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news you can trust I **thursDAY 10 may 2018 I vol. 15, no 51 I N300

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Japaul pulls plug on $350m Milost deal as stock slumps 8% M

Banks liquidity pressure eases but earnings, NPL risks remain – Moody’s ... base stress test shows manageable deterioration in capital Endurance Okafor & Micheal Ani

oody’s, the credit rating agency, expects a stable outlook for the Nigerian banking system due to its projection of improving Continues on page 38

Cites numerous red flags with proposed equity injection N3.25bn wiped off market cap since BusinessDay March 12 report Senate declares Inspector

LOLADE AKINMURELE

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t’s been two months since BusinessDay first published an article raising a red flag over the announced investments in some Nigerian companies by a purported US-based private equity firm, Milost Global Inc, and the dust hasn’t settled.

A number of those announced

deals have gradually collapsed since then, with oil and maritime services firm, Japaul, being the latest to back off on a planned $350 million (N126 billion at N360 per US dollar) deal, citing “numerous red flags associated with the proposed equity injection,” in a statement filed at the Nigerian Stock Exchange (NSE) on May 9, 2018.

“The board of the company,

at its meeting held on Thursday, March 29, 2018, deliberated on the proposed equity injection

by Milost… and management resolved that it should in consultation with the company’s retained counsel, take prompt steps to pull out of the transaction in a non-prejudicial manner,” a statement signed by Akin Oladapo, Japaul’s acting managing director said.

Two phone calls and an email to Japaul, seeking comments on whether the deal termination will attract a cost, went unanswered.

Unity Bank, a tier-two commercial lender, and mortgage bank- Aso Savings and Loanshave since distanced themselves from deals with Milost, with the Continues on page 35

General of Police unfit to hold office

…as National Assembly again fails to present 2018 budget KEHINDE AKINTOLA & OWEDE AGBAJILEKE, Abuja

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he Senate has declared the Inspector General of Police (IGR), Ibrahim Idris, as an enemy of democracy and Continues on page 35

Dangote among 75 world’s Most Powerful People – Forbes ... more powerful than US Vice President ENDURANCE OKAFOR

L-R: Oluwole Ajimisinmi, company secretary; Segun Oloketuyi, MD/CEO; Tina Vukor-Quarshie, non-executive director, and Abubakar Lawal, nonexecutive director, all of Wema Bank, at the bank’s 2017 annual general meeting in Lagos, yesterday.

Watch out for our report on Insurance Industry Solvency margin ratios tomorrow

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igeria’s foremost entrepreneur, Aliko Dangote has been ranked among 75 most powerful persons on Continues on page 4

9mobile sale: Clouds hang over Teleology’s capacity to raise balance of payment Jumoke Akiyode-Lawanson

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here is some uncertainty around the final takeover of 9mobile by Teleology Holdings which was named the preferred bidder, as the company is likely facing

challenges in raising the balance of its $500 million dollar bid, as local financiers are said not be keen on extending further credit to the telecom sector, especially a struggling player.

Sources in the banking industry say that banks having

been forced to take a significant to make significant provisions for loans extended to Etisalat, the legacy company of 9mobile, are now more cautious about further lending to the sector.

Sources in the private equity community are also told Busi-

nessDay that there is a general feeling that the best days of telecom are behind it.

“The voice business is no longer lucrative as it used to be. Data is the future but most telcos are selling data below their cost of generating it due to

the intense competition in the sector” a major telco player told BusinessDay. Although Teleology succeeded in raising the $50 million nonrefundable deposit before the March 22, 2018 deadline set for Continues on page 4

2 BUSINESS DAY NEWS

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Local pharmaceuticals innovate new drugs amid codeine crisis ODINAKA ANUDU

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t was an irony of sorts that while the National Agency for Food and Drug Administration and Control (NAFDAC) was announcing a ban on three pharmaceutical firms over codeine-containing syrup on Tuesday, an Anambra State-based drug maker, Juhel Nigeria, was getting set to unveil its new Oxytocin injection for pregnant women, the first of its kind in Africa.

Juhel’s injection, unveiled on Wednesday in Lagos, was manufactured in collaboration with the United States Pharmacopeia (USP).

It has the capacity to reduce afterbirth bleeding and maternal deaths, estimated at 58, 000 each year.

The drug was hitherto imported from outside Africa but is now locally manufactured in Awka, Anambra State, Ifeanyi Okoye, CEO of Juhel Nigeria Limited, said.

“We have the capacity to produce enough Oxytocin that will serve the rest of sub-Saharan Africa,” Okoye said.

“USP for two years collaborated with Juhel Nigeria Limited towards the production of maternal commodities –Magnesium sulphate and Oxytocin injection,” Okoye said, adding that his firm is one of the three drug makers in the coun-

try to have ‘Blow Fill Seal’ (BFS) machines, which can do the multiple task of blowing the bottle, filling it with polyethylene and then moving it to the conveyor belt to seal.

“We are conserving our foreign exchange because we are no longer going to import Oxytocin. Secondly, the cost of these drug is much cheaper than its imported counterpart,” Frank Jacobs, president of the Manufacturers Association of Nigeria (MAN), said.

Juhel is not the only firm innovating new products.

Drugfield Pharmaceuticals Limited has come up with Chlorhexidine gel, which caters for the umbilical cord. It is one of the World Health Organisation (WHO)’s requirements for child care.

Similarly, SKG Pharma has locally produced Amino Acid and Vitamins, first in Africa. Moreover, Daily Need Industries has produced Amoxicillin Dispersible Tablets (DT), used for the cure of Pneumonia. May &Baker entered into a joint venture project with Federal Government to produce vaccines locally. Gloria Elemo, director-general and chief executive officer of the Federal Institute of Industrial Research Oshodi (FIIRO), told BusinessDay that FIIRO has entered into an understanding with May &Baker for the commer-

cialisation of a sickle cell supplement produced by the institute.

“There are also new facilities and investmentsgoingonintheindustry,” Okey Akpa, chairman, Pharmaceutical Manufacturers Group of the ManufacturersAssociationofNigeria (PMG-MAN) told BusinessDay. Nigeria’s drug makers have invested N300 to N500 billion locally in new plants, vehicles, buildings and personnel.

They share 35 percent of the African drug market and over 70 percent of the West African market, according to PMG-MAN. Out of over 100 drugs firms, only nine are listed on the Nigerian Stock Exchange- Neimeth, Neros, Emzor, May & Baker Nigeria, Fidson, Drugfield, Nigerian German Chemical Plc (NGC), Novartis and GSK. Swiss Pharma, Evans Medicals, Chi Pharmaceuticals as well as May &Baker have obtained the WHO prequalification, which enables them to participate in international drug supplies. Also, Juhel, Fidson, Drugfield, and SKG Pharma, among others, are ramping up investments to obtain this certification. Fidson completed its N9 billion manufacturing plant in Ogun State in 2016 and the majority of players have relocated their plants to Ogun on back of friendlier business environment.

Thursday 10 May 2018

Banks liquidity pressure ease but earnings...

Continued from page 1

foreign currency risk. This is supported by recovering global oil prices and a more liberal foreign exchange market.

However, Moody’s expects banks’ earnings to come under pressure, capital metrics to decline marginally, and asset quality to remain weak between the next 12-18 months, resulting from declining yields on government securities, the introduction of new IFRS 9 accounting standards, and increase in NonPerforming Loans (NPLs) of the banks.

“Operating conditions for the Nigeria’s banks will continue to gradually improve over the next 12 to 18 months, but remain challenging,” Akin Majekodunmi, Vice President and Senior Credit Officer, at Moody’s said at a conference in Lagos.

“Nigeria’s growth prospects remain vulnerable to global oil prices, as crude oil will remain the nation’s largest export commodity and its main generator of foreign currency for the foreseeable future.”

Moody’s rates seven banks in the country which account for 68 percent of total assets in the Nigerian banking system.

“Nigerian banks’ profitability will nevertheless decline on account of lower yields on government securities, as well as a

likely reduction in income from derivatives,” Moody’s said.

The MD of Cowry Asset Limited, Johnson Chukwu in an earlier published interview with BusinessDay said banks would have to review their strategies by moving away from FGN bonds and identifying credit worthy customers and lending to them.

Moody’s however, expects the pressure on the Nigerian banks’ profitability to be offset partially by a recovery in loan growth and transaction income from the expansion of digital platforms, and the ease of foreign currency shortages.

Although the rating agency sees banking system foreign currency liquidity to be vulnerable to global oil prices.

Oil prices on Monday 7 May, 2018 surged to a four year high of $74 per barrel amid Donald Trump’s withdrawal from the Iran nuclear deal.

Exposure to non-oil foreign currency borrowers is cited by the Moody’s to remain an additional source of risk for the banks, even though it does not expect a marked weakening of the naira in the foreign exchange markets over the next 12 months.

Foreign currency loans accounted for 40.7 percent of the system wide loan book at the Continues on page 4

Thursday 10 May 2018

BUSINESS DAY

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4 BUSINESS DAY NEWS Banks liquidity pressure ease but earnings...

Continued from page 2

end of the third quarter of 2017, down from 50 percent at yearend 2016.

A significant proportion, some 10 percent to 20 percent, has been dispersed to borrowers with little or no foreign currency income.

These borrowers are vulnerable to fluctuations in the naira/ dollar exchange rate as a depreciation of the naira reduces their repayment capacity, Moody’s said.

However, at least half of all oil and gas loans have been rescheduled/restructured since 2015 and repayment schedules should now better match oil and gas corporates’ oil revenues and should translate into a gradual flattening in the percentage of problem loans in the sector, unless there is another significant fall in oil prices to below $40/ barrel, according to Moody’s.

Moody’s conducted a scenario analysis to gauge the solvency of banks under both a base-case and a low-probability highly

stressed scenario that is roughly equivalent to a 1-in-25 year event.

“Under our base-case (or most likely) scenario, we expect the system-wide capital ratio to remain roughly stable over a two-year horizon. This is driven by an increase in loan losses, due to an increase in system-wide non-performing loans and in risk-weighted assets, driven by loan growth. This impact would be offset by pre-provision income leaving the capital ratio virtually unchanged at 17.0%,” Moody’s said.

The base case is based on Moody’s current macroeconomic forecasts.

Meanwhile, high inflation and the continued vulnerability of the government’s balance sheet to shocks is seen by the agency as a restrain to Nigeria’s economy over the projected outlook period.

On the weakening of asset risk, Moody’s expects only a moderate deterioration in loan

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performance given the lagging effect of subdued economic growth - continued asset risk vulnerability from banks’ large exposures to the oil and gas sector and foreign currency borrowers in general capital weakening .

The banks’ capital levels are projected by the rating body to decline moderately on account of the introduction of IFRS 9. While it expects provisioning costs to be absorbed by pre-provision income.

On the stability of funding and liquidity, the Banks are projected to continue to benefit from stable deposit funding and solid liquidity buffers in local currency.

The agency also expects banking system income to be supported by both a recovery in loan growth to 10 percent over 2018 and an increase in noninterest income/transactional income through the promotion of ebanking platforms. Coupled with stable government support, as the authorities are projected to continue to have a strong willingness to support the banks.

L-R: Babatunde Fowler, executive chairman, Federal Inland Revenue Service (FIRS); Gladys Simplice, vice president, Chartered Institute of Taxation of Nigeria (CITN); Cyril Ede, president, CITN, and Vice President Yemi Osinbajo, during the 20th annual tax conference, with the theme ‘Institutionalising Tax-Paying Culture in a Developing Economy’ in Abuja, yesterday.

Pic by Olawale Amoo

9mobile sale: Clouds hang over Teleology’s capacity...

Continued from page 1

it to pay up and show commitment of interest to take over Nigeria’s fourth largest telecommunications operator, industry analysts say that other recent developments have complicated the sales process further.

These include the addition of new sale criteria by the Nigerian Communications Commission (NCC) chairman, the senate interruption and court order to stop the process as a result of complaints by minority shareholders of the former Etisalat (now 9mobile).

“There are clouds surrounding this process and there has been too many back and forth over the sale process which will affect investor confidence,” a source told BusinessDay. “Teleology might be talking to financial lenders and private equity firms to raise the necessary funds, but they will find it very difficult to get such amount of money. Especially because different issues keep arising and the company is losing subscribers and operating at a loss.”

This is regardless of the fact that

Teleology only needs to raise $251 million, the balance of its $301 million financial bid.

This was revealed during the House of Representatives’ investigative hearing on the collapse of Etisalat (now 9mobile) in Abuja last week, refuting initial reports that suggested that the company had to balance the sum of $450 million.

During the hearing, the Nigerian Communications Commission (NCC), through its Deputy Director, Legal and Regulatory services confirmed that Teleology submitted a financial bid of $301 million cash.

Teleology, the preferred bidder and Smile Communications, the reserve bidder submitted financial bids, as well as bids for technical and infrastructure investments to sustain 9mobile which was said to have brought the total value of Teleology’s bid to $500 million and Smile Communication’s bid to $300million.

“Smile’s financial bid was about $150 million while Teleology’s was $301 million for actual cash.

Other investments apart from the financial bid will be made to keep

the telco running successfully when it is finally acquired by the preferred bidder. Considering that Teleology’s outstanding payment for its financial bid is $251 million, having already paid the $50 million deposit, it is possible that they are able to raise the funds on or before the stipulated deadline,” Olusola Teniola, President, Association of Telecommunications Companies of Nigeria told BusinessDay in a telephone interview.

Teniola however, acknowledged that Teleology is most likely struggling to raise the funds as “the risk profile of companies in Sub Saharan Africa is much higher than any other environment.”

On the issues raised by the Nigerian Senate, Chairman of the NCC and the multiple court orders which have in some way disrupted the sale, Teniola said that “stakeholders hope that the sale will be concluded in the interest of Nigeria’s telecommunications industry and for the greater good of the economy.”

Although Teleology, headed by Adrian Wood, former CEO of MTN Nigeria had initially mentioned African Export -Import Bank (Afrimex) as its financial support for

Thursday 10 May 2018

Dangote among 75 world’s Most Powerful...

Continued from page 1

the planet, ahead of the Vice President of the United States of America, Mike Pence.

According to the Forbes latest 2018 ranking of the World Powerful people, Dangote ranked among world leaders like Xi Jinping, the Chinese President, Vladimir Putin the Russian President and Donald Trump, the President of the US, all of whom were ranked first, second and third respectively.

Dangote was ranked 66th most powerful person in the world ahead of Mike Pence, the VicePresident of United States ranked 67 and Qamar Javed Bajwa, the highly influential Chief of Army Staff of Pakistan ranked 68.

The Africa’s richest man is the only Nigerian on the list and one of the only two Africans who made the list with the other being the Egyptian President, Abdel Fattah el-Sisi, who was ranked 45th most powerfulDangote, it would be recalled was the only black man who made the list apart from President of the United States, Barack Obama, in the 2016 ranking released in 2017 and was listed at number 71 just above the then American presidential contender, Donald Trump, who was listed at number 72.

Dangote is the Chairman of the Dangote Cement which produces 44 million metric tons annually across the African continent and still plans to expand and increase its output by 33 per cent by 2020.

According to the Forbes’s rich list, Dangote as at March 2018 had an estimated net worth of $14.1 billion and ranked among the 100 richest in the world and the richest in Africa, a position he has held for almost a decade.

Dangote reached the peak in 2014 when he came 23rd richest in the world and in 2013 surpassed the Saudi-Ethiopian billionaire Mohammed Hussein Al Amoudi by over $2.6 billion to become the world richest person of African descent.

It will be recalled that the Presithe bidding process and said it was also talking to UBS, a global firm that provides financial services, equities and equity linked products, Wood was unable to answer questions on how successful Teleology has been in trying to raise the funds so far, as his mobile phone was switched off and text messages sent by BusinessDay where not responded to.

BusinessDay was also not able to get a response from Micheal Ipoki, Wood’s partner in Teleology who is also a former CEO of MTN Nigeria, who was contacted via email and text message.

In an exclusive interview with BusinessDay, Ernest Akinola, CEO of Ntel (that previously expressed interest in acquiring 9 mobile) confirmed that 9mobile was recording losses in revenue and subscribers as a result of the uncertainty around its sale.

“At the time that we went in to pitch for 9mobile because we were also interested in buying the company, the figures in their data room show that the company had only 13 million subscribers in December 2017 due to the crisis. This is a big drop from the about 21 million subscribers that the telco recorded in past years,” Akinola said.

dent of the Dangote Group of companies has often made such lists due to his business concerns and humanitarian efforts in Nigeria and other parts of the world especially his efforts through the Aliko Dangote Foundation to rid Nigeria and Africa of polio, malaria and mal-nutrition.

His efforts in this regard was recognized by the United Nations which appointed him, Malaria Ambassador.

Dangote stepped up his humanitarian activities recently spending billions of Naira to build hospitals and critical hospital equipment, the lack of which has forced Nigerians of means to seek medical attention abroad.

He also made a donation of a N1.2billion Business School complex to Bayero University in Kano and is presently constructing a similar one for the University of Ibadan Business School.

The business mogul has continued through the Foundation by disbursing N10 billion to vulnerable women across the 774 local governments in the country.

Dangote made a donation of $2 million to the World Food Programme as part of efforts to help Pakistani nationals devastated by floods in the year 2010.

Aliko Dangote was made the chairperson of the Presidential Committee on Flood Relief which raised in excess of N11.35 billion, of which Dangote himself contributed N2.5 billion, an amount higher than the entire contribution from the 36 state governors in Nigeria.

Within the top ten most powerful people in the world as listed

by Forbes are Angela Markel, the German Chancellor ranked 4th, Jeff Bezos, the Founder of Amazon.com 5th, the Catholic pontiff, Pope Francis ranked 6th, Bill Gates comes 7th, Mohammed bin Salman Al Saud, the Saudi Prince, 8th, Narendra Modi, the Indian Prime Minister 9th and Larry Page , the Chief Executive of Google came in as the 10th most powerful person in the world.

Teleology was given 90 days from March 22, 2018 when it paid the $50 million non-refundable deposit to balance up its financial bid payment.

Spectrum Wireless, spearheading other non bank investors in EMTS also known as Etisalat, now 9mobile, with about 17.5 percent stake in the company, had taken United Capital Trustees Limited, representatives of the bank debtors to court, challenging the earlier granted ex-parte order, which led to the nullification of the Interim Board set up for 9mobile.

