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Nigeria misses out on $275m cocoa revenue as low value addition takes toll

... risks losing spot on cocoa rankings as flood, disease cut output JOSEPHINE OKOJIE

f local processors had fully processed all of Nigeria’s cocoa, the country’s secondlargest export earner after oil, into butter and cake before exporting in 2018, an additional $275 million could have been created by the players in the value chain, BusinessDay’s calculations show. Africa’s most populous nation currently ranks joint fifth with neighbouring Cameroon with 210,000 metric tonnes production in the 2016-2017 season, data from the International Cocoa Organisation (ICCO) state. For every 2.6 metric tonnes of raw cocoa beans, a processor Continues on page 38

Inside

L-R: Jamie Angus, director, British Broadcasting Corporation (BBC) World Service Group; Uche Pedro, panellist; Wole Soyinka, nobel laureate, and Festus Okoye, commissioner, INEC, during the BBC conference themed ‘Beyond Fake News’, in Abuja, yesterday. Pic by Tunde Adeniyi

Economic Intelligence Unit filters out noise in Nigeria’s democracy claims N

IHEANYI NWACHUKWU

S&P to downgrade MTN if it increases Nigeria exposure P. 2

P. 37

ig er ia’s cur rent democratic system may look impressive to the All Progressives Congressled government but that is not the same view held by the Economic Intelligence Unit (EIU). The EIU categorically tagged Nigeria’s democracy as one that

is a ‘Hybrid Regime’, characterised by “substantial irregularities that often prevent the democratic process from being both free and fair”. Another negative linked to Nigeria’s democracy is that government pressure on opposition parties and candidates is common. And in a ‘Hybrid Regime’, “corruption tends to be widespread and the rule of law is

weak. Civil society is weak. Typically, there is harassment of and pressure on journalists, and the judiciary is not independent,” the EIU said. For the first time in three years, the EIU’s latest Democracy Index assessed the global state of democracy in 2018. Surprisingly, it ranked Nigeria low on major indices used. In the “Democracy Index

2018”, titled ‘Me too? Political participation, protest and democracy’, made available to BusinessDay, the EIU used five indices – electoral process and pluralism; civil liberties; the functioning of government; political participation; and political culture. On electoral process and pluralism, Nigeria scored 6.08, functioning of government (4.64), Continues on page 38

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FEC approves public building maintenance frameworks, 4 new private universities TONY AILEMEN, Abuja

F L-R: Mahmood Yakubu, chairman, INEC; Festus Okoye; Baba Shetima Alto, and May Agbamuche-Mbu, all INEC commissioners, at a consultative meeting with media executives in Abuja. Pic by Tunde Adeniiyi

Three years after, Buhari continues to hide petroleum contracts from Nigerians ISAAC ANYAOGU

hree years into the administration of President Muhammadu Buhari, who came to power vowing to end corruption, Nigeria is yet to publish its petroleum contracts, a critical requirement to make the oil and gas sector transparent and end corruption in the sector. Petroleum contracts set out the legal framework for oil and gas projects. When they are published, it allows for public scrutiny, but previous governments have balked at disclosing them claiming it could expose company secrets, giving undue advantage to the competition and violate contract terms. However, an analysis of 23 upstream and downstream contracts in Nigeria, including 10 model contracts, by Rob Pitman and Anne Chinweze, analysts at the Natural Resource Governance Institute (NRGI), an extractive sector transparency non-profit, found that contracts in Nigeria contain several terms for which a strong public interest case can be made for disclosure. “Fiscal terms contained within contracts can have an enormous impact on public finances. In the upstream sector, exploration and production contracts and associated agreements contain clauses that dictate the amount of money that the country receives in taxes and royalties and how much oil or gas the companies must share with the government,” said the NRGI analysts in a briefing published

on its website last year. “Downstream, sales and swap agreements determine how much the country receives for the oil it sells. In 2015, for example, petroleum revenue from taxes, royalties, oil trading and other payments accounted for 53 percent of total government revenue. Of these revenue streams, oil sales made by NNPC alone accounted for 39 percent,” the analysts said. Ayodele Oni, partner at Bloomfield Law firm, said there is need to balance morality and Nigerian law. Oni cited section 5 of the Petroleum Profits Tax Act, which states: “Every person having possession of or control over any documents, information, returns or assessment lists or copies of such lists relating to tax or petroleum operations or the amount and value of chargeable oil won by any company, who at any time communicates or attempts to communicate such information or anything contained in such documents, returns, lists, or copies to any person- (a) other than a person to whom he is authorised by the Minister to communicate it; or (b) otherwise than for the purpose of this Act or of any Act or law, relating to a tax upon income, in force in any part of Nigeria, shall be guilty of an offence.” Oni said, “But I agree, the people who own the oil have a right to know the terms of the contracts their government signs with oil companies.” The Petroleum Act 1969 empowers the Minister of Petroleum Resources to award oil companies licences for exploration, prospecting

and production rights of crude oil in Nigeria. Successful companies are required to pay statutory fees – application and renewal fees, rents and royalties. Oil mining leases (OMLS) attract additional non-statutory fees, including bidding fees, data inspection fees, signature bonus and reserve value fees. Nigerians do not know what their government is getting from these deals. The Federal Government has also failed to honour commitments it made to open up these deals. In 2015, Ibe Kachikwu, minister of state for Petroleum Resources and then group managing director of the Nigerian National Petroleum Corporation (NNPC), announced that contracts would be made open to the public. One year later, Nigeria released a statement at the Anti-Corruption Summit held in London that it was “working towards full implementation of the principles of the Open Contracting Data Standard focusing on major projects as an early priority”. In 2017, Nigeria formally joined the Open Government Partnership – a multilateral initiative to strengthen governance. In the country’s first National Action Plan, Commitment 3 on fiscal transparency contains language committing to “disclose oil, gas and mining contracts in the area of exploration and production, exports, off-taking and swap on a publicly access portal in both human and machine readable formats”.

ederal Executive Council (FEC) on Wednesday approved a new maintenance policy that will drive maintenance culture in Nigeria. The new policy, known as the ‘National Public Building Maintenance Frameworks’, was announced by Babatunde Fashola, minister of Power, Works and Housing, while briefing State House Correspondents after FEC’s first meeting of the year presided over by President Muhammmadu Buhari at the Council Chambers of the Presidential Villa, Abuja. The FEC also approved the establishmentoffournewprivateuniversities thatmettherequirementsfortheestablishment of universities in the country. While unveiling the new maintenance framework, Fashola said it is a precursor to the development of a “maintenance economy” aimed at providing jobs for millions of the nation’s teeming youths currently unemployed across the country. Fashola said his ministry was also working towards developing a framework for maintenance of other government assets including roads, bridges and oil assets across the country. “We have never developed this type of maintenance economy which we are creating today. With what we have done now, we have started with a national pilot plan for inventory of our national assets and a maintenance procurement manual which will be made available to all the Ministries, Departments and Agencies of government, nationwide,” he said Fashola also announced that the award of contract for the development of basic infrastructure commitments of the Mambila power plant was also approved by FEC. He said the Council approved the first contract of over N800 million for demarcation of specific area of land for the project, leading to enumeration and resettlement preparatory to construction of the Mambilla Hydro Power Project, noting that government was targeting economic enablement with the project. “So this is the first step. Already, 129 different categories of Nigerian businesses have submitted proposals

... but offers opportunities for long-term investors CHUKA UROKO

he recent offloading of seized assets for sale on the property market by the Assets Management Company of Nigeria (AMCON) is capable of worsening the situation in the market and piling more pressure on property owners, market analysts say. They note, however, that the development also offers investment opportunities for willing buyers. The property market in Nigeria is awash with empty buildings that cut across residential, retail and commercial office segments of the

market. An unconfirmed report has it that 300,000 square metres and 200,000 square metres of residential and commercial office space, respectively, are unoccupied. In a widely advertised announcement, Tuesday, AMCON disclosed that it had properties for sale in various parts of Nigeria, including Lagos, Ogun, Rivers, Delta, Edo and Kaduna States. These are mainly residential and commercial property in highbrow locations, meaning that they belong in the sub-markets where vacancy factor is very high. In Lagos, for instance, AMCON has a property sitting on 3,709 square metres of land for sale. The property

comprises 8 units of three-bedroom apartments within the 12-storey 24unit Mulliner Apartments in Ikoyi, an upscale location in Lagos where vacancy rate is well over 30 percent. “What this means is that vacancy rate in that sub-market will rise further in the course of the year. And don’t forget that there are also some on-going projects that will be delivered into the market this year,” Yemi Madamidola, an estate manager, told BusinessDay. “AMCON properties are usually hard sell because there is something cultural about buying seized properties.”

Continues on page 38

•Continues online at www.businessday.ng

S&P to downgrade MTN if it increases Nigeria exposure SEGUN ADAMS

S AMCON’s assets sale seen deepening property market woes •Continues online at www.businessday.ng

even before we advertised. What we have done is to develop procurement guidelines for the various jobs,” he said. “Mambilla will consume 18 million bags of cements. As such, 22,500 trucks will be needed. So, look at the drivers and the diesels. Apart from the mining jobs, you need to transport them and youarelookingat900,000trucks,42,000 tonnes of steel that will be required to build this. You can see the economic impact of Mambilla,” he said. Adamu Adamu, minister of Education, also announced FEC approval of four new private universities which recently satisfied all the necessary requirements for their establishments. They include Greenfield University, Kaduna; Dominion University, Oyo; Trinity University, Ogun, and Westland at Iwo, Osun State. Hadi Sirika, minister of state for Aviation, on his part said the Council approved the contract for the procurement and installation of the second phase of controller-pilot data link communications for the Kano flight information region. Sirika said the controller-pilot data link communications, also referred to as controller pilot data link, is a method by which air traffic controllers can communicate with pilots over a datalink system. He explained that within the Kano flight information region is Abuja and Lagos airports. The total contract sum is $5,403,271 which is equivalent to N1,652,320,271.80 exclusive of 5 percent VAT. The contract is to Nigeria Airspace Management Agency. Sirika said when completed, it would improve communication by digital means between the pilot and thecontroller,improveefficiency,make decision making faster and make departuresandarrivalseamlessandfaster. Ibe Kachikwu, minister of state for Petroleum, disclosed that FEC also approvedEngineeringProcurementConstruction and Installation contract for the 12-inch by six-inch Opoho Okoho flexible pipelines in OML 119 which is awarded to Messrs National Oil Verco completion and MELCURT Nigeria Ltd, a consortium of two companies, at the total contract sum was $3.7 billion.

&P Global Ratings has warned that should MTN increase its relative exposure to Nigeria, its debt could be downgraded. The rating agency said in a statement this week, after MTN reached an agreement with Nigerian authorities over historical dividend repatriations, that it was unlikely to downgrade the network operator in the next 90 days. It also affirmed MTN’s BB+ long-term issuer credit ratings. But it could downgrade the company in the next 12 months if its debt climbed or its revenue mix shifted “materially and sustainably, leading to greater exposure to Nigeria – the lower ratedsovereignofitstwomainmarkets”. In the six months to endJune, MTN generated revenues of R17.2bn from Nigeria, versus R21.2bn from SA. The countries contribute similar levels of profitability towards the group. For now, S&P Global Ratings said MTN’s economic exposures to SA, which has a foreign currency long-

term rating of BB, slightly outweighed exposures to Nigeria, with its foreign currency long-term rating B. “There remains a two-notch difference between the potential sovereign cap and MTN’s BB+ issuer credit rating,” S&P Global Ratings said. The ratings agency also said MTN’s outlook could be revised to stable if its relative exposure to SA increased. In December, MTN said it had reached an agreement with Nigeria’s central bank, which had earlier demanded that the operator reverse payments from the country worth $8.1bn. The number was ultimately reduced to $53m. However, Nigeria’s attorneygeneral still wants MTN to pay $2bn in back taxes. MTN claims its tax affairs are up to date and the matter is expected to be heard in court on February 7. “In the event that MTN Nigeria has to pay a settlement or make a significant payment, we believe that our forecasted metrics would remain within the range for the current rating level,” S&P Global Ratings said.

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‘2018 held worst record for Nigeria auto industry’ ENDURANCE OKAFOR

igeria’s auto industry seems to be among those hit the hardest in 2018, as Vincent Ezeh, managing director, Germaine Auto Centre, a car sales and maintenance company, said so far, last year held the worst performance record for the industry. On the reasons while Nigeria’s car industry reported the poorest performance, Eze said auto market bottomed out in 2018 because of the economic performance and more specifically because people that were supposed to spend did not spend. “People that are supposed to spend were not spending; government and public sector used to be our biggest purchasers, in 2018 they were down on purchase,” Ezeh said.

This then left corporates with the number one spot of highest car purchasers in 2018, but “how many vehicles will corporates buy,” the MD asked. This is because “if a company buys vehicles this year, there is a slim chance that they are going to buy next year, but government buys every time,” he said. He said since “this administration, may be because they want to tighten their belt and all of that, but most government organisations and parastatals did not buy and so corporates became number one, which is supposed to be the other way.” This was disclosed to BusinessDay Tuesday in Lagos on the sideline of the lunch of Germaine new lube bay in partnership with Total E&P Staff Multipurpose Cooperative Society, aimed at catering for Total Upspring Company Nigeria Limited staff as well as

other corporate organisations in the vicinity. Speaking on how Germaine Auto Centre managed the challenging year, he said, “We are more innovative in the services that we provide in car maintenance, we got more creative in what we are offering, for example instead of depending on selling brand new Toyota cars, we looked at selling pre-owned vehicles at affordable rate, and that is what we have been able to do to hold ourselves and help in growing the business.” However, he is optimistic about the industry performance in 2019, saying, “We are hoping this time that people have adjusted and really see that they need these vehicles, we are already seeing signs and inquiries are coming in from different models and so we are hoping that 2019 will be better than 2019.”

World Bank raises Nigeria’s growth to 2.2% in 2019 HOPE MOSES-ASHIKE

orld Bank is expecting Nigeria’s economy to grow by 2.2 percent in 2019, assuming that oil production will recover and a slow improvement in private demand will constrain growth in the non-oil industrial sector. The current growth projection by World Bank shows a 0.1 percentage point compare to 2.1 percent forecast in June 2018. Reacting to the development, Johnson Chukwu, managing director/CEO, Cowry Asset Management Limited, said, “We have to look at our current rate and those factors that will propel 2.2 percent growth. Given the size of the economy and stage of development, it is not out place for the country to grow at that rate. “We need a stable political environment, a shift in economic policy for us to achieve the 2.2 percent and

then we need stable oil prices above the $60 range. It is not an impossibility, economy has grown at much higher rate that. “For me it is an indication that something is wrong if our economy is projected to grow at 2.2 percent when we should be growing above our population growth rate. The key thing is that any growth rate below the population growth rate will not address the poverty crisis and unemployment rate we have in the country.” Growth in sub-Saharan Africa is expected to accelerate to 3.4 percent in 2019, due to improved investment in large economies together with continued robust growth in non-resource intensive countries. The World Bank report stated in its annual Global Economic Prospects published on Wednesday, that per capita growth is forecast to remain well below the long-term average in many countries of the region, yield-

ing little progress in poverty reduction. Ayodele Akinwunmi, head, research, FSDH Merchant Bank Limited said, If the growth projection is higher than 2018, it shows improvement which is good “but should we be growing at 2.2 percent when our population is alost 3 percent – the answer is no. If we fix security challenges in agriculture, it can do 3 percent. We need to grow to about 5 to 6 percent for us to have an expansion in economy that will be able to take the unemployed youth in the country. “We need to resolve the security challenge in the country, partner with private sector to improve infrastructure, ensure there is adequate legislation for commercial transactions and ensure that bottlenecks to importation and exportation of goods are removed. Once we do that, trade will flow, economic activities will boom, we will have growth and people will invest in Nigeria.”

38 days to election, Nigerians lament inability to get PVCs INIOBONG IWOK

ith a few weeks to the presidential election in Nigeria, some registered voters are lamenting the inability of the Independent National electoral (INEC) to issue them with their Permanent Voters Card (PVCs). INEC ended the Continuous Voters Registration (CVR) across the country last August 31, with a promise that the last batches of PVCs would be ready for collection by December 2018. However, findings by BusinessDay, show that several Nigerians, espe-

cially those who registered in the last batch may be disenfranchised, due to the inability of INEC to resolve the bottleneck encountered in the distribution and collection of the PVCs. A middle age man, Adeoye Samuel, who is a resident of Aguda Surulere, said officials of the commission informed him that his PVC might be ready for collection in the first week of February after several visits to the commission’s offices in Surulere since the beginning of January 2019. “I have been to INEC office in my area about three times this year, and all they are telling me is that I

should come back. Some of my friends who registered early have collected, but I am among those who registered just before they ended the registration in August, but I expected the card to be read by now,” he said. “The last time, I went to their office I was told to come back first week of February. I hope the card would be ready before the general elections the way they are going about it,” Adeoye said. Similarly, a businessman, Emeka Obasi, said he had visited INEC offices in the state twice since last December to pick up his card but was informed that the PVCs would be ready by end of January.

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SSA countries upped Eurobond issuance by 77% in 2018 … rising rates in Eurobond markets may cap trend BUNMI BAILEY

ub-Saharan Africa (SSA) economies in 2018 tapped more into the Eurobond market, increasing by 77 percent the amount they raised from offshore sources as they sought to access cheaper funds to meet domestic needs, United Capital Research says. The countries raised $18.6 billion last year, from $10.5 billion they issued in 2017, United Capital, a leading African financial and investment services company in Nigeria, said in a 2019 outlook report released recently. BusinessDay analysis of the report shows that in the first quarter of 2018, four SSA countries (Nigeria, Kenya, Senegal and Ivory Coast) issued $5.5 billion and €3.3 billion worth of Eurobonds while Angola, Ghana, and South Africa followed suit in the second quarter by issuing $7.5 billion worth of Eurobond. A Eurobond is a special

type of bond that is issued in a currency other than the issuer-country’s home currency. Since it is issued in a foreign currency and its target investors are foreigners, it is considered one way that a country can raise foreign pubic debt. SSA countries are faced with financing challenges including need to fund infrastructural gaps, but domestic high interest costs are pushing the governments to look outwards to tap into lower-cost funds. This has led to rising exposure by these countries to the financial markets of the developed economies. But analysts warn that with rising interest rates in the mature markets, the attractiveness of these markets may begin to wane for the SSA countries. This trend is being driven by the higher-yield environment within the SSA region relative to yields in the development markets, says Ayodeji Ebo, MD, Afrinvest Securities Limited said. Consequently, he said, “The SSA countries

reduce domestic borrowings,” citing the example of Nigeria, which raised more external debt in 2018 than in 2017. The report said however that primary market activities were largely muted in the third quarter amid rising rates in the developed markets with only Nigeria issuing another $2.9 billion in the last quarter albeit at a more expensive rate. In 2017, Nigeria, South Africa, Senegal, Ivory Coast and Gabon issued $4.7billion, $2.5 billion, $1.1 billion, $2 billion, $0.2 billion worth of Eurobond, respectively, while Angola, Ghana and Kenya issued none. According to Cytonn report by the Cytonn Investments team that that provides reliable market insights for investors interested in the high-growth East Africa region, SSA seems to have positioned itself as an attractive investment destination as seen by the improving macroeconomic conditions.

Air Peace crew foil attempt to traffic 3-day-old baby IFEOMA OKEKE

agle-eyed Air Peace all-female crew comprising Sinmisola Ajibola, Onohi Agboighale, Mojoko Ewane, Taiye Abbey, Victoria Ukpiaifo and Ngozi Ezeamaka on Sunday frustrated an attempt by a middle-aged woman and her collaborators to traffic a three-day-old baby boy through the Port Harcourt Airport to Lagos. The suspect had booked Air Peace Port HarcourtLagos Flight P4 7393 on Sunday. During boarding, the lead crew of the flight, Mojoko Ewane, observed that the suspect was handling the baby in an awkward manner and decided to question her. When she was questioned at the boarding door of the aircraft, the suspect claimed the baby was three days old. She, however, later told her interrogators that the baby was born on January 5, a day before her aborted trip. The suspect said she

gave birth to the baby shortly after travelling from Lagos to Port Harcourt on an Air Peace flight on January 5. A call was later placed to the contact numbers the suspect said belonged to her husband and the doctor who handled the birth of the child. While the alleged husband claimed that his wife was actually pregnant, the alleged doctor’s number rang unanswered. When the suspect was asked to breastfeed the baby, she could not as there was no breast milk. The suspect tried to create a scene, rallying other passengers on the flight to prevail on Air Peace crew to allow her fly, but the crew stood their ground. When the crew informed the suspect that the carrier’s standard operating procedure barred them from allowing passengers fly with a week-old baby on grounds of health, she claimed to be a nurse and insisted that the baby’s health would not be

jeopardised. The airline, it was gathered, later invited personnel of the Department of State Services (DSS) at the Port Harcourt Airport to take over the case for further investigation. Chris Iwarah, Air Peace corporate communications manager, confirmed the incident on Wednesday, saying the airline was proud that its crew professionally discharged their responsibility to ensure passengers’ safety and assist government in fighting crime. A DSS source in Port Harcourt also confirmed that the suspect had been transferred to the zonal office of the National Agency for the Prohibition of Trafficking in Persons (NAPTIP) in Uyo, Akwa Ibom State, for further handling. The source claimed that the suspect confessed that a lady gave her the baby. The DSS source commended Air Peace crew for foiling the attempted child trafficking with their vigilance.

Court to hear application seeking to disqualify Buhari on January 21 FELIX OMOHOMHION, Abuja

Federal High Court, Abuja, Wednesday, adjourned to January 21 an application seeking to disqualify the All Progressives Congress (APC) presidential candidate, President Muhammadu Buhari, on grounds that he presented false information to the election umpire, the Independent National Electoral Commission (INEC), for the purpose of contesting the 2019 presidential election. The plaintiffs, Kalu Kalu,

Labaran Ismail and Hassy Kyari el-Kuris, alleged that the President lied in his information contained in form CF001, which he submitted to INEC, regarding his educational qualification. The suit, filed by Ukpai Ukiro, on behalf of the plaintiffs, has as the first defendant, President Buhari, the APC and INEC as the second and third defendant, respectively. The suit, with no: FHC/ CS/ABJ/1310/2018, wants the court to determine, “whether having regard to the information in the af-

fidavit contained in the first defendant’s INEC’s form, CF 001, regarding his educational qualification/certificate, the first defendant has submitted false information to the third defendant. “Whether from the facts and exhibit contained in the affidavit in support of this originating sermon and having regard to section 31 (5 and 6) of the Electoral Act 2010, as amended, the first defendant is disqualified from running for the office of the President of the Federal Republic of Nigeria in 2019 general election.

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Double PIN pension contributors in confusion as PFAs commence bio-data update MODESTUS ANAESORONYE

ome pension contributors that may have inadvertently registered with more than one Pension Fund Administrator (PFA) are currently in confusion over ongoing bio-data update as directed by the National Pension Commission (PenCom). The PFAs are currently embarking on bio-data update in compliance with PenCom’s directive that contributors and retirees under their management should be aligned with the National Identity Management Commission’s (NIMC) database. PenCom had late last year directed all Retirement Savings Account (RSA) holders and retirees to update their bio-data, particularly the National Identification Number (NIM) and Bank Verification Numbers (BVN) with their respective PFAs. It had also directed all PFAs to update the

records of their clients. BusinessDay checks, however, show that some contributors who registered with more than one PFA and possess more than one RSA Personal Identification Number (PIN) do not know which PFA to align as, in most cases, they have their contributions spread in more than one PFA. “I have two different PINs, one with AIICO Pensions and another with Stanbic IBTC Pensions,” one of the contributors told BusinessDay. According to the contributor, he had earlier registered with one of the PFAs. When he changed employment, his new employer did not accept the first PFA he had chosen, maybe for ease of remittance to the Pension Fund Custodian (PFC), and so he was compelled to open account with a second PFA where the rest of the staff had their contributions. Currently, he is confused, having received a notification

from one of the PFAs about its plan to update his bio-data. “We are aware of these issues and that is why we are appealing to contributors to provide their National Identification Number (NIM) and their Bank Verification Numbers with their PFAs so that we can reconcile the information we have,” Peter Aghahowa, head, corporate communications at PenCom, said. “No one person has two NIMs or two BVNs, and that is the same thing we want to do with RSA holders. We believe that when this exercise is completed, we would have properly resolved the bio-data issues we have. That is why we are soliciting the support of contributors and retirees,” he said. Paddy Ezeala, regional manager, South East, Premium Pension Limited, said the Contributory Pension Scheme as implemented in Nigeria and many other countries was highly

technology-driven. “If there is total compliance with the necessary procedures and requirements, the implementation of the scheme would be a smooth sail, stopping short of being a turnkey rendition,” Ezeala said. He noted, however, that inadequate and inappropriate data input by contributors at times renders the work of pension operators extremely difficult and slows down processes. “Even contributors have been subjected to avoidable suffering because of the inadequacies and inconsistencies in data input. Some have had the payment of their entitlements unduly delayed, and consequently casting a slur on the effectiveness of the CPS,” he said. He further said there were extreme cases, such as double registration, where workers or contributors open RSAs with two different PFAs.

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CBN to issue N823.43bn Treasury Bills, N985.92bn to mature Q1 2019 HOPE MOSES-ASHIKE

entral Bank of Nigeria (CBN) will in the first quarter of 2019 issue N823.43 billion worth of Treasury Bills (TBs), while N985.93 billion will mature in the same period. A breakdown of the Nigerian TBs issue programme for the Q1 2019 released on Tuesday by the CBN shows that a total of N59.02 billion TBs for 91 days tenor, N248.84 billion for 182 days, and N678.05 billion for 364 days tenor, will hit the financial market in the first quarter. The CBN will rollover a total of N51.45 billion for 91 days tenor, N164.91 billion for 182 days and N607.05 billion for 364 days tenor, in the same period. Meanwhile, the CBN has continued its intervention in the interbank sector of the foreign exchange market by injecting another $210 mil-

Port Notel promoter seeks increased private sector participation in Akwa Ibom AMAKA ANAGOR-EWUZIE

anaging director of Port Notel Limited, Nigeria’s first ocean terminal, Victor Akpanika, has called for increased private sector participation in the maritime segment of the oil-rich Akwa Ibom State. According to Akpanika, the involvement of more private investors in the state maritime business will enable more Nigerians, especially the indigenes of the state, to derive immense economic benefits. In a statement made available to BusinessDay, Akpanika also picked holes in the arguments that “the state does not need more than one seaport due to the perceived dearth of market demands.”

This was in reaction to recent assertion by Udom Emmanuel, the state governor, who informed a delegation of Ibeno Community leaders that sought for the approval of a certificate of occupancy (C-of-O) for the development of Port Notel Ocean Terminal, that the state was supporting the development of Ibom Deep Seaport alone. Governor Emmanuel said while the Ibom port had gone far with the technical procurement processes, the Port Notel project was still at its early planning phase. Faulting this stand, Akpanika said Nigeria’s maritime domain was large enough to accommodate many players since it was considered the gateway to the West and Central Africa sub-regions with a popula-

tion of about 180 million people, third largest economy in Africa with a rebased gross domestic product (GDP) of over $500 billion and 10th in oil production in the world. According to Akpanika, the present deficiency in modern maritime infrastructure facilities has made it difficult for Nigeria to properly interface with the global maritime marketplace. “Nigeria currently has sufficient maritime market demand space that is very attractive to port developers, operators, financiers seeking to invest in port terminal and jetty facilities. Several littoral and hinterland states are pushing themselves forward to attract local and foreign investors to come and invest in ocean, coastal, river or inland dry port facilities,” he said.

lion into the forex market. In the forex trading on Tuesday, the CBN injected $100 million in the wholesale segment of the market in addition to $55 million each in the Small and Medium Enterprises (SMEs) and invisibles sectors. Isaac Okorafor, director, corporate communications department, disclosed this on Tuesday, saying the bank was unrelenting in its resolve to sustain liquidity in the forex market as well as maintain stability there. Okorafor said the CBN’s continued intervention was aimed at ensuring that the bank met the requests of genuine customers in the various windows of the market. On the bank’s restriction of access to forex for some 42 items, he said the policy would continue, particularly as it was greatly boosting local production of items on the list.

165 persons charged to court for committing offences at Lagos airport in 2018 IFEOMA OKEKE

L-R: Mario Russo, head of commercial, Promasidor Nigeria Limited; Chinedu Mgbemena, senior category winner of the 2018 Cowbellpedia Secondary School Mathematics TV Quiz Show; Anders Einarsson, managing director, Promasidor Nigeria Limited; Akinfoluhan Akinleye, 2018 junior category winner, and Abiodun Ayodeji, marketing manager, Promasidor Nigeria Limited, at the flag-off of 2019 Cowbellpedia Secondary Schools Mathematics TV Quiz Show in Lagos.

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bout 165 persons were charged to court for committing various offences at the Lagos airport between January and December 2018. This was disclosed Wednesday by Joseph Alabi, spokesman for Lagos Airport command. According to Alabi, some of the suspects were charged with assault, stealing, obtaining by false pretences as well as unlawful entry and touting, which contravene the Federal Airports Authority of Nigeria (FAAN) bye laws. He said the command made 257 arrests and secured 46 convictions within the period under review, saying 32 persons were still

under investigation while 60 others were awaiting trial. He said the command was committed to making the airport and its environs safe and secure for travellers, airline operators and other airport users He also disclosed that Joseph Mukan had been appointed as the Commissioner, Murtala Muhammed International Airport (MMIA) Police Command, Lagos. He said Mukan, was a former Police Commissioner of Bayelsa before he was recently transferred to the nation’s busiest airport to replace AIG Aminchi Baraya. “The new CP is a thorough bred professional and he will bring his wealth of experience to bear towards improving security at the Lagos airport.

MultiChoice launches Step Up campaign for DStv, GOtv subscribers SEGUN ADAMS

ideo entertainment company, MultiChoice Nigeria, has kicked of the New Year for DStv and GOtv customers with a new offer tagged ‘Step Up.’ From January 15 till April 15, 2019, the Step-Up campaign offer will give all active and disconnected DStv Compact, Family and Access customers the opportunity to pay for an upgraded package and get a boost to view programmes on an even higher package within 48 hours. DStv customers on the Access package can pay N4,000 for Family package and then get a boost to view programmes on the Compact package, while customers on the Family package

can pay N6,800 for Compact package and instead view Compact Plus package programming. Likewise, Compact customers can also pay N10,650 for Compact Plus package and in turn get Premium package programming. Customers on the GOtv platform are also not left out of this offer. GOtv Plus, Value and Lite customers will get upgraded to GOtv Max when they pay a reduced fee of N2,500, while GOtv ‘tops up’ with N700. Active and disconnected GOtv Max customers can also take advantage of this limited time offer to renew their subscription for N2,500. This campaign will give GOtv customers on Plus, Value and Lite an opportunity to experience the exciting premium content

available on GOtv Max including La Liga, Serie A, FA Cup, BET, Fox Entertainment, StarLife, ROK 2 and CBS Reality and more. According to Martin Mabutho, chief customer officer, MultiChoice Nigeria, the offer reiterates the company’s commitment to give more value for money to loyal customers as they will enjoy content on a higher package than what they paid for while encouraging them to remain active to enjoy quality entertainment lined up for the year. “We are pleased to launch this first-of-its-kind offer that will give our customers the opportunity to experience the exciting programming available across higher packages at the price of a lower package.

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Osinbajo should chair council for capital market master plan

UCHE UWALEKE Uche Uwaleke of Nasarawa State University Keffi is Nigeria’s first Professor of Capital Market and the President of the Association of Capital Market Academics of Nigeria

t is no longer news that the Nigerian equities market, with a disappointing record of -18.84 per cent Year-toDate return, was among the poor performing stock markets in the world last year. This partly explains the weak and non-inclusive real GDP growth witnessed in 2018. When the 10-year (2015– 2025) Capital Market Master Plan (CMMP) was launched in November 2014, it was meant to harness the potentials of the market in catalyzing economic growth and development. Consistent with the CMMP, the Securities and Exchange Commission has undertaken a raft of initiatives to enhance transparency and boost investors’ confidence notable among which are the establishment of a National Investors Protection Fund meant to cushion the adverse effect of losses suffered in the stock market and encourage domestic retail investors, the e-Dividend Mandate Management System (eDMMS) developed to minimize cases of unclaimed dividends by enabling direct payment of investors’ dividends into their nominated bank accounts and the Direct Cash Settlement scheme which ensures that investors receive their money directly whenever securities are sold. Others include the Corporate Governance scorecard for companies listed on the Nigerian Stock Exchange designed to foster

good governance practices by public companies as well as the recapitalization of capital market operators aimed at improving their baseline infrastructure and service delivery which has gone a long way in curbing sharp practices in the market. As a complement, the NSE has implemented minimum operating standards for market operators as well as launched the Premium Board which offers issuers the benefits of greater visibility and opportunities to raise capital. In addition, physical share certificates have been fully converted into electronic form in what is known as dematerialization of share certificates. Also, activities in the non-interest capital market space are beginning to gain traction especially with the introduction of sukuk. Furthermore, information obtained from the SEC website indicate that as part of efforts to boost capital market literacy, the Commission, in conjunction with the Nigerian Educational Research and Development Council (NERDC), is walking the talk concerning the inclusion of capital market studies in the curriculum of both Junior and Senior Secondary Schools in Nigeria. Despite these giant strides, the journey to making the Nigerian capital market ‘one of the largest, most liquid, most diversified and most sophisticated emerging markets by 2025’ seems very far. The market is still shallow and concentrated and yet to be properly positioned to support Nigeria’s economic priorities. The flagship securities exchange, the NSE, is small compared to most emerging markets. Many of the systemically important corporations such as the International Oil and Telecom companies are not listed on the stock exchange and so it is easy to see why the market fails as a barometer for measuring economic performance. Moreover, the performance of the equities market remains tied to the apron-string of

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In many jurisdictions with success stories in capital market plan execution, the implementation Council or Committee as the case may be is led by the Minister of Finance or the Prime Minister with membership drawn from very top government officials most of whom report to the President

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foreign investors who often dictate the pace of market activity. This has left the market vulnerable to external shocks. In fact, there is a consensus among market players that the dismal performance of the stock market in 2018 has a lot to do with the exit of foreign portfolio investors. Against the backdrop of its outstanding performance in 2017 when the return was in excess of 40 per cent, it is evident that volatility in the stock market is more pronounced in Nigeria than elsewhere in Africa. Some major initiatives in the CMMP to create stability in the market, boost domestic participation and enhance its contribution to the nation’s economy include establishing a National Savings Strategy, reducing the tax burden for listed companies, promoting capital market participation in the listing of government-owned firms as well as granting incentives for companies in priority sectors to get listed. Others include

establishing specialized funds to support critical economic sectors as well as incentivizing venture capital and private equity. All of these will entail proactive and sustained engagement with the Executive and the Legislature. In recognition of this therefore, the implementation architecture includes a Capital Market Master Plan Implementation Council (CAMMIC) currently led by Mr Tola Mobolurin, a seasoned professional who commands a lot of respect within and outside the capital market community. However, in view of the pivotal role of CAMMIC in fast tracking the implementation of the CMMP including through interfacing with senior government officials, it stands to reason that the Vice President, Professor Yemi Osinbajo, who heads the Economic Team, is better positioned to lead the CAMMIC. In many jurisdictions with success stories in capital market plan execution, the implementation Council or Committee as the case may be is led by the Minister of Finance or the Prime Minister with membership drawn from very top government officials most of whom report to the President. A few examples will suffice. In Kenya, a high-level Committee (CMMP-SC) championing the implementation of the Capital Market Master Plan is chaired by the Cabinet Secretary National Treasury (the equivalent of a Finance Minister). Other members of the CMMP-SC include the Attorney General, Cabinet Secretary Agriculture, Cabinet Secretary Mining, the Governor of the Central Bank of Kenya, the CEO of the Capital Markets Authority among other top government officials. Sri Lanka shares a similar experience where the Capital Market Advisory Council is the key driver and is chaired by the Secretary to the Sri Lankan Treasury with the Governor of Sri Lanka Central Bank as a member. The case of Malaysia is quite instructive. The country developed and launched its first

10-year (2001–2010) capital market master plan in 2001. The plan was adopted as a national project with support from the highest levels of government. The Prime Minister championed its implementation. Not surprisingly, market size nearly tripled from US$186 billion in 2000 to US$517 billion by 2010. The success of the plan paved way for the launch of a second master plan currently being implemented till 2020. Back home, ownership of the CMMP at the highest level will equally pay off. To this end, the 12-member CAMMIC which comprises the DG SEC, Deputy Governor (financial System Stability) of CBN, DG PENCOM, CEO of the NSE, Chairmen of the capital market committees of both chambers of the National Assembly and some other distinguished Nigerians should be expanded to include the Ministers of Finance, Justice, Budget & National Planning, Industry, Trade & Investment and Education. By so doing, it is easier to obtain the buy-in of the Federal Executive Council. That said, a key priority in forging ahead should be to include CMMP as an integral part of the government’s economic recovery and growth agenda especially given the fact that the capital market received no mention in the ERGP. It bears repeating that the successful implementation of the CMMP hinges on support from the government hence the need to have somebody operating at the highest level as head of CAMMIC. To this end, Prof Yemi Osinbajo, the Chairman of the National Economic Council and who has been successfully piloting the Presidential Enabling Business Environment Council, should also be saddled with the responsibility of championing advocacy for major initiatives contained in the capital market master plan.

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Nigerian Diaspora are paying it forward with education

Pardon Mujakachi Pardon Mujakachi is the Nigeria Country Director of WorldRemit; a leading digital money transfer service

igeria has no shortage of high-achievers. From Achebe to Adichie, the country has been a prolific producer of noted writers, academics, scientists, and more. In the UK, children of Nigerian immigrants’ children outperform their white British peers. Meanwhile, in the United States, home to the second-largest Nigerian diaspora community in the world, Nigerians are the country’s most highly-educated immigrants. Despite a reputation for excel-

lence abroad, children at home are being left behind. In 2017, Nobel laureate Malala Yousafzai called on then-acting president, Yemi Osinbajo, to declare “an education state of emergency in Nigeria” in light of the urgent need for investment in the country’s educational sector. With over 12 million children out of school, Nigeria is home to one of the largest numbers of out-of-school children in the world. Yet Nigeria also leads the field on a different front: it has the largest volume of remittances in Africa, as its industrious diaspora keeps earning and sending money home in ever increasing numbers. Much has been said about the impact of remittances on the country – particularly in terms of investment in real estate. A recent report from the global consulting agency Dahlberg also explored how diaspora funds could be channelled towards investments in SMEs and other economic activities. Less attention has been paid,

however, in the investment that the diaspora is already making in an area critical to the future of the nation: the education of Nigeria’s children. Informally, almost everyone who is sending or receiving money back will know a child or student whose fees are being paid or who is being helped in other ways - with books, uniforms, exam costs - to go to school: put simply, supporting the education of the extended family back home is a top priority of Nigerians abroad. Our new research reveals the scale of that support. Analysis of household level data shows that diaspora remittances currently keep an estimated 200,000 children in the classroom. It also shows that children in families that receive remittances are 40% less likely to be out of school. They will also have more spent on their education and are less likely to be working in household chores, the family business or in other forms of work. At an individual-level, this investment is transformative. Take Nsikak,

a Nigerian nurse now living in Australia, for example. He has supported the education of his brother and sister in Ikot Offiong, a village in Cross River State for almost a decade. Thanks to his contributions, his sister Abasifreke, now aged 20, completed primary and secondary school and now attends the University of Uyo, where she is training to be a chemistry teacher. By making it easier to send money home, we can enable students like Abasifreke to reach their full potential. Technology is making a difference. Digital disruption to the traditionally, cash-based remittance industry is driving costs down and freeing up more money to support diaspora causes at home. Our estimate is that if all remittances were digital, an additional $825 million would be freed up for education across the globe. And it’s not just about costs. Digitisation has meant that transfers are faster and can be tracked more easily. No more trips half-way across a city in the US,

Europe or the UK, to send money from a bureau which take several days to arrive or entrusting it to a friend of a friend to carry home, with all the attendant security risks. This matters not just because children’s education is too valuable to be entrusted to such unreliable methods, but experience shows that exam fees and school equipment often need to be paid at shortnotice, not days or weeks later. Almost one in four Sub-Saharan people reside in Nigeria, Africa’s most populous country. By 2050, the United Nations estimates that Nigeria will be the third largest country in the world. In order to cope with the current and future needs of the country, expanding access to education is an economic and social imperative. Leveraging the contributions of the diaspora, and potential of technology, must be a critical part of efforts to scale access to quality education.

