the NPA is aware that NIMASA is acquiring a new security architecture, Usman said the authority is excited to partner with them in this regard.

Meanwhile, Customs Licensed Agents that attended the meeting, raised concerns on problems of road conges-

tion, which compels port users to lose man hours due to lack of transit parks for trucks.

They urged the NPA to make provisions by assigning a park for trucks doing business in Onne Ports.

As a result, Usman called on the port manager to check if there is any land belonging to the NPA that could be leased as Transit Park. She however, stated that people need to be mindful of the fact that the NPA cannot designate a land that is not within their

purview.

“If there is no available land, NPA will reach out to the Rivers State Government to know if it will be gracious enough to provide a trailer park that would house trailers at commercial charges,” she said.

On the poor state of the East-West Road that leads to Onne, she said, there is a history to the road and its construction, but that NPA would make the appropriate recommendation to see to it that it is rehabilitated.

“The road is not under NPA’s purview but we will get the Federal Ministry of Works and Rivers State Government to join in fast-tracking the full rehabilitation of that road in the same way the Tin-Can Island Port access road has been awarded for full reconstruction,” she assured.

Earlier in his presentation, Yinusa Ibrahim, Rivers’ Port manager, who stated that Rivers Port is operated by two major concessionaires including PTOL and BUA Ports and Terminal Ltd, both of which operates four berths each, said business activities have started to pick up at the Port.

In the first half of 2019, Rivers Port had 162 vessel calls with gross registered tonnage (GRT) of 2,616,728 and cargo throughput of 1,659,722.

“The NPA needs to build a new control tower to enable strong communication signal for vessels calling the Port. This is because at certain nautical miles, it is usually difficult for crews to commu-

nicate with the control tower,” Ibrahim said.

In terms of towage, he stated that the NPA has purchased enough tug boats that would soon be deployed to the ports where they are needed. “The NPA has pilot cutter that is being refurbished and would soon be deployed to the ports to enable operations.

“In terms of dredging, the NPA has collaboration with private sector company for dredging of Eastern Ports, but there is need to look into the issues of expansion of the channel to enable the coming of bigger vessels.

On the other hand, Onne received about 360 oceangoing vessels; 2,053 service boats, totaling 2,413 vessel calls in Onne Port in the first half of 2019.

Cargo throughput stood at 13,011,652 metric tonnes; container traffic stood at 108,128 which is equivalent to 145,588 TEUs. Al-Hassan Ismailia, Onne Port manager said in terms of port efficiency, the average waiting time in the port was under five days; time on berth is 2.18 days; turnaround is 2.67 days; container dwell time for Intels, 16 days; West African Container Terminal (WACT), 19 days and Brawal seven days.

“In Onne, towage is provided by a private company, a third-party contractor. The port has five tug boats, two owned by the NPA and three by third-party. The management is also making efforts to procure pilot cutters,” he said.

average sized vessels to the ports, and shipping companies must deploy smaller tonnage which cannot provide economic transportation to most shippers.

“Road infrastructure to connect the ports with the importers and exporters’ places of business lack maintenance.

Delivery and distribution of goods thus become uneconomic or even impossible.”

Holm further observed that “Security on waterways and port access roads is critically compromised. Vessels require expensive armed protection to navigate the rivers, and road hauliers can only move during limited day time hours with additional high logistic costs.”

According to him, the in-

vestment by Marguisa Lines and the willingness of its customers to use the Calabar Port will be jeopardised “unless the above key issues are urgently addressed by the government.”

Marguisa Lines is headquartered in Madrid and since 1990, has specialised in liner transportation between the Mediterranean and West Africa.

Its main service operates between the ports of Algeciras in Spain and Malabo in Equatorial Guinea, and connects a large network of global and regional ports.

“The port of Malabo will also serve as hub port for the feeder vessel calling at Calabar on regular basis,” Holm said.

We want to open up Calabar Port to business - Holm AMAKA ANAGOR-EWUZIE

C

hristian Holm, managing director of Hull Blyth Nigeria Limited, has given insights into why his company recently facilitated the call of the first containership to Calabar Port in 15 years.

Addressing members of House of Representatives adhoc committee investigating why Warri, Port Harcourt, Calabar and Onne Ports are not being put to maximal use, Holm said Hull Blyth, which is the shipping agent to Marguisa Lines, owners of the containership called ‘MN Boreas’, facilitated the visit of the ship in order to open up business activities in the

Asein Marie Ehemeiri (l) Port manager, Calabar Port; Christian Holm (2nd r), managing director of Hull Blyth Nigeria, and other officials of the Calabar Port during the maiden visit of MN Boreas, the first container ship to call at the Calabar Port in 15 years.

eastern ports.

He said the vessel made its first call to the port on September 22, 2019.

“We are excited about the willingness of Marguisa Lines www.businessday.ng

to invest in the port and in the new service, and all the new opportunities that opens up for trade and development in Calabar and beyond. With this, the port is connected

with a global container liner service,” he said.

Holm, however, identified underdeveloped infrastructure, shallow water drafts, poor road infrastructure and insecurity as factors hindering large vessels from calling ports outside Lagos.

According to him, ports outside Lagos have not been upgraded in accordance with modern seaborne trade.

“This relates to containerised trade, where the requirements for sizeable port container yards and related handling equipment are not met,” he said.

He further said that water depth in rivers to the ports as well as alongside the quays has shallow drafts. “The shallow drafts prevent access of

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@Businessdayng

Wednesday 09 October 2019

BUSINESS DAY

23

MARITIMEBUSINESS SHIPPING

LOGISTICS

MARITIME e-COMMERCE

NCS to save over N480bn annually for shippers, moves to regulate govt agencies …Wants negotiation before introduction of new charges AMAKA ANAGOR-EWUZIE

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orried by the rising cost of doing business in the nation’s seaports, the Nigerian Shippers Council (NSC) said it has estimated that the planned 35 percent reduction in charges by shipping companies will save about N480 billion annually for shippers.

The Council, which is perfecting plans to sign Memorandum of Understanding (MOU) with shipping companies in no distant time, said it is currently moving strongly to ensure that government agencies under the Ministry of Transportation are also put under economic regulation.

This would ensure that such agencies do not introduce any charges without first seeking negotiation with the Council.

BusinessDay discovers that the Council has approached the Ministry of Transport to ensure that agencies like the Nigerian Ports Authority (NPA) and the Nigerian Maritime Administra-

Gbemisola Saraki (r) Minister of State for Transportation, and Anita De Werd, head of Marketing and Business Development of Maersk, Africa Region, at the 2019 World Maritime Day Celebration in Lagos recently.

tion and Safety Agency (NIMASA), come under economic regulation.

Speaking on the issue, Hassan Bello, executive secretary of NSC, said that having succeeded in getting the shipping companies to reduce charges, it will now focus attention on the gov-

ernment agencies by ensuring that they come to the Council for negotiation before their new charges are introduced.

According to him, it has become very important for these agencies to come to the negotiation table before introducing new charges be-

cause having arbitrary charges could jeopardise the gains of the agreement, the Council plans to sign with shipping companies to reduce charges by 35 percent.

Bello said it was better to discuss charges before they are introduced because of the con-

sequences it would have on the shippers and the economy.

Bello further cited example of the Oil and Gas Free Zone Authority (OGFZA), which had introduced a charge, and had to come for negotiation with the Council.

“So, if we can have such cooperation from an organisation outside the Ministry of Transport, why can’t we have with people inside,” he said.

Bello said that it has observed that agencies like NPA and NIMASA, which charge environmental fees, duplicates charges that can impact negatively on shippers.

He said the Council is getting support from the Ministry of Transportation to correct all the wrongs in the system. “We are doing a lot of things with NIMASA. We think that coming together with NIMASA is very important as far as these charges are concerned.”

He however, said that the implementation of new charges will begin once the MoU with shipping companies as agreed by the Ministry of Transportation comes into effect.

Maersk embraces diversity, inclusion for Africa’s growth, says De Werd AMAKA ANAGOR-EWUZIE

A

nita De Werd, head of Maersk Marketing and Business Development within the Africa region, has said that the company acknowledges the importance of diversity and inclusion for the development of the global maritime sector.

De Werd, who delivered a goodwill message at the 2019 World Maritime Day Celebration hosted by the Federal Ministry of Transportation in Lagos recently, said to fulfil its role in society as enablers of global

trade, the shipping firm needs to advocate for women to have a seat at the table in the organisation and to ensure women entrepreneurs have access to global trade.

She said Maersk has developed a partnership agreement with She-Trades, an initiative from the International Trade Centre, to connect three million women entrepreneurs to the global markets by 2021.

De Werd commended Nigerian women operating in the maritime industry for being the standard bearers for the African continent.

Citing example, she said: “About 400 years ago, Queen Amina led her community because she deserved to do so based on her capability and ambition. Her gender was not a disqualifier. She was a fierce warrior, who personally led military expeditions of over 20,000 infantrymen to innumerable battles. She was innovative and brought great wealth and power to her kingdom.”

According De Werd, Amina typifies the Nigerian woman of today, who is hard working, open-minded and a fast learner.

“A woman that is capable of leading and bringing prosperity to everything she does. On this day of celebrating the 2019 World Maritime Day, Maersk celebrates especially the Nigerian women, who hold top positions and inspire those around them.”

She said being a diverse and inclusive organisation makes Maersk stronger and more resilient. She added that it helps them to understand the present, better anticipate the challenges as well as opportunities that may arise in the future.

De Werd further said that

Maersk was keen on bringing African women on board its leadership teams through its Africa Leadership Development programme, where 65 percent of participants are now heading up managerial roles in African countries.

“Organisations that reflect the societies they serve are stronger and more successful. When we work, think, and act to leverage the participation of women in the workplace, we are seizing one of the greatest opportunities of our age - equality for all,” De Werd added.

VESSELS EXPECTED AT LAGOS PILOTAGE DISTRICT SHIP

AGENT

PORT

TONNAGE/UNI

EXP

E. T. A

LENGHT

CARGO

164M 142M 190M 190M 164M 153M 168M 145M 155M 190M 261M 228M 154M 190M 200M 249M 255M 132M 135M 188M

G/CARGO G/CARGO B/SUGAR B/WHEAT G/CARGO G/CARGO G/CARGO G/CARGO G/CARGO B/SALT CONT CONT B/GAS B/WHEAT B/WHEAT CONT CONT B/BAUXITE AGO B/GYPSUM

S/N

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

TOP ELEGANCE FAN ZHOU 9 KAPETAN SIDERIS SANTY MAGA CARAVAN JUMBO KINETIC POOLGRATCH XIN SI LU SHIMEI FORTUNE NASCO PEARL SEASPAN LINGUE MERKUR FJORD JOHANN SCHULTE MANDARIN CHINA DESERT CHALLENGER MAERSK COLOMBO LEONIDIO UNISTREAM BROOK ARUNA ISMAIL

SHIP

APS ENL 21000MT BLUESTAR DAN.REF 758.611MT BLUE STAR GDNL 47000MT BLUE STAR GDNL 27379MT BLUESTAR DAN.REF 5775.125MT BLUESTAR DAN.REF 5200MT BLUESTAR DAN.REF 2568.273MT BLUE STAR DAN.REF 7228.925MT BLUE STAR DAN.REF 14783.951MT BLUE STAR GDNL 25000MT CMA.CGM.NIG APMT 520FCL CMA.CGM.NIG APMT 500FCL DARLIMFIZ PWA/NOJ 4000MT GOLDEN ABTL 50820MT GOLDEN ABTL 54700MT MAERSK APMT 440FCL MAERSK APMT 405FCL OCEAN LINER ENL 5820MT PEAK NOJ 10000MT PLATINUM GDNL 45000MT MOTOR VESSELS AWAITING BERTH AT LAGOS

www.businessday.ng AGENT

https://www.facebook.com/businessdayng PORT TONNAGE/UNI

PILOT

EXP

DATE ARRIVED

-

04/10/19 25/09/19 03/10/19

S/N

1 2

GRANDE HERMES GUO RUI CC JASPER

ALRINE BLUE STAR CMA.CGM.NIG

ENL DAN. REF APMT

17000MT 13088.39 560FCL

10/10/19 20/10/19 14/10/19 20/10/19 15/10/19 10/10/19 20/10/19 21/10/19 27/10/19 22/10/19 08/09/19 10/10/19 07/10/19 15/10/19 12/10/19 19/10/19 14/10/19 10/10/19 06/10/19 08/10/19 DISTRICT.

@Businessdayng LENGHT 190M 155M 260M

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CRNAPP SHIFTING CRNAPP

24

Wednesday 09 October 2019

BUSINESS DAY

BANKING

The cashless policy journey into March 31, 2020 HOPE MOSES-ASHIKE

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Godwin Emefiele. CBN governor

the underserved in the rural communities.

Nigeria’s financial inclusion rate increased to 63.6 per cent in 2018 from 45.4 per cent recorded in 2016, according to a Survey by Enhancing Financial Innovation and Access (EFInA).

Financial inclusion strategy seeks to ensure 80 percent of bankable adults in Nigeria have access to financial services.

National Financial Inclusion Strategy (NFIS) was launched in 2012 with a mandate to reduce financial exclusion rate of bankable adults to 20 percent by 2020.

In his five year policy thrust, Emefiele said the ultimate objective of the CBN in his second term administration was to ensure that 95 percent of eligible Nigerians have access to financial services by 2024.

As part of efforts towards meeting this objective, the CBN recently issued Approval-in-Principle (AIP) to three Payments service banks (PSBs).

PSBs are specialised banks established to promote financial inclusion and enhance access to financial services for low income earners and unbanked segments of the society by leveraging on technology.

The CBN also re-introduced the cashless policy. The intent of the policy is to encourage electronic payments, with the www.businessday.ng

objectives of developing the payments system, as part of the key requirements for achieving the Payments National Vision; whilst reducing the risk and costs associated with already identified high usage of cash.

The policy prescribed processing fees on daily cash withdrawals and cash deposits

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The policy prescribed processing fees on daily cash withdrawals and cash deposits that exceed N500,000 for Individuals and N3,000,000 for Corporate bodies

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‘

efore the introduction and implementation of cashless policy in the country seven years ago, the ease of cash flow occasioned by the cash-based economy made Nigeria vulnerable to fraud, terrorism, and crime.

Armed robbers attacked bullion vans and customers who carried large sum of cash. Apart from that, the central bank spends billions of naira to remove and replace dirty notes in circulation.

However, the cost of currency management reduced in 2014 by 13 percent following the introduction of cashless policy by the Central Bank of Nigeria (CBN).

The CBN in 2012 after several engagements across multiple stakeholders, introduced the cashless policy, which is aimed at curbing excesses in the handling of cash or reduction in the volume of currency in circulation.

Looking at the implication of the policy on the Nigerian economy, Ayodele Akinwunmi, of investment banking, FSDH Merchant Bank Limited, said it would reduce handling charges, increase efficiency, increase velocity of transaction which will in turn increase economic activity, and above all, increase financial transaction particularly among people in the rural areas.

It will also create more job opportunities for Nigerians as they continue to develop financial applications that are used in financial technology business.

The volume of currency in circulation fell by 7 percent to N2 billion as at the end of September 2019 from N2.16 billion at the end of April 2019 according to data from the CBN website.

Conscious that over 40 percent of eligible Nigerians in 2015 lacked access to financial services, the CBN under the leadership of Godwin Emefiele, governor, embarked on a couple of steps to improve access to finance.

Through initiatives such as the Shared Agent Network Facility (SANEF) and the launch of a policy on Payment Service Banks, which enables non-banks to provide limited financial services, the regulator sought to encourage the use of technological tools in improving access to finance for people who live in underserved parts of the country.

Also, the Apex bank set up a payment services management department solely dedicated to enabling the build-up of a robust payment systems infrastructure, while seeking to contain the risk to the financial system that could emerge from the use of digital channels.

Consequently, the total volume of retail electronic payments has witnessed a threefold increase over the last five years. New financial access points are being created in parts of the North East and North West as a result of measures deployed by the central bank to extend financial services to

that exceed N500,000 for Individuals and N3,000,000 for Corporate bodies. The processing fees prescribed are 3 percent and 5 percent on withdrawals by individuals and corporates respectively while deposits/ lodgements are charged by 2 percent and 3 percent also for individuals and corporates.

In addition, the process for merchant settlement was reviewed to further deepen financial inclusion, enhance transparency and efficiency of the Nigerian payments system.

According to a circular by the CBN, the charges on deposits would apply in Lagos, Ogun, Kano, Abia, Anambra, and Rivers States, as well as the Federal Capital Territory, while nationwide implementation of the policy would take effect from March 31, 2020.

Sam Okojere, director, payments system management explained that there would be no processing fee either under the Cashless Policy or tax on cash-outs done at agent locations in order to encourage financial inclusion in the country.

The central bank has braced itself for this new cashless regime in the 6 states and the FCT. This has been done through the licensing of 26 Mobile Money Operators, 10 Super Agents, 21 Payment Terminal Service Providers, 21 Payment Solution Service Providers, 4 Third Party Processors, 9 Switches and 5 non-Bank Acquirers. It is expected that these licensed entities will smoothen the implementation of the Cashless Policy across the Payments System.

As evidenced by the NIBSS second-quarter fraud report of 2019, attempted fraud volume decreased by 47.28 percent from Q1 figures, while Web, ATM and Mobile remain the usual suspects to be used by fraudsters.

Okojere noted the growth in the volume of transactions that occurred in 2012 against 2018, following the Cashless Policy re-introduction and increase in usage of electronic transactions.

Consequently, transactions on instant payments grew from 4 million in 2012 to 729m in 2018, transactions on PoS from 2.5 million in 2012 to 285 million in 2018, and transactions on Mobile Inter-Scheme grew from 2,200 in 2012 to 15 million in 2018.

Responding to the challenges of the cashless policy, Akinwunmi said, “the challenge is the resistance from some people who do not want the process to work for reasons best known to them”.

The House of Representatives directed the central bank to suspend the implementation of the cashless policy on deposits following reactions from the public.

Taiwo Oyedele, head, Tax and Regulatory Services, PwC said, it is not the role of the lawmakers to issue directives to the CBN. According to him, a better approach would have been to ask the CBN to provide data and explanation of possible impact of the policy and measures put in place to ensure desired outcomes.

The National Assembly has the tendency of playing to the gallery and align with public sentiment,” Oyedele said.

@Businessdayng

Wednesday 09 October 2019

BUSINESS DAY

PENSION today

25

In Association With

With CPS, your fears for the future are conquered

W

ith the coming on board of the Contributory Pension Scheme (CPS) in 2004 and revised through the 2014 Pension Reform Bill, pension administration in Nigeria has been made much easier, offering greater hope and freedom to workers to be part of their retirement planning. Now employees have the right to choose how they want to retire through proper planning and projections.

This hope has continued to be rekindled with continuous growth in pension fund assets under management by the respective Pension Fund Administrators(PFAs), meaning that some interest and returns are being accumulated for contributors, which further strengthens their position in retirement.

As the end of July 2019, total Pension Funds Under Management stood at N9.367 trillion, and growing month on month basis.

He clearly stated objectives of the CPS are: to (a) ensure that every person who worked in either the Public Service of the Federation, Federal Capital Territory or Private Sector receives his retirement benefits as and when due; (b) assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age; and (c) establish a uniform set of rules, regulations and standards for the administration and payments of retirement benefits for the Public Service of the Federation, Federal Capital Territory and the Private Sector.

In other words, the CPS promises every employee minimal basic comfort in retirement, thereby reducing dependency in old age. But this cannot be achieved without the employee working consciously towards it. Therefore, if you desire to retire happily, if you truly wish to retire into the good life after a long working career, you need to plan for it. Here are some things you need to consider as you plan for your retirement.

First of all, what is the current status of your Retirement Savings Account (RSA)? If you consider how much you have in your RSA at present vis-a-vis your current age, how long you have worked, how much time you have left before retirement, and how much goes into your RSA monthly, that will give you an idea of how much you would likely have in your RSA when retirement eventually knocks at your door.

The next question you need to ask yourself is, what sort of lifestyle would you want for yourself in retirement. Do you want to live like a king, in relative comfort or as a pauper? Do you want to tour the world to see all the beautiful islands that Mother Nature has generously bestowed on the world, or do you want to simply sit in a dilapidated hut in your village gazing into empty space with no food in your stomach? When you think about this and consider the amount you would have in your RSA on retirement, then you would know certainly whether you are on the right path.

Also, considering the present state of your health, you should ask yourself what your healthcare needs would be when you grow older and when you retire. Then you should consider your beneficiaries or dependents. Would you want to leave something behind for them in case of death?

What would you want to leave behind for them? Considering the current status of your RSA, do you think you would be able to achieve that? If not, what do you do?

Indeed, the earlier you do the mathemat-

ics, the better. This will help you to know exactly what kind of retirement awaits you, whether or not there is really something tangible to look forward to after these long years of sweating it out in the workplace. It will also help you to know whether your present plan will do or whether you need a change of tactics. And if it becomes very clear that the cumulative accruals into your RSA won’t guarantee you a relatively good life or meet your needs at the end of your working career, then, it may be time to begin to consider making additional voluntary contributions.

Additional Voluntary Contribution (AVC) refers to the additional sum an employee voluntarily contributes to his Retirement Savings Account besides the total contributions being made by him and his employer. AVC is captured in the Pension Reform Act, and is meant to afford employees who might have need to plan for bigger pack the opportunity to do so while still in active employment. An employee willing to make additional voluntary contribution is advised to liaise with his employer to remit a certain additional amount of money along-

side the statutory pension contribution to his chosen PFA. The money so contributed, alongside the employee’s statutory contribution, is invested by the Pension Fund Administrator (PFA) and returns generated are credited into the contributor’s RSA. Then, there is need for every employee contributor to the CPS to ensure the safety and growth of their contributions. Note that your PFA is mandated to periodically forward your RSA statement to you, which helps you to monitor the status of your account. However, you can also monitor the status of your RSA using any of the selfservice channels provided by your PFA. And if at any time you discover that your monthly remittances are less than the amount being deducted from your monthly salaries, liaise with your employer showing your RSA statement for the period in dispute and ensure that the differences are resolved.