A letter signed by Olabiyi Durojaiye, chairman of the NCC board to Central Bank of Nigeria (CBN), which listed “technical expertise” and “at least 3 years operational history” as new criteria for ownership, also sent indications that the telecoms regulator was not comfortable with Teleology acquiring 9mobile, as a result of lack of technical expertise.

Saheed Akinade-Fijabi, chairman, House committee on Telecommunications, also threatened that the House of Representatives may be forced to stop the ongoing sale of 9mobile to Teleology Holdings.

Thursday 10 May 2018

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FG identifies 60% challenges stalling Lagos-Ibadan rail project … as track laying begins at Papalanto MIKE OCHONMA

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inisteroftransportation, Rotimi Amaechi, accompanied

by Lai Mohammed, the minister of information, said the Federal Government had identified about 60 percent of some of the bottlenecks hampering the ongoing Lagos-Ibadan standard gauge rail project.

Making this disclosure at the end of the monthly inspection tour of the standard gauge rail projectonTuesday,Amaechisaid in the quest to have the knowledge and experience of the infrastructural development going on under the President Muhammadu Buhari administration, the Federal Government started with the rail project because of the capacity rail had to transform the economy.

While admitting that there are hitches along the rail corridor, Amaechi said the government and contractors had found solutions to some of them, up to 60 percent.

As of the time of filing this report, Chinese Civil Engineering and Construction Company (CCECC), contractor handling the project, has started the laying of tracks from Papalanto, Ogun State. Its target is to lay 1.2 kilometres of tracks daily with a

project completion time line fixed for January 2019.

According to Amaechi, 60 percentofthesolutionshavebeen found and CCECC has agreed to implementthoseissues.“Thenext one, which is a natural hitch, is the rain. We say that tracks laying is whatcanbedoneduringtherainy season while the remaining civil work can resume from August, after the rainy season,” he said.

On his part, Lai Mohammed pointed out that the idea behind the project was to showcase to Nigerians the amount of work this government had been able to do in the last three years.

According to Mohammed, the idea is to let Nigerians know that the administration has done a lot in the area of infrastructure development. “In particular, people complain that they do not know we have done so much. So, we want to show people what we have achieved.

“Coming back to today’s meeting,Ithinkonethingwehave achieved in the last two hours we started is that the December day for the Lagos - Ibadan modern gauge is not negotiable, and I am happytosaythatbothconsultants, contractors and everybody involved have seen why it is importanttomeetthisdeadline.Though there are challenges, but they are not insurmountable,” he said.

Nigeria, France’s cultural ties to expand economic relations ENDURANCE OKAFOR

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igeria Embassy in France, through the launch of the Nigerian Creative Arts Exchange, will attract investors and French business community into Nigeria.

This will be done through showcasing of Nigerian culture and art, cuisine, fashion, music, film and traditional games, as a way of selling the country to potential investors and stakeholders.

The exhibition is a platform that demonstrates Nigeria’s interest in expanding economic and cultural bilateral relations with France, by developing channels for commerce between both countries.

“Through the Nigerian Creative Arts Exchange we are thus creating a forum where participants can make enquiries, network and build useful links, in a relaxed setting.

“We invite participants to both experience the elements of Nigerian culture that will be on display, and to use the occasion to initiate conversations with representatives from the different industries, which will range from fashion to pharmaceuticals, agriculture to real estate, finance to tourism, amongst others. These together represent a wide array of trade opportunities,” Modupe Irele, Nigerian ambassador to France, said.

The Creative Arts Exchange reinforces the similar commitment expressed last year when

the French Prime Minister received the Nigerian Vice President Yemi Osinbajo in Paris, and previously, when former President Francois Hollande attended Nigeria’s centennial celebrations in Abuja.

This sentiment is underscored by the fact that in only his first year in office, President Emmanuel Macron of France will be visiting Nigeria to further strengthen bilateral relations through trade and culture.

Indeed, Nigeria is France’s largest trading partner in Africa, with diversified exports spanning petroleum, pharmaceuticals, electronics and Agro-allied products.

The Nigerian Creative Arts Exchange exhibition scheduled to take place at Le Pavilion Dauphine, Paris, Saint Clair on May 19, will feature Bisi Silva (world acclaimed visual arts curator); Ituen Bassey (Fashion); Orange Culture (Fashion); Andrea Iyamah (Fashion); Lanre Da Silva (Fashion); Chef Tiyan and Chef Fregz (Cuisine); Kemi Lala Akindoju (Nollywood), and Adekunle Gold (singer-songwriter).

The exhibition is proudly supported by Bank of Industry, Emzor Pharmaceutical, UBA, Total, Lagos State Government, CIUC Consulting, Institut Francais, NEPC, CCI France Nigeria, SJ Tours, Aart of Life Foundation, French Ministry of Foreign Affairs. Media Partners include Ebonylife TV, Bella Naija, Pulse NG, Channels TV, Wish Africa and Red TV.

5 NEWS

BUSINESS DAY

Binatone marks 60th anniversary with special promo

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s part of its 60th anniversary celebration, Binatone International is offering its customers all over the world a 10 percent discount on all its products.

Prasun Banerjee, managing director of Global Appliances (Nigeria) Limited, the sole distributor of Binatone in Nigeria, says in a press release that the special promotion is meant to say “Thank you” to it teeming customers.

According to Banerjee, “A generous 10% discount on almost the entire range of Binatone products will be made available to everyone via leading retailers such as Game, Shoprite, Spar, Cash & Carry and others. The promotion will run for the full month of May across the entire country, ensuring that everyone has a chance to participate.”

He says Binatone is offering this range of promotional offers all over the world, stressing that Nigeria and its people have faced challenging economic times in the recent past and the company is dedicating its anniversary offer to reduce the effects on its customers.

Founded in the UK in

1958, Banerjee says Binatone has been consistently delighting its numerous customers with high quality, innovative products at affordable prices in the last 60 years.

“And what’s more, there is no compromise with this offer. Every product purchased under the Binatone Anniversary promotion will carry the standard Binatone two-year warranty, meaning that there has never been a better opportunity for consumers to enjoy ownership of Nigeria’s most loved domestic appliance brand than now,” he says.

Speaking further on its two-year warranty policy, he points out that most importers offer a maximum of only six months warranty on their products, whereas Binatone is the only company that offers a two-years warranty, backed up by a network of service centres, as standard across its entire range of products.

“When people buy a Binatone they consider it an investment, knowing it will give them many years of reliable service. After all, our overriding mission is customer satisfaction,” he says.

6 BUSINESS DAY NEWS FEC directs Education Ministry to enforce ban on school fees in universities TONY AILEMEN, ABUJA

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ederal Executive Council (FEC) has directed all heads of Federal Universities to enforce ban on collection of school fees, saying that the law banning payment of fees was still in force.

Minister of state for education, Anthony Anwuka, disclosed this Wednesday while briefing State House correspondents after the weekly FEC meeting presided over by Vice President Yemi Osinbajo This is as FEC also approved the issuance of provisional licence for the establishment of Skyline University in Kano State.

Anwuka disclosed that the application for the establishment of the university had been on since last year, adding, “The National Universities Commission (NUC), after going through the rigorous verification of the claims as to the application, sent a recommendation to the Ministry of Education, which in turn presented in the request to FEC and it approved.

“They wanted the NUC through the ministry to provide a status report to FEC on all the nation’s universities in terms of their performance, be they private, state or federal.

We stressed on quality of staff on the various universities.”

According to Anwuka, “ FEC also discussed the issue of school fees in the various universities and noted that as of law, no federal university should charge tuition fees.

And, we understand some universities now charge fees per course unit and we are going to make sure that we investigate that properly and stop it.’

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Ebola outbreak to take $1m from WHO’s emergency fund … as 17 deaths confirmed in DRC ANTHONIA OBOKOH

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he new Ebola outbreak in the Democratic Republic of Congo is to take $1 million from the World Health Organisation (WHO) emergency fund in order to curtail and prevent it from spreading to other countries.

Two confirmed cases of the virus and 17 deaths have been reported in the northwest of the Democratic Republic of Congo (DRC), the health ministry said on Tuesday.

The last Ebola outbreak in the DRC was in 2017, and killed four people.

The WHO says it has released an emergency fund of $1 million from its contingency fund to support the response activities for the next three months, and has deployed more than 50

experts to work with the goal of stopping the spread to surrounding provinces and countries.

The outbreak declaration was made after laboratory results confirmed two cases of Ebola out of a sample of five suspected patients, the WHO says.

“Our top priority is to get to Bikoro to work alongside the government to reduce the loss of life and suffering related to this new Ebola virus disease outbreak,” Peter Salama, WHO deputy director-general, Emergency Preparedness and Response, said.

“Working with partners and responding early and in a co-ordinated way will be vital to containing this deadly disease,” he said.

The latest outbreak is the ninth time an Ebola outbreak has been recorded in the DRC, since the discovery

of the virus in the country in 1976.

More than 11,000 dead have been recorded across six countries in West Africa including Nigeria, Liberia and Sierra Leone.

“We know that addressing this outbreak will require a comprehensive and coordinated response,” Matshidiso Moeti, WHO regional director for Africa, said.

“We will gather more samples, conduct contact tracing, engage the communities with messages on prevention and control, and put in place methods for improving data collection and sharing,” Moeti said.

The Ebola virus causes an acute, serious illness that is often fatal if untreated; the virus is transmitted to people from wild animals and spreads in the human population through human-tohuman transmission.

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… says agency to work with CITN to get more people into tax net HARRISON EDEH, Abuja

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ederal Inland Revenue Service (FIRS) has decried tax filling by ‘businessmen’ taxconsultants,sayinghenceforth non-professionals should not be allowed to embark on professional duties such as filling in of tax returns, among others.

Babatunde Fowler, executive chairman, FIRS, while speaking at the ongoing Chartered Institute of Taxation of Nigeria (CITN) annual conference, as he delivered a paper titled: “Institutionalising a Tax Paying Culture in a Developing Economy,” said effective January 2019, the FIRS will not accept any tax returns prepared by non-member of CITN. This, he said, would ensure FIRS deepen its operations with the professional body and reach its target of improving tax-toGDP ratio that would ensure government got more fund for its developmental projects.

“We must be engaging professionals and members of CITN to improve our revenue targets and give a professional outlook to what we have been doing to improve taxation in Nigeria. We are currently leveraging on technology to ensure proper tracking and expanding of our tax returns,” Fowler said.

Fowler also informed that the agency had been leveraging technology to facilitate easy filling of returns in its operations, saying,

HOPE MOSES-ASHIKE

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Over 4m people to benefit from ExxonMobil N13bn investment in community projects ver 4 million citizens of Akwa ibom State will be beneficiaries of N13 billion investment geared towards uplifting the lives of the people through human capital development, education, skill acquisitions and three health centres within the next 18 month.

Three majors project that will help to achieve these objectives will include a technical skills centre in Ikot Akata, a trauma centre at the University of Uyo Teaching Hospital, and an engineering complex at the University of Uyo. E x xonMobil affiliate, Mobil Producing Nigeria Unlimited, operator of the Nigerian National Petroleum Corporation/Mobil Producing Nigeria Joint Venture, is to invest this amount in one of the largest community

FIRS decries non-professional handling tax filing “On e-services, we have perfected the ability to upload returns and assessment notices together with assessment calculations to the tune of 97 percent completed nationwide.”

This,accordingtoFowler,consisted of, “e-registration, e-filling, e-taxation, e-stamp duty, e-WHT credit notes, e-reciepts, e-TCC,” Hesaidfurtherinhispresentation that, “The extent to which an economy is able to grow sustainably depends largely on its ability to generate tax revenue to finance it’s expenditure and the efficiency of its tax system.”

It would be noted that ACCA global suggests that the IMF recommended minimum threshold of Tax-to-GDP ratio of 15 percent.

As confirmed by the Ministry of Finance, Nigeria falls far below this threshold and is low compared with other countries.

As a result of this development, he said the Federal Government was doing everything possible to improve its projects and development through improved taxation.

“A look at the World’s most development economies and societies dhows that there is clearly a relationship between tax and development as these are countries with established tax system where public infrastructure, institutions and systems can be sustainably developed and maintained from tax revenue,” he said.

Naira weakens to N361.14k after 5 months

L-R: Abiola Ajimobi, governor, Oyo State, with Tomiwa Idowu, director, Gilead Capital, during an agricultural trade mission to the UK recently.

OLUSOLA BELLO

Thursday 10 May 2018

investments by any company in Nigeria.

“These investments will provide long-term health, education and economic benefits to many in our communities,” Paul McGrath, chairman and managing director of Mobil Producing Nigeria, said, saying, “We continue to work closely with the government of the AkwaI bom State as part of our commitment to communities where we operate and helping to improve quality of life.”

The technical skills centre will consist of a threeblock training complex for critical skills required in oil and gas careers, such as pipeline fabrication, welding, electrical works, chemical lab works, civil works and engineering design.

The centre is expected to train more than one hundred students annually.

Again, Reps ask FG to halt planned sale of NLNG KEHINDE AKINTOLA, Abuja

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ouse of Representatives on Wednesday urged President Muhammadu Buhari to halt the proposed sale of Nigeria Liquefied Natural Gas (NLNG).

The resolution was passed sequel to the adoption of a motion sponsored by Brown Randolph, who expressed concern that the planned sale of the asset for an ambitious fiscal stimulus plan involving the generation and injection of massive foreign capital is not a step in the right direction.

Randolph noted that the sale of NLNG would affect Nigerian workers and the country at large.

“The House notes of a proposal by the Federal Government to sell the multi-billion dollar Nigerian Liquefied Natural Gas Limited (NLNG) to raise funds to reflate the Nigerian economy.

“The House further notes

that the proposal was as a result of the recommendation of a Ministerial Retreat in 2016 for an ambitious fiscal stimulus plan involving the generation and injection of massive foreign capital, estimated at between $10 and $15 billion (about N4.72trn) into the economy to help the recession recovery process.

“The House is aware that the Minister of Budget and National Planning, Udoma Udo Udoma, stated that one of the ways to fund the plan would be through the sale of some national assets and the proceeds reinvested in the economy to raise the needed capital for infrastructural development.

“The House is also aware that the NLNG is one of the most successful ventures that Nigeria has embarked upon when it’s started from train one through to the sixth train and now the seventh train in the offing,” the River State lawmaker noted.

oreign exchange market on Wednesday witnessed 0.14 percent depreciation in naira/dollar exchange to N361.14k, after five months of trading around N360 per dollar.

Naira was quoted at N361.14k to the dollar on Wednesday, showing exactly the same rate traded on January 8, 2018, at the investors and exporters forex window, data from the FMDQ and compiled by BusinessDay revealed.

At the Nigerian Autonomous Foreign Exchange Fixing (NAFEX), naira weakened marginally by 0.03 percent to close at N360.87k on Wednesday from N360.77k on Tuesday.

The local currency also lost N1 at the Bureau De Change (BDC) segment as it closed at N363 per dollar on Wednesday as against N362/$ traded the previous day, data from Naijabdc showed. Naira traded at the same level of N305.75k at the Central Bank’s official window.

The Central Bank of Nigeria (CBN) continues its interventions, injected $210 million on Tuesday to enhance liquidity in the forex market.

The bank again offered

the sum of $100 million to authorised dealers in the wholesale segment of the market. The Small and Medium Scale Enterprises (SMEs) segment received the sum of $55 million while the sum of $55 million was apportioned to invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA).

The CBN’s first half 2017 economic report revealed that Aggregate foreign exchange inflow into the economy in the first half of 2017 was $34.82 billion, indicating an increase of 3.7 and 20 percent above the levels in the second and first halves of 2016, respectively.

O f t h e t o t a l , i n f l ow through autonomous sources at $18.95 billion accounted for 54.4 percent, while inflow through the CBN was $15.87 billion and accounted for 45.6 percent.

Aggregate foreign exchange outflow from the economy rose by 1.5 and 16.7 percent to $13.88 billion above the levels in the second and first halves of 2016, respectively. Consequently, the net foreign exchange flow to the economy was $20.94 billion, as against $19.90 billion and $17.12 billion, in the second and first halves of 2016, respectively.

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NEWS Oil/gas industry to enjoy ease of doing business ‌ as NCDMB, OPTS sign agreement to shorten oil contracting cycle OLUSOLA BELLO

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takeholders in the oil and gas industry may soon begin to enjoy the ease of doing business as the problems associated with contracting circle in the industry, which has been responsible for projects delay and in some cases heighten the cost of projects, is to be reduced to the barest minimum.

Contracting circle for projects in the industry has been between 24 to 36 months, meaning that an average project from conception to the time of execution could be between 24 and 36 months.

This situation has discouraged investments in the industry, because inflation sets in and thereby increasing the cost of the project. Nigeria has the longest contracting circle among it peers in crude oil production in West Africa, and perhaps in the world.

This follows the signing of a Service Level Agreement (SLA) aimed at shortening the often protracted industry contracting cycle between the Nigerian Content Development and Monitoring Board (NCDMB) and the Oil Producers Trade Section (OPTS), the umbrella body of major international

and indigenous operating oil companies on Wednesday in Lagos. The signed SLA aimed at shortening the often protracted industry contracting cycle.

The SLA with the OPTS is sequel to the one entered between the Board and the Nigerian Liquefied Natural Gas Company (NLNG) in May 2017, which was the first between a regulator and another entity in the Nigerian oil and gas industry.

The agreement commits the 28-member OPTS companies to comply with the provisions of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, essentially to submit to the NCDMB documents like their Quarterly Job Forecasts, Nigerian Content Plans, Bidders Lists, Nigerian Content Evaluation Criteria, Nigerian Content Technical Bids, among other relevant information in relation to industry contracting and procurement cycles.

On the other hand, the Board pledged to respond on specific timelines and committed that should it fail to meet the set deadlines, the companies can proceed with their tendering processes after duly informing the Board.

Simbi Wabote, executive secretary NCDMB, signed on behalf of the Board, while the

Paul McGrath, managing director of ExxonMobil Nigeria, signed on behalf of the OPTS. The Massimo Insulla, managing director of the Nigerian Agip Oil Company (NAOC), Jeff Ewing, managing director of Chevron, and Nicolas Terraz, managing director of Total Exploration and Production Nigeria, witnessed the event.

Speaking at the event, the executive secretary explained that the SLA with the OPTS was in furtherance of the Board’s efforts to meet the target set by the minister of state for petroleum resources, Emmanuel Ibe Kachikwu, for the industry contracting cycle to be shortened to six months. Through the efforts of the NCDMB, the cycle had been cut significantly to 14 months from 24-36 months.