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The need for more professionalism in Nigeria’s transportation sector FESTUS OKOTIE Okotie, a maritime transport specialist, wrote via fokotie@festusokotieconsulting.com, fokotie@bernardhallgroup.com and fokotie.bernardhall@gmail.com

he sustainability and the efficiency of the transport system of any successful nation depend hugely on the quality of human resources that run the system. Transportation management systems in Nigeria faces many human resources challenges which tend to scuttle the energy and efforts channelled towards growth and development. The challenges of a sustainable transport system in Nigeria are enormous, but the most challenging are those seen as human resources challenges which are meant to drive the ideas, plans and vision to fulfilment. A large percentage of all failures in transportation are traceable to human resources failures and solving this challenge is a sure way of bringing permanent solutions and sustainability to the transport system. Human resources management in any society or nation is central to the progress of such society. It is more than just hiring and employing people; it is more about direction, management of human assets , making strategic plans for the future, nurturing of human talent to maximize the potentials fully to the benefits of the society and to themselves. The purpose of transport planning and research is to secure the best use of natural and acquired advantages which

Daniel IGHAKPE IGHAKPE wrote in from Lagos via danighakpe@gmail.com.

igeria is currently ranked the country with the highest number of extremely poor people. It is estimated that 87 million out of the estimated 180 million population of Nigeria, which represents 45 per cent of Nigerians, are currently living in extreme poverty. Also, according to a recent report on labour force statistics released by the National Bureau of Statistics (NBS), unemployment in Nigeria increased from 18.8 per cent in the third quarter of 2017 to 23.1 per cent in the third quarter of 2018. The number of those actively seeking jobs rose from 85.1 million to 90.5 million. The number of persons with no work at all and those that worked for under 20 hours a week rose from 17.6 million in the fourth quarter of 2017 to 20.9 million in the third quarter of 2018 – an addition of 3.3 million people. Furthermore, the weak growth in the formal economy suggests that

needs highly trained professionals that can design transport network facilities while considering the environment, the laws and the economy. Deficiencies in the supply of these professionals will hinder the process of development in the transport sector. Sustainability and growth in the transport sector of any nation depends on the level and structure of human resources development available within such society such as transport planners, educational institutions and facilities ,economists, engineers, trainers, policies and laws which can stimulate growth and development through meaningful participation by individuals and government in this sector. The need for transport professionals trained specifically for the management of transport systems in the different modes is very exigent, because transportation performs optimally in an organized state. All transport systems irrespective of the level of the perfect arrangement of its design will fail unless it is managed and operated in a civilized state with modern technology operated by well trained personnel with defined rules and regulations. The laws of such society have to come first as the foundation for the transport laws to operate. This also is required in the formulation of the policies that govern the sector. In Nigeria, trained personnel are needed in the formulation of policies required to operate transport services at local, state and federal levels. The directors of transport, commissioners for transport, state and federal house of assemblies committee members of transport, special advisers to Governors and the President, the Minister of Transportation have to be fully informed and carried along to be able to make the right inputs into the transport policies and when all

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It is high time government at all levels look inwards by appointing professionals with the right skills and knowledge in transportation to sensitive positions within the sector for them to set the system in the right direction as it is done globally for us to achieve optimal and higher results

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these are rightly done with professionals who are well informed of the latest trends and information globally on modern transport systems, it will go a long way to foster development and sustainability. The importance of training in the growth of the transport sector cannot be over emphasized. This provides for continuity in all fields of human endeavours and as such in all modes within the transport systems. Training provides a means of transferring skills and knowledge so that they do not end with the carriers of such knowledge. Sustainability requires the skills to be acquired, improved upon, adopted and implemented in such environment. All players in the transport sector needs various types of training for improved efficiency of the system and for self improvement and are expected to also give training to those under their supervision as a way of fostering sustainability and development within the transport system.

Transportation institutions and training centres are fundamental structures needed in any nation that desires to achieve and maximize its full potential in the growth and development of its economy through better transportation systems, adequate pool of manpower are needed and required to achieve such goals and objectives. Highly skilled and specialized professionals in this sector are also needed to conduct research, construct, maintain and operate the transport infrastructures and services. The success of any transport policy depends on the human resources available within the sector to develop and implement the policies. Some examples of government transport organisations and institutions for professional trainings and skill acquisitions are the Nigerian institute of transport technology Zaria charged with training middle level management staff, the Nigerian Maritime Academy Oron and school of oceanography Lagos charged with the training of seafarers, the Nigerian college of Aviation Technology Zaria, which trains pilots and air crew, Federal University of Technology Owerri, Imo State, which offers Transportation Management Technology to the Doctorate level, Federal University of Technology Minna, Niger State also offers transport courses. All the above institutions and training centres needs upgrade, modern facilities and more funding for them to be able to discharge their statutory responsibilities more efficiently and effectively. A draft national transport policy was produced in 2004 as a result of the desire of our local shipping operators to protect themselves against the excessive competition and dominance of their foreign counterparts which necessitated the enactment of cabotage Act

which became enforceable or effective on May 2004. Nigerian Maritime Administration and Safety Agency (NIMASA) Nigerian Ports Authority(NPA), Federal Airports Authority Of Nigeria(FAAN),Nigeria Railway Corporation(NRC), Federal Road Safety Commission(FRSC) are some of the structured establishments set up to implement and sustain the government policies in the transport sector. Nigeria is truly in need of trained transport personnel and professionals in all the various modes across the transport sector with skills on modern information technology needed to bring about the necessary upgrade and growth in our transport system. One of the ways of dealing with the current trend of lack of professionalism in our nation’s transport sector is by involving transport experts and professionals in the decision making process, formulation of policies and laws within the sector, encouraging professionalism within the transport system. Most of the leaders at the helm of affairs in our transport sector holding key and strategic positions have very little or no knowledge about the sector. In fact most of the chairmen of transport committees in our transport system have no transport qualifications and never attended any training within or outside the country. The same old or obsolete ways of managing the sector in the 80’s is what is been used until date and we expect to get different results? Until we adopt modern approach and global standard of operations, we will continue to rock bottom and get lower results. Note: The rest of this article continues in the online edition of Business Day @https://businessdayonline.com/

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Reducing poverty and unemployment through agriculture employment in this space will be relatively inadequate to reduce poverty. However, can agriculture be used to reduce the high rate of poverty and unemployment in Nigeria? Absolutely! Agriculture has the potential to reduce the high rate of poverty and unemployment in the country by providing employment to millions of Nigerians across the agriculture value chain, from production to consumption. Take cassava processing as a singular example. Nigeria is the largest cassava producer in the world. There is much to gain from knowing the value chain of cassava, starting from production, to processing, and then marketing. Cassava, just like yam, is a root and tuber crop. However, unlike yam, it can grow in relatively poor soil and in low rainfall areas. Cassava and its by-products have various uses. It can be processed into starch: the cassava starch used for making paper and textiles. It can be processed into High Quality Cassava Flour (HQCF) to make cakes, bread, and biscuits. It can be processed into chips usable

for animal feeds. It can be processed into ethanol, which is used as bio-fuel when combined with additives. Cassava is also processed into fructose, used in industry for sweetening fizzy drinks. Cassava can also be processed into fufu, gari, and apu, etc., for local consumption. In Nigeria, we produce over 50 million metric tonnes of cassava every year, and over 26 states out of the 36 states in Nigeria produce the crop. If we embrace good agricultural practices, the production, processing and marketing of cassava can actually serve as a good tool to reduce the high rate of poverty and unemployment in Nigeria. It is also important to note that the largest portion of the population of Nigeria is the youth category. The percentage of youth (age 15 - 35) unemployment is put at 55.4 per cent. So, with increased youth involvement in agriculture, the sector has the capacity to reduce the high rate of youth unemployment. Yet another way of growing youth involvement in agriculture is by giving increased attention to the practical aspect of agriculture in the primary and secondary school cur-

riculum. Establishing viable school farms is one way of achieving this. This helps to make agriculture/ farming attractive to young people, right from an early age. The idea behind establishing school farms is to make agriculture an integral part of the school culture, so that the pupils and students are well positioned to appreciate farming, and make it a lifestyle, even when they do not intend to specialise in it. The knowledge obtained from practical sessions on the school farm helps not only to re-enforce what is taught in the classrooms. It also equips the pupils/students with first-hand knowledge of how to run agribusinesses, which is very important in cultivating an entrepreneurial spirit in the students. Our national policy on education lays considerable emphasis on self-reliance, and it is no secret these days that whereas many school leavers (including university graduates) are finding it increasingly difficult to secure paid employment, those of them with technical/vocational bias easily get employed as artisans.

Technical and pre-vocational subjects like Agricultural Science not only impart specialized skills, they also offer opportunities for future income generating activities and self-employment. Agriculture also supports the manufacturing industries by providing raw materials for these industries without which the industries cannot produce. These industries depend on agriculture for manufacturing their products which they sell to earn income. These industries also employ many workers in the factories, and have the potential of earning a lot of money. This can also help to reduce poverty and unemployment. Agriculture can also attract foreign exchange through added value to agricultural products which can be exported. In view of the above, it can be said that agriculture can absolutely be used to reduce the high rate of poverty and unemployment, as well as bring many other important benefits to the economy.

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Frank Aigbogun editor Patrick Atuanya DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Chuks Oluigbo EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure GENERAL MANAGER, ADVERT Adeola Ajewole ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)

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GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

Thursday 10 January 2019

Petrol subsidy is no longer justifiable: End it

e c ently th e federal government through the minister of state for petroleum resources, Ibe Kachikwu, reported that its annual expenditure on fuel subsidy has ris en to over N1.4 trillion. Going by the figures, it means about N3.76 billion is spent daily on subsidising petrol. For the records, it is also a staggering 386 per cent higher than the earlier figure of N774 million daily given on March 5, 2018 by the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Maikanti Baru, for the importation and distribution of petroleum products in the country. How can a any government rationalise the spending of such humungous amount on the consumption of petrol by its middle and upper class whereas 87 million of its citizens are living in extreme poverty, unable to afford the mere necessities of life?

What rational and sensible government could afford to leave millions of its citizens in poor health, ravaged by avoidable diseases such as malaria, yellow and Lassa fever, cholera, typhoid etc while it continues to spend billions of dollars and trillions of naira yearly to subsidise consumption of petrol by the rich and the middle class? Despite Nigeria being a signatory to the World Health Organisation recommendation for every government to spend at least 13 percent its annual budget to health, Nigeria has not allocated more than 6.57 percent of its budget to the health sector. A good example is the 2018 budget where only N340.45 billion, representing 3.9 percent of the N8.8 trillion expenditure plan, was allocated to the health sector. It took a Bill Gates recently to remind the Nigerian government of global statistics we are all aware of – that “Nigeria is one of the most dangerous places in the world to give birth, with the fourth worst maternal mortality rate in the world, ahead of Sierra Leone, Cen-

tral African Republic, and Chad,” and that “one in three Nigerian children is chronically malnourished.” What rational government with a modicum of conscience will spend over a trillion naira yearly on frivolous consumption of petrol that adds very little to the economy while allocating only a meagre N605.8 billion to education in a country of nearly 200 million people with a clear majority young population desperately in need of education? What country with a sensible government will be happy allocating far more to its consumption of fuel than educating and developing its future workforce and human capital? We believe there can no longer be any rational or sensible explanation for the humongous amount of money spent daily on subsidising the consumption of petrol to the detriment of other critical sectors and needs in society. Petrol is a commodity like any other that is best left to market forces of demand and supply. The little political capital derived from maintain-

ing the huge and extremely corrupt fuel subsidy regime is not commensurate with the long-term damage that is being done to the economy, growth and development of the country by that wasteful expenditure. Nigeria cannot afford to be travelling down an escalator that is clearly going up. The government needs to summon up the political courage or will and finally do away with the subsidy regime. The money lost through that scheme can go a long way in transforming the existential realities of many Nigerians. We totally agree with billionaire philanthropist, Bill Gates who surmised that any government that invests in health, education, and opportunities (human capital) is laying the foundation for sustained prosperity of that country. Any country, however, that prioritises other issues, like Nigeria is currently doing with fuel subsidy, will realise, sooner or later, that there will be a sharp limit on how it can grow.

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Nigeria Labour Congress, protesting over non implementation of new minimum wages in Abuja.

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FRSC, others partner to mitigate traffic challenges on Lagos-Ibadan road

he Federal Road Safety Corps (FRSC) is collaborating with other traffic and safety management agencies to mitigate traffic challenges along the Lagos/Ibadan Expressway. The corps also urged road users to be cautious while driving on the road as construction resumed on Tuesday. Clement Oladele, the Ogun sector commander of FRSC said that the corps was sensitising road users on the need to heed instructions on the road to avoid accidents or delays. Oladele said Julius Berger Nigeria Plc was commencing the rehabilitation and reconstruction of the road from Lagos to Sagamu interchange. He therefore implored motorists to drive cautiously and exercise restraint during this period. The commander also advised motorist to exercise some patience and plan extra time for travel to avoid delays and panic that the road diversions might cause. “The expressway from Sahara interchange to Ibadan would also be resuming reconstruction works, which would lead to diversion of traffic, especially within the overriding axis of the highway,’’ Oladele said. He also advised motorists to take note of the increased traffic due to vehicles returning after the yuletide. Oladele urged motorists to drive at the average speed limit of 50 km/hr at the construction sites and use their lights due to poor visibility, especially in the mornings and late evenings.

NAPTIP secures conviction of 25 human traffickers

he National Agency for Prohibition of Trafficking in Persons (NAPTIP) says it secured 25 convictions of human traffickers in 2018. The agency’s director of public enlightenment, Arinze Orakwue, who disclosed this in Awka, said that 1,922 human trafficking cases were reported to the agency last year while 192 of them were fully investigated. He disclosed that 2,200 Nigerians were evacuated from Libya with recorded 50 human trafficking. Orakwue said that the agency was redoubling efforts to reduce the rate of trafficking in persons across the country in 2019. He said that part of NAPTIP’s efforts to curtail the act was its plan to canvas for the inclusion of human trafficking-related issues in the nation’s school curriculum. According to him, if the plan worked, it would help in checking the act of human trafficking in the country. The director said that such a subject would also appeal to the conscience of the youths not to avail themselves to human trafficking and inculcate the zeal to live right in their minds. Orakwe urged religious leaders to also preach about the inherent dangers of trafficking in persons as a way of curbing the act. He noted that the agency has nine offices across the country located in Enugu, Lagos, Kano, Benin, Sokoko, Maiduguri, Uyo, Osogbo, and Abuja. NAN

Lagos to launche reality TV show on emergency rescue operations JOSHUA BASSEY

agos State government is set said to launch a reality television programme to showcase the efforts and strategies of state emergency management agencies before, during and after rescue operations. The aim, the government says is to deepen safety of lives and property in the state. Kehinde Bamigbetan, the state commissioner for information and strategy, who addressed newsmen on the programme, tagged ‘Lagos Rescue’, said it would be showing every Sunday on Lagos Television, starting from Sunday, January

13, 2019 from 10:00pm to 10:30pm. Bamigbetan added that the programme is designed to enlighten residents of their responsibilities during emergency situations. According to him, the administration of Governor Akinwunmi Ambode, in the last three and half years, had invested massively in safety of lives and property and towards enhancing the activities of emergency management agencies, adding that the new initiative was another demonstrable commitment to the welfare of the people. He said: “Lagos Rescue is an initiative of the Lagos State government to showcase the efforts of the state emergency

management agencies at addressing emergencies in order to ensure the safety of lives and property. The programme is also meant to highlight the roles and responsibilities of the citizenry during emergencies for regular smooth operation. “In his spirited efforts to ensure that Lagosians live in peace, and also promote an accident-free society, Governor Ambode approved the reality programme in view of the many benefits it offers the state. This is in addition to the huge funds regularly allocated to the emergency management agencies to strengthen their capacity to manage an emergency,” said Bamigbetan.

Kano probes bloody clash between rival hunters ADEOLA AJAKAIYE, Kano

ano State government has ordered an investigation into the clash between rival local hunters in Ganduje town in Dawakin Tofa local government area of the state. The incident occurred on Sunday, leading to the death of one person while two others were critically injured. Mohammed Garba, the commissioner for information said that the government

was leaving no stone unturned in the bid to identify and bring to justice those involved. “Governor Abdullahi Ganduje has directed security agencies to thoroughly investigate the matter with a view to bringing to book perpetrators of the unfortunate incident,’’ Garuba said. He dismissed insinuations linking the clash to Ganduje’s visit to the town to attend a wedding ceremony. “While it is true that Governor Ganduje was in the town to attend a wedding

fatiha, the clash between the rival hunters erupted after the governor left the town”. The commissioner warned that the government would not fold its arms and allow ‘disgruntled elements’ to disrupt the prevailing peaceful atmosphere in the state. He reaffirmed the commitment of the state government to protecting lives and properties and admonished the residents to develop the spirit of tolerance, patience and obedience to constituted authority.

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BUSINESSTRAVEL Ethiopian Airline’s competitive advantages are its fleet, destinations, connections– Mekonnen Firiehiwot Mekonnen is the general manager, Nigeria for Ethiopian Airlines. In this interview with Ifeoma Okeke, she speaks about the airline’s unique selling points, its air service to Los Angeles and plans for the Nigerian market, amongst other issues. What is your partnership structure with Los Angeles Tourism Board for this new route that you just started? he thing is Los Angeles has been one of our routes for more than three years; it is just a route change. It used to go via Island Dublin, so we changed the route to via Lome, Togo so that we can give more convenience, more comfort and more short connectivity to all our West African passengers. As you know, we have a code share agreement with Asky Airlines, so all West Africa passengers can come to Lome within an hour or less and enjoy their flight. When it was via Island it used to be a very long distance, now that they are departing from Lome, which is from West Africa, the flight is now shorter. So it has been there already. The only thing is the route change which will Firiehiwot Mekonnen, general manager, Nigeria for Ethiopian Airlines. make it more convenient, shorter and comfortable for the customer. Since this is your first flight on okay, things are getting better and most of the destinations. So it has the route change, were you im- the economy and the market are impacted a lot in being one of the pressed by the passenger traffic? getting better. The competition biggest carriers. Ethiopian Airlines is known Yes, we are impressed. You is also getting stiffer and stronger know that it is Christmas season since more foreign airlines are as Africentric, it builds its marand New Year holiday, so most coming in. But it is good that ket around Africa. Do you at any passengers are coming into the the market is growing and the time feel threatened that such country for holiday, so the traffic Ethiopian airport has taken over market could be eroded by other is heavier on the incoming flight from Dubai as the biggest gate carriers from other parts of the which is to West Africa, Ghana and for Africa, and the Lagos market world? As it is known, the African marNigeria. So the flight that we are contributes to that. ket is already dominated by forWhat impact do you think going in is fully booked for both economy and business class. So your new service and new air- eign carriers than Africans. Right it is a really promising sector in craft have made in getting more now, African carriers dominate only 20percent of the market. The passengers? terms of traffic. Yes it has great impact in a only way we can overcome or have What advantages are there for a passenger from Nigeria positive way because the new an improved figure is by being tothrough ET that will make him aircraft that we have is modern, gether and supporting each other. or her not take Delta Airline that more comfortable and more cost Ethiopian Airlines does not feel threatened. The only way out for flies directly to the US or Emir- effective. Do you think there are ex- African carriers is when all African ate Airlines or any other airline? The first thing that will con- ceptional services Ethiopian countries can come together and vince you to take an Ethiopian Airlines has provided to make defend the continent and then I airline is the short distance. You people realise that it offers as believe that there will be no threat. There has always been this don’t have to go via Europe or via much good service as any other criticism that Ethiopian airlines highbrow airline operating into Middle East to come to the U.S. is taking over everywhere, the You are just going to fly only half an Nigeria? One thing that has made a question now is why is it that hour flight from Nigeria to Lome and then direct to Los Angeles. difference for Ethiopian Airlines you build you hub in Lome when There is even no technical stop- and has made people realise that majority of your passengers are over. The other thing is that the Ethiopian Airlines is as good as coming from Nigeria? We would love to have a hub aircraft that we are using is a very the big giant carriers are the fleet in Nigeria. We have already made that we have, our destinations new and modern aircraft and most a proposal to the Federal governand more importantly, the conimportantly, we are giving Africans flavoured service. We are also giv- nections. The connections that we ment of Nigeria that we are willing ing a five star service but we are have to the Middle East, Asia and to partner with them to build a charging a fair price. Just because even the United States are very national carrier. Nigeria is a giant we have a fair price doesn’t mean short. We are also building an- of Africa be it in economy or in that our service is not that much, other terminal which gives more population, so we will be happy to we are giving the best service but comfort and more convenience for partner with Nigeria and establish the passengers who are in transit. a strong national carrier which we are charging a fair price. Looking at your operations in So the impact that we have has can defend Africa as a continent. I Lagos, what is your evaluation of been our aircraft, the connectiv- believe that if Nigeria has a strong ity, the products that we offer national carrier, the number that the market? The operation in general is and our increased frequencies to we see can be changed in a great

way. So why we have a second hub in Lome is because the Togolese allowed us and they are willing to partner with us. So as long as Nigeria is willing to partner with us, we will be happy to have another hub in Nigeria. There is criticism that you are operating from Kaduna even though you have stopped, were you doing it to respond to the yearnings of the government? The criticism that Ethiopian Airlines is flying everywhere in Nigeria should not have been criticism but it should have been compliment because we are giving convenience to the passengers. A passenger wants to fly from Enugu, if there is no international carrier in Enugu, the passenger may have to spend a night and then get a hotel accommodation. So there is a lot of cost attached to it. On top of that, when you look at it in terms of time and convenience, we are creating the convenience that has never been there. If you look at the Kaduna route, we were creating convenience. If you look at Kano, it is the same thing. The question you are asking me is if we are really making profit. I can guarantee that most of the Nigerian destinations are not that much profitable because of the competition. The price that used to be charged two years ago is still the price that we are charging now. So it is not because we are making profit everywhere, it is because we are creating convenience that has never been. So this should have come as a compliment instead of the criticism. There is no carrier

that has asked to fly to Enugu and has been rejected, I don’t believe that. But we are flying there and a lot of passengers are really happy about that. Will you be willing partner with any Nigerian flag carrier? Of course, in fact we are looking at any other kind of partnership with Nigerian carriers because that is how we can defend Africa, by being together. So the partnership can be in Maintenance Repair Overhaul (MRO), or in other kind of technical services. So we are looking to see a partnership coming up between a Nigerian carrier and Ethiopian Airlines. We are willing to support in anyway, as long as it is going to help the Nigerian carriers grow and become strong. So we are willing to partner with any Nigerian carrier. Let us look at competition among African airlines, when you built the Lome hub, South Africa went to Ghana trying to build a kind of hub and they are now partnering with Africa World Airlines, (AWA) to the US. Do you think you people can talk and share the market in a way that it will be profitable for everybody? How does that affect your market in West Africa? It is not affecting our market actually. As I mentioned, Africa is big enough for everybody as long as we work together to regain our market share. Sometimes what we don’t know is that you can even create a market that was not there. So the best thing is to solicit a new market and create awareness. I believe that if there is money, people can spend it. Most of the time what they don’t know is how to spend it. Africa is big enough for everybody and as you know, we are also in partnership with Ghana to establish the national carrier. On Single African Air Transport Market (SAATM), I found out that some countries feel that Ethiopia would erode their market if they join the SAATM, so is Ethiopia finding it difficult to convince these countries that this is better for Africa? I think it is the responsibility of everybody to convince each other that this will help Africa to grow and strengthen the market and the economy. When that is applicable, everybody is going to benefit from it. Of course it is a little difficult right now to convince them but once they get to know how beneficial it will be for Africa, and the country, I am sure they will understand it. That is the only way that we can get back our market share as African carriers.

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The unsustainable level of Nigerian states’ debt OMOBOLA ADU

debt stock by states reveals terrifying numbers that suggest that the debt level across

the 36 States in Nigeria is largely unsustainable based on the amount of internally

generated revenue (IGR). Statistics from the DMO and the National Bureau of

debt-to-income ratio shows that a state has too much debt for the amount of income earned. The Centre for Economic Policy Research along with several empirical papers from the International Monetary Fund (IMF) recommends a maximum debt-toGDP ratio of 183 percent for developed and developing economies. Table 1 presents information on the states with the highest debt-to-IGR ratio. Unsurprisingly, Ekiti State has the highest ratio with about 5,380.12 percent followed by Osun State with a ratio of 3,495.65 percent and Kebbi State having 3,351.05 percent as at H1 2018. This means that based on these ratios, States like Ekiti and Osun are likely to fall behind in debt repayment because there IGR is too low to adequately manage the huge amounts of debt acquired. In order to reverse this trend, these states will have to increase their IGR. In the absence of no revenue from FAAC, Ekiti State has to increase its IGR by 54 times to be able to offset the current level of debt, provided it does not increase the current debt level. Similarly, Osun State has to increase it IGR by 35 times while Kebbi State has to increase its IGR generation by at least 34 times. Conversely, Ogun, Rivers, Lagos, Anambra and Kwara had the lowest debt-to-IGR ratio during the reference period of about 322.56 percent, 353.76 percent, 489.39 percent, 501.69 percent and 554.99 percent, respectively. Nationwide, the average debtto-IGR ratio as at H1 2018 was about 1,677.29 percent across the 36 States and 17 states are above the nationwide threshold.

12734BDN

here have been concerns raised about debt sustainability at the state government level, owning to their inability to meet certain statutory obligations such as regular salary payment to civil servants, timely payment of contractors’ fees, among others. BusinessDay Research and Intelligence Unit (BRIU) is of the view that while the total debt obligations among states are not the same, there is need for some states to revisit the management of their finances. Debt financing has become a major fiscal policy instrument used by the Nigerian government at all levels in order to undergo capital projects that are not within its financial capacity. Debts are usually time-bound and require that the government repays the loans along with the specified interest at the end of the agreed period. The government can either borrow domestically by selling treasury securities to the public or by borrowing from the Central Bank. Also, the government can also engage in external borrowing, although the downside risk from external borrowing is that the loan has to be repaid in the foreign currency, particularly the US dollar. According to the Debt Management Office (DMO), Nigeria’s total debt stock rose by 13.78 percent to N22.3 trillion in H1 2018 from N19.6 trillion in H1 2017. The composition of the debt stock shows that domestic and external debt accounted for 70 percent and 30 percent of total debt respectively. Further breakdown of the

Statistics (NBS) shows that Lagos State has the highest amount of debt totalling N961.1 billion as at the end of the June 2018 compared to an IGR of N196.3 billion during the same reference period. Delta State has the second highest debt amounting to N242.2 billion as against an IGR of N29.8 billion during the same period. The other seven states with the highest debt in Nigeria as at H1 2018 were: Rivers, N215.5 billion; Akwa Ibom, N194.5 billion; Cross River, N184.2 billion ; Osun, N166.8 billion; Edo, N154.3 billion; Ekiti, N147.7 billion; Kaduna, N146.8 billion and Bayelsa, N140.5 billion. When comparing the top 10 states with the highest debt to the 10 top states with the highest IGR, it can be seen that only Lagos, Rivers, Delta, Akwa Ibom, Edo and Kaduna states feature in both categories leaving out Cross River, Osun, Ekiti and Bayelsa, thereby questioning the debt sustainability level of these four states based on their IGR. To assess the capabilities of the states to manage their debts, each of the states’ IGR is compared to their total debts derive the debt-to-IGR ratio. This ratio is similar to the debt-to-income ratio that is used by financial institutions to determine an individual’s ability to manage current debt position based on the income earned. Likewise, the debt-to-IGR ratio measures the capacity of Nigerian states to manage their debts based on the income generated within the state (IGR) excluding allocations from the federal government. A low debt-to-income ratio signifies that there is a good balance between debt and income, whereas a high

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Techno Oil gas cylinder plant ready for commissioning this year

Pg. 18

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

MANUFACTURING

How Notore could become the new Okomu & Presco with CBN policy LOLADE AKINMURELE & OLUFIKAYO OWOEYE

he Central Bank of Nigeria (CBN)’s inclusion of fertilizer on a list of 41 items barred from sourcing foreign exchange at the official window could be a boon for local fertilizer companies from Notore to Indorama. Under the revised policy, which the CBN intends to use to stimulate local demand for fertilizer, means importers will now have to patronize the parallel market for FX to import fertilizers into the country. The spread between the official CBN rate and the parallel market is as wide as N57 per dollar. To avoid these extra costs, fertilizer importers are likely to turn to local manufacturers, which would in turn boost revenues for the local fertilizer companies and comes as a relief particularly for struggling Notore. A similar scenario played out with Okomu oil Plc and Presco Plc, both of which benefitted from the CBN’s dollar restriction on palm oil imports. Presco’s revenues rose 115 percent between 2015 and 2017, while profit climbed a staggering 920 percent within the same period. Okomu saw revenues rise 108 percent within the two year period while profit rose four-folds. The two companies have also helped shareholders to bumper return on investment in terms of capital appreciation, bonuses and dividends. Should the dollar restriction on fertiliser replicate the success with palm oil, local fertiliser companies and their shareholders could be in for similar gains. Shares of Notore remained at N62.50 Tuesday, where they have been for the

past 5 years. “The new policy will boost domestic demand and could be a game changer for the local fertiliser companies, but the government must keep a keen eye on smuggling so that the gains of the new policy are not muted,” said Ayodeji Ebo, managing director of Afrinvest Securities Limited. “We may not see an immediate impact from the CBN policy but the future looks bright for the companies involved,” Ebo added. New CBN policy The apex bank as part of its developmental objective of employment generation and inclusive growth had in July 2015 restricted the availability of foreign exchange to the importation of 41 items. The recent addition of fertilizer to the list is seen by many as a welcome development which could help boost the local production capacity of Fertilizer in the country. This is also in line with the Presidential Fertilizer Initiative PFI which was flagged off in 2016. Just the same time the CBN announced this new policy, Notore Chemical Industries Plc, a major manufacturer of Urea Fertilizer released a ‘notoriously’ bad 2018 financial results for the second year running. This has also raised some growing concerns by PWC, the auditor of the company. According to the auditor’s report as contained in the financial results, the Group and Company incurred net losses of N2.01 billion and N1.91 billion respectively during the year ended 30 September 2018 and, as of that date, the Group and Company had net current liabilities of N8.48 billion and N9.11 billion respectively.

Source: Company financials, Business Day

According to the auditors, these circumstances cast doubt about the ability of the Group and Company to meet their obligations as they fall due and accordingly. In its recently released 2018 full year results for the period ended 30th September 2018, the company’s revenue fell 25 percent to N26.8 billion as against N35.9 billion a year ago. Loss before Income Tax surged 69 percent to N3.63 billion from N2.15 billion in 2017. Figures from the results also show that revenue from Urea and other Chemicals production plummeted 25 percent from N35.68 billion in full-year 2017 to N26.65 billion in 2018, the largest revenue segment of the company. Also, revenue from its Ammonia production segment almost halved from N214 million in full-year 2017 to N170 million in the same period 2018. What Notore is doing to

get out of the woods Last year, the company undertook a Listing by Introduction of 1.61billion ordinary shares at a Listing Price of N62.50 per share. Sadly, there has been no movement on the share price as the price remains flat. According to the company, the listing is to help promote better liquidity of its ordinary shares in the secondary market and have access to long term capital from a wide range of local and international investors when required. While speaking at the “Facts behind the listing” Onajite Okoloko, the company’s Group Managing Director, noted that this will grant Nigerians the opportunity to participate in Notore’s growth story. Speaking on the mediumterm plan, he said that the company would develop new compound fertilizer blends specifically for key growth crops, expand its seed business and develop

a crop protection business and as well expand fertilizer production capacity. Noting that dredging activities are expected to commence on Notore’s privately owned jetty in 2019 thus, increasing the jetty berth capacity from 15,000mt vessels to 25,000mt. Upside risk for Notore Notore has also continued to enjoy patronage from the Federal Government as it remains the primary supplier of fertilizer for the ongoing Anchor Borrowers’ Program (ABP), the ₦55 billion programme intervention scheme launched in 2015 by the Federal Government through the Central Bank of Nigeria (CBN) to boost agricultural production and non-oil exports in the face of unpredictable crude oil prices and its resultant effect on the revenue profile of the nation. The Company had on 4 July 2018, secured formal approval for a US$37 million long-term loan facility from

Afrexim Bank, for the funding of its Plant Turn-AroundMaintenance (TAM) program, to acquire and install a back-up power plant and for the stocking-up of critical equipment spares inventory. The loan is repayable over seven years with one-year moratorium on principal repayment, and upon successful completion of the TAM program in Q3 2019, the company’s Urea production volume will increase to its nameplate capacity of 1,500mtpd, this will translate to a significant increases in future revenues and cash flows of the Company and the Group. Downside Risk for Notore The dwindling purchasing power of local farmers, depreciating infrastructure, importation of foreign brands, smuggling activities at border posts have impacted negatively on the activities of Notore in recent times. Investors are anxiously Continues on page 18

AVIATION

Godsmart expands shareholding in NAHCO to 26.95% OLUWASEGUN OLAKOYENIKAN

n its quest to diversify its investment into the aviation industry, Godsmart Nigeria Limited, the single majority shareholder of Nigerian Aviation Handling Company Plc, has expanded its shareholding in the aviation services firm to 26.95 percent. The expansion followed a transfer of all 97.45 million ordinary shares

of Lufthansa Commercial Holding GmbH, which represents 6 percent shareholding in NAHCO, to Godsmart Nigeria Limited. This came barely six months after Godsmart purchased 16.7 percent ordinary shares of NAHCO from some shareholders through trading on the Nigerian Stock Exchange (NSE) to become the single largest shareholder of the company. According to Godsmart, it looks to expand into the

aviation industry as part of its current vision of expanding its presence in the global corporate world. Data from the Nigerian Stock Exchange (NSE) show that the transaction was executed on Thursday, December 28, 2018 as NAHCO recorded an unusual surge in volume and value of shares traded, rising to 98.54 million units and N413.24 million from 177,570 million units and N641,750 in the preceding day respectively.

As a result, shares of NAHCO jumped 1.39 percent to N3.65 after the close of business on Thursday, December 28 but shed 4.11 percent to N3.50 on Tuesday, January 2, 2019. The Board of Directors of NAHCO recently appointed Olatokunbo Adenike Fagbemi, a former Non-Executive Director, as Acting Group Managing Director of the company with effect from December 20, 2018. Fagbemi’s appointment followed the

resignation of Idris Yakubu from the company. Results of nine-month ended September 2018 show the company grew revenue by 25 percent from N7.25 billion compared with N5.79 billion recorded in the corresponding period of 2017. Likewise, profit after tax rose to N601.31 million in the review period as against N287.45 million posted in the same period of 2017, this is despite a 168 percent increase in its income tax

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

expense to N130.53 million. NAHCO is a Nigerian diversified enterprise with interests in aviation cargo, aircraft handling, passenger facilitation, crew transportation and aviation training. Godsmart Nigeria Limited was founded in year 1998 and is a fully Nigerian owned company. Besides its recent investment in the aviation services firm, the company provides furniture solutions, image technology and security systems.

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Business Event

OIL & GAS

Techno Oil gas cylinder plant ready for commissioning this year ... Highlights progress of FG’s ERGP Focus Labs ISAAC ANYAOGU

echno Oil, an indigenous oil and gas company, which obtained Federal Government approval for the construction of its LPG manufacturing plant at Kajola, Ibeju Lekki area of Lagos State could bring it on stream before the end of the year. Construction began in last year from a project that derived impetus from participation in the Federal Government Economic Recovery and Growth Plan Focus Lab. Focus Labs are designed as workshop-style closed-door investment fora between private sector and senior government officials, serving as forums for detailed discussions and interactions to address some of the inhibitions to business investments in the country. The ERGP focus newsletter for December 2018 sent to

BusinessDay indicates that the project is nearing completion and may commence production soon. “The assembly plant is about 65 per cent completed and is expected to be ready for commissioning by second quarter 2019,” the document said. The plant has an installed production capacity of five million 4 high quality LPG cylinders of various sizes annually. The company also recently completed the construction of a 12,000 metric tonnes capacity Liquefied Petroleum Gas terminal in Lagos. It is currently into the production of 6kg and 12.5 kg LPG cylinders while plans are afoot to commence industrial gas cylinder production soon. Using raw materials, including steel coil for the production of gas cylinders, the plant started with small volume production of the cylinders. “However, with the granting of incentives for machines

required for the construction of the plant, Techno Oil is set to reduce the importation of LPG cylinders into Nigeria, deepen the adoption of LPG usage in the country as well as the switch from firewood and kerosene to LPG which is cleaner and safer,” the document said. During a recent working visit by a Federal Government team to the LPG Gas Cylinder plant and the 12,000 ton LPG storage terminal at Kirikiri Industrial Estate, Apapa, Lagos, significant progress was noticed on the backward integration initiatives. The completion of the plant is expected to reduce Nigeria’s importation of gas cylinders mostly from Asian countries and help backward integration in the country. It is also expected to help ramp up the use of Liquefied Petroleum Gas (LPG) and reduce the use of firewood and kerosene, energy sources environmentalists warn are both dangerous to human health as well as the environment.