Finally, it is incumbent upon you as an employee to research into the available pension payment options (Programmed Withdrawal and Life Annuity) to assist you in making the right choice when you retire.

IS NOW RC634453

Diamond Pension Fund Custodian Limited 1A, Tiamiyu Savage Street, Victoria Island, Lagos State.

Tel: 01-4613753, 2713680, 2713954 Fax: 01-2713955 Email: info@accesspfc.com Website: www.accesspfc.com

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This section is created to increase awareness and deepen knowledge about the Contributory Pension Scheme.

If you have enquiries or contributions, send to this e-mail: accesspfcbusday@yahoo.com

26

Wednesday 09 October 2019

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

Insurance sector life annuity fund portfolio grows to N323b Modestus Anaesoronye

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he insurance industry life annuity fund portfolio now stands at N322,918,475,660.72 as at the end of Q2, 2019. This represents a growth of17.46 percent from N274,918,556,624.90 as at end of Q4, 2018.

Within the same period under focus, the cumulative total RLA payouts stands at N122,094,395,111.31 as at end of Q2, 2019, according to the National Insurance Commission (NAICOM).

The RLA market has been in existence since the advent of the Contributory Pension Scheme (CPS). The RLA portfolio so far has recorded 73,554 contracts purchased for a total premium of N341,615,154,821.14 as at end of Q2, 2019.This depicts 13.02% and 6.21% growth in count and volume, respectively in 2019 from end of Q4, 2018.

The growth (i.e. YoY) during the last three years for RLA business has averaged 34.28 percent and 35.12 percent in count and volume respectively, while RLA fund portfolio growth has averaged 27.46% notwithstanding the RLA payouts made (i.e. cumulative

total payments of N122,094,395,111.31 as at end of Q2, 2019).

The graph of the annuity payouts, premium receipts and portfolio fund balance depicts a clear representation as the difference between the cumulative premium amounts received and fund balance is small (i.e. N18,696,679,160.42) compared to the cumulative annuity payouts earlier stated.

The above indicates growth in the RLA business and a positive future outlook for the business in Nigeria.

Retiree Life Annuity is an insurance product and one of the available retirement benefit options for retirees which can be purchased from a Life Insurance Company licensed by the National Insurance Commission (NAICOM) and authorized to sell RLA under the regulation on retiree life annuity.

RETIREE LIFE ANNUITY STATISTICS AS AT 3OTH JUNE, 2019

Agricultural insurance critical for farmer’s sustained productivity – WAICA GMD Modestus Anaesoronye

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ith climate change negatively affecting farmers’ productivity across the world, especially, in Africa, there is an urgent need for increase in agriculture insurance uptake by players in the agricultural sector value-chain to cover risks that could lead to low farm yield.

Abiola Ekundayo, group managing director, WAICA Reinsurance Corporation who stated this at the WAICA Re International Agriculture Insurance Seminar held in Harare, Zimbabwe recently, noted that though Africa has about 17 percent of the world’s pastures and arable land, the value of premiums for agricultural insurance in Africa represents less than 0.7 percent of the world’s total.

This remarkably low figure, he said, is deplorable when one considers that about 60 percent of the active population in Africa is

working in the agricultural sector and that with the advent of climate change, the risks in agricultural activities are becoming even more frequent and severe.

For smallholder farmers, he said, agriculture insurance offsets risks associated with weather fluctuations, adding that, risk reduction can make it more likely that a farmer will qualify for credit and thus invest in the tools and resources, such as, seed, fertilizer, labour, among others, needed prior to harvest that would potentially increase crop yields.

Stating that Agric Insurance provides farmers with the peace of mind required to invest savings into businesses, he added that, this also increases their confidence to engage in contracts with buyers and processors.

Speaking on agricultural microinsurance, he suggested the development of index insurance, an approach he said, pays out benefits on the basis of a predetermined index, such as, www.businessday.ng

rainfall level, livestock mortality rates, and so on, for loss of assets and investments resulting from weather and catastrophic events, without requiring the traditional services of insurance claims assessors to assess individual losses.

With the development of new technologies for the management of insurance schemes, such as the adoption of mobile payments, he said, costs have the potential to drop even further.

As the dynamics regulating claim payments are known to both parties at the onset, index insurance also reduces the information asymmetry between clients and insurers on the risks insured, something that continues to be an issue for classic insurance schemes, he pointed out.

While calling on commercial and subsistence farmers to embrace Agric Insurance as a form of risk mitigation mechanism, he added that, insurance has the potentials to return a farmer, who suffered an insured risk, back to

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the position he was before disaster struck.

The training attracted 64 participants from 14 African countries and were trained on Agriculture insurance in Africa and global outlook, Perils and their impact on agricultural production, Classes of agriculture insurance business – crop, livestock, forestry, bloodstock, aquaculture and greenhouses, Scope of cover and exclusions for the different classes, among others.

The seminar also included an excursion to an agricultural project site to enable participants have a practical appreciation of the concepts being taught.

Waica Reinsurance Corporation Plc believes in training and the development of human capacity both within the institution and those external to WAICA Re and has conducted various training programmes so far for its cedants based in West Africa and beyond. WAICA Re promises to continue its annual training and development efforts.

@Businessdayng

Wednesday 09 October 2019

BUSINESS DAY

27

insurance today E-mail: insurancetoday@businessdayonline.com

‘After recapitalisation insurance industry will be better placed to contribute to evolving growth in the economy’ Ken Aghoghovbia, deputy managing director/COO, Africa Reinsurance Corporation (Africa Re), participated at the Nigerian Economic Summit Group held in Abuja. In this interview with Modestus Anaesoronye at the sideline of the event shares his thought on how insurance could contribute to evolving economic growth in Nigeria, reinsurance activities in the continent, and how Africa Re is sustaining the objectives of its establishment. Excerpt: As a delegate at the last Nigerian Economic Summit Group, how do you think the insurance industry can position itself to contribute to the evolving growth of the economy? his Summit aims at having very productive publicprivate dialogue. It is hoped that the role of insurance in addressing major problems of the economy would be better understood by policymakers. Governments should know that with available insurance products, NDDC for instance, is saved the trouble of running after contractors who abscond with payments advanced to construct roads or fail to perform to agreed standards. Also, farmers will be better positioned to secure funds for business expansion and not become dependent on family members after a bad season. At the end of the ongoing recapitalisation exercise, the insurance industry will certainly be better placed to contribute to the evolving growth in the economy.

There is a regulation guiding the exercise, which is within the authority of the regulator. It’s therefore important that the market players and insurance companies work towards achieving this timeline and whatever needs to be done should be done quickly, and all hands need to be on deck to see that there is a smooth exercise.

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How would you describe the reinsurance market in Nigeria, and what challenges do you see as hampering the growth of the market?

Looking at the Nigerian reinsurance market, we would be talking about the national players - largely Africa Re, Continental Re, Nigerian Re, there is also WAICA Re and then the non-national companies that actively participate in special lines and facultative businesses, like oil and gas, aviation, and also following in some of the treaties. The competition in the market is quite keen, you have the strong ones that do more of proper pricing, you have those who are writing for volume, but generally, I think there is descent play in the market.

The insurance industry in Nigeria is currently embarking on a recapitalisation exercise, how do you see this impacting to make the industry move forward on the path of growth?

Yes, in my opinion, I think it’s overdue.

Ken Aghoghovbia

I also think that the initial step by the regulator that is the TIER Based capital is a good one, which is like risks based capital. I think it was a good one if they had given enough time to the operator’s to achieve their capital target. This new

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Our mission as an institution was and still remains to foster the development of insurance and reinsurance industry in Africa; to promote national, regional and subregional underwriting retention capacity; and to support African economic development

‘

Let us have an overview of the reinsurance market this year up to the third quarter of 2019?

I think the reinsurance market globally is responding to claims development from certain lines of business. We have seen a lot of withdrawals in certain classes like aviation; we expect capacity to shrink in those areas. So, a lot of the underwriters are actually going back to the basics.

We don’t have that big jump in rates, but each company is taking policies to ensure that pricing is proper. I think with these developments, the market is on the positive path. So, this year, I have not seen many catastrophe claims here in Africa, so we expect a better result.

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capital requirement, that is, 8 billion naira for life and 10 billion naira for non life and 20 billion naira for reinsurers is good.

I believe that we have learnt some lessons against the background of the health of many of the insurance companies in the market today. Many of them appear to be technically insolvent, and even if they are not, some of them are struggling with liquidity and ability to meet their obligations. It is very important that that the issue of capitalisation, with governance are strengthened in a bid to move the industry forward. So, I am in support of the regulators doing something about it.

At the end of the recapitalisation exercise, we are hoping that some companies will find mergers, what number from the existing 59 do you see meeting the requirement?

Well, first I expect the number to come to somewhere around 30, plus or minus, which is not a bad number. But what is the right number, I think that will depend on many factors, primarily how much capital is being attracted into the market. If we have more capital, then the number could be higher but if not we hope to see mergers and acquisition to ensure that the market is not disturbed.

What will be your advice to the operators at this time as they go through the exercise?

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Give us an insight into how Africa Re has continued to sustain its objective of developing the African market?

Our mission as an institution was and still remains to foster the development of insurance and reinsurance industry in Africa; to promote national, regional and sub-regional underwriting retention capacity; and to support African economic development. For this reason, you see Africa Re providing technical training for the market. You are aware of the Young Professionals Programme we are running and providing training to so many young Africans, to not only create awareness but also to educate them on what insurance is all about. The demand is so huge that we are upping the number that will be going in the next phase. We are doing it free as part of our Corporate Social Responsibility. We have shown a lot of interest in agricultural sector, as you may be aware, working with the World Bank.

We are looking at products to help the African market have food security; we are currently looking at how we can support African governments provide energy for its population. Most financiers are afraid to put their money in this market without a security backing.

Africa Re is lucky to be the only ‘A’ rated company in this part of the world, so we are looking at leveraging on that to help many governments in Africa that are pursuing their energy agenda. We are pleased when we see some of the governments make this stride, like today, Egypt has sufficiency in energy. So, we wish to see that in Nigeria and many other countries because we know the effect that could have on businesses and economic development.

Africa Re recently won the NAIPCO Award as the Developmental Promoter of the Insurance Industry in Nigeria for 2019, what does this mean for the Company?

Africa Re has received many awards, within and outside the Continent, but the award we got here in Nigeria our host country means a lot to us. We are really flattered, we feel challenged on what will be our next initiatives to make the award really, really meaningful to everybody.

So, we are encouraged, and certainly we will not rest on our oars, so that we will continue to give same support to the industry and the continent.

@Businessdayng

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Harvard Business Review

MANAGEMENTDIGEST

Where companies go wrong with learning and development STEVE GLAVESKI

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rganizations spent $359 billion globally on training in 2016, but was it worth it? Not when you consider the following: — Seventy-five percent of 1,500 managers surveyed among 50 organizations were dissatisfied with their company’s learning and development (L&D) function.

— Seventy percent of employees report that they don’t have mastery of the skills needed to do their jobs.

— Only 12% of employees apply new skills learned in L&D programs to their jobs.

— Only 25% of respondents to a recent McKinsey survey believe that training measurably improved performance.

Not only is the majority of training in today’s companies ineffective, but the purpose, timing and content of training is flawed.

Bryan Caplan, a professor of economics at George Mason University, says in his book “The Case Against Education” that education often isn’t so much about learning useful job skills, but about people showing off, or “signaling.”

Today’s employees often signal through continuous professional education (CPE) credits so that they can make a case for a promotion. L&D staff also signal their worth by meeting flawed key performance indicators, such as the total CPE credits employees earn, rather than focusing on the business impact created. The former is easier to measure, but flawed incentives beget flawed outcomes, such as the following: — WE’RE LEARNING AT THE WRONG TIME: People learn best when they have to learn. Applying what’s learned to real-world situations strengthens one’s focus and determination to learn.

Today’s employees often learn uniform topics, on L&D’s schedule, and at a time when it bears

little immediate relevance to their role — and their learning suffers as a result.

— WE’RE LEARNING THE WRONG THINGS: Want to see eyes glaze over quicker than you can finish this sentence? Mandate that busy employees attend a training session on “business writing skills,” or “conflict resolution,” or some other such course with little connection to their needs.

— WE QUICKLY FORGET WHAT WE’VE LEARNED: Like first-year college students who forget 60% of what they learn in high school, studying merely to get the CPE credit suggests that employees, too, will quickly forget what they learn. In the 19th century, the German psychologist Hermann Ebbinghaus found that if new information isn’t applied, we’ll forget about 75% of it after just six days.

Incorporating new learning into your work is one way to retain knowledge. Another is spaced repetition. Originally proposed by the psychologist Cecil Alec Mace in 1932, it refers to spreading learning out over time (material should be reviewed in gradually increasing intervals of roughly one day, two days, four days, eight days, and so on). This approach takes advantage of the

psychological spacing effect, which demonstrates a strong link between the periodic exposure to information and retention. Studies show that by using spaced repetition, we can remember about 80% of what we learn after 60 days — a significant improvement.

Today’s fast-moving business landscape calls for organizations and their people to adapt to changing circumstances rapidly, and to always be learning. Lean learning, which pays homage to Toyota’s lean manufacturing system, stresses using effort only when it’s needed, improving results and cutting waste. It’s quick and affordable, and provides employees and organizations with an immediate capability update.

Lean learning is about: learning the core of what you need to learn; applying it to real-world situations immediately; receiving immediate feedback and refining your understanding; and repeating the cycle. Like lean manufacturing and the lean startup before it, lean learning supports the adaptability that gives organizations a competitive advantage in today’s market.

Here’s how to apply lean learning: — THINK 80/20: Tim Ferriss,

the author of the “4-Hour” book series, is an advocate of a lean learning method he calls DiSSSCaFE. He suggests identifying the minimum learnable unit and applying the Pareto Principle.

If you want to learn Japanese, focus on the 20% of words and phrases that show up 80% of the time. Then apply what you learn in actual conversations with Japanese speakers as frequently as needed.

— APPLY LEARNING TO REAL-WORLD SITUATIONS: At Collective Campus, we don’t just teach executives a specific innovation methodology. We first ensure that they can actually apply the methodology internally, and we request that they bring realworld projects to workshops so that we can apply what’s learned in real time, shorten the feedback loop, deliver results and encourage “aha” moments.

— LEVERAGE GUIDED LEARNING: Rather than provide training at specific intervals, guided learning embeds continuous learning into a live application. Think screen pop-ups that support rapid, context-sensitive, personalized learning. This is especially applicable for functional leads, employee onboarding, cross-functional teams, information technology and end-user

Make this summer your best one ever With any of our FirstBank cards, you can enjoy a flexible summer in over 200 countries worldwide Visit any FirstBank branch for the issuance of your Summer Cards

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training.

— PERSONALIZE CONTENT: Using today’s technologies, you can personalize training so that it adapts lessons based on employee performance, tailoring content to every employee’s needs, learning style and delivery method.

— PROVIDE ONGOING SUPPORT: Providing employees with further support after a learning session via a combination of instant messaging, voice messaging and chatbots ensures that they can apply learning to specific challenges.

— ACTIVATE PEER LEARNING: When your employees want to learn a new skill, they typically don’t Google it or refer to your learning management system first; 55% of them ask a colleague. When you account for the fact that humans tend to learn as they teach, peer learning offers a way to support rapid, just-in-time learning, while strengthening the existing understanding your employees have about concepts. It could be as simple as establishing an online marketplace, or periodic peer-learning workshops, to connect employees who are willing to teach specific skills with colleagues who want to acquire such skills. Encouraging peer learning by incorporating it into performance reviews can ensure that employees continue to invest time in the program.

— OFFER MICRO COURSES: Give employees bite-size learning opportunities, which can take the form of digestible, hourlong courses on topics of immediate relevance.

To begin practicing lean learning, organizations need to move from measuring CPEs earned to measuring business results created. Lean learning ensures not only that employees learn the right thing at the right time for the right reasons, but also that they retain what they learn.

• Steve Glaveski is the CEO of Collective Campus and the author of “Employee to Entrepreneur: How to Earn Your Freedom and Do Work That Matters.”

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MANAGEMENTDIGEST

Where online learning goes next LEAH BELSKY

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MONEY echnology is transforming jobs and skills faster than organizations or people can adapt. Coursera’s Global Skills Index 2019 found that two-thirds of the world’s population is falling behind in critical skills. Research from the World Economic Forum suggests that the core skills required to perform most roles will change by 42 percent on average by 2022.

At this level of disruption, companies are scrambling to identify and source the skills they need to stay competitive.

Universities have to play a major role in preparing a skilled global workforce. Doing so will require using online offerings to extend reach and establish partnerships with other universities and content providers. Much like industries, universities will need digital solutions to solve the big problems in higher education.

HIGHER EDUCATION AT GLOBAL SCALE By harnessing emerging technologies, universities can reach beyond campus walls to empower diverse learners at global scale. It begins with embracing stackable, online learning, which provides flexibility and afford-

ability that increases access to university curricula and allows students to engage in smaller chunks of learning before committing to larger degree programs.

Technology-powered formats like mobile-friendly experiences meet the learner where they are. Using AI-powered adaptive learning will enable universities to personalize education for millions for more effective outcomes.

By embracing technology in its many forms, universities will be able to offer life-changing ac-

cess to millions more globally.

Through deeper engagements and local industry partnerships worldwide, top colleges will be able to use advances research and collaborative thinking to tackle some of the most pressing challenges we face today.

A GAME-CHANGING UNIVERSITY ECOSYSTEM It will take a global community working together to scale access to higher education. Universities can be the center of this revolution by using technology to create a shared

learning ecosystem, supplementing their own curriculum with top courses from other institutions.

Technology-driven collaboration will also help alleviate faculty shortages plaguing institutions worldwide. Earlier this year, Inside Higher Ed reported on a nationwide shortage of computer science professors. Digitally-powered ecosystems could seamlessly connect content experts from academia or industry to deliver custom learning programs for students anywhere in the world. Uni-

versities would be able to leverage the best minds in the industry or allowonline faculty exchanges between institutions.

TURNING INDUSTRY-READY Stanford and Silicon Valley’s intertwined history exemplify what’s possible when industry and academia come together.

According to a PitchBook report, Stanford had the highest number of entrepreneurs — 1,178 — in an undergraduate program globally in 2018 (with 1,015 companies and $28.84 billion in capital raised). As skill demands in the workplace continue to evolve quickly, we need greater industry and university interdependency.

As talent shortages grow worldwide, institutions and enterprises must chart partnerships that equip learners with employable skills. One standout example is Google IT Support Professional Certificate’s alignment with 25 community colleges in the U.S. to offer the information technology training program. With more than 215,000 open IT support roles, this collaboration addresses a major skills shortage. Google connects learners in the program with top employers who have IT support jobs, among them Walmart and Bank of America.

• Leah Belsky is senior vice president of enterprise at Coursera.

When surprise is a good negotiation tactic you can engineer to trigger more trust, creative problem-solving and collaboration: — Offer a compliment or an apology — Offer more options Use “I” and “we” pronouns — Offer to extend a deadline Here are some unpleasant surprises that lead to a distrust, animosity, defensiveness and deadlock: — Saying an insult — Being critical of the other party — Using “you” pronouns

ROI BEN YEHUDA AND TANIA LUNA CONNECTING n most writing on negotiation, surprise is treated as a negative tactic. By adding new partners, changing deadlines, taking back a promise or creating ultimatums, you can throw your opponents off their game and cause them to make poor decisions.

But negotiators can also use surprise in more positive ways: to signal collaboration, generate creativity, destabilize negative patterns and earn a positive reputation. To leverage surprise constructively, we have to start with an understanding of what surprise is.

Although surprise is fleeting, it is cognitively complex. In “Surprise,” a book Tania co-authored with Dr. LeeAnn Renninger, we point out that surprise is a series of states. We call it the Surprise Sequence: Freeze, Find, Shift, Share.

Consider how the Surprise Sequence can play out in a negotiation. Let’s say you get a lowball job offer that won’t even cover your rent. First you FREEZE. Then you wrack your brain to FIND an explanation (“Is it me?” “Is it them?”).

You SHIFT your thinking and decide it’s definitely them, get angry, then go SHARE a scathing review on Glassdoor. A positive surprise, like an unexpected signing bonus, would leave you feeling like you walked away with the best deal in the world (whether or not you did).

I

Expecting the unexpected can reduce the disorienting effect of surprise and even let us spot opportunities to use it for good. These skills help negotiators harness the power of positive surprise.

1. Q-STEP The best negotiators notice when something unexpected happens, and they stay in the surprise.

Rather than allowing themselves to jump (shift) to a conclusion, they suspend judgment and step into question-asking mode. We call this skill “q-stepping.”

Research by the Huthwaite www.businessday.ng

Group found that expert negotiators ask twice as many questions as their average counterparts. They make sure they’re asking the right questions and ask more questions when uncertainty increases.

Before, during and even after the negotiation, get to a state of curiosity. Say: “I wonder what led them to that thought.” Then q-step: Make sure the first step you take is to ask at least one question.

2. SAY “YES, IF” An unexpected suggestion during a negotiation can lead to a better and more creative outcome

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than either partner anticipated. Yet most of us quickly shut down surprise since it threatens our plans.

In a competitive negotiation, saying “Yes, if” can create a win-win scenario. For example: “I need a 10% raise.” “YES, IF you can cut costs by 10%.”

“I want higher royalties on this book.” “YES, IF you sell 1,000 copies.”