Wabote stressed that operations of the oil and gas industry were time sensitive adding that a shortened contracting cycle would cut the cost of projects considerably.

He noted that the SLA signed with the NLNG had improved the turn-around time of approvals between the two establishments, informing that the Board was working to sign a similar agreement with the Indigenous Petroleum Producers Group (IPPG).

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Benin Industrial Park: Edo meets host communities over EIA, resettlement plan

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s more investors indicate interest in the Benin Industrial Park project, the Edo State government has initiated a talk with stakeholders in the communities hosting the project, to remove any community-related encumbrances and set the stage for a hitch-free development of the park.

Secretary to the Edo State government, Osarodion Ogie, said the state government would on Thursday, meet traditional rulers, elders and youths of communities hostingtheindustrialparkatatown hall meeting.

“The Town Hall Meeting will discuss the Environmental and social impact assessment exercise andResettlementActionPlanwith respecttotheBeninIndustrialPark project,” Ogie said.

Heexplainedthatthe“meeting willholdatthepalaceoftheEnogie of Oghobaghase Dukedom in Obaretin Community, on BeninSapele Road.”

OgiesaidthechairmanofIkpoba Okha Local Government Area, theEnogieofOghobaghaseDukedom,Edionwere,elders,members ofAgbomoba,EkosaandIyanomo communities are to attend the

meetingandurgedotherinterested partiestoattendandparticipate,as relevantinformationwillbeshared at the meeting venue.

The federal government through the Nigerian ExportImport (NEXIM) Bank joined the growing number of private investors, to express its readiness to support the park’s development and build local capacity to meet export standards, with three fundingwindowsrunningintoN553bn.

Accordingtothemanagement of NEXIM, the funding opportunities are a N500 billion Export Stimulation Fund managed by the bank in partnership with the Central Bank of Nigeria (CBN) and a N50 billion State’s Export Development Fund, which the state government can access to encourage entrepreneurs to improve the quality of goods to meet international standard.

“There is also a N3 billion Export Development Fund available for capacity development for entrepreneurs in the non-oil sector,” executive director, Business Development, Stella Okotete, said during a courtesy visit to the governor in Benin City, the state capital, recently.

FG commits to improve policy implementation to drive off-grid power investment KELECHI EWUZIE

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inister of state for industry, trade and investment, Aisha Abubakar, says the Federal Government remains committed to diversifying the economy through effective implementation of policies and programmes that will create favourable climate for both local and foreign investors.

According to Abubakar, government believes that supporting small businesses through promoting green Micro Small Medium Enterprises initiatives is essential for increasing productivity, job creation and boosting Nigeria’s economy by mitigating the effect of climate change and epileptic power supply in the country.

The minister made this disclosure in Lagos, Tuesday, at the official inauguration of the national power programme for MSMEs and the formal unveiling of Tellco

Europe SolarLed solutions.

Abubakar, who was represented by Francis Alaneme from the ministry, observed that the capacity of MSMEs in Nigeria to perform the critical role as the engine of growth, industrialisation, and wealth generation and empowerment creation was hampered by numerous challenges.

These challenges can be access to finance, access to modern technology, government policy inconsistency, unfair competition from imported goods, multiple taxes and levies, skill gap due to unskilled labour, among others.

Speaking on the action plan of the government to address these issues, the minister said the Federal Government Economic Recovery and Growth Plan (ERGP) in the area of agriculture, energy, industrialisation and social investment was an ambitious plan that sought to achieve a 7 percent economic growth rate by the year 2020.

I did not walk out of South-West leaders’ meeting – Fayemi

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inister of mines and steel development and governorship aspirant of the All Progressives Congress (APC), Kayode Fayemi, has denied media reports that he stormed out of a meeting of the party’s South West leaders with Ekiti State governorship aspirants in Abuja on Tuesday.

The minister said in a statement in Abuja on Wednesday that contrary to misleading media reports and social media posts purporting that he walked out of the meeting, he only left the venue, like other attendees, at the end of the meeting.

The minister, in the statement signed by his special

adviser on media, Yinka Oyebode, said there was no basis for him to storm out of the meeting called by the leaders to proffer way forward for the party, in the face of the rescheduled Ekiti governorship primary.

The minister, however, said he could not make the second part of the meeting when it reconvened later in the evening, having earlier taken permission from the leaders to attend another meeting.

“It is thus worrisome and highly embarrassing reading reports of purported ‘walk out’ on our leaders when nothing like that actually took place.

Maiden African LG summit targets strengthening grassroots leadership HOPE MOSES-ASHIKE

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he first ever African Local Government Economic Development summit is targeting to meet the needs of the public service and governance, as well as strengthening grassroots leadership.

Organisers of the summit scheduled to hold in June 26-28 in South Africa said the three-day event would see local government councils across gather to network and strategise on development of councils in Africa.

The local council in Africa is a formofpublicadministrationatthe lowest tier of administration with a state or region, acting within powersdelegatedtothembylegislation or directives of the higher level of government.

According to Visioner of the summit, Chris Sanni, the summit aims at meeting needs of the public service and governance as well as strengthening grassroots leadership, as “we need to foster human capacity development at the grassroots.

“If Africans are to make Africa rise again, the impact of the local government is of utmost importance as regional economic development partnerships will work to attract and retain opportunities for economy fortification and improved quality of life.”

Most states can’t pay salaries without FAAC - Osinbajo

… says FG, states must get more Nigerians into tax net HARRISON EDEH, Abuja

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ice President Yemi Osinbajo on Wednesday said without the monthly allocation from the Federation Accounts Allocation Committee (FAAC), it would be difficult for most states of the federation to survive.

Osinbajo said this while declaring open the 20th annual tax conference of the Chartered Institute of Taxation of Nigeria.

The conference, which is the single largest gathering of tax practitioners in the country, has as its theme, “Institutionalising tax paying culture in a developing economy.”

Babatunde Fowler, executive chairman, Federal Inland Revenue Service (FIRS), the President of the CITN, Cyril Ikemefuna, and other top government officials, attended the event.

Osinbajo said prior to the discovery of oil, many regions in the country generated adequate revenue through taxes from agricultural produce to the extent that they still contributed money to run the central government.

The Vice President lamented the low tax paying culture of Nigerians, adding that at 6 percent, Nigeria had one of the lowest tax to Gross Domestic Product ratio in the world.

He said as of May 2017, only 14 million out of the country’s 70 million Nigerians economically active paid taxes to the government.

He said through deliberate strategies to ensure voluntary tax compliance, the FIRS had been able to increase the number of tax payers from 14 million in May last year to 19 million.

Out of the total taxpayers in the country, only 943 of them paid self-assessment taxes of N10 million and above, he said.

Giving further breakdown of the 943 taxpayers who paid N10 million and above, the Vice President said 941 of them reside in Lagos while the remaining two were residents of Ogun State.

He said, “Today, the states in the whole Western region apart from Lagos do not even earn enough in taxes to pay salaries let alone do any major project.

“Without federal allocation, most states cannot survive. Lagos state alone takes as much IGR as 31 states combined. This tells you how little the other states generate in IGR.” He said when people pay their taxes, they tend to hold government more accountable on how the country’s resources were being managed.

He said the reason why mismanagement of funds thrived in the past was because oil monies were readily available

thus reducing the necessity for people to pay taxes.

He said the current administration has put in place measures to check the mismanagement of government resources.

For instance, he said through the implementation of Treasury Single Account, about N4 billion monthly bank charges were being saved by the government.

In addition, he said the audit of government payroll through the Presidential Initiative on Continuous Audit had saved the government over N200 billion personal costs.

This N200 billion, according him, will have been paid to ghost workers if government had not cleaned its payroll.

“When people pay taxes, they are more inclined to hold government accountable and they tend to be less passive in governance,” he said.

In his speech, the CITN president said the conference was vital in view of the efforts of government to shore up tax revenue.

He said during the conference, tax practitioners would review the implementation of the Economic Recovery and Growth Plan, the Voluntary Assets and Income Declaration Scheme, transfer pricing, arbitrary tax incentives as a disincentive in a tax system, among others.

L-R: Karl Meekings, lead analyst, global banking/capital markets (EY); Urum .K. Eke, group managing director, FBN Holdings plc; Henry Egbiki, EY Nigeria country leader, and Adam Nuru, managing director, FCMB, at EY global banking outlook breakfast session in Lagos, yesterday.

Lagos rice mill to create 200,000 jobs … freight haulage to increase from 50 tons to 500,000 tons JOSHUA BASSEY

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n addition to significantly stabilising rice availability at affordable prices, the Imota Rice Processing Plant being completed in Ikorodu, Lagos will be expected to create over 200,000 direct and indirect jobs upon commencement of operation in 2019.

The rice mill, which will be one of the largest in sub-Saharan Africa, would be receiving paddy supply from different sources such as from Kebbi State, with which Lagos State government signed a memorandum of understanding in 2016 to strengthen the agro value chain.

The state government had

also acquired expanse of lands in Ogun, Osun and Abuja to encourage rice farming as part of strategic plan to keep the 32 tons p/h rice processing plant running 24/7.

Lagos is looking to partnering rice farmers within and outside the state to cultivate about 32,000 hectares of rice farms - an equivalent of about 130 million kilogram of processed rice or 2.6 million 50kg bags of rice per year.

Governor Akinwunmi Ambode during an inspection of the rice mill, Wednesday, was optimistic it would be ready January 2019, and begin production in February same year.

Represented by Adebowale Akinsanya, his commissioner

for works and infrastructure, Ambode said the project was part of the grand policy by his administration to ensure food security, and back the economic integration of the Southwest region as the land to be cultivated and rice paddy for the mill would be supplied largely by farmers from the region.

“The key take away from here is that the construction of the rice mill and the industrial park among other complementing facilities are going on as planned.

“The mill is part of the food security strategy of this administration as well as Southwest integration efforts. Already, we have commitment from the contractors working on the

project that it would be delivered by January 2019 and the rice mill that would be the food engine of the Southwest will be in production by February,” he said.

At the Imota Regional Food Stuff Market where the present Mile 12 Market and other markets within the axis would be relocated, the governor said the first phase of the project which would accommodate about 1500 shops was already at 75 per cent completion stage, while the second phase, among other facilities such as concretised roads, fire stations, drainages, sewage system, power stations, sewage treatment, 1000 capacity car park, over 100 capacity trailer park among other facilities.

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comment is free COMMENT Why don’t Nigerians pay tax?

Send 800word comments to comment@businessdayonline.com

MICHAEL FAMOROTI Famoroti is Chief Economist at Vetiva Capital Management. He can be reached on m.famoroti@vetiva.com.

“Taxes are what we pay for a civilized society.” – Oliver Wendell HolmesJr. n 2017, The Economist magazine reported that Swedes were deliberately overpaying on their taxes, by $4 billion in 2016, to be precise. Initially deemed further indication of the ultra-collectivist yet liberal nature of Sweden, closer investigation uncovered the truth: a combination of negative interest rates on bank deposits and positive interest rates (0.56%) on tax refunds made it more profitable to overpay in taxes and hope to get a refund (Sweden has now scrapped the interest rate). But you can understand why people were quick to conclude that Swedes were paying too much tax.

The entire Nordic region is a global star in tax collection. Estimates from the Organisation for Economic Co-operation and Development peg Sweden’s tax-to-GDP ratio at 44%, Denmark’s at 46%, and Finland’s at 44%. In 2000, Sweden’s tax-to-GDP ratio was nearly 50%!

This is a dream scenario for Nigeria, a country where taxes amount to less than 7% of GDP. Even after considering differences in the history, governance, and wealth of the two nations, what drives the differences in tax attitudes in Sweden

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OLUWASEUN FAKUADE AND OLADIPO ADEJUMO • Oluwaseun Fakuade is a public policy professional who is interested in the people-oriented development and prosperity of Ekiti state.

• Oladipo Adejumo is a Public Relations professional with a bias for public affairs.

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ll was going smoothly during the APC gubernatorial primary elections in Ado-Ekiti until thugs disrupted the otherwise peaceful process. Watching live television coverage by TVC and the reactions by sponsored individuals present at the election venue showed an organized agenda (given the vituperations) against Dr. Kayode Fayemi, known to his fans as JKF. Any independent observer will see a baffling but conclusively premeditated bias to discredit JKF. We must therefore ask; who is behind the organized attempt to malign Dr. Fayemi? Who is afraid of JKF? Why would these political miscreants disrupt orderly proceedings? We have to look at four broad categories; the populace, the party hierarchy, the delegates, and the opponents. i. The populace: As a veteran of the pro-democracy movement that birthed the fourth republic, JKF has consistently shown that the safe and secure future of Nigeria and Nigerians is uppermost on his mind. No one can deny his track record of commitment

and Nigeria? Or to put it simply, if Swedes are overpaying, why don’t Nigerians pay tax?

Economists have been studying tax for centuries and although optimal tax theory guides governments on how to structure their tax systems, the discipline has made little headway on how to get people to pay taxes. Nevertheless, we have theories that can give us insights and prescriptions, and understanding which of these apply to Nigeria would tell us why Nigerians don’t pay tax, and, crucially, how to address that.

We get the economic foundation for tax enforcement from the Allingham-Sandmo (AS) model which posits that people evade taxes because the expected benefit of doing so is greater than the expected cost. In the simplest version of the model, the taxpayer weighs up the added benefit of keeping his income if he fails to fully declare it (and isn’t caught) against the penalty he would pay (if caught). The model tells us what we are now familiar with; increasing the likelihood of the evader being caught (through better enforcement) disincentivizes evasion, and so would increasing the penalty of evasion. But it also reveals more subtle insights for Nigeria. As punishment is a function of the likelihood of being caught and the penalty, there is no point having high penalties if enforcement is weak. Moreover, most versions of the AS-model suggest that evasion levels are independent of a country’s tax rates but empirical evidence suggests that higher tax rates lead to more evasion. The lesson for Nigeria?

Strengthen enforcement, set large

In the simplest version of the model, the taxpayer weighs up the added benefit of keeping his income if he fails to fully declare it (and isn’t caught) against the penalty he would pay (if caught) fines, and leave the tax rate as it is.

The AS-model gives us a basic framework for analyzing a Nigerian’s decision to pay tax, but game theory helps us analyze the decision in a more realistic strategic context between the taxpayer and tax-collector.

Within this framework, a Nigerian’s decision to pay or evade is a direct function of what the tax-collector does; if the tax-collector enforces (e.g. audits) then the best option is to pay, but if they don’t enforce, the best option is to evade. This set-up is particularly applicable to the Voluntary Assets & Income Declaration Scheme (VAIDS) which aims to entice previous evaders into the tax net by waiving the penalties they would have paid if they were caught. So, as a tax evader, should I come under VAIDS? Well, that depends on my beliefs about the government’s willingness and ability to catch and punish me if I evade. If I think it is going to be business-asusual in tax collection post-VAIDS, then I stick to my tried and trusted formula of evading taxes. Realizing this, the government has tried to signal its intention to enforce postVAIDS by touting the expertise of its

international forensic experts and warning citizens that they already have a list of suspected evaders.

The extension of VAIDS beyond the March 31st deadline suggests that Nigerians are calling this bluff.

There is another game-theoretic approach to tax that may be more relevant to Nigeria: modelling the situation as an interaction between taxpayer and public service provider. Nigerians often justify their non-compliance by arguing that public funds are wasted or looted. Regardless of the moral status of this assertion, you can see the economic logic; if the government has been unfaithful in little, why trust it with more tax revenue? In this model, there are two main equilibriums: a steady state where people pay high taxes because they know the government will spend judiciously, and a steady state where people pay low taxes because the government spends frivolously. If Nigeria is stuck in the latter scenario, we need to step out of it, but as we do so, we are confronted by a chicken-and-egg challenge. Citizens don’t trust the government enough to take a leap of faith by paying higher taxes, but because tax revenues are so low, the government is unable to demonstrate its faithfulness by boosting public services.

Other theories can help explain Nigeria’s tax misbehavior. Social theories suggest that the problem is a bandwagon effect and we simply need to get enough influencers paying tax for the critical mass of the population to follow suit. Meanwhile, lowtaxpayment could stem from ignorance, not malice. Many Nigerians don’t

Fayemi: What are they afraid of? to that cause and dogged pursuit of its objectives. His history in the political trenches of Nigeria’s return to democracy, his fight against tyrannical reign in Nigeria, the Radio Kudirat days, among others show a consistency of purpose and strong character in the person of Dr. Fayemi.

One has to ask with all respect: “how many candidates aspiring for any position in Nigeria today can boast of a similar track record?” This is not his first rodeo in the government at this level. The people of Ekiti State, who benefited from his first administration, inclusive of many of his current political detractors within the APC, as well as the elderly, young citizens and the less privileged who eagerly anticipate more this time around; are part of the landmark records of his time as Governor. Without any doubt, Kayode Fayemi’s era as governor remains the most ennobling, inclusive and one that was focused on public policy initiatives that uplift the people in the political history of Ekiti state. ii. The party hierarchy: As a founding member of one of the parties that transformed into the APC, JKF has maintained consistent loyalty to the ideology of the party and its leadership over the years. JKF’s professional handling of the APC Presidential primary elections leading to President Buhari’s emergence as flag-bearer remains a reference point in election organisation in Nigeria. He is an asset to the party and his performance in

government is a clear testament of that unimpeachable fact! As a democrat, he was the first politician to lose an election (rigged election according to revelations that has since become public) and concede with dignity. Even his detractors attest to his civility and his omoluabi disposition, a position which many view as a weakness in Nigeria’s volatile, condescending and vacuous political scene. iii. The delegates: It is a verifiable fact that JKF mentored most of the delegates and provided a conducive atmosphere for them to grow politically. He procured their forms while in office, and ward off political operatives intent on hijacking the party structure.

Even after his appointment as a minister of the Federal Republic by President Buhari, he maintained close ties with the delegates, holding quarterly meetings with them in his country home at Isan-Ekiti. These delegates, unlike the treacherous snakes, feel a sense of duty to return JKF to Oke Ayaoba. They trooped triumphantly into the election venue in over 20 luxurious buses, overjoyed and in a celebratory mood in anticipation of a successful primary outcome for JKF. Victory was a certainty for JKF as was evident in the decisions of the delegates after just 5 LGA votes!