INSURANCE

AXA Mansard to enhance customer experience with its first responder service ISRAEL ODUBOLA

n line with its commitment to enhance customer experience, AXA Mansard Insurance plc, a member of the AXA Group and global leader in insurance and asset management, has launched the first responder service which aims to support customers whose vehicles are insured with the company whenever they are involved in road accidents. The First Responder Service is an initiative meant to provide flexible and efficient claims settlement to customers on the retail motor insurance plan right at the scene of accident and also to provide necessary assistance to the customers. The service aims to reduce turnaround time for service delivery to customers. With the introduction of the new service, customers will have access to trained First Responder Officers (FROs) who have been trained to perform the first responder duties. The FROs, who are also members of staff of AXA Mansard Insurance and part of the Motor Claims Team, will pro-

vide on-the-spot assistance to the customers, assess damage to customers’ vehicles, adjust claims and initiate the claims. In her comment about this new service, Rashidat Adebisi, divisional director, Retail Solutions, AXA Mansard Insurance, said “We are delighted to introduce the AXA First Responder service to our vehicle insurance subscribers. Customer experience is very important to us and we are ensuring that we provide services that would be customer oriented. “The service would help our customers to get both service and support at the scene of unwanted situations like road traffic accidents. We assure our customers that they would receive the needed support as they navigate their ways around town.” In carrying out this service, the FRO is expected to arrive at the scene of the accident within 10-30mins of the customer’s call and the officer would arrive on a power bike, this strategy has been used in order to perennial traffic situation in Lagos. According to her, “With the First Responder service, customers on our vehicle insurance

package with vehicles worth N3, 000,000 (3million) will have access to the FROs who will provide on-the-spot assistance to them, should they be involved in an accident. This is another benefit of being on the AXA Mansard comprehensive motor insurance plan. The FROs will be accessible to customers between the hours of 7:00am and 7:00pm during the weekdays; and access to the service is absolutely free. The service is currently only available to in Victoria Island, Ikoyi, Lekki, Ikeja axis, and Surulere areas in Lagos.” An industry expert lauded this initiative and stated it would elevate the quality of service delivery, and would also help AXA Mansard Insurance attract prospective customers to purchase its policies, which consequently would propel customer confidence. He disclosed this to BusinessDay via telephone conversation. Last year, AXA Mansard won the Outstanding Insurance Brand Award and Advertising Excellence Award for its innovative solutions in pensions, investment, health and protection.

L-R: Tokunbo Abiru, managing director/CEO, Polaris Bank Limited; Ebunola Anozie, CEO/founder, Care Organisation Public Enlightenment (C.O.P.E.); Osato Giwa-Osagie, chairman of COPE, Emeritus, and Kolade Ojo-Osagie, group head, corporate planning & strategy, Polaris Bank, during a thank you visit by Trustees of COPE, a cancer focussed NGO to Polaris Bank for the lender’s support in the fight against breast cancer in Nigeria.

L-R: Fola Adeyemi, permanent secretary, ministry of information and strategy; Kehinde Bamigbetan, commissioner for information and strategy, and Idowu Ajanaku, special adviser to the governor on information and strategy, during a press briefing on the launch of a Reality TV Programme ‘Lagos Rescue’ by the State Government, in Lagos.

L-R: Uche Osoka, group art director, SO&U; Udeme Ufot, group managing director, SO&U; Boyce Akpata, board member, SO&U, and Ima Abasi Esu, senior brand director, SO&U, at the SO&U Group GIVELOVE Outreach held in Lagos.

MANUFACTURING

How Notore could become the new Okomu & Presco with... Continued from page 17

waiting for the Onajite Okoloko-led management team to turn things around and return Notore to the path of profitability so that shareholders can get a good return on their investment in no long time. Notore commenced commercial production and distribution of fertilizer across the country in 2010 after the reha-

bilitation of plants and assets acquired from the moribund National Fertilizer Company of Nigeria (NAFCON) through the federal government’s privatization programme in 2005. Notore Chemical Industries (Mauritius) Limited controls 76% of the shareholding structure with a couple of other Nigerian investors. The Group currently pro-

duces Urea and Ammonia and owns a Urea producing plant in Onne, Rivers State. It currently supplies and sells its fertilizer products across the thirty-six (36) states in Nigeria including Abuja, the Federal Capital Territory. The Group trades and exports its manufactured fertilizer products to West Africa, South Africa, South America, and Europe.

L-R: Sunday Okereke, regional sales manager, East, PZ Cussons Consumer; Mercy Johnson-Okojie, celebrity brand influencer; P. O. Konyeha, active distributor, Port Harcourt Territory; Ahusimere Ejiroghene, brand manager, morning fresh, PZ Cussons Consumer, and Sunday Ekpo, area sales manager, PZ Cussons Consumer, at the official Morning Fresh trade launch in Port Harcourt, recently.

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Onuwa Lucky Joseph (08023314782) Editor.

MTN rounds up year 2018 with good cheer Stories ny Onuwa Lucky Joseph

Who gave what in 2018?

tedola Donates N2Billion Engineering Complex to University Billionaire businessman Femi Otedola, donated a complex to the Augustine University’s engineering faculty that’s reportedly worth about N2billion Speaking at the event, Otedola said, like his father, he was passionate about education and development of the country. “My father was very passionate about a university being built in Epe”. “So, it is with this project – I want all my friends to know – because the hand of God is in it. It is a worthy cause. My mother persistently encouraged me to support the Augustine University project. Subsequently, I decided to build an engineering faculty for

the university – which would be my home – for the glory of God. I can assure you that this project will be completed in good time,” Otedola explained. The university which began operation in 2015, is already running at least eight courses subscribed to by 200 students up to 400-level. Femi’s exultant mother, Lady Doja Otedola, at the occasion, said: “I think I’m the happiest person today and I’m sure I’ll always be happy. It is always on record that this Augustine University was meant to be built at Odo-Ragunsin. Sometime in 1994 my late husband, Sir Michael Otedola, was approached to make financial donation to them. He was able to help get this large parcel of land for the university through the supports of the thenAlara of blessed memory.

Dangote doles out N2.5bn, earmarks N10bn to vulnerable women

major complaint about corporate organisations is that they are always looking to make a buck or two. Of course they are. That’s why they are in business. But they know that going after a buck or two is not all businesses are about. If they must remain in business, then they must assign commensurate value to their customers and would be customers by doing the giving sometimes rather than being continuously enriched at their customers’ expense. Serious organisations do the give-backs as often as possible, but they consider year ends the best time to trot out their goodwill creds (street-speak, sorry). They do this in multifarious ways. Gifts to kids and adults, especially the disabled and displaced; this would usually involve visits to orphanages and old people’s homes. More and more, however, regular customers are captured in the goodwill campaign as companies make elaborate effort to see them happy and hopeful and

enjoying the end of year season. What better way for 2018 to end then than with corporate organisations lining up delights for customers and the general public. Though many Nigerians would consider 2018 another annus horribilis, with just about everything going askew for the greater majority, MTN, which also had acknowledged dips in its fortunes decided to continue the tradition of giving at year end, something that kindles happiness and helps individuals look forward to another year with hope. MTN SEASON OF SURPRISES The MTN Season of Surprises which now in its 4th season was more a 20-Day bonanza spree that saw people getting something of value for nothing, at 90 locations, nationwide. MTN staff who double as volunteers for the give-away just turn up and turn on the smiles and the grins and guffaws with their handouts of food items (including bottles of oil and bags of rice) and branded souvenirs wherever they visit. Shoppers at the big malls found themselves walking away

with gift vouchers, while commuters at bus stations as well as airports got refunds for their fares as well as free tickets for their next commutes. Even cinemas and musical concerts were not left out. Lots of free tickets! One major community that missed out was universities. You can be sure they would have been well targeted by MTN. Unfortunately, the ASUU strike helped make sure this was not possible. Hopefully, some university students were amongst those on hand to receive the goodies at the different locations. All in all, and according to the company, more than 300,000 Nigerians were touched. This is better than the 250,000 for 2017. And it was all accomplished by MTN staff who volunteer every year for this assignment, to put smiles on the faces of their countrymen and women. You could say their spirit was infectious as they transmitted their positivity into others, some of whom were clearly dispirited until the MTNers showed up. Is this marketing or what? If it’s not, tell me what is.

Cadbury rewards 30 employees for long service

lhaji Aliko Dangote who says he wants to be known as the biggest philanthropist in Africa, had his foundation disburse a total of N2.5 billion to 256,500 women across Kano, Lagos, Jigawa, Kogi, Adamawa, Borno and Yobe states. Dangote made this known during the inauguration of the foundation’s “one-off and unconditional microgrants” programme in Niger State. The scheme targets 25,000 disadvantaged and vulnerable women in Niger State, who will each be given N10,000 cash “to boost their household income generation.” While saying “I do not only want to

be known as Africa’s richest man, but the biggest philanthropist”, he revealed that the Dangote Foundation had earmarked N10 billion for the empowerment of vulnerable women in the 774 local government areas of the country. In her remarks, the Executive Director, Aliko Dangote Foundation, Halima Aliko -Dangote, said the foundation was poised to help lift the status of women in the country, saying “If you empower a woman, you empower the whole nation.” (‘Who Gave What’ continues next edition)

ecall that Cadbury Nigeria has had some rather tumultuous times in its recent history, trying times which saw a significant number of staff members jumping ship to save their careers. However, a few stayed on to right the ship and ensure it didn’t sink with the gale of the Bunmi Oni Years. The company felt that end of year 2018 was a good time to reward 30 of those folks for their dedication. According to Bala Yesufu, Cadbury Director of Corporate and Government Affairs, West Africa, 18 of the awardees are in the 10 years category, nine awardees in the 20 years category while the last three awardees were been rewarded for 3 decades of meritorious service. 11 out of the 18 awardees in the 10 years category, it turns out, are staff of Cadbury’s Ondo Plant. “The awardees” Yesufu disclosed, “have been part our lives,

have contributed in no small measure to the growth of the business over the years. Cadbury will continue to celebrate its employees for their commitment and loyalty to the organisation.” It will be recalled that a resurgent Cadbury won several awards in 2018 for its commitment to workplace safety and Corporate Social Responsibility (CSR). Its Ondo Plant received an award for its Excellent Safety Culture,

under the Safe Workplace Intervention Project (SWIP) of the Nigeria Social Insurance Trust Fund (NSITF) and the Nigeria Employers Consultative Association (NECA). Cadbury’s Ikeja Plant won a similar award in 2013. Cadbury also received an award for its commendable CSR at the 2018 Annual Compliance and Green Awards ceremony, organised by the Lagos State Environmental Protection Agency (LASEPA).

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Corporate Social Impact

Rwandan ambassador’s son wins nature photography contest at AUN Stories by Onuwa Lucky Joseph

final-year student of Communications and Multimedia Design (CMD) at the American University of Nigeria (AUN), Yvan Kamanzi, has emerged as the winner of the just-concluded Birds of AUN competition. Yvan is the son of the Rwandan High Commissioner to Nigeria, H.E. Satnislas Kamanzi. Software Engineering major, Chukwuma Stephen emerged second-place winner while Assistant Professor of English Mohammed Tristan Purvis, won third place. AUN President, Dr. Dawn Dekle, who initiated the ‘Birds of AUN Competition,’ announced the winners early December, at the lobby of the Dr. Robert Pastor e-library building. Global conservation watchdog National Geographic had designated 2018 as the Year of the Bird, ‘bringing attention to the threats birds face and reigniting conservation efforts.’ Dr. Dekle had introduced the contest in January after she noticed the many beautiful birds on the campus. President Dekle, who is leading the university through a strategic sustainability agenda, had chal-

lenged students, faculty and staff to watch and photograph ‘the magnificent birds that inhabit our campus,’ and share their observation. Mentioned in Mr. Kamanzi’s winning entry was the blue-headed Coucal (Centropus monachus), a bird, he said: “chooses to remain aloof.” “Like all coucals, the blue-headed has very long claws that allow it to feed on tiny insects and amphibians. Their voices are deep with resonant “coo” phrases. They sit upright as they perch and sing on top of trees

and branches. They are interesting to watch and do interesting things. The blue-headed Coucal can be found lurking around treetops behind Dorm EE’s open fields and the AUN huts behind the School of Law”. The winners received N90,000 in cash prizes plus certificates. Six semi-finalists were recognized, and each received a certificate of participation. They include Cyril Oni, Ifeatu Uzodinma, Jessica Gwadi, Terdoo Orje-Ishegh, Chiedozie Joseph, and Ruth Unde.

closer to home. Real estate magnate Bill Cummings, whose Cummings Properties owns more than 10 million square feet of commercial space in the greater Boston area, started a “$100K for 100” program at his foundation in 2012. The initiative gives out 100 grants of $100,000 every year to local nonprofits supporting human services, education, healthcare, and social justice. He and his wife gave away $35 million in total last year. Similarly, when Hurricane Harvey struck in 2017, Dell computers founder and Austin billionaire Michael Dell jumped into action, launching the Rebuild Texas Fund through his Michael & Susan Dell Foundation. The campaign aims to raise over $100 million to aid in the long-term recovery of communities affected by the hurricane; Dell’s foundation committed $36 million to the effort. Higher education is another popular cause among the top givers. In 2017, Home Depot cofounder Bernard Marcus gave $11 million to Duke University for stem cell therapy research, and committed $38 million to the University of Colorado to create a brain institute. Hedge fund billionaire Ken Griffin committed $125 million in November 2017 to University of Chicago’s economics department, while late Microsoft cofounder Paul Allen gave $50 mil-

lion to the University of Washington to help establish a computer science and engineering school. In total, members of America’s Top 50 Givers donated $12.6 billion in 2017 -- up from $12.2 billion in 2016. Collectively, the group’s lifetime giving exceeds $158 billion. THE FIRST 25 Warren Buffet Bill & Melinda Gates Michael Bloomberg Walton Family George Soros Mark Zuckerberg and Priscilla Chan Gordon & Betty Moore James & Marilyn Simons Hansjoerg Wyss Dustin Moskovitz & Cari Tuna John & Laura Arnold Pierre Omidyar Michael & Susan Dell Charles Koch Larry & Beth Gies Bernard & Billi Marcus Lynn Schusterman Eli & Edith Broad Chuck Feeney Ray Dalio Julian Robertson Jr W. Barron Hilton T. Denny Sanford Stephen Bechtel Jr DeVos Family

America’s top philanthropists

romises are way too easy to make. Like our politicians do when they are seeking votes. They’ll promise heaven and earth. But the real deal is in giving away the cash for the reasons stated. That’s where the rubber meets the road and that’s where a lot of so called philanthropists falter. Forbes partnered with Boca Raton, Florida’s SHOOK Research, and tracked the philanthropists who made good on their pledges. We only count money that reaches beneficiaries – and exclude commitments that have yet to be paid out or donations that are still sitting as foundation assets. Unsurprisingly, many of America’s Top 50 Givers are among the richest in the country; nine of the top ten givers are members of the 2018 Forbes 400, as well as 40 of the top 50 overall. For the fourth straight year, Warren Buffett is No. 1 on the list, with 2017 giving of $2.8 billion. The Berkshire Hathaway chairman, who signed the Giving Pledge in 2006, gave more than $2 billion to close friends Bill and Melinda Gates’ foundation, and split the rest between the Susan Thompson Buffett Foundation (named after his late wife) and three foundations set up by his children. Bill and Melinda Gates are right behind at No. 2 with $2.5 billion

in 2017 donations. The couple has given over $35 billion to their foundation since 1994, and the nonprofit is now the biggest private charitable foundation in the world. Top grantees in 2017 include the Global Fund to Fight AIDS, Tuberculosis and Malaria, Gates Medical Research

Institute and Alliance for a Green Revolution in Africa. Two Facebook cofounders, Mark Zuckerberg and Dustin Moskovitz also made the ranks. In 2015, Zuckerberg and his wife Priscilla Chan founded limited liability company Chan Zuckerberg Initiative (CZI), which focuses on science, education, justice and economic opportunity and does impact investing and advocacy as well as philanthropy. The couple, who pledged to give away 99% of their Facebook shares in their lifetime, donated $400 million to charity last year. Moskovitz, who set up Good Ventures Foundation with his wife Cari Tuna, gave away $298 million in 2017; his foundation supports causes including animal welfare and artificial intelligence research. While some philanthropists’ dollars reach all four corners of the globe, others like to focus a little

(Adapted and culled from Forbes magazine)

Thursday 10 January 2019

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In association with

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

Market capitalisation

NSE Premium Index

The NSE-Main Board

NSE ASeM Index

2,165.23

399.27

793.81

Week open (28 – 12–18)

31,070.0 30,773.64

N11.721 trillion

N11.241 trillion

2,162.11

1,402.01

793.81

Week close (04 – 01–19)

30,638.90

N11.426 trillion

2,129.24

1,409.02

792.45

Year Open

Percentage change (WoW)

-1.28

Percentage change (YTD)

-2.52

-0.06 -3.00

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

300.24

2,218.37

1,222.99

1,201.80

725.65

285.42

2,208.75

1,242.60

1,171.74

730.77

299.85

2,199.55

1,182.47

1,174.14

NSE Banking Index

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

1,399.64

399.27

124.82

1,385.04 1,378.82

393.91

127.01

387.04

124.70

NSE 30 Index

-2.23

-0.17

-1.65

-2.14

-0.17

-2.70

-2.70 -2.98

-1.00 -1.41

731.57

-1.03 -2.41

2.91 -0.79

-0.94 -1.54

-3.88

-1.93

-4.48

-15.08

Zenith, GTB, FBNH, UBA, others top analysts banking stocks picks

…also Unilever, Nestle, Dangote Cement, others get ‘buy’ rating HEANYI NWACHUKWU

tock investors who wish to reap both capital appreciation and dividend income should start considering stocks like Zenith Bank Plc, GT Bank Plc, FBN Holdings Plc, UBA Plc, Transcorp Plc, Dangote Cement Plc, Seplat Plc, Flour Mills of Nigeria Plc, Nestlé Nigeria Plc, Dangote Sugar Refinery Plc, and that of Total Nigeria Plc. INVESTOR check shows these companies and some others are reoccurring as major analysts stock picks for this year 2019. Most of these value stocks are also known for their history of paying dividend. Other stocks that have analysts ‘Buy’ ratings are FCMB Group Plc, Fidelity Bank Plc, Stanbic IBTC Holdings Plc, Unilever Nigeria Plc, Okomu Oil Palm Plc, Presco Plc, Julius Berger Nigeria Plc, and Vitafoam Plc. Investors are expected to buy and hold stocks and ignore market volatility associated with overreaction in the market. Analysts believe the following sector of the NSE should record fairly strong growth in 2019 –Consumer Goods, Industrial Goods, Financial Services (Banking) and Oil and Gas. It is also expected that the full year performance of companies listed on the Nigerian Stock Exchange (NSE) will either woo investors to the market or discourage investors. Amid all these, the Nigerian equity market is expected to close the year 2019 in positive territory. The equity market had depreciated by 17.81percent in 2018, after an appreciation of 42.30percent recorded in 2017. Analysts views FSDH Research said its analysis shows that the earnings performance of the quoted companies may show

improvements in 2019 compared with 2018 “if appropriate policies are implemented to address the risk factors in the economy.” FSDH Research recommends valueinvesting strategies for stock investment in 2019, saying investors should select companies in good business with sound fundamentals, whose share prices are trading below their fair values. “Although a number of factors may limit the growth of the equity market in 2019, we believe it will record a modest recovery. The election activities that will dominate the first quarter of the year may deter investors throughout Q1 2019. “However, informed investors usually make money from the equity market when other investors are cautious. Therefore, we expect some

strategic positioning in the equity market in first-quarter (Q1) 2019 ahead of a recovery in Q2 2019,” FSDH Research analysts said. “Developments within the global crude oil market may determine the direction of the equity market. FSDH Research observes that the price of crude oil and the Nigerian equity market tend to move in a similar direction. “An increase in the yields on fixed income securities, considered by many investors to be low-risk investments, may depress the equity market as investors realign their portfolios in favour of such fixed income securities. There may be a few activities in the primary market segment of the equity market in 2019 as investors lean towards fixed income securities to secure high yields”, FSDH analysts

added. Vetiva Research They see three major drivers for the Nigerian equity market in 2019: the local political landscape, global sentiment towards emerging markets, and domestic macro-economic fundamentals. On the political front, Vetiva Research anticipates a rocky start to trading in the equity market as elections draw near. “Historically, the periods before major elections in Nigeria have been characterised by a ‘steer clear and monitor’ approach by foreign investors and local investors. Unsurprisingly, the ASI shed 4percent on average in Q1’2011 and Q1’2015, the previous election years. We expect a similar trend in Q1’19, particularly as foreign

investors monitor developments in the global oil market and Sino-American trade negotiations,” according to Vetiva Research analysts. “We note that foreign investors accounted for c.49.38percent of market activity in 2018, despite sizable capital outflows. Finally, we expect currency pressure to persist through the year and forecast only modest economic performance (2019 GDP growth: 2.7percent year-on-year (y/y) and do not expect macroeconomic developments to provide much market joy in 2019. Coupled with our expectation of adverse external conditions in 2019, we anticipate modest post-election equity market performance and project a market return between -5percent and 5percent, with a point estimate of 2.5percent. United Capital research For equities, performance in 2019 United Capital research analysts said it will be anchored on the outcome of the general election on one hand and the change of guard at the Apex Bank on the other. “Overall, we imagine a flattish performance in first-half (H1) 2019 and a quick rebound in second half (H2) 2019, especially if the outcome of the election is seen to result into a smooth and peaceful transmission from May 29 onward. “Against the backdrop of a better balance of risks going into 2019 and considering the extreme valuation differences between Nigeria (9.0x) and the rest of the world (EM: 11.6x, FM: 10.9x, and the world: 15.6x), we anticipate net-capital inflow into Nigeria in 2019, especially after elections. Accordingly, our base case return for the market is projected at +9.4percent”, said United Capital research analysts.

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Thursday 10 January 2019

STOCK MARKET REPORT FOR JANUARY 4TH 2019

Helping you to build wealth & make wise decisions

The market opened for four trading days this week as the Federal Government of Nigeria declared United Capital Investment Views Tuesday 1st January 2019 a Public Holiday to mark the New Year celebrations.

2018 review; 2019 preview

Meanwhile, a total turnover of 1.647 billion shares worth N8.413 billion in 14,773 deals were traded this week by investors on the floor of the Exchange in contrast to a total of 3.129 billion shares valued at N14.348 billion that exchanged hands last week in 10,394 deals.

Global Economy in 2019: R i s i n g d o w n s i d e r i s ks , waning upside surprises rom a synchronized growth in 2017 to an uneven outcome in 2018, the global economic outlook for 2019 is bumpier. By our estimates, worries around r i s i ng rat e s i n t h e U. S, together with an expectation for the European Central Bank (ECB) to end its asset purchase program and begin rate hikes will top the list of factors to watch. In addition, concerns about a trade war between the US and China, the materialization of an actual Brexit as well as sustained pressure on oil prices are set to amplify risks to already badly beaten Emerging Market (EM) assets in 2019. While yields on EM bonds touched a 9-year high in Dec-18, indicating that downside risks should be much lower, a probable escalation of the concerns highlighted above suggests that there are potentials for deeper dives. This is worsened by a spree of high profile elections set to keep investors on the edge in economies such as India, South Africa, Argentina, Indonesia, Thailand, and Nigeria in 2019. Overall, our outlook for the global economy in 2019 is bumpy amid elevated risk factors in the monetary policy, geopolitical and trade environments. Accordingly, the International Monetary Fund’s (IMF) projection for global growth is flat at 3.7% amid rising downside risks in contrast to waning potentials for upside surprises. Sub-Saharan Africa: Will SSA assets rally in 2019? The outlook for SubSaharan Africa (SSA) is broadly in line with a bumpy global posture in 2019. The IMF sees growth in the region at 3.3% in 2019 on the expectation of further rebound in oil-rich Nigeria and Angola, although heavy reliance on oil leaves both economies exposed to external shocks. However, indications that the market rout on SSA assets is not yet over remains. In 2018, SSA assets closed bearish as sell-offs in Nigeria (-17.8%), South Africa (-11.4%), Ghana (-3.1%) and the Francophone based BRVM (-29.1%), drove stocks across the region to record lows. By Bloomberg’s estimate, African stocks fell 28.9% (vs. 16.8% for EMs) in dollar terms. Also, yields of SSA Eurobonds rose to 2016 levels (averaging 5.9% vs. 4.9% for EMs) amid increasing fiscal deficit, especially via Eurobond issuances, across the region. Hence, the question is, “will bargain hunters opt for SSA assets in 2019?” Despite attractive valuations, downside risks abound. Top on the list includes worries around the outcome of presidential elections in Nigeria and South Africa, the two biggest economies in the region, as well as sustained pressure on

oil prices and the prospect

less expansionar y, amid

underwhelming in 2018, we

expenditure is expected to be

The Servicesdefaults Industry (measured ledcthe reactivity a s i nchart g with c o 1.154 s t obillion f dshares ebt ofFinancial sovereign amidby avolume)i n e r v i c i 70.08% n g a and n d68.25% n o nto-the d etotal bt recent spreebillion of debt valued at N5.742 traded issuances. in 9,174 deals; thus scontributing recurrent amplified equity Nigeria: turnover volumeIsandthe valueelectionrespectively. The Healthcare Industryspending, followed with 271.277 million by recent calls for an upward riskworth overpriced? shares N82.647 million in 219 deals.The third place was Services Industry with a turnover of While recovery remained adjustment of the minimum 91.734 million shares N 208.562 million in 232 deals. w a g e. Ho w e v e r, c a p i t a l gradual andworth considerably weaker. expect factors to Bank Trading in thethree Top Threekey Equities namely, Diamond Plc, Union Diagnostic & Clinical Services NairaforAssets: What is worth the shape the performance of the Plc and NEM Insurance Plc (measured by volume) accounted 816.016 million shares Nigerian economy in 2019. investment case for Nigeria N1.305 1,615general deals, contributing 49.54% andin15.51% to the total equity turnover volume 2019? First,billion thein2019 election, and value respectively. Despite poor sentiment for billed for Februar y, will

naira assets in 2018, election uncertainties, hawkish y polic y stance, into Q2-19, if Turnover the outcome is monetar Turnover Traded Advanced Declined Unchanged global economic volatilities stretched. same token, Date DealsBy the Volume Value (N) and Stockspressure Stocks onStocks Stocks EM assets the outcome of the election 31-‐ D ec-‐ 1 8 4,145 929,325,633 3,951,562,822.69 96 32 17 47 will shape policy and overall may keep sentiments for naira assets bearish in 2019. momentum growth 1,562,205,414.12 in H202-‐Jan-‐19 2,857 of 214,418,136 91 16 22 53 the investment 19. possible 1,128,059,719.18 change However, 03-‐Jan-‐Secondly, 19 3,688 a169,193,476 98 13 24 61 of guard at the office of the CBN case for Nigeria remains 04-‐ J an-‐ 1 9 4,083 334,317,109 1,771,127,452.09 92 11 20 61 compelling. Governor is another factor For Fixed income to watch, as the Governor’s first 5-Year tenor ends in Jun- instruments, the shape of probably subdue economic

Equity Turnoverin- Q1-19, Last 4 daysand possibly activities

19. Finally, the outcome of the the yield curve is expected election is anticipated to come to flatten out and remain with possible reforms across key elevated in Q1-19 as rates on sectors of the economy, amid short-term bills level up with gaping infrastructural deficits, longer-term instruments on disturbing poverty statistics, the back of increased election shar p r i s i n g p o p u l a t i o n uncer tainty and fur ther For Further Inquiries Contact: Market Operations Department Page 1 growth, rising fiscal deficit, liquidity mop-up by the calls for minimum wage CBN. However, on successful adjustment, sub-national completion of the election, we g ove r n m e nt i n s o l ve n c y , expect political risk to give way, and faltering revenue base. predicating a normalization Our forecast for GDP growth of the yield curve amid a remains weak, projected repricing of risks. Nonetheless, a t 2 . 1 % . We e x p e c t t h e a moderation of the yield curve headline inflation rate to may be capped by pressure in stay elevated, well above the global space as the ECB CBN’s single-digit target, begins its rate hike in H2-19. but marginally below the For equities, performance c u r r e n t M P R o f 1 4 . 0 % . in 2019 will be anchored on Conditions in the external the outcome of the general sector may remain volatile, election on one hand and the but we expect the CBN to change of guard at the Apex continue to suppor t the Bank on the other. Overall, we naira at N360-N365/USD imagine a flattish performance levels, buoyed by decent in H1-19 and a quick rebound external reserves. However, in H2-19, especially if the Foreign Portfolio Investors outcome of the election is seen (FPIs) are unlikely to return to result into a smooth and until after the election. We peaceful transmission from imagine that the MPC will May 29 onward. Against the continue to hold off any backdrop of a better balance rate cut in H1-19, in view of risks going into 2019 and of elevated uncertainties considering the extreme i n t h e p o l i t y . A s s u c h , valuation differences between aggressive liquidity mop- Nigeria (9.0x) and the rest u p w i l l c o n t i n u e a m i d of the world (EM: 11.6x, FM: changes in global monetary 10.9x, and the world: 15.6x), we c o n d i t i o n s , e x p a n d e d anticipate net-capital inflow political spending, calls into Nigeria in 2019, especially for a new minimum wage after elections. Accordingly, and higher inflation. Fiscal our base case return for the operation is expected to be market is projected at +9.4%.

Investor’s Square •Have you been shabbily treated by your registrar, stockbroke r or other capital market operators? Let us know and investor will help you investigate and report back. E-mail: iheanyi.nwachukwu@businessdayonline.com

Retail investors’ interest regained in OTC stocks …market cap hits new high of N520.89bn HEANYI NWACHUKWU

etail investors in Nigeria regained interest in OverThe-Counter ( O TC ) t ra d e d stocks in the year 2018, while institutional investors confirmed their confidence in NASD market structure. In the NASD OTC market, institutional investors executed long term acquisitions in some of the better managed securities. As at clos e of trade week on January 4, 2019, the market capitalisation of NASD traded securities increased to N520.89 billion, from preceding week’s level of N509.69 billion, which shows a 2.20percent increase in Capitalisation. Also the Unlisted Securities Index (USI) for the week ended January 4, 2019 recorded a 2.20percent increase from 733.35 points

to 749.47 points. For this OTC market, it was indeed a remarkable year of creating liquidity and supporting transparency in the Nigerian capital market. “Last year commenced with a release of pent up trading activity that had built up during the 15-month recession period. First depressurisation in quarter one (Q1) of 2018 alone resulted in trade activity that exceeded total trade activity of 2017 (in volume and value)”, NASD said in a January 4 note to INVESTOR. The entry of Allianz Plc into the Nigerian Insurance lands cap e and var ious private equity (PE) firms into the financial sector were significant stand out events, the NASD noted. A fully indigenous firm Agemate limited refined and released two versions of the Bilateral Interdealer Trading System [BiTs] during the review year. The NASD said, “The

flexibility of BiTs enabled us to provide the OTC community with a more representative Value Weighted Pricing methodology – fur ther encouraging investor interest and price discovery. “The Apex regulator also provided full support of the market and approved our scheme to launch a trade guarantee fund which will ensure that no investor will lose from a failed trade on the NASD OTC”. The review year 2018 also witnessed NASD introduction of the capital market to the growth enterprise industry through NASD Enterprise Portal (www.nasdep.com). “We remain convinced that the bulk of Nigeria’s economic activity will come from this segment. We acknowledge the several f i na n c i a l a d v i s e r s a n d private equity firms that have already enlisted to play in this critical area,” NASD noted.

Citigroup, UBS bearish on Emerging Markets

ains in emerging markets since the start of the year failed to make UBS Group AG and Citigroup Inc. any less bearish as they saw new risks arising and weakening the chance of 2016- or 2009-style rebound. The MSCI Emerging Markets Index, the equity benchmark, fell Tuesday after posting the biggest two-day gain in two months. The currencies gauge retreated from the highest level since July. A measure of dollar debt rose for a seventh day Monday, and its local-currency counterpart climbed to an eight-month high. While the rally through yesterday was supported by China’s move to release more cash into the financial system and by speculation that the Federal Reserve may pause interest-rate increases this year, UBS said the key risks for emerging economies lay elsewhere. Potential declines

in trade as well as economic growth could outweigh Fed and dollar moves, it said. UBS was not alone. Commerzbank AG said signs of stress were rising in the usually more resilient emerging markets: for instance, Poland was seeing greater uncertainty over the future of Central Bank Governor Adam Glapinski. Nedbank analysts said volatility in the South Africa’s rand will intensify in 2019 due to slowdown in global growth. Not all banks are bearish on emerging markets. Morgan Stanley turned bullish on emerging-market sovereign debt due to attractive valuations, strategists Simon Waever and Jaiparan S. Khurana wrote in note. Recent dips in emerging-market currencies are an opportunity to add risk, Morgan Stanley strategist Andres Jaime said in a report. “Leading indicators point unanimously to a coming

contraction in global trade, one that may possibly begin in Q1 2019,” UBS strategists including Bhanu Baweja wrote in an emailed note Monday. “If global trade goes into recession, as we expect, emerging-market currencies will see another round of depreciation.” Citigroup strategists are “now bearish” on emerging-market sovereign credit “as a whole” because of debt-service pressure. New sovereign issuances may strain the bond markets that are already under pressure from volatility in U.S. and global stock markets, they said. “One of the monthly peaks in debt-service payments happens in March, with $10.9 billion in the sovereign space and $7.7 billion on the corporate-credit front,” strategists including Luis Costa wrote in their note. “That may be particularly troublesome in January, given the expected pipeline of new issuances on the sovereign front.”

Thursday 10 January 2019

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

reason to believe that the bank will not be a going concern in the next twelve (12) months from the date of this report. For this reason, these financial statements are prepared on a going-concern basis.” “One of the Directors of the Company raised a whistle blowing petitions to regulators during the financial year bothering on perceived fraud. However, the matter is still under investigation

by regulatory agencies”, the directors noted. Independent auditors in their report to the members of Resort Savings and Loans Plc raised key audit matters. “Substantial portion of directors’ loan which was written-off in 2011 as bad due to its nonperforming nature was written back into the books in line with Central Bank of Nigeria (CBN) directive. The amount of the loan was N2billion. Necessary entries had been passed to reinstate the loan earlier written-off from the books. Interest had however been suspended on the loan balance. “The matter is considered key audit matter due to the materiality of the amount involved to the operation of the bank and in compliance with the directive of the apex Bank” BBC Professionals, the independent auditors to the Resort Savings and Loans Plc noted in their report. The independent auditors added: “The bank is required by Central Bank of Nigeria (CBN) to inject minimum fresh capital of N10.793 billion to meet the minimum capital requirement of a Mortgage Bank.” Resort Savings & Loans Plc is duly licensed to carry on

Mortgage banking business. It is a primary Mortgage Bank (PMB) authorised to receive deposits and maintain accounts for their customers for the purpose of providing service, creating mortgage a s s e t s a n d o t h e r c re d i t facilities. The bank has been actively involved in the provision of retail Mortgage Banking Services to variety of its customers to own their own houses. Resort Savings and Loans Plc is actively involved in the Nat i o na l Ho u s i n g Fu n d loan disbursement and the monthly NHF remittance collection. The bank is also engaged in the provision of liability management through its product range. Some of these include Resort Insurance-Linked Mortgage Fund (RILMFUND), Resort Asset and Liquidity Jewel, Current Account, Savings and Tenor Deposits. Resort Savings & Loans Plc fully owned subsidiary; Resort Developers Limited carries on the business of real estate development, management and loan syndication and consulting services.

green projects •A process to determine how a selected project(s) fits within the eligible green projects’ categories identified in (1) above •The environmental sustainability objectives of a selected project(s). This information must be within the context of the issuer’s overarching objectives, strategy, policy and/or processes relating to environmental sustainability. The GBP transparency principle is very high. Consequently, all green projects evaluation and selection process are subjected to external reviews. Management of Proceeds The process for managing and tracking the proceeds of issued green bonds should be clearly and publicly disclosed. For transparency, it is recommended that an issuer’s management of proceedsissupplementedwiththe appointmentofanauditororother third party to monitor and verify the internal tracking methods and the allocation of funds from the green bond proceeds. Where the green bonds are outstanding, balance of the tracked proceeds are periodically adjusted to match allocations to eligible green

projects made during a given period. Full disclosures must exist with respect to the intended types of temporary placement for the balance of unallocated proceeds. Reporting Detailed reporting promotes credibility and transparency of the entire process. It not only provides periodic information which assures the investors but highlights the issuer’s effort in the promotion of sustainability and related practices. Pending full allocation, issuers of a Green Bond are to report the use of proceeds to be renewed annually. Such information must be readily available and timely in case of any material development. The periodic report will usually include the list, description and amount allocated to projects funded with the proceeds of the bond. Where a confidentiality agreement is in place, or in the face of competitive considerations, the issuer is under obligation to still provide generic information on an aggregated portfolio basis. For instance, percentage allocated to certain project categories. On an annual basis, or as is required/agreed, periodicreportsontheuseofgreen bond proceeds and expected climate and/or environmental

impacts of eligible projects must be reported. Green Bond Market in Nigeria As a champion of innovative initiatives in the Nigerian financial markets, FMDQ, in partnership with FSD Africa and CBI, has made one of the most significant contributions yet, to the development of the Nigerian nonsovereign DCM, specifically the green bond market. Having signed a Cooperation Agreement in June 2018, the trio have spearheaded a three(3)-yearNigerianGreenBond MarketDevelopmentProgramme to,amongothers,createawareness and drive the requisite education required to integrate the principles ofgreenfinancingintotheNigerian DCM, in order to facilitate the establishmentanddevelopmentof the green bond market in Nigeria. The Programme will support the development of guidelines and listing requirements for green bonds in Nigeria, develop a pool of Nigeria-based licensed verifierstosupportissuers,facilitate engagement with extant and potentialissuersandinvestors,and support broader DCM reforms that have/will have an impact on the nongovernment bond market in Nigeria.

HEANYI NWACHUKWU

he full year Loss A f t e r Ta x a t i o n (L AT) of Resort Savings and L oans Plc expanded by 36.98 percent to N947.430million in 2017, from a lower Loss After Tax (LAT) of N691.648 million the company reported in the preceding full year 2016. Its recently released full year scorecard at the Nigerian Stock Exchange (NSE) for the period ended December 31, 2017 shows Resort Savings and Loans Plc top-to-bottom line figures were in the red. Th e c o m p a ny ’s G ro s s Earnings decreased by 44.50 percent to N490.578 million in 2017 from N883.993 million in 2016. Its interest income decreased by 22.83 percent to N415.837 million, from N538.858 million recorded in 2016. It s f e e a n d c o m m i s s i o n income decreased by 91.68 percent to N8.925 million, representing a decline from N107.225 million reported in 2016. Investment income

of N11.163 million as aga i n st N 1 5 . 5 6 1 m i l l i o n in 2016 represents 28.26 percent decline. Loss before income tax of N933.374 million shows a decline of 37.86 p e rc e n t , f ro m N 6 7 7 . 0 2 2 million in 2016. Total Asset depleted by 6.16 percent to N7.181 billion, from N7.653 billion in 2016. Total Liabilities of N10.260 billion in 2017 represents

4.86 percent increase compared with N9.784 billion total liabilities in 2016. Shareholders fund depleted by 44.46 percent to N3.078 billion as against N2.131 billion recorded in 2016 financial year. The directors of the company in their report said they assessed the bank’s future performance and financial position on an ongoing basis and “have no

FMDQ Learning

Green Bonds Financing

n the September edition of the FMDQ Spotlight, the concept of Sustainable Finance was introduced and its different elements – Environment, Social and Government (ESG) – were discussed, including the different categories under each element. In this month’s edition, the discoursedelvesfurtherintoGreen Bonds Financing as a subset of Sustainable Finance. Introduction Climate change portends serious threats to energy, food supplies and water, amongst others, and it is imperative that both governments and the private sector work together to build structures and infrastructures that will continuously reduce these threats and foster the sustainable growth and development of the economy. Furthermore, financial marketoperatorshave,ofnecessity, become creative in finding funding options for sustainable infrastructure development that support energy, food security and clean water supply. One of such options is the issuance of green bonds. The green bonds market, therefore, provides a plan and access for funding projects that contribute to environmental sustainability.