3. ENGINEER SURPRISE A surprise of any scale can have a rapid impact on the mood, process and outcome of the negotiation and the relationship of the parties. Here are some surprises @Businessdayng

• Roi Ben-Yehuda is a leadership trainer and writer at LifeLabs Learning. He teaches negotiation and conflict resolution at Columbia University and John Jay College. Tania Luna is the co-CEO of LifeLabs Learning. She co-author of “Surprise: Embrace the Unpredictable and Engineer the Unexpected.”

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TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

Nigerians to earn extra selling cars online – Car45.com ... Subscribers may make N300,000 monthly

MIKE OCHONMA

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MIKE OCHONMA Transport Editor

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igeria’s leading online automotive trading platform, Cars45 has unveiled its latest product known as Cars45. com Autopreneur Empowerment Initiative in Lagos. This was created by online platform whereby businesses-minded people signed onto Cars45.com network can earn a living by either referring people to sell or buy cars or other services they provide in which these online traders are paid according to the volume of their transactions.

Classic Event Centre in Oregun, on the outskirts of Ikeja which was the venue in Lagos attracted stakeholders in the automotive industry including banks, insurance firms, lubricant companies, car distributors, car dealers, entrepreneurs and other players in the industry.

Chief executive officer of Cars45, Etop Ikpe said introduction of the Autopreneur initiative was born out of their experience with their Merchant Prgramme which was earlier introduced in 2017.

Ikpe stated that with the success recorded with the Merchant Academy Programme (MAP), Cars45 discovered that, there was need to do more in order to fully empower their trainees.

He said that before the MAP, it was realised that the platform had bridged lots of communications gaps for Nigerians and also created several employment opportunities for many.

On their achievements so far, Ikpe noted that “Nigeria’s biggest problem is unemployment. For us, the platform that we have has made it possible for somebody who did not have any historical experience to become a successful online car

trader. What they needed to do was to understand what we understood.

And for us, it was all about to passing this knowledge to them, so that they can go and trade and begin to make something for themselves”.

On Cars45 Merchant Academy, the CEO added that “We set up the training academy to train people.

They have gone through the Merchant Academy and from there, they go into active trading. However, there is a problem that we realised and that is the fact that the programme needed more behind it and that gave birth to the Autopreneur which we are launching today and that is stage two of the entire programme”.

Ikpe emphasized that, their training is not just only about selling cars, but that they also equip their agents with the right technology; introduce them to diverse business opportunities, including lubricants, insurance and other areas in order to increase their income level.

On his part, John Egwu, vice president in charge of retail services, Cars45,

JohnexplainedthatAutopreneuriswell packaged in such a manner that people can sit comfortably in their houses and mobile phones and earn a living.

“We are in a time where we need to empower ourselves and build the GDP of our country. This is our own contribution to Nigeria. We are not expecting you to be educated or to have a degree; but we want to make you earn a living from your house”.

According to Egwu, online traders who work very hard can make as much as N10, 000 in each transaction and can also make as much as N300,000 monthly if they are able to sell, at least one car per day.

Speaking further, Mayokun Fadeyibi vice president, consumerto-business services, said event was a big opportunity for the company to launch out the Autopreneur programme.

“Autopreneur is really focused on empowerment, providing opportunity for everyone where every single person can earn a living, making extra income by referring people to

Abuja Motorfair to boost auto sector investment

sell or buy cars or even other services they provided”.

Fadeyibi added that Cars45.com also have about 70 inspection centres around the country where those who wants to sell their cars can drive in get instant payments in addition to a large distribution network that enables one to find a car that being sort after.

Oluseyi Folaranmi, vice president in charge of customer and dealer experience, noted that Cars45.com is out to ensure that experiences of customers when buying a care are seamless.“We are trying to bring trust in the system, by telling you the exact state of the cars’’. He noted.

Cars45.com new Emergency Service introduced recently, Folaranmi said it is testament to the company’s efforts at improving customer experience and bringing relief to road users on their journey. Our commitment is to consistently improve the nation’s auto industry with extensive investment in developing solutions that make life better and delivers convenience to users on every trip.

he 20th edition of the Abuja International Motorfair targeted towards boosting investments in the sector despite the myriads of challenges confronting the auto sector as well as the Nigerian economy, in general, is set to assume its rightful place as a key sector that drives socio-economic development.

The event which holds at the International Conference Centre Annex, Garki, Abuja from October 28 to November 2, 2019 has been repackaged to ensure that all the tiers of government in Nigeria are made to accord the automotive sector high priority as it is capable of catalyzing and sustaining the nation’s quest for economic diversification and development.

The managing director said that hosting motorfair of international standard such as the Abuja Motorfair will go a long way in placing Nigeria in the global map

Ifeanyi Agwu

of automotive business and will equally fast track the making of the nation as a hub in Africa.

Agwu who doubles as the Continues on page 31

CFAO, Total, dealers open multiple-brand service outlet in Abuja MIKE OCHONMA

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t a time when many vehicle owners are increasing finding it difficult to have a hassle-free, budget-friendly automotive service and maintenance, CFAO automotive group has partnered with Total Oil plc to open the first of its kind multi-brand, quick service franchise called AutoFast.

This is part of efforts in the partnership to offer better services and deliver exciting ownership experience among vehicle owners, It is domiciled at Total retail network service stations across Nigeria.

The launch event took place on 26thSeptember at the Total service station, Wuse zone 6, Abuja and plans are ongoing to open additional four centers across the country before the end of this year with more to come in 2020.

AutoFast, which was opened to the motoring public penultimate weekend with remarkable footprints

in several African countries, offers quality and affordable car maintenance and repair services to vehicle users across the country. Total and CFAO have expressed satisfaction with the partnership.

“We are proud to enter into this partnership with CFAO, a key player in the automotive industry but also a major player on the African continent. This collaboration is a concrete illustration of our desire to be a reference brand recognized for its proximity to its customers and the value it brings to each of them,” said Stanislas Mittelman, Africa Director of Total Marketing & Services.

Reacting on the development, Thomas Pelletier, managing director, CFAO Nigeria Plc, , said: “We are proud to partner with Total on this project. CFAO has been in Nigeria for over 117 years and Total Nigeria for over 60 years with Nigeria’s interest at heart. We share similar ideals of offering total customer satisfaction by creating quality products and services. Vehicle users are in for a www.businessday.ng

L-R: Billy Okoye managing director, NNPC Retail; Thomas Pelletier, managing director, CFAO Nigeria; Jérôme Pasquier, Ambassador of France in Nigeria, Daniel Dargent, Ambassador of Belgium in Nigeria; Imrane Barry, managing director, Total Nigeria plc during the inauguration of the first AutoFast quick auto service center at the Total service station, Wuse Zone 6, Abuja.

better experience as they can drive into AutoFast service stations in Total Retail Network closest to them”.

Following this partnership, cus-

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tomers can now carry out 35 essential control items for their vehicles for free while maintenance is less than one hour with quality parts from the @Businessdayng

Original Equipment Manufacturers (OEMs), at affordable prices. For instance, a Toyota corolla basic service will go for as low as 8,500 naira.

These results in a significant saving in time, cost and increased car lifespan, even the company’s technicians have gone through different stages of intensive training with efficient modern tools and are ready to serve you in line with international best practices.

Total is at the forefront of lubricant technology. Quality and durability are evident in its automotive lubricants and Total’s Quartz 9000, Quartz 7000, Quartz 5000 and Total 4x4 are just perfect for your vehicles.

“CFAO, a renowned distributor of automotive brands in Africa with outstanding aftersales service and Total’s service station strengths across the country will ensure that auto users enjoy better service delivery at their convenience. Our goal is to make AutoFast a brand of choice to our customers,” Pelletier added.

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Lack of supervision drags Lagos-Badagry road project MIKE OCHONMA Transport Editor

Continued from page 30

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his is exactly 10 years that the Lagos state government started the expansion and modernisation of the LagosBadagry expressway, and there are fears among commuters plying the road that, the quality of job may be compromised, while the completing the project may not be achieved in before the end of the first term tenure of the present administration in four years time.

This according to the lamentations of many helpless commuters who face robbey attacks along the corridor is due to the snail spped and lack of supervision by the Lagos state government.

The bad condition of the road is so disturbing that, many people especially office workers and business owners had no other alternative but to rent a temporary accommodation near Mile 2 without any increament in their salaries or commensurate profits.

Caught in the web of the daily frustrations they are made to go through everyday, usage of commercial motorbikes by commuters to get to their destinations on time has become the rule rathet than the exceptions.

Kelly Nwosu who lives inside the railway compound at EbutteMetta, but operates his business at the Agbara market wondered why the Lagos state government through the appropriate ministry or agency concerned cannot be embarking on a monthly inspection of the Lagos-Badagry road project in to ensure that quality job is done and speed of work hastened.

He regretted that, the Chinese

Abuja Motorfair set to boost auto sector...

Civil Engineering & Construction Corporation (CCECC) handling the project has not shown executed the project with the urgency it deserves despite the concern shown by Babajide Sanwo-Olu during his campaign and eventual emergence as the Lagos state governor. ‘’According to him, driving through the road has remained commuters nightmare as we are daily subjected to all manners of horrendous traffic gridlocks and robbery attacks by criminal elements that strikes against motorists once there is a built-up vehicular traffic’’.

One month after his assump-

tion of office as the executive governor of the state, Babajide Sanwo-Olu, the Lagos state governor had assured Lagos residents that rehabilitation work would commence on Lagos-Badagry Expressway from Mazamaza to Okokomaiko this in June.

The governor, who announced this during an inspection visit to Lagos-Badagry Expressway, said talks were ongoing with the contractor to resume work on site once the required financing is in place.

According to the governor, “In this month of June we shall be moving to site. Work will commence on this road, so all the T’s

and I’s will be done this week so as to move to site immediately. We will ensure that we firm up discussion with CCECC and move to site because work has been abandoned here for almost four years”.

Unfortunately, four months after the Lagos state governor’s pronouncement, it is not impossible that, no official of the Lagos state government will take the risk of passing the critical flashpoints along the corridor particularly the few meters stretch right infornt of the abandoned Lagos trade fair complex now refered to as the Auto Spare Parts and Machinery Dealers Association (ASPAMDA).

chairman of the organizing committee for the event said, “this edition has been packaged to increase the attention of the government to the importance of urgently addressing the current challenges in the sector so as to use it to drive the nation’s economic diversification policy”.

In his positionas the managing director of BKG Exhibitions Limited, organisers of the event, he said, “every effort has been deployed to ensure that the sector receives the needed support from both the government and the private sector to enhance its’ rapid development.

We are packaging a show that will showcase all the existing and potential investment opportunities that abound in the Nigerian automobile industry, which we believe are very attractive to existing and prospective investors”, he announced.

He noted that for over 19 years, the organisers have been able to create a comprehensive automobile exchange platform drawing global attention. ‘’We believe that with high attention from all levels of government leaders, joint efforts of sponsors and organizers, strong supports from the motoring journalists and people in all fields, and powerful market and social demands, the Abuja International Motor Show is now ‘ a must be’ place for any serious player in the industry”.

He stated.

Nigeria dithers as Hyatt plans to double African presence MIKE OCHONMA

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igeria and the entire West Africa appears not to be attractive on the hospitality radar of Hyatt Hotels Corporation’s affiliate as its affiliate is entering into a management agreement with seven hotel developers in Africa which is to be opened in the coming three years. The Seven Hotel of Hyatt Regency which is in the pipe line would bring the total number of Hyatt-branded hotels to 15 by 2021.

Currently, there are eight Hyatt regency Hotels which are operational in Egypt, Morocco, Tanzania, South Africa, Algeria, Kenya, Ethiopia and Mozambique.

“Hyatt has been focused on growing its brand presence in the Africa, with gate way cities and tourist destinations being one of the most important development strategies, said Tejas Shah, regional vice president of development of sub-Saharan Africa, Hyatt.

As Hyatt Regency this is a milestone in expanding the existence in the African market, Hyatt increasingly is gaining popularity with leisure travelers.

“We are proud to be working with Hyatt again to introduce its brands to the global city of Manchester,” said Tejas Shah, regional vice president of developmentsubshahranAfrica,Hyatt.

Tourism in Africa is projected to increase and drive job opportunities for over 3.5 million people in the next 10 years, as the number of tourists expected to grow by 4.4 percent in the coming 15 years.

“Africa, and particularly East Africa, remains a focus for Hyatt with an increasingly favorable business climate and heightened tourism spend, encouraged by relaxed ambience settings,” Shah adds.

Dakar-Senegal, Marrakesh-Morocco and Cairo- Egypt are among the new destinations where the Chicago-headquartered Hyatt’s opens its door until 2021.

According to the UNWTO Tourism 2018 Edition, international tourist arrivals in sub-Saharan Africa have grown by 5.8 percent from 2005 to 2017, which is well above the global average of 4.2 percent.

Furthermore, the continent saw a sustained growth of 8.6 percent in international tourist arrivals last year www.businessday.ng

visa rules, travel incentives, and a growing middle class.

“The opening up of more Hyatt

in Africa can make to serve our esteemed customers to provide the highest level of service beside the

direct and indirect jobs created by this hospitality industry”, the Vice President stated.

Friesland Campina WAMCO Limted which participated in the Hyundai Buy & Win promo having purchased a Santa Fe 3.5 won the highend LG Insta View Door-in-Door Refrigerator after its ticket was picked by Hari Elluru, head of corporate marketing for LG Electronics, West Africa and Gaurav Vashisht the Sales and Marketing Head of Hyundai Motors Nigeria through a raffle draw organised in Lagos.

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tax issues Ahead of paying taxes 2020

Federal High Court upholds imposition of consumption tax in Lagos State

Iheanyi Nwachukwu

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head of next month’s l au n c h o f Pay i ng Taxes 2020 report, questions are been raised whether Nigeria and other African countries have done enough to earn them improved ranking. Well-planned reforms allow tax payers time to plan, prepare and consult with tax authorities. Top-performing economies demonstrate this characteristic.

Governments improve on their tax systems, change tax rates, and even what is taxed for a variety of reasons, including increasing tax revenue, promoting growth, and innovation, reducing employment cost and reducing reliance on non-tax revenue.

For more than a decade, Paying Taxes as part of the World Bank Doing Business project, has compared tax systems across 190 economies, highlighting how technology is changing the way taxes are administered and collected, using a medium-sized case study company as the basis for the comparison.

The question arises as global average results for case study Company used in the Paying Tax-

es 2019 were almost unchanged from last year despite that 113 economies recorded tax reforms.

Year-on-year, more and more businesses are able to file and pay their taxes online, resulting in substantial savings in time and cost. Also, introduction of new tax software, real time reporting systems and data analytics are

changing the way companies meet their tax obligations and how tax authorities monitor and enforce those obligations.

The Paying Taxes 2019 shows that technology alone is not sufficient to improve performance.

It noted that the steady reduction in both the number of hours it takes to file taxes and the number

of payments companies have to make reflects the increasing use of technology across the world both by companies and tax authorities. As the cost of technology falls, more companies are using tax software, and more tax authorities are creating easierto-use online portals to simplify compliance.

he Federal High Court (FHC) last week (October 3, 2019), delivered judgment in the case between The Registered Trustees of Hotel Owners and Managers Association of Lagos (RTHMAL) and the Attorney-General of Lagos State and Federal Inland Revenue Service (the Defendants).

The primary issue for determination was whether the Hotel Occupancy and Restaurant Consumption (HORC) Law and Regulations issued by Lagos State is legal and valid.

The Court ruled that Lagos State has statutory authority to impose consumption tax on hotels and restaurants. Accordingly, the Hotel Occupancy and Restaurant Consumption Law and Regulations issued by Lagos State is valid and must be complied with by Registered Trustees of Hotel Owners and Managers Association of Lagos.

The Federal High Court, relying on the provisions of the Second Schedule to the Constitution of the Federal Republic of Nigeria, stated that consumption tax neither falls under the Exclusive Legislative List nor the Concurrent Legislative List.

Rather, it is a residual matter on which States are empowered to legislate. The FHC supported this point by referring to the Schedule to the Taxes and Levies (Approved List for Collection) Act (Amendment) Order, 2015, which includes “Hotel, Restaurant or Event Centre Consumption Tax” as one of the taxes that may be collected

by State Governments.

How a global tax reform ‘revolution’ will affect transfer pricing Sweeping tax reform is a global phenomenon — profound changes are occurring not only in tax rates, but at even more fundamental levels, writes Peter Griffin his installment of the 2019 Transfer Pricing (TP) and International Tax Survey: how profound change, transparency and controversy are reshaping a critical business function, zeroes in on the challenges presented by global tax reform, including not only the US Tax Cuts and Job Act (TCJA) but also initiatives such as Base Erosion and Profit Shifting (BEPS) and subsequent Organisation for Economic Co-operation and Development (OECD) activity.

“In the past,” says Jeff Michalak, EY Global International Tax and Transaction Services Leader, “the way most international tax teams approached their reporting was to release the least amount of information possible, only that information that could support their case. Today, thanks to BEPS, the current OECD project and a climate of global tax reform, the paradigm has shifted. Now it’s the tax authorities who have vastly greater control of the dialogue, companies must adjust.”

Sweeping tax reform is now a worldwide phenomenon — profound changes are taking place not only in

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tax rates, but at even more fundamental levels impacting definitions of what can be taxed jurisdiction by jurisdiction.

Overall, says Michalak, “host nations will be extending their claims on income for tax purposes in ways that will guarantee more controversy and double taxation.” The pace and degree of change, he says, “makes it vital that businesses take a comprehensive look at the whole of their tax and transfer pricing strategies.”

Paradigm shifts The net impact of these ongoing fundamental tax reforms results in nothing less than a handful of what Michalak calls “novel concepts” resulting in “paradigm shifts.” Some of the most significant areas include: Transparency: The most profound set of changes, says Michalak, are measures driving dramatically greater tax transparency. In general, “what BEPS has done is introduce vastly greater disclosure, meaning tax authorities now have far more data than ever before.”

This is significant, he continues, “because in the past, the way most international tax teams approached their reporting on an audit was to try and direct the conversation by releasing the least amount of information possible — only that information that www.businessday.ng

could support their case.”

But in the age of BEPS, says Michalak, “now it’s the tax authorities who have vastly greater control of the dialogue. They have country-by-country reports, including not only your information but also information from dozens of companies in the industry in which you operate.” Plus, he explains, “they are sharing a great deal more information with other tax administrations where the company in question conducts its business.”

Income allocation: Nations are also passing legislation broadening their ability to claim broader swaths of income for taxation within their jurisdictions. “Nations are saying that owing to the digital economy, it’s now too easy to do business in ‘my’ country without a physical presence.” So, in response, says Michalak, “countries are changing the rules.”

For example, in 2016, the UK introduced its Diverted Profits Tax (DPT) and Australia, its Multinational Anti-Avoidance Law (MAAL). At their core, these are a means to expand jurisdiction with respect to transfer pricing with related parties in other nations. Companies faced with DPT or MAAL audits, says Michalak, “may see these countries impute profits for domestic taxation — which could be across multiple tax years.”

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New focus on intangibles: Countries in general are renewing their focus on intangibles and, in particular, seeking ways to increase their share of taxable income by reducing the ability to deduct royalties. A good example is the foreign derived intangible income (FDII) tax, a component of the US TCJA reform. FDII incentivizes companies to maintain intellectual property (IP) in the US by offering an incentive rate of only 13.125percent on intangibles-based income earned overseas.

Global minimum tax: Yet another novel concept, again a key feature within the TCJA, is the introduction of an intangibles-focused global minimum tax. Known as Global Intangible Low Tax Income (GILTI), its purpose is to discourage companies from placing their IP in non-US, low tax jurisdictions, thus generating significant streams of low tax income. GILTI is also seen as a means of encouraging US-based and other companies to develop and maintain their IP in the US. Closely related is the Base Erosion and Anti-abuse Tax (BEAT). BEAT targets both non-US and US companies whose revenue stems from services.

That is, companies whose activities are deemed to drive reasonable profit from the US by use of interest, rents or services fees may be subject to BEAT. @Businessdayng

Other nations may soon implement similar minimum tax provisions for intangibles. Meanwhile, the UK has already enacted something similar of its own. Known as Offshore Receipts in Respect of Intangible Property (ORIP), “this allows the HMRC [Her Majesty’s Revenue and Customs] to tax a greater share of intangible income, such as royalties, where the sales take place in the UK,” says Michalak.

The end of arm’s length: In a final example of the paradigm shift, “tax authorities, in general, are moving away from the time-honored arm’s length standard,” says Michalak.

“This has been the ‘old economy’ standard for many decades,” say Michalak. But today, “within BEPS the cracks were forming — arm’s length had survived, but its role was downgraded and there was the introduction of additional methodologies.” With the current OECD project, says Michalak, “what we’re seeing is that the OECD and others are looking for completely new ways of determining what fair means in transfer pricing.” Consequently, says Michalak, “the arm’s length standard is ending and during the transition to whatever comes next, all the new formulas that will arise, there are likely to be a lot more disagreements and challenges.”

Wednesday 09 October 2019

BUSINESS DAY

33

FINANCIAL INCLUSION

& INNOVATION

CBN’s cashless-policy will affect business, retail - Dozie Stories by ENDURANCE OKAFOR

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s the nationwide date for implementation of the Central Bank of Nigeria’s cashless-policy draws near, Uzoma Dozie, CEO of Sparkle has said business and retail will be most affected by the policy.

The last Group Managing Director of Diamond Bank said everyone is practically exempted from the cashless policy except for business and retail that are financially excluded.

According to him, only a small percentage of the country’s population will be impacted by this policy; estimates suggest 5-10 percent.

“There are two key segments that will be impacted the most; business and retail. Those who have, todate, actively chosen to remove themselves from the financial system and who have chosen not to succumb to paying taxes,” Dozie said in a mail response to BusinessDay. The CEO explained that the policy will not affect a

lot of Nigerians due to the poor state of Africa’s largest economy.

With the most population in the continent, Nigeria has one of the highest per-capita rates of poor people in the world. Data by the World Poverty Clock puts about 95million of the people in Nigeria to be living in extreme poverty.