Seeing that the potential landmark victory would invalidate their acclaimed popularity and organized political demise, JKF’s detractors led thugs to the venue, spearheaded by a certain but now-infamous Demola Adeusi, a

renowned vagabond and mentee of one of the aspirants. iv. The opponents: Political treachery is not a strange phenomenon in Nigerian politics but the well orchestrated campaign of calumny against JKF takes it to new heights. Shortly after he lost the election, many of the beneficiaries of his administration (which led to the dissatisfaction of many party faithful and rebellion by others) betrayed him; engaging in antiparty activities. The truth is, many of his current opponents not only served with him, they are direct beneficiaries of his magnanimity and kindness.

Shockingly, his declaration of intent to run brought out the very worst in them. It is also clear, in the weeks following his declaration, of the viral media apparatchik ran by Mr Ojudu and Bimbo Daramola to discredit him, malign his integrity, and assault his personality. Unfortunately, the delegates know of Mr Ojudu’s treachery following the 2014 election loss, and the irresponsibility that has trailed his political emergence in Ekiti State. Mr. Ojudu, a political feather weight, is tied to the apron strings of powers above within the APC and an opposition that is hell bent on destroying Dr. Kayode Fayemi’s political career. Using proxies, the huge campaign of calumny which he and his gang of shame embarked on to dissuade President Buhari from appointing him as Minister is public knowledge. Despite this, JKF has continued to rise and shine much

know or understand tax laws and end up unintentionally evading.

In this case, education is key, both in matters of financial literacy and tax affairs.

Once we figure out which models reflect Nigerian behavior, we would be able to boost compliance by following the model’s prescriptions. Given Nigeria’s meager compliance rate and how diverse the evaders are, it is likely that all models apply. This means that we need a coordinated approach of trying each model’s prescriptions while keeping an eye on the cost, reach, and applicability of each measure. For example, stricter tax enforcement may discourage evasion,but taxpayers would only comply begrudgingly if it is not followed by better public service provision.

Moreover, education is an essential element of any approach to boost tax compliance. Finally, what we learn from Sweden and other Nordic countries is that the social contract of a nation matters too; it sets the terms and lays out what is expected from each party – government and taxpayer.

Without a clearly communicated social contract in Nigeria, we will continue to debate why we should pay tax (or why we don’t) and never get to the business of actually paying it. *The views expressed in this article are personal to the author and may not reflect the opinion of Vetiva Capital Management Limited or any its affiliates

Send reactions to: comment@businessdayonline.com

to their sleeplessness, sadness and eternal depression. To thwart JKF’s reemergence in Ekiti politics, no weapon is too low for them to deploy in ensuring that JKF fails to get the party ticket.

If the well-being of Ekiti State is as important to his opponents as it is to JKF, the thuggery incident that marred the party primary will not never have occurred. The parochial interest of a handful cannot take precedence over that of an entire state. Perhaps the constituencies that these political gladiators claim to represent ought to ask them the basis of their interest in the government house as there is a clear misalignment between their interests and those of the people they claim to represent.

Also, the people need to query the integrity and character of all who are contesting for the most hallowed position in Ekiti state, and ascertain if any of them fails the omoluabi test that Ekiti people have been known for. This is what separates Dr. Fayemi from the bloc: as a true descendant of Obafemi Awolowo’s political dynasty, he not only represent the character and intelligence of Obafemi Awolowo, but also the political ideology of service to the people and decency in politics. July 15th will no doubt be the beginning of a new Ekiti state as the people vote to reclaim their land and restore lost values by re-electing JKF.

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comment is free

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What is your leadership mantra?

TAJUDEEN AHMED Tajudeen Ahmed, a strategy expert, with several years of senior management experience in consulting, commercial banking, and FMCG, is the General Manager/Group Head Business Development at BUA Group.

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ne of the maj or themes of human endeavor that has always had multifarious definitions is “leadership”; hence, it is not surprising that copious literatures have discussed leadership under various circumstancesorganizational, social, religious, governmental, etc.

Broadly speaking, leadership could be said to be the process of influencing, motivating, and guiding other persons to do certain things, accomplish common goals and objectives, etc which they might not necessarily do on their own volition.

It could, therefore, be asserted that just as varied as the definition of leadership is, the approach of leaders to the leadership concept also differs significantly. These approaches are influenced by upbringing, circumstances, personal and professional experiences, character, social influences, etc.

These influences may loosely combine to form the “mantra”,

which may shape the style of leadership some leaders adopt, or put simply, the way they execute their leadership mandates.

Indeed, a leadership mantra could be considered as a statement of ethics, values, beliefs, and credos of the leader or a person aspiring to be a leader.

Leadership mantras are developed as many as are leaders. In that wise, leaders have varied mantras they seek to pursue; some are very clear and others are subtle, and I dare say, that some are unconsciously cultivated. Therefore, there exist leaders, whose mantras may include: making a difference, leading change, grooming a network of loyalists, integrity, “me and me alone”, etc.

The leader who seeks to make a difference would usually go the extra mile by cultivating the innate, developing, and totally undeveloped skills of his team members. He would correct them when necessary, just as he will praise and rebuke them appropriately without making them lose their self-confidence.

This kind of leader provides his followers opportunities to “shine” by allowing them to take additional responsibilities with a view to honing their existing skills and developing new ones.

A leader who seeks change will not brashly upset the applecart in trying to achieve his objectives. This is a fundamental issue for consideration because history has repeatedly shown that human beings usually resist change, even if it is beneficial to them! First, the leader whose mantra is change does an analysis of the existing state of affairs; seeks and ob-

A leader imbued with integrity is not hard to identify among the crowd.

He refuses to cut corners; he completely gives no room for malfeasance of any form- cheating, kickbacks, bribery, favoritism, unmerited elevation, nepotism, etc; and his word is his bond tains buy-in of all stakeholders, if possible; and works with them to drive the change he wants to achieve. In working with them, and not merely giving instructions ‘above their heads’, he would have succeeded in making them committed to the change agenda as equal partners and willing collaborators.Even when there are consequences of the change, for instance by way of employee exit, change of role, potential demotion, etc, the followers may likely accept the consequences and adjust accordingly.

The leader whose mantra is about grooming a network of loyalists may ultimately destroy his team or even the entire organization depending on the ramification of this mantra and the level of his influence within the organization. Under such leaderships, merit is usually tossed under the bus; because “blind loyalty” trumps everything. Experience has shown that such leaders have a pool of employees they identify as ‘my boys’ from whom other

employees, junior and senior, seek favors andto whom they virtually genuflect, in order to belong in the good books of the ‘capon’ and get by within the organization.

This is, however, not an attempt to downplay loyalty. In fact, loyalty is an important ingredient of stakeholder buy-in, and by extension, the two-way relationship between the leader and the follower(s). My grouse regarding this particular mantra is the leader’s unbridled ambition for grooming bootlickers, cronies, ‘head-nodding’/unthinking acolytes, fawning subordinates, and dumb ‘zombies’.

A leader imbued with integrity is not hard to identify among the crowd. He refuses to cut corners; he completely gives no room for malfeasance of any form- cheating, kick-backs, bribery, favoritism, unmerited elevation, nepotism, etc; and his word is his bond. His singlemindedness means that he may be derisively mocked as being too harsh, excessively officious, or overtly religious, but he maintains his stance. Such leaders, when crooks are being unjustly elevated or celebrated, refuse to follow or join the crowd; they remain on the “narrow path”, which, in most instances, is strewn with thorns.

Another leadership mantra is the “me and me alone” type; one that is reflective ofhaving everything revolve around the leader.

When he is not available, work in his department, unit, division, association, group, club, etccomes to a halt! On the strength of the fact that he hardly gives opportunities to his team members, when he is unavoidably ab-

sent to attend a crucial meeting, make a presentation, or write a report, the entire foundation of his team is shaken. Such leaders take all accolades and refuse to share the limelight with their team members. In the end, they usually do not have committed, loyal subordinates;and they are rarely missed when they leave the organization.

Other instances of a leadership mantra could be a combination of any of empathy, humility (having the presence of mind, when appropriate, to say “thank you”, “I am sorry”, “well done”, “pardon me”, etc), creativity, mutual respect, genuineness, etc.

Leaders are what they seek to become; what they aim, plan, or work to achieve. Therefore, I ask: when leadership is thrust upon you, by circumstances or sheer providence, or when you deliberately seek leadership- in your closet, community, office, estate association, alumni association, club, etc- what is your leadership mantra?

Whatever your mantra is, it must be edifying, enduring, worthy of positive emulation; and must have substance. You may have it defined or codified, which is good; or, you may not, meaning it shows in a subtle, unconscious manner, which is not bad either. However, it is a tragedy of monumental proportions to have majority of team members or followers say about their leadership, when critical testimonials are required: “He claims to know it all and we cannot be bothered about him. He should stew in his own juice.”

Send reactions to: comment@businessdayonline.com

The African Continental Free Trade Area Treaty: Why is it significant?

MOSES ORUAZE DICKSON Dickson is the Managing Solicitor, TRIAX Solicitors.

T

he current global trend towards multilateralism and the harmonisation of investment rules in agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) 2018, the European Union-Canada Comprehensive Economic and Trade Agreement (CETA) 2017 and Pan-African Investment Code (PAIC) 2016 present an excellent opportunity to reshape future global investment policy.

This new multilateralism in investment governance promises to recalibrate and harmonise international investment rules. For Africa, the PAIC and its respective Regional Economic Communities (RECs) represents the most tangible manifestation of an integrated policy on investment on the continent.

This is also evident in a number of regional and African Union (AU) led initiatives including the African Continental Free Trade Area (AfCFTA) Treaty signed by 44 African leaders at the 10th extraordinary African Union Summit on 21 March 2018, in Kigali, to create the world’s largest single market.

The preamble of the AfCFTA Draft Agreement provides as a general statement that the Member States are conscious “of the need to establish clear, transparent, predictable and mutuallyadvantageous rules to govern Trade in Goods and Services, Competition Policy, Investment and Intellectual Property among State Parties, by resolving multiple and overlapping trade regimes to achieve policy coherence, including in our relations with external partners.” Besides the AfCFTA, the Kigali Declaration Agreement was signed by 47 Member States, while 30 Countries signed the Protocol on Free Movement of Persons and the African Passport to ease mobility of people across the continent.

The goal of the AfCFTA is fourfold. Firstly, it aims to create a single continental market for goods and services, with free movement of business persons and investments, and thus paving the way for

accelerating the establishment of the Continental Customs Union and the African customs union.

The AfCFTA commits governments to remove tariffs on 90 per cent of goods produced within the continent and phase out the levy in the future. It envisions a continental market of 1.2 billion people, with a combined Gross Domestic Product (GDP) of more than $3.4 trillion.

The AfCFTA is expected to boost the level of intra-Africa trade from the current 14 per cent to over 52 per cent by 2022.

Secondly to expand intra-African trade through better harmonisation and coordination of trade liberalisation and facilitation regimes and instruments across RECs and across Africa in general.

The establishment of the AFCFTA and the implementation of the Action Plan on Boosting Intra-African Trade (BIAT) provide a comprehensive framework to pursue a developmental regionalism strategy.

Thirdly, to resolve the challenges of multiple and overlapping memberships and expedite the regional and continental integration processes. Multiple and overlapping memberships are costly and cumbersome to implement.

By belonging to several of them simultaneously compliance requirements are duplicated and different

sets of rules have to be met with regard to the same product when exported to separate destinations.

However, the RECs will not be terminated. Article 21 states that “State Parties that are members of other regional economic communities, regional trading arrangements and custom unions, which have attained among themselves higher levels of regional integration than under this agreement, shall maintain such higher levels among themselves.”

Last but not least, to enhance competitiveness at the industry and enterprise level through exploiting opportunities for scale production, continental market access and better reallocation of resources.

These goals and objectives are echoed by the Chairman of the AU, Rwandan President Paul Kagame, who said, “The promise of free trade and free movement is prosperity for all Africans because we are prioritising the production of value-added goods and services that are made in Africa.”

The potential for sustainable development is echoed by UNECA’s African Trade Policy Centre (ATPC) and the African Union Commission (AUC): “AfCFTA is an opportunity for development in Africa. But it must be wielded by private enterprise. Through doing

so, businesses can benefit from the great opportunities that the continent has to offer, and contribute to its sustainable growth and development.” Thus, the AFCFTA places Africa in a unique position to make a contribution to international investment law reform on the negotiation of multilateral treaties but also to grow national economies.

The AfCFTA Agreement and the protocols have now been submitted for ratification by state parties in accordance with their domestic laws. African countries not party to the AfCFTA Agreement, such as Nigeria and South Africa, will have to accede to the Agreement. The AfCFTA will be accompanied by its own institutions including the Assembly of Heads of State and Government, the Council of African Ministers responsible for Trade, the Committee of Senior Trade Officials, the Secretariat and a Dispute Settlement Mechanism. This is necessary in order to allow the institution to function in a transparent and rules-based manner. Overall, it hoped that the AfCFTA will promote investment for inclusive growth and sustainable development in light of crises over food security and the environment across Africa

Send reactions to: comment@businessdayonline.com

12

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Editorial PUBLISHER/CEO

Frank Aigbogun EDITOR-IN-CHIEF Prof. Onwuchekwa Jemie EDITOR Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya EXECUTIVE DIRECTOR, SALES AND MARKETING Kola Garuba EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure ADVERT MANAGER Adeola Ajewole MANAGER, SYSTEMS & CONTROL Emeka Ifeanyi HEAD OF SALES, CONFERENCES Rerhe Idonije SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu HEAD, HUMAN RESOURCES Adeola Obisesan

Thursday 10 May 2018

Sexual predators as academics in Nigeria

S

ome weeks ago, a voice recording allegedly suggesting that a profess or of Manag em ent an d Accounting at the Obafemi Awolowo University, IleIfe, Richard Akindele, was demanding sex in return for grade rocked the social as well as mainstream media. The academic who is also a reverend gentleman, was overhead in the tape demanding five rounds or five days of sex from the hapless lady, a final year student who failed his course, to upgrade her marks to a pass. Of course, the University has come out blazing, describing the alleged act as “totally and morally reprehensible.” It also set up a high-powered committee to investigate the allegation and submit its report within one week promising to deal decisively with anyone found culpable.

The reaction is expected especially since the recording is now trending on social media and the image of the school is being smeared. But we must state that sexual harassment in our universities is more widespread than the authorities would admit and they have failed

to tackle the problem or lay down stringent rules to prevent its occurrence. ASUU also, that has now made the organisation of strike actions to protest government underfunding of the universities as its main goal, has turned a blind eye to the vice of sexual harassment that is destroying our universities and turning them into a caricature of what a university should be.

In 2012, a pilot ICPC/NUC University System Study and Review (USSR) of corruption in the university system was undertaken and the review identified a series of infractions including admissions racketeering, misapplication and embezzlement of funds, sale of examination questions, inducement to manipulate awards of degrees, direct cheating during examinations, deliberate delays in the release of results, victimization of students by officials, lack of commitment to work by lecturers, and above all, sexual harassment and exploitation of students by lecturers. At the presentation of the report in 2012, the ICPC Chairman, Mr Ekpo Nta, was quoted as saying: “we have uncovered many corrupt practices in our universities. Sexual harassment seems to rank

extremely very high among corrupt practices in our universities. Our report is based on the quantum of petitions we have received on this corrupt practice. We’re emphasizing this because sexual harassment has to do with the immediate challenge we need to address.”

In fact, the rampant cases of reported cases of sexual harassment in our tertiary institution forced the Senate in 2016, to propose a bill, known as the Sexual Harassment in Tertiary Education Institution Bill, which prescribes a 5 year jail term for lecturers and educators convicted of sexual harassment of either their male or female students and also ban lecturer-student relationships altogether.

According to the sponsor of the Bill, Senator Ovie Omo-Agege, there was virtually no family in Nigeria that does not have someone who had been harassed or approached by a lecturer in an institution of higher learning in Nigeria. As he puts it: “Indeed there is no family in Nigeria where you don’t find a victim of sexual harassment...It is either your wife when she was younger or your daughter, your sister or even a niece who has gone through the tertiary education system at one point

or the other...You will find out that they have had this brush with these lecturers who continue to see these young women as perquisite of their office as lecturers.

We feel that is unacceptable.

We have to put a stop to it.”

At a time when progressive universities are outlawing any form of sexual or romantic relationships between students and teachers, our universities are being turned to centres of sexual harassment, rape and transactional sex. Pray, how can any meaningful knowledge be learnt and transmitted in such an environment? It is not surprising therefore that our universities are bereft of any serious academic endeavours and our so-called academics are lost in the conversations within their disciplines and have resorted to conversing among themselves in beer parlors and eateries at university staff clubs.

This is a major problem in our universities and not just the underfunding because even when the universities are properly funded, we will be faced with a bigger problem – total lack of academics worth their salt but only sexual predators and lay-abouts pretending to be academics.

ASUU needs to do a thorough introspection!

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Thursday 10 May 2018

BUSINESS

COMPANIES & MARKETS

DAY

13

How modern technology boost activities in packaging industry

Pg. 14

Co 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

FCMB’s ROAE remains strong on cost efficiency BALA AUGIE

F

irst City Monument Bank (FCMB) Plc has utilized the resources of shareholders in generating higher profit as the lender continues to intensify its cost control mechanism.

For the first three months through March 2018, FCMB’s return on average equity (ROAE) increased to 5.70 percent from 3.50 percent the previous year.

The lender is efficient in keep cost to its barest minimum while boosting profit as cost to income ratio (CIR) improved to 68.68 percent in March 2018 from 70.30 percent the previous year.

Operating expenses fell by 8.93 percent to N17.68 billion in the period under review from N16.23 billion as at March 2017; thanks to investments in business improvement, digital

transformation and process automation.

Net interest income (NIM) increased to 7.50 percent in March 2018 from 6.80 percent the previous year despite a low interest environment.

FCMB’s recorded a 63.25 percent jump in net income to N2.58 billion in the period under review from N1.58 billion the previous year.

The growth in profit was largely driven by a stronger net interest margin and a 1.78 percent surge and a 38.55 percent increase in trading income and fees and commission income to N1.0 billion and N4.78 billion respectively.

FCMB recently concluded the acquisition of an additional 60% stake in Legacy Pension Managers Limited, bringing its total stake in Legacy to 88.2% and thus making Legacy a subsidiary of FCMB. FCMB paid NGN6.96bn for the additional 60% stake, implying it valued the company

at NGN11.56bn.

Analysts are of the view that the lender’s recent acquisitions will contribute to its earnings.

FCMB’S Loans and advances to customers dropped by 6 percent to N595.82 billion in March 2017 as against N649.79 billion the previous year.