Green Bonds Principles The primary objective of green bonds is to raise capital for new and existing projects that have environmental benefits. The Principles guiding such investments, referred to as the Green Bonds Principles (“the GBP”) are process guidelines that promote transparency, disclosure, integrity and reporting in the green bonds market. The GBP sets the foundation for the various elements that need to be incorporated within a Green Bond Policy Framework (“the Policy Framework”)— a critical document developed prior to the issuance of a green bond depicting the sustainability-based qualities and the environmental value-add of a given green project and which gives credibility to a green bond. The core elements typically covered in a Green Bond Policy Framework are as follows: •Use of Proceeds •Process for Project Evaluation and Selection •Management of Proceeds •Reporting Use of Proceeds All green bonds must be utilised for the projects they are designated for, and such projects must have clear environmental

benefits which shall be captured and appropriately described in all legal documentation for the security. These benefits are assessed and quantified by the issuer. Where the proceeds of the bond are to be used either in whole or in part for refinancing, full disclosure of the investment project portfolios being refinanced must be made. Proceeds realised from the issuance of green bonds must be directed towards projects that deliver clear environmental benefits. Some areas of eligible projects include: •Renewableenergyandenergy efficiency •Pollution prevention and control •Sustainable land use (including sustainable forestry and agriculture) •Sustainable water management (including clean and/or drinking water) •Clean transportation Routines and systems are set up to ensure the proceeds are allocated to the intended projects. Process for Project Evaluation and Selection Within the Policy Framework, the following should be typically outlined: •A process to identify eligible

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Leadership

Thursday 10 January 2019

Shaping people into a team

The hard truth about innovative cultures Gary P. Pisano

culture conducive to innovation is something that both leaders and employees value in their organizations. And who can blame them: Innovative cultures are generally depicted as fun. But despite the fact that innovative cultures are desirable and that most leaders claim to understand what they entail, they are hard to create and sustain. How can practices apparently so universally loved be so tricky to implement? The reason, I believe, is that innovative cultures are misunderstood. The easy-to-like behaviors that get so much attention are only one side of the coin. They must be counterbalanced by some tougher and frankly less fun behaviors. 1. TOLERANCE FOR FAILURE BUT NO TOLERANCE FOR INCOMPETENCE Given that innovation involves the exploration of unknown terrain, it is not surprising that a tolerance for failure is an important characteristic of innovative cultures. And yet for all their focus on tolerance for failure, innovative organizations are intolerant of incompetence. They set high performance standards for their people. Exploring risky ideas that ultimately fail is fine, but mediocre technical skills and poor management are not. People who don’t meet expectations are either let go or moved into roles that better fit their abilities. The truth is that a tolerance for failure requires having extremely competent people. Attempts to create novel technological or business models are fraught with uncertainty. You often have to learn as you go. “Failures” under these circumstances provide valuable lessons about paths forward. Google can encourage risk-taking and failure because it can be confi-

dent that most Google employees are very competent. Creating a culture that simultaneously values learning through failure and outstanding performance is difficult in organizations with a history of neither. A good start is for senior leadership to articulate the difference between productive and unproductive failures: Productive failures yield valuable information relative to their cost. A failure should be celebrated only if it results in learning. A simple prototype that fails to perform as expected because of a previously unknown technical issue is a failure worth celebrating if that new knowledge can be applied to future designs. Building a culture of competence requires clearly articulating expected standards of performance. If such standards are not well-understood, difficult personnel decisions can seem capricious or, worse, be misconstrued as punishment for a failure. Leaders should communicate expectations regularly. Hiring standards may need to be raised, even if that temporarily slows the growth of the company. Managers are especially uncomfortable about firing or moving people when their “incompetence” is no fault of their own. Shifting technologies can render a person who’s very competent in one context incompetent in an-

other. Consider how digitization has impacted the value of different skills in many industries. In some cases, people can be retrained to develop new competences. But that’s not always possible when really specialized skills are needed to do a job. 2. WILLINGNESS TO EXPERIMENT BUT HIGHLY DISCIPLINED Organizations that embrace experimentation are comfortable with uncertainty. They experiment to learn rather than to produce an immediately marketable product or service. But without discipline, almost anything can be justified as an experiment. Discipline-oriented cultures select experiments carefully on the basis of their potential learning value, and they design them rigorously to yield as much information as possible relative to the costs. And they face the facts generated by experiments. This may mean admitting that an initial hypothesis was wrong. Disciplined experimentation is a balancing act. As a leader, you want to encourage people to entertain “unreasonable ideas” and give them time to formulate their hypotheses. Killing a hypothesis too quickly can squash the intellectual play that is necessary for creativity. Of course, not even the best-designed experiments always yield black-

and-white results. Scientific and business judgments are required to figure out which ideas to move forward, which to reformulate and which to kill. 3. PSYCHOLOGICALLY SAFE BUT BRUTALLY CANDID “Psychological safety” is an organizational climate in which individuals feel they can speak truthfully and openly about problems without fear of reprisal. Psychological safety is a twoway street. If it is safe for me to criticize your ideas, it must also be safe for you to criticize mine — whether you’re higher or lower in the organization than I am. Unvarnished candor is critical to innovation because it is the means by which ideas evolve. In some organizations, people are comfortable confronting one another about their ideas. Criticism is sharp. People are expected to be able to defend their proposals with data. In other places, the climate is more polite. Critiques are muffled. One manager at a large company where I worked as a consultant captured the essence of the culture when she said, “Our problem is that we are an incredibly nice organization.” When it comes to innovation, the candid organization will outperform the nice one every time. The latter confuses politeness with respect. Building a culture of candid debate is challenging in organizations where people tend to shy away from confrontation. Leaders need to set the tone through their own behavior. They must be willing (and able) to critique others’ ideas without being abrasive. 4. COLL ABORATION BUT WITH INDIVIDUAL ACCOUNTABILITY Well-functioning innovation systems need information, input and integration of effort from a diverse array of contributors. But too often, collaboration

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

gets confused with consensus. And consensus is poison for rapid decision-making. Ultimately, someone has to make a decision and be accountable for it. An accountability culture is one where individuals are expected to make decisions and own the consequences. Committees might review decisions, but at the end of the day, specific individuals are charged with making critical choices. 5. FLAT BUT STRONG LEADERSHIP An organizational chart gives you a pretty good idea of the structural flatness of a company but reveals little about its “cultural flatness” — how people behave and interact regardless of official position. In culturally flat organizations, people are given wide latitude to take actions and voice their opinions. Culturally flat organizations tend to generate a richer diversity of ideas than hierarchical ones, because they tap the knowledge of a broader community of contributors. Paradoxically, flat organizations require stronger leadership than hierarchical ones. Flat organizations often devolve into chaos when leadership fails to set clear strategic priorities and directions. Getting the balance right between flatness and strong leadership is hard on management and on employees. For leaders, it requires the capacity to articulate strategies while simultaneously being adept with technical and operational issues. For employees, flatness requires them to develop their own leadership capacities and be comfortable with taking action.

Gary P. Pisano is the Harry E. Figgie Jr. professor of business administration and the senior associate dean of faculty development at Harvard Business School. He is the author of “Creative Construction: The DNA of Sustained Innovation.”

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BUSINESS DAY

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Spending Trends

Nigeria seen as a key driver of growth in emerging market digital sales by 2022 David Ibemere

bout 3 billion consumers in emerging markets will be online by 2022. Most of them will use the internet to collect information before buying products, pushing the level of digitally influenced purchases to nearly $4 trillion, and Nigeria is seen to play a key role says a report by the Boston Consulting Group. The report titled Digital Consumers, Emerging market and the $4 trillion Future noted that Nigeria internet population, presents an enormous opportunity for retailers especially players in the e-commerce space to cheer, however, warned that companies trying to tap into this

market would have to tweak their strategies at the product, country, and city levels to leverage the potential of meeting the digital expectations of their customers.

Digital influenced buying refers to retail purchase that consumers make with the help of information collected on the internet, whether they are buying or not.

Nigeria Retail Outlook 2019 to focus on growth, development of retail sector …as consumer preferences change, competition heightens BUNMI BAILEY

onsumer insight, retail business development and growth for 2019 and beyond will shape the key issues to be discussed at theThe Nigeria Retail Business Outlook 2019 with the theme “Building the Appetite for Sustainable Growth”. The quarterly event Put together by Bervidson Group, the event is scheduled to hold on January 17th at the Lagos Continental Hotel, Victoria Island, Lagos, strictly for enterprise level leaders - owners, clevel executives and senior managers in retail and retail supporting organisations. According to a statement from to the orginsers the roundtable event will seek to address pertinent issues on current and future retail business in Nigeria, best practices within the organizations for sustainable growth and development. Amidst a global retail industry going through a challenging phase that has seen many store closures, the Nigeria retail industry is experiencing a transformation that is shaped

and driven by changing consumer preferences, heightened competition from nimble new entrants, a rising ecommerce trends, and dynamic socio-political environment. In particular, as the country heads for a general election in 2019 and with political calculations daily shaping the issues in the socio-political space, winning and visionary business owners and leaders cannot afford to stay aloof. The country is projected to grow though sluggishly by 2.3percent in 2019, but there are clouds in the horizon that may possibly cause the economy to under-perform, according to International Monetary Fund (IMF). Growth is however expected to gain steam going forward thanks to rising oil production following a significant ramp-up in infrastructure investment in recent years and rising oil price. Moreover, softer inflation and improved exchange rate liquidity should buoy domestic demand dynamics in 2019. However, political uncertainty and downside risks related to the 2019 elections and politics is high, likely putting economic

reforms on the backburner and delay the 2019 budget. Governance may in fact go on recess! Nonetheless, one thing is certain: whatever the outcome of the 2019 elections, Nigeria will not be the same again. Given the issues above that heavily clouds the retail outlook for 2019, many forward looking retailers are asking questions: How will the Nigeria socio-political and economic environment look like post 2019 elections? How should retail leaders be responding? What growth opportunities and challenges lie ahead in the year 2019? What will the investment climate look like? What policies are likely to shape issues in the ecosystem? How will foreign investors react? What are the implications for retail business development and growth in the country? It is in this light that the retail roundtable has put together The Nigeria Retail Outlook 2019 to provide answers these and many more questions that retail leaders gathered at the event may have. Seasoned speaker of repute has been invited. Doyin Salami will be the Keynote Speaker and to lead the discussions.

Nigeria internet users have continued to swell as the latest figures from Nigeria Communications Commission shows a total of 108.5 million subscribers were active on the internet in November 2018 as against 94.8 million in same corresponding month of 2017 which represented 14.5 percent growth in subscribers’ base. The report which surveyed 15,000 internet users 1,000 or more people in each of nine countries: Brazil, China, India, Indonesia, Kenya, Morocco, Nigeria, the Philippines, in urban areas, where the connectivity level is highest and internet use is most engrained, noted that Nigeria is right behind Chinese and India consumers in their high regard for online marketplaces such as Jumai, Konga, Jiji, Payporte among

others, although largely to survey a product they intend to buy. Jumai and Konga in the last four months have ranked in the top most visited websites in Nigeria according to data from similarweb.com a data analytics website with an average of three million visitors daily. While the reported noted that more Nigerians are now more digitally aware growing at 4.8 percent, only behind South Africa 4.9 percent, however e-retail spending has continued to lag. South Africa is currently the leading country in online retail spending growth recording a 1.0 percent increase. Despite Nigeria huge online presence was ranked fourth in Africa on an online retail purchase with 0.3 percent growth, behind Morroco, Ke-

nya boosting 0.8 percent, 0.6 percent respectively. Chukuji Jerry, a consumer research analyst told BusinessDay in a telephone interview that Nigerians should embrace buying online. “It will take a lot of convincing to get consumers to pay before delivery, hence e-commerce companies must develop a strategy that will build trust on their services first, if they do not want to end up providing simply a survey on products,” “With the increasing penetration of internet in Nigeria and across Africa; this is a huge market and the sales volume is bound to continue progressing in the coming years, nevertheless, for e-commerce to attain its full potential in Nigeria, infrastructural issues, trust, as well as e-fraud challenges need to be addressed.”

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igeria’s retail sector, which includes the start-ups and entrepreneurs, will be getting a boost with the Mentor-Matchup challenge set up by 234Finance. 234Finance.com, a platform that promotes African entrepreneurship by bridging the gap between investors and early stage startups in Africa’s emerging market put up the event in a bid to address unemployment challenge in Nigeria and facilitate skills among youths. 234Finance has ushered a fresh perspective on entrepreneurship by leading the charge with Mentor Matchup Challenge 2.0. The event which took place last month, at Oriental hotel, Lagos gathered established and emerging entrepreneurs or representatives from their Startups. Ezinne Nwazulu, Managing Partner, 234Finance succinctly explains; “We put together the Mentor Matchup Challenge 2.0 because there is a huge knowledge gap between millennials and the generation before us. “There is an urgent need for the two groups to interact, engage and learn from each other. Knowledge they say is

L-R: Favour Ugu, founder of Ekete, Ejiro Jakpa, founder of Nicnax Granola, Ezinne Nwazulu, managing partner, 234Finance and Alessia Balducci, general manager, Seedspace.

power. The Mentor Matchup Challenge 2.0 bridges the knowledge-gap young Africans lack access to, for practical solutions to the challenges they face in running businesses.” The Mentor-Matchup Challenge 2.0, came just in time to coincide with the end of the year prep and goal setting for the coming year. The event was also spaced into a trifecta of interactive sessions that proved to be both informative and fostered practical learning. The event started out with ‘Growing a Global Brand in Africa’s Emerging Market’, a panel discussion moderated by the incomparable communication guru Yasmin Ocansey; her expertise cuts

across the communications spectrum- including broadcast journalism in both radio and television. The panel featured Joycee Awosika, CEO of Orìkí, a global agri-beauty brand; Ejike Ugwu, Financier and Head of Moneda; Bunmi George, Fitness Professional and Founder of Shredder Gang; and Buffy Okeke-Ojiudu, a Nigerian Businessman and the CEO of the Zebra Group. As the conversations swayed among the panelists, it examined the role of an entrepreneur in shaping the outcomes of their startup or brand’s future and its importance of exploring emerging trends in the global economic landscape, while being equipped with the right team

Thursday 10 January 2019

Iphone emerges the biggest smartphone brand in 2018

234Finance to boost retail, start-ups with Mentor-Matchup challenge BUNMI BAILEY

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to build a sustainable venture. The Second session was the Mentor-Matchup Challenge. Attendees were distributed according to the following sectors; Media and Entertainment, Financial Services/ Fintech, Agribusiness, E-Commerce and Energy. They were seated in the round with an assigned Mentor sharing tips and responding to niggling business challenges. A mentee was nominated from each sector to summarize learnings from the minisessions. The icing on the cake was having Investors sit in for these sessions and share unfiltered knowledge based on their practical experiences. Among the Investors present were Ngozi Ekeoma- CEO Nepal Oil & Gas Services, Olu Oyinsan- Managing Partner OUI Capital, Prince OkonkwoChairman Tetrazzini Foods Limited, and Kayode Fadahunsi- CEO, Properis Holdings. The Funding expert , Ifedayo, Durosinmi – Etti facilitated an inspiring talk- Accessing Grants For African Startup which happens to be the title of her book that an attendee was lucky to win by answering a riddle session. The final part of the trifecta was the core purpose of all registered applicants in attendance.

p p l e ’s i p h o n e , the world’s most powerful personal device retained a majority in the premium smartphone market in the third quarter of 2018, as it made up 47 percent of all phones sold in it, according to a report compiled by counterpoint Research, a market research company that delivers in-depth intelligence of the technology markets to the mobile industry. From the report, Apple is still the biggest brand in the premium segment of the smartphone market (defined as phones costing $400 or more). “Samsung is the second biggest brand, with a total share of 22 percent. On the other hand, this company is also the leader in the $400600 sub-segment; it sold 25 percent of those phones, whereas Apple, Huawei, Vivo and OPPO sold 21 percent, 17 percent, 10 perent and 7 percent of these units respectively,” “Apple was also found to lead the $600-800 subsegment (with a 61 percent share), as well as that for $800+ devices (79 percent). OnePlus was found to be the fastest-growing brand in

the market as a whole, however, and remains the market leader in India. It was also among the top 5 premium phone-makers in Europe for this quarter,” the report further stated. The growth of the market was driven by increased brand diversity; for example, Huawei captured a share of over 10 percent for the first time this year. The Counterpoint report also indicated that the premium segment benefited from increased competition from a greater number of brands in Third quarter of 2018. And this enabled it to grow by 19 percent, whereas the overall market fell by 5 percent In addition, Huawei achieved a total premium smartphone market share of 12 percent in the quarter, making it the first time this company had done better than 9 percent in this category. “On the other hand, this picture may change with data from Fourth quarter of 2018. However, Counterpoint expects this market to continue to grow in this quarter, as it will be driven by holiday sales of devices such as iPhones,” It said

Living under poverty line How Nigerians are struggling to survive

If you want to contact the writer of this story call: +234(0) 8030814083

Bailey.oluwabunmi@businessdayonline.com

Woman 35, in dire need of funds for dialysis, surgery Name: Mrs Ugbede Kehinde Oluwatoyin State of Origin: Ogun Age: 35 Dependents: Mother and three siblings Occupation: Trader I deal in eggs and foodstuffs at App market, Abuja. Before I ventured into this business, I worked in the bank having graduated from University of Abuja where I studied Economics. In 2008, I was employed at Oceanic Bank (now Ecobank) where I worked as a teller before I was moved to the customer service desk. I served in different branches of the bank before I was relieved my job. From App market, I moved to Kubuwa where I was trading until I was diagnosed of kidney failure in 2018. How did it start? It started in August, 2017

but like malaria and typhoid. I had the same experience every two weeks. By November, 2017, we were treating ulcer but unknown to us, what I had was bigger than ulcer. I was short of blood and was given two pints of blood. Before I got married in December, 2017, I was referred to Maitama Hospital for endoscopic but my fiancé did not allow me to go because of the cost. Two months after the wedding, my condition deteriorated and that was why I was diagnosed of kidney failure. The situation got worse in January, 2018 when I started bleeding through the nose and vomiting two or thrice a week. Second week in January, I was at Kubwa General Hospital. I asked the doctor the result of the general tests carried out

on me and she said they were all good. But, I wasn’t getting any better. The bleeding and vomiting still persist. I also lost appetite, had sleepless nights and coughed profusely. I was given antibiotic, malaria drugs and cough syrup. With the

medication, it even got worse. On February 23, 2018, I was diagnosed of Chronic Kidney Disease (CKD) at Kubwa General Hospital. I was referred to Gwagwalada Teaching Hospital for further treatment and dialysis.

Analyst: Bunmi Bailey Graphics: Fifen Eyemisanre Famous

I spent six weeks at the hospital before I moved to Zenith Medical and kidney centre in Abuja, where I have been receiving treatment till date. What is the cost implication? I was told the best treatment option for my condition is kidney transplantation and it would cost about N13.3m. This sickness is really capital intensive. My husband and I cannot bear the cost. I do dialysis twice a week and the treatment drugs cost N110,000 per week. On every dialysis, I take injection for blood because I’m anaemic and infusion because I lack vitamins and glucose. How have you coped so far? We get assistance from family, friends and good spirited individuals. This sickness is really capital intensive.

A plea for help My husband work is a mathematics teacher at ElisAngel model school. From the time I was diagnosed of this sickness till now, it has not been easy for him. My husband’s salar y couldn’t take care of the sessions of dialysis in a week. Since I was diagnosed of this disease, I couldn’t do any work to support my husband and the family. On monthly basis, I spend N1m dialysis, drugs and admission. The doctor said the lasting solution is the kidney transplant. N10m is required for the transplant but I sincerely do not know where or how to get that kind of money. I am calling on Nigerians to come to my aid and help me raise the funds for my kidney transplant.

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Thursday 10 January 2019

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BUSINESS DAY

GARDEN CITY BUSINESS DIGEST How REIF pressed for good policies, expo of home-made goods in 2018 ...President says palm oil importation must be halted, now

IGNATIUS CHUKWU

he Rivers Entrepreneurs and Investors Forum ( R E I F ) l e d by multi-faceted businessman, Ibifiri Bobmanuel, has revealed the roles played by the forum to press for appropriate policies for businesses in Rivers State and Nigeria as a whole. He also disclosed in an exclusive interview a demand that importation of palm oil must be halted immediately to boost investments in the palm produce sub-sector. Excerpts…. Can you capture highpoints of REIF in 2018? REIF fared very well in 2018. It is traditional for a very big organization to be able to carry out its responsibilities during the course of a year. I think 2018 was no different. The difference may be that we upped the ante (our game) because of more experience under our belt. We keep getting better. To sum it up, we were able (for the first time) to encourage businesses affiliated to REIF to a seminar where they were given opportunities to exhibit their prowess in goods and services to the world. We had representatives from Aba that are affiliated to REIF; big businesses, multinationals, oil and gas companies, manufacturing, processing, and agricultural companies (such as SIAT) to display some of their goods. Some of the palm fruits and quality of oil at SIAT were on display. We were able to show the capacity of companies in Nigeria and the need to support those

capacities through policies and government actions. In 2019, we would focus on persuading the FG to encourage some critical sectors of the economy. If you are talking about backward integration or encouraging Agriculture Nigeria must place her policies where her abilities are. Threat to SIAT and oil palm investments In the palm oil sector, SIAT has one of the biggest palm fruit processing facilities in the world. They have major investments in all parts of Africa including Nigeria. What they are doing in Port Harcourt here is worth commending. We looked at the quality of what they processed and it is amazing; they plant it there, nurse it, grow it, harvest it and process it (the finest of oils in the world) there. You encourage such an investor by encouraging his market position. But, that is not done today. So, how do we as a nation grow the capacity that we have? If the FG allows importation of palm products, obviously, it goes at cross-purposes the inhouse producing plants. We have the palm value chain in Nigeria (SIAT is our case study), but SIAT is the ideal scenario we should long for since they have everything in the complex; from nursery to processing and marketing. They run a full circle. This is the kind or model we want in all our industries. We want SIAT to be given the needed policy backing from the FG. I mean the policy thrust of the FG should seek companies

President Buhari

like SIAT into account in making their policies. If the FG encourages importation of palm oil for whichever tariffs, it’s wrong. Palm oil should be banned outright. Companies are shutting down The other day I was reading about companies that had recently shut down. Some of their owners are people I know very closely. You wonder why such fullproof businesses would shut down after spending billions of millions of naira in setting them up. If the policies are not strengthened, these are problems investors will face. Nigeria cannot afford to be signing agreements with the US on agric products to be imported into Nigeria when we have home-grown

agric manufacturing plants like what some of us have. We have spent millions of dollars in setting up BobTract Manufacturing outfit. The least we expect from the FG is to buy from us. In REIF’s last event, we itemized that by getting our businesses to come and showcase what we do. We have the Abia State Leather Processing and Manufacturing Works and the fabrics section are doing well (best set of fabrics, clothe lines), from the very least to the highest businesses. We give Aba makers the opportunities to come and showcase their abilities. We have businesses like Bob-Tract, Point Engineering, Plantgeria, and several others and they showcase their prowess.

That is where we are going to. In the last event, we got people from the FG, state government, international community, private sector, and different vendors to come for us to warehouse them and tell them what we expect from them and tell them why our quality is where we are. Now, we are mix-matching businesses, especially the SMEs with international suppliers. That is one project that we did and will do more in 2019. In 2019, we would be encouraging the FG to strengthen the policy thrust to encourage businesses that have already invested in Nigeria. Also, we are mix-matching the local SMEs with international partners and raw materials that cannot be sourced in-country. The ones sourced in-country will be mix-matched with manufacturing outfits or equipment producing outfits to process what they produce because we discover that in the chain of production, where we are shortchanged the most is that point when we begin to look at processing. For instance, we produce much cocoa in the country but could hardly afford one chocolate making outfit. We least have them. This was done in the 41 items that Buhari banned when he came to power and there was uproar? Those 41 items needed to be thought through so that the ones you have locally (capacity) you must have to put your feet on the ground.

That is why you were elected to lead. You need to call a spade a spade. In banning 41 items, you must have to find supporting funding to your local producers and manufactures. You cannot ban in a vacuum, else, you have advert effects. When you have an eye for growth and development, you have an opportunity to create jobs, create capacity, etc. See Malaysia which came into Nigeria to take palm seeds from this part, today, they are the largest producer in the world and their GDP is mostly from that nut. This is how to fashion your policy. In 2018 or so, the FG went to the US and had a meeting with Trump and signed up agreement for Nigeria to buy some agric products from the US. I think that would only be good if we did not have such capacity. Today, if you are talking about agric equipment, companies like Bob-Track have the capacity. What we would expect the FG is to come down and ask questions from seriousminded manufacturers on what can be done to boost capacity. If that is done, there would be more jobs. That is why today Trump tells you America First, a slogan to tell you that every decision he takes must be geared towards growing the American economy. We need ‘Nigeria First’ policy for us to grow Nigeria and buy Nigeria. We can’t do this except we put our money or policy where our mouth is. This is the direction for REIF in 2019.

The spirit of Christmas with Flame Initiatives

Port Harcourt by Boat With

IGNATIUS CHUKWU

n the spirit of Christmas, Flame Initiatives, an international NGO, reached out to widows through CINTA Project, a widow-empowerment program, last week, in Lagos. The memorable event which was sponsored by Nestle Nigeria, GBF, McPeens, Kingsword

International Church, Igando, Eltee Production Company, 54 Artistry, Citimax Pharmacy and others, had about 100 widows in attendance with their children. In addition to a free medical check-up, the widows went home with free drugs, food items, school bags for their children, goody bags, and other packages that can make their Christmas really merry. The happy widows did not disappoint on the dance floor as they moved and glided to some melodious tunes. Guest speaker, Bimpe Oke, encouraged them to keep on in spite of the different challenges they face as widows. Emphasizing that they are responsible for their children, she charged them not to pass on that responsibility to anyone and to ensure their safety. “Our children are our re-

sponsibility, you can’t hand them over to someone else. Don’t drop your children anywhere because of life challenges...” She tackled sexual molestation, emotional pain, child abuse, financial challenges and other issues bothering the widows and also encouraged them to

speak out about their challenges and for the organizers to mediate between the widows and human rights groups. Elated Tolu Oni, one of the event organizers, could not hide her excitement, “I feel fulfilled and I am happy the event was a success. I am glad to give back to

the society especially to widows who may be wondering if society cares about them. I encourage everyone to give back to the society in their own little way. We shouldn’t leave everything to the government.” The widows went home full of smiles, thanking Flame Initiatives for showing love to them in a practical way. This event would not have been successful without support from sponsors and volunteers. It is also open to your support and sponsorship. CINTA Project is the brainchild of Flames Initiative to empower widows and help them live better lives. Flames Initiative is an international NGO committed to social good and to making a difference in our local communities and across Africa. Source: Patrick Abadom

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Thursday 10 January 2019

Investing in Rivers State 2018 budget:

Rivers economy is rising, Nigeria’s is falling - Wike

overnor Nyesom Wike of Rivers State says the economy of the state is rising but that the national economy is falling. He said this while presenting the 2019 budget of N480.112Bn. Rivers State budgeted N510Bn in 2018 but realised far less than that, netting less than N300bn by the end of November 2018. The governor reduced the expectations to N480.112Bn for 2019. This time, the governor christened it; “Budget of Sustainable Growth and Development.” Presenting the more modest budget before the Rivers State House of Assembly before Christmas, Gov Wike said it was the last budget in his first term, though he seeks a second. “Permit me therefore to take a few moments to reflect on our performance.” He stated: “Never for a moment did we betray this trust; neither did we take the interest of our people for granted. We’ve remained faithful, truthful and just to their aspirations and even those who never gave us a chance when we started now admit that we’ve done well and believe strongly that things can only get better for our State under our watch. “When we came in three and half years ago, we met a state that was literarily on its knees: physically battered, economically raped and psychologically traumatised. But we came in with a clear vision and mission: a vision to repair and renew the promise of our state; a mission to pull our people from the cesspool of despair and restore our hopes for brighter future. “Three and half years after, we have substantially achieved our commitments on all directions of human advancement. Under our watch, Rivers State has emerged from the brink of economic disaster to an era of fiscal sustainability. Today, our Gross Domestic product has increased and our economy is growing at a rate above the national average and attracting new investments even when the national economy continues to be weak, wobbly and troubling. “Under our guardianship, we have invested at record levels to provide critical social and economic infrastructure across the state; especially roads, schools, and health facilities. In the process, we created hundreds of thousands of jobs across the construction value chain. We supported small businesses with interest free loans, tax moratoriums and other tangible investment incentives. Today, Rivers State has become economically competitive and businesses, including new start-ups, are responding positively to the improved investment conditions in the State. “We prioritised the construction and expansion of road infrastructure

Governor Nyesom Wike

and today, we have successfully delivered over 1600 kilometers of roads across the State. Three and half years ago, we could hardly find any tarred street without deep cracks and potholes across the State. Today, that has become a thing of the past. There is no Local Government Area we have not reached; no State or Federal Constituency we have not touched; and no Senatorial District we have not positively affected with our development policies, programmes and projects.” He went on: “In the areas of urban renewal and rural development, we have constructed and reconstructed several roads in Port Harcourt city, Obio/Akpor Local Government Area, Omoku, Elele, Isiokpo, Okochiri, Ogbunabali, and Amadi Ama communities. The numerous roads and other social amenities, including water, electricity, jetties, and land reclamation we have provided are boosting socioeconomic activities and improving the wellbeing of our people in several of our rustic and hitherto neglected communities across the State. “It is a thing of joy and profound sense of fulfillment that for the first time in history the people of Opobo can now access other parts of the State on a tarred road as a result of our efforts to fulfill our promise. As critical components of human capital development education and healthcare delivery also received appreciable attention in the last three and half years of our administration. We have comprehensively rehabilitated, furnished and equipped over 180 basic

education schools through the State’s Universal Basic Education Board.” He said several secondary schools have been rebuilt and expanded while a lot more are presently undergoing total reconstruction and rehabilitation. “In 2018 we trained over 1000 teachers on 21st century education skills to improve the quality of teaching and delivery of lesson notes in our basic education schools. More teachers will be trained in the course of 2019. Furthermore, we have expanded access and improved quality in all our tertiary institutions. New faculty buildings have been built and equipped for the Rivers State University; the Ignatius Ajuru University of Education and also in the two State-owned Polytechnics. “We also provided grants to all the tertiary institutions to upgrade their facilities, upwardly adjusted the salary structure of both teaching and nonteaching staff of our universities and ensured the regular payment of staff salaries. Furthermore, the School of Midwifery has been comprehensively rehabilitated while the College of Nursing and that of Health Technology have been listed for reconstruction in the next fiscal year. “With respect to healthcare, we are gradually getting closer to actualising our commitment to providing an affordable, effective and efficient healthcare delivery system for our people. To this end, the 13 general hospitals and the mother and child hospital we have comprehensively rehabilitated and or constructed will soon be equipped and put to effective use.

“We are transforming and equipping the Braithwaite Memorial Hospital with the most advanced diagnostic and other equipment for the treatment of heart, liver and kidney diseases. We are also going on with the construction of the regional referral hospitals we inherited from the previous administration to bring access to tertiary healthcare closer to our people. “Finally, we also fought and reduced the monstrous heights of insecurity and our state is today reckoned as one of the most peaceful, safe and secure states in the country. These are just highlights of the development strides we recorded in the last three and half years of our administration to lay, strengthen and consolidate the foundations for the future of our state. “Collectively, we are all focused and committed to building a state where no one or section is left out from the benefits of progress; a society where everyone has a fair chance to pursue set goals and realise their potential; a society where everyone is educated, economically empowered and physically secured enough to live a peaceful, fulfilling, healthy, and meaningful life. But as you know, social transformation is like a journey; it takes time to fully manifest and benefit the entire populace. “Yes, we have made significant progress in the last three and half years of our administration. But there is still a lot to be done to get to where we want our State to be.” How Rivers budget performed in 2018 On performance of the expiring budget (2018), Gov Wike said the projected revenue for the state was 510Bn only. “Out of this sum 152Bn (One hundred and fifty-two billion was projected from internal generated revenue, (IGR) while statutory allocation (FAAC) was estimated at N210Bn (Two Hundred and Ten Billion naira) only. Therefore aggregate projected revenue from IGR and FAAC was N362Bn only. “We also projected to source the sum of N148Bn from other sources, including internal and external loans. As at November 2018 total revenue receipts from all sources (except internal and external loans) stood at 288.721Bn. This represents about 79 per cent performance on the revenue side with respect to the totally projected IGR and FAAC receipts for 2018. It is worthy of note that while internally generated revenue for 2018 improved marginally over that of 2017, what was realized was about 32 per cent less than the total amount projected for the fiscal year 2018. “This means that we still have serious challenges in meeting our IGR targets, a situation we must collectively find ways to overcome if we must de-

liver on our development targets to the people. On our part, we shall continue with our efforts to stimulate economic growth, diversify the economy and attract more investments to shore up the State’s revenue base. “It is also worthy of note that the 2018 budget was financed principally from proceeds from IGR, FAAC, Paris Club Refund and dividends from the State’s stock portfolio. We literally refused to borrow in order to encourage us to live within our means as well as achieve appreciable levels of fiscal sustainability. “On the expenditure side, we prudently managed and applied the available resources to deliver on the mandates of the 2018 budget. For instance, in spite of the shortfall in aggregate revenue, we substantially funded our recurrent expenditure, including the regular payment of salaries, pensions and the release of overheads to ministries, departments and extraministerial agencies (MDAs). “Also, aggregate capital releases to MDAs as at November stood at over 65 per cent of the total capital expenditure. As you may have noticed, we completed and delivered over 30 capital projects in 2018 during the 3rd anniversary of our administration, including: Slaughter – Trans Amadi – Garrison road; Abuloma – Woji – Elelenwo – Akpajo; Obiri ikwerre – Airport road; Elele Alimini internal roads; Omoku internal roads; Cardinal Jim Rex-Lawson Cultural Centre; Amadi Ama internal roads; Dr. Peter Odili Doctors’ Quarters (BMSH); Chief Emmanuel Aguma House; Dame Patience Jonathan road (former creek road); Bishop Johnson Street; Captain Amangala Street; Tourist Beach road; Birabi Memorial Grammar School, Bori; General Sanni Abacha Road; Mbuoshimi Community Health Centre; Mgboshimini Community Primary School; P.G. Warmate House (Former Waterlines Building); Ozuaha – Ipo – Omademe road; Traditional Council Secretariat; National Industrial Court Building; Court of Appeal Building; Okochiri Internal roads; Isiokpo internal roads (phase 1); 24 nos 3 Bedroom flats for civil servants; Government Girls Secondary School, Rumuokuta; Nyemoni Grammar School, Abonnema; Government Secondary School, Onne; Faculty of Sciences and Technical Education building, Rivers State University; Faculty of Management Sciences building, Rivers State University; Faculty of Medical Sciences Building, Rivers State University; SUBEB Head Office complex, Port Harcourt; and Ogbunabali internal roads. “From all assessments the policy objectives of the 2018 budget circle on expenditure targeting, spending prioritisation and effective implementation were substantially achieved.

Governor Wike hosts Rivers leaders to a New Year State Banquet

ivers State Governor, Nyesom Ezenwo Wike on Tuesday hosted leaders of the state to a New Year State Banquet to herald the sustained development of the state. The Rivers State New Year Banquet attracted leaders of the Executive, Legislature, Judiciary,

the business community, civil society and professional groups. It was a night laced with comedy and music, while the leaders were treated to assorted food and drinks in celebration of the New Year. Guests were also treated to the international dance drama, Seki, which showcase the rich Rivers cul-

ture of Okrika, Ikwerre and Kalabari. Toasts were moved for the Rivers State Legislature by Justice L-C Thompson, for the Executive by Minority Leader of the Rivers State House of Assembly, Benibo Anabraba and for the State Judiciary by Commissioner of Environment, Prof Roseline Konya.

Governor Wike and his wife, Justice Eberechi Suzzette NyesomWike led other dignitaries to cut the Special New Year Cake. Speaking on behalf of the Rivers State Governor, Deputy Governor Ipalibo Harry Banigo assured that the State Government will continue to defend the interest of the state.

The governor noted that his administration will sustain the development of the state in 2019. In an opening remark, Head of Service, Rufus Godwins said that Rivers people are happy with the developmental exploits of Governor Wike, hence they will support him in 2019.

Thursday 10 January 2019

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LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

INSIDE Singapore to assess ‘performance and contribution’ of international firms

30 Brexit: Ireland’s prime minister targets UK legal business

30 City law firm wants more female solicitors talking to the press

30 TOP 10 legal business & tech trends for 2019

31 YOUNG BUSINESSLAWYER OYEYEMI ADERIBIGBE

appy New Year, it is already day 10 of 365. As is the norm, the bulk of the (circa 7.8 billion) people in the world are carving out new year resolutions, personal goals and change mantras for 2019. Every year, the bulk of us consciously take out time to carve out the frame for a “new me” that is expected to emerge, and we devote time to outline myriad actions and activities for this “new me”. There is nothing wrong with this as the ideal is in itself positive, but the idea that we turn new leaves every cycle of 365 days is a farce and we must be careful not to live our lives out that way, it prevents holistic progress. In mapping out your 2019, I think you should be mindful to ensure that your starting point is not disconnected from your realities. There is

Outlook for the Nigerian power sector in 2019 AYODELE ONI

r iting in early 2018 on what to e x p e c t i n t hat year (2018), the author had stated that “2017 recorded significant activities and going by factual indications, the sector is projected to witness a lot more activities in 2018 especially because the current administration will want to make a positive impact ahead of the general elections in the year 2019. We believe that off-grid engagements and transactions will primarily drive private sector activities in the generation segment especially as relating to providing solutions to homes and small scale businesses”. The foregoing projections did actually come to pass in 2018 with the Rural Electrification Agency (“REA”) taking crucial steps and lead on a number of off-grid projects (including the Sura Project under the auspices of the Energizing Economies Policy) and to also encourage private sector involvement. This is unlikely to change, in the year 2019. We expect that there will be more play in the offgrid space, but like the writer had stated previously, off-grid power supply especially in form of mini and micro-grids isn’t sufficient to power industrial growth or have sustainable power availability. It is also curious whether the pricing will be affordable and sustainable if government abandons the grid for off-grid power supply. As alluded to above, the year 2018 witnessed significant developments and the implementation of several polices as well as the issuance and/or amendment of power sector regulations, all geared towards providing a reliable, stable and sustainable power

sector. Key amongst these regulations, for example, is the Nigerian Electricity Regulatory Commission (NERC) Meter Asset Provider (MAP) Regulations issued in 2018 (MAP Regulations 2018) for the purpose of providing a structured process for the provision and maintenance of meters. Whilst it was conceived that the new metering regime referred to, in the preceding paragraph, coupled with other policy developments which encourage active private participation in the power sector would cushion the demand and supply deficit in the sector, it was rather unfortunate that as at November 2018, the total available capacity of energy generated was put at a miserly 4200MW.

in the power sector for the year 2019 may be classified under two separate categories; Private Investments (“PIs”) and Government Backed Projects (“GBP”). Private Investments For PIs, several efforts are currently being put in place by the Federal Government of Nigeria (FGN) through the Federal Ministry of Power, NERC and other industry regulators to combat collection losses within the electricity sector. For starters and as mentioned earlier, MAP Regulations 2018 provided the much-needed unbundling of the metering service industry and it will be great if investors can latch on this opportunity to make hay while the sun shines. Essentially, the MAP Regulations 2018 now allows private investors to engage in the procurement, provision and management of meters to power offtakers within the NESI. In addition, there is also the need for investors to harness the opportunities in the Nigerian renewable energy space. While it may appear, from a first glance, that there is hardly any new prospects in this regard, careful attention to The foregoing and the cumula- the hidden opportunities that in tive events of 2018 notwithstand- the renewable energy space, which ing, 2019 promises to be relatively are yet to be fully tapped, explored engaging with respect to projects and maximised will leave prudent and opportunities for both lo- investors with tangible window of cal and foreign investors. This is opportunities in this space. Nigebecause a thorough appraisal of ria’s electricity mix is still largely the current state of the Nigerian dominated by thermal and hydro power sector will reveal that there generation technology. Deploying is still a lot to be done to rescue renewable power technology and the power sector from perceived more particularly, solar technology collapse. Given the potentials and would largely help increase the Naopportunities that abound in the tion’s electricity grid and guarantee Nigerian power sector in 2019, it, more reliable electric power supply. therefore, becomes pertinent, to Deploying solar technology is of provide a summary outlook for course not limited to on-grid power the Nigerian Electricity Supply In- generation. dustry (“NESI”) for the year 2019. There is a relatively high tenINVESTMENT OPPORTUNITIES Continues on page 31 Opportunities for investments

Productivity is “Importanter” no “new you” created from a list of actions; there can be no “new you” outside careful consideration of your habits and leanings as they are the real action points irrespective of your list. A few critical considerations are outlined below, and it is my view that they are important ingredients to feed into your plan for the year. Take responsibility If you have worked for at least 1 week in the corporate sphere you would have heard the phrase, “take ownership”. When a task lands at your desk, it is your duty to ensure that it is finished. I believe this attribute is the distinguishing ingredient for how far or fast most lawyers go professionally. The proverbial “they” that many of us refer to in our conversations about work do not exist. There is no

achievement to third parties and we determine to be responsible for our progress, we will recognise that our work experience is different.