While applauding the first step by the apex bank, the CEO said the next thing would be to ensure the private sector is empowered and incentivised to build a

pan-Nigerian infrastructure that will deliver on a cashless policy.

“We have sufficient capacity in terms of potential providers installed in Nigeria already - now we need the impetus, a catalyst, for them to scale their infrastructure,” Dozie said recommending “government engagement with both segments.”

The founder of Sparkle, mobile-first platform focused on the country’s retail sector said that while the intentions are there,

Taj Bank inks partnership with Smart Save to give financial access to Northerners

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he newly licensed Ta j B a n k a n d Smart Save Integrated Technologies Ltd have signed a partnership to allow people to save their money from their little earnings towards a target.

Hamid Joda, Founder and chief operating officer of Taj Bank said recently in Kano that the bank has seen an opportunity to reduce the financial exclusion rate, especially in northern Nigeria. “ The partnership will allow customers to seamlessly be on-board and benefit from the available financial services,” Joda said.

Despite the increase in Nigeria’s financial inclusion rate, the Northern region of Africa’s most population retained its position of the

highest excluded hub in the country, EFInA’s bi-annual 2018 figures show.

The percentage of financially excluded people in 2018 dropped by 4.8 percent from 41.6 percent in 2016 to 36.8 percent in the review year, although, millions still lack access to financial services and the North East, North Central and North West take the large share of the rate.

Compared to other regions of Africa’s largest economy, the northern part of the country reported more unbanked people owing to the high illiteracy level, the insurgency in some parts of the region coupled with the high poverty rate, checks by BusinessDay revealed.

The co-founder and

Chief Executive Officer of Smart Save, Jamilu Abdussalam said the platform with its Saveme.ng, digital savings platform, works in form of a piggy bank.

According to him, all funds are warehoused with a commercial bank while all transactions are processed and secured by Paystack, “a Central Bank of Nigeria (CBN) licensed payment processing company on behalf of Saveme.ng.”

In his remarks, Shu’aibu Sani, the COO of Smart Save said the firm is committed to making Nigerians understand the importance of saving for their basic life needs. He said they are collaborating with key players in the industry like Taj Bank in giving customers confidence and seamless services.

www.businessday.ng

and the policy has been implemented and tested in a number of states (Lagos, Ogun, Kano, Abia, Anambra, Rivers State, and the FCT), “without additional coordinated efforts to provide the required infrastructure, the cashless policy will not see the light of day.”

Dozie asked if the CBN and private sector can achieve this alone? “No this must be a deliberate and co-ordinated roll-out, which also takes into consideration the on-going

identity agenda for Nigeria” He advised that retailers who want to scale would have to consider the cost of cash and the operational risks that comes with managing cash; by this, he meant the cost of moving cash around, storing cash, insuring cash, and also having a lightweight and potentially ambiguous paper trail of cash.

“What businesses of all sizes should be thinking about, and this needs to be supported and pushed by the CBN, is investing in the digitization of their customers - looking at the many opportunities that this presents. This requires education at all levels, to engage businesses and customers, highlighting the many benefits of moving away from cash.”

Furthermore, by creating a digital footprint for a business, owners of businesses can build a credit line with their banking institutions, and unlock capital for future expansion opportunities, the CEO said.

He further said that investment in the value chain and education of customers

of the various businesses will save billions of Naira in the long term. “They may not know it yet, but it is our role to educate them, as well as provide financial incentives.”

“By making cash more expensive, which is what the CBN is attempting with this policy, they are actively driving people and businesses into the financial system. This is a longerterm play to bring more people into a financially inclusive system where the benefits are felt by many, and not by the few.”

Estimated at 37 million, Nigerian Micro, Small & Medium Enterprises (MSMSE) are said to have a finance gap of $158.13 billion, data compiled from the 2017 MSMEs report by the World Bank and Finance Forum read.

According to the Washington-based financial institution, MSMEs play a huge role in facilitating economic development due to their flexibility and affinity to innovation. “Even more so in emerging economies with a high contribution from the informal sector.”

PFS’ Clirec tops Bobsguide 2019 Global Payments Rankings

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he leading global information resource for the financial technology sector, Bobsguide in its 2019 Global Payment Rankings voted Precise Financial Systems’ (PFS) flagship accounts reconciliation solution, Clirec as the world’s best account management solution.

The Bobsguide 2019 Payments Rankings was voted for by each firm’s clients and end-users and it represents a diverse list of old and new innovative players.

According to the London-based company, there were 40 categories for the ranking and each category had three winners with a total of 120 winners. Clirec was the only brand representing the Africa continent in the Bobsguide 2019 Payments Rankings.

“This year we have asked market participants to select who they believe to be the leaders in the payments and pay tech industries and votes flooded in across the board.

Payments have become a fast-moving vehicle, driven by regulation, market forces, and

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technological advances. New players are emerging while incumbents look to reinvent themselves in this evolving ecosystem”, Bobsguide said on its website.

Bobsg offers a combination of news, analysis, reports, whitepapers, webinars and comprehensive product directory, listing over 7,000 Fintech solutions in areas such as asset management, risk management, payments and transfers, treasury management, wholesale banking, and trading.

To emerge overall winner in the “best account management solution” category, Clirec - a suite of fully integrated accounts reconciliation modules with multi-currency and multi-lingual capabilities – outperform the duo of Free Agent and Xero, which returned as second and third place winners respectively.

However, in the best credit card providers’ category, MasterCard came ahead of American Express and MBNA. The winners in the best mobile app category included NatWest, Revolute, and Santander.

The winners in the best @Businessdayng

in-app money management were NatWest, Starlings, and HSBC. PFS’ Clirec came top in the best account management solution with Free Agents and Xero coming behind.

Specifically, Free Agent is cloud-based accounting software targeted at small businesses and their accountants.

The company was purchased by the Royal Bank of Scotland.

Xero is a New Zealand domiciled public technology company, listed on the Australian Stock Exchange.

Xero offers a cloud-based accounting software platform for small and medium-sized businesses.

Other categories were the best liquidity management solution, cross-border transaction solution, remittance solution; cash transfer solution, corporate treasury solution, and POS solution.

The rest were best wholesale payments solution, ecommerce solution, digital innovation, and crypto payment solution, use of machine learning in payments, use of artificial intelligence in payments, and use of DLT in payments among others.

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Wednesday 09 October 2019

BUSINESS DAY

PRIVATEEQUITY &FUNDRAISING

Africa’s PE records $1.7bn fundraising in H1 2019 MICHAEL ANI

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frican fundraising for the first half of 2019 reached $1.7bn in final closes and $0.9bn in interim closes, according to the African Private Equity Data Tracker, released by the African Private Equity and Venture Capital Association (AVCA).

T h e re p o r t s h o w e d that 70 percent of the total amount raised from final closes was from sector-specific funds. This indicates a growing trend for specialization among fund managers, preferring to focus on

identifying and valuing opportunities in their areas of expertise.

When annualized, fundraising into the continent could touch as high as $3.4 billion by year end, a possible increase of 37 percent from the $2.7 billion, raised in 2018.

In 2015, funds raised by African Private Equity firms, rose to $4.5 billion, from as low as $1.4 billion in 2014.

After the surge in 2015, values of PE fundraising fell in 2016 and 2017 to 3.4 and 2.4 billion dollars respectively.

Not until 2018, that the value of PE deals, buck the twoyear downward trend to

record growth.

“We continue to see robust and sustained growth in the African PE ecosystem, as highlighted by the latest fundraising, deals and exit figures. In particular, Africa’s rising middle-class continues to be a key driver of growth for African PE,” said Tokunboh Ishmael, Chair, AVCA and Co-Founder and Managing Director, Alitheia Capital.

The report further showed that a total of 79 PE deals were recorded, with a total reported deal value of $700 million in the first half of 2019.

Moreover, 60 percent of

the total deal value in 2019 H1 was from PE deals below $50million in size.

In terms of geographies, South Africa attracted the largest share of PE deals by volume (28 percent), followed by North Africa (19 percent), while Multi-region deals attracted the lion’s share of PE deal value (51 percent).

As with previous years, Financials, Consumer Discretionary, Consumer Staples and Industrials were the highest performing sectors by volume in H1 2019, attracting 58 percent of the total deals volume.

Meanwhile, Industri-

als, Consumer Staples and Healthcare were the top three sectors by value, accounting for almost three quarters 73 percent of the total reported deal value in the first half of 2019.

Notably, the Health Care sector showed an important increase in terms of volume and value, rising to 11 percent and 12 percent in 2019 H1 from 8 percent and 4 percent in 2018 H1, respectively.

The report shows the total number of reported African PE exits in the first half of 2019 stood at 19, with Trade Buyers being the most common exit route, representing over half 58 percent of the

total exit volume, followed

by MBOs or private sales at 37 percent.

Michelle Kathryn Essomé, CEO, AVCA, said “As shown by the 2019 H1 African Private Equity Data Tracker, the African PE ecosystem continues to grow at an exciting pace. We continue to be encouraged by investors’ interest in and commitment to Africa’s growth. The final close in 2019 H1 of major funds such as Amethis’ €375m fund – as well as the ongoing fundraising efforts by other funds – is testament to the attractive opportunities that exist on the African continent.”

Amethis sells its minority stake in CDCI to Moroccan Group Retail Holding MICHAEL ANI

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methis West Africa, a subsidiary of Amethis Finance based in Paris has sold its minority stake in Compagnie de Distribution de Côte d’Ivoire (CDCI) to Groupe Retail Holding, thus becoming the company’s majority shareholder.

CDCI is now the secondlargest food retailer in Côte d’Ivoire with a network of

150 stores. Thanks to its unique positioning, the Company is present with both the King Cash brand and the CDCI brand and, above all, targets the middle and working classes by leveraging its broad geographical coverage with more than 50 percent of stores outside Abidjan.

In 2014 the entry of Retail Holding and Amethis into CDCI shareholding enabled the Group to modernize and expand its distribution network with the

opening of more than 20 stores across the country.

The financial support provided also enabled CDCI to strategically reposition its retail business, rebrand its King Cash brand and renovate its existing stores.

Through this partnership, the Company’s infrastructure has been strengthened to anticipate and support its future development.

In September 2019, in line with its initial exit strategy from this investment, Amethis sold its entire stake

in CDCI to Retail Holding, which thus became the company’s majority shareholder: “Thanks to the partnership with Amethis and Yasser Ezzedine, we were able to start our expansion in sub-Saharan Africa while pursuing our growth in Morocco. We strongly believe in the development potential of modern distribution in Africa,” said Zouhaïr Bennani, President of Retail Holding Group.

The pioneer of modern distribution in French-

speaking West Africa, and founder of Sococé, the first shopping centre, in Abidjan, in 1995, Yasser Ezzedine, states that “Amethis will remain a unique, faithful and sincere partner in its approach to supporting entrepreneurs on the continent.”

Khady Kone-Dicoh, Investment Director at Amethis, said “We are proud to have supported a visionary entrepreneur such as Yasser Ezzedine over the past five years and to have

accompanied an Ivorian leader in the food retail sector in this decisive phase of its development. We are also pleased to have contributed to the regional integration of a leading Moroccan player.”

“Sub-Saharan Africa is an undeniable growth driver for Morocco, we are pleased to have contributed to the deployment of a Moroccan strategic player in Côte d’Ivoire,” concludes Laurent Demey, Partner at Amethis.

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

Email the PE & F team loladeakinmurele@gmail.com

Continues on page 34

Wednesday 09 October 2019

BUSINESS DAY

35

POLITICS & POLICY Lagos lawmakers pass vote of confidence in Speaker INIOBONG IWOK

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awmakers in the Lagos State House of Assembly yesterday passed a vote of confidence in the Speaker of the House, Mudashiru Ajayi Obasa.

This was sequel to a Matter of Public Importance raised by Tunde Braimoh representing Kosofe Constituency 2 during plenary.

Braimoh said that the Speaker had done well since he assumed office with his leadership style and people oriented Motions and Bills that have changed the lives of the people of the state.

“I, Hon. Tunde Braimoh, representing the good people of Kosofe Constituency 2, hereby move and propose that a vote of total confidence be passed in the Speaker of the House, Mudashiru Obasa,” he said.

This was supported by,

Mudashiru Ajayi Obasa

Rasheed Makinde, representing Ifako/Ijaiye Constituency 2, which was adopted as the decision

of the whole lawmakers in the House through a voice vote.

Commenting on the

matter, Yinka Ogundimu (Agege 2) said that Speaker Obasa had been a blessing to the Assembly and that

Governors afraid to organise flamboyant parties because of EFCC - Magu BENJAMIN AGESAN MAKURDI

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cting Chairman of the Economic and Financial Crime Commission (EFCC), Ibrahim Magu, has alleged that some state governors were now afraid of organising flamboyant parties because of the commission’s “eagle eyes”.

Magu spoke yesterday during his working visit to the commission’s zonal office in Makurdi, the Benue State capital.

The acting chairman noted that some of the governors were maintaining low profile to avoid attracting the attention of the anti-graft agency, adding that the development was due to the fact that whenever the governors contravened the law, EFCC would come after them, as they were always on the commission’s radar, both within and outside the country.

“EFCC is all eyes and ears.

Wherever and whenever they organise such ostentatious parties, they will be fished out and prosecuted; be it within or outside the country,” Magu said.

The acting EFCC chairman assured the nation that the commission would not relent in its efforts at curbing the excesses of public office holders, saying necessary strategic plans had been put in place and were expected to yield results in the fight against corruption.

According to Magu, even though corruption is deeprooted in the country, the anti-corruption war of the Federal Government is yielding results.

Magu said the task of fighting corruption was very complex and sophisticated, as organised criminal gangs were daily devising new high-tech means of perpetrating fraud and other criminal activities.

The acting chairman further said that the agency, in its quest for success, was always ahead of the fraudsters and criminals in their activities.

He added that the commission had recorded tremendous achievements through its whistle-blowing policy.

“Whistle blowing is working very well and we are paying. What delays the payments sometimes are the rudiments of the courts,” he said.

Magu disclosed that the commission recovered millions of naira from members of the Eighth Benue State House of Assembly who were allegedly involved in strange car deals.

He said that the commission was still investigating some of the legislators. The anti-graft boss, however, described corruption as a cankerworm that had eaten deep into the country’s fabric.

He appealed to journal-

ists to join the fight against corruption in the country, using their investigative expertise.

Magu also added that EFCC had been intensifying efforts to clamp down on internet fraudsters, stressing that its joint operations with the U.S. Federal Bureau of Investigation was yielding results.

He said the massive crackdown on internet fraudsters (popularly called Yahoo-Yahoo boys) nationwide was still ongoing.

BusinessDay recalls that FBI and the EFCC had, at a joint press conference in September, announced that 167 people had been arrested in Nigeria and 74 in the U.S. watch list for internet fraud.

Some weeks after, the U.S. officials released a list of Nigerians suspected to be behind online scams.

The FBI’s “sweep” operation, along with EFCC, had since May focused on dismantling the cybercrime enterprises.

Also, Magu said there was no political inclination in the agency’s war against corruption.

He said the anti-graft agency would go after any corrupt person, no matter his status in the society.

The EFCC helmsman said two governors have been convicted and that they are all chieftains of the ruling All Progressives Congress

(APC).

Addressing journalists after his official visit to EFCC office in Makurdi, Magu explained that before anyone is invited for questioning, a thorough investigation would have been carried out to determine the individual’s level of complicity in the indictment.

The acting chairman said corruption has reduced drastically as governors no longer embezzle funds with impunity, like before, where they held lavish, wild birthday parties abroad.

On his mission to Benue State, Magu said it was to boost the war against corruption, adding that journalists should partner the commission to enable it win the war.

The acting chairman said the journey had been smooth for the anti-graft agency.

According to him, one of EFCC’s recent achievements is reducing the activities of internet fraudsters, popularly called “Yahoo boys”, especially in the Southwest and Southeast.

Magu said the anti-graft agency had made so many arrests and got a good number of convictions.

He described corruption as a global disaster, adding that the whistle-blowing system of the commission was paying off, but that it only takes a long time because of the court processes.

he had done a lot as the Speaker of the House.

Also speaking, Fatai Mojeed (Ibeju Lekki 1) recalled that few weeks ago, the people of Lagos State celebrated the achievements of Governor Babajide Olusola SanwoOlu, adding that this was made possible because of the activities of the House.

He added that Speaker Mudashiru Obasa initiated Lagos Neighbourhood Safety Commission (LNSC), which he said made the state safe.

In his view, Abiodun Tobun (Epe 1) reiterated that the Lagos State House of Assembly and Sp eaker O basa stand above a common standard of excellence. “ You are bold, and courageous. You were insistence that the parliament must go beyond the common standard of excellence.

“We are behind you as you have been elected by us and sovereignty

belongs to the people.

On behalf of the people of Epe Constituency 1, I would say that we are behind you,” he said.

In his view, Gbolahan Yishawu (Eti Osa 2) described Speaker Obasa as a role model, and a trail blazer.

Yishawu stressed that Obasa had taken the Assembly high and that his depth of knowledge is high, while stressing that his understanding of the economy of Lagos State as former chairman of the House Committee on Budget was second to none.

The Deputy Speaker of the House, Wasiu SanniEshinlokun, who also spoke on the matter, said that he aligned with all the accolades being showered on the Speaker.

Eshinlokun stated that the Lagos State House of Assembly was doing very well in the 9th Assembly, saying that this had rubbed on the Speaker of the House.

Kwara APC moves against crisis, warns against indiscriminate suspension SIKIRAT SHEHU, Ilorin

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ollowing the suspension of Mohammed Awobimpe and Baba Malik, chairman and vice chairman, respectively of the All Progressives Congress (APC) at the Ifelodun Local Government Area of Kwara State, the party has warned against the indiscriminate suspension of party members and unconstitutional act that could cause crisis within the party at the state level.

It was gathered that Awobimpe Malik allegedly mismanaged funds and involved in antiparty activities, hence, their suspension at a meeting held by the executives, APC elders and other stakeholders in the council, giving room for Olurotimi Ajisafe, APC secretary of the area to assume the position of APC chairman in acting capacity.

Speaking in Ilorin, Kwara Sate capital on Tuesday against the suspension of the APC Chairman and Vice Chairman of Ifelodun

Local Government, the state APC State Chairman, Bashir Bolarinwa expressed dismay over wanton and reckless removal of party officers by “the congregation of disgruntled, selfish and attention-seeking elements in the party”.

The party chairman, who decried a situation where one would labour to build a house and later be found destroying the house, warned that the organs of the party would no longer condone recklessness and activities inimical to the growth and unity of APC through application of appropriate sanctions.

Bolarinwa wondered why a party which was formed for the liberation of kwarans, is now being deployed by some desperate politicians who are fixated with personal gains as a vehicle of torment for the same kwarans.

He therefore, declared as null and void the suspension of all officers embarked upon without due diligence, as laid down by the party’s constitution.

36 BUSINESS DAY

Wednesday 09 October 2019

news

BEDC earmarks 200,200 meters for MAP in Delta

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EDC Electricity plc ( BE D C ) h a s e a rmarked a total of 200,200 meters to be rolled out to customers in Delta State in the next two years with a monthly cumulative average of 10,000 units under the Meter Asset Provider (MAP) scheme.

Abu Ejoor, executive director, commercial, BEDC, disclosed this at a media launch of MAP in Asaba for Delta State customers, saying the scheme was taking off in Asaba and would eventually move to all local government locations in the state.

According to him, some of the locations flagged for take-off of MAP within Asaba Township include NTA road, behind NTA, behind Government House, Amechi Iyio Way, Anwai road, Infant Jesus axis, Borrow Pit community and Ibuzo town road.

Ejoor said that the MAP scheme would assist in reducing customers’ complaints on metering, wrong and estimated billings which, he said, account for over 60 percent of complaints.

Stressing that BEDC was committed to improving service delivery to customers, he said the company had connected 112 communities without supply in its coverage areas to the national grid with 55 of such locations in Delta.

Speaking on current reality on power supply in Delta, Ejoor explained that 32 percent of BEDC’s power allocation comes to Delta, adding that an average of 84,516MW is delivered to the state monthly.

“Before Asaba and Warri TCN problem, there was average daily availability of 10-22 hours on 33KV feeders and six-10 hours on 11kv feeders.

About 14 percent of power generated is lost due to poor network infrastructure, while we continue to improve the network,” he added.

He listed some recent power supply improvement projects in Delta to include construction of commercial feeders in Asaba, Warri, Udu, Ogwuashi-Uku, Agbor from six hours to average 22 hours to the commercial customers in the environs and the rehabilitation and restoration of power supply to many communities in the state, including Ubulu-Uku, Ibuzo, Issele-Uku and Illah.

Also speaking, Fidelis Obishai, chief state head, Delta, disclosed that in view of the failed 2x150MVA 330/132kv power transformers in Asaba transmission station, customers were being presently fed from Onitsha, adding that available power is 30MW as against 100MW required.

#NES25:’Fourth revolution entrepreneurs must prioritise innovation, mentorship, patient capital’ HARRISON EDEH, Abuja

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ith global advancement in te ch n o lo g i ca l innovation and artificial intelligence, industry stakeholders have called on Nigerian entrepreneurs to prioritise innovations, mentorship and patient capital in growing their businesses in various sectors of the economy.

This was the submission of stakeholders at the just concluded Nigerian Economic Summit (#NES25) during a breakout session on Micro Small and Medium Enterprise (MSME), which has the topic: ‘Unleashing Nigeria’s Entrepreneurs.’

Onyeka Akuma, CEO of Farm Crowdy, speaking at the panel session, raised concern on non-prioritising of mentorship, as he noted that most young entrepreneurs get into business because of necessity not because of passion and believe in what they do.

He stated, “Entrepreneurs must think through a process of business before embarking on it. There is a place for skills, improvement and mentorship.