The decline in loans was due to a reduction in FCY loan book and cautious growth the LCY loan book focusing on Agriculture, Manufacturing and Consumer Finance.

Total deposits grew by 8.83 percent to N747.69 billion in the period under review from N689.86 billion as at March 2018; driven by 9% YoY and 13% QoQ growth in CASA deposits as a result of our continued focus on retail banking.

1Q18 Low-Cost Deposit ratio is 70:30.

FCMB’s nonperforming loans (NPLs) increased to N33.92 billion in March 2018 from N29.52 billion

the previous year. NPLs to gross loans increased to 5.30 percent in March 2018 from 4.30 percent as at March 2017.

Banks in Nigeria have seen

NPLs rise on the back of the exposure to the oil and gas, aviation and 9 mobile (formerly Etisalat).

FCMB’s share price closed at N2.53 as of Tuesday, valuing

it at N50.10 billion.

The stellar performance means the lender has not disappointed investors that have been awaiting the first quarter financial performance.

Banks shows low credit appetite to financial markets BUNMI BAILEY

T

he start of the first quarter (Q1) 2018 may not be a good start for some fi-

nance, insurance and capital markets as bank lending to these markets declined.

The volume of credits to the private financial sector from the banks dropped by 11 per cent (quarter-on-

quarter) to N999.5 billion in Q1 2018 from N1.1 trillion in Q4 2017 but increased (year-on- year) by six per cent to N999.5 billion in Q1 2018 from N943.5 billion in Q1 2017, according to

L-R: Abdullahi Mainasara, zonal head, North-west of First City Monument Bank (FCMB); Danladi Darki, managing director, Danladi Abba Enterprises; Lukman Mustapha, regional head, Abuja & North, FCMB; George Mawadri, general manager, Africa, Etihad Airways, and Mohammed Kumo, senior manager, Business Development of Azman Air Services, during the launch of the FCMB and Etihad Airways partnership on discounted travel package in Kano State.

the banking credit report released by the National Bureau of Statistics (NBS).

Based on the report, the total value of credit outflow from the banking sector stood at N15.6 trillion as at Q1 2018.

This shows a 2.5 per cent decrease (year-on-year) to N15.6 trillion in Q1 2018 from N16 billion in Q1 2017. On a quarter-on-quarter basis, credit outflow from banks declined by 0.6 per cent to N15.6 trillion in Q1 2018 from N15.7 billion in Q4 2017.

Analysts have attributed this to the weak balance sheet and revenue projection of mortgage banks, capital market operators, insurance companies and Microfinance institutions.

“The decline in banking industry credits to other financial institutions may not be unrelated to the financial health challenges and weak revenue profile of these sub-sectors, particularly the insurance and capital markets sub-sectors”, Johnson Chukwu, CEO of Lagos-based

financial advisory firm, Cowry Assets, said on phone.

“Unfortunately other financial institutions such as the mortgage banks, capital market operators, insurance companies and Microfinance institutions cannot be said to have rebuilt their balance sheets after the financial meltdown of 2007/2008.

The macroeconomic policies, which until recently encouraged investment in government securities also did not help matters as such policies further worsened the prospects of these sectors attracting customer patronage.”

Consequent upon their weak revenue prospects and balance sheets, banks had to keep their credit availment to only a few of the very sound operators in these subsectors, hence the decline in banking industry credits to the financial sector,” Chukwu further added.

With the effects of the low credits, borrowers are now looking to Nigerian banks as

interest on treasure bills and bonds continue to decline.

“Nigerian banks are facing a decline in interest income in 2018 as interest rates on governmentissued T-bills and bonds continue to decline. In fact, Q1 2018 brings to a close a two-year period when Nigerian banks could earn thick spreads between their deposits and the rates available on risk-free government paper. So, it is not a surprise to see interest income under pressure,” An anonymous quote said.

Also analysts are of the opinion that liquidity levels have improved which has reduced interbank lending Dolapo Ashiru, CEO, Mega Capital Financial Services Limited said, “Interbank lending has slowed down as liquidity levels improved. CBN has eased liquidity tightening which has improved banking sector liquidity. So there is no need for banks to borrow heavily from the others.”

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COMPANIES & MARKETS How modern technology boost activities in packaging industry Olusola Bello

T

he revolution taking place in the modern industrial world with the use of robots in carrying out major operations in the course of production has made it mandatory for industrial groups to jettison the use of the old and archaic wooden pallets for plastic pallets, Ravi K. Kanwal, managing director of Shongai Packaging Industry Ltd has said.

Plastic pallets as compared to wooden pallets are hygienic, termite and bacteria free, stronger and long lasting, and using plastic pallets can be cost effective as it can be used for 3 to 5 years as per the application and handling.

Ravi K. Kanwal, who dis-

closed this during the customers forum held recently said the use of plastic pallets, unlike the wooden can be everlasting as the waste, when broken into pieces can be recycled and converted into other useful products by the company.

The chief executive said using of plastic pallets will help to discourage deforestation thereby saving the environment from the dangers of degradation through deforestation.

“Use of plastic pallets saves incessant felling of woods which often degrade environment. Around the world, no fewer than one billion trees are cut per year to make wooden pallets. We can imagine the impact on environment if we use plastic pallets as a substitute”.

Worried about the danger which the continued use of

wooden pallets posed to the environment, Kanwal said, “if we cannot sustain the environment, we cannot sustain ourselves as the environment and the economy are two sides of a coin”.

Meanwhile, the Shongai Packaging boss has appealed to the Federal Government and National Agency for Foods, Drugs Administration and Control, (NAFDAC) to enforce the laws on the use of plastic pallets in the food industries as it is termite free, washable and long lasting also economical in the long run”.

Shongai Packaging, a subsidiary arm of Sona Group Industries said the customers’ forum became necessary in view of the direction modern technology in the business of packaging is headed and the need for industries to be on top of their games.

Thursday 03 May 2018

Thursday 10 May 2018

BUSINESS DAY

C002D5556

Investor

15

In association with

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

Year Open

38,243.19

Market capitalisation

N13.609 trillion

NSE Premium Index

The NSE-Main Board

NSE ASeM Index

2,564.13

1,713.69

1,087.32

Week open (27 – 04–18)

41,244.89

N14.940 trillion

2,947.62

1,839.20

958.52

Week close (04 – 05–18)

41,218.72

N14.931 trillion

2,951.14

1,835.05

958.52

Percentage change (WoW) Percentage change (YTD)

0.12

-0.06

NSE Ind. Goods Index

NSE Pension Index

330.69

2,560.39

1,975.59

1,379.74

1,012.70

364.28

2,696.52

2,066.32

1,603.74

993.55

359.10

2,682.65

2,088.13

1,606.90

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

1,746.68

475.44

139.37

1,875.32 1,873.70

517.48

145.76

525.53

144.36

-0.23

0.00

-0.09

7.08

-11.85

7.27

15.09

7.78

NSE Lotus II

NSE Banking Index

NSE 30 Index

1.56 10.54

-0.96 3.58

976.10

-1.89 1.79

-1.42

-0.51

1.06

0.20

8.59

4.78

5.70

16.46

MTN Nigeria listing may trigger IPO of other Telcos …as companies seek cheaper capital HEANYI NWACHUKWU

T

he much expected listing of Nigerian unit of MTN Group will help balance the Nigerian bourse and give investors options for sector rotation and reduce volatility associated with a single name dragging down the entire market.

The coming to Custom Street market by MTN Nigeria for Initial Public Offering (IPO) will also open the doors for other telecommunications companies (Telcos) to approach the market for cheaper capital against consortium of bank loans which put pressure on them.

MTN Nigeria has continued to make good progress with the preparations for its listing on the Nigerian Stock Exchange (NSE). Extensive local marketing to target Nigerian investors is ongoing as part of a retail offer and institutional bookbuild, which may also involve selected international institutions.

MTN aims to list its Nigerian unit worth $5.23 billion (N1.8trillion) by July and raise funds to cut debt. It plans to raise at least $400million (N140billion) from the IPO to pay preference shareholders. The roadshow for the IPO is expected between this month and June.

In show of commitment to move ahead with the 2018 target,

Broker Performance Report Start Date 02/01/2018 through End Date 30/04/2018 Print Date 02/05/2018

Top 10 Brokers by Volume Rank

Broker

Description

Quantity

% of Volume

1

UBAS

UNITED CAPITAL SECURITIES LIMITED

11,236,330,604

10.74

2

CSL

CSL STOCKBROKERS LIMITED

7,466,992,631

7.14

3

SISB

STANBIC IBTC STOCKBROKERS LIMITED

7,258,359,403

6.94

4

CSSL

CARDINALSTONE SECURITIES LIMITED

4,669,909,822

4.47

5

APEL

APEL ASSET LIMITED - BRD

4,209,685,629

4.03

6

RSNL

RENCAP SECURITIES (NIG) LIMITED

3,778,553,373

3.61

7

CORD

CORDROS SECURITIES LIMITED - BRD

3,592,304,087

3.43

8

RWD

REWARD INVESTMENT AND SERVICES LIMITED

3,492,757,002

3.34

9

MERI

MERISTEM STOCKBROKERS LIMITED

2,961,440,151

10

MCSE

MORGAN CAPITAL SECURITIES LIMITED

2,955,543,360

2.83

51,621,876,062

49.36

Top 10 Total Volume

2.83

NOTE: The top 10 Stockbrokers are responsible for 49.36% of the total volume between 02/01/2018 and 30/04/2018

Top 10 Brokers by Value Rank

Broker

Description

Value

% Value

1

SISB

STANBIC IBTC STOCKBROKERS LIMITED

177,768,670,944.91

16.28

2

CSL

CSL STOCKBROKERS LIMITED

138,155,208,358.98

12.65

3

RSNL

RENCAP SECURITIES (NIG) LIMITED

100,734,382,278.04

9.23

4

EFCP

EFCP LIMITED

80,632,653,945.80

7.38

5

FBNS

FBNQUEST SECURITIES LIMITED

48,413,976,864.20

4.43

6

CORD

CORDROS SECURITIES LIMITED - BRD

45,614,935,920.33

4.18

7

UBAS

UNITED CAPITAL SECURITIES LIMITED

33,024,441,968.18

3.02

8

CHDS

CHAPEL HILL DENHAM SECURITIES LTD - BRD

27,936,736,796.28

2.56

9

CSSL

CARDINALSTONE SECURITIES LIMITED

27,136,149,015.55

10

APEL

APEL ASSET LIMITED - BRD

19,900,902,308.75

1.82

699,318,058,401.02

64.05

Top 10 Total Value

2.49

NOTE: The top 10 Stockbrokers are responsible for 64.05% of the total value between 02/01/2018 and 30/04/2018 Published by The Nigerian Stock Exchange ©

the group recently appointed Chapel Hill Denham as lead manager for the initial public offering (IPO). Other appointed advisers are South Africa’s Rand Merchant Bank, Renaissance Capital and Vetiva Capital.

The telecoms firm is also working with Stanbic IBTC Capital, Standard Bank of South Africa, Standard Advisory London and Citigroup Global Markets, as joint advisors and global coordinators, with Stanbic acting as lead issuer.

“While Telecom represents 12 percent of the economy, the sector does not feature on the Bourse, following the delisting of erstwhile telecom stocks –such

Page 1 of

1

as Starcomms and HIS,” Abiola Rasaq, Head of Investor Relations at United Bank for Africa Plc had noted.

“The listing of MTN should further deepen the Nigerian equity market and hopefully attract more names in the telecom sector to the Exchange”, he said.

All around the world, capital markets act as barometers of economic and political conditions.

Global listing activity (IPOs and Follow-On offers) rebounded by 17.99percent in 2017, from a 22.32percent dip in 2016.

For the Nigerian Stock Exchange, listing activity has since 2015 been dominated by

supplementary offers, listings by introduction, debt issuances, mergers and divestments.

“Based on the growth in equity market capital raising activities wherein N44.51billion was raised in 2017 (a 1,622.03percent increase from N2.59 billion in 2016), it is expected that the recovery seen in 2017 will gain momentum in 2018 with the potential IPO of MTN Nigeria and cross-border listings for several issuers seeking to compete internationally”, said Oscar N. Onyema, CEO, the Nigerian Stock Exchange.

“One major impact from the listing of MTN Nigeria is that it will significantly dilute the dominance of the banking and cement sectors on the Nigerian bourse and give investors more options which is good for the market,” according to Kayode Tinuoye, head, research, financials at Lagos-based investment bank United Capital Plc. More importantly, he noted that the listing of MTN on the Nigerian bourse makes the stock market become more reflective of the broader economy “with telecoms contribution of over 10percent to Nigeria’s GDP.” “ Wi t h a b o u t $ 1 6 b i l l i o n valuation of the Group and the approximately 40 percent historical contribution of the Nigeria entity, even if you adjust for relatively higher cost of equity in Nigeria, MTN Nigeria should

easily topple Dangote Cement as the largest listed entity in Nigeria”, the analysts had noted.

Wi t h Nig e r i a ma k i ng u p 40 percent of group revenues, combined with the still fast growing telecommunications sector, MTN’s Nigerian unit could potentially fetch a $6.8 billion (N2.4trillion) valuation when it lists, according to the Lagos-based analysts.

Nigeria’s telecoms sector boasts of other big names such as Glo, Airtel, and 9mobile which have chosen to remain private and refused to leverage public share sales in their expansion drive while also making the Nigerian bourse non-reflective of key sectors of the economy.

Most of these Telcos like MTN are grappling with declining voice revenues as consumers turn to data-based platforms such as WhatsApp to make calls.

These advisors to proposed MTN Nigeria shares listing reentered the boardrooms for proper pricing of their shares. MTN Group plans to list its Nigerian unit on the Premium Board of the Nigerian Stock Exchange (NSE) which has the likes of Dangote Cement Plc, Zenith Bank Plc, FBN Holdings Plc, Seplat Petroleum Development Company Plc, Access Bank Plc, Lafarge Africa Plc and United Bank for Africa Plc. MTN Group said in a note Continues on page 17

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NSE-ASI reverses uptrend …sheds 0.1% week-on-week

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n the trading week to May 4, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) reversed the week-onweek (w/w) gains recorded in the preceding week, sliding 0.1percent w/w to close at 41,218.7 points in the holiday-shortened week.

Although the market opened the week on a high note and closed in the green three of four trading days, the decline recorded towards the end of the week overshadowed the gains. Consequently, market capitalisation depleted N9.5bn to N14.9tn while YTD return stood at 7.8percent.

Despite the overall dull theme, performance across sector indices was mixed with a bullish undertone as three of the five sector indices we cover closed in the green.

The Agriculture (+3.2percent) index led the gainers for the week as appreciation in OKOMUOIL (+4.9percent), LIVESTOCK (+9.1percent) and PRESCO (+1percent) buoyed the index.

The Financial Services (+1.2percent) and Industrial Goods (+0.3percent) index also trended northwards consequent on uptick in GUARANTY (+2.1percent), DIAMOND (+4.5percent), WEMA (+4.8percent), UNITY (+20percent) and DANGCEM (+0.2percent). The Oil & Gas (-2.5percent) and Consumer Goods (-1.5percent) indices trailed due to declines in OANDO (-8.7percent), JAPAULOIL (-8percent) and SEPLAT (-1.9percent).

Investor sentiment remained relatively buoyant despite bland market performance as market breadth closed at 1.2x (formerly 0.9x); 37 stocks advanced while 31 declined.

Activity levels were divergent as volume traded plunged 8.9percent to 332.7mn units while value traded advanced 5.6percent to close at N5.2bn.

We expect to see some mixed performance as investors seek triggers beyond the q118 earnings filing.

Money Market: Liquidity splurge keeps rate at 3percent Consistent with the pattern in recent weeks, system liquidity was awash with cash as the CBN maintained the build-up in liquidity for the fifth consecutive week, as money market rates averaged 3.0% (Previous week: 3.1percent). The weeks’ liquidity profile was kept afloat by T-bills maturities to the tune N190.8bn and OMO of worth N186.7bn despite N600.0bn that was mopped up via an OMO auction by the CBN during the week.

The Apex bank conducted

i t s b i - m o nt h l y Nig e r i a n Treasury Bill (NTB) auction, wherein it successfully refinanced N95.4bn. Demand was robust with a bid-tocover ratio of 4.2x. Notably, the 364-day tenor was mostly demanded (with a bid-cover of 6.4x ; 5.0x at the 91-day tenor and 2.3x at the 182-day tenors) The auction was carried out at the following stop rates: 91-day (10.2percent vs. 10.9percent at the last auction), 182-day (11percent vs. 12percent at the last auction) and 364-day (11.1percent vs. 12.1percent at the last auction). In terms of liquidity profile, N290.9bn maturing bills are expected to hit the system this week.

Yields: FI bulls take a breather as sub-13percent yield prompt profit-taking Compared to what was o b s e r v e d ov e r t h e p a s t few weeks, last week saw a bearish market, following

parallel and official market, to close the week at N361.0/$1 and N305.2/$1 respectively.

On another note, the Investors and & Exporters F X w indow/NAFE X, saw a 9bps downtrend to end the week at N360.8/$1. The outlook of the naira remains tied to the spate of CBN’s intervention in the spot and forward markets.

Global stocks mixed as the Fed keeps rate constant Global equity indices extended its mixed performance to the week ended 4th of May 2018. In the U.S. markets, the Fed kept policy rate constant but signaled the possibility of future hike and reports that 204,000 private sector jobs were added in April. This came amid the commencement of high-level trade talks with China. Thus, the DJIA (-0.2percent) and S&P 500 (-0.2percent) recorded modest

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

PFAs CrusaderSterling Pensions Premium Pensions ARM Pension Mgrs.

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

IEI Anchor Pension Managers Radix Pension NPF Pensions

the release of OMO auction results that showed a significant sale of N600.0bn at a rat e t hat w a s 5 b p s higher than the previous weeks OMO clearing rate of 11.5percent. Consequently, yields saw a retracement as players speculated against a probable hike in OMO auction rates by the CBN. Av e r a g e T- b i l l y i e l d i n che d hig he r by 2 2 b ps w/w to close the week at 12.1percent (91-day (up 62bps to 11.6percent), 182day (up 43bps to 11.9percent) and the 364-day (down 40bps to 12.9percent). In a similar theme, average bond yield inched higher by 4bps to end the week at 13percent.

Generally, we believe sentiment in the FI space is tied to whether the CBN retains its prior tightening stance via OMO auctions.