“they” that can take responsibility for your career like you can. If many of us stop transferring the blame for non-

Take care of yourself Mental health has in recent times, taken the spotlight in professional circles. In the legal services industry, several surveys have shown that there is an uptick in the occurrence of suicides and this has been attributed to frustration, emotional dissatisfaction, bad habits and stress. Take it easy on yourself. Also, do not beat yourself too hard in such a way as to cause mental stress when you make errors at work. In many cases, you are akin to a child learning to walk and if you do it right, you will become steady on your feet. It is important to also note that you must have periodic reviews of

your personal aspirations and those of the organisation within which you work. If there is a misalignment between these, the pressure of work combined with internal dissatisfaction could lead to persistent failure and mental stress. Additionally, pace yourself, work efficiently, manage the expectations of your peers and superiors. No platitude or imperative is enough to keep you going when your body needs to stop. You are dispensable if you are not useful, so make your health (both physical and mental) your priority. Where it is the case that your personal aspirations are not in line with those of your organisation, you need to work towards changing this as quickly as possible. Speak to a Continues on page 30

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Singapore to assess ‘performance and contribution’ Productivity is... of international firms Continued from page 29

he government of Singapore has said it will delay the renewal process for five international firms’ licences to practice local law in the city-state, instead deciding to extend their licences by a year. A notice published by the Ministry of Law last month said magic circle firms Allen & Overy and Clifford Chance, US firms Latham & Watkins and White & Case and international firm Norton Rose Fulbright will have their licences extended to 2020 while the government decides whether to renew them and how long they will last. The ministry said it will assess the ’performance and contribution’ of each firm to Singapore and their respective proposals. The firms all operate in Singapore under the Qualifying Foreign Law Practice (QFLP) scheme. The QFLP programme, which has been in operation for a decade, enables foreign practices to hire Singapore-qualified lawyers and give Singaporean law advice.

superior, get guidance, introspect intentionally to seek to understand how you can align these expectations or change your base and do not stop until you find peace.

The five firms were awarded their licences in 2009 and they were renewed in 2014. Their current licences are due to expire in 2019. Another batch of firms, US outfits Gibson Dunn & Crutcher, Jones Day and Sidley Austin plus magic circle firm Linklaters, were awarded licences in 2013. Their licences were due to expire in 2018 but the ministry also decided to defer the decision on renewal until 2020.

The ministry said: ‘To decide whether to renew a firm’s QFLP licence, the ministry will consider the firm’s quantitative and qualitative performance, such as the value of work that the Singapore office will generate and the extent to which the Singapore office will function as the firm’s headquarter for the region, during the licence period relative to its earlier commitments, the firm’s proposal for the new licence period.’

Brexit: Ireland’s prime minister targets UK legal business

reland’s prime minister has said the country is exploring how to take legal business from the UK after Brexit. Taoiseach Leo Varadkar cited a partnership of the legal representative bodies to exploit the UK’s departure from the EU. After the first new year meeting of Ireland’s Cabinet, Varadkar said that ministers had decided to prepare Brexit legislation in detail over the next two weeks, but that any no-deal legislation would not be introduced to the Dáil until March. ’A partnership with the Bar Council and the Law Society, they take a view that one of the areas that could benefit from Brexit are legal services, on the basis that Ireland could… take some business from the UK,’ he told the Irish media. The Law Society of Ireland and Bar of Ireland have developed a set of proposals aimed at assisting the Irish government’s stated key priority to ‘minimise the impact [of Brexit] on trade and the economy’. These are contained in a report published last year, Promoting Ireland as a leading centre globally for international legal services. Ken Murphy, chief executive of the Society, told the Gazette: ‘After the UK leaves the European Union, the Irish legal profession will be unique in terms of its European and common law identity. Ireland’s ongoing alignment with the UK in so many spheres – economic, political and social – means that we have an opportunity to provide world-class professional services, in many cases complementing the

Thursday 10 January 2019

Target efficient productivity: Permit me to say this, planning the year is important but your productivity is importanter! In this context, the reference to productivity simply means the ability to deliver desired results. The desired result is subjective, and you must work to develop the intuition to articulate what is sought to be achieved with each task or client engagement. Many have learnt from experience that it is no longer sufficient to show up at work and do what you are told to do. Every business owner seeks stakeholders who would mind the business to ensure successful output and growth and you must be able to bring mind value to the table as well. As such, irrespective of the position or role you play, how you show up, what you do when you show up and the extra that you bring to the table go a long way to determine how well you would do professionally. Also, it is so easy to be caught up in activity and flurry of the many tasks that you are faced with daily, as such, planning must be intentionally geared at results so that you are not very busy but

unproductive. At every point, you must be able to measure the progress made towards the desired result and when it is time bound, you must align priorities to ensure efficiency and timeous delivery. Please note that you will continue to operate on the same level if you do not take steps to grow. Even physical growth is aligned with diet as such, you must feed on material and cultivate relationships that will enhance your productivity. One easy way of doing this is to invest heavily in reading books on productivity and management, test yourself on the learning by trial and error but be careful not to do things that are averse to the culture of your organisation. This is vicarious learning and when this is done well, you would note that you have a line-up of examples to feed off on how best to implement your tasks as they evolve from day to day. 2019 will have its shot at you, but you must be prepared if you want to thrive. I wish you all the best.

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

City law firm wants more female solicitors talking to the press …Hopes for ‘greater gender balance in the firm’s approach to business development and communications’

UK market and its main operators.’ Varadkar’s commitment follows a surge in applications from England and Wales lawyers to join the roll in Ireland in anticipation of Brexit. Transatlantic firm Eversheds Sutherland topped a ‘league table’ of registrations published last August, with 132 England and Wales solicitors admitted to the Irish roll. Eversheds was followed by magic circle firms Freshfields Bruckhaus Deringer (131) and Slaughter and May (98), and and Latham & Watkins (80). The figures appeared in data

produced by the Law Society of Ireland showing that by last September 1,644 England and Walesqualified solicitors had joined the Irish roll since 2016. A further 75 Northern Ireland solicitors had also joined. Amid continuing uncertainty about mutual recognition Christina Blacklaws, president of the Law Society of England and Wales, observed then that law firms and solicitors were doing everything they could to ensure they continue to meet their clients’ needs seamlessly when the UK leaves the EU.

As the profession marks 100 years since women were able to qualify as solicitors, a City firm has set up a training programme to help its female lawyers raise their media profile. London-headquartered international firm Clyde & Co announced today that it hopes its training programme will encourage a ‘greater gender balance in the firm’s approach to marketing, business development and communications’. The firm says women represent, on average, less than 20% of the firm’s spokespeople quoted in the press. It stresses that media spokespeople are chosen ‘first and foremost’ on their ability to speak about a topic. Liz Jenkins, a partner and member of the firm’s global management board, said: ‘It’s my firm belief that women are sometimes more reticent than men to put themselves forward for profile raising and personal brand building opportunities. Our own experience and figures also suggest that. What we want to do with this programme is to challenge the status quo and provide all our lawyers, but especially our female lawyers, with training to help them develop the skills to promote

Liz Jenkins

their expertise and the business confidently and professionally.’ The programme will cover social media, camera interview techniques, presentation skills, writing for online and offline audiences, creating a personal brand and effective networking. The firm says the training will be available to men but will be ‘particularly promoted’ to women. It will also ‘seek to involve female spokespersons in as many media interviews as possible’ in the run up to International Women’s Day on 8 March. A quarter of Clyde & Co’s 415 partners are female. In its 2017 gender pay gap report, the firm acknowledged it had ‘more work to do to achieve greater gender balance at senior levels in the firm’. 2019 marks the centenary of the Sex Disqualification (Removal) Act, which enabled women to become solicitors, barristers, jurors and magistrates.

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BUSINESS DAY

TOP 10 legal business & tech trends for 2019 As the year starts out, stakeholders in Nigeria’s legal industry are coming up with projections and forecasts for the direction the industry would take in 2019. Studying these projections, LEGALBUSINESS has put together a list of 10 trends that analysts believe would hold sway for Nigerian law firms and lawyers in 2019. Below, we share our list of TOP TRENDS IN 2019. 1. Artificial Intelligence I, which is gradually making its way into the Nigerian legal space, is expected to make a huge impact in the industry in 2019. It is predicted that the use Artificial Intelligence (AI) will not only be used effectively in top tier law firms but Nigeria’s med-level law firms will be willing-partakers in this technological advancement from 2019.

2. Data analytics will grow and thrive in 2019 2019 will see more business lawyers using data analytics software to speed up transaction and case management tasks, such as distributing cases, projecting revenues, projecting firm budgets and predicting business outcomes.

6. Cyber Security ith data breaches on the rise globally, Nigerian law firms who operate internationally with cross border clients and transactions will continue to place ‘Cyber security right at the top of their ‘To-do’ lists and operational budgets for 2019. A 2018 study reveal that 80 percent of the largest firms in the United States went through a malicious breach, with one firm alone experiencing a leak of 11 million files. Top Nigerian law firms would be mindful of this data.

7. Restructuring and Mergers A study of legal market trends in 2018 reveals that 2019 may see amongst other things, quite a number of legal business restructuring; greater partnerships; more lateral hires and more industry mergers between the 2nd and 3rd quarters of this year.

3. Legal Service Consumption Trends 8. Business Efficiency Industry analyst predict that top tier and large law firms will continue to focus on efficiency and cost control measures, with a view to driving and increasing profitability and cash flow generation in 2019.

In the face of volatility rising from the 2019 elections, consumption trends for legal services may swing both upwards and downwards based on election outcomes and other risk factors.

10. Alternative Billing Systems With the evolution of time, it is projected that in 2019 lawyers will be seeking better pricing models with alternative billing systems and accounting software for, productivity, cost effectiveness and increased profitability.

4. Gender Equality

study of the market reveals that there is more awareness for gender related issues, with a deliberate move by many law firms to improve on gender diversity. Thus, it is predicted that several law firms would be taking critical steps towards increasing gender equality with

9. Legal tech products and services Analysts further predict an increase in commercial uses for legal technology services and products: AI, Block Chain services for smart contracts, deeds management, e-voting, etc. gender-focused firm policies.

5. Going Green Motivated by environmental concerns, more lawyers would be looking to ensure that their law firms contribute their part in eco-conscious operations of their offices and practices.

Outline by BusinessDay Law Editor, Theodora Kio-Lawson

Outlook for the Nigerian power.... Continued from page 29

dency for off-grid solar technology generation and solar home systems solutions to be favoured to help ramp up the country’s electricity supply in 2019. From the review of regulatory regime for 2018 and given the ‘body language’ of NERC, it may be asserted that the regulatory regime for 2019 will be particularly encouraging to potential solar photovoltaic (pv) generation technology investors as several incentives (including pioneer status recognition and tax reliefs) exist to ensure that profitability of investment in solar power generation. Government Backed Projects Rural electrification still stands as a major support to the current generation capacity. It is important to mention that the REA, in conjunction with the FGN has made serious efforts at creating access to grants to aid investors in developing sustainable mini-grids and solar home systems to provide access to electricity for rural

and underserved communities. Interestingly, the REA is currently maintaining the Nigeria Electrification Project (NEP), a Federal Government initiative aimed at providing electricity access to households, micro, small and medium enterprises in off-grid communities across the country through renewable power sources. Through the NEP, investors in Solar hybrid Mini-Grid and Standalone Solar Systems may access grants for the purpose of developing same. Similarly, the Ministry of Power had announced its intentions to invest $150,000,000 (One Hundred and Fifty Million United States Dollars) in rural electrification projects, with plans to use 44 tertiary institutions and small hydro dams in the rural areas as anchors for the electrification Programme. It is expected that this programme would commence in 2019, hence creating opportunities for investments. Several other projects which were expected to commence in the previous year 2018 but are still in

their teething phase, are expected to eventually be implemented in 2019. Some of these projects include the N9.8 billion Mambilla hydro power project and the N12 billion counterpart funding for earmarked transmission lines and substations; improvement of the Afam Power Station to add an additional 240MW through a Public Private Partnership; completion of the transmission and other requirements to operate the 30MW Gurara Phase 1 Hydroelectric Plant, the 40MW Kashimbilla Hydroelectric Plant and the 215 MW Kaduna Gas/LPG/Diesel Power Plant. The completion of the NNPC 4,600MW Power Plants in FCT, Kaduna, Kano via the recently approved contract for the construction of AjaokutaAbuja-Kaduna-Kano Gas Pipeline project. The completion of the Katsina Wind Farm (10 MW), Gbarain (115 MW), Kashimbilla (40 MW), Afam III (240 MW), Gurara (30 MW), Dadin Kowa (29 MW), and Kaduna (215 MW) power plants by the Federal Government. Concluding Remarks

In conclusion, whilst it is expected that there would be wide spread apprehension on the viability of investing in the Nigerian Power Sector, especially in recognition of the upcoming national elections, it is largely believed that there will be a spike in investment activities in the power sector especially as it relates to off-grid power solutions. We expect to see mini-grids, solar homes systems and small-scale renewable energy solutions complement the grid in 2019 and beyond. It is envisaged that these will provide sources from which largescale bulk power is transmitted rather than such being a substitute for the national grid. It is clearly the case that there is a good business case for investing in off-grid projects in 2019 and going forward, but from a strategy point of view, it is critical that the development of Nigeria’s power sector is integrated and collaborative. This ensures longer lasting results and not just short-term political gains. We also expect local governments and the state government to get more

involved in supporting off-grid projects in 2019 as it has become clear that active participation at these levels of government is crucial to overall success of the objectives of the power sector in 2019. However, fixing the NESI is central to every campaign promise, and has in fact been identified as one of the major drivers of a progressive government in Nigeria. It is, therefore, our position that the commitment of any government regime to find lasting solutions to the power issues in the country as well as see to the implementation of the various projects being contemplated under the Federal Ministry of Power is unwavering. Based on the foregoing, we are confident that 2019 would witness significant developments for the Nigerian power sector.

Ayodele Oni, (ayodele.oni@bloomfield-law.com), a commercial lawyer, specializes in international energy investment law & policy and is currently advising a number of electric power and gas projects developers.

BUSINESS DAY

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2019: Understanding the Akinlade factor in Ogun is that of a grand design to install a government that is not homegrown in Ogun State but a government that would be answerable to some forces outside the confines of Ogun State.” According to them, “After extensive and due consultations with our elders, members and stakeholders in the APC in Ogun State, we have come to the inevitable conclusion to seek the general mandate of our people in the 2019 elections on the platform of the Allied Peoples Mandate (APM).”

Zebulon Agomuo

The crux of the matter Recall that Ogun State was nearly taken over by the People’s Democratic Party (PDP) until Amosun stepped in and through his great performance, people-oriented brand of politics and sense of justice changed the tide in favour of the APC. In pursuit of that justice, the governor in the twilight of his tenure went round and listened to the people’s cry and he decided that a Yewa person must succeed him. The Ogun people in the APC massively chose Akinlade as the flag bearer; but the APC national leadership denied the people their choice. This resulted in the massive exodus from the APC to other parties in the state. The chief beneficiary is the APM where Akinlade picked the gubernatorial ticket.

Adekunle Akinlade

What this shows is that whenever and wherever the choice of people is tampered with, they can form a movement that can be very difficult to burst. Today, in just two months, the APM has become a movement to reckon with. That is the power of a critical mass when their wish is subverted. Amosun decided to swim or sink with Akinlade. The governor took the decision having felt so bad that the result of the acrimonious Lagos gubernatorial primary was allowed to stay by the national secretariat of the party, whereas that of Ogun was upturned. The Ogun APC members also felt so bad at that seeming double-standard. At that point, there was no better choice for Akinlade than to leave. An observer, who would not want his name in print, said: “What is happening in Ogun right now ahead of the gubernatorial election in March shows that it could be suicidal for anybody to underrate or toy with APM, which within a space of three months has become a movement.” Side-stepping the issue Some analysts seem to have failed to interrogate the issues in the political development in Ogun State. The major issue in the Ogun State APC is about internal party democracy. “It is about the desperation of some forces in the party to ride rough shod over other members in the party whom they perceived as not complying with their dictation. It is about a party leadership

that has submitted itself to the whims and caprices of a faction in the party and will stop at nothing to satisfy the insatiable appetite of such leaders to expand their political tentacles even to where they have no political capital,” a pundit said. Mass defection to APM Recall that while decamping from the APC for APM, about 24 of the 26 winners of the primary election of the All Progressives Congress(APC) for the Ogun State House of Assembly tickets, had alleged that there was a grand plan by some individuals outside the

‘

Today, in just two months, the APM has become a movement to reckon with. That is the power of a critical mass when their wish is subverted

‘

he issue of 2019 gubernatorial election in relation to the alliance between the All Progressives Congress (APC) and the Allied People’s Movement (APM) in Ogun State is about the power rotation arrangement in the three major ethnic blocs in the state. Analysts, who have followed the recent developments in the state, say it is the insistence of Governor Ibikunle Amosun on fairness and justice, favouring a Yewa indigene as the next governor of the state that is the crux of the matter. In Ogun, many believe that Amosun was right and tending to be just in his decision that his successor must come from Ogun West Senatorial district, because the zone has not produced a governor since the creation of the state in 1976. And this informed his choice of a member of House of Representatives, Adekunle Akinlade from Ipokia Local Government Area of the state. Some of those who hold this view are outside of Ogun West, and they believe that it should go to Yewa for the sake of justice. It is the alleged refusal of the powers that be at the national secretariat of the party to allow the people’s choice that led to Akinlade’s exit from the APC. Although some critics say the support by the sitting governor to Akinlade amounted to anti-party, some analysts however, reason that Amosun is free to support whoever he wants to. According to them, if some political parties are free to endorse President Muhammadu Buhari as their presidential candidate, and some others on the platform of Coalition of United Political Parties (CUPP) have also adopted Atiku Abubakar of the People’s Democratic Party (PDP), the Ogun State governor’s support for the APM candidate is in order.

state that were bent on hijacking the party machinery in Ogun State. They alleged that the signs of crisis began to show when they were allegedly refused party nomination forms at national headquarters, Abuja. “None of us was given the requisite INEC forms for the nomination of the party as candidates for the election as at December 1, 2018 when the nomination and substitution of candidates for the Houses of Assembly closed according to the Electoral Act and the Guidelines of INEC,” the aggrieved members had said. “We wish to place it on record that we made several attempts at the state secretariat and the national secretariat of the party to collect the nomination forms. The National Chairman of the party, Comrade Adams Oshiomhole, in concert with some other forces apparently had designs which are at variance with the opinions and wishes of the overwhelming majority of the members of the APC in Ogun State. He ignored the winners of the primary election that was conducted by the committee he constituted and offered our tickets to people who are not the preferences of the members of the party in our respective constituencies,” they said, adding that “In some cases, the tickets were offered to individuals who never expressed interest in contesting election or who are even not resident or known to the people of the constituencies they are to represent. The emerging picture

The debate rages In a recent rejoinder to a piece in a national daily authored by Duro Onabule, a former Press Secretary to President Ibrahim Babangida, on the crisis in the Ogun APC, Senator Iyabo Veronica Anisulowo, said: “The choice of the next governor of Ogun State on the grounds of which section of the state is due to fill the office has dominated political discourse in the state for the better part of the year. It is a debate that is unending. Chief Onabule added his voice and his preference but the fact of the matter is that there are many informed people in the state that hold different opinions. While one cannot question Onabule’s preference, his recourse to selective amnesia to confuse the issues is simply unexpected of someone of his calibre. In the build-up to the APC primaries, the party had a stakeholders’ meeting where it was openly resolved that the party would elect its gubernatorial candidate from the Yewa Zone of the state. The meeting was attended by party elders and activists from the Ijebu zone.” According to Anisulowo, “In spite of the consensus in the APC to elect its gubernatorial candidate from Yewa Zone, the party opened its doors to aspirants from other zones to contest against whoever was presented by the people of Yewa Zone. Hon. Adekunle Akinlade was presented by the elders and members of the party in Yewa and he went into the primaries with other aspirants who insisted on going into the exercise including Dapo Abiodun, Bimbo Ashiru, Jimi Lawal and Sen. Gbenga Kaka, all from the Ijebu zone. The outcome of the primaries has been an issue of controversy.” The senator had also alleged that the problem in the APC in the state was masterminded by outside influence. “The rumble in Ogun State, as Onabule describes it, is the outcome of the plot hatched in Lagos by some territorial expansionists who want to bring Ogun State under their control for economic exploitation. They have willing tools in the hands of some ambitious politicians who have lost relevance in Ogun State,” she said.

Thursday 10 January 2019

www.

BUSINESS DAY

Shouldn’t APC stop the blame game and tell Nigerians what it has next? MODESTUS ANAESORONYE

or upward of four years now, the ruling All Progressives Congress (APC) has c o n c e n t ra t e d o n blaming the past administration of President Goodluck Jonathan and the PDP’s 16 years in power for failure to transform the economy and for handing over to it a decayed country.

Yes, it was on this premise that Nigerian’s en-mass voted for the Party and relied on its promises of change. Nigerians that voted for President Mohammadu Buhari believed that the country needed change. But whether or not these promises have been achieved in the past four years running is a story for another day. The focus for the APC now as we get into campaigns and political debate ahead of 2019 should be what it will do in addition to what it has done so far, not the blame game we are seeing. I watched the recent debate of vice presidential candidates and I could not fathom why the vice president, Yemi Osinbajo was still blaming PDP’s 16 years for the president administration

to perform to expectation. Even the crowd that watched the live debate was uncomfortable with the vice president still blaming the PDP up till now. Governance is a continuum, so whoever wins should have seen the problem of the country if not totally, at least reasonably that made him or her accept to serve as a president or in any other political office. If as a candidate in the coming elections, and up till now you are still not in the know of the rot or how bad or good the economy and country are that has agitated your mind, which is the reason you are coming into government, then don’t bother contesting because you are late to the game. It practically means you are not prepared for

political office in 2019 and will not know what to do if voted into power. The experience of the past when new governments take all the time on earth to settle down and appoint ministers and officers should not be the case anymore. This costs the nation so much that we will not be able to go that route again. Whoever becomes the president now or is re-elected, should not go on blaming the past endlessly, but should get on to work and address the real economic issues that are bothering the country. That person should have known what to do before contesting and hit the ground running once in office. So, now you have a role to play by identifying and addressing issues of

public concern not to start a new era of the blame game. Nigerians are tired of it and will not want it again. We have the problem of infrastructure in this country, we have problem of unemployment, we have the problem of poor health services, we have the problem of a poor education sector, security is a problem, poverty and the likes continue to be of serious concern. These are obvious challenges that Nigeria is grappling with, so if you do not have solutions to these challenges, then don’t bother contesting because Nigerians are running out of patience and may no longer sit down to watch. Just know that there is no seat for you in Aso Rock.

NEWS

Buhari falters with false claims on economy, fight against insurgency MICHAEL ANI

resident Muhammadu Buhari’s recent claims on the workings of the economy, achievements in the agricultural sector and the successes in the fight against insurgency might not entirely be true, BusinessDay fact check shows. In a recorded interview with Arise TV on January 6, 2019, the 76-year old Nigerian president dished out claims in a bid to buttress how well his administration has succeeded in tackling insurgencies in the North-east region compared with the rate his administration met it in 2015. He also made some spurious claims the economy. “Before we came in, Boko Haram used to occupy 17 local governments in the North-east, especially Borno and Yobe, but physically, they do not hold any local government,” Buhari said. While it might be a bit tricky to ascertain whether or not the Islamic sect occupies a larger territory, a report from Amnesty International, a London-based non-governmental organization focused on human rights, shows

that at least 1,813 people were killed from January to June 2018 across 17 states. This figure is almost double the death toll of 894 recorded in 2017. If truly Boko Haram has ceded all its territories as Buhari claims, perhaps the increasing violent acts inflicted by the group would have declined. In another separate report documenting the upsurge in violence, Amnesty International also raised a red flag on the incessant killings arising from the clash between farmers and semi-nomadic herdsmen in the North-central region. It reported that violent farmers/herders’ clashes have killed more than 3,600 people since 2016, most of them in 2018. “Of the 310 attacks recorded between January 2016 and October 2018, 57 percent were in 2018. These attacks were well planned and coordinated, with the use of weapons like machine guns and AK-47 rifles,” said Osai Ojigho, Amnesty’s Nigeria director. President Buhari in the interview blamed the farmers/herders’ clashes on former Libyan president, Muammar Gaddafi,

FACT CHECK saying that the Fulani herders are only cattle-rearers who move with sticks but never with guns. Buhari also claimed that the country under his watch has achieved food security by making fertilizer available having halved the price at which they are sold. In the real sense, while the president’s claim on the drastic fall in the price of fertilisers might not be untrue, his argument of a 100 percent local production can be faulted. No doubt, the Nigerian-Morocco fertiliser deal has helped to increase local blending capacity by 25 percent, according to a document by Presidential Fertiliser Initiative (PFI). However, Nigeria stills import more than 50 percent of its fertiliser stock of blended NPK despite being highly endowed in limestone and urea, which constitute the bulk of the components for production of the product. On the economy, the president, in comparing his administration’s achievements with those of his predecessors, claimed his administration has

done well even with very little resources. He claimed that the country achieved “about 2.1 million bpd times 100 times 16 years, yet, there was no provision for infrastructure”. The major opposition People’s Democratic Party (PDP) was in charge in Abuja for the 16-year period from 1999 to 2015. BusinessDay calculations, however, show that Brent crude, the benchmark grade for Nigerian oil, sold for an average of $55.8 per barrel in nominal terms within that period, according to data from the Organisation of Petroleum Exporting Countries (OPEC). That puts the president’s claim at nearly double the actual price. When adjusted for 2017 inflation, the price for a barrel of Brent averaged $64.7 in the period under review. President Buhari had also remarked earlier that “oil was at $37 per barrel” when he assumed office. Buhari was sworn into office on May 29, 2015. On that day, a barrel of Brent crude traded for $65.56, according to a historical price compilation on the Financial Times markets portal.

Brent would average $57 that year and it wasn’t until December 2015 that the price slipped to an all-year low of $37.93 per barrel. This is perhaps the period the president was referring to as a supply glut exacerbated by American shale output and the resumption of Iranian exports combined with slowing Chinese demand to send prices tumbling. Buhari is, however, closer to the actual daily production average with his claim of 2.1 million barrels daily. Between 1999 and 2014, the average daily production was 2.3 million barrels. The low point in that period was in 2002, when Africa’s largest oil producer pumped an average of 2.1 million barrels daily. Three years later, in 2005, the country pumped its highest volumes of the period, some 2.6 million barrels daily. However, there was a huge slump in production to as low as 700,000 barrels per day at some point at the height of the Niger Delta militancy between 2006 and 2009, before President Umaru Yar’Adua declared an amnesty that helped oil output to rebound.

BUSINESS DAY

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Live @ The Exchanges Top Gainers/Losers as at Wednesday 09 January 2019 GAINERS

Market Statistics as at Wednesday 09 January 2019

LOSERS

Company

Opening

Closing

Change

Company

Opening

Closing

Change

UNILEVER

N33.75

N37

3.25

DANGCEM

N186

N170

-16

JBERGER

N23.5

N25.85

2.35

GUARANTY

N32

N31.3

-0.7

N18

N18.85

0.85

ETERNA

N4.35

N3.95

-0.4

FLOURMILL ZENITHBANK MOBIL

N20.3

N21

0.7

ACCESS

N5.85

N5.5

-0.35

N183.6

N184

0.4

CUSTODIAN

N5.95

N5.6

-0.35

ASI (Points)

29,336.80

DEALS (Numbers)

3,806.00

VOLUME (Numbers)

234,897,039.00

VALUE (N billion)

2.245

MARKET CAP (N Trn

10.939

Stocks investors lose N261bn in one day as sell off persists …Dangote Cement leads basket of 19 laggards against 14 advancers Stories by Iheanyi Nwachukwu

t was indeed another woeful outing yesterday on the nation’s bourse. This time, at the sound of trading gong, stock investors were caught in the web of over N261billion loss as only 14 stocks gained as against 19 losers. Dangote Cement Plc recorded the highest dip as the share price of the largest cement maker lost N16 or 8.60percent, from N186 to N170. The Nigerian Stock Exchange (NSE) All Share Index (ASI) decreased by 2.33percent, while the Year-to-Date (ytd) return stood at a negative of 6.66percent. The All Share Index closed at 29,336.80 points as against the preceding day close of 30,036.15point. The value

of listed stocks closed at N10.940 trillion as against preceding day close of

N11.201 trillion, representing a decline of N261billion.

L-R: Pilsoon Han, vice president, Good Consulting Group; Henry Rolands, acting commissioner, Corporate Services, Securities and Exchange Commission, Mary Uduk, Intae Lee, acting director general SEC and Republic of Korea Ambassador to Nigeria during a meeting between SEC and Republic of Korea Ambassador to Nigeria in Abuja.

Rewane, others to discuss 2019 budget, implications for citizenry

group of Nigeria’s economic stakeholders and concerned citizens will this Saturday converge in Lagos to critically appraise the proposed 2019 Appropriation Bill with a view to adequately informing the Legislature and the Executive on critical areas to concentrate on the proposals to mitigate the poverty level in the country. Amongst the leading experts scheduled to speak at the a-political and interdenominational forum with the theme ‘Nigerian Economic Outlook: 2019 Elections – Nigeria Calls’ are Bismarck Rewane, Managing Director/CEO Financial Derivatives Company Limited who will deliver the Keynote Address; and Innocent Chukwuma, West Africa Director Ford Foundation who will also speak on the topic ‘Impact

The volume of stocks traded increased by 8.62percent,

of the 2019 elections on the socio-political environment and requirements for sustainable growth and development.’ Others include Musa Ali-Baba, CEO of Teasy Pay whose topic is ‘2019 elections and the Business environment and opportunities’ and Yemi Adamolekun who will speak broadly on the ‘2019 Elections’. According to the organizers of the event, the ‘Nigerian Economic Outlook Forum’ is a market-focused parley which seeks to provide insight and promote understanding of the environment and opportunities in Nigeria particularly with respect to the annual National Budget. Specifically, the objective is to equip participants with the requisite knowledge of the insights, implications and opportunities which the 2019 budget presents for the

Nigerian economy. At the end of the intellectually engaging discussions, the organizers expect that participants and the nation’s political leaders, including the citizenry, should have improved strategic business focus as well as improved decision-making by prayerfully applying this knowledge and understanding. Recalling that the Federal Executive Council (FEC) on 7th December 2018, approved the proposed 2019 budget of N8.9 trillion, representing about N200 billion lower than the 2018 budget – for presentation to the National Assembly for consideration, the experts pointed out that despite moderate progress on economic recovery and growth, the country remained threatened by vulnerability on multiple fronts – economic, social and political.

from 216.24million to 234.89million, while the total value of stocks traded decreased by 15.88percent, from N2.66billion to N2.24billion in 3,806 deals. Diamond Bank Plc, GTBank Plc, Zenith Bank Plc, FBN Holdings Plc and Transcorp Plc were actively traded stocks on the Nigerian Stock Exchange (NSE). The Financial Services sector led the activity chart with 195.934 million shares exchanged for N1.82billion; followed by Conglomerates with 17.77million shares traded for N37million. GTBank Plc followed in the basket of top laggards after its share price lost 70kobo or 2.19percent, from N32 to N31.3. Eterna Plc lost 40kobo or 9.20percent, from N4.35 to N3.95. Access Bank Plc share price declined from

N5.85 to N5.5, after losing 35kobo or 5.98percent while that of Custodian Investment Plc lost 35kobo or 5.88percent, from N5.95 to N5.6. Most of analysts stock picks for 2019 occupied the top gainers table on Wednesday January 9, 2019. For instance, Unilever Nigeria Plc recorded the biggest rally, after its share price increased from N33.75 to N37, representing gain of N3.25 or 9.63percent. Julius Berger Nigeria Plc followed after its share price increased from N23.5 to N25.85, up by N2.35 or 10percent. Flour Mills Nigeria Plc stock price advanced from N18 to N18.85, gaining 85kobo or 4.72percent. Zenith Bank Plc gained 70kobo or 3.45percent, from N20.3 to N21; while Mobil Oil Nigeria Plc stock price increased from N183.6 to N184, adding 40kobo or 0.22percent.

No viable derivatives market without regulatory, stakeholders’ capacity - SEC

igeria will not have a viable derivatives market without building the capacity of the regulator and other stakeholders, said Mary Uduk, Acting Director General, Securities and Exchange Commission (SEC). Uduk made this remark on Wednesday at the official opening of a seminar on the Operations and Regulations on Derivatives Market in Nigeria under the Knowledge Sharing Programme (KSP) held at the Head office of the Securities and Exchange Commission. “The Knowledge Sharing Programme represents what Korea has to offer the world. Once a povertystricken-country, the Korean people have built one of the most thriving market economies. Korea now also boasts the 11th largest economic growth country in the world”, Intae Lee, Ambassador of the Republic of Korea said at the

seminar. He expressed confidence that the launching of the first KSP project will serve as a cornerstone for the bolstered economic cooperation between the two countries in the future. The Ambassador said the programme envisages the bright future that the two great nations will continue to build together, particularly in the area of economic and developmental cooperation. With that vision in mind, he said Korea has abundant developmental knowledge and experiences to share with Nigeria. The KSP which is on “Capacity Building on Operation and Regulation of Financial Derivatives Markets in Nigeria” is based on the following topic areas: Development of Nigerian Derivatives Market, Operation, Surveillance, and Supervision on the Derivatives Market, Monitoring and Surveillance on Derivatives

Market of Nigeria and Establishment of ICT infrastructure for Financial Derivatives Market. Through the KSP, Korea shares with Nigeria the recipes for the success of its derivatives market. Through the KSP, Korea offers the secrets behind her success to Nigeria so as to walk together the paths toward greater prosperity, affluence, and success. Speaking further at the seminar, the Acting DG disclosed that the Commission will welcome any collaboration with the Republic of Korea to digitalise operations in the Commission and the market. “The entire capital market is embracing financial technology and here at the SEC we are working on automating our processes to improve our regulatory work and we are open to collaborations to make this happen,” She added.