For any entrepreneur, it is access to patient funding that matters. Business support services are key. We must have industrial clusters that address these

concerns to make meaningful impact and address the concerns of over 40 million MSME stakeholders in the country.”

Degun Agboade, president of National Association of Small and Medium Enterprises, told BusinessDay on the sidelines that many small scale businesses and industrialists go into business without mastery in what they were embarking on.

He raised further concern that ease of doing business in the country despite the appreciate World Bank ranking had several cross cutting challenges ranging from over-regulation, multiple taxation, weak and unsupportive framework, poor access to markets, and non-formalisation of the informal sector.

He pointed out that several funding interventions from Development Finance Institutions from the Bank of Industry, the Central Banks remain unaccessed through several windows provided.

Earlier in his remarks, Kayode Pitan, managing director, Bank of Industry, stated that the bank had redefined its lending options to ensure adequate support for Micro and Small Scale Businesses in the country.

He noted that the bank would keep supporting small scale businesses in the country as the foremost development finance institution.

L-R: Tony Okpanachi, MD/CEO, Development Bank of Nigeria (DBN), and Babagana Umara Zulum, governor, Borno State, during a courtesy visit to DBN’s head office in Abuja.

NERC threatens to revoke licences of Ikeja, Abuja, 6 other DisCos for poor remittance ISAAC ANYAOGU

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igerian Electricity Regulatory Commission (NERC) has served notice to eight power distribution companies (DisCos) of its intention to cancel their licences for failure to meet their obligated remittance to the market.

“The Commission has reasonable cause to believe that the DisCos listed below have breached the provisions of the Electric Power Sector Reform Act, terms and conditions of their respective distribution licences and the 2016 – 2018 Minor Review of the Multi Year Tariff Order (MYTO) and Minor Remittance Order for the year 2019,” the regulator said.

The affected DisCos include the Abuja Electricity Distribution Company plc, Benin Electricity Distribution Company plc, Enugu Electricity Distribution CompanypPlc and Ikeja Electric plc.

Others are Kaduna Electricity Distribution Company, Kano Electricity Distribution Company, Port Harcourt Electricity Distribution Company and Yola Electricity Distribution

Company.

NERC had only two months ago published a minor review of electricity tariff meant to address shortfalls caused by lack of non-reflective tariff, but provided a minimum remittance threshold DisCos must meet by July 2019.

The increased tariff, which takes effect from January 1, 2020, prescribes at least 30 percent rise in tariff across the various customer classes.

DisCos were required to meet their obligation to the market, improve collections by metering customers, especially government ministries and departments, and payback loans from the Central Bank of Nigeria.

However, the regulator believes that the DisCos, despite exacting a favourable tariff review from it, has failed to meet its own end of the bargain by remitting more of what it collected to other players across the value chain.

“The Commission considers the actions of the aforementioned DisCos as manifest and flagrant breaches of EPSRA, terms and conditions of their respective distribution licenses and the Order, and therefore

requires each of them show cause in writing within 60 days from the date of receipt of this Notice as to why their licenses should not be cancelled in accordance with section 74 of EPSRA,” NERC says.

DisCos routinely remit far less than what they collected to other players across the value chain. This occurs even when they record improved remittances.

The regulator says the affected DisCos have failed to meet the expected minimum remittance thresholds for the July 2019 billing cycle. Of the eight DisCos, Ikeja Electric which controls the largest franchise area and collected the most of any DisCo recorded the poorest remittance failing by 49 percent.

According to NERC’s first quarter report for 2019, while Ikeja Electric recorded the best collection efficiency of all the DisCos at 84 percent in the first three months of 2019, it only remitted 39 percent of its collections back to the market.

Eko DisCo on the other hand recorded 80 percent collection efficiency and remitted 43 percent back to the market.

“We have to first remove our own cost because we have to be

in business and the remaining we pay to the market,” notes Sunday Oduntan, executive secretary of Association of Nigerian Electricity Distribution Companies (ANED), speaking on a panel session at the BusinessDay Future of Energy Conference, which held in Lagos on October 3.

NERC has been accused of failing to wield the hammer in the face of bad behaviour of operators especially the DisCos, with this order, the regulator may be serving notice to the DisCos that it is no longer going to tolerate market indiscipline which is largely responsible for the inability of GenCos to pay their gas suppliers as remittances to them from the DisCos is a paltry 15 percent of their market invoice.

However some analysts say the action of the regulator was the equivalent of using a bayonet to check the menace of houseflies.

“Revocation of licence is not an everyday power you wield as a regulator,” says Chuks Nwani, an energy lawyer, based in Lagos. “The regulator ought to exercise restraint regarding threatening to revoke licences.”

Wema Bank celebrates Customer Service Week with rewards

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n keeping with its promise to be “the financial institution of choice in service delivery and superior returns,” Wema Bank is marking this year’s Customer Service Week with several rewarding initiatives to further enhance customer experience in all its branches.

The annual Customer Service Week is a period when service organisations and global agencies commend the patronage and loyalty of their customers with rewarding activities. The 2019 Customer Service Week kicked off on October 7 and will run till October 11.

To celebrate this year’s

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event, all Wema Bank branches are engaging in exciting activities to boost customer experience including gift treats to customers who walk into the banking hall by 9:45 am.

All branches have also been beautifully decorated as staff show up to work in colourful costumes all week long.

Also, customers who make transactions using Wema Bank’s USSD *945# will be rewarded with an amount of airtime recharge.

In a bid to interact and get feedback from customers, Wema Bank’s MD/CEO, Ademola Adebise, and other senior managers will be taking calls from customers at the bank’s

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contact centre.

Speaking on the importance of service delivery, Mr Adebise commended the bank’s staff who continue to work to satisfy the bank’s esteemed customers while also appreciating customers for their loyalty over the years.

In his words, “we are constantly looking for new ways to serve customers better, provide a delightful experience, deliver excellent financial services and inspire growth among our customers.”

To sign off the event, the bank will hold a Service Recognition Award ceremony where accolades will be given to Best Performing Staff, Best @Businessdayng

Frontline Officer, Best Teller, Best Driver, Best Cleaner, Best Relationship Manager and other staff who serve and support customers daily.

Wema Bank has over the years introduced innovative solutions to enhance customer experience. Among these are the launch of ALAT, its digital banking platform, in 2017, increased hours of service at the bank’s contact centre and introduction of multilingual services.

Recently, the bank launched Salary Based Lending on ALAT as it looks to support salary earners within its customer base with instant low-interest loans.

Wednesday 09 October 2019

BUSINESS DAY

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news Questions for Nigeria as ExxonMobil...

Continued from page 1

world where gas is on the ascendancy and oil slips from prominence.

ExxonMobil on Tuesday awarded a JGC Corp.-led group a contract to develop its $33 billion liquefied natural gas project in Mozambique, which is set to be the biggest ever private investment in Africa.

JGC will be joined by Fluor Corp. and TechnipFMC plc to develop the Rovuma LNG project, Exxon Senior Vice President for LNG Peter Clarke said in a speech Tuesday in the Mozambican capital, Maputo.

The project will cost between $27 billion and $33 billion, according to March estimates by Johannesburg-based Standard Bank Group Ltd. Rovuma’s planned output is 15.2 million tons of LNG per year, higher than a nearby project that Total SA is developing with a capacity of 12.9 million tons.

Adeola Adenikinju, director, Centre for Petroleum, Energy Economics and Law, University of Ibadan, said the LNG market is basically for export and a shift of emphasis to the domestic market meant the incentives that were provided for Nigeria Liquefied Natural Gas (NLNG) were no longer available for other LNG projects.

“This made super oil majors seek countries that are focusing on the export market,” Adenikinju said.

Muda Yusuf, director general, Lagos Chamber of Commerce and Industry, said investors have options because foreign investments naturally flow to where they are most valued or where returns will be the most guaranteed.

“We have remained struck with Petroleum Industry Bill (PIB) which is expected to create certainty in the sector, while the issues surrounding insecurity are still here,” Yusuf told BusinessDay. President Muhammadu Buhari had on Tuesday sought the support of the legislature to pass into law two Petroleum Industry Executive Bills supposed to provide certainty and attract further investments into the sector.

Yu s u f s a i d N i g e r i a needs to put on the table the right kind of incentives and policy framework that will make it the preferred investment destination for oil and gas projects.

Kelvin Atafiri, who runs Cavazanni Human Capital Limited, an investment firm exposed to the oil and gas sector, said foreign investors operate in other countries apart from Nigeria and they would rather go to countries with less bureaucracy and agencies than countries with uncertainty such as Nigeria.

Mozambique holds 100 trillion cubic feet (TCF)

of proven natural gas reserves, the third-largest in Africa behind Nigeria and Algeria, yet the Southern African country has continued to attract more new investments than Nigeria and Algeria.

However, international oil companies (IOCs) have virtually halted new large projects in Nigeria with the country’s oncelucrative oil sector which accounted for a significant part of foreign direct investment into Nigeria now missing on the African FDI radar.

Deloitte, one of the “Big Four” accounting organisations and the largest p ro f e s s i o n a l s e r v i c i n g firm, named Ghana, Mozambique, Tanzania and Uganda as new countries that w ill be competing with Nigeria’s oil and gas sector for Foreign Direct Investment in 2019 and beyond.

For an established oil country such as Nigeria, Deloitte noted that delays in reforming the sector have deterred further investments as governance challenges, corruption, as well as economic, security and high-cost concerns still hinder investment inflow.

“Improving economic conditions and transport sector growth could see domestic consumption increas e by 31 percent between 2017 and 2023 while investment in gas infrastr ucture, such as new pipelines, will boost production,” Deloitte said in its “The new frontier: Winning in the African oil and gas industry” report.

While other countries are growing in leaps and bounds, Nigeria, which was once ranked the fourth largest LNG exporter in 2016, according to the World LNG Report, has delayed in taking Final Investment Decisions (FID) on various LNG projects in the country. This is eroding the country’s share in the global market, and stakeholders said this has cost the country over $5 billion.

Since the development of the NLNG, new projects have been too few and far between. Two LNG projects in Nigeria – Olokola LNG and Brass LNG – have been unable to reach Final Investment Decision. The NLNG’s Train 7 is finally making progress towards FID after many false starts.

The OK LNG project was stalled because all the international oil companies (BG, Shell and Chevron) withdrew from the project, with only the Nigerian National Petroleum Corporation (NNPC) left.

•Continues online at www.businessday.ng www.businessday.ng

President Muhammadu Buhari presenting the 2020 Appropriation Bill before the joint session of the National Assembly, in Abuja, yesterday.

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Again, FG fixes unrealistic revenue targets for 2020 budget Continued from page 1

only generated N2.043 as revenue from both oil and non-oil sources, despite a N6.998 trillion target for full year. And even though it said it would generate N1.859 trillion from the sale of assets and joint ventures, Nigeria as at June this year had not generated a dime from other sources, meaning it ignored its proposition in the budget.

Though the 2020 budget proposes a lower oil revenue target as opposed to other years where it projected the larger chunk of its revenue to come from the oil sector, analysts, however, worry that without strict reforms in the economy, the government would still be faced with the challenge of generating the needed revenue from the non-oil sector.

“It is commendable that the government has taken a bold step to increase the share of government non-oil revenue and other revenue as against oil revenue, but the concern is how much of the non-oil revenue target will be realised as this has been the trend historically,” said Gbolahan Ologunro, an equity research analyst at CSL Stockbrokers Limited.

To boost revenue in the non-oil space, Nigeria pegged the proposed budget on a 50 percent increase in Value Added Tax (VAT), a tax imposed on additional services at each stages of production, from 5 percent to 7.5 percent

The additional revenues from the VAT increase are expected to be used to fund health, education and infrastructure programmes, with 85 percent of the revenue allocated to the states and local governments.

In order to send a relief to the Small and Medium-scale and Enterprises (SMEs), the VAT increase excluded basic commodities and also raised the threshold for VAT registration to N25 million in turnover per annum, according to the proposed budget.

“I don’t think we are likely going to see any improvement even with the new increase in VAT since the gains from the tax revenues will be offset with the new N30,000 minimum wage implementation; hence, we will be back to status quo in terms of increased deficit and high level of borrowings,” Ologunro said on phone.

Emeka Ucheaga, CEO, EAU Intelligence, thinks the revenue target “is ambitious and non-realistic”.

“Actual revenue in 2018 was N3.9 trillion at crude oil price averaging $71 per barrel and saying we will increase revenue to N8.15 trillion is a joke,” Ucheaga said.

“Without good fiscal policies towards increasing the tax net and improving the efficiency of our tax collection, then this budget is a mirage,” he said.

The shortfall between actual revenue receipt by the Federal Government and projected revenue worsened when a global collapse in oil

prices that happened in 2014 and an agitation by militant groups in the Niger Delta sent oil production to as low as 1.2 million barrels. This culminated in pushing the oil-dependent nation to its first recession since 28 years.

Prior to 2014, Nigeria’s miss in revenue target – that is, the variance between actual and budgeted Federal Government retained revenues – was in the billion-naira range but with the collapse in oil prices, the difference has stayed within the trillionnaira range. This is despite oil prices and production levels increasing to what they were pre-recession level.

In 2014, the Federal Government’s actual retained revenues stood at N3.727 trillion, based on data obtained from the CBN’s quarterly reports. This value represented a shortfall of N3.5 billion from the N3.731 trillion projected in the 2014 budget.

In 2015, when the country started feeling the gentle heat from the fall in crude oil prices, variation between actual and projected revenue ballooned 19.58 percent to about N675.89 billion. In that year, Nigeria realised N2.776 trillion even though it stipulated a revenue generation of N3.452 trillion.

The gap, however, widened further at the thick of the economic recession that forced Africa’s biggest oil producer to look to the nonoil sector as the messiah that would lift the economy from its precarious state. For the

Why Nigeria can’t produce enough food despite billions from FG Continued from page 2

gap of 7.1 million MT. Similarly, local production of sweet potato is estimated at 1.2 million MT, while demand is 6 million MT, leaving a gap of 4.8 million MT. Nigeria produces 400,000 MT of wheat annually but with a demand of 4 million MT, which leaves a gap of 3.6 million MT. Maize production in the country is put at 10.5 million

MT but demand is 15 million MT, leaving a gap of 4.5 million MT. Ndidi Okonkwo Nwuneli, founder, Leap Africa and managing director of AACE Foods, said one important step is to have a platform to link everyone in the value chain together by providing the right kind of training and support.

Nwuneli said she has already founded an online platform for millions of entre-

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preneurs who will transform this sector.

Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry (LCCI), suggested the need for reduction of production cost to encourage firms to export.

But he said trade must be facilitated by agencies like the Customs, the CBN, Finance Ministry and other relevant agencies.

“We should use technology to make things easy. Scan@Businessdayng

first time in many years, the non-oil sector raked in the highest amount of revenue for the government while the oil sector played a second fiddle.

Of the total N2.621 derived as revenue in 2016, non-oil revenue was N824.22 billion while retained revenue from oil stood at N697.80.

However, even an increase in non-oil revenue could not narrow the shortfall between actual and budgeted revenues. Variations between budgeted and actual in 2016 ballooned some 32 percent to N1.234 trillion.

The same trend followed in 2017 and 2018 when variations between actual and budgeted stood at N2.426 and N3.2 trillion, respectively.

For 2018, the Federal Government could only manage to hit revenue of N3.96 trillion, a far cry from the N7.16 trillion apportioned in the budget.

However, the dwindling revenues have not stopped Nigeria from increasing its recurrent expenditure which has more than tripled.

The Federal Government pegged the 2020 budget deficit at an estimated N2.18 trillion, 2.3 percent above 2019 levels of N2.13 trillion. Also, it represents 1.52 percent of estimated GDP, below a 3 percent threshold set by the Fiscal Responsibility Act of 2007, and in line with the ERGP target of 1.96 percent.

The deficit is expected to be financed by new foreign and domestic borrowings, privatisation proceeds, signature bonuses and drawdowns on the loans secured for specific development projects.

ners have not worked for three years and even if you have 1,000 containers, they have to be inspected manually,” he said.

Nigeria is one of the least mechanised farming countries in the world with the country’s tractor density put at 0.27 hp/hectare, which is far below the Food and Agriculture Organisation (FAO) recommended tractor density of 1.5 hp/hectare.

•Continues online at www.businessday.ng

Wednesday 09 October 2019

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news

NECO decries fake accreditation, rising exam malpractices in schools Godsgift Onyedinefu, Abuja

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he National Examinations Council (NECO) says the presentation of falsified documents

by Principals and Proprietors of schools in order to secure accreditation is a challenge the council is being confronted with.

Acting registrar of NECO, Abubakar Gana, stated this in a brief submitted to the minister of education, Adamu Adamu, on the mandate and achievements of the Council between May 2018 and September 2019.

Gana also noted that the menace of examination malpractice had continued to hunt public examinations across the country, with NECO recording over 40,000 cases in its June/July 2019 Senior Secondary Certificate Examination (SSCE).

He said incessant cases of examination malpractice, especially impersonation and particularly collusion by supervisors, teachers and school administrators, who ought to been part of the army in fighting the scourge, was a major challenge in the conduct of the exercise.

He therefore urged the Federal Government to formulate a deliberate policy aimed at promoting discipline and a culture of honesty among teachers, school administrators and

students.

The registrar further called on the government to prioritise security of examinations, just as the Independent National Electoral Commission (INEC) is provided security during elections.

Although NECO acquired 8,000 biometric verification machines before its conduct of the 2019 SSCE, the registrar said the exam body required more biometric verification devices to serve its over 16,000 centres and enable it strengthen its efforts towards eliminating identity theft, which is the severest form of examination malpractice.

Speaking on its achievements, the NECO boss said immediately after his assumption of office, he embarked on critical reforms that led to the successful conduct of the 2018 June/July SSCE under compelling circumstances, and released the results of the examination within 40 days of completion.

He further stated that the Council abolished the use of scratch cards following the scam that surrounded it, which led to loss of hundreds of millions in revenue, adding that it subjected all printed 2018 November/December registration cards to activation only after the money for each card must had been credited to the Council’s TSA.

Akwa Ibom presents N597.8bn budget for 2020 ANIEFIOK UDONQUAK, Uyo

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overnor Udom Emmanuel has presented an appropriation bill of N597.8 billion for 2020 fiscal year to the Akwa Ibom State House of Assembly for confirmation.

The budget, christened budgetofindustrialisationandpoverty alleviation phase 11, consists of N111.225 billion for recurrent expenditure and N369.642 billion for capital expenses as well as N116.933 billion for consolidated revenue fund charges.

The approved budget size for 2019 was N672.985 billion.

A breakdown of the budget showsthattheprojectedrecurrent revenue is estimated at N381.556 billion as against the approved provisions of N374.758 billion for 2019, while the recurrent expenditure is estimated at N228.158 billion.

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Presenting the budget, the governor said the projected revenuewouldbefundedfromstatutory allocation, which is expected to bring in N52 billion, derivation fund, N255 billion, revenue from parastatals N2 billion, Value Added Tax of N20 billion, and internally generated revenue of N52.556 billion.

The budget shows that administration will gulp N102 billion while the economic sector is estimated to cost N237 billion and social services N26 billion.

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L-R: John Obaro, MD/CEO, SystemSpecs; Geoffrey-Joseph Amah, MD, ARMWAY Limited; Tunde Lemo, former deputy governor, Central Bank of Nigeria (CBN), and Cosmas Maduka, president/CEO, Coscharis Group, at the 6th Foursquare public lecture themed: Eradicating Poverty in Nigeria, in Lagos, yesterday. Pic by Olawale Amoo

Wadume: Poor communication cause of officers’ killing - DHQ Stella Enenche, Abuja

... recommends probe of Captain, ASP, Inspector

efence Headquarters Tuesday, blamed lack of adherence to standard operating procedure for the killing of three police officers attached to the IGP Intelligence Response Team, and two civilian’s in Ibi, Taraba State.

The officers - Inspector Mark Ediale, Sergeants Usman Danzumi, Dahiru Musa, as well as an informant, were allegedly killed by soldiers on duty at a checkpoint, on August 6, 2019.

They were killed on their way to Jalingo, the Taraba State capital, shortly after arresting a suspected kidnap kingpin, Hamisu Bala (alias Wadume).

Concerned about the fatal incident, President Muhammadu Buhari had ordered the Defence Headquarters to set up a panel of investigation to unravel the circumstances surrounding the ugly development.

The Chief of Defence Staff (CDS), Gabriel Olonisakin, had

set up a seven-man Board of Inquiry (BOI) headed by Rear Admiral Ibikunle Olaiya.

According to the Defence spokesperson, Colonel Onyema Nwachukwu, in the report submitted to the CDS, the panel observed infractions and poor communication between personnel of the police and troops of the Army.

This is as the BOI further recommended investigation of Captain Tijani Balarabe, who was alleged to have ordered the attack on the police operatives.

Also recommended for further investigation were Sergeant Mohammed, and Corporal Bartholomew Obanye.

On the part of the Police, the Board emphasised the compelling need to probe the role of the Divisional Crime Officer (DCO) in charge of Ibi Police Division, Assistant Superintendent of Police (ASP) Aondoona Iorbee, and Inspector Aliyu Dadje.

D

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“After a thorough and painstaking investigation into the incident, the BOI submitted its report to the convening authority observing that, there were infractions and poor communication between personnel of the NPF and troops of the NA. “It was also observed that there was non-adherence to the Standard Operating Procedure by both parties involved in the incident.

“It further made some recommendations to the NA and NPF to forestall future reoccurrence and bring anyone culpable to book in accordance with extant laws.

“The BOI also recommended that the NA and NPF should further investigate Captain Tijani Balarabe, Sergeant Ibrahim Mohammed, Corporal Bartholomew Obanye, DCO Ibi Police Division, Assistant Superintendent of Police Aondoona Iorbee, and Inspector Aliyu Dadje for complacency and necessary

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disciplinary measures. It was also recommended that further investigation be conducted on Hamisu Bala for gunrunning and possibly kidnapping, in order to prosecute the suspect,” the panel said.