Currency Market: Naira appreciates in the Parallel market In the Foreign exchange market, the naira appreciated by 14bps and 15bps in the

CURRENT PRICE 3.9690 3.8949 3.8849 3.7591 3.5777 3.4192 3.4049 3.2582 3.2309 3.1140 3.1051 3.0042 2.7774 2.7074 2.6726 2.6075 2.5167 2.4531 2.3064 2.0160 1.4558

losses w/w. However, the techladen NASDAQ (+1.3percent) defied all odds to close the week in the green, as Warren Buffet’s Berkshire Hathaway buyback of bell weather APPLE (+13.3percent) buoyed the index.

In the European markets, broad gains were observed across major equity indices despite weaker Eurozone retail sales growth of 0.8percent in March 2018. Investors, however, ignored the weak economic data as G er many’s DAX (+1.9percent), UK’s FTSE ( + 0 . 9 p e rc e n t ) , F r a n c e ’s CAC (+0.6percent) and Pan European Stoxx (+0.6percent) all trended northwards w/w.

Emerging markets indices tracked the mixed global sentiments as Brazil’s IBOV (-3.8percent), Russia’s RTSI (-1.8percent), a n d I n d i a’s S E N S E X (-0.2percent) diminished w/w while China’s SCHOMP (+0.3percent) and South Africa’s JALSH (+0.3percent) advanced w/w.

•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

Commodities trading: Committee wants review of SEC rules, regulations

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he Securities and Exchange Commission (SEC) received the technical committee (TC) report on commodities trading ecosystem in Nigeria and decided to share with the market stakeholders for views and comments.

The Securities and Exchange Commission as part of its implementation of the 10-year Capital Market Master Plan (CMMP) constituted the Technical Committee on CommoditiesTradingEcosystem and mandated the Committee to identify challenges of the existing framework/infrastructure and develop a roadmap for a vibrant ecosystem. An organized commodities market consists of multiple players that form the agricultural value chain. They include commodity exchanges, farmers, merchants, aggregators,

relevant stakeholders.

The committee sees the need to review SEC rules and regulations relating to commodity exchanges especially rules on the spot market, and make rules on collateral management.

Also recommended is the need to commence advocacy for macroeconomic stability and policies which will promote the commodity market (exchange rate, interest rate, inflation rate, infrastructure and so on; advocacy for amendment of existing legislations such as the Land Use Act and Bankruptcy L aw w h i c h i mp e d e t h e development of the market.

According to the technical committee, one major impediment towards having a vibrant commodities market is the financial exclusion of farmers, especially smallholder farmers who produce most of

enactment of a warehouse receipt bill into law will go a long way in ensuring that farmers can access credit easily and affordably, the technical committee noted.

“Deliberate efforts should be made to develop public enlightenment and education roadmaps for the commodities markettoimproveunderstanding and encourage participation.

It is also vital to encourage investment in allthe requisite supportive infrastructure such as warehouses and storage facilities by exchanges and the private sectors. Similarly, to enlarge the scope of participation, existing commodity merchants and other relevant stakeholders should be encouraged into the exchanges either as traders or investors,” the technical committee note.

Thecommitteealsonotedthat high value export commodities

L-R: Dayo Oriomoloye, chief risk officer, Sterling Bank plc; Yinka Oni, chief information officer, Sterling Bank plc; Dapo Martins, chief marketing officer, Sterling Bank plc; Tinu Awe, executive director, regulation, The Nigerian Stock Exchange (NSE); Abubakar Suleiman, chief executive officer, Sterling Bank plc; Justina Lewa, company secretary, Sterling Bank plc, and Adebimpe Olambiwonnu, group head, finance and performance management, Sterling Bank plc, during the Closing Gong Ceremony in commemoration of the Facts Behind the Figures at the Exchange, recently.

processors/producers, commodity market operators, warehouse operators, collateral managers, banks, insurance companies, clearing houses, and logistic companies.

The Committee came-up with recommendations on how to develop a thriving ecosystem and assigned responsibilities to

the commodities traded, albeit in small individual units.

The committee recommends that the farmers should be organized into cooperatives to aggregate produce and be encouraged to become members of the exchange. Introduction of the Electronic Warehouse Receipts (EWRs) and the

such as cocoa, sesame and ginger should be designated as flagship products and trading of such commodities through the exchange should be incentivised; adding that exchanges should install traceability system for Nigeria’s flagship and other export commodities that are traded through their platform.

Standard Chartered out with new sustainability framework

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tandard Chartered has published a new sustainability framework. The Sustainability Philosophy sets out how Standard Chartered integrates sustainability into its organisational decisionmaking and how the Bank will work with its clients, suppliers, NGOs and governments in its markets - how the Bank addresses the balance between supporting business and economic growth, and protecting the environment.

Over the coming weeks and months, the Bank will be publishing new criteria and standards which will outline clearly the type of business it will and will not do, starting with Coal.

Additionally, for the first time the Bank has made public the Prohibited Activities List, which details those activities it will not support.

Commenting on the new framework, Tracey

McDermott, Group Head Corporate Affairs, Brand and Marketing, said: “We believe we have a key role to play in promoting sustainable economic growth in the communities and markets we serve.

We aim to be a force for good – taking a long term view and working with our clients to improve their sustainability performance and so help to drive up standards across our markets.”

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BUSINESS DAY

Investor

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Helping you to build wealth & make wise decisions

Nigerian stock investors lost N9bn last week IHEANYI NWACHUKWU

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nvestors at the Nigerian stock market lost about N9billion in the trading week to May 4, 2018 following reduced buy interest in bellwether st o ck s. A h e a d o f t h i s week’s close, analysts expect declining trend to continue as the last batch of first-quarter (Q1) 2018 earnings roll in.

The market performed in line with expected mixed performance as portfolio and fund managers continued to dig into the recent Q1 numbers for effective repositioning of their portfolios.

To h e d g e a g a i n s t possible losses, investors are strongly advised to take keen interests on firms’ fundamentals before t a k i ng a n i nve s t m e nt position. Preferably, they are advis e d to take a medium-long term view of the market.

In the trading week under review, the Nigerian Stock Exchange (NSE) All-Share Index ( A S I ) d e p re c i a t e d b y 0.06percent to close last week at 41,218.72 points, from preceding trading weekend level of 41,244.89 points. The stock market’s year-to-date return stood at 7.78percent. The value of listed equities on the Nigerian bourse decreased

by N9billion to N14.931 trillion, from N14.940

t r i l l i o n re c o rd e d t h e preceding weekend.

At the close of trading last week, all other indices finished lower with the exception of NSE Premium, NSE Banking, NSE Industrial goods, and NSE Pension indices that appreciated by 0.12percent, 1.56percent, 1.06percent and 0.21percent respectively, while the NSE ASeM closed flat.

Thirty-seven (37) equities appreciated in price during the review w e ek, higher than 33 in the preceding week.

Thirty-two (32) equities depreciated in price, lower than 41 equities in the preceding week, while 100 equities remained unchanged, higher than 95 equities recorded in the preceding trading weekend.

C & I Leasing Plc rallied most, from N1.39 to N1.80, up by 41kobo or 29.50percent ; while Dangote Flour Mills Plc declined most, from N14 to N11.40, down by N2.60 or 18.57percent.

Trading in the Top Three Equities– United Bank for Africa Plc, Mutual Benefits Assurance Plc and Access Bank Plc (measured by volume) accounted for 457.930 million shares worth N3.784 billion in 1,469 deals, contributing 34.41percent and 18.16percent to the total equity turnover volume

Vivo Energy becomes largest UK-listed African IPO in over a decade

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and value respectively.

L a st w e e k wa s ju st four day trading sessions as Tuesday May 1, 2018 was public holiday to mark the Workers Day celebration. The market recorded a total turnover of 1.331billion shares worth N20.835 billion in 18,695 deals in contrast to a total of 1.825 billion shares valued at N24.653 billion that exchanged hands the preceding week in 23,148 deals.

The Financial Services Industry (measured by volume) led last week activity chart with 1.042

b i l l i o n s h a re s v a l u e d at N11.275 billion traded in 9,665 deals ; thus contributing 78.32percent and 54.11percent to the total equity turnover volume and value respectively.

The Consumer G oods Industry followed with 8 4 . 1 2 4 m i l l i o n s ha re s worth N4.322 billion in 3,691 deals; and Oil & Gas Industry with a turnover of 51.918 million shares worth N596.463 million in 2,307 deals.

A l s o t ra d e d o n t h e Nigerian Stock Exchange during the review week

were 709,058 units of Exchange Traded Products (ETPs) valued at N3.845 million e xe c u t e d i n 1 0 d e a l s, compared with a total of 56,260 units valued at N376,387.48 transacted the preceding trading week in 6 deals.

Total of 80,152 units of Federal Government and State Bonds valued at N82.543 million were traded last week in 14 deals, compared with a total of 725 units valued at N660, 984.55 traded the preceding week in 10 deals.

ondon Stock Exchange (LSE) last Friday welcomed Vivo Energy, a retailer and marketer of Shell-branded fuels and lubricants in Africa, to the Premium Segment of the LSE Main Market. Shareholders raised £548 million from the sale of existing shares to international investors, valuing the company at £1.98 billion.

To celebrate the listing and start of conditional trading on Friday May 4, 2018, Tom Attenborough, Head of International Business Development, London Stock Exchange welcomed Vivo Energy to London Stock Exchange.

Admission will take place today Thursday May 10, 2018.

Vivo Energy is the first company identified in London Stock Exchange Group’s ‘Companies to Inspire Africa’ report to float on London Stock Exchange. The ‘Companies to Inspire Africa’ report was published in 2017 and identifies the fastest-growing and most dynamic private businesses across Africa.

“The listing today represents a major milestone for Vivo Energy.

We are delighted to welcome our new shareholders to the register. We have been thrilled with the level of support and interest we have had through this process from the global investor community and would like to thank all my colleagues for their hard work in reaching this significant moment in the Company’s history. We look forward with confidence to the next stage of our development as a listed business,” John Daly, chairman of Vivo Energy said.

MTN Nigeria listing may trigger IPO of other...

Continues from page 15

preceding its financials for the year ended December 31, 2017 that “management has already initiated its Co r p o rate G ove r na nc e Rating Scoring with the NSE with a view to listing on the NSE’s Premium Board.”

MTN Group had planned extensive local marketing to target Nigerian investors as part of a retail offer and institutional book-build, which may also involve selected international institutions.

The company recently met with local and foreign analysts to help them understand its business and operations, ahead of the forthcoming listing. The telecoms firm aims to list its Nigerian unit on the Lagos bourse via an IPO this year; its Group Chief Executive Rob Shuter said, adding

that IPO plans were well advanced and the company would provide exact terms in the next few months.

MTN reported improved results for the 12 months ended December 31, 2017, delivering on guidance communicated in March 2 0 1 7 a n d re tu r n i ng t o profitability in headline earnings.

For the Group, macroeconomic conditions were challenging across a number of our markets. For instance, Ni g e r i a e x p e r i e n c e d a markedly weaker naira as well as hard currency liquidity challenges earlier last year, but this improved as the year progressed.

In constant currency, the Group service revenue in 2017 grew by 7.2percent, underpinned by 11.2percent growth in service revenue in Nigeria and a 3.9percent (on

an organic basis) growth in service revenue in South Africa.

In 2017, MTN Nigeria subscribers base was 52.3 million; revenue increased by 11.4percent; data revenue increased by 86.6percent; digital revenue decreased by 3.5percent; Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) margin declined by 7.5 points to 38.9percent (excluding the impact of the regulatory fine); while capital expenditure (capex) increased by 38.2percent.

MTN Nigeria maintained positive momentum in 2017, with the overall macroeconomic environment stabilising and the increased oil price and production offering some relief. During the review year, MTN focused on operational performance, network quality, customer

experience and churn management.

The subscriber base at year end was 52.3 million, following both the definition review as well as lower gross connections as a result of new regulations that require all subscriber connections to take place in permanent structures.

During the last quarter of 2017 the Nigerian business recorded net additions of 1.965 million, a strong result.

Total revenue increased by 11.4percent, driven by strong data revenue growth.

Data revenue increased 86.6percent, benefiting from customised data offerings and improved network quality driving data usage.

Back to listing Nigerian unit, the Group obtained its shareholders’ approval in principle to prepare for the listing, including

amendments to its corporate structure. The listing of Nigerian unit is subject to requisite regulator y a p p rov a l . A re n ow n e d lawyer and boardroom expert, Gbenga Oyebode was appointed chairman of board committee on MTN floatation.

MTN representatives have been engaging with market regulators the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE). The extensive engagement with regulators is on the structure and parameters of the listing.

Ahead of that target month, MTN Group hopes to get all necessary approvals for the listing including that of the Securities and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE).

MTN agreed to list

the Nigerian unit on the Nigerian Stock Exchange this year as part of a June 2016 agreement to pay a $1 billion fine for missing a deadline to disconnect unregistered subscribers amid a security crackdown.

On June 10 2016, MTN Nigeria Communications Limited (MTN Nigeria) resolved the matter relating to the previously imposed regulatory fine with the Federal Government of Nigeria after the completion of an extensive negotiation process.

In terms of the settlement agreement reached on June 10, 2016, MTN Nigeria agreed to pay a total cash amount of N330 billion over three years (the equivalent of 25.1 billion rand) to the Federal Government as full and final settlement of the matter.

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BUSINESS DAY

Thursday 10 May 2018

INTERVIEW

Thursday 10 May 2018

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World Bank to give $300,000 to state that completely accessed UBEC funds Hamid Bobboyi is the Executive Secretary of the Universal Basic Education Commission, UBEC. He, in this exclusive interview with the BusinessDay’s team led by Bashir Ibrahim Hassan, General Manager, Northern Operations, spoke on his key plans for delivering improved, qualitative and affordable basic education to Nigerian children in line with the demands of 21st century learning. Excerpts.

Could you share with us your overall success story on journey in UBEC so far? o m i n g i n t o a n o rganisation like UBEC which has six zonal offices and about 28 state offices, I realized it is a very big organisation that has its tentacles in every nook and cranny of the country.

UBEC’s mandate is derived from the UBEC Act of 2004, as the coordinating agency of the basic education sector. It also coordinates as an interventionist agency that provides some resources to the states to ensure that there is some form of stability and activities at the state level in terms of infrastructural and other forms of support required to ensure that we have functional basic education in the country.

The importance of UBEC lies in the fact that solid foundation of the educational system has to be provided by basic education.

This will ensure and help us to provide the human resources that the nation needs for its developmental purposes, for government agencies, industries, factories who depend largely on the educational foundation provided by the basic education system in the country to function efficiently.

One key issue we saw when we came in was that a huge unaccessed funds. Perhaps due to lack of advocacy and information, States are not interested utilizing the funds for the provision of basic education. However, we have undertaken advocacy visits to the states and the governors and it has been rewarding.

UBEC is funded monthly from the releases that are usually completed at the end of the year. So by the end of 2016, we had been able to get the entire North-West being able to access it’s fund.

In 2016 also, the entire NorthEast accessed the UBEC fund, with the exemption of Adamawa. Most of the states in the South-South are also doing very well with regard to accessing the UBEC fund - Cross River, Akwa Ibom, Edo, and Rivers States are all doing well; Bayelsa is lagging behind in that regard though.

For the South West, majority of the states have also come forward.

Lagos has always been at the forefront in accessing its own UBEC fund. Ironically, Ogun State that is an industrial cluster has not been up to date in accessing the UBEC fund either.

The UBEC fund is a counterpart fund, and you have to bring in the same amount you are taking. If you bring for instance N3.8 billion, you will get the same amount.

Osun has also done very well.

We still have not made much progress in the South East in terms of fund assessment of their counterpart funding.

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Another key issue we have also focused on since my assumption of office is strategic planning. There is no nation that will achieve its purpose without setting strategic goals. Hence, we asked ourselves how we can ensure that there is a strategic plan for the basic education sector.

But you don’t plan at the federal level only. You also plan for the 36 states of the federation and the federal capital Territory. We have already taken off with the strategic Plan since 2017. The World Bank has initiated a reward system for states that are doing very well according to laid-out plan and assessment of the fund for the development of the education system.

According to the World Bank, every state that has completely accessed its counterpart funding of the Unversal Basic Education Fund gets cash reward of $300,000. They are currently doing evaluation and assessment of the states that are in full compliance.

At UBEC, we said every state that wants to access its funds must make sure that the action plan it is bringing forward that particular year is coming from its strategic plan. The strategic plan must be in line with the National Personnel Audit of All Basic Education in the country. The National Personnel Audit is all about data.

We need credible data to help us plan, and it is essential to us that the data is available. The data is expensive of course, but we also realize that you cannot do without data. So we have gone out of our way to leverage on technology to facilitate and make our work easier regarding the National Personnel Audit issue. In that regard, we are working with the National Space Research Development Agency, using the General Racket Radio Service, GPRS to ensure proper mapping of schools. After the enumeration process, the entire data is uploaded on the server. In terms of that, we are moving very fast.

Following the school enumeration is a strong push for a ‘model school system’ which will be a pace-setter and the backbone for our basic education system: that you go and you look at what we are doing and see the standards we are talking about, and then endeavor to replicate in the schools. So it will serve as a model and a pointer to others.

We are taking off from each of the geo-political zones. We will have a comprehensive system and priortise the issue of capacity building for teachers, and also have a ‘smart classroom’.

The idea of the smart classroom’ we are championing is that everything from the teaching process in terms of ‘Smart boards linked to internet’ and other processes are made interactive between the teacher and the students. The idea of tablets will also be an integral

Bank will come to Nigeria and sort out all the logistics and other issues of accessing the funds.

Which states constitute the largest percentage of out-of-school children?

I don’t want to be particular about states.

However, about 10 states from the North West and North East Account for about 85 per cent of out-of-school children in the country.

How long will it take to fully implement these plans that you have talked about?

The plan has already begun and is on course. We have already commenced works on those things we need to change to align with the new strategic plan: understanding the need for the states to be up and doing and situate their projects within their plan.

The plans are however not rigid; if it meets some challenges as we move on, we will adjust them appropriately. In terms of the model schools, it is something that we are optimistic that before the end of the year, we must have been done with the zonal models.

Hamid Bobboyi

part of the projects, wherein all the text books being used in teaching are stored in pads that could be readily accessed.

The tablets will be distributed in the ‘smart classroom’, and we believe it will help students learn fast, and also develop their learning skills, using the internet. We are also working on these plans based on our overall strategic action plan that we have running through to 2021, which will ensure that every local government has at least one, and upgrade their own in the same standard with the model school system.