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A community-style protection case for submarine cables in West Africa Ifeloju Alakija and Bolaji Mudashir

ver 95 per cent of international data, internet and communication are transmitted by wires deep at the bottom of the ocean known as submarine cables. These are the cables that enable people to stream videos and audio from Facebook, Boomplay, Netflix, YouTube, Periscope or any channel or download limitless volumes of documents from Google, Amazon and many others, effortlessly, with little delays and at an affordable rate. They also power government to government communications. The importance of submarine cables is underscored by the lack of capacity of satellite technologies to handle the communications requirements of the modern digital economy and society. According to a 2017 report by the Policy Exchange, in a single day, submarine cables carry some $10 trillion financial transfers, process 15 million

financial transactions as well as transport a vast amount of data, from emails to classified government to government information. Hence, any threat to them in essence is a threat not just to the operators but to the collective. There are currently about 1.5 million kilometres of optic subsea cables globally. The first submarine cables was laid in 1858, a telegraphic cable connecting Britain to the USA. The next generation of submarine cables in

terms of technology, were the coaxial and copper cables which were used by telephone companies. The TAT-1 (Transatlantic No. 1) was the first transatlantic telephone cable system and it was laid in 1956. Before 2009, only 16 African countries were connected to a submarine cable system. That number has since increased to 26 cable systems. As at 2016, submarine cable capacity reached 33 countries. About five of the cable networks are powering connectivity in West

Africa. These include MainOne, Glo 1, WACS, ACE, and SAT-3. These cables also land on Nigeria’s shores. A single submarine cable has capacity of 30 million voice channels which could translate to a minimum of 30 million telephone calls. Cumulatively the five cables have a capacity of over 40TBPS international connectivity. Currently, countries within the region are utilizing less than 10 per cent of this capacity. One major

reason is the inadequate terrestrial fiber network required to haul internet and communication traffic across the landscape of the respective countries, and this is attributable to a number of other challenges. Regardless, these submarine cables are the major arteries of communications of the modern world, and they face significant threats on a daily basis. Submarine cables are largely owned and installed by private communications companies, which makes them prone to government neglect. Government neglect is also responsible for the absence of a legal framework towards the protection of these assets. Even the current United Nations Convention on the Law of the Sea is seen as deficient in ensuring the security of undersea cables. Experts have noted that 70 per cent of the threats to submarine cables are not from natural causes but from external aggression. These threats fall into two categories namely fishing and shipping activities. Fishing activities include harmful

practices like bottom trawling. Bottom trawling is an industrial fishing method where a large net with heavy weights is dragged across the seafloor, scooping up everything in its path – from the targeted fish to incidentally cutting fibre optic cables in the process or snagging at them in such a way that it causes a shunt. In the case of shipping, anchorage which happens when ships drop their anchors where there are submarine cables and it lands on them. In 2008, there was an Italy-Egypt incident in which shipping traffic cut three cables, reducing connectivity by 80 per cent. Other threats include dredging activities and offshore activities in the oil and gas industry; where oil and gas installation, production and maintenance activities occur near or along cable paths it could result in damage to the subsea optic fibre infrastructure. Note: The rest of this article continues in the online edition of Business Day @https:// businessday.ng

Data protection in Nigeria: Giving claws to regulators FRANK ELEANYA

he leaked personal data of hundreds of German politicians by a hacker last week has again raised the red flag on Nigeria’s lack of movement on data protection and privacy. This is just as the ghosts of the leak of Amazon S3 data allegedly belonging to customers of Nigerian airline, Arik, and Facebook’s disclosure in 2018 that about 200,000 personal data belonging to Nigerians were breached by Cambridge Analytica, still hovers in the air. In both later incidences, the Nigerian authorities did not investigate or take any action to protect citizens’ data in the possession of thousands of companies. For the former, although German authorities are reported to be investigating the attack on its politicians, experts have suggested it was only possible because the German government, like their Nigerian counterparts do not take cyber security seriously. Data protection in some parts of the world is a high priority. Facebook, Google,

Twitter and several technology companies that houses billions of data belonging to their users have faced intense regulatory security lately, which include appearing before lawmakers to defend how they deploy data in their possession. The European Union commission took it a notch higher in 2018 with the release of the EU GDPR which has caused many ripples across the world. Even Nigerian companies are frantically making efforts to comply with the GDPR provision to enable them to continue to provide services for their clients residing within the EU. The number of internet users in Nigeria rose to 108.46 million in November 2018, from 94.82 million a year earlier, according to data from Nigerian Communications Commission (NCC). More growth is expected as mobile broadband network continue to expand their capacity and price of phones get cheaper. That presents a major exposure worry for data protection and privacy. The 1999 Nigerian constitution does not assign the responsibility for data

protection to any agency, but it does make reference to protection of privacy of Nigerians. Section 37 of the constitution provides that the “privacy of citizens, their homes, correspondence, telephone conversations and telegraphic communications is hereby guaranteed and protected”. The 2007 Act that established the National Information Data Protection Agency (NITDA) to some extent presents them as the regulator responsible for data protection in Nigeria. However Ngozi Aderibigbe a legal data expert and managing associate with Jackson, Etti & Edu told BusinessDay that the agency is not the only regulator with data oversight conferred on it. “Other regulators, including, the Nigerian Communication Commission (NCC) and Central Bank of Nigeria (CBN) have some data protection regulations, and these regulations are enforceable against the specific entities subject to the regulatory checks of NCC and CBN,” said Aderibibge, “Therefore, each regulator – NITDA, NCC, CBN – is responsible for enforcing any breach of

their respective data protection laws.” While the CBN and NCC appear to show a little interest in policing the data of consumers under the care of providers in their segment, NITDA which should naturally take the lead appears the most irresponsible. “NITDA which is the agency with regulatory powers to monitor the use of information technology, and the custodian of the NITDA Guidelines for Data Protection, has not shown any willpower to enforcing the data protection standards set out in the guidelines,” Aderibigbe said. A visit to the website of NITDA will show six downloadable standards and guidelines. The National Information Systems and Network Security Standards & Guidelines and Standards for Data Interoperability are the only two documents that pay more than passing attention to data and give some sort of guideline around its usage. However, both documents address companies and government ministry department. Neither of them pays any particular attention to the larger societal need

for data protection. There is also little evidence to show that the available provisions are being enforced on companies. In 2010, National Identity Management Commission (NIMC) sponsored a data protection bill with aim to regulate the governing of personal information of individuals, including the collection, holding, use of disclosure of such information by persons and organisations other than government institutions in a manner that recognises and protects the personal information and data of individuals. The bill has which is presently with the Nigerian senate is not making the desired progress. However, if enacted into law, it will prohibit the processing of data for purposes other than their intended use and companies could be fined for breaches of personal information. “It would be great to have this bill passed into law as it would strengthen the data protection regime in Nigeria,” Aderibigbe said, “It is particularly important that, in addition any regulatory penalties imposed for breaches,

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

individuals should have enforceable rights against any data collector or data processor where necessary.” To be sure, Nigeria is not the only African country that battle has a poor data protection environment as more than half of Africa’s 54 countries have no data protection or privacy laws, according to Article 19, a London-based rights group. Out of the 14 countries that have, nine have no regulators to enforce them. However, Nigeria is at a bigger risk being the African country with the most internet users. Aderibigbe recommends enforcing the NITDA Guideline and other data protection regulations already in existence. “These regulations and guidelines made in furtherance of their respective principle legislations are, by law, as enforceable as the principal legislations,” she said. A bigger issue however could also be the lack of public awareness of the existence of these regulations and their enforcers. Increase awareness will boost the level of compliance with the regulations.

BUSINESS DAY

Thursday 10 January 2019

FEATURE

How innovation and technology drive new era of reform at FMBN

After over three decades of underperformance with minimal impact on homeownership in Nigeria, the Federal Mortgage Bank of Nigeria (FMBN) is in for good times. The on-going reform at the bank, driven by innovation and technology, is aimed, among other things, to remove administrative and regulatory encumbrances, recapitalize the bank to N500 billion to expand its capacity to provide affordable mortgage housing finance, and set it on the path of efficiency, quick progress and impact, writes IKYAAVE TERHEMEN-MARK, Abuja.

he Federal Mortgage Bank of Nigeria (FMBN) is experiencing a remarkable turnaround for good. The current set of professionals that run the apex mortgage institution with Ahmed Dangiwa as managing director have, in the last 18 months of being at the helm, demonstrated that it is indeed possible to reform and revitalize the bank, not only to serve as a more effective provider of affordable mortgage finance but also as one that is more accountable, transparent and innovative. This much awaited positive twist in the narrative of the national mortgage bank is commendable which is why it is important that the government and stakeholders support the team that is leading the reform agenda to ensure that it is sustained and deepened even further. At the heart of the efforts to reposition the bank is the aggressive push for a comprehensive review of the law setting up the FMBN by the National Assembly. The review will help to remove administrative and regulatory encumbrances and other gaps that have hindered the bank’s growth over the 4-decades of its existence and set it on the path of efficiency, quick progress and impact. Key aspects of the review include the N500 billion recapitalization of the bank to expand its capacity to provide affordable mortgage housing finance, the strengthening of the powers of the bank’s board and a friendlier regulatory regime that will aid professionalism and enhance service delivery. The bank has recorded remarkable progress. After 12 years of attempts to have the National Assembly act on the bills to amend the FMBN and the National Housing Fund (NHF) laws, the Senate and the House of Representatives finally did so in 2018. What is left now is for the president to sign the amended bills into law. The assent will fundamentally reset the structure, size, depth of FMBN’s operations and birth a more robust national mortgage finance facility. The current executive management team has also braved several inherited challenges to record strong corporate performance. Dangiwa reported during the visit of the Senate Committee on Housing in December last year impressive performance scorecard for the period spanning April 2017 to September 2018. This includes loan disbursements totaling N40.9 billion for the creation of about 2000 mortgages, provision of Home Renovation loans totaling N14billion to 16,031 Nigerian workers, processing of N12.4 billion refunds to 97,215 retirees and registration of 224,752 to the fund. Of note is the speed of processing NHF refunds which increased by over 53.44 percent, 21.82 percent increase

in NHF collections, and 21.15 percent spike in loan disbursements when compared to earlier trends. Others include the recovery of N4.2billion outstanding debt. Innovative affordable housing products: Another hallmark of the new FMBN is the emerging strong focus on innovation in the design of its housing products. There are some signature initiatives that are now redefining the bank. First is the introduction of the rent-to-own housing scheme. The new housing product makes it possible for workers to move into their homes and pay conveniently via monthly or yearly rentals over a maximum of 30 years at 9 percent interest rate. Another key feature of the product is the elimination of the need for equity payment and other costs associated with a typical mortgage transaction. Access to the house is immediate. The scheme has been commended by notable Nigerians including Barnabas Gemade, chairman, Senate Committee on Housing, and Winifred Oyo-Ita, the Head of Service of the Federation, who described it as an appropriate tool that will lessen the financial burden of homeownership for civil servants. There is also the individual NHF construction loan product. Under the facility, a contributor to the NHF with a Certificate of Occupancy and an approved building plan with certified bill of quantities can access up to N15million and pay back over a 15-year period at single digit interest rates of 7 percent. Another initiative is the reduction in equity contribution requirements for accessing NHF loans from 10 to zero percent for sums of up to N5 million and below and 10 percent for loans of between N5 million and N15million The FMBN Digital Roadmap: Besides innovating its housing products portfolio to fit the reality of the typical Nigerian worker, FMBN has also taken many commendable steps towards boosting efficiency in its business operations. At the heart of this drive is the adoption of a digital philosophy which seeks to leverage technology to optimize company-wide performance and service delivery. FMBN is aggressively leveraging technology to automate its old business processes and building an IT-driven structure that will drive its operational activities. The most recent action in this regard is the launch of the ‘FMBN Digital Mobile Platform’ which empowers contributors with real-time access to information on their NHF accounts. “This platform is an ecosystem of innovative mobile messaging solutions integrated into a single suite and seeking to address the challenges associated with effective monitoring,

Ahmed Dangiwa

management and notification of monthly NHF contributions nationwide”, Dangiwa said. Key components of the platform include *219# USSD Short Code, Mobile Apps for Android & iOS platforms, Online Self-Service Kiosk i.e. www. fmbn.gov.ng/nhfmobile and SMS and Emails Notifications. The platform has several features that are designed to usher in a new era of transparency and accountability in the operations of the NHF. This includes enabling NHF contributors to receive instant notifications, stay in the know of their contributions and remittances to the scheme on the go, update their records, check contributions, register and retrieve NHF numbers, request for statement of account, calculate home affordability and mortgage payment, and search for NHF-related information from FMBN bulletin board service. The launch of the FMBN mobile platform is particularly significant given the history of the bank. It is noteworthy that since the NHF was established in 1992 to act as a sustainable pool of funds for driving affordable housing delivery for civil and public servants, its operations have largely been defined by opacity and secrecy. Public and civil servants that, on a monthly basis, contribute 2.5 percent of their salaries to the scheme with the hope of benefitting from a suite of affordable housing services including long term loans of up to 30 years and single digit interest rates of 6 percent were largely left in the dark concerning their contributions. Nothing was clear.

This lack of clarity fueled suspicions of fraud, mismanagement, diversion and lack of value to those whom the scheme was supposed to benefit. The FMBN digital platform has helped to break from this past and now lays a foundation for the bank’s operations going forward. FMBN has also done a good job of engaging the right IT companies to deliver on the project. The IT infrastructure that supports the platform is built by a reputable local IT firm and supported by world class data storage and IT solutions providers such as NetAPP that is based in California, United States. The systems are secured, available, reliable, easily accessible and easy to use with or without an internet connection. They give each NHF contributor increased access to their contributions, greater transparency, clearer disclosure and convenient access from the comforts of their homes/offices or while on the go via phone or email. Dangiwa, at the launch event, expressed delight and stated that the launch of the digital platform was the result of the new management’s commitment to addressing, in a structured manner, the challenges that have bedeviled the effective implementation of the NHF scheme. “On assumption of office in April 2017, we audited the system and discovered that most employers underremit deductions, remittance schedules of deductions are not provided, contribution records are updated and maintained in passbooks and most contributors do not know the status of their contributions.

“Having critically evaluated the issues, we decided to automate the process to give contributors unfettered access to the information pertaining to their contributions and the policies associated with the scheme for greater efficiency, transparency, accountability and service delivery. I am extremely excited that today, we are here to witness the realization of this strategic milestone”, he said. The Digital Platforms, he added, was significant because it marked the end of over 30-year period of opaqueness in the management of NHF funds – where contributors were completely in the dark about the state of their NHF accounts. He assured that the introduction of the mobile digital solutions had put the power of convenient access to information about the state of NHF accounts in the hands of contributors since they could now manage, monitor, and receive prompt/instant notifications via their mobile phones and email accounts on activities on their accounts. Building trust with labour unions: FMBN has also strengthened its engagements with critical stakeholders, especially the labour unions to build more confidence in the NHF scheme and provide greater value to contributors. The hallmark of this is the partnership with the Nigeria Labour Congress (NLC), the Trade Union Congress (TUC), and the Nigeria Employers’ Consultative Association (NECA) to deliver high quality, safe, decent and affordable housing to workers under the National Affordable Housing Delivery Programme (NAHDEP). In a back-to-back fashion, groundbreaking events for the pilot phase of the project were carried out in Nasarawa, Kogi, Abia, Enugu, Akwa Ibom, Katsina and Jigawa states. A total of 100 housing units comprising one, two- and three-bedroom flats are to be delivered within an 8-month period. Overall, there are a lot of reasons to say that the present team of professionals that are running FMBN, has succeeded in putting the bank on the right course. The passage of the FMBN and NHF amendment bills by the National Assembly and possible signing into law by the President, the adoption of the DIGITAL philosophy which has seen the launch of the digital mobile platform and the innovations in its housing portfolio to fit the reality of the Nigerian worker amongst others serve as strong signposts of a new FMBN. This is a good development for the country’s housing sector. A stronger, well run, transparent and accountable FMBN is critical to addressing the Nigeria’s housing challenges. It is therefore, important that government and other stakeholders support the ongoing reform effort at the bank.

Thursday 10 January 2019

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38 BUSINESS DAY NEWS

Economic Intelligence Unit filters out noise in ... Continued from page 1

political participation (3.33),

politicalculture(3.75),andcivilliberties (4.41). Overall score for Nigeria is 4.44. Based on these scores, Nigeria ranks a low 108 among the snapshot of the state of democracy worldwide for 165 independent states and two territories. This comes barely seven weeks before Nigerians go to the polls to elect a President for the next four year, as well as governors, National Assembly members and the various States House of Assembly members. While Nigeria’s major opposition People’s Democratic Party (PDP) after its 16 years of power is working hard to regain its populist position in the runup to the 2019 general elections, the ruling APC is also trying to turn the tide in its favour after criticisms that Nigeria is now home to highest number of very poor people in the world. Looking at the state of democracy in Nigeria and the rest of sub-Saharan Africa (SSA), the EIU said the region remained poor over the years, noting that a concentration of authoritarian regimes continues to characterise the region, which contains seven of the 15 lowest ranked countries in the world. Except Mauritius tagged to have “Full democracy”, other SSA countries have “Flawed democracy”, “Hybrid regime”, or “Authoritarian”.

Nigeria belongs to the “Hybrid regime” category, the EIU said. In a Hybrid regime linked to Nigeria, according to the EIU, “Elections have substantial irregularities that often prevent them from being both free and fair. Government pressure on opposition parties and candidates may be common. Serious weaknesses are more prevalent than in flawed democracies—in political culture, functioning of government and political participation. Corruption tends to be widespread and the rule of law is weak. Civil society is weak. Typically, there is harassment of and pressure on journalists, and the judiciary is not independent.” According to the EIU, “Democracy is more than the sum of its institutions. A democratic political culture is also crucial for the legitimacy, smooth functioning and, ultimately, the sustainability of democracy. A culture of passivity and apathy – an obedient and docile citizenry – is not consistent with democracy.” “The electoral process periodically divides the population into winners and losers. A successful democratic political culture implies that the losing parties and their supporters accept the judgment of the voters and allow for the peaceful transfer of power. Participation is also a necessary component, as

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apathy and abstention are enemies of democracy,” the EIU stated. The Economist Intelligence Unit (EIU) is the research and analysis division of The Economist Group and the world leader in global business intelligence. “In a democracy, majority rule must be combined with guarantees of individual human rights and the rights of minorities. Most measures also include aspects of the minimum quality of functioning of government. If democratically based decisions cannot be or are not implemented, then the concept of democracy is not very meaningful. “Even measures that focus predominantly on the processes of representative, liberal democracy include (albeit inadequately or insufficiently) some aspects of participation. In a democracy, government is only one element in a social fabric of many and varied institutions, political organisations and associations. Citizens cannot be required to take part in the political process, and they are free to express theirdissatisfactionbynotparticipating. “However, a healthy democracy requires the active, freely chosen participation of citizens in public life. Democracies flourish when citizens are willing to participate in public debate, elect representativesandjoinpoliticalparties. Withoutthisbroad,sustainingparticipation, democracy begins to wither and become the preserve of small, select groups,” the EIU further said.

Thursday 10 January 2019

AMCON’s assets sale seen deepening... Continued from page 2

Madamidola pointed out, however, that these assets sale has its positive side, explaining that beyond the bureaucracy that attends such sales, it throws up buying opportunities for people, mainly investors, who are patient and have long-term view of the market. Such investors believe that in spite of the present slowdown, the market will rise again when the economy rebounds. The situation in residential segment of the market is mixed. Whereas there is a lull in the upper end of the market, the mid-low end remains active even at the peak of recession. An interesting development in the market, which is to the advantage of home-seekers, is that understanding the times, developers have increased their shift towards more density development, optimising their use of space, especially in prime locations. Most of the big ticket developers, including Africa Capital Alliance, Grenadines Homes, Periwinkles Investments, who were in the market before now developing stand-alone houses and duplexes, have shifted to investing in smallsized and multi-family units developments as could be seen in the Blue Waters, Oceania and Oxygen Apartments by the aforementioned

developers. “What we are doing is in response to what the market says; this is where demand is at the moment and we are responding to that,” Obi Nwogugu, principal at Capital Alliance, explained to BusinessDay. The public sector is also aggressively responding to demand at the low-end market with its various housing initiatives. Northcourt Real Estate’s recent report reveals that the Family Homes Fund (FHF) and the Federal Ministry of Finance are upbeat on providing 500,000 lowincome homes by 2023. So far, only 400 housing units, under that fund, have been completed in Nasarawa State while construction is ongoing in Ogun, Kano, Delta and Kaduna States. Similarly, the Federal Housing Authority (FHA) has made a N27 billion investment to deliver 1,650 housing units targeted at lowincome earners in Zuba, Kwali and Lugbe, Abuja. Also, the Nigerian Army in collaboration with Post-Service Housing Development Limited, the Otukpo Local Government Council and Betoniq West Nigeria Limited, will be bringing 221 housing units to the Benue State market over a 24-month timeframe.

Suppressed 17,000MW electricity load demand puts power sector on edge OLUSOLA BELLO

N Employees of Resourcery Plc led by Tani Fanfunwa, managing director, and Andrew Ejoh, executive director, during the ‘Walk for Wellness’ and CSR visit to Kuramo Primary School, Victoria Island, Lagos.

Nigeria misses out on $275m cocoa... Continued from page 1

gets a tonne of butter and 1.5MT of cake. The average price of pro-

cessed cocoa intermediate products, such as butter and cake, for 2018 was $7,429 and $ 1,300 per tonne. This means that processors could have created an additional $275 million in value (total value of 210,000 MT of locally produced cocoa processed into cake of $156 million plus value of butter $600 million, less $480 million price of cocoa input (at $2,290 per tonne) paid to farmers. “We only process about 15 percent of our raw cocoa beans in 2018,” said Akin Olusuyi, president, Cocoa Processors Association of Nigeria (COPAN). “Our agriculture has remained at the rudimentary stage because the active players that take the commodity from the farmers do not add any value by processing it. The direction to economic growth is industrialisation and not the exporting of raw agricultural commodities,” Olusuyi, who is also the managing director of

Ile Oluji Nigeria Limited, Nigeria’s oldest cocoa processing firm, said. Nigeria once had 27 cocoa processingfactoriesinthe1970s,butthenumber felltoeightinthe2000s,withacombined installed capacity of 150,000MT. Today, Africa’s most populous country has only five functional factories with a combined utilisation capacity of less than 30,000MT per annum, BusinessDay gathers. “The only thing that can drive our economy is manufacturing through value addition. This is what will sustain the cocoa industry and also drive production,” Dokun Thompson, the Olooni of Eti-Oni and an international cocoa trader, said. Thompson said the country could generate more revenue and create jobs as well as other spinoffs when cocoa is not only processed into intermediate products, such as butter and cake, but also into finished products like chocolates. “One major challenge facing Nigeria’s cocoa industry is poor local consumption. Nigeria has

no chocolates manufacturer at the moment despite the industry being worth about $10 billion globally,” the international cocoa trader said. He cited the Ivory Coast model as an example for the country to emulate in developing its cocoa subsector. Ivory Coastwasabletoimproveitsproduction from800,000MTto1.2millionMTtoday because the government focused more on value addition, Thompson said. Similarly, Nigeria has failed to steadily increase its cocoa production over the years, despite the commodity being the largest single foreign exchange earner after oil. Last year, floods and disease outbreak in major cocoa producing states cut the output of the product, with the Cocoa Association estimating a large decline. “The high incidence of last year’s floods would cut down the country’s 2017/2018 production by about 15 percent,” Sayina Rima, national president, Cocoa Association of Nigeria (CAN), said by phone from his farm in Ikom, in the country’s South-South region. “This might affect our global cocoa rankings for the period,” Rima said.

igeria’s power sector challenges are not likely to improve dramatically anytime soon despite government’s claims on its achievements. The magnitude of the problems on ground appears larger than is known. These problems run through the entire value chain in the industry. The generation and distribution companies are still saddled with technical issues which have limited their capacities to generate and distribute power to consumers. Consequently, Nigeria experienced a daily average suppressed electricity load demand of 17,000 megawatts in the last three months of 2018. This represents the daily average electricity required for both industrial and domestic needs which could not be met by the generating companies. The country was only able to generate between 3,500MW and 4,200MW daily throughout the period. The actual daily average electricity demand load for the period was 22,000MW, as against the 13,000MW total installed capacity of the generating companies in the country. Statistics from the Nigerian system operator put the daily transmission capacity at about 5,000MW, despite Babatunde Raji Fashola, minister of Power, Works and Housing’s persistent claim that the transmission lines have capacity to wheel about 7,000MW of electricity. On October 22, 2018, average energy sent out was 3,854MWh/ hour. Peak generation attained on October 22, 2018 was 4,729MW. This shows low/minimal optimisation of generation capacity is due to constraints on the transmission and distribution

networks. Joy Ogaji, executive secretary, Association of Power Generation Companies, said without these constraints, additional 3,000MW could be made available to customers and also serve as an incentive for power generating companies (GenCos) to recover the unavailable capacity of over 5,000MW. A further challenge is the constant request from the system operator to make the GenCos’ power plants operate at base load contrary to their design to operate optimally and efficiently, she said. Ogaji also said that operations of power turbines far away from their base loads lead to a reduction in efficiency or, in other words, an increase in consumption of gas (for the thermal) by as much as 15-20 percent, a cost not captured or contemplated by Multi Year Tariff Order (MYTO). She explained that a wide variety of determinants affect the investment decision in power generation. First of all, the state of the market in the power sector acts as a determinant of whether or not generation capacity should increase or be optimised. “To optimise the current generation capacity, planning becomes pivotal, taking into cognisance the gestation period for power development. There is need for massive investment in transmission and distribution networks in the country,” Ogaji said. Analysts say if answers can be given to GenCos’ most pertinent questions, then power supply issues in the country will be tackled effectively. Such questions include whether they can fully transmit the power they generate, whether they can get the gas to do that, and, finally, who will pay for the power.

Thursday 10 January 2019

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Ahalson, Aqua Criderio, 3 others record significant progress on back of ERGP - FG CALEB OJEWALE

ive Nigerian businesses made substantial progress and investments in recent times on the back of the Federal Government’s Economic Recovery and Growth Plan (ERGP), the Ministry of Budget and National Planning said in a recent publication. The companies, which include three agro-based businesses, an indigenous oil company, and Nigeria’s first gold refinery, were featured in the fifth edition of the ERGP Focus Labs Newsletter, a publication that highlights progress on investments said to be unlocked and projects facilitated at the Focus Labs. Ahalson Ltd, one of three agro-allied companies highlighted by the report, has been able to commercialise improved maize seed varieties. Following the ERGP Lab process, it was noted that Ahalson has achieved considerable progress in the implementation of its 3-feet plan and has achieved significant percentage of its target. The company has been able to supply Alfa safe seeds and inputs to its 2,600 farmers, currently culti-

vating 3,500 hectares with five tonnes-per-hectare output. With N90,000/tonne, Ahalson expects to turn over N1.6bn. It currently works closely with off-takers such as Grand Cereals, Dawanau Market Association and NNFM to open up markets for these farmers. Ahalson has also gone ahead to acquire grains cleaning plant of 43,200MT/annum in order to clean maize, sorghum and sesame seeds for local and international markets, the report said. Aqua Criderio, another agro-allied company, opened integrated fish farms in Lagos and Akwa Ibom States, according to the publication. Through the support of the ERGP Implementation Unit, the report said, Aqua Criderio has gained CBN’s approval of N10bn loan for the projects. Meanwhile, the Isreali partners have accepted to bring in the balance of funds needed to drive the project which total outlay is put at $150m. Aqua Criderio is currently working out guarantee issues and the final arrangement for the foreign partners to arrive Nigeria to kickstart the project. The third agro-allied business, Harvest Feed and Agro Processing Limited in Abeo-

kuta, Ogun State, the report said, has increased its production levels by over 70 percent. The company currently produces cassava starch with a potential to venture into other cassava value chain products in the near future. It is planning for cassava pellets, flour, glucose, and chips. The report also stated that at the Focus Lab session, the company had raised some issues, including the implementation of Import Adjusted Tax (IAT) of 60 percent on imported cassava products to ensure a competitive advantage over imported starch, and sourcing for additional funds from CBN/BOI to increase its production capacity utilisation. After the Lab, a policy draft was prepared for the implementation of 40 percent IAT on imported cassava products and presented to the Tariff Technical Committee (TTC). The report said the Committee has made significant progress towards the new IAT in collaboration with the Nigerian Customs Service and it is hopeful that the Ministry of Industry, Trade and Investment will achieve policy change early in 2019.

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BUSINESS DAY

Lassa fever: Edo warns against self-medication

do State government has warned residents of the state, especially those in areas where Lassa fever is endemic, against self-medication, urging them to visit medical centres for proper diagnosis when they feel feverish. In a statement, Crusoe Osagie, special adviser to the state governor on media and communication strategy, said the state government was stepping up awareness of Lassa fever to mitigate the resurgence of the ailment in the state. He urged residents in the state to desist from self-medication, but rather visit health

centres for proper diagnosis. The state government embarked on an extensive media campaign since reports of the resurgence of the viral disease in some states across the country, informing residents of measures to prevent resurgence and help-lines to call for assistance to stem the spread of the ailment. According to Osagie, “The state government is committed to ensuring that there is no resurgence of Lassa fever in Edo State. We have commenced an extensive media campaign, and have called out to the local government councils to ensure directives on environmental sanitation

and the need to avoid bush burning are adhered to. We are working with the World Health Organisation (WHO) and the Nigerian Centre for Disease Control (NCDC) to mitigate resurgence of the ailment. “However, we are also aware that a number of people are prone to elect to selfmedicate when they experience symptoms of fever. This is why we are putting this call out there, especially for persons in areas where Lassa fever is endemic. People should go to the health centres to get proper diagnosis when they feel feverish before they start taking medications.

Plan to end darkness in Edo: CCETC-Ossiomo 55mw transmission equipment sails out of China

arely a week after Edo State governor, Godwin Obaseki, visited the site that will host the 55 megawatts CCETC-Ossiomo Power plant in Ologbo, near Benin City, the governor on Wednesday said transmission equipment - transformers, cables, supply lines, among others, had sailed out of China, heading to Edo State. According to Obaseki, “The latest information

made available to me by those tracking the movement of the equipment from China, said the transmission cables, transformers and other supply infrastructure have sailed out of China and heading to Nigeria. “I have also been told that work is being fasttracked on the 55mw power plant, which is coming from Saudi Arabia, to be positioned for sail out.” The governor explained that “the current cycle of

darkness foisted on electricity consumers in Edo State by the Benin Electricity Distribution Company (BEDC) is killing businesses and ruining social activities,” assuring that a new era is in the horizon with his administration’s bold initiatives. He further said the April date for the commissioning of the first phase (5mw) of the project is realistic as the project partners are intensifying work on site.

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BBC joins Osinbajo, Soyinka to heighten calls against fake news in Nigeria ONYINYE NWACHUKWU & HARRISON EDEH,

amie Angus of the British Broadcasting Corporation (BBC), Vice President Yemi Osinbajo and Nobel Laureate Wole Soyinka were among critical stakeholders who raised passionate calls on Wednesday on the need to check the ravaging impact of fake news in Nigeria going into elections next month. The calls were made at the BBC organised event on fake news themed ‘Nigeria 2019: Countering Fake News’. The conference is born out of the obvious dangers posed by the rising rate of fake information in the country, particularly as election draws closer. Angus, director, BBC World Service Group, told BusinessDay that the situation was worrisome and that the Corporation had

committed to initiating conversations, but would allow the country’s stakeholders to tackle the menace before things get out of hand. “I think we know it’s a problem which is not only causing confusion and the lack of trust between audiences and publishers, but it’s actually causing a threat in terms of even people’s well-being because we have seen examples with vigilantes, we have seen disinformation leading to violence in different parts of Nigeria, so we know it’s not just media talking point, it’s a real present threat to people’s security, lives and property. So people need to understand that, and that is why we need to take the problem seriously,” he said. Angus said the BBC was particularly concerned because Nigeria is its biggest single country audience. “We really care about

Nigeria, and as a country we have got a long history of working closely with and we care about the national Nigeria’s immediate climax. But I think more widely, the BBC wants to be the solution to the entire media community in Nigeria. What we are looking for is to mobilize resources, start the conversation, be part of the solution but let the country find its own national selfsolutions,” he said. As part of its solution, Angus said the BBC would be publishing high quality, independent and verified fact-checking content into the Nigerian elections, adding that specifically around the elections, “we will publish this fact-check stories, we will publish a different sort of key explainer every day”. Angus, who had earlier participated in the panel discussions, suggested

sharing of fact-checked news items by conglomerate of media outlets, which would assist in validating their news items. “Collective strength of media outfits in validating information through proper fact-check of trending news items is key in curbing this menace as well as media education,” he said. At the event, Vice President Osinbajo and Soyinka, as well as other panellists called on the traditional media to set the standards in news delivery through thorough interrogation and fact-checking of news items. “Aside from the damage and the integrity harm done to public information, the capacity of fake news to cause alarm and fear and even future violence had been demonstrated again and again,” Osinbajo said.

L-R: Akin Salu, executive head of sales, MultiChoice Nigeria; Seun Ikhekua, head of customer value management, MultiChoice Nigeria, and Martin Mabutho, chief customer officer, MultiChoice Nigeria, at the MultiChoice Step-Up campaign press conference in Lagos, yesterday. Pic by Pius Okeosisi

Minimum Wage: Buhari appoints Rewane to head technical committee MICHEAL ANI

resident Muhammadu Buhari on Wednesday appointed the managing director of Financial Derivative Company, Bismarck Rewane, as head of newly inaugurated Technical Advisory Committee on the implementation of a National Minimum Wage. This is coming about 24 hours after the Federal Government and Organised Labour finally agreed to forward the new National Minimum Wage Bill to the National Assembly on or before January 23.

“Let me make this clear that it is not a question of whether the National Minimum Wage will be reviewed upwards or not. I am committed to reviewing the Minimum Wage,” Buhari said. “However, it is important to explain that even though the subject of a National Minimum Wage is in the Exclusive Legislative List, we have been meeting with the State Governors because it is imperative that the Federal Government carries the State Governments along in determining any upward review of the minimum wage for

workers. “This is especially necessary considering the prevailing public sector revenue challenges, which have made it extremely difficult for some of the governments to pay workers as and when due,” he said. The 76-year-old Nigerian President noted that after the new minimum wage had been passed into law negotiations would begin over salary review for all workers already earning above the new minimum wage. The committee has one month to complete and submit its report.

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Thursday 10 January 2019

Nigeria producing 1.78mbd of crude oil - Kachikwu DIPO OLADEHINDE

inister of State for Petroleum Resources, Ibe Kachikwu, says Nigeria is currently producing about 1.78 million barrel per day and about 350,000bpd of condensates. According to Bloomberg, the minister on Tuesday, while speaking in Abuja, said he also expected production from new Egina deposit to rise to 150,000bpd by the end of January. “Currently studying how much of Egina is crude and how much is condensate. If it is pure crude it raises concern and other implications in terms of OPEC production Quota? If it is condensates, then obviously we smile,” Kachikwu told Bloomberg. Energy research analyst at Ecobank Jubril Kareem in a tweet, however, said “under OPEC’s 1.2 million production cut agreement, Nigeria is expected to keep oil production at 1.738m barrels/day (excluding other liquids).” He said, the development will take Nigeria’s total liquid (crude oil, condensate etc) above 2.1m b/day in 2019. “This is still below the proposed budget benchmark of 2.3mln bpd,” Kareem tweeted. Kachikwu also noted that contract awarded for replacement of corroded crude pipeline for Opkoho and Okono fields on OML 119 would cost $37 million, which after completion is expected to double asset’s output to 40,000bpd. Days before OPEC’s production cuts started on January 1, France’s Total had started up oil production from Nigeria’s ultradeepwater oil field Egina,

which is expected to produce 200,000 bpd at peak output. The Floating Production Storage and Offloading (FPSO) unit that was used to develop the ultra-deep Egina oil field is the largest such unit that Total has ever built, according to the French group. Total noted that the plateau production at the ultra-deepwater field would be 200,000 barrels of oil per day, which would account for some 10 percent of Nigeria’s oil production. The situation with Egina is a dilemma for Nigeria, which wasn’t spared from the new OPEC/non-OPEC production cuts this time around, is expected to contribute with up to 40,000 bpd to the 800,000 bpd OPEC had pledged to cut from January, Nigerian Oil The 40,000-bpd figure is some 2.5 percent of Nigeria’s current crude oil production of 1.7mbpd, the minister said in the first half of December. Following a wave of militant violence in 2016 and early 2017, Nigeria’s oil production started to recover in the latter half of 2017, when attacks on oil infrastructure subsided. According to the Nigerian National Petroleum Corporation (NNPC), the country’s oil production increased by 9 percent in 2018 compared to 2017, the NNPC Group’s Managing Director Maikanti Baru said in a statement. Total is set to begin exports from the new ultradeep Egina oil field offshore Nigeria as early as in February 2019, at an initial rate of just over 100,000bpd, Bloomberg reported four weeks ago, quoting a copy of a loading programme for the new grade it had seen.

Airfreight demand flat in November 2018 – IATA IFEOMA OKEKE

nternational Air Transport Association (IATA) released data for global airfreight markets showing that demand, measured in freight tonne kilometres (FTKs), was flat (0%) in November 2018, compared with the same period the year before. This was the slowest rate of growth recorded since March 2016, following 31 consecutive months of year-onyear increases. Freight capacity, measured in available freight tonne kilometres (AFTKs), rose by 4.3 percent year-on-year in November 2018. This was the ninth month in a row that capacity growth outstripped demand. While international e-

commerce continues to grow, overall demand faced significant headwinds. There were signs of weakness in global economic activity; a contraction in export order books in all major exporting nations, with the exception of the US; shorter supplier delivery times in Asia and Europe; and weakened consumer confidence compared to very high levels at the beginning of 2018. “Normally, the fourth quarter is a peak season for air cargo. So, essentially flat growth in November is a big disappointment. While our outlook is for 3.7 percent demand growth in 2019, downside risks are mounting. Trade tensions are cause for great concern. We need govern-

ments to focus on enabling growth through trade, not barricading their borders through punitive tariffs,” Alexandre de Juniac, IATA’s director-general/CEO, said. Three of the six regions reported year-on-year demand growth in November 2018 – North America, Middle East and Latin America. Asia Pacific, Europe and Africa all contracted. African carriers saw freight demand decrease by 7.8 percent in November 2018, compared to the same month in 2017. This was the eighth time in nine months that demand contracted. Capacity shrank 7.4 percent year-on-year. Demand conditions on all key markets to and from Africa remain weak.

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Ghana: Govt. to award oil blocks to prospective winners August 31 Page 42 POWER

Africa: AfDB approves $149m credit risk participation Page 44 Market Insight

Debrief

Nigeria’s 2019 oil outlook mired in uncertainties around upcoming elections, stalled reform FRANK UZUEGBUNAM

C Oil rises to $57 on China-US trade talks, OPEC cuts Page 46 OPEC weekly basket price DAY

PRICE

4/1/19

55.14

3/1/19

52.95

2/1/19

52.17

28/12/18

51.55

27/12/18

52.35 Source: OPEC

rude oil prices rose to a 4-year high in October 2018 before dipping more than $30 in the following months. Oversupply and demand worries were seen as the cause of the volatility. But there were other market dynamics at play; President Donald Trump’s tweets demanding lower oil prices and US shale producers pumping out unprecedented volumes of crude which threatened to undo all of OPEC and Russia’s years-long work. The organization of Petroleum Exporting Countries (OPEC) members and 10 nonOPEC producers in December 2018 decided to cut oil production and help to re-balance an oil market that was becoming over-supplied. The implementation of that decision which

took effect from January 2019 should lead to a gradual stabilization of prices and probably, a return to a lower-volatility environment. But then, there are other variables; can US continue to exceed production expectations? Will the slowdown in the global economy devolves into something worse? How effective will US pressure on buyers of Iran crude be? What of the decision by Qatar to remove itself from OPEC and focus more on natural gas? On the supply side, will we see a significant further decline in production from Venezuela? Can Libya manage to maintain production without more disruptions? According to the International Energy Agency (IEA), the market may operate in 2019 without the very high volatility witnessed in 2018. For Nigeria, its crude oil production rose to 2.09 million

barrels a day in 2018 compared with 1.86 million bpd the year before, according to the Nigerian National Petroleum Corporation (NNPC). “Nigeria’s crude oil daily production recorded an upward swing of about 2.09 million barrels in outgone 2018 compared with the 2017 average daily production of 1.86 million barrels,” the NNPC said in a statement. The country was producing 1.6 million bpd of oil and 0.4 million bpd of condensate. Nigeria has maintained “a line of consistent year-on-year improvement”, Maikanti Baru, Group Managing Director said. However, the coming on stream of the 200,000 b/d Egina oil field could take the country’s production output to a decade high of 2.3 million b/d. However, uncertainties remain. The volatile campaign season ahead of upcoming elections and the stalled oil sec-

tor reform are key indices. In the past few years, there has been apathy in investment in the sector as a result of the lack of progress of the industry legal and regulatory reform which President Buhari withheld its assent in August 2018. But in a twist, he promised recently he would assent to the Petroleum Industry Governance Bill (PIGB) as soon as the National Assembly presented it to him. Oil majors are all losing patience with the slow progress of reform. On the political front, the upcoming elections give cause for concern which could result in pockets of violence, enough to disrupt operations. There are palpable fears that politicians may use militants in a way that could lead to some shut-ins and vandalization of pipelines and other oil installations especially in the southern part of the country where President Buhari’s popularity has waned.