In addition, the board made a strong case for the establishment of “an Interagency Liaison Desk” by the Services and other security agencies, for harmony of activities.

According to Nwachukwu: “Following directive of the Commander-in-Chief of the Armed Forces, President Muhammadu Buhari, for an immediate investigation into the unfortunate incident that led to the killing of 3 Nigerian Police Force (NPF) personnel and 2 civilians by troops of the Nigerian Army (NA) along Ibi-Wukari Road in Taraba State, the Chief of Defence Staff General AG Olonisakin constituted a Board of Inquiry (BOI) to investigate the incident.

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BUSINESS DAY

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news AXA Mansard to partner LagosMums for parenting confab, exhibition

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XA Mansard, a member of AXA, a leader in insurance and asset management, is set to partner LagosMums to hold the sixth edition of its annual Parenting Conference and Exhibition on October 12, 2019.

The annual event has become a popular way for mothers to meet, network, share experiences, talk about parenting, and discuss ways to achieve worklife balance and many more activities. There will be a range of speakers to discuss various important and interesting topics in a relaxing and encouraging environment. There will also be an exhibition that will bring together various companies who provide goods and services to cater to various aspects of family life. Participants will have access to attractive deals at the exhibition.

“Most people desire to belong to a community of people who share their interests, passions and pain points and mothers are not an exception,” said

Naomi Aduku, head of Business Development at AXA Mansard Pensions Limited, saying, “It is therefore very exciting for us at AXA Mansard to be partnering LagosMums for an event which engenders group support and camaraderie among women.”

In emerging economies like Nigeria, the purchasing power of women is increasing as well as access to education and higher-level employment. The woman’s role in the economy is growing as gender differences in labour market participation narrows. They own one-third of the world’s businesses, and according to the ‘SHEforShield’ report done by AXA and IFC in 2015, their average income in emerging markets is increasing by 8.1 percent a year, versus 5.8 percent for men. Bringing it home, the trend is pretty much the same. The Nigerian woman is getting more involved in economic activities.

According to the World Bank, the female participation rate has improved from 47.3 percent in 2003 to 50.43 percent in 2016.

Finnish Embassy hosts Obaseki, seeks partnership to deepen Edo-BEST, TVET reforms

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do State governor, Godwin Obaseki, was hosted by the Ambassador of Finland to Nigeria, Jyrki Pulkkinen, for an Education Roundtable, during which the education reforms in Edo State was on the spotlight.

The meeting, held at the Ambassador’s residence in Abuja, also hosted other dignitaries from Edo and Lagos states, including World Bank country director, Shubham Chaudhuri; the Edo State Universal Basic Education Board (SUBEB) chairman, Joan Osa Oviawe; Lagos State commissioner for education, Folashade Adefisayo, among others.

Jyrki said he was impressed with the progress in the transformation of the basic education sub-sector in Edo State driven by Governor Obaseki.

He noted that he wanted to know how Finnish expertise could contribute to the gains being made, congratulating the Obaseki on the 2019 Best Performing Governor of the Year

honour by the Nigeria Union of Teachers (NUT).

While giving the opening remark at the meeting, Governor Obaseki noted that a lot had been achieved in repositioning basic education in Edo State, noting that the state government ran a five-pronged programmed tagged Edo Basic Education Sector Transformation (Edo-BEST) programme.

He said under the programme, pupils now learn more in a term than they used to learn in three years under the old system, noting that a tech-based teaching method has been adopted, with teachers adequately trained to ensure that the system runs smoothly.

The state government is also working with the World Bank in re-enacting Technical and Vocational Training and Education (TVET) in the state with the revamp of the Government Science and Technical College (GSTC), formerly Benin Technical College.

Oriflame better positioned to showcase SwedishNigerian business collaboration - Swedish ambassador SEYI JOHN SALAU

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ollowing a successful business meeting with Vice President Yemi Osinbajo earlier in the year, Carl-Michael Gräns, the Swedish ambassador to Nigeria, says Oriflame is better positioned to showcase and strengthen business collaboration between both countries.

Gräns, who is the Swedish Ambassador to Nigeria, Ghana and ECOWAS, paid a courtesy visit to the Lagos office of Oriflame Nigeria Limited on its fifth anniversary celebration, where he expressed his support and belief in the Oriflame brand.

According to Gräns, Ori-

flame brand has the capacity to showcase greater Swedish business collaboration opportunities in Nigeria, as the Embassy of Sweden will continue to support the partnership between Sweden and Nigeria, while enhancing establishment and investments of successful Swedish businesses in Nigeria.

It will be noted that earlier in the year, Stephan Tillander, the Charge DAffair, Embassy of Sweden in Nigeria, led some Swedish firms, businesses and universities in a meeting with Osinbajo on strengthening business partnership with Nigeria on Information Communication Technology (ICT) and digital economy. www.businessday.ng

#NES25: NNPC laments JV partners’ failure to develop assets 10 years after sales HARRISON EDEH, Abuja

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igerian National Petroleum Corporation (NNP C ) on Monday said buyers of the divested assets of its Joint Venture (JV ), and partners have all failed to make meaningful impacts and contributions to the development of the assets, almost 10 years after their sale.

Speaking in Abuja at a round-table on “Rethinking the future of the Extractive Industry,” at the 25th Nigerian Econ o m i c Su m m i t ( N E S ) , group managing director of the NNPC, Mele Kyari, expressed disappointment over the sale of the JV assets to the new partners, noting that if the NNPC had a foreknowledge of the incompetence of the

buyers, it would not had consented to the sale of the assets.

Going forward, he said the NNPC had rolled out stringent conditions for the divestment of assets by its JV partners, while he cautioned its partners against proposing the divestment of their stakes to firms not capable of improving the fortunes of the assets.

The NNPC chief executive noted that henceforth, firms seeking to acquire the assets of its JV partners must be able to manage the assets, attract financing and must be able to operate the assets.

He said, “In the last ten years, many of our partners have divested assets from the joint venture; some of the Production Sharing Contracts, PSC, have looked for other PSC contractors to join the

business.

“For the JVs and without exceptions, all the divestment from our partners to all the companies we are now working with, did not deliver the value that we expected. Many of the assets went down; most of them could not add any production to the baseline. That is the reality that we have on ground now.

“If we can roll back time and go back to 2010 up till 2012, NNPC would not grant those consents, if we had known this, because what the consent you are granting means is that they are bringing in a partner who would h e lp you w o rk th e a s sets. If we know today that this cannot happen, we would not have consented to it.

“At that time, we did not have a choice, but

today, we are in the best position to say no when we want to; we have a government that would tolerate us, support us and had insisted that we must do things correctly.

“Today, if you bring a partner who is on paper, an upstream operator, after the divestment is set, we will say no to it. That is the reality. It would also apply to our partners. This is a clear message to our partner, do not propose sale to people who cannot manage these assets, who cannot find financing and who cannot operate these assets.

“Indeed, the NNPC has the option of either preempting the transaction or to decline the consent of we are not convinced, especially if you are not able to give us the partner that would be able to do business as we expect.”

Wale Babalakin (r), national president, Government College, Ibadan, Old Boys Association (GCIOBA), and Tola Obembe (l), his deputy, addressing the press on GCI’s 90th anniversary celebrations.

Education, bedrock of civilisation, says babalakin

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ational president, Government College, Ibadan, Old Boys’ Association (GCIOBA), Wale Babalakin, says quality education is the bedrock of societal development and must never be compromised.

Babalakinsaysahalf-educated person is a danger to himself and the society.

Speaking in Lagos Tuesday at a press conference on GCI’s 90th anniversarycelebration,Babalakin said all Nigerians must see the rebuilding of the educational system as a personal and collective challenge.

He said GCI old boys had decided to take up the challenge and ensure that their alma-mater continued to provide the quality education it was known for.

His words: “It’s a waste of time

… GCI turns 90 goingontheblamegame.It’sgoing to be challenging but it’s a goal we have set for ourselves.”

Babalakin said quality education would come at a cost, adding that countries that had recorded landmarkachievementsinvarious spheresoflifehaddonesothrough investmentintheeducationsector.

He said: “This year, we are going to be celebrating our 90th anniversaryofrenderingserviceto the nation. The theme of this year’s anniversaryis90YearsofServiceto the Nation.

“We are very grateful to the foundersoftheschoolwhocreated amodelschoolintheWesternpart of Nigeria in 1929. This school was foundedoncertaindefinedprinciples,oneofwhichisthatitbasically

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is an assembly of the most gifted boys in the old Western Region, extending from the boundary of Nigeria with the Republic of Benin toAsabainthecurrentDeltaState.”

He further stated that one of theuniqueprinciplesofthecollege were its traditions.

“These traditions were established and nurtured in the course of the school’s existence. For example, though we have a united front when acting for the school, we also have strong affiliations to our various Houses, which were four in number, up till 1947. The fifth one was established in 1973.

“The School ran a collegiate system where the Houses were independent in many spheres.

Competition among the Houses was vibrant.

“Discipline too was a key qual@Businessdayng

ityofGovernmentCollege,Ibadan.

There was great emphasis on rewarding hard work or success andtherewassufficientpenaltyfor bad behaviour. There were grades of House and school penalties for whatever offence were committed,’ he said.

Babalakin said the college had produced outstanding students in all facets of Nigerian life.

He noted that not less than 15,000 students have graduated fromthecollegesinceitsinception in 1929.

It has been very difficult to decide the area of activity in Nigeria that we are going to celebrate because GCI boys have simply distinguished themselves in all areas. We have no less than 1000 old boys that are deserving of the award.

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news NNPC to partner Afreximbank on refineries rehabilitation, downstream infrastructure financing Olusola Bello & Harrison Edeh

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esirous to put the refineries back on track, the Nigerian National Petroleum Corporation (NNPC) has expressed readiness to collaborate with the African Export and Import Bank (AFREXIMBANK) or any financial institution willing to finance its critical projects, especially refineries rehabilitation, downstream infrastructure, including pipelines.

Mele Kyari, group managing director of the NNPC, stated this when he played host to Amr Kamel, executive vice president of AFREXIMBANK and other top officials of the bank who paid him a business visit at the NNPC Towers, Abuja.

Full rehabilitation of the refineries is expected to begin in January 2020. This is because the NNPC has a mandate from the presidency to ensure that the refineries now become operational at optimal capacities.

Kyari had said the corporation was committed to this timeline, saying, “We will stick to time, we will deliver this project by 2022. We will commence actual rehabilitation

work in January. We will do everything possible between October and December to close out all necessary conditions for us to deliver on that project.”

According to Kyari, I believe that with the support that the NNPC has from the shareholders — government of this country, the entire staff of this company and the contractors, it is doable and we will deliver the project.

Nigeria has about 445,000-barrels capacity refineries that have been comatose for several years, and this has made the country to be dependent on fuel importation.

According to a release signed by Samson Makoji, NNPC’s acting group general manager, group public affairs division, the NNPC boss said this while responding to the AFREXIMBANK chief’s expression of desire to participate in the Nigerian Oil and Gas Industry.

He said the corporation was open to financial and technical partnership with reputable financial institutions like the AFRIXIMBANK to develop the industry.

“We have a number of financing needs; it depends on how much you are bringing to the table. We need support, particularly in refineries rehabilitation, depot optimisation, and pipelines financing,” Kyari stated.

He assured the team of his readiness to work with the bank, adding: “We will provide you with basic information. We are ready to talk to you.”

Speaking earlier, Amr Kamel said he was in NNPC to congratulate Kyari and his management team on behalf of the board and management of the bank.

He said the bank’s management team thought it imperative to interact with NNPC, being a key player in one of the most viable sectors of the Nigerian economy, which is the largest in Africa, with a view to seeking collaboration on ways to further grow the oil and gas sector.

Apart from financing of refineries rehabilitation and other downstream projects, the AFREXIMBANK boss expressed interest in participating in some other projects such as the Ajaokuta-Kaduna- Kano (AKK) pipeline system.

UBA Foundation to reward schools with highest entries for 2019 essay competition KELECHI EWUZIE

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BA Foundation has commenced the 2019 edition of its annual National Essay Competition in Nigeria with a call for entries, now in its ninth year.

The essay competition, targeted at senior secondary school students, is organised annually as part of UBA Foundation’s Education initiative aimed at promoting reading culture and encouraging healthy and intellectual competition among secondary school students in Nigeria and across Africa.

Bola Atta, CEO, UBA Foundation, says the essay competition will provide an opportunity for students in secondary schools across the country to put in their entries and to win prizes in the form of educational grants to study in any university of their

choice on the African continent.

Atta, while speaking at the media launch to unveil the call for entries, Tuesday at UBA headquarters in Lagos, said in 2018, the prize money increased significantly as the UBA Foundation emphasised that education remained one of the Foundation’s key initiatives.

According to Atta, “The first prize for the UBA National Essay Competition is a N2 million educational grant, while the second and third prizes are N1.5 million and N1 million educational grants, respectively.”

Speaking with the students and participants at the event, Atta said, “To usat the Foundation, this is our drive to improve the quality of education across the continent.

It is also our way of giving back to the society. The competition is a key aspect of our investment drive inhumancapital,asweseektoimprove knowledge base, allow stu-

dents to express themselves and write creatively. We will continue to sustain the initiative because education is very important to UBA and we are more than committed to providing the necessary supportforstudentsinNigeriaand across the African continent.

“We are driven by the mantra to do well and do good and we will not relent in our efforts to touch lives through our various projects, and initiatives.”

Ogechi Altraide, group head, Direct Sales Agency, while speaking on the benefits of reading and writing essays, motivated the studentstoresearchintothetopics and give it their best shot, adding that there was the need for them to focus on adapting themselves to happenings in their generation, and to have a growth mindset.

This, she explained, will ensure that they can apply themselves and conquer whatever challenges they are faced with.

Water pollution: Lagos Assembly directs environment ministry, LASEPA to investigate Iniobong Iwok

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he Lagos State House of Assembly Tuesday, called on the Ministry of the Environment and the Lagos State Environmental Protection Agency (LASEPA) to investigate the pollution of the water in Shomolu area of the state.

It was alleged that the pollution was as a result of underground leakage caused by a filling station in the area.

The resolution of the House followed the motion moved by Rotimi Olowo, Shomolu I, saying leaking of the underground tanks in a filling station at Saint Finbarr, Akoka, has polluted the water.

The lawmaker reiterated that drinking of such water was

unhygienic, and could affect the health of the residents.

While buttressing the need to urgently intervene on the issue, Hakeem Shokunle, Oshodi-Isolo I, said drinking water with carbon monoxide was poisonous.

According to Shokunle, water containing fuel meant for drinking has irreversible effects on the body, and can alter the DNA. Desmond Elliot from Surulere I, equally called for a thorough investigation of the issue because of its important to the wellbeing of the people.

On his part, Tunde Braimoh of Kosofe II said the issue must be given priority considering the important to the people.

The majority leader, Sanai Agunbiade, however www.businessday.ng

cautioned his colleagues for mentioning a particular filling station, saying it would be too early to jump into conclusion.

“I am not too comfortable with mentioning of a particular filling station. There should be a thorough investigation to ascertain the truth,” he said.

The Chief Whip, Rotimi Abiru, said the issue in contention happened in his constituency, saying the Ministry of the Environment had already conducted investigation on the matter.

In his ruling, the Speaker, Mudashiru Obasa, stated that the House would still come up with a committee to do its independent investigation, saying the ministry would be required to submit it report to the House, if need be. https://www.facebook.com/businessdayng

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GEORGE PARKER IN LONDON, SAM FLEMING IN BRUSSELS AND ARTHUR BEESLEY IN DUBLIN

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oris Johnson on Tuesday urged Leo Varadkar to keep faith with talks on a possible Brexit deal, despite Downing Street fears that the prospects for an agreement before October 31 are all but dead.

Mr Johnson’s allies said the British prime minister would meet the taoiseach later in the week to try to resuscitate the talks, after a day of acrimony in which Number 10 aides accused Mr Varadkar and Angela Merkel of blocking a deal.

Donald Tusk, European Council president, retaliated by accusing Mr Johnson of engaging in a “stupid blame game”, but both sides seemed determined on Tuesday night to cool tempers and avoid a complete breakdown.

Mr Johnson’s team described a 40-minute telephone call with Mr Varadkar as “constructive” and said they expected the prime minister to meet his Irish counterpart on Thursday or Friday for more talks.

“Both sides strongly reiterated their desire to reach a Brexit deal,” a Downing Street spokesman said.

Each camp remains far apart on the key issue of how to handle the Irish border, with tensions fuelled by what Downing Street called a “frank” 30-minute phone call between Mr Johnson and Ms Merkel.

Mr Johnson’s aides claimed Ms Merkel argued that Northern Ireland would have to remain in the EU customs union under any Brexit deal in order to avoid a hard border.

Mr Johnson has insisted that the

Boris Johnson urges Varadkar to keep Brexit talks alive Bid to cool tempers as hopes for deal with EU fade amid blame and acrimony

Talk in Brussels is turning to an extension of the Brexit process — something Boris Johnson has vowed cannot happen © Reuters

region must stay in the UK customs territory.

“Merkel said that if Germany wanted to leave the EU, they could do it no problem, but the UK cannot leave without leaving Northern Ireland behind in a customs union and in full alignment forever,” said a

Trump administration had ordered Gordon Sondland not to testify in Ukraine-related inquiry

Officials suggest funnelling money to Nokia and Ericsson to help them compete with Chinese telecoms group

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he US is looking at ways to funnel money to Huawei’s European rivals, as officials warn that the Chinese company is becoming dangerously dominant in the global race for the next generation of mobile communications.

Officials in the US government have suggested issuing credit to companies such as Nokia and Ericsson to enable them to match the generous financing terms that Huawei offers to its customers, according to two people with knowledge of the situation.

The move is part of a wider push to fund a rival to the Chinese company, which is the largest telecoms equipment maker in the world, but which the US believes poses a security risk to it and its allies.

One senior government official said: “We gave up our superiority in making telecoms equipment decades ago, and now we are realising that this might not have been the best choice for national security reasons. Almost every department and agency is desper-

ately looking right now for ways to get back into this game.”

“If we don’t, Huawei could soon be the only option for anyone wanting to roll out 5G networks.”

Another said: “This is one of the big concerns of the government right now. Everyone from the defence department, to the commerce department, to the department of homeland security, is looking at this.” The White House declined to comment.

Huawei sells 28 per cent of the world’s telecoms equipment, according to Dell’Oro, the market research company. Ericsson and Nokia are its closest rivals. Both companies declined to comment.

To the consternation of the Trump administration, there is no US group that can build the radio equipment to transfer signals between mobile phones and the towers or sites that make up the network.

Some officials believe the best way to counteract Huawei’s dominance is to make sure its rivals can match the Chinese company’s multibillion-dollar credit lines from China’s state banks that allow it to offer much longer payment terms than most of its rivals. www.businessday.ng

The Downing Street account caused outrage among Ms Merkel’s supporters. “Johnson is misusing the phone conversation to start a blame game,” said Norbert Röttgen, a senior MP in the chancellor’s CDU/ CSU group.

There is pessimism in Brussels

House Democrats subpoena US diplomat in impeachment probe

US pushes to fund western rivals to Huawei KIRAN STACEY IN WASHINGTON

Downing Street insider.

“The call with Merkel showed the EU has adopted a new position. She made clear a deal is overwhelmingly unlikely and she thinks the EU has a veto on us leaving the customs union.”

Sterling slipped to its lowest level against the euro for a month.

and London about the prospects of a deal by October 31, let alone by the time of an EU summit next week. Talk in Brussels is turning to an extension of the Brexit process — something Mr Johnson has vowed cannot happen.

Mr Johnson’s allies have not confirmed that the prime minister will definitely attend the October 17-18 summit, especially if it turns into a discussion about the terms and length of any extension to the Article 50 exit process.

With talks on the verge of collapse, an unnamed Number 10 source wrote a remarkable note in which they claimed Britain would punish EU member states if they agreed to extend the Article 50 exit process.

Mr Johnson’s aides fear that the EU will decide to push the prime minister into seeking a delay to Brexit, precipitating a general election and possibly a second referendum, with the possible result that Brexit is reversed.

A note published by The Spectator — attributed to a “contact in Number 10” and not disowned by Downing Street — said there was a threat that any EU member state that agreed to delay Brexit would be guilty of “hostile” interference in British politics.

DEMETRI SEVASTOPULO AND LAUREN FEDOR IN WASHINGTON

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he House committees leading the Ukraine-related impeachment inquiry into Donald Trump have subpoenaed Gordon Sondland, US ambassador to the EU, to appear before Congress after the state department ordered him not to testify on Tuesday.

The heads of the Democraticcontrolled committees — intelligence, oversight and foreign affairs — accused the Trump administration of obstructing their investigation by preventing Mr Sondland from appearing for a deposition and also blocking him from providing the committees with messages on a personal device.

“We consider this interference to be obstruction of the impeachment inquiry,” the committee heads said. “We will be issuing subpoena to ambassador Sondland for both his testimony and documents.”

Mr Sondland, a former hotelier and Trump fundraiser, had been scheduled to appear Tuesday before the House committees lead-

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ing the impeachment inquiry. But his lawyer, Robert Luskin, said the state department told Mr Sondland that he should not appear for a voluntary deposition.

Mr Luskin said his client was “profoundly disappointed” he would not be able to appear, but added that he “stands ready to answer the committee’s questions fully and truthfully”.

Mr Trump said on Twitter that he “would love to send” Mr Sondland to testify, but that “he would be testifying before a totally compromised kangaroo court”.

Adam Schiff, the Democrat who heads the House intelligence committee, said the text messages and emails from Mr Sondland’s “personal device” that were being withheld by the state department were “deeply relevant” to the inquiry.

“By preventing us from hearing from this witness and obtaining these documents, the president and secretary of state are taking actions that prevent us from getting the facts needed to protect the nation’s security,” Mr Schiff added.