This is very vital in repositioning our education system, because we are in the 21st century and some of our schools are not even up to 19 Century standards with respect to the teaching activities that go on there.

Another key aspect we are looking into is the ‘Teacher Capacity

UBEC is sometimes accused of being very rigid with its stance, laying down specific instructions such as the kind of roof and textbooks that must be utilised at each time

Development’, which is one of the thrusts of our activities. We plan to channel 10 per cent of the funds from the Consolidated Revenue to teachers’ development. You are a major witness to the recent event that happened in Kaduna State wherein teachers could not answer primary school-level questions.

It is a real epidemic, not just in Nigeria, but all over Africa.

In a recent World Bank report on about 16 African countries, we are told that teachers could not pass the exams given to their grade 6 students and it is worrisome. So unless we focus on teacher capacity development, it will be difficult for us to break away from this kind of issue. Soon, we are going to announce the result of the National Assessment report in the country.

As a regulatory agency, we need to ask how our students are doing.

It is very important because we invest a lot. We need to asses level of literacy and the level of numeracy as these are the key fundamentals to help us in our strategic plans.

Before the end of May, we will make Public this assessment.

What Plans do you have to ensure all the states access their counterpart funds, and judiciously utilise them?

We are hopeful that with advocacy, interaction, and engagement with the governors that we have commenced, things will gradually change for the best.

UBEC is sometimes accused of being very rigid with its stance, laying down specific instructions such as the kind of roof and textbooks that must be utilised at each

time. But what we are saying currently is, let us work with states as partners. UBEC doesn’t own a single school. The schools are found in the states and that is why we are reaching out to the states to ensure a better future.

UBEC is interventionist, and as a regulatory agency, maintains standards. The key issue now is how to ensure standards.

I have been doing state advocacy since we came on board. I was in Osun, Adamawa, Ondo and I move around to see for myself and sit down with the states and discuss.

What has your experience been with your advocacy campaigns?

The advocacy visits to the states have been rewarding. On my visit to Osun state, I was pleased with what I saw there, looking at what they are doing, looking at model schools and the use of Technology in learning. They are already picking up fast in that regard. The senior secondary schools they have are already using tabs.

Hence, you see the interaction is good to enable us know what our problem is.

Osun is also keen about vocational schools, so that anybody who leaves the school system can use his skill to earn a living.

In the North, during the interactions, you still find out the challenges of out-ofschool children. It is a thing of worry, and Nigeria has been reputed to have about the largest number of out-of- school children.

In that regard, I make bold to say that we are lucky - the time I assumed office was about the time the World Bank gave Nigeria $611 million to address the concerns of out-of-school children in the country. They have set up the implementation agency, and we are working closely with them. Agreements are already effective in that regard. Also, in few weeks, another team from the World

Which other states are already in into the model schools?

Just like I mentioned earlier on the advocacy visits that I have embarked on, I have also seen some schools in Osun keying in into the model school pattern of our vision and strategy. Lagos is also doing great in that regard within the public school system.

I have gone round Kano, Adamawa and Edo, and I found out that many of our states are very serious with the issue of education. Edo is really committing resources to on education. The first education conference I attended on my resumption was in Edo state. About two weeks ago, they launched the school reform programme. They have also keyed into the ICT aspect of education development. They have virtually given all the teachers tablets to aid their teaching.

Sokoto is also doing fairly well in line with our strategic vision. Kano has the highest population in the zone, it is also struggling just like some states in the Southern part of the country. The case of Kano, is because we don’t have the large pool of private sector participation in the school ownership just as in the case with Lagos.

The Private schools in Lagos had over 1.7 million pupils in basic education, with the Public sector having about 420,000 pupils. Access is very important as the poor must also have access to good and qualitative education. Lagos is doing very well in terms of ensuring that its public school is working and doing great. Incidentally, one of the model schools we are going to establish is going to be in Lagos.

How do you measure the impact of UBEC’s intervention in the various states of the federation?

The Commission has played strategic roles in various states. Recall that the UBE programme was established in 1999, and many states could not even pay teachers’ salaries, while the infrastructure was largely poor. States could not even find the money to provide the basic requirements including chalk within the system.

Fortunately, with the establishment of the UBEC system following the enactment of the 2004 Law, there is some relative stability in basic education in the country, such that by the end of the year, if your state is able to pay the counterpart fund, it will be able to get resources to develop the basic education system.

The basic education sector is employing the highest number of people. There are more teachers employed in the basic education system across the country than in any other sector.

Even though basic education is the responsibility of the local government areas while secondary education is the affair of the states, the Federal Government is intervening in all these sectors. We are mindful of the complaints of the various states of the federation that they don’t have the counterpart funding for the education sector.

How do you deal with the states’ concern of not having the counterpart funding?

The whole idea is to expand the resource of basic education in the country. If you allow any state to access funds without the counter-

part funding, it reduces by half the available resources in such states.

But we have also seen efforts from some states to ensure UBEC lives up to its mandates of sustaining basic education in the country.

Another key aspect of what we are doing is continuous teachers training, to ensure we get those kinds of teachers that help in providing functional education.

From our findings (which we will make open in our Personnel Audit reports), some states are still employing teachers with secondary school certificates, while some employ dropouts. These are the teachers who sat exams in Kaduna and failed. As a nation, we must find a way of removing those kinds of people from the system.

Also, we have to look at what is going on in the Colleges of Education. We must look at the criteria for selecting those who teach in our schools. We cannot continue harvesting those who could not get through University Degree and Polytechnics in their JAMB sittings and who only pick College of education as a last option to teach in our schools. The teaching profession ends up attracting those who have failed to make it in other sectors. We have to change that.

Smaller countries like Finland are already priortising the teaching profession. The Salary of a teacher in Finland for instance is better than the salary of other professionals.

We must find a way to revamp our pre-service teachers training.

We must ensure that the right people get into the teaching profession. We must incentivise them so that we have the best teachers in our basic educational system.

Also, we must ensure that our compensation package for the teachers is ripe enough and made attractive, the kind that will encourage people to teach. It is a priority that we need to look at in rebuilding the foundation of our educational system.

Do you have any concerns, and would you want any of your enabling laws amended to ease your work?

The challenges are always there.

One key thing that we need to do to make a difference in the basic education is build synergy to ensure that all the actors are alive to their responsibilities. We must sit with all stakeholders and continuously discuss ways of repositioning the sector. I think it is very important that we appreciate that the nation has different tiers of government, and unless these tiers work together to produce the best form of governance, it will be difficult to make progress.

The second key issue is how to re-energise our communities to participate in the provision of education. In many states where education has reached higher lev-

els, citizens are properly mobilised to demand the best education for their children; they don’t want education officials to neglect their own school. We have to do that for the entire nation, so that if there are challenges from the part of the government, we leverage on the community to address such.

Our focus in the next few years is the provision of community support to facilitate growth and sustainability of basic education in the country.

On the issue of Law, the changes in the Law is more on how to reduce the counterpart funding requirement and add more resources. I think we need to find a formula that does not burden

the states or reduce the amount of resources that go to the state for the development of qualitative and affordable education in the country.

At the moment, we also need to look at the last years of the secondary education, which has been reduced to the status of a helpless Orphan. The new efforts in trying to look at the Law is to evolve means of incorporating senior secondary education in what we do, and increasing funding support for it in such a manner that we achieve seamless support for it. So we need to redefine basic education to include senior secondary school rather than just junior secondary school.

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Luxury

Malls

Companies

Deals

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Thursday 10 May 2018

Spending Trends

Big Indonesian FMCG companies target opportunities in Nigeria’s retail market STEPHEN ONYEKWELU

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ig Indonesian Fast Moving Consumer Goods (FMCG) companies are courting Nigeria’s retail market and its behemoth of consumers because Africa’s most populous nation has a growing aspirational middle class.

Indonesia is working to improve bilateral relations with Nigeria, promote business ties and improve people-to-people relations between both countries.

The balance of trade between Indonesia and Nigeria in 2014 was $4 billion but came down to $2 billion in 2015 and further down to $1.8 billion in 2016, Harry Purwanto, the Indonesian Ambassador to Nigeria, said, April 2017 during a press briefing in Abuja.

“Our main objective is to promote Indonesian products in the Nigerian market and strengthen bilateral relations between the two nations and between Indonesia and West African countries” Bagus Wicaksena, Director, Indonesian Trade Promotion Centre, Lagos, told BusinessDay in an exclusive interview at the Food West Africa 2018, in Lagos, the leading food and beverage trade exhibition in West Africa.

Indonesia wants to boost its export development to non-traditional countries, besides Europe, the United States of America and Asia. “We see that Africa is going to be our new potential partner, in terms of trade or investments.

Source: Global Edge.msu.edu; Nigeria’s Major Trading Partners in 2016

Africa has been developing fast.

Nigeria in particular is one of our potential markets because its large population represents a huge market opportunity. Nigeria is our gateway to the West African market, especially. Nigeria has growing middle class in addition to its large population” Wicaksena said.

The Indonesian Trade Promotion Centre has been in Nigeria since 2009/2010, designed to promote especially non-oil and gas products. It is part of the Ministry of Trade in Jakarta, Indonesia.

These Indonesian FMCGs are looking for anchors in Nigeria,

they want Nigerian distributors for their products. Four big Indonesian FMCG companies seeking to break into the Nigeria retail and consumer goods market include; Mayora Group, which began producing biscuits in 1948 but has long become a giant in the Indonesian packaged food industry whose products can be purchased in more than 100 countries on five continents.

“We are the second largest food producers in Indonesia and have been exporting to Nigeria since 1994. We set up shop in Nigeria in 2014 but closed shop in 2016 due

to dollar shortages that made it difficult for us to pay our parent company in Indonesia. Now, we rely on Nigerian distributors to export our products to Nigeria” Dipa S. Komala, Group Country Manager in Nigeria, Mayora Group told BusinessDay. “We are an export driven company, 49 percent of our $2 billion sales revenue in 2017 came from export. We have over 35, 000 employees and 3, 800 of these are outside Indonesia. We have 32 manufacturing facilities around the world. Some are in India, Denmark, China, Thailand

and Lebanon. We plan to build a manufacturing facility in Nigeria” Komala surmised.

Dua Kelinci is another Indonesian FMCG firm looking to break into the Nigerian retail and consumer goods market. Established in 1985 and has vast experience in the food industry. It exports to Europe, the Middle East, Canada, USA, India and China.

“In Indonesia we are one of the leading companies for peanuts and snacks, our sales volumes last year was over $2 billion. We are present in many countries around the world and are now focusing on developing products for the African market. We have been in the African market since 2015 and in Nigeria we started in 2016” Abdullah Mujahid, Head of Area International at Dua Kelinci, told BusinessDay. “We are here because of the population, it’s a big market and consumption is big too. We are working hard to understand the demand pattern and develop competitive pricing that is affordable” Mujahid said.

The other two of the four big Indonesian FMCG companies are Marizafoods and Kapal Api Global. Marizafoods exports to Saudi Arabia, China, Russia, Singapore, USA, Australia and the United Kingdom but without any footprint on the African continent.

Kapal Api products have been exported to more than fifty countries. It has more than 50 percent market share in Indonesia’s coffee industry.

1001Squared AI launches Quickhelp Nigeria JOSEPHINE OKOJIE

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he 1001Squared Artificial Intelligent (AI) Nigeria has introduced a revolutionary voice recognition directory system called Quickhelp.

Quickhelp is a chat board directory service that adopts artificial intelligence to provide services to its users and businesses.

“We are adopting (Artificial Intelligence) AI to provide our services and this makes it unique and allows our service directory more interactive,” Tosin Odubela, chief executive officer, Quickhelp Nigeria said during the unveiling recently in Lagos.

“We have enabled voice commands on our platform such that our clients can actually ask questions and our technology will respond using a random algorithm to generate the right contact you need,” Odubela said.

He stated that Quickhelp also provides other services for its users such as business contacts, taxi bookings, business tips, and traffic hints amongst others.

Odubela noted that the Quickhelp directory services are currently free for users until it introduces its premium services, adding that the business already has plans to roll out across the continent.

“We have mapped out our strategy on how we intend to roll out across Africa and in the next couple to weeks the process will be made in this regard.

“We are the first directory service providers to do this in Nigeria,” the CEO further said.

Speaking on how lists of new businesses come on board, the chief executive officer, said with the adoption of artificial intelligence, Quickhelp is able to mine data of new businesses and service providers.

He added that the Quickhelp is a product of 1001Squared AI Global based in Canada. “We are able to secure the deal via an acquisition arrangement and intend to scale all across Africa very soon.”

“With this our platform is able to provide the information our clients need in a conversational sound without them having to click on sound and buttons,” he added.

L-R: Ridwan Jimoh, developer; Idowu Kayode, marketing and brand manager; Tosin Odubela, chief executive officer; Abiola Olayande, Volunteer; Uche Amara, partners and Isaac Falade, mobile app developer, all of 1001Squared AI Nigeria during the unveiling of Quickhelp Nigeria in Lagos recently.

Thursday 10 May 2018

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Global retail update

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Growth plans in Africa outh African electronics group Jasco aims to double its systems integration and managed services business as it enters a new era with the appointment of a new CEO, Mark van Vuuren.

The company, which already has a base in Kenya, will seek further opportunities in East Africa.

Coffee deal in Europe Nestlé will pay Starbucks $7.15 billion as part of a global coffee alliance in which the Swiss-based food giant is getting the rights to market the U.S. coffee company’s products around the world outside Starbucks’ coffee shops.

Big changes Harrod’s is overseeing some major shifts in its marketing and digital teams, with the appointment of Amanda Hill as first chief marketing officer. The former chief brands officer for BBC Worldwide is poised to overhaul the renowned department store’s brand strategy.

Money worries British retailers are facing tough times, as close to 43,000 businesses ended the first quarter in ‘financial distress’, according to insolvency specialist Begbies Traynor.

Acquisition in Israel Competing for the industry’s top spot, New York-headquartered International Flavors & Fragrances is set to buy Haifa-based ingredients company Frutarom for USD 7.1 billion in cash and stock. The latter sells more than 70,000 products and has Unilever, Nestlé and Coca-Cola among its customers.

Going international Italian food emporium operator Eataly is looking overseas to grow. Chairman Andrea Guerra said that he will decide on a possible joint-venture in China. The company has ended 2017 with a profit of EUR 1 million, compared to a loss of EUR 21 million in 2016.

Turnover grew 20% to EUR 465 million (paywall).

Fuelling competition Chinese smartphone maker Xiaomi announced that it will enter France and Italy this month and is set to make more moves in Europe. Meanwhile, Israeli start-up BringBring is challenging big supermarket chains in the country as it is trying to prove that providing online shopping can be profitable.

Meal kit moves Fruit and vegetable giant Del Monte is investing USD 4 million in Purple Carrot, a Massachusetts-based startup, which only sells vegan meals. The deal gives the latter access to a national distribution network. Blue Apron started piloting meal kits at select Costco stores, marking the company’s first retail store distribution.

Flagship sale Canadian department store owner Hudson’s Bay and joint

venture partner RioCan have signed a conditional agreement to sell the former’s iconic store in Vancouver for about CAD 675 million to an Asian buyer. It follows the sale of its Lord & Taylor store on New York’s Fifth Avenue last year.

Fighting misuse Walmart announced that it would restrict opioid prescriptions to no more than a sevenday supply as the retailer aims to curb an opioid epidemic that has plagued the United States. The company also said that from 2020 it would require e-prescriptions for controlled substances.

Esprit exits German-headquartered but Hong Kong-listed global fashion brand Esprit has announced the closure of its Australian and New Zealand business. The move will see 16 retail stores and 13 factory outlets shut down by the end of the year. The company says it will develop other markets in Asia.

Best intentions Convenience chain 7-Eleven wants to become the premier retailer in Australia and has unveiled a brand new look for smaller, urban stores.

The franchise business plans to introduce a parcels locker service and to trial digital payment options.

BUSINESS DAY

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LG writes the future of television in four letters - OLED

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elevision technology has come a long way.

It has transformed the way we consume entertainment and the formats in which media is streamed but these days, we expect our television to do more.

Consumers demand television are so thin that they look like paintings on the wall. They are more than just appliances, but elements of décor integrated into the design of a home, and also render the sharpest images without compromising on resolution. Home cinema is not just about the picture anymore either. Sound is just as important. Consumers want the best in immersive sound technologies like Dolby Atmos, which has had a big impact since its arrival in cinemas and homes, doing for sound what Blu-ray and 4K Ultra HD did for visual depth and quality.

Today, consumers are eyeing televisions that would be able to learn usage patterns and automatically suggest entertainment based on our individual preferences.

The switch from LCD to LED transformed TV design, allowing for lighter, thinner and easily wall-mountable frames, housing even more sophisticated display tech.

The picture quality also dra-

matically improved with new contrast ratios rendering more vivid colours, deeper blacks and crisper whites but they were still more functional than aesthetic.

As a large segment of the population embraced internet connectivity, television became smarter, integrating content-streaming apps for a more seamless viewing experience. As Internet Service Providers (ISPs) upgraded their infrastructures to accommodate the growth in streaming services, television manufacturers also upgraded their television’s ability to tap into different types of content.

In the future, televisions with built in Artificial Intelligence (AI) will be able to learn usage patterns and automatically switch modes based on user preference, and even take instructions from multiple users as television become increasingly connected to digital home assistant systems.

When it comes to display technology, where the ultimate transformation of this decade happened was with LG’s pioneering efforts with OLED technology. The world saw its first Organic Light Emitting Diode (OLED) TV in 2012, when LG Electronics unveiled the world’s largest 55” OLED

panel. Six years on, and LG continues to lead in the OLED TV market, racking up awards and accolades for its innovative OLED TVs. LG’s pioneering efforts in the design and manufacturing of OLED televisions has culminated in complete dominance of the OLED market, leaving LG at the very pinnacle of innovation in display technology, redefining the TV viewing experience, and its place in your home. With continued investment in R&D and innovation, consumers say LG has made OLED technology affordable and accessible, allowing more people to enjoy a better-quality television experience than before.

LG OLED television are considered by industry experts to offer the most advanced display technology.

As each pixel on the display can be individually switched on and off, OLED offers enhanced picture quality without image degradation. This results in the highest quality image rendering with the purest blacks. With its myriad advantages, OLED panels have become the most desired display technology today and LG is leading the charge in making this technology even more ubiquitous and accessible. With the new LG SIGNATURE W8, set to make its debut this year, all this and more will be possible.