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Brief Angola: IMF’s Lagarde urges Angola to lower dependence on oil

omy,” Amewu said. Chairman of the Licensing Bidding Round Committee, Lawrence Apaalse has expressed optimism that with the interest of these companies, exploration works are likely to begin before the end of 2019. “After we announce the

Thursday 10 January 2019

oil

Ghana: Govt. to award oil blocks to prospective winners August 31

hana’s Minister of Energy is expected to announce the winners for the bids of the country’s oil blocks by the end of August 2019 after a final validation in which 60 applications were received from 16 companies including, Exxon Mobil, Tullow Oil, Aker Energy among others. According to the Committee, two applications were invalidated because the block has been reserved for the Ghana National Petroleum Corporation (GNPC). Addressing a press conference in Accra, John Peter Amewu, Minister of Energy, said that the interest expressed by some of the major players in the process speaks volumes about the confidence in the country’s economy. “The interest expressed by some of the major players in the oil and gas sector worldwide in this licensing round speaks volumes about the confidence the global community have in our econ-

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winner on August 31, parliament will ratify them and work begins immediately. With the kind of interest some of these companies have expressed so far, I am confident that they will start work by the end of this year 2019,” he said. 43 out of the applica-

tion which is about 74 per cent were interested in competitive bidding whiles 15 are applying for direct negotiation. Meanwhile, the two firms that have been invalidated will have an opportunity to discuss a partnership deal with the GNPC.

ngola, Africa’s second-biggest oil producer, should lower the economy’s dependence on oil and its vulnerability to the commodity’s price fluctuations so that enough resources can be made available to improve living standards in the nation, International Monetary Fund Managing Director Christine Lagarde said. “Economic diversification in sectors other than oil is central to the success of the government’s development strategy,” Lagarde said in a statement. Last month, lawmakers in the southwest African nation asked the government to revise the country’s 2019 budget as the price of oil, the country’s biggest source of revenue, fell below the assumed price. Oil resources allowed Angola to rebuild critical infrastructure since the end of a civil war 16 years ago, and the country has made progress in reducing poverty, Lagarde said. Key reforms in economic diversification will include improving the business climate, fostering competition in domestic markets, curbing monopolies and

leveling the playing field for foreign direct investment, she said. Meanwhile, Angolan crude cargoes remained in ample supply for February loading, traders said, while Chinese demand was subdued, suggesting differentials could weaken. About 16 cargoes of February-loading crude were available, a trader said, suggesting a well-supplied market. Chinese demand has been weaker for the latest month’s cargoes and inventories are high, traders said. Offer levels were not believed to have changed. The state oil firm Sonangol was last offering two cargoes of Dalia at dated Brent minus 30 cents a barrel loading February 17-18 and February 23-24.

Libya: Looting at closed Libya’s Sharara oil field to cause 8,500 b/d production drop

ooting at the Sharara field in Libya, the country’s largest field, whose crude oil exports are currently under force majeure, will cause production at the site to drop by 8,500 b/d when it reopens, according to stateowned National Oil Corp (NOC). In a statement, the NOC said the site had been looted for the third time in a week on January 1, and that “major operational equipment,” including transformers and electrical cables, were missing. The company called on the government to implement emergency security measures to prevent further such incidents at the site. “We are very con-

cerned that these attacks are not just simple thefts, but part of a systematic attempt to destroy the Sharara field,” the NOC said. Output at the Sharara field has been shut in since December 8 after armed groups, along with the help of local people, occupied the site. They were protesting about the economic conditions and frequent power outages the south of the country has been facing. “The legitimate and rightful concerns of the Southern Libyan communities are being hijacked and abused by armed gangs, who instead of protecting the field to generate wealth for all Libyans, are actually enabling its exploitation and looting,” NOC chairman Mustafa

Sanalla said. Libyan crude production has fallen 400,000 b/d since the blockade began. The shutdown of the Sharara field resulted in an output loss of 315,000 b/d there, with an additional loss of 73,000 b/d at El Feel due to its dependence on Sharara for electricity supply. OPEC member Libya had previously boosted output to up to 1.3 million bpd. The company has previously said force majeure on crude exports from the Sharara field would not be lifted until “alternative security arrangements” are established there. NOC runs the field with Spain’s Repsol, France’s Total, Austria’s OMV and Norway’s Equinor, formerly known as Statoil.

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onMobil, Italy’s Eni and China’s CNPC with a 70 percent interest; and Empresa Nacional de Hidrocarbonetos, South Korea’s Kogas and Portugal’s Galp with 10 percent each respectively. LNG offtake commitments, secured from “affiliated buyer entities of the partners”, are “subject to the conclusion of fully-termed agreements, which will be finalized and initialed in the next weeks, and the approval of the government of Mozambique,” ExxonMobil said in a statement. “These commitments are an important step forward for the Rovuma

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Mozambique: Area 4 partners secure buyers for Rovuma LNG project

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Brief

il major ExxonMobil says its project partners in Mozambique’s Area 4 concession have secured LNG offtake commitments for the Rovuma LNG project, paving the way for a final investment decision in 2019 and production to begin in 2024. Partners in the Area 4 exploration and production concession in northern Mozambique are Mozambique Rovuma Venture, a joint venture between Exx-

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LNG project and provide a solid foundation for securing project financing,” Massimo Mantovani, Eni’s chief gas and LNG marketing and power officer, said. Mozambique Rovuma Venture submitted the development plan for the first phase of the Rovuma LNG project, which will comprise two processing trains each with a capacity of 7.6 million mt/year, to the government of Mozambique in July 2018. ExxonMobil will head the development of the

LNG facilities, and Eni will lead the upstream work. An immediate competitor for Rovuma LNG is Anadarko’s Area 1 project in Mozambique that also aims to reach a final investment decision in 2019 as the race for greenfield LNG projects heats up. Mozambique is expected to become the third-largest LNG producer in Sub-Saharan Africa in the mid-2020s, when over 25 million mt/year of LNG starts up with at least three LNG projects on the drawing board, according to consulting firm Wood Mackenzie.

Ghana: Govt. denies paying $40m for take-or-pay gas contract

hana’s Ministry of Energy has denied media report that it signed a $40 million monthly forfeiture to Eni Ghana and partners in the Offshore Cape Three Point (OCTP) gas agreement. The media report stated that the government has been paying the monthly ‘penalty’ for failing to develop infrastructure to offtake associated gas from the OCTP production, as agreed with the operating partners, led by ENI Ghana. In a response signed by Nana Kofi Oppong Damoah, Head of Communications and Public Affairs, the Ministry said in setting the records straight, government has since assuming office, taken steps, including a part off-take of the gas which have consequently reduced the liability from $40 million to $28 million. The Ministry in its official statement stated that the former administration of the NDC signed a contract with ENI to flow 180 mmscfd in 2015 committing Ghana to a take or pay obligation, which will be 90 percent of total gas produced but did not plan for the utilization of the gas nor planned for gas transportation infrastructure to flow the gas to the market. The NPP realized after assuming office that such

plans did not exist and Ghana would be required to pay monthly for the gas produced whether we used it or not. Since there was no plan for utilization of the gas, it meant that Ghana was going to lose millions of dollars monthly. The NPP Government initiated the following measures to fully utilize the gas and manage the take or pay obligation: The ENI gas is nonassociated gas. Though it is an integrated oil and gas project, the sponsors will only make their money from the gas sales. The production of gas can therefore be deferred, leaving the gas in the ground for future utiliza-

tion. But if the total gas production is deferred, we will have to pay the Sankofa Partners their share of the gas deferred. Therefore, we decided to defer the production of the GNPC share of the gas. This has reduced the take or pay gas to 140 mmscfd. The Government achieved a significant reduction in the gas price from US$10.15/MMBtu to US$7.89/MMBtu. Thus, compared to the price negotiated by the NDC Government, the NPP Government is saving the nation circa US$95 million annually in gas payments to the Partners. Over the life of the project, this will amount to over US$700

million in present value terms, or US$1.5 billion in money of the day. The take or pay gas will cost us $40 million per month if we fail to take the entire 140 mmscfd. However, we have been taking 60mmscfd in Takoradi for power generation, which has reduced the amount of gas un-utilized to 80mmscfd. Thus, about US$28 million is being paid for gas currently not utilized. It must be emphasised though that the un-utilized gas is not lost to the State. Once capacity to offtake the gas becomes available, the Sankofa Partners will supply the un-utilized gas, which has already been paid for.

Algeria: Sonatrach signs contracts to develop gas fields near Gassi Touil

lgeria’s stateowned Sonatrach signed two contracts with national companies to develop gas fields on the outskirts of Gassi Touil, about 150 km from Hassi Messaoud. The periphery of Gassi Touil comprises of six gas fields with a total of 47 wells that can produce 12.3 million cubic meters per day. The first contract, worth about $178 million, was signed with CosiderPipelines for the development of a collection network connecting 25 wells

to the existing gas treatment center at Rhourde Nouss. The network is expected to produce 7 million cubic meters per day. The second contract was signed with National Company of Large Petroleum Works. The deal, worth about $275 million, will help build a collection network connecting 22 wells to the gas treatment center at Gassi Touil, with the network producing 5.3 million cubic meters per day, Sonatrach said. The company added that the installations are to be delivered by December 2020.

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power

Renewables overtake coal as Germany’s main energy source

enewables overtook coal as Germany’s main source of energy for the first time last year, accounting for just over 40 percent of electricity production, research showed. The shift marks progress as Europe’s biggest economy aims for renewables to provide 65 percent of its energy by 2030 in a costly transition as it abandons nuclear power by 2022 and is devising plans for an orderly long-term exit from coal. The research from the Fraunhofer organisation of applied science showed that output of solar, wind, biomass and hydroelectric generation units rose 4.3 percent last year to produce 219 terawatt hours (TWh) of electricity. That was out of a total national power production of 542 TWh derived from both green and fossil fuels, of which coal burning accounted for 38 percent. Green energy’s share of Germany’s power produc-

tion has risen from 38.2 percent in 2017 and just 19.1 percent in 2010. Bruno Burger, author of the Fraunhofer study, said it was set to stay above 40 percent in 2018. “We will not fall below the 40 percent in 2019 because more renewable installations are being built and weather patterns will not change that dramatically,” he said. Green power sceptics say that output merely reflects favourable weather patterns and does not prove the sector’s contribution to secure energy supplies. Solar power increased by 16 percent to 45.7 TWh due to a prolonged hot summer, while installed capacity expanded by 3.2 gigawatts (GW) to 45.5 GW last year, according to the Fraunhofer data. The wind power industry produced 111 TWh from combined onshore and offshore capacity of just under 60 GW, constituting 20.4 percent of total German power output.

Africa: AfDB approves $149m credit risk participation

he Board of Directors of the African Development Fund (ADF), the concessional window of the African Development Bank Group, have approved a credit risk participation by the Private Sector Credit Enhancement Facility (PSF) in seven loans cumulatively valued at $149 million.

The seven operations include senior loans targeting renewable energy and agroindustry sectors in Uganda, Sudan, and Cameroun among others, as well as lines of credit to lenders in Liberia and Mali. Launched in 2015 by the ADF, the PSF provides credit risk participation in private sector operations of the African Develop-

ment Bank in low-income countries; and is on its way to building a $1.5 billion portfolio of exposures. “These approved operations bring the facility’s total portfolio to over 40 percent of its $1.5 billion target size and increase the PSF’s footprint to 29 countries. They deliver on our mandate to contrib-

ute to development impact through enabling additional financing of private sector projects in low-income countries,” PSF Administrator, Cecile Ambert said. The operations were prioritised in light of their superior expected development results, particularly in terms of increased access to electricity, food security, and job creation.

sector is developing fast and receiving increased attention from investors but is still perceived as

high risk; few players have reached profitability. “This transaction fits FMO’s inclusive business

and green strategy as well as the core theme in the strategy of the Access to Energy Fund: providing access to energy for the unreached rural communities.” In addition to the current financing, FMO provided Technical Assistance to ZOLA, to put a credit scoring system in place. The FMO-arranged senior loan will consist of $5 million from the Access to Energy Fund (AEF), which catalyses the investment of $12.5 million from FMO-A and $15 million from Symbiotics. The tenor of the loan is five years. ZOLA Electric borrows the money in its local currency, the Tanzanian shilling.

Tanzania: FMO backs $32.5m electrification facility

n Tanzania, an estimated 145,500 households will soon have access to reliable and affordable power through the recent signing of a $32.5 million finance facility. FMO the Dutch development bank and lead financier, recently signed a $32.5 million finance facility with ZOLA Electric and Symbiotics, an investment firm specialised in emerging, sustainable and inclusive finance to provide an estimated 145,500 households in Tanzania access to reliable and affordable power. According to Bill Lenihan, Co-CEO, ZOLA Electric, “We are excited to announce this new in-

vestment from FMO and Symbiotics. It will allow us to connect more people in Tanzania, support the communities in which we operate and continue the development of our industry-leading power systems.” Additionally, the investment is expected to create around 2,100 new jobs in off-grid solar. According to a company statement, despite their ongoing works, there is still significant unmet need and untapped potential. There is growing recognition of the potential for distributed renewable energy to disrupt power supply and the sector is attracting significant investment interest. Rosemarijn van der

Meij, Fund manager of the Access to Energy Fund (AEF), managed by FMO said “The off-grid

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ENERGY intelligence

Hurray! Fuel scarcity-free holidays …but at what cost? ISAAC ANYAOGU

any Nigerians still have emotional scars from the fuel scarcity of 2017 where many slept at filling stations in vain hopes of buying Nigeria’s most important commodity – petrol. The queues in some stations were almost a kilometre long, fights broke out; it was a regular bedlam in many filling stations. Maikanti Baru, the NNPC group managing director was barely a year in the saddle and his inexperience shone brightly. Shylock marketers have since sworn off importation of petrol citing over N800bn debt by the government, the stateowned corporation was reeling. There is nothing that get Nige-

rians more angry than having anything come between them and cheap petrol. Suddenly transport costs rose over 500 percent and food prices shot up. In the face of scathing criticism, the NNPC established a war room and officials from the GMD to those filing papers started monitoring petroleum distribution across the nation especially in Lagos and Abuja, the two states with the most potential for outrage. In Abuja, Baru was selling petrol and in Lagos, Yemi Osinbajo, the vice president even came out to sell fuel. A lot of Nigerians have heaved a long sigh of relief in 2018. The NNPC in December 26 press release said residents of Benin have commended the Federal Government for ensuring availability of fuel during Christmas celebration and said availability of the product

made the celebration stressfree for them. The NNPC quoted residents saying that unlike the previous years where they had to wake very early and queue endlessly for the product, this year celebration proved to be otherwise. Much of this is the result of early preparation and it helps too that with the general elections only two months away, the Federal government cannot afford to piss off voters. So, even if the heavens had to be moved to ensure that Nigerians are not separated from their precious commodity, the NNPC was willing to do it. The statement said that the NNPC GMD had effectively put in place strategies to ensure that the unfortunate incident would not undermine products supplies during the festive period. In another release, the

NNPC said it had enough stock of Premium Motor Spirit (PMS), otherwise called petrol, and other products, adding that the company’s petrol stock would last about 45days even in the absence of fresh supplies, advising members of the public not to engage in panic buying. However the corporation is not saying how much this effort to ensure petrol availability is costing the country. According to its published operations and financial report, Nigeria’s daily petrol consumption came to an average of 53million litres per day in the nine months between January and September 2018. To further illustrate the cost of cheap petrol, between January and August, the NNPC claimed N487bn as under recoveries. The difference

between the actual cost of a litre of petrol and the pegged price of N145 per litre is what the NNPC records as under recoveries. An NNPC document presented to the Senate during a January 2018 subsidy probe obtained by BusinessDay shows that between 2006 - 2015, the NNPC claimed N170.6billion as under recoveries in ten years while it claimed N632.2billion in two years alone (2017 and 2018), a 217 percent difference. This is more than what Nigeria is spending on the health and education sectors highlight a country and its sense of priorities. While university lecturers are still on strike, and hospitals in the nation continue to morph into consulting clinics, it does not matter as long as the middle class in Lagos and Abuja can get cheap petrol.

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ENERGY intelligence OPEC Flakes OPEC oil output posts biggest drop since 2017 on Saudi move

Oil rises to $57 on China-US trade talks, OPEC cuts

il rose to around $57 a barrel after China said it would hold trade talks with the United States and a survey showed China’s services sector expanded in December, while signs of lower crude supply also lent support. The Organization of the Petroleum Exporting Countries cut crude output in December and the American Petroleum Institute (API) reported a 4.5 million-barrel drop in

crude inventories. Brent crude, the global benchmark, was up $1.25 to $57.20 a barrel. US crude oil was up 90 cents at $47.99. “Recent Chinese data is not confirming the doomand-gloom trend,” said Olivier Jakob, oil analyst at Petromatrix. “And you’ve got OPEC cutting.” China’s services sector extended its solid expansion in December, a private survey showed, bucking a trend of downbeat economic data.

Both oil benchmarks are on track for solid gains in the first week of 2019 trading despite rising concerns that the China-US trade war will lead to a global economic slowdown. But in comments that helped oil to rally, China’s commerce ministry said it would hold vice-ministerial trade talks with US counterparts in Beijing in this month. The two nations have been locked in a trade war for much of the past year, disrupting the flow

of hundreds of billions of dollars worth of goods and raising concern of slowing growth. Despite the demandside worries, oil has received some support as supply cuts announced by the global coalition of producers known as OPEC+ kick in. OPEC, Russia and other non-members agreed in December to reduce supply by 1.2 million barrels per day (bpd) in 2019. OPEC’s share of that cut is 800,000 bpd.

Iran says despite US sanctions, it has found new ‘potential’ oil buyers

ll countries that were granted waivers from the United States to continue buying a certain amount of Iranian oil imports are complying with US sanctions, a senior Iranian energy official said, noting that Tehran was hopeful to find new buyers. The United States withdrew from a nuclear deal with Iran last year and snapped sanctions in place to choke Iran’s oil and banking industries, while temporarily allowing eight customers to keep buying crude from the Islamic Republic. “China, India, Japan, South Korea and other countries that were granted waivers from America to import Iranian oil are not willing to buy even one barrel more from Iran,”

Amir Hossein Zamaninia, Iran’s deputy oil minister for trade and international affairs, was quoted as saying. However, without giving details, Zamaninia

said: “Despite US pressures on Iranian oil market, the number of potential buyers of Iranian oil has significantly increased due to a competitive market, greed and pursuit of more profit.”

The 180-day exemptions were also granted to Italy, Greece, Taiwan and Turkey. Washington seeks to bring Iranian oil exports to zero in order to curb Tehran’s missile and nuclear programmes and counter its growing military and political influence in the Middle East. Iran has urged European countries, which are still committed to the nuclear deal, to oppose the sanctions by creating a financial mechanism that facilitates payments of Iranian oil sales. Zamaninia said the mechanism, known as SPV (Special Purpose Vehicle for trade), would be “helpful but could not resolve the problems since US influence will affect any European action”.

PEC oil supply fell in December by the largest amount in almost two years, a Reuters survey found, as top exporter Saudi Arabia made an early start to a supplylimiting accord while Iran and Libya posted involuntary declines. The 15-member Organization of the Petroleum Exporting Countries pumped 32.68 million barrels per day last month, down 460,000 bpd from November and the largest month-on-month drop since January 2017. The survey suggests Saudi Arabia and some of its allies acted unilaterally to bolster the market as crude prices slid on the possibility of a new glut. A formal accord by OPEC and its allies to cut supply in 2019 has taken effect. Oil has slid to $56 a barrel from a four-year high of $86 in October on signs of excess supply. While OPEC has not ruled out further action, officials hope prices will be supported by further out-

put declines in January as producers implement the new deal. OPEC, Russia and other non-members, an alliance known as OPEC+, agreed in December to reduce supply by 1.2 million bpd in 2019. OPEC’s share of that cut is 800,000 bpd. The deal came just months after an accord to pump more oil, which in turn partially unwound a supply cut that took effect in 2017. The drop in OPEC output in December is the largest month-on-month decline since January 2017, the first month of the earlier supply-cutting deal, according to Reuters surveys.

OPEC-led cuts should rebalance oil market in first quarter - UAE energy minister

he OPEC-led deal to cut 1.2 million b/d from the start of January should bring balance back to the oil market in the first quarter of 2019, the UAE’s energy minister Suhail al-Mazrouei said. “As we start a new year, I remain optimistic toward achieving the market balance during the first quarter after [the] OPEC and NonOPEC production cut. At this time last year we remember the same pessimistic views which we disagreed with and as we expected 2018 was a good year,” he said in a tweet. The minister said last month that OPEC and non-OPEC producers would consider “deeper cuts” if the reduction wasn’t enough to restore balance. Algeria’s energy minister Mustapha Guitouni said late last month he was confident oil prices would return to between $65/b and $70/b by April, but stressed the OPEC alliance would cut produc-

tion further if the market had not responded by then. The oil exporting alliance, which includes OPEC, Russia and other allies, has been vocal in trying to talk up a Brent crude market which briefly dipped below $50/b in late December after peaking at $86/b in

October. The group plans to meet in April to assess market conditions even though the current agreement is scheduled for six months as weakening market fundamentals and sharp volatility cast a shadow over policy making.

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ENERGY intelligence

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What Nigeria can learn from Qatar’s LNG strategy? ISAAC ANYAOGU

n December 2018, Qatar caused a stir in the oil market when it announced that it was leaving OPEC in January, an organisation it had been a member since 1961. Saad Sherida al-Kaabi, Qatar’s minister of state for energy affairs and president and CEO of Qatar Petroleum said the withdrawal decision reflect the country’s desire to focus its efforts on plans to develop and increase its natural gas production from 77 million tonnes per year to 110 million tonnes in the coming years. Clearly, the decision is more strategic than political, a business decision to take advantage of the next big thing. This is what differentiates successful nations from well, countries like Nigeria. Decisions are viewed from the prism of long-term, strategic benefits rather than emotional and primordial sentiments. Qatar’s oil production has been on

the decline since 2013, from about 728,000 barrels per day in 2013 to about 607,000 barrels per day in 2017, or just under two percent of OPEC’s total output. Conversely, the country’s Liquefied Natural Gas (LNG) production has been growing exponentially. Steven Wright, Associate Professor at Hamad bin Khalifa University in Qatar, in an article for Aljazeera said Qatar began to strategically cultivate its natural gas sector in 1987 at a time when many in the industry hardly saw any potential in gas. “This decision paid dividends many times over: Qatar today has emerged as the world largest exporter of LNG, GTL (Gas-to-Liquids) and helium. The revenue from the natural gas sector has propelled its economy and has given it special importance globally,” said Wright. However, Qatar is not resting on its oars with the threat to market share coming from countries like Russia, Australia and the United States. In September this year, it set a target to lift its LNG output from the

current 77 million tonnes per year to 110 million by 2024. The move to reduce focus on oil and concentrate on LNG is even pragmatic. As the world begins to take the threat of climate change seriously, fossil fuels which are a big contributor to greenhouse emissions will be increasingly maligned even if the world grudgingly continues to depend on crude oil. Qatar recognises that it is cleaner fuels like LNG that have a brighter future than oil, given the global trend to moving towards cleaner fuels. There is much more uncertainty about the growth in demand for oil than there is for natural gas says Wright. Africa’s biggest oil producer has the potential to leverage gas to power its economy but a blind obsession with crude oil has turned the focus from gas. 40 years after an oil industry has been developed, Nigeria does not even have terms for its gas rather charges mere pittance as fines from companies who flare more gas than is used for power

production. Maikanti Baru, NNPC GMD in a recent announcement said Nigeria achieved an average national daily gas production of 7.90bscf, translating to 3 per cent above the 2017 average daily gas production of 7.67bscf. He said out of the 7.90bscf produced in 2018, an average of 3.32bscfd (42 percent) was supplied to the Export market, 2.5bscfd (32 percent) for Reinjection/ Fuel Gas, 1.3bscfd (16 percent) was supplied to the domestic market and about 783mmscfd (10 percent) was flared. For a country that sits upon proven natural gas reserves of 5,627 billion cubic meters, the celebration of three percent increase in production, demonstrates a painful lack of ambition. Several LNG projects including Brass LNG and OK LNG has been stalled and even the NLNG Train 7 is proceeding at the speed of loose conveyor belt with occasional jerks in the form of announcement of new partnerships but the critical FDI remains elusive.

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Live @ the Stock exchange Prices for Securities Traded as of Wednesday 09 January 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. 159,103.84 5.50 -5.98 207 7,788,618 UNITED BANK FOR AFRICA PLC 247,945.80 7.25 -0.68 125 3,055,743 ZENITH BANK PLC 659,326.37 21.00 3.45 535 25,816,028 867 36,660,389 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 253,061.81 7.05 -1.40 279 21,520,752 279 21,520,752 1,146 58,181,141 BUILDING MATERIALS DANGOTE CEMENT PLC 2,896,886.26 170.00 -8.60 138 289,507 LAFARGE AFRICA PLC. 101,479.11 11.70 - 51 269,755 189 559,262 189 559,262 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 376,604.52 640.00 - 10 1,548 10 1,548 10 1,548 1,345 58,741,951 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,900.00 95.00 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 11,300.89 45.20 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 17,610.58 6.60 - 0 0 0 0 0 0 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 0 0 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 1 20,000 OKOMU OIL PALM PLC. 79,889.96 83.75 - 8 5,846 PRESCO PLC 62,000.00 62.00 - 14 139,147 23 164,993 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,590.00 0.53 - 5 25,643 5 25,643 28 190,636 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 767.71 0.29 - 3 4,623 JOHN HOLT PLC. 186.79 0.48 - 4 185,850 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 47,964.63 1.18 -0.84 129 15,480,048 U A C N PLC. 25,931.67 9.00 3.45 52 2,100,606 188 17,771,127 188 17,771,127 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 34,122.00 25.85 10.00 29 226,991 ROADS NIG PLC. 165.00 6.60 - 0 0 29 226,991 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,287.35 1.65 - 4 102,016 4 102,016 33 329,007 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 12,135.72 1.55 -9.88 24 1,564,777 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 153,326.80 70.00 - 38 95,564 INTERNATIONAL BREWERIES PLC. 266,471.72 31.00 - 5 4,210 NIGERIAN BREW. PLC. 630,955.57 78.90 - 57 131,334 124 1,795,885 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 28,000.00 5.60 -0.88 54 922,956 DANGOTE SUGAR REFINERY PLC 163,800.00 13.65 -0.73 57 1,066,875 FLOUR MILLS NIG. PLC. 77,292.16 18.85 4.72 56 1,479,769 HONEYWELL FLOUR MILL PLC 8,643.92 1.09 -4.39 47 2,713,707 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 775.17 4.35 - 3 50,000 NASCON ALLIED INDUSTRIES PLC 47,689.89 18.00 - 10 17,408 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 227 6,250,715 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,782.02 10.00 3.63 13 364,420 NESTLE NIGERIA PLC. 1,149,351.57 1,450.00 - 26 66,176 39 430,596 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,690.67 4.50 - 30 500,246 30 500,246 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 47,645.72 12.00 - 9 17,661 UNILEVER NIGERIA PLC. 212,565.20 37.00 9.63 40 2,417,070 49 2,434,731 469 11,412,173 BANKING DIAMOND BANK PLC 43,541.53 1.88 -1.05 193 54,670,375 ECOBANK TRANSNATIONAL INCORPORATED 247,718.94 13.50 - 30 3,235,152 FIDELITY BANK PLC 55,052.11 1.90 5.56 79 7,439,778 GUARANTY TRUST BANK PLC. 921,195.91 31.30 -2.19 341 27,682,062 JAIZ BANK PLC 15,616.05 0.53 3.92 21 2,908,396 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 57,005.03 1.98 0.51 129 2,575,339 UNION BANK NIG.PLC. 174,724.52 6.00 - 36 492,669 UNITY BANK PLC 10,637.30 0.91 - 15 410,510 WEMA BANK PLC. 22,373.19 0.58 -1.69 44 2,430,673 888 101,844,954 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,158.12 0.60 -3.23 32 1,750,710 AXAMANSARD INSURANCE PLC 18,900.00 1.80 -4.26 18 3,210,899 CONSOLIDATED HALLMARK INSURANCE PLC 2,660.00 0.38 - 0 0 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 2,945.90 0.20 - 3 1,944,900 GOLDLINK INSURANCE PLC 2,411.47 0.53 - 0 0 GREAT NIGERIAN INSURANCE PLC 1,913.74 0.50 - 0 0 GUINEA INSURANCE PLC. 1,412.20 0.23 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,197.03 0.30 -3.33 11 4,111,000 LAW UNION AND ROCK INS. PLC. 2,148.17 0.50 - 4 2,600 LINKAGE ASSURANCE PLC 5,760.00 0.72 - 0 0 MUTUAL BENEFITS ASSURANCE PLC. 1,680.00 0.21 - 4 101,935 NEM INSURANCE PLC 10,085.76 1.91 -9.91 43 1,703,740 NIGER INSURANCE PLC 1,702.69 0.22 - 6 735,796 PRESTIGE ASSURANCE PLC 2,691.28 0.50 - 2 101,243 REGENCY ASSURANCE PLC 1,400.44 0.21 - 3 55,783 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 3 1,010,000 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 10.00 7 593,000 WAPIC INSURANCE PLC 5,353.10 0.40 - 27 6,348,165

163 21,669,771 MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,658.62 1.60 - 5 100,098 5 100,098 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,116.00 0.98 - 1 200 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 0 0 RESORT SAVINGS & LOANS PLC 4,645.19 0.41 -8.89 1 2,000,000 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 2 2,000,200 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,880.00 3.94 - 35 290,501 CUSTODIAN INVESTMENT PLC 32,938.44 5.60 -5.88 10 80,974 DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 33,664.61 1.70 6.25 91 7,789,571 ROYAL EXCHANGE PLC. 1,080.53 0.21 - 5 121,323 STANBIC IBTC HOLDINGS PLC 472,601.52 46.15 - 13 30,931 UNITED CAPITAL PLC 16,800.00 2.80 6.87 91 3,824,279 245 12,137,579 1,303 137,752,602 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 1 933 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 888.28 0.25 - 4 62,608 5 63,541 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,425.00 4.95 - 2 200 GLAXO SMITHKLINE CONSUMER NIG. PLC. 14,589.69 12.20 - 20 45,638 MAY & BAKER NIGERIA PLC. 2,401.00 2.45 - 9 106,200 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,208.55 0.70 -9.09 20 1,698,880 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 51 1,850,918 56 1,914,459 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 0 0 0 0 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. 648.00 6.00 - 3 1,670 TRIPPLE GEE AND COMPANY PLC. 381.11 0.77 - 0 0 3 1,670 PROCESSING SYSTEMS CHAMS PLC 939.21 0.20 - 0 0 E-TRANZACT INTERNATIONAL PLC 16,590.00 3.95 - 0 0 0 0 3 1,670 BUILDING MATERIALS BERGER PAINTS PLC 2,492.48 8.60 - 2 5,725 CAP PLC 22,050.00 31.50 - 8 200,405 CEMENT CO. OF NORTH.NIG. PLC 243,811.94 18.55 - 17 78,050 FIRST ALUMINIUM NIGERIA PLC 696.42 0.33 - 2 85,000 MEYER PLC. 313.43 0.59 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,999.41 2.52 - 1 100 PREMIER PAINTS PLC. 1,279.20 10.40 - 0 0 30 369,280 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 3,170.38 1.80 2.86 15 502,900 15 502,900 PACKAGING/CONTAINERS BETA GLASS PLC. 33,498.12 67.00 - 3 2,750 GREIF NIGERIA PLC 388.02 9.10 - 0 0 3 2,750 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 48 874,930 CHEMICALS B.O.C. GASES PLC. 1,577.57 3.79 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 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. 50.60 0.23 - 0 0 0 0 0 0 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 1 10,000 1 10,000 INTEGRATED OIL AND GAS SERVICES OANDO PLC 52,833.50 4.25 1.19 114 1,557,595 114 1,557,595 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 66,349.53 184.00 0.22 23 97,701 CONOIL PLC 16,134.39 23.25 - 17 57,737 ETERNA PLC. 5,151.37 3.95 -9.20 34 1,076,610 FORTE OIL PLC. 34,580.87 26.55 - 49 266,452 MRS OIL NIGERIA PLC. 7,055.81 23.15 - 5 4,851 TOTAL NIGERIA PLC. 67,972.27 200.20 - 23 14,581 151 1,517,932 266 3,085,527 ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 19,988.83 2.05 - 1 10 1 10 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 411.72 0.35 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,475.89 4.20 - 5 4,435 TRANS-NATIONWIDE EXPRESS PLC. 328.19 0.70 -10.00 10 1,367,616 15 1,372,051 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 1 100 1 100 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 0 0 IKEJA HOTEL PLC 2,889.53 1.39 - 0 0 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 46,362.46 6.10 - 1 402 1 402 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0

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FINANCIAL TIMES

World Business Newspaper

US-China trade talks conclude as hopes of progress rise Analysts warn that complicated questions remain despite desire on both sides to do a deal Tom Hancock

lobal markets moved higher as US and China officials concluded trade negotiations that had been extended into an unscheduled third day, spurring hopes the two countries had made progress on defusing a dispute weighing on their economies. While growing concerns about the economic slowdown on both sides are adding pressure to reach a deal, analysts cautioned that Beijing was unlikely to compromise on key issues such as industrial policy, with progress dependent on whether Washington would be satisfied with promises to purchase more US goods. “Trade talks between China and the US have concluded, and the Chinese side will soon release the results,” Chinese state media cited a foreign ministry spokesman as saying on Wednesday afternoon. The US did not immediately confirm any agreement. US President Donald Trump tweeted on Tuesday that the trade talks in Beijing were “going very well!”, with a member of the US trade delegation to Beijing telling Reuters that “its been a good one for us”, when asked about progress in the talks. Markets reacted positively, with Shanghai’s CSI 300 up 1.95 per cent by early Wednesday afternoon, Japan’s Topix was up 1.1

per cent and Hong Kong’s Hang Seng index rose 1.99 per cent, as oil prices hit a three-week high. The trade war launched last spring has led to tariffs being levied on more than $350bn of bilateral trade. Beijing has repeatedly offered to increase purchases of US agricultural and energy goods while Washington has pushed for concessions on market access and intellectual property protection for American companies. Lu Xiang, a researcher at the Chinese Academy of Social Sciences, a state-run think-thank, said he did not believe Beijing would deviate significantly from its previous proposals as officials hoped that a weakening US economy would add to pressure on Washington to accept a quick deal. “Maybe the US just realised that it’s a good offer now. The US seems to realise that the damage trade war causes is unbearable. The best option for the US is to collect a trophy and retreat,” he said. The two sides agreed on a three-month freeze on new tariffs in December, buying Beijing time to launch a fiscal and monetary stimulus to boost flagging growth. Arend Kapteyn, global head of economic research at UBS, said “the willingness to negotiate on the US side is starting to increase” as evidence of the trade war’s impact on growth becomes evident in both countries. But he noted that Washington’s dual focus on reducing its trade

Rod Rosenstein set to leave US justice department US deputy attorney-general likely to step down after William Barr is confirmed as new AG

Kadhim Shubber

od Rosenstein, the US deputy attorney-general, is expected leave the Department of Justice in the coming weeks, according to a person familiar with the matter. His departure is likely to follow the confirmation of William Barr, Donald Trump’s pick for attorney-general, according to the person, who said Mr Rosenstein wanted “to ensure a smooth transition” for the incoming head of the justice department. Mr Rosenstein, who was confirmed to the position in April 2017, has drawn more attention than the number two at the DoJ typically receives. His time in office has been defined by his decision, just weeks into the job, to appoint Robert Mueller, the special counsel, to investigate Russia’s role in the 2016 presidential election. A justice department spokesperson declined to comment. News of Mr Rosenstein’s exit was

reported earlier by ABC News. Mr Rosenstein has overseen the Russia investigation led by Mr Mueller and has been publicly criticised on numerous occasions by the president. In November, Mr Trump shared an image on Twitter that showed his deputy attorney-general behind bars. “He should have never picked a special counsel,” Mr Trump told the New York Post when asked about the image. The person familiar with the matter said Mr Rosenstein was not being pushed out and that he had long viewed the role as a two-year job. The Republican attorney, who served under both George W Bush and Barack Obama as the US attorney for the district of Maryland, has been viewed as a stalwart defender of Mr Mueller’s investigation. Mr Barr will take responsibility for the probe if he is confirmed following his Senate confirmation hearings next week.

The administration of Donald Trump, right, has pushed for trade concessions from Chinese President Xi Jinping, left, who views centralised control of the economy as essential to growth © AP

deficit with China and gaining more market access and better treatment of US companies in the country added “confusion” to the talks. “If everything was done to open up the [Chinese] market and deal with these other issues, that wouldn’t do anything about the bilateral deficit,” he said. The US delegation is led by Jeffrey Gerrish, the deputy trade representative, who is close to Robert Lighthizer, the US trade representative, one of the most hawkish officials on China in the Trump administration who has

pushed for concessions on the country’s industrial policy. Beijing views state control of its economy as essential to economic growth and is unlikely to compromise. “It’s very hard for China to meet all Trump’s requests,” said Pang Zhongying, an international relations expert at the Ocean University of China. “I have very few reasons to be optimistic.” Goldman Sachs wrote in a note this week that the relationship is “too multi-faceted and complex to resolve in such a short timeframe”.

“We continue to see a comprehensive deal involving a full rollback of tariffs as unlikely by the March 1 deadline. More likely scenarios are a further extension of time for negotiations or escalation,” they added. Beijing’s continued concerns about slowing economic growth were signalled late on Tuesday when a spokesman for China’s top planning agency said the government would look to boost sales of automobiles and home appliances, sending shares in manufacturers sharply higher on Wednesday.

Donald Trump uses TV address to press for border wall funding

Democrats say president is prolonging government shutdown over campaign promise Courtney Weaver

resident Donald Trump used a rare national address to warn of a “growing humanitarian and security crisis” at the southern US border, but stopped well short of declaring a national emergency — a move that could have prompted litigation and a backlash from Congress. The president used the televised nine-minute address, which was broadcast by all the major US networks, to repeat his insistence that the US needed $5.7bn in funding for a border security wall, ramping up his fight to win the public opinion war over the continuing federal government shutdown. He also blamed the Democrats for the government shutdown prompting Nancy Pelosi, Speaker of the House of Representatives, and Chuck Schumer, Senate minority leader, to shoot back that they wanted greater border security and were willing to end the shutdown but not with funding for the wall. In his address, Mr Trump alleged that the border crisis was hurting American workers looking for jobs, particularly African-Americans and Latinos, while fuelling illegal drug use and violence against US citizens. “Thousands of more lives will be lost if we don’t act right now,”

Mr Trump declared, sitting at his desk in the Oval Office. “The federal government remains shut down for one reason and one reason only: because Democrats will not fund border security.” Mr Trump and Democrat congressional leaders have held firm in their positions, with the president sticking to his demand for a physical barrier and his political opponents insisting that they will not back any funding bill that includes money for a wall. The shutdown is now the second-longest in US history. Previously, Mr Trump had suggested that he could potentially declare or make the case for a national emergency at the border. Such a move would allow him to circumvent Congress and build the wall without US lawmakers’ approval, allowing him to fulfil one of his key campaign promises. Yet on Tuesday he did not touch on the issue, a sign of the potential political and legal backlash such a declaration could incite. Instead, Mr Trump chose to pin blame for the shutdown on Democrats who he falsely claimed were unwilling to devote any funds to border security. The president said he had invited Democrat congressional leaders to the White House on Wednesday to continue negotiations over reopen-

ing the government. “This situation could be solved in a 45-minute meeting,” he said. In a separate televised address after Mr Trump, Ms Pelosi and Mr Schumer noted that Senate Republicans and House Democrats had been willing to pass short-term spending bills to keep the government funded but that the president had been unwilling to sign them. “The president is rejecting these bipartisan bills which would reopen government — over his obsession with forcing American taxpayers to waste billions of dollars on an expensive and ineffective wall,” Ms Pelosi said. Mr Schumer said Democrats would refuse to be governed “by temper tantrum”. He continued: “Make no mistake: Democrats and the president both want stronger border security. However, we sharply disagree with the president about the most effective way to do it.” Much of the media coverage of Mr Trump’s address focused on fact-checking his assertions on the border. In the run-up to the speech, some US news outlets expressed concern that Mr Trump was using the address as a publicity stunt, as he sought to gain the upper hand against his Democratic opponents.