The Democratic-controlled House committees have proceeded rapidly with an investiga@Businessdayng

tion that most experts believe will lead to articles of impeachment being brought — and passed — against Mr Trump. The president is banking on Republicans senators defending him during a potential trial in the Senate.

Most Republicans have so far refused to criticise Mr Trump over his July phone call with his Ukrainian counterpart, in which he encouraged President Volodymyr Zelensky to investigate Joe Biden — a frontrunner for the Democratic presidential nomination — and the local business activities of his son Hunter.

Republican lawmakers defended the state department’s decision, echoing Mr Trump’s criticisms of Mr Schiff. Jim Jordan, the Republican congressman from Ohio, said Mr Schiff was running an “unfair and partisan process”.

The House committees are also looking into why Mr Trump withheld $391m in congressionally authorised military aid to Ukraine and whether he used the funds as a bargaining chip to urge Mr Zelensky to find dirt on the Bidens, in a move critics have said would amount to foreign interference in the US election.

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China state broadcaster and Tencent stop airing pre-season NBA games Controversy over team official’s tweet backing Hong Kong protests extends to league CHRISTIAN SHEPHERD, SHERRY FEI JU AND TOM MITCHELL IN BEIJING

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hina’s state broadcaster CCTV, the main television distributor of the NBA in the country, and Tencent have halted plans to air the basketball league’s preseason games, in a sharp escalation of a row sparked by a team official’s support for the Hong Kong protests.

Daryl Morey, general manager of the Houston Rockets, posted “stand with Hong Kong” on his Twitter account last Friday.

The phrase echoed a slogan from demonstrations that have plunged the Asian financial hub into political crisis.

Amid angry calls for an apology from Chinese fans and state media, the Rockets’ commercial partners have suspended business dealings with the team, broadcasters said they would not air Rockets’ games and Alibaba’s Taobao, China’s largest ecommerce platform, halted sales of the team’s merchandise.

The NBA had attempted to distance itself from the incident, releasing a statement calling Mr Morey’s tweet “regrettable”. Fuelling accusations that the league was trying to have it both ways, however, a Chinese-language version of the statement used a harsher phrasing that was closer in tone to that used by Chinese officialdom. The league said on Tuesday that there should have been “no discrepancy” in the two statements.

The NBA’s response drew bipartisan criticism from US politicians who alleged the league had abandoned its values to maintain Chinese business deals.

Comments by NBA commissioner Adam Silver in an interview with Japan’s Kyodo news on Monday reignited the controversy and prompted CCTV’s decision. Mr Silver voiced his support for Mr Morey’s “freedom of political expression” and also backed an open letter by Joe Tsai, Brooklyn Nets owner and co-founder of Chinese tech group Alibaba, which said the tweet supported a “separatist movement”.

Mr Silver tried to clarify further in a statement on Tuesday: “It is inevitable that people around the world — including from America and China — will have different viewpoints over different issues.

It is not the role of the NBA to adjudicate those differences.

“However, the NBA will not put itself in a position of regulating what players, employees and team owners say or will not say on these issues. We simply could not operate that way.”

CCTV said in a statement that it strongly opposed Mr Silver’s support for Mr Morey’s com-

ments. “Any remarks that touch upon a nation’s sovereignty and social stability are outside the scope of free speech,” the broadcaster wrote in a statement. It added that it will “immediately take stock of all co-operation and exchange with the NBA”.

Last season, almost 500m Chinese watched NBA games on streaming platforms owned by Tencent. This year, the league extended its online rights deal with the tech company for five years worth $1.5bn, double the value of its previous contract.

The Chinese government joined in the sharp criticism of the NBA on Tuesday.

“If you go against the opinion of the Chinese public you will not be successful,” a Chinese foreign ministry spokesman said.

“The NBA has been [active] in China for a very long time,” he added. “The prerequisite for its co-operation and communication with China is to know the opinion of the Chinese public . . . The NBA knows clearly what to do and what to say next.”

The announcements come after a number of Chinese celebrities had said they would boycott NBA events in the country, including a fan evening in Shanghai on Wednesday and an exhibition game the following day between the Los Angeles Lakers and Brooklyn Nets. Both events would normally draw large crowds.

Among those vowing not to attend were actors Wu Jinyan and Zheng Yunlong and singer Fan Chengcheng. In a statement on Weibo, the Chinese microblogging platform, boy band Unine apologised to their fans for dropping out of the event, but explained that they could not attend because all members “oppose any kind of action or remark that attempts to split the motherland”.

The visit to China by Mr Silver, which included pre-season games in Shanghai and Shenzhen, is part of the NBA’s efforts to maintain its dominant position in China according to John Wolohan, a professor of sports management at Syracuse University.

“The one thing that cannot be understated is how much people under 40 in China love the NBA,” Mr Wolohan wrote in an email.

“The NBA and the Houston Rockets are not going to take down [or change] the Chinese government.

So, they can either stay in China and increase their brand, or they can take a stand [over free speech].”

The loyalty of China’s basketball fans, however, could help the league ride out the controversy, given the NBA remains “streets ahead” of the country’s domestic basketball competition, according to Beijing-based sports analyst Mark Dreyer. “If you boycott the NBA, what are you left with?” he asked. www.businessday.ng

Zimbabweans carry food donated by aid organisations. Drought, corruption and economic mismanagement have generated widespread shortages and hunger © AFP

Drought and mismanagement push Zimbabwe to brink of famine

Country risks ‘marching towards starvation’ as food shortages mount, UN warns JOSEPH COTTERILL IN HARARE

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siga market in Harare’s most densely populated suburb should be bustling with customers buying maize meal, cooking oil and other staples.

Yet these days Tsiga, in the Zimbabwean capital’s Mbare district, is an increasingly empty and unhappy place. Traders say there are ever fewer buyers for goods that have surged in price, amid rising desperation over an economic crisis in the southern African nation that is threatening to morph into famine.

“Things are tough. People are saying it’s too hard to survive,” said Chengetai Takaindisa, a vendor, as she scrabbled for business. “[Customers] have to survive on one meal a day.”

Zimbabwe is already grappling with its worst economic crisis since the 2017 army coup that overthrew Robert Mugabe,

the former dictator who died last month. Under his successor, President Emmerson Mnangagwa, and his ruling Zanu-PF party, the population has suffered daily power cuts, long fuel queues and currency chaos.

Now the country is also facing serious food shortages. The UN World Food Programme warned in August that it risked “marching towards starvation” next year.

According to international estimates, 8.5m people — more than half the population — face uncertain food supplies by early 2020. Underlining the severity of the crisis, the number includes 3m people in cities, a contrast with previous food shortages, which mostly affected rural areas. Mr Mnangagwa’s government has begun buying grain abroad but it is in a race against time and has few financial resources.

Natural disasters are part of the explanation. Like other nations in the region, Zimbabwe was struck

this year by two powerful cyclones that damaged farmland. A severe dry season, which peaked in August, compounded the damage and decimated the grain harvest.

But economic mismanagement has exacerbated the crisis, say analysts. “What makes it worse is that macroeconomic conditions are very bad at the moment,” said Wandile Sihlobo, chief economist at South Africa’s Agricultural Business Chamber.

Buying power has collapsed as the new local currency, the Zimbabwe dollar, has more than halved in value since it was introduced earlier this year. Annual inflation hit 289 per cent in August, according to economists’ calculations based on official data. Urban dwellers who buy food rather than grow it are especially affected.

“Prices go up each and every day,” Ms Takaindisa said. Her own daily takings of about Z$50 ($3.30) would barely cover the cost of two bottles of cooking oil.

Cormart to expands caustic soda business in Nigeria

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ormart Nigeria Ltd., a leading chemical and food raw materials Company and a member of Tropical General Investments (TGI) Group has announced its plans to further increase investment in the production, warehousing and logistics operation of its liquid caustic soda.

Martin Middernacht, the executive director, Cormart Nigeria Ltd. explained that the investments in these areas are major steps towards accomplishing the company’s vision to be the market leader in manufacturing and sales of specialty chemicals.

The Caustic soda plant, located at Cormart’s factory along LagosIbadan expressway, is currently undergoing expansion. The plant services food and beverage, brewer-

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ies, soap and detergent, oil and gas, pharmaceutical, steel and mining, paper, pulp and other industries.

Johannes Flosbach, the general manager, Cormart Nigeria Ltd, also confirmed that the investment in logistics included three 30-tonne tankers to aid in the transportation of ready-to-use caustic soda. “We take extra precautions considering the corrosiveness of caustic soda.

Our tankers have a tank-within-atank container which extends the margin of safety,” said Flosbach while expressing the company’s passion for quality and safety in its business processes.

Okoh Jonah, the technical sales manager, Cormart Nigeria Ltd., said that caustic soda is one of the most widely used chemicals in the industry. “Our liquid caustic soda is available for various industries @Businessdayng

at a very competitive price with great quality. We also sell caustic flakes and pearls”, he said.

Since its inception in 1981, Cormart Nigeria Ltd has been at the forefront of production, importation, stocking and distribution of chemicals and other raw materials. It provides premium products and services across the paint, confectionaries, cosmetics, pharmaceutical, food and beverage industries.

With cutting edge and cost effective products and solutions, Cormart represents the business interests of top multinational companies who wish to do business in Nigeria. Cormart is committed to the continuous increase of local production and expansion of product lines to meet emerging market demands.

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Weak auction shakes Japan’s bond market from its slumber Demand lowest in three years as investors prepare for policy shift from central bank LEO LEWIS AND ROBIN HARDING IN TOKYO AND TOMMY STUBBINGTON IN LONDON

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or years, Japan’s giant government bond market has slumbered on the edges of global finance. Dominated by the country’s central bank, prices rarely budge, leaving traders with little to do.

But at the start of this month, a sale of 10-year debt failed to stir the usual interest from investors in the ¥1.1 quadrillion ($10.3tn) market. Unnerved by new plans at the central bank to shift to buying more shorter-term debt, some private buyers stayed away, making it the worst auction in terms of demand since 2016.

Japanese government bonds, JGBs, stumbled, sending ripples through other markets including US Treasuries and even, briefly, UK gilts.

Behind the drop in demand was a rethink by economists and investors about the next steps for the Bank of Japan ahead of its meeting on October 31, as policymakers fret about the health of the global and domestic economy.

One option for the BoJ is simply to cut interest rates and accept the dent to profitability at the nation’s commercial banks, which have chafed against further easing measures. Alternatively, the BoJ could go further with its rejig of bond purchases. Analysts are increasingly shifting towards the second view and bracing themselves for what could be one of the central bank’s most market-moving meetings in recent years.

A graphic with no description “JGBs remain in the eye of the storm and will continue to influence the direction of global rates,” said Priya Misra, head of global rates strategy at TD Securities.

Poor economic data and a rise in the country’s consumption tax are likely to keep propping up debt prices, she said.

Still, the lacklustre auction on October 1 reflected expectations that the BoJ could pull back more forcefully on its massive purchases of long-term JGBs, which have underpinned the past six years of market action.

Its aim is to push long-term debt yields further above short-term interest rates — an effect known as steepening the yield curve that is crucial to the health of the country’s banking system and the returns of its massive public sector pension fund.

The ensuing sell-off demonstrated markets’ acute sensitivity to central banks’ support. But its fleeting nature highlights the challenge the BoJ faces in pushing up longer-term yields in a world where investors are anticipating rock-bottom interest rates — in Japan and beyond — as far as the eye can see.

The BoJ tweak came on the same day as a rise in the country’s consumption tax that many economists expect will knock the fragile growth of the Japanese economy.

Last week, fresh data showed a sharp jump in department store sales in September. But traders and analysts were not encouraged, instead taking the data as evidence that consumers rushed to the shops to bring forward their purchases of big-ticket items ahead of the longdelayed rise in VAT from 8 per cent to 10 per cent on most goods. Data on supermarket turnover from the first week of October was none too encouraging, either.

Some economists fear that the tax rise could be burdensome enough to push the world’s thirdbiggest economy into a technical recession.

Vodafone to close 1,000 shops across Europe UK telecoms group to slash store portfolio by 15% as it overhauls high street activity NIC FILDES IN DÜSSELDORF AND JONATHAN ELEY IN LONDON

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odafone is to shut 1,000 shops as part of an overhaul of its retail estate.

The telecoms company operates 7,700 stores across Europe but wants to change its role on the high street to reflect changing consumer behaviour.

Nick Read, chief executive, said it also expected to transform roughly 40 per cent of its stores. That could involve upgrading existing shops to larger formats or downgrading them to kiosk-like “click-and-collect” outlets where consumers can pick up pre-ordered items.

He said 15 per cent of the company’s stores would shut within two years as a result of the overhaul.

“If you believe 40 per cent of your transactions are going to be digital, then how does that impact why some-

one goes to a store? The journeys and purpose of the stores changes,” he said.

The plans will not, however, reduce the number of stores in the UK. Vodafone’s UK arm said last month it would spend £5.5m opening 24 new franchise stores, creating 100 jobs, with another 50 due to be opened next year. It has 400 stores in the UK. Although independent mobile phone retailers, including Carphone Warehouse and the collapsed Phones4u chain, have struggled as customers shift to buying handsets online or direct from the manufacturer, there has been little sign so far of the networks themselves shutting the thousands of stores they operate.

One former telecoms executive said the profitability of stores was likely to have declined in recent years, but they were still an important customer service channel, giving the networks an opportunity to market services such as home broadband and more expensive calls packages. www.businessday.ng

Kristalina Georgieva: ‘We have spoken in the past about the dangers of trade disputes. Now, we see that they are actually taking a toll’ © Getty

IMF chief asks staff to examine consequences of negative rates Kristalina Georgieva urges countries to wield monetary policy wisely amid ‘synchronised slowdown’ JAMES POLITI IN WASHINGTON

K

ristalina Georgieva, the IMF’s managing director, has asked staff to look more closely at the risks of negative interest rates for the world economy, urging countries to use monetary policy “wisely” in the face of a “synchronised slowdown” in global growth.

In a phone interview with the Financial Times, Ms Georgieva, the 66-year-old Bulgarian economist who became IMF chief on October 1, said the fund would “accelerate” its work on the pitfalls of negative interest rates as one of its first steps under her leadership.

“Obviously if we were to be going through a more prolonged period of low to negative interest rates we ought to more seriously think about the consequences, as well as what an exit strategy might look like,” she said.

Ms Georgieva’s comments to the FT came as she offered a downbeat assessment of the world economic outlook, which has been buffeted by political risk and rising trade tensions, in a speech in Washington on Tuesday. The IMF in July predicted that world growth would slow to a

rate of 3.2 per cent this year before rebounding to 3.5 per cent in 2020, but Ms Georgieva said there would be “downward revisions” to the figures for both years when the fund releases a new set of forecasts next week.

“In 2019, we expect slower growth in nearly 90 per cent of the world,” Ms Georgieva said in her speech. “The global economy is now in a synchronised slowdown.”

Ms Georgieva said trade tensions — which have increased since Donald Trump become US president in 2017 — have put a significant drag on the global economy. By 2020, losses from trade uncertainty — including the secondary effects on confidence stemming from tariffs — would reach $700bn, equivalent to the value of Switzerland’s economy, Ms Georgieva noted.

“We have spoken in the past about the dangers of trade disputes.

Now, we see that they are actually taking a toll,” Ms Georgieva said, adding that in additional to stagnant global trade, the decoupling of the major economies was also a growing concern.

“The current rifts could lead to changes that last a generation — broken supply chains, siloed trade

sectors, a ‘digital Berlin Wall’ that forces countries to choose between technology systems,” she warned.

Ms Georgieva said there was now sufficient evidence that “nobody wins” from trade disputes. “Some lose more than others,” she said.

The IMF has called on central bank to pursue loose, or accommodative, monetary policy in the face of the slowdown if they needed a dose of stimulus, but Ms Georgieva acknowledged they were grappling with their mandates under “difficult circumstances”.

“They should communicate their plans clearly, remain data dependent, and where appropriate keep interest rates low. Especially since inflation is still subdued in many countries and overall growth is weakening,” she said in her speech.

However, in both her speech and comments to the FT, Ms Georgieva noted that there could be unintended consequences as central banks push interest rates deeper into negative territory.

Ms Georgieva suggested the IMF would be exploring the “search for yield” that was driving funds and companies towards riskier investments, as well as the distributional impact of low and negative interest rates.

HKEX abandons £32bn bid for LSE after charm offensive fails Hong Kong stock exchange says pursuing bid is not in its shareholders’ interest DANIEL SHANE AND ALICE WOODHOUSE IN HONG KONG AND PHILIP STAFFORD IN LONDON

H

ong Kong Exchanges and Clearing has abandoned its £32bn offer for the London Stock Exchange Group, ending its attempt to create a global capital markets operator and break up the LSE’s rival deal for Refinitiv.

The Hong Kong bourse said on Tuesday that it was “disappointed” it had not convinced the LSE’s management over its plans, which it submitted a month ago.

Its cash-and-shares offer

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amounting to £83.61 per share was based on the LSE giving up its agreed deal to buy Refinitiv, the data and trading group, for $27bn. However, the LSE flatly rejected its rival and its shareholders were unmoved by a three-week charm offensive Hong Kong launched to persuade them.

Charles Li, chief executive of HKEX, said the board had concluded an offer was not in the best interests of its own shareholders. “We only regret the chances we didn’t take,” he said in a blog post. “We believe the strategic rationale for the combination of our two businesses is compelling.”

In response, the LSE said it remained committed to its purchase @Businessdayng

of Refinitiv and expected to post a circular to shareholders in the coming weeks, and then hold a vote in November.

Shares in HKEX, which had until the end of Wednesday to make a formal bid, gained 2.3 per cent in Hong Kong on Tuesday. LSE shares dropped 6 per cent to close at £70.02.

Chris Turner, an analyst at Berenberg in London, said HKEX’s decision to pull the plug was not a huge surprise. “Investors were asking them to sweeten the bid to £95 and upwards, yet even a simple merger model showed that was not possible.

They simply didn’t have the financial ability to do what investors were demanding.”

50

Wednesday 09 October 2019

BUSINESS DAY

FT

ANALYSIS

Brexit is a journey without end for Britain No majority exists for any deal option with the EU. Brexiters are as much to blame as Remainers MARTIN WOLF

I

n 1933, Joseph Goebbels stated that, “The modern structure of the German State is a higher form of democracy in which, by virtue of the people’s mandate, the government is exercised authoritatively while there is no possibility for parliamentary interference, to obliterate and render ineffective the execution of the nation’s will.” It is a measure of how far the UK has fallen that Boris Johnson, the prime minister, often sounds rather like this.

Mr Johnson sought to prevent “parliamentary interference” in Brexit negotiations, by proroguing (or suspending) it for five crucial weeks. He dissented from the Supreme Court’s unanimous decision that this was unlawful. He has suggested he could ignore the Benn Act requiring him to seek an extension to the Article 50 deadline, should he not achieve a deal. He condemned this legislation as the “surrender act”.

Worst of all, he plans to frame the next election as a battle of “people versus parliament”.

How did the UK reach a position in which its prime minister regards parliament as an obstacle to be ignored? The simple answer is that it decided to insert a particularly ill-considered referendum on an exceptionally contentious subject into a parliamentary system. This created conflicting sources of legitimacy. Worse, the meaning of the option that won a small majority

in that referendum was ill-defined.

“Brexit means Brexit” is perhaps the silliest sentence ever uttered by a British prime minister. But it was also all that could be said.

Contrary to what Brexiters insist, parliamentary involvement is not an unwarranted intrusion. Any referendum requires legislation.

This one also required negotiation and agreement. Alas, no majority exists for any option for a deal with the EU. Brexiters are as much to blame for this as Remainers.

Consequently, “no deal” has emerged as the fallback position.

But the Leave campaign said essentially nothing about a no-deal exit. There is no mandate for what every informed observer, including the civil service, knows would be a disruptive and costly result. It would also be just the beginning of negotiations, not their end. But those talks would occur in worse circumstances. There would be pervasive economic uncertainty.

This would be a mad choice. Governments exist to help their countries, not harm them deliberately.

Among the most important reasons for this outcome is the refusal, especially on the Brexit side, to try to understand the EU. They needed to comprehend that the EU is an existential project for its members, not just a trade deal. Application of European law, under the European Court of Justice, is a central part of that project. The EU, with 27 remaining members, was also sure to be an inflexible counterparty.

Trump ethanol plan fails to cheer biofuel markets Reforms are aimed at Midwestern states crucial to president’s re-election prospects GREGORY MEYER IN NEW YORK

T

he US ethanol industry sounded elated last week when the Trump administration unveiled longsought reforms to shore up biofuel demand, but the reaction in the markets has been less enthusiastic.

The price of compliance credits used in ethanol markets has fallen since Friday’s announcement by the Environmental Protection Agency, reflecting questions about the details and doubts it could drive greater sales, analysts said.

Most petrol sold in the US contains about 10 per cent ethanol. The commodity is of huge economic importance in Midwestern US states, where more than a third of the corn crop is sold to ethanol plants. These states, in turn, are crucial to Donald Trump’s re-election prospects in 2020.

Mr Trump’s EPA on Friday announced a plan to push ethanol demand to 15bn gallons a year — the level required by a congressional mandate — in 2020 after previously punching holes in the mandate by giving exemptions to dozens of oil refiners.

If successful, the plan would soften the impact of the exemptions

on ethanol demand, pushing up the price of credits that oil refiners purchase to meet blending requirements. The credits are formally known as Renewable Identification Numbers, or Rins.

But after Friday’s announcement, the Rin credits “have been falling off a cliff ”, said Denton Cinquegrana of Opis, a fuel price information service.

Opis reported the average price of ethanol Rins was 20 cents a gallon on Monday, down 16 per cent from Thursday and close to the average price of 2019. The drop reflected “disappointment” in the proposal, said Bill Lapp of Advanced Economic Solutions, a consultancy.

The price of ethanol swaps was $1.485 a gallon in Chicago on Monday, down 2.3 per cent from Thursday. Corn futures also settled at $3.87 a bushel, slightly lower than Thursday.

The EPA this week plans to formally propose the expanded biofuel requirements, according to an agency official. In its announcement last week, the EPA said that it would “seek comment on actions to ensure that more than 15bn gallons of conventional ethanol be blended into the nation’s fuel supply beginning in 2020”. www.businessday.ng

After 14 years, is Bolivia falling out of love with Evo Morales?

As he runs for a fourth term, the president has been accused of growing more autocratic ANDRES SCHIPANI IN ORINOCA

A

t Bolivia’s largest museum, perched on a hill in an isolated Andean village, one item stands out. It is a replica of a makeshift football covered in white cloth that Bolivia’s President Evo Morales used to play with as a small child, in between school lessons and herding llamas on the chilly plateau.

The $7.2m museum is dedicated to explaining the extraordinary rise of Mr Morales — Latin America’s longest-sitting president — from a childhood being raised in a hut on the breezy shores of Lake Poopó to spending nearly 14 years as president. He now runs the country from a 25-storey presidential palace he built in the capital La Paz. Mr Morales was one of a generation of leftwing leaders who came to power in the first decade of the century and surfed the wave of the China-led commodities boom to push more redistributive policies.

The bright hopes that many of his peers raised have since been dashed. In Brazil, former president Luiz Inácio Lula da Silva is in jail after being convicted of corruption and the economy has suffered a traumatic fall. The unravelling of Hugo Chávez’s revolution in Venezuela has led to one of the biggest peacetime economic collapses.

Bolivia, however, has continued to prosper, even after commodity prices fell. During Mr Morales’s time in office, the country’s gross domestic product has quadrupled.

“I would never vote for anyone else,” says Walter Vilca, a quinoa and potato farmer from Orinoca, standing outside the wattle-anddaub hut where his “brother president” grew up.

He adds that Mr Morales has brought stability to a once-divided country — Bolivia’s presidency had five office-holders in the five years before he took office. Mr Morales also produced tangible improve-

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ments in the day-to-day lives of poor Bolivians like himself, fuelling a new sense of dignity.

“I played with a cloth ball like him. Now, we have a football pitch with synthetic grass here, and food every day,” says Mr Vilca. “We have all we need.”

But as he prepares to run on October 20 for an unprecedented fourth term as president — after what critics believe was a bungled attempt to get around constitutional term limits — Mr Morales faces a series of profound questions.

There are warning signs that the strong economic run could be running out of steam — last year’s 4.2 per cent rise in GDP, according to government statistics, was partly the result of an unsustainably high budget deficit. And in a country where many young people only remember him as president, the 59-year-old leader is facing growing criticism that he is becoming autocratic.

Opponents say he holds sway over the courts and accuse members of his government of corruption.

With no named heir-apparent, some allies worry about a cult of personality around Mr Morales — the sort of uncritical admiration that finds expression in expensive museums and shiny presidential palaces.

“Politics is not a profession, it is a lasting passion for the people,” Mr Morales tells the Financial Times, adding that “it is a request from the Bolivian people” that he runs again. “People tell me, ‘Evo, if you do well, we’ll do well’.”

Comments like these have alienated a section of the president’s support. While political opponents warn about the risks to Bolivia’s democracy. “If we continue with Señor Morales as president, we will go from authoritarianism to dictatorship,” says Carlos Mesa, a former president and his main election challenger.

“Bolivia is not on the path to becoming Venezuela,” says a foreign diplomat in La Paz. “But its democratic credentials are definitely @Businessdayng

being tested.”

Mr Morales is ethnically an Aymara — one of Bolivia’s main groups, which make up roughly two-thirds of its 11m population.

He was the first indigenous president of a country traditionally ruled by members of the small group of white citizens or the larger minority of mestizo Bolivians, whose ancestry includes Europeans and indigenous people. Until Mr Morales took office, the indigenous majority were often treated as second-class citizens.

It was his connection to the rural poor, those such as Mr Vilca, that secured his first presidential term with 54 per cent of the vote.

He built on that to win again in 2009 with 64 per cent of the vote after the constitution was changed to allow immediate re-election. In 2014, he had the support of 61 per cent of voters.

Those victories were built on a strong economy. The commodity price boom that began in 2003 lifted Bolivia and much of the rest of the region. Yet while neighbours Argentina and Brazil struggled after commodity prices started to fall in 2014, Bolivia has grown at an average of 4.9 per cent a year between 2006 and 2018. The IMF forecasts the Andean nation’s GDP will grow 4 per cent this year, which would once again be the fastest rate in South America.

Unlike other members of Latin America’s “pink tide” of leftwing governments, where economic mismanagement has undermined many of the earlier gains, Bolivia has run prudent macroeconomic policies for much of Mr Morales’s presidency. His government has been more adept than most in the region at managing the commodities windfall.

In gas and mineral-rich Bolivia, the basis of Mr Morales’s economic model — which critics dub a form of “state capitalism”— was to renationalise resources and redistribute tax receipts in order to fuel internal consumption.

Wednesday 09 September 2019

BUSINESS DAY

Live @ The STOCK Exchanges

51

Prices for Securities Traded as of Tuesday 08 October 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 254,148.36 7.15 0.70 171 2,282,200 UNITED BANK FOR AFRICA PLC 203,486.56 5.95 -1.65 171 5,260,727 ZENITH BANK PLC 565,136.89 18.00 1.11 546 60,916,021 888 68,458,948 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 190,245.05 5.30 -0.94 197 6,564,252 197 6,564,252 1,085 75,023,200 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,615,554.93 128.50 -1.15 59 567,246 59 567,246 59 567,246 BUILDING MATERIALS DANGOTE CEMENT PLC 2,571,412.57 150.90 - 33 62,294 LAFARGE AFRICA PLC. 257,724.73 16.00 0.31 66 434,537 99 496,831 99 496,831 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 304,225.84 517.00 - 17 2,282 17 2,282 17 2,282 1,260 76,089,559 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 2 210 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 2 78 UPDC REAL ESTATE INVESTMENT TRUST 13,074.52 4.90 - 0 0 4 288 4 288 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 4 288 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 52,417.35 54.95 - 4 173 PRESCO PLC 40,350.00 40.35 - 2 3,073 6 3,246 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,290.00 0.43 - 5 18,772 5 18,772 11 22,018 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 688.30 0.26 - 0 0 JOHN HOLT PLC. 214.03 0.55 - 0 0 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 40,647.99 1.00 1.00 53 4,630,376 U A C N PLC. 20,169.08 7.00 -1.41 88 2,159,089 141 6,789,465 141 6,789,465 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 24,486.00 18.55 - 4 8,999 ROADS NIG PLC. 165.00 6.60 - 0 0 4 8,999 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,884.22 1.11 -1.77 10 343,911 10 343,911 14 352,910 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 8,142.68 1.04 -9.57 5 136,370 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 71,187.44 32.50 -1.22 43 227,738 INTERNATIONAL BREWERIES PLC. 108,307.86 12.60 - 11 2,495 NIGERIAN BREW. PLC. 399,845.10 50.00 - 84 1,176,238 143 1,542,841 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 111,500.00 22.30 -0.67 43 892,078 DANGOTE SUGAR REFINERY PLC 122,400.00 10.20 -2.86 62 484,252 FLOUR MILLS NIG. PLC. 61,505.69 15.00 - 52 240,902 HONEYWELL FLOUR MILL PLC 7,850.90 0.99 - 19 236,439 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 39,344.16 14.85 10.00 34 3,397,129 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 210 5,250,800 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,500.29 9.85 - 29 84,788 NESTLE NIGERIA PLC. 974,967.19 1,230.00 - 31 196,808 60 281,596 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,878.29 3.90 - 36 374,750 36 374,750 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 27,793.34 7.00 - 9 31,120 UNILEVER NIGERIA PLC. 153,391.64 26.70 - 24 46,858 33 77,978 482 7,527,965 BANKING ECOBANK TRANSNATIONAL INCORPORATED 139,456.59 7.60 - 34 291,478 FIDELITY BANK PLC 47,518.67 1.64 0.61 92 5,154,497 GUARANTY TRUST BANK PLC. 785,812.49 26.70 0.56 240 27,892,777 JAIZ BANK PLC 13,848.20 0.47 -6.38 10 579,000 STERLING BANK PLC. 56,141.32 1.95 - 13 337,979 UNION BANK NIG.PLC. 203,845.27 7.00 - 41 265,661 UNITY BANK PLC 7,364.28 0.63 - 20 111,935 WEMA BANK PLC. 22,373.19 0.58 -7.94 32 1,762,301 482 36,395,628 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,643.24 0.67 -1.47 18 403,050 AXAMANSARD INSURANCE PLC 17,535.00 1.67 - 9 25,514 CONSOLIDATED HALLMARK INSURANCE PLC 2,276.40 0.28 - 0 0 CONTINENTAL REINSURANCE PLC 23,857.31 2.30 1.32 21 986,400 CORNERSTONE INSURANCE PLC 5,302.62 0.36 - 2 20,967 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,123.80 0.29 3.57 13 1,467,239 LAW UNION AND ROCK INS. PLC. 1,890.39 0.44 - 1 45,438 LINKAGE ASSURANCE PLC 4,080.00 0.51 - 1 200 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 8 2,020,000 NEM INSURANCE PLC 12,145.16 2.30 - 4 4,899 NIGER INSURANCE PLC 1,702.69 0.22 - 0 0 PRESTIGE ASSURANCE PLC 2,637.45 0.49 - 0 0 REGENCY ASSURANCE PLC 1,333.75 0.20 - 1 137,500 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 3 108,500 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 1 1,000 WAPIC INSURANCE PLC 4,683.96 0.35 -5.41 45 2,789,617 127 8,010,324

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MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,743.97 1.20 9.09 13 540,018 13 540,018 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,158.00 0.99 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,796.93 1.39 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 8,000.00 4.00 3.36 36 791,163 CUSTODIAN INVESTMENT PLC 35,291.19 6.00 - 4 4,175 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 31,684.34 1.60 -0.62 79 37,335,549 ROYAL EXCHANGE PLC. 1,080.53 0.21 - 1 658 388,041.40 37.05 - 23 140,540 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 12,900.00 2.15 3.37 59 2,231,962 202 40,504,047 824 85,450,017 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 852.75 0.24 - 1 274,223 1 274,223 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,615.21 3.65 - 5 75,700 GLAXO SMITHKLINE CONSUMER NIG. PLC. 8,490.72 7.10 - 18 117,410 MAY & BAKER NIGERIA PLC. 3,450.47 2.00 - 12 128,819 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 873.61 0.46 - 8 166,357 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 43 488,286 44 762,509 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 -9.09 4 1,111,354 4 1,111,354 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 534.60 4.95 - 0 0 292.02 0.59 - 0 0 TRIPPLE GEE AND COMPANY PLC. 0 0 PROCESSING SYSTEMS CHAMS PLC 1,127.05 0.24 -7.69 17 5,046,542 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 0 0 17 5,046,542 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,157,510.66 308.00 - 5 65 5 65 26 6,157,961 BUILDING MATERIALS BERGER PAINTS PLC 2,173.68 7.50 - 7 9,510 CAP PLC 17,885.00 25.55 - 11 28,170 CEMENT CO. OF NORTH.NIG. PLC 199,781.21 15.20 - 24 75,987 MEYER PLC. 313.43 0.59 - 0 0 1,769.32 2.23 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 42 113,667 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,818.12 1.60 - 16 100,070 16 100,070 PACKAGING/CONTAINERS BETA GLASS PLC. 26,898.49 53.80 - 3 3,862 GREIF NIGERIA PLC 388.02 9.10 - 0 0 3 3,862 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 61 217,599 CHEMICALS B.O.C. GASES PLC. 2,547.42 6.12 - 2 3,000 2 3,000 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 83.60 0.38 - 1 880 1 880 3 3,880 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 2 52,000 2 52,000 INTEGRATED OIL AND GAS SERVICES OANDO PLC 44,753.08 3.60 - 49 999,439 49 999,439 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 53,332.04 147.90 5.64 12 19,980 CONOIL PLC 10,686.86 15.40 - 20 71,647 ETERNA PLC. 4,108.06 3.15 - 5 28,650 FORTE OIL PLC. 20,448.95 15.70 6.08 34 141,236 MRS OIL NIGERIA PLC. 5,166.13 16.95 - 3 5,800 TOTAL NIGERIA PLC. 41,829.09 123.20 - 25 18,572 99 285,885 150 1,337,324 ADVERTISING AFROMEDIA PLC 1,820.01 0.41 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 294.09 0.25 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,387.46 4.05 - 10 90,020 TRANS-NATIONWIDE EXPRESS PLC. 361.01 0.77 - 0 0 10 90,020 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,723.78 3.05 - 0 0 IKEJA HOTEL PLC 2,452.98 1.18 - 5 236,400 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 41,042.18 5.40 - 0 0 TRANSCORP HOTELS PLC 5 236,400 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 211.68 0.35 - 1 10,000 LEARN AFRICA PLC 786.88 1.02 -8.93 12 388,095 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 496.12 1.15 - 6 36,682 19 434,777 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 629.93 0.38 2.70 4 123,634 4 123,634

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BUSINESS DAY Wednesday 09 October 2019 www.businessday.ng

AC Milan and Elliott: The hedge fund trying to crack Italian football

The feared fund has made one of its most high-profile and risky investments in the Italian club Murad Ahmed, Arash Massoudi, in Milan and John Burn-Murdoch in London

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t was October 2018 and Paolo Maldini found himself locked in a debate about money with Gordon Singer. The former captain of AC Milan and Italy wanted the head of the London office of Elliott Management, the $38.2bn hedge fund founded by his US billionaire father Paul, to open his cheque book.

Earlier that year, in an audacious move that even Elliott executives consider its most highprofile venture since fighting the government of Argentina over its sovereign debts, the hedge fund gained control over the seven-time European club football champions.

At Milanello, the Italian team’s country retreat-cum-training ground, Singer junior was being asked to sanction a minor transaction by Elliott’s standards: a €35m fee to acquire Brazilian forward Lucas Paquetá. But the deal broke the tight transfer budget its executives imposed on a club in dire financial trouble. Mr Maldini was among the team officials arguing it was worth gambling on a player that could change AC Milan’s fortunes.

Mr Singer relented: “Let’s do it.”

“That was something that gave us a lot of energy,” says Mr Maldini, recalling the scene. “We saw the passion also to have something nicer and more attractive and, in the end, more successful for the business.”

The discussion between the footballing legend and the London financier illustrates one of the most fascinating questions in both the sports industry and the Italian business world — can the world’s most-feared hedge fund find a formula to crack the volatile football industry?

Sensitive to the charge their ownership is a vanity project, Elliott executives say their plan for the Rossoneri — the Red and Blacks — has a clear profit motive: win matches on the pitch, raise revenues off it, all to raise the club’s value and sell for a healthy return.

So far that has been easier said, than done.

This account of Elliott’s plans for AC Milan is taken from more than a dozen interviews including with executives at the two organisations plus bankers, agents, analysts and rival club officials.

Elliott’s task is to revive a fallen giant. AC Milan last won Serie A, Italy’s top league, in 2011. It has failed to qualify for the Champions League, Europe’s most lucrative club competition, for the past five seasons. Over the past decade, its annual revenues have stagnated at around €200m, according to the consultancy Deloitte. Those at Real Madrid, the world’s highestearning club, have almost doubled to around €750m over the same period. In its heyday, AC Milan employed greats such as Marco

One of AC Milan’s latest signings, the 22-year-old Brazilian midfielder Lucas Paquetá © AFP

van Basten and Kaká. Today, it is forced to settle for more unheralded talents like Paquetá.

The stakes are equally high for Elliott. Failure at AC Milan would be a reputational blow, particularly in Italy, where the hedge fund is active in battles over the future of Telecom Italia and CNH Industrial, the tractor and truckmaker controlled by the Agnelli family, which also owns rival club Juventus.

“I think it’s going to be really hard to turn Milan round and sell it for $1bn,” says one club executive who declines to be named. “I keep thinking there must be a more obvious play here that I’m not seeing. It could be as simple as Paul Singer’s son wanted to get involved in football and they have so much money that they could just do that.”

That view is rejected by figures close to Elliott’s leadership, who point to the fund’s healthy returns to investors over many years as evidence that it does not succumb to distractions. Largely unnoticed, Elliott has also funded a complex debt deal with the owner of French club Lille, deepening its presence in the world’s favourite sport.

Yet, much depends on how the Italian team performs on the pitch.

After losing four of its opening six league fixtures the club sat 16th before victory over Genoa on Saturday moved it up the table. Last Sunday, fans watching the team beaten 3-1 by Fiorentina started chanting: “This ownership doesn’t deserve us”.

“We all saw that last year, 14 of the 16 teams that qualified for the second round of the Champions League had the highest revenues [in world football],” says Mr Maldini. “We’re not magicians. We know that.”

In April 2017, Li Yonghong, an unknown Chinese businessman,

catapulted himself to global attention by acquiring AC Milan for €740m from Silvio Berlusconi, the Italian media mogul and threetimes prime minister who had owned the club for two decades.

The takeover was funded by highinterest loans worth more than €300m from Elliott.

According to people familiar with the talks, Mr Li presented a radical plan for the club based on exploiting its large Chinese fan base. Elliott’s executives were dubious of the strategy. Further due diligence garnered limited information on the origins of Mr Li’s wealth.

Elliott calculated that either the loan, which carried annual interest of more than 11 per cent, would be repaid or a default would give it control of the club. In July 2018, Mr Li did the latter, losing around €500m in equity overnight. Elliott and AC Milan executives say they have had no further contact with the Chinese businessman. He could not be reached for comment.

Though Elliott injected a further €50m in emergency financing to shore up the club’s balance sheet, it effectively acquired AC Milan for around €400m — just over half of what the club had been valued at months earlier. Instead of “flipping” the club through a fire sale, Elliott elected to treat AC Milan as a distressed asset needing a turnround.

The first step was to hire competent managers. Elliott appointed Ivan Gazidis, who during his previous role as chief executive of Arsenal played casual football matches with Gordon Singer, as AC Milan’s new chief executive.

“It’s not an intellectually challenging business,” says Mr Gazidis. “It’s emotionally challenging . . . Fundamentally, we’re talking about a group of 23-year-old millionaires kicking a piece of

leather into a basket . . . Millions of people around the world invest their self-esteem in their ability to do that well.”

Under Mr Gazidis, the club has initiated approaches to hundreds of brands in the search for new global sponsors. In the 2017-18 season, the club made €70.2m in endorsement agreements, compared to €143m at Juventus, Italy’s highest-earning club, and €356.2m at Real Madrid.

This counts as new thinking at a club which previously had no dedicated sponsorship salespeople. “It is probably too much to call it Stone Age but [AC Milan’s] commercial team was definitely 10 years behind the Premier League and probably two, three years behind the top clubs in Italy,” says Casper Stylsvig, the club’s new chief revenue officer, and a former global sponsorship director at Manchester United.

Structural challenges remain.

Last season, Serie A teams shared €1.2bn in broadcasting revenues, €2bn less than clubs in the English Premier League. Instead, Elliott is banking on raising the value of the club by transforming Milan’s skyline.

In September, AC Milan played its city rival Inter at San Siro, the 93-year-old stadium shared by the two clubs. An hour before the match, AC Milan’s new chairman Paolo Scaroni greeted Matteo Salvini, head of the rightwing League party and a man with ambitions to become Italy’s next prime minister.

Mr Scaroni, who has run Italian energy groups Eni and Enel, is known as one of the country’s best-connected businessmen. He says Elliott hired him for tasks considered uniquely “Italian”.

Lobbying Mr Salvini, a diehard AC Milan supporter wearing his faded red and black jersey, over plans to build a new stadium, was one such

moment.

AC Milan and Inter, owned by China’s Suning retail conglomerate, are proposing to fund the €1.2bn construction costs. The new ground would be built by 2023, next to the current site, which is owned by the local municipality and faces demolition. In return, the two clubs would have a 90-year lease on the land and retain all match day revenues. The clubs estimate annual income from a new stadium would more than double from €40m today to over €100m, closer to Barcelona which earns almost €145m from match day revenues.

The San Siro decision is political, needing approval by Milan’s mayor, who will make a decision in October, and will be influenced by public opinion, hence the lobbying of key figures such as Mr Salvini.

The Milan clubs have threatened to build a stadium elsewhere if they cannot stay at the current site.

“When you have a team like Milan, you have to climb two mountains at the same time,” says Mr Scaroni, who is also deputy chairman of investment bank Rothschild. “One mountain is the economic results . . . but the other mountain is the sport results, and [they] are very much connected. If you lose all the games, your sponsorship [income] goes down, the stadium is empty and you don’t have the money to buy players.”

Elliott also needs more immediate improvements. “We want to win on the pitch,” says Franck Tuil, a senior portfolio manager. “We want the football to be attractive to our fans. We want the football results to improve in order to move toward participation in the biggest club competition, which today is the Champions League.”

Top European teams are reliant on income from the Champions League. Around €2bn was shared between participating clubs last season. But to regularly qualify, AC Milan must overcome intense domestic competition from the likes of Juventus, Inter and Roma.

To run its sporting operations, the club hired Mr Maldini as technical director and Zvonimir Boban, another former player, as chief football officer. “Our presence here is also kind of a guarantee to the fans, for the supporters that it’s not going to take 10 years to get back,” says Mr Maldini, who says anything less than a return to Europe’s top competition within three to five years would amount to total failure.

But they have also had to accept Elliott’s edict that AC Milan must avoid ageing stars and acquire young players who have higher transfer resale value.

AC Milan cannot, at the moment, outspend the opposition anyway. This season, it accepted a one-year ban from European competition in return for the authorities ending an investigation into violations of so-called financial fair play rules between 2015 and 2017.

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