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NATIONAL NEWS

Democrats threaten plan to lift sanctions against Oleg Deripaska

Congo’s voters have earned the world’s support

Congressional leaders express reservations about agreement made by Trump administration

The country’s neighbours should direct President Joseph Kabila to the exit

Joshua Chaffin

David Pilling

Trump administration plan to lift sanctions on the aluminium empire controlled by the Kremlin-linked billionaire Oleg Deripaska has come under threat from Democratic lawmakers, who have demanded it be delayed for further scrutiny. Seven Democratic chairs of House of Representatives committees on Tuesday sent a letter to Steven Mnuchin, the Treasury secretary, expressing reservations about the plan in which Rusal, En+ and EuroSibEnergo — which together form one of the world’s largest aluminium producers — would be released from sanctions in return for various governance changes intended to distance them from Mr Deripaska. “We have a number of concerns about the agreement,” the members of Congress wrote. They complained that it “appears to keep intact significant ownership” of Rusal’s holding company, En+, by Mr Deripaska. They also asked that a 30-day window for Congress to oppose the Treasury’s recommendation, which was delivered in late December, just before the holiday break, be scrapped so that Mr Mnuchin could “fully brief” members to resolve their concerns. On Wednesday, Russian investors appeared spooked by news of the congressmen’s letter. Shares in Rusal were down 1.4 per cent on the Moscow market at 1100GMT, after recovering from a 4 per cent fall at the open. The Kremlin said work was being carried out regarding the lifting of the sanctions against Mr Deripaska’s companies. “Painstaking work is being done on this, and let it continue,” said Dmitry Peskov, the spokesman of President Vladimir Putin. “We would prefer to be very cautious with regard to any statements concerning sanctions on Mr Deripaska’s companies.” A representative for Mr Deripaska did not respond to a request for comment from the Financial Times. Along with dozens of other Russian officials and corporate entities, Mr Deripaska and his companies were placed under US sanctions in April in retaliation for Moscow’s alleged interference in the 2016 US election. The case has been fraught with complexities for an administration already under heavy scrutiny over the president’s ties to Russia and its efforts to influence the election. While not wanting to appear soft on Russia, the administration has been forced to address disruptions to the aluminium market that have resulted from the sanctions, affecting US businesses and allies. Democrats had been weighing whether or not to confront the administration over the deal. On Friday, Charles Schumer, the Senate minority leader, fired a warning shot by filing a motion disapproving the agreement and preserving his procedural ability to challenge it. While Mr Schumer said he had not yet made up his mind, he raised “critical questions” that it would not do enough to separate the company from Mr Deripaska. He also gave voice to a widespread frustration among Democrats that the deal had been rushed through just before the holiday break to minimise their opportunity to oppose it.

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I Populist politicians such as Sweden Democrats leader Jimmie Akesson (second left) and leader of Italy’s League Matteo Salvini (right) have emerged as electorates and parties become more polarised and opposition to mainstream parties grows © FT montage

Europe shaken as political systems splinter Rise of populists a symptom of fragmentation among electorates and parties Ben Hall

hen a Spanish nationalist party took 12 seats in Andalucia’s parliament last month, it was not just the latest example of rising populism in Europe. It also demonstrated a deeper trend that threatens to disrupt governance across the continent — the fragmentation of electorates and the parties that represent them. Representation has splintered in almost every sizeable political system in Europe, making it harder to form governing coalitions, creating political instability and giving a voice to new formations on the radical left and right and in the political centre. “You have new dimensions in politics today,” said Hans Wallmark, a centre-right MP from Sweden. “Pessimists-optimists, centre-periphery. It is not so easy as when you had a left-right scale on which you could plot political choices. “It is not necessarily a chaotic system, but a new political landscape is taking shape,” he added. “We are going to see it for many years.” Before the Andalucía breakthrough by Vox— in a country previously considered immune to far-right politics because of its Francoist past — Spain was already a four-party

system, with socialists, the far-left, centre-right and liberals vying for power. If Vox establishes a national appeal, there will be five, plus a smattering of Catalan, Basque and Galician nationalists. Opinion polls suggest no party nationally enjoys backing of more than 24 per cent. In Belgium, meanwhile, it took the country a world record 541 days to form a government after inconclusive elections in 2010. Following the country’s 2014 polls, in which eight parties won between 33 and six seats each, it took five months to assemble a coalition — which collapsed last month. Mr Wallmark’s Sweden could be heading for more elections this year after parties failed to form a government following September’s poll. No party wants to co-operate with the far-right Sweden Democrats, who won 17.5 per cent in the vote, but that means neither a centre-left nor a centre-right bloc can muster a majority in parliament. The losers from the fragmentation of European politics have mostly been mainstream centre-left and centre-right parties, as in Germany, where the populist rightwing Alternative for Germany and the left-leaning Greens have eaten into support for the Christian Democrats and Social Democrats. In May’s European Parliament elections, the centre-left

and centre-right blocs are likely to lose their majority for the first time in 25 years. Tarik Abou-Chadi, assistant professor at the University of Zurich and Centre for Democracy Studies Aarau, said three deep-seated reasons lay behind the trend: societies were becoming more individualised; big organisations such as trade unions, churches and political parties were “losing their capacity to link voters to a particular identity”; and political debate was becoming more “multidimensional”. For example, he argued, it was no longer about capital versus labour, while some social liberals as well as conservatives now opposed immigration. Mainstream parties, Prof AbouChadi said, were increasingly less able to react quickly to new concerns and issues. They were “like the old department stores of the 1960s competing with cool new boutiques”. The most extreme example of such fragmentation is the Netherlands. Thanks to a highly proportional voting system, 13 parties won seats in the 150-strong assembly there in the 2017 general election. The coalition government is made up of four parties and took office 225 days after voters cast their ballots. Indeed, some analysts have described the fragmentation trend as “Dutchification”.

Nigeria faces rising violence in 2019 Government, private sector and donors must unite to promote development Feargal O’Connell

s Africa’s largest economy, now recovered from its recent recession, Nigeria is brimming with economic potential. It is on track to become the third most populous country in the world by 2050, overtaking the US. That Nigeria appears just behind Yemen and Syria and ahead of Somalia on the International Rescue Committee’s 2019 Emergency Watchlist may, therefore, come as a surprise. The armed insurgency in the north-east, brought into the spotlight by the Chibok schoolgirl kidnapping by Boko Haram five years ago, continues. Two million people have fled their homes within Nigeria and to neighbouring countries. Our prediction is that violence will intensify in 2019. Even in recent weeks, local branches of Isis have been retaking territory from the Nigerian Army. Less noticed internationally is the communal violence between farmers and herders in central

areas of Nigeria. Driven by factors including environmental degradation caused by climate change, and new state laws on grazing rights, by July these conflicts had killed more people in 2018 than the violence in the north-east. There are yet more conflicts affecting Nigeria simultaneously. In the north-west, the government regularly deploys the military to combat banditry. In the oil-rich Niger delta there is persistent militancy and in the east of the country there is renewed Biafran separatist sentiment. Ongoing violence combined with underlying fragility are likely to trigger food shortages and increased risk of disease in 2019, in a country in which tens of millions live below the poverty line. Nigeria may be catching up with India in terms of absolute size of population, but it has already overtaken India to become the country with the world’s largest number of people living in extreme poverty. Nigeria’s elections in February and March may also have a destabilising impact. It is unclear whether

President Muhammadu Buhari will be re-elected, but what is clear is that there will be intense competition for influence between regional and national level power brokers around the polls. This risks leading to violence but also diverting government attention from ongoing conflicts. This should matter to all of us. In 2015, global leaders committed to achieving the Sustainable Development Goals, a transformative set of goals to improve human wellbeing and reshape our world by 2030. But IRC’s recent report showed that people caught in conflict in places like Nigeria are being left behind and, if their situation is not addressed, the SDGs cannot be met. What does this mean for Nigeria’s government and its international partners this year? First, the humanitarian needs of Nigeria’s growing population must be met. This is an investment not just in Nigeria’s people but in its future. Despite the risks involved in delivering humanitarian support — aid workers were kidnapped and even killed in Nigeria in 2018 — it must continue.

n a world that is turning away from democratic ideals, one place where the concepts are jealously nurtured is among African voters. That is because most Africans are deprived of the real thing by leaders who organise sham elections, or who cling on through constitutional artifice or brute force. Yet the democratic flame is alive. The ideal of wanting to be heard, of exercising control and of ejecting bad leaders flickers brightly. Take the people of Beni in eastern Congo. They were told a few days before the December 30 poll that, for them, the vote was cancelled. Ostensibly that was because of security concerns due to an outbreak of the Ebola virus and militia activity. The people of Beni showed up to vote anyway. Thousands held a “mock election” — a parody of sham elections they fear are being held nationwide — where they placed fake ballots into fake urns and got their fingers inked, presumably with real dye. Much is at stake in these elections in Congo, a central African nation whose lands are the size of Britain, France, Spain, Germany, Norway and Greece, with Iceland thrown in for good measure. If an opposition party candidate wins, it would mark the first time in Congo’s tumultuous history that power has changed hands through the ballot box. That will not happen if outgoing president Joseph Kabila can help it. He originally sought to stay on past his constitutional limit of 16 years in power. But the people of Congo would not have it. In the run-up to December 2016, when Mr Kabila was supposed to step down, they took to the streets to protest, often braving truncheons and bullets. Finally he agreed to go, though elections were delayed for two years. Plan B was to place Mr Kabila’s stooge on the presidential seat. That way Mr Kabila could keep his influence — and perhaps return after five years. Plan B is also faltering. The state pulled out all the tricks of incumbency, denying the opposition the chance to campaign freely and tampering with voting. Yet, according to the Catholic Church, the country’s only credible institution, the people have not voted for Mr Kabila’s chosen candidate, Emmanuel Shadary. Instead, they appear to have opted for Martin Fayulu, a former ExxonMobil executive who offers at least the hope of change. Felix Tshisekedi, another opposition leader, is also claiming victory amid rumours that he has cut a deal with the ruling elite, an outcome that would also make a farce of the democratic process. Mr Kabila and his clingers-on have too much at stake to go quietly. They are gatekeepers to the world’s richest reserves of cobalt, without which the electric car revolution will remain a mere twinkle in the eye of Tesla chief Elon Musk. Mr Kabila and crew have grown fabulously — and unaccountably — rich through control of Congo’s vast mineral reserves, which include copper, coltan, uranium, gold and diamonds.

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Carmakers temper their enthusiasm for driverless technology Shift in mood at Consumer Electronics Show as groups grow wary of ‘Level 3’ autonomy Richard Waters

he first wave of driverless car technology is nearly ready to hit the mainstream — but some carmakers and tech companies no longer seem so eager to make the leap. The change in mood has been evident this week at the Consumer Electronics Show in Las Vegas, which has become an annual showcase for the technologies transforming the auto industry. Two years ago, Audi executives used CES to tout the imminent launch of the first car designed, under certain circumstances, to take full control away from the driver. In driverless mode, the high-end A8 would only call on the driver to get involved if it encountered a situation too complex for it to handle — a degree of autonomy known as “Level 3”. Level 3 would be the first point at which full responsibility — and legal liability — shifts from driver to car. But regulators have been wary about whether transferring control between car and driver can work effectively in an emergency, and the Audi software has never been activated in cars sold in the US. At CES this week, the German carmaker was no longer boasting about its advances in automated driving. Instead, it was one of several companies to unveil a new industry group called Pave. Audi’s president of North American operations Mark Del Rosso said the group’s aim was to “educate policymakers” about how the “technical challenges of creating driverless vehicles are solvable”, and bring real advances in road safety. The carmakers may wish they had acted earlier to put their education and safety agendas ahead of the technology race that has characterised the rush towards autonomous vehicles. The debate has intensified after a woman was killed in Arizona last March by a self-driving Uber vehicle. “It’s a level of autonomy that scares the carmakers — but it also scares lawmakers and regulators,” Chris Jones, an auto analyst at Canalys, said of the looming Level 3 threshold. Mike Ramsay, an analyst at Gartner, agreed, saying that technology was no longer the limiting factor. “The regulatory framework is a problem far more in need of ironing out than any of these systems,” he said. “There will have to be some clarity about what is legal and what isn’t.” Carmakers caught up in race to Level 3 The idea of a driverless car that can hand back control to a human with little warning has always divided the auto industry. Carmakers such as Toyota, Volvo and Ford, as well as Waymo, which began life as Google’s driverless car project, have been consistently sceptical about the idea of Level 3, arguing it is safer to wait longer for more advanced forms of automation that never require human intervention. Daimler Trucks, the world’s biggest maker of commercial

vehicles, also turned its back on Level 3 this week. Critics like Martin Daum, the company’s chief executive, said that the technology sent a confusing message to drivers: they are encouraged to switch their attention to something other than the road, but expected to be ready to retake control at a moment’s notice. Other executives, however, remain bullish on the technology. Dirk Wisselmann, senior engineer at BMW, said the carmaker’s iNext vehicle in 2021 will feature Level 3 technology enabling hands-free, pedal-free driving. He envisions a driver watching movies while the car cruises down the highway, and it would only alert the driver to retake control in the case of a construction zone or particularly bad weather. “If the driver doesn’t take over, the car makes a safe stop,” he said. Despite the differences of opinion, many carmakers have nevertheless found themselves caught up in a race to Level 3. That has been particularly true for producers of the most expensive luxury cars, where ever-higher levels of driver assistance and automation, like adaptive cruise control, collision avoidance and lane-holding on highways, have started to seem standard. Many see the next, inevitable step as full automation, even if only in limited circumstances like highway driving or while in traffic jams. The race has been stoked by Elon Musk, chief executive of Tesla, who has made this one of his company’s main goals. Mr Jones at Canalys estimates that “well over two-thirds” of Tesla customers pay $5,000 for the company’s Autopilot software, its current, lower level of driver assistance — a sign of how it has made advanced technology synonymous with its brand. Mr Musk may be years behind in his promise of full autonomy, but rivals have had little choice but to try to match him, said Gartner’s Mr Ramsay. On the cusp of Level 3, however, the focus at CES this week shifted to less ambitious — and less controversial — goals, such as enhancing the technology but stopping short of the all-important handover of responsibility. This will lead to “extending the envelope” of today’s driver-assistance systems, said Erez Dagan, a founder of Mobileye, an Israeli company that was acquired by Intel in 2017 and supplies many carmakers. The new capabilities include bringing the kind of lane-holding common on highways to urban streets and roads with poor lane markings, and teaching cars how to navigate through complex junctions. But this could turn out to be an expensive detour for carmakers. Today’s driver assistance systems require only simple hardware like a front-facing camera for automated braking. Extending their capabilities to more complex situations means adding rearfacing cameras and sensors like radar and lidar that can build up a picture of everything happening around a car. It also means adding to the processing power and software in order to integrate and make sense of all the new data.

Chevron and Occidental invest in CO2 removal technology Canadian start-up is able to capture CO2 from the air and use it to make synthetic fuel Leslie Hook

il majors Chevron and Occidental Petroleum are taking a minority stake in a Canadian start-up that has developed technologies to suck carbon dioxide directly from the atmosphere and use it to make synthetic fuel. The deal marks the first significant investment by energy groups into the technology, known as direct air capture, which pulls carbon dioxide from the atmosphere by using chemicals and fans. Carbon Engineering, a Bill Gatesbacked start-up based in Squamish, British Columbia, said the new investment was part of a $60m fundraising round that would help it design and build commercial-scale plants. The company has not disclosed its valuation. The investment comes at a time when the oil and gas industry is racing to find ways to reduce carbon emissions while also maintaining its core business model, producing and selling fuel. Part of the answer could be “nega-

tive emissions”, which refers to a range of technologies that reduce the level of carbon dioxide in the air. “Negative emissions are increasingly essential in the various scenarios for how we address climate change,” said Steve Oldham, chief executive of Carbon Engineering. “It’s infeasible that we all stop using fossil fuels overnight.” Unlike more traditional methods of carbon capture, which rely on pulling carbon dioxide out of a smokestack or from close to the source of emissions in an industrial process, direct air capture sucks carbon dioxide from the air. The process has long been thought to be too expensive to be deployed on a large scale, but a paper published last year in scientific journal Joule using data from Carbon Engineering’s pilot plant suggested it could cost as little as $100 a tonne of carbon dioxide extracted. Tech innovations fuel an oil and gas fightback Carbon Engineering also uses carbon dioxide to produce synthetic fuels that can substitute for gasoline, jet fuel or marine fuel and be used in the same

engines without modification, according to the company. Even though these fuels produce carbon dioxide when burnt, they are considered low-carbon fuels because they are made using carbon dioxide that came from the atmosphere in the first place. The investment in Carbon Engineering is only the second public deal made by Chevron’s Future Energy Fund, following its investment last year in ChargePoint, an electric vehicle charging company. “We are interested in looking at innovations around carbon capture,” said Barbara Burger, head of Chevron Technology Ventures. The fact that Carbon Engineering uses carbon dioxide to make synthetic fuels is an area of particular importance, she added, pointing to Chevron’s significant downstream business. Occidental said it was particularly interested in exploring atmospheric carbon extraction to complement its enhanced oil recovery operations, which inject carbon dioxide into old wells to maximise their production.

Chevron and Occidental invest in carbon removal start-up Move part of trend for energy companies looking to offset emissions Leslie Hook

il majors Chevron and Occidental Petroleum are taking a minority stake in Canadian start-up Carbon Engineering, which has developed technologies that suck carbon dioxide directly from the atmosphere and use it to make synthetic fuel. The deal marks the first significant investment by energy groups into the

technology, known as direct air capture, which pulls carbon dioxide from the atmosphere by using chemicals and fans. Carbon Engineering, a Bill Gatesbacked startup based in Squamish, British Columbia, said the new investment was part of a $60m fundraising round that would help it design and build commercial-scale plants. The investment comes at a time when the oil and gas industry is racing to find ways to reduce carbon

emissions while also maintaining its core business model, producing and selling fuel. Part of the answer could be “negative emissions” which refers to a range of technologies that reduce the level of carbon dioxide in the air. “Negative emissions are increasingly essential in the various scenarios for how we address climate change,” said Steve Oldham, chief executive of Carbon Engineering. “Its infeasible that we all stop using fossil fuels overnight.”

China puts the squeeze on high rollers in Macau Geopolitical threats mount in the world’s biggest gambling centre Henny Sender

019 is the year of the pig, according to the Chinese calendar. It is also the year that marks the 20th anniversary of the return of the former Portuguese colony of Macau to the motherland of mainland China. Those reasons — superstitious and sentimental — are on a list put out by Credit Suisse, in an attempt to justify a bullish stance on casino firms operating in Macau, the world’s biggest gambling centre, after a very rocky year. In 2018 the Bloomberg Macau

China Gaming index fell by more than a quarter, under-performing the Hang Seng stock index as a whole, reflecting a year of macro pressures as high rollers from the Chinese mainland cut back on spending and borrowing. That means that this year is beginning on a note of low expectations and undemanding valuations. Still, there are lingering risks — not all of them economic — as China gets ready to celebrate the lunar new year and its reunion with Macau. Perhaps the biggest is the risk that casino companies in Macau will join the growing numbers of firms becoming hostage to Sino-US

tensions, whatever happens this week. Such geopolitical fears eclipse economic dangers such as slower growth, a squeeze on shadow banking and a possible plunge in the value of the currency (such as happened three years ago), triggering huge capital flight. Today three of the six major Macau casino firms are either wholly or partly owned by American interests, including Sands China, Wynn Macau and MGM China (the last a joint venture with Pansy Ho, whose father Stanley was a towering presence on the casino scene before his retirement several years ago).

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ANALYSIS Takeda seeks to divest $10bn of assets after £46bn Shire deal Japanese pharmaceutical group eyes reduction in $48bn debt pile following acquisition Hannah Kuchler and Kana Inagaki

Volatility: how ‘algos’ changed the rhythm of the market Critics say high-frequency trading makes markets too fickle amid rising anxiety over the global economy Robin Wigglesworth

hilippe Jabre was the quintessential swashbuckling trader, slicing his way through markets first at GLG Partners and then an eponymous hedge fund he founded in 2007 — at the time one of the industry’s biggest-ever launches. But in December he fell on his sword, closing Jabre Capital after racking up huge losses. The fault, he said, was machines. “The last few years have become particularly difficult for active managers,” he said in his final letter to clients. “Financial markets have significantly evolved over the past decade, driven by new technologies, and the market itself is becoming more difficult to anticipate as traditional participants are imperceptibly replaced by computerised models.” Mr Jabre is not alone. There has been recently a flurry of finger-pointing by humbled one-time masters of the universe, who argue that the swelling influence of computer-powered “quantitative”, or quant, investors and high-frequency traders is wreaking havoc on markets and rendering obsolete old-fashioned analysis and common sense. Those concerns were exacerbated by the volatility in financial markets in December, when US equities suffered their biggest monthly decline since the financial crisis, despite little fundamental economic news. And with growing anxiety over the strength of the global economy, tightening monetary policy across the world and an escalating trade war between China and the US, these trades are getting more attention. Even hedge fund veterans admit the game has changed. “These ‘algos’ have taken all the rhythm out of the market, and have become extremely confusing to me,” Stanley Druckenmiller, a famed investor and hedge fund manager, recently told an industry TV station. It is true that markets are evolving. HFTs dominate the market-making once done by humans in trading pits and the bowels of investment banks. Various quant strategies — ranging from simple ones packaged into passive funds to pricey, complex hedge funds — manage at least $1.5tn, according to Morgan Stanley. JPMorgan estimates that only about 10 per cent of US equity trading is now done by traditional investors. Other markets remain more human, yet are slowly but surely being transformed. This has made “the algos” a fashionable bugbear whenever markets tremble like they did in December. Torsten Slok, Deutsche Bank’s chief international economist, put them at the top of his list of the 30 biggest risks for markets, and even Steven Mnuchin, the US Treasury secretary who caused market unease with comments on liquidity late last year, has said the government will study whether the evolving market ecosystem fed the recent turmoil. But markets have always been tempestuous, and machines make a

convenient, faceless bogeyman for fund managers who stumble. Meanwhile, quants point out that they are still only small players compared with the vastness of global markets. “It’s insane,” says Clifford Asness, the founder of AQR Capital Management. “People are missing the forest for the trees. That we trade electronically doesn’t change things, we just deliver the same thing more efficiently . . . It’s just used by pundits and fund managers as an excuse.” The recent turmoil has unnerved many investors, but two other debacles stand out as having first crystallised the fear that algorithms are making markets more fickle and fragile. At 2:32pm on May 6 2010, US equities suddenly and mysteriously careened lower. In just 36 minutes the S&P 500 crashed more than 8 per cent, before rebounding just as powerfully. Dubbed the “flash crash” it put a spotlight on the rise of small ultra-fast, algorithmic trading firms that have elbowed out investment banks as the integral intermediaries of many markets. Michael Lewis, author of Flash Boys, fanned the flames with his book by casting HFTs as mysterious, investor-scalping antagonists “rigging” the stock market. What was once an esoteric, little-appreciated evolution in the market’s plumbing suddenly became the topic of a vitriolic mainstream debate. “It was a wake-up call,” says Andrei Kirilenko, former chief economist at the Commodity Futures Trading Commission who wrote the US regulator’s report on the 2010 event and now leads Imperial College London’s Centre for Global Finance and Technology. “The flash crash was the first market crash in the era of automated, algorithmic trading.” In August 2015, markets were once again abruptly thrown into a tailspin — and this time volatility-sensitive quantitative strategies were identified as the primary culprits. The spark was rising concern over China’s economic slowdown, but on August 24, the S&P 500 crashed on opening, triggering circuit-breakers — implemented in the wake of the flash crash to pause wild trading — nearly 1,300 times. That rippled through a host of exchange traded funds, worsening the dislocations as they briefly became divorced from the value of their underlying holdings. Many investors and analysts blamed algorithmic strategies that automatically adjust their market exposure according to volatility for aggravating the 2015 crash. Targeting a specific level of volatility is common among strategies known as “risk parity” — trend-following hedge funds and “managed volatility” products sold by insurance companies. Estimates vary, but there is probably more than $1tn invested in a variety of such funds. Risk parity, a strategy first pioneered by Ray Dalio’s Bridgewater Associates in the 1990s, often shoulders much of the opprobrium. The theory is that a broad, diversified portfolio

of stocks, bonds and other assets balanced by the mathematical risk — in practice, volatility — of each asset class should over time enjoy better returns than traditional portfolios. Bonds are less volatile than equities, so that often means “leveraging” these investments to bring the risk-adjusted allocation up to that of stocks. As volatility goes up, risk parity funds in theory rein in their exposure. However, risk parity funds can vary greatly in the details of their approach, and are generally slower moving than the $300bn trend-following hedge fund industry. These funds surf market momentum up and down, and also use volatility metrics to scale their exposure. When markets are calm they buy, and when turbulence spikes they sell. This has been a successful strategy over time. But it leaves the funds vulnerable to abrupt reversals — such as the market tumble last February — and means they can accentuate turbulence by selling when markets are already sliding. Leon Cooperman, the founder of Omega Advisors, has argued that the US Securities and Exchange Commission should investigate and tame the new “wild, wild west environment in the stock market” caused by these volatility-sensitive strategies. “I think your next guest ought to be somebody from the SEC to explain why they have sat back calmly, quietly, without saying anything and allowing these algorithmic, trend-following models to wreak havoc with what has, up to now, been the best capital market in the world,” he told CNBC in December. Some quants will grudgingly admit that volatility-targeting is inherently pro-cyclical and can at least in theory exacerbate market movements. But they say critics wildly overestimate just how much money is invested in these strategies, how much they trade, and their impact. “Risk parity is basically a passive portfolio with some periodic, countercyclical rebalancing. Our volatility targets aren’t perfectly static, but they only change over a 10-year window,” says Bob Prince, co-chief investment officer at Bridgewater. Other risk parity strategies may vary, but overall “it’s only ever going to be a drop in the ocean”, he adds. Markets had been vulnerable to panicky plunges long before trading algorithms emerged, yet fears over machines seem deeply embedded in our psyche. A 2014 University of Pennsylvania paper found evidence of what it dubbed “algorithm aversion”, showing how human test subjects instinctively trusted human forecasters more than algorithmic ones, even after seeing the algo make fewer and less severe forecasting errors. And there are plenty of other potential culprits to blame for exacerbating recent turbulence. Many traditional active funds suffered a battering in 2018. That has led to a rise in investor redemption notices and has forced many to sell securities to meet the end-of-year withdrawals.

akeda will consider selling businesses from its Nycomed acquisition in 2011, as Japan’s largest pharmaceutical group seeks to divest $10bn of assets after completing a £46bn deal to buy Shire. Christophe Weber, chief executive, said Nycomed was among the company’s “non-core assets” that it could consider jettisoning but denied that the $13.7bn acquisition of the Swiss drugmaker had been a flop, as some analysts have suggested. Investors in Takeda have

that the company was likely to sell Nycomed’s OTC business in Russia. Other brands deemed outside the core areas include Azilva, a blood pressure medicine, Nesina, for diabetics, and Uloric, which is used to treat patients with gout. The troubles Takeda faced with Nycomed could be relevant for its integration of Shire, but the company has changed significantly since its last major acquisition. Under Mr Weber, the first n o n -Jap a n e s e C E O o f t h e 237-year-old group, the company is led by an international executive team and the organisation is much leaner follow-

Christophe Weber, chief executive of Takeda, says Nycomed is among the company’s ‘non-core assets’ it might consider offloading © Bloomberg

called for more clarity on the planned disposal of assets, which will be critical for the group in reducing $48bn in net debt that it will shoulder from buying Shire. Mr Weber said in an interview at the JPMorgan healthcare conference in San Francisco that his company had hundreds of brands outside its focus areas that he could sell if he could find buyers with a better strategic fit. To simplify the business, Takeda will focus on five core areas: oncology, gastrointestinal conditions, neuroscience, rare diseases and plasma-derived therapies. “The overall environment is demanding more innovative medicine,” he said. Takeda bought Swiss drugmaker Nycomed, which included Daxas, a treatment for lung conditions, and a portfolio of over-the-counter medicines in 2011 in a bid to expand its presence in emerging markets such as Russia. But market conditions deteriorated following the acquisition, and analysts had long criticised Nycomed’s operations as a “black box” for Takeda. “As a business, it was a failure and the acquisition was not necessary,” said Fumiyoshi Sakai, an analyst at Credit Suisse, adding

ing an aggressive cost-cutting programme. “The management needs to take this [Shire] acquisition and make sure that they drive improvement in profitability,” said Alessandro Valentini, a portfolio manager at Causeway Capital Management, which has been a longtime investor in Takeda. Critics have expressed concern that the acquisition may end up being one in a string of large deals needed to sustain Takeda’s drugs pipeline. “Shire’s assets will run out in 10 years,” Mr Sakai said. “Takeda basically bought five years’ worth of time through this deal. If their efforts don’t bear fruit at the end of that period, they may need to do another major acquisition.” But Mr Weber rejected the idea that Takeda might do a Shire-sized deal every five years. He said he was “confident” the acquisition would drive “longterm, highly innovative and sustainable” growth. “Our long-term ambition is to have a very productive research and development engine,” he said, adding that Takeda has 21 assets in phase two and three drug trials. Phase three is the largest and most important stage for proving a drug’s efficacy.

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Opinion Democracy or development: Which should come first?

CHRISTOPHER AKOR Chris Akor, a First Class graduate of Political Science, holds an MSc in African Studies from the University of Oxford and is BusinessDay’s Op-Ed Editor christopher.akor@businessdayonline.com

he dismal performances by democratically elected governments in Nigeria in recent history has led to heated debates about the feasibility of Western liberal democracy in postcolonies like Nigeria where the very existence of the state is being threatened by grand corruption, insecurity, social disorder, poverty, hunger and inequality. There are those who think that the national priority should be about solving these existential problems and not about the fine details of democracy – excessive rulebased systems and fractious conflicts – which may not be exactly what the country needs right now. For these people, it is better to develop our unique style of governance that fits our kind of society and designed to solve our problems rather than a wholesale adoption of a system of governance that clearly does not suit us and may actually hinder the achievement of

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

reating jobs is the number one task for the Nigerian economy and its managers in 2019. It follows from the latest unemployment figures released by the National Bureau of Statistics. Nigeria nurses a high 23% unemployment. It is unacceptable and there must be a collective resolve to change the narrative. Job creation is a task for the entire economy. It is not for one arm, nor is merely for Government. Government should take the lead through policy with the various tools in

national goals. Implicit in this argument is the need for a capable strongman, in the mould of Lee Kuan Yeu of Singapore, who will, in one fell swoop, obliterate the corrupt old order and institute a new and glorious order which will transform the country from the backwaters of international development to a first world country. It was largely that desire for that kind of a messiah that led to the election of Buhari in 2015, of course, following the re-writing of history and the laundering of Buhari’s image by the APC bigwigs and those interested in making him president. Now that it is obvious that Buhari isn’t that kind of a messiah, the proponents of that argument, rather than backing down, are even more insistent on the necessity of getting a Lee Kuan Yeu-type autocrat to clean the Augeas’ stables first before the practice and experience of democracy can make meaning and respond to the yearnings of Nigerians. These arguments are not new anyway. They mirror the debates in the 1960s and 70s largely among new and emerging states over what model of development to choose from between the liberal Western capitalist and Soviet socialist models. Interestingly, quite a lot of African independence leaders chose to go with the socialist model. Their main argument then was that being newly independent nations, they were so much in

a hurry to develop; to catch-up with the West, as it were, and could not afford the luxury of the gradualism inherent in the liberal democratic model. In no time therefore, most African states experienced a transition from Western liberal democracy to ‘one party’ states or ‘no party’ states. In rationalising this shift, leading proponents of the one party state such as Tanzania’s Julius Nyerere argued that two or multi party politics may only be justified in cases where the parties are divided over some fundamental issues. But in

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....the development of a capable state that is accountable and ruled by law is one of the crowning achievements of human civilisation. It is the absence or weakness of institutions or more appropriately, a capable state that is at the root of corruption

new nations where there is actually no major policy or fundamental disagreement beyond the one overarching goal of achieving socio-economic development within the shortest possible time, it is absurd to have party competition(s) as it will merely encourage the growth of factionalism and conflict, which the new states hardly have time for. The only competition that may be entertained is between individuals in one party and not between parties. Others abolished parties altogether and with time, democracy or any pretentions to democracy. In the 90s, and early 2000s, especially after the collapse of the Soviet Union and the triumph of the western liberal democracy model, the debate shifted to a question of sequence. Which should come first – democracy or economic development? Those that argue for democracy believe it could create the enabling environment for economic development. Opponents however contend that for poor, fragile states just coming out of conflict situations especially, the real and existential need is for economic development and that democracy cannot function without some minimum level of socioeconomic development. Using copious examples from different parts of the world, they showed how insistence on the institutionalisation of democracy – with its inherent fractious competition - could lead to a relapse into violence

and conflict. This school of thinking was further reinforced by the experiences of South East Asian countries that largely spurned the Western liberal model and were still able to industrialise almost at a breakneck speed. Almost all those countries like China, South Korea, Taiwan, Singapore etc were virtual dictatorships. In Africa, the shining example was Rwanda, where, after leading his band of exiled Tutsi militias to stop the genocide and took over control of the country in 1994, the strongman, Paul Kagame has led Rwanda to socio-economic recovery and growth that it has become one of the best performing nations in Africa economically and has become one of the most attractive destinations for foreign direct investment in Africa today. Of course, the West largely funded the post-war economic recovery in Rwanda. However, ridden by the guilt of its failure to stop the genocide and a fear of relapse, the West allowed Paul Kagame to appropriate and personalise all powers while outwardly maintaining pretentions to democracy. So, given the level of rot and decay in the Nigerian system, it is understandable that some Nigerians are beginning to question the suitability of liberal democracy in Nigeria. The belief is that with its insistence on rules, procedures and processes, and the legal requirement of presumption of innocence

until proven guilty, the big thieves could always game the system and make it difficult to ensure a largely corrupt-free polity, which many Nigerians believe is a sine qua non for rapid economic growth and development. But like I have argued time and again, the development of viable national institutions and not personal rule is the real harbinger of sustainable growth and development and not some autocratic or dictatorial posturing of leaders. Any growth or development not built on institutions could quickly unravel. Zimbabwe was the toast of the world in the 1980s and 1990s but has now unravelled. Rwanda, with the insistence of Paul Kagame to become life president, is facing the prospect of unravelling too. Like Francis Fukuyama argues, “the development of a capable state that is accountable and ruled by law is one of the crowning achievements of human civilisation.” It is the absence or weakness of institutions or more appropriately, a capable state that is at the root of corruption. In Nigeria and other developing countries, corruption serves largely to grease the wheels of inefficient bureaucratic government machines leading to efficient outcomes. Common sense therefore dictates that an effective war against corruption must involve the strengthening of state institutions, which is possible only in a democratic setting.

The imperative of job creation the box. Indeed, so many tools available to recommend the government as the key driver of economic growth. Job creation is one of the routes to economic growth. Enabling environment is a matter of management of the macro economic environment and the micro for the states. It is about policies that are wholesome, creative, realistic and capable of promoting productivity and innovation. It is about using the tools of political economy to cause chain reactions in the economy. The concern of course is the fact of an economy that is struggling and going deeper into the pain-o-meter. No less a person than President Muhammadu Buhari has asked Nigerians to prepare for more pain. The 2019 budget is already failing even before consideration and appropriation by the National Assembly because the fundaments are wrong. The contribution of government is to use a mix of monetary and fiscal policies to create the environment for private sector players to create jobs. Job creation strategies include reduced interest rates, increased public works, use

of benefits, reduced taxation and more. Economists say it is supply side or trickle-down. We need it now. In this age, innovation is the main driver of economic growth in most economies. Innovation and start ups are the primary fuel for the growth of many economies today. Nigeria should be articulating policies that would propel increased activity in the start up arena and innovations. There are many hubs now where young Nigerians are active in the start-up ecosystem. From Yabacon to Aba through Awka and Enugu, young ICT and STEM enthusiasts as well as professionals are working hard to produce apps and products that tackle specific problems. Governments at Federal and State levels only need to lend support with policy interventions that would encourage investments in those areas. Offer incentives to enable movement from idea to app to mass market. In August, the Onitsha 5 Coding Girls brought honour to Nigeria by winning the Technovation Challenge in Silicon Valley. When will the app the young girls developed be available in the market

for purchase and download by users in Nigeria? Is there a system and institutions in place to enable the idea to move from laboratory to the mass market? Where is the Federal Ministry of Science and Technology and its counterpart in Anambra State to ensure that this happens? Where are the investors to bring it to pass? These are the kinds of tasks that Governments should undertake. Create a pathway for investors in importation of container loads of stuff to see new vistas in enabling developments in technology translate to real-time products and apps in the market place of Ni-

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Supply side economics stresses the imperative of high and sustained expenditure on public works.The Federal Government claims it is spending on infrastructure.They should do so much more

geria. We must encourage entrepreneurship in the right direction. Supply side economics stresses the imperative of high and sustained expenditure on public works. The Federal Government claims it is spending on infrastructure. They should do so much more. The expenditure is too little to effect fundamental change. It is disappointing to see the lack of political will in cutting down the ratio of spend on capital versus recurrent expenditure. It turns to embarrassment reading snippets of what constitutes this recurrent expenditure in a change government. Huge sums on feeding and such inane terms for outright stealing such as N65m for animal conservation, N1billion for travels in the office of Mr President and the sums on feeding. The Presidency has continued to operate a restaurant that serves five-course meals at no charges to both the occupant of the office and the many hangers on. Contrast with the fact that President Barack Obama paid for any extra meals in the White House, as is the standard in most parts of the world. Why are interest rates so

high in this economy? Calling on the Ministry of Finance and the Central Bank. Do something to bring down interest rates. The Federal Government needs to step in to ensure the take-off of NLNG Train 7 and the other two liquefied natural gas projects. Each day we delay causes significant job losses and loss of market share. 2019 should see the actualisation of the Petroleum Industry Governance Bill into an Act of the National Assembly. There should be paranoia at all levels of government about unemployment and the need to create jobs. The consequences are getting closer to Government Houses as the Governors of Borno and Katsina recently reported. Banditry, kidnapping and such-like are symptoms of economic dysfunction. The Executive and Legislature require to make sacrifices for the benefit of Nigeria by cutting the recurrent expenditure in our budgets. Damn too high and unproductive. Transfer half of that sum to expenditure on public works, for a start. More on this job creation challenge. Welcome to 2019.

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