With support for both Dolby Vision™ and Dolby Atmos®, LG OLED TV is the first of its kind to offer a premium cinema experience in the comfort of your home. It also features LG’s Active HDR technology, which optimizes HDR picture quality scene-by-scene, rendering brighter scenes and greater shadow detail for a life-like viewing experience.

Living under poverty line How Nigerians are struggling to survive

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

Patient in dire need of funds to complete radiotherapy Name: Joseph Ogbeh State of Origin: Cross River State Dependents: Wife and four children Occupation: I was working as a distributor before I was diagnosed of cancer which has gulped all my saving leaving me bankrupted.

I had this lump on my neck that appeared and disappeared. I was in Port Harcourt then, so, I went to University of Port Harcourt Teaching Hospital, UPTH in 2015 and after spending so much money, I was referred to Federal Medical Centre, Bayelsa. When the hospital embarked on strike, a consultant in the hospital advised me to go to National Hospital, Abuja for radio-

therapy.

I got to National Hospital Abuja and did all the tests I had done before. I paid N90,000 to use the machine but after using the machine for three days, the machine broke down and I was told to go home. I started vomiting blood at home and was taken back to hospital where I was given four courses of chemotherapy at N163,000 per course and another four courses of chemotherapy when I started vomiting blood again some months later.

When the hospital got a new machine in December 2017, I went back to complete my radiotherapy but was told the cost had gone

Joseph Ogbeh

up to N300,000. By this time, I had everything I had apart from my new refrigerator I bought for N175,000. I traveled home and was able to sell the fridge for N75,000. I told them at the hospital that i was expecting some money and pleaded with them to accept N160,000 which was all I had and they did. Now, they are threatening to stop my treatment if I don’t balance up. I have sold all my property including my bus and my wife sold her wrappers and jewelries to pay my bills while I was on admission.

House rent: My rent expired while I was taking chemotherapy last year and my landlord sent my wife and children packing. A friend

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

of mine volunteered to offer them shelter and he did but his landlord said my wife and children should leave because the occupants in my friend’s house are too much.

School fees: My children have not been in school for two years now because I could not afford to pay their school fees and my wife does not have a job.

This sickness has dealt with me but I’m pained that my innocent children had to quit school. I want to send them back to school and get a place for us to stay but I cannot do that if I’m still in this condition.

I appeal to benevolent Nigerians to help me with funds to complete my radiotherapy treatment.

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Harvard Business Review

Thursday 10 May 2018

Global Business Perspectives CONNEC TING

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Supreme court continues to narrow the meaning of obstruction

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here is a great deal of talk about how Robert S. Mueller III, the special counsel, may be trying to build a case of obstruction of justice as part of his investigation of Russian interference in the 2016 election.

Whether enough evidence exists is an open question, although there are bits that could be the building blocks of an obstruction case. The New York Times reported a few weeks ago that John Dowd, who was President Donald Trump’s lawyer, had discussed possible pardons for Paul Manafort and Michael T. Flynn with their lawyers.

Then there was the president’s decision to fire James B. Comey as director of the Federal Bureau of Investigation, and Comey’s memos show Trump’s near obsession with being cleared of the tawdry allegations in a dossier compiled during the presidential campaign.

But did those efforts constitute obstruction of justice? Before one jumps to any conclusions, it’s worth examining the Supreme Court’s decision in a tax case last month. The ruling continues a trend of narrowing the laws used to prosecute an obstruction case. The court’s message has been that more is needed to prove obstruction than just conduct that might have some tangential impact on how prosecutors put together a case.

In Marinello v. United States, the justices reviewed the conviction of a defendant for violating a provision called the “omnibus clause,” which makes it a crime for anyone who “obstructs or impedes, or endeavors to obstruct or impede, the due administration” of the tax laws. The jury convicted Marinello of failing to file tax returns for his business after he used funds for personal expenses and paid employees in cash without any tax withholding

Special Counsel Robert Mueller leaves the Capitol after a closed meeting with the Senate Judiciary Committee, in Washington, June 21, 2017. For months, President Donald Trump has insisted he is eager to make the case to the Mueller, that he has done nothing wrong. But the questions that Mueller wants to ask the president show why Trump’s lawyers have countered that an interview would be a minefield for him to navigate. (CREDIT: Doug Mills/The New York Times

while discarding business records.

The Justice Department, in defending the obstruction conviction, argued that conduct that makes it more difficult for the Internal Revenue Service to determine the amount owed in taxes constitutes an endeavor to obstruct the tax laws. Under this approach, just about anything that might cause the IRS a problem could conceivably be a violation.

The majority opinion by Justice Stephen G. Breyer took a narrower view of the provision. It found that to prove a violation, the government must show “there is a ‘nexus’ between the defendant’s conduct and a particular administrative proceeding, such as an investigation, an audit or other targeted administrative action.”

This nexus requirement makes it harder to establish obstruction because prosecutors must

show what the defendant knew about an impending investigation or administrative action, and that the conduct was intended to make it more difficult to complete it.

The court took a dim view of the government’s argument for a broad reading of the law: that prosecutors would use good judgment and not overreach when bringing obstruction charges. Justice Breyer explained that “to rely upon prosecutorial discretion to narrow the otherwise wide-ranging scope of a criminal statute’s highly abstract general statutory language places great power in the hands of the prosecutor” — too much power, in the justices’ view.

The Marinello decision is just the latest case to narrow broad obstruction laws out of concern that prosecutors could take the provisions too far. The court relied on three earlier de-

cisions overturning obstruction convictions to support its conclusion that an expansive view of this type of conduct would be problematic despite the broad language used by Congress.

The nexus requirement for proving obstruction of justice was recognized in United States v. Aguilar, a 1995 decision that overturned the conviction of a federal judge who had lied to FBI agents about tipping off a friend that was the subject of a wiretap. The court held that “if the defendant lacks knowledge that his actions are likely to affect the judicial proceeding, he lacks the requisite intent to obstruct.” Although one would expect a federal judge to know that lying to investigators would have an impact, the court required proof of actual knowledge that the false statements would be provided to the grand jury, not just a general familiarity with how the process worked.

In Arthur Andersen v. United States, a 2005 decision, the court unanimously overturned the obstruction conviction of the accounting firm. Arthur Andersen had been convicted of destroying records shortly before the Securities and Exchange Commission began an investigation into financial misstatements by its client Enron. A defendant “cannot be someone who persuades others to shred documents under a document retention policy when he does not have in contemplation any particular official proceeding in which those documents might be material,” the opinion explained.

In 2015, the court restricted the scope of a statute that was adopted as part of the Sarbanes-Oxley Act to make it easier for prosecutors to pursue obstruction cases in the wake of Enron’s collapse. The law makes it a crime to conceal, alter or destroy “any record, document or tangible object.”

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

In the case, Yates v. United States, a majority of the justices held that a “tangible object” did not include the undersized fish the defendant had been caught with on his fishing boat but that he threw overboard before returning to port. Although a fish is indeed tangible, the statute was narrowed to cover only those items that hold information, similar to a record or a document, and not just anything with a physical existence.

Justice Ruth Bader Ginsburg’s opinion noted that “an aggressive interpretation of ‘tangible object’ must be rejected,” and a narrower reading must be adopted to avoid making the destruction of just about anything with possible value in an investigation into obstruction of justice.

Mueller is reportedly looking at the possibility that there were attempts to obstruct the investigation in Russian meddling in the election. For the most part, actions or statements that might be considered obstructive are open to conflicting interpretations. Whether it be the firing of Comey or talk of removing Rod J. Rosenstein, the deputy attorney general, these acts are probably insufficient alone to prove obstruction in court because they would be lawful actions, so inferring the requisite intent would be a significant challenge.

Absent evidence along the lines of the “smoking gun” recording of President Richard M. Nixon discussing the Watergate break-in, proving such a case will be especially difficult because the standard is proof of intent to obstruct beyond a reasonable doubt. The message from the Supreme Court in the wake of the Marinello decision is to tread carefully when trying to show that ordinary acts amount to obstruction, even if they make life more difficult for prosecutors.

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Private aviation market flourishes on new understanding of its gains – Okwa Harold Okwa is the founder of Jetseta, a company that provides easy and affordable access to private air travel and helicopter shuttle services through an app that seamlessly connects travellers to private aviation providers at attractive fares worldwide, on the go. In this interview with Ifeoma Okeke, he explains why Nigerians are opting to fly private jets and how the industry has grown over the years.

How many private jet operators do we have in Nigeria now? urrently in Nigeria there are about 36 private jet operators, half of this number is state owned and the other half being owned by individuals and corporate companies.

Although there are an increasing numbers of foreign registered aircraft in Nigeria at present. I would say this number is around the 100 mark.

How have they grown in the last five years?

The industry was believed to have been growing rapidly from 2013- 2015, largely due to increased economic activity, which a lot of people attributed to the high oil prices at the time. From Q3 2015, it saw a sharp decline in the growth of the sector, and eventually shrinking. This was due to a number of economic and political factors in Nigeria. A major one was a spike in the exchange rates, which affected operators running costs adversely.

Why are some Nigerians opting to fly private jets?

This new understanding of what private aviation brings to the table has allowed the market to bloom and therefore generate the necessity to meet this increase in demand. This rise caught the eyes of the government in the past, which years ago removed import duties on new jets, has opted to not specify a time restriction for foreign aircraft in Nigeria and has invested

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Harold Okwa

in the soon-to-be-opened terminal in Abuja (although this is currently facing some delays).

This public-sector movement has been a result of the increase in the use of private aviation, and due to a lack of other competitive means of transportation. Some argue that more immediate economic development returns come from investing in the business

aviation market, as opposed to building new roads or rail networks.

Whatever the case, the oil and gas industry, as well as finance and manufacturing have benefited from the amenities of this industry: landing in places without commercial flights and connecting communities otherwise isolated or precariously connected.

This boom has seen local

Dana Air introduces ‘Cash Back’ initiative

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ne of Nigeria’s leading airlines Dana Air, has introduced has introduced another customer centric initiative designed to gift its guests with some ‘cash back’’ on every booking.

The initiative requires the airline’s guests to get a card called “Thank you’’ card at its Murtala Muhammed Airport 2 sales outlet , pay for their booking using the card, to get a good discount on every booking which can also be used to shop at any partner outlets.

“Dana Air is pleased to have again launched an initiative to ensure that our guests get rewarded for their loyalty. This time, we are using technology to re-imagine the customer experience and reward our guests.

This reward which comes in form of a good discount, instant cash back, can be used to shop at any partner outlets,’’ said Kingsley Ezenwa, Communications Manager of Dana Air. “A customer with the thank you card doesn’t need to queue to pay for booking at any of our outlets. It is just a swipe and the card is debited.

The passenger also gets the cash back reward instantly. This means our guests get rewarded instantly for every booking. It is just our little way of creating a seamless travel experience for our guests while getting extra value for money spent.’’

Speaking further, Ezenwa said, we will continue to explore technology to ease booking, and the travel experience of our guests. We are a creative brand with a tireless knack

for innovation and ingenuity.’’

“Our self-service kiosk is also located at MMA2, where guests can choose to avoid the queue and book tickets, reschedule their flights or even pay for their booking without an interface with our agents. The kiosk is the first of its kind at the airport and created to suit the needs of our time-conscious guests.’’ These are just to mention a few initiative we have put in place to keep up with our vision which is to become Nigeria’s most customer friendly airline.

Dana Air is one of Nigeria’s leading airlines with over 27 daily flights from Lagos to Abuja, Port Harcourt, Uyo, and Owerri. The airline is reputed for its innovative products, world-class in-flight service and unrivalled on time performance.

companies like Jetseta rise to the occasion and service local demand through a mobile app that seamlessly connects travellers to private aviation providers at attractive fares worldwide, on the go. Just one click by the customer and the precise aircraft for the desired route will be allocated at an affordable price. We want to make private air travel easy, connecting aircraft owners and travellers in order to increase each side’s productivity. Owners need to pay the costs of having a jet and travellers need to maximize their time to bolster their businesses.

What is the total turnover of the industry?

It is difficult to give an exact figure of the current industry turnover, but it is believed to be about $6.5 billion dollars per annum.

What kinds of services are on offer?

There are a cocktail of services on offer. Though most operators keep it simple and offer just adhoc full charter services, and occasionally would sell their “empty legs” at a discounted price. At Jetseta, we have been innovative, to create a third service, which is called ‘Single seats’, where we allow passengers pay for just a seat on popular routes like Lagos, Abuja and Port Harcourt. I am aware of some operators who have commenced doing fractional ownerships and timeshare services.

Who are the leading players?

Currently the market is some-

what an Oligopsony, with a relative good supply of aircraft, especially when it comes to large cabin, heavy jets, but fewer numbers of frequent/routine charterers. This is partly why we had to create the “single seats” option. It has allowed for a wider market of private aviation users, in a sense democratizing the private jet experience. In my view, there isn’t a clear-cut leading player, nevertheless, at Jetseta we like to see ourselves as a ‘virtual airline’, I would say we are aiming to become the leading player.

Who are their major customers?

Major customers would range from CEOs, Diplomats, Sports personalities, Entertainment celebrities, Political figures, NGO aid workers etc. Most of these customers have one thing in common; they are “time poor”. In most cases they need to get to remote parts of the country/continent, and would not readily be able to do fit this in their schedules with commercial air flight options.

What is the average cost to the customer for opting to fly private?

The cost of flying private jets depends on a number of factors ranging from the flight distance, size of the party travelling, type of aircraft to be used, waiting times, stopovers etc. However on our business jet which shuttles the Lagos, Abuja, Port Harcourt route, prices start from N70,000 (about $200) a seat.

Air Peace CEO to chair LAAC seminar

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llen Onyema, the Chairman of Air Peace would be the chairman of the forthcoming 22nd annual seminar of the League of Airport and Aviation Correspondents (LAAC), which is scheduled to hold in Lagos.

The seminar, themed “Financing Aviation Development Through Private Sector Partnerships,” will hold on July 19, 2018 at the Sheraton Hotels and Towers, Lagos.

Apart from Onyema, other major players in the global aviation industry would also be in attendance and would present various papers on how to move the Nigerian aviation industry forward. Some of the topics slated for discussion include; ‘Partnerships as Key to Survival of Local Airlines in Nigeria,’ ‘Funding Perspectives of Aviation Security in Nigeria,’ ‘Federal/ State Government Partnership in

Air Navigational Development and ‘Maintenance, Repair and Overhaul (MRO) Financing.’

Chris Iwarah, spokesman for Air Peace, said that the annual seminar would offer the players in the sector a platform to discuss elaborately on the challenges and prospects in the Nigerian aviation industry in particular and Africa as a whole.

Onyema has a wealth of experience in the aviation industry, having started Air Peace in 2014 with just seven aircraft, which has grown to 24 within the last four years.

The airline is the fastest growing carrier in the entire West and Central Africa Region, connecting major cities in Nigeria, West Africa while plans have reached an advanced stage to expand its wings to United States, United Kingdom, South Africa and other long haul routes.

Innovation

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24 BUSINESS DAY Nokia 7 plus review: Stock Android with 48 hours battery life C002D5556

CALEB OJEWALE

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he Nokia 7 plus, one of the newest additions to the Nokia range of smartphones released this year is now available in Nigeria, and TechTalk got to review one of the units which so far appears to be a good contender in the mid-range Smartphone market.

HMD Global, the Finland-based company which acquired rights to the Nokia brand name launched the Nokia 7 plus along with four other Nokia phones at Mobile World Congress 2018.

HMD and Google have struck a deal to make all of these Nokia devices (and potentially future models) Android One devices. Being on the Android One program means users of Nokia 7 plus will get faster updates, as well as the same stock Android experience with no bloatware.

Since the phone comes without any bloatware — just Google apps — the

software experience is stock Android 8.0 Oreo, guaranteeing access to faster versions and security updates.

The menu pops up easily, and is neatly displayed, with apps opening quickly.

Very important to note is that absence of bloatware implies there is a lot more space on the device for the user, to store more media, or even get those apps you really want to have and/or consider important.

Its processing power relies on a Qualcomm Snapdragon 660, an octa-core processor and 4GB of RAM which would ensure the device runs smoothly for most users. Come to think of, many PCs still run on 4GB RAM, so for a smartphone, it is not doing badly.

There’s 64GB of internal storage available, as well as a MicroSD card slot which can accommodate up to 256GB. This second slot is however a hybrid which can also be used for a second SIM card.

T h e p h o n e’s 6 i n c h screen is quite impressive, with a resolution of 1080

life. The 7 plus has not failed to live up to expectations in this regard.

x 2160 pixels, supporting 4G/LTE, and fast charging battery.

Some interesting features include; The Battery Nokia 7 plus packs a 3800 mAh battery, which true to the manufacturer’s claim of the phone’s capacity, actually lasts 48 hours on

Data Privacy: How Twitter uses your information FRANK ELEANYA

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ver the weekend, Twitter sent an email to this writer, and perhaps millions of other users on its platform, about the need to change password on “all services where” the password has been used. According to the company, it recently unmasked a bug that stored passwords in an internal log.

The social media platform claims to “have fixed the bug and our investigation shows no indication of breach or misuse by anyone.”

While that assurance may come as a relief, users should not forget Facebook in a haste; in 2014 it discovered that Cambridge Analytica was assessing data illegally and thought it had “fixed the bug” by ordering the company to delete the data it had accumulated, only for whistleblowers to reveal years later that the problem was not quite “fixed”.

Today, while Cambridge Analytica has confessed it amassed over 80 million users’ data, shut down its operations and declared bankruptcy, Facebook is left to clean up a mess that may not go away as soon as possible.

Twitter appears not to be taking any chances however.

Prior to sending its email, the company had on April 24, following the outbreak of the Facebook data scandal, released a post detailing what it does with the information it generates by the second from its more than 300 million monthly active users.

The company would also be changing its Privacy Policy, effective May 25th.

To understand the ramification of a data breach on the platform; 79 percent of Twitter accounts are based outside the United States while 83 percent of 183 members of the United Nations have Twitter presence. Twitter users send out a total number of 500 million tweets per day.

“We believe you should always know what data we collect from you and how we use it, and that you should have meaningful control over both,” Twitter wrote in a post.

“We want to empower you to make the best decisions about the information that you share with us.”

There are many ways Twitter generates its information.

The privacy policy explained that even if a user is only looking at Tweets, certain insights like the type of device the user is using and the IP address. An IP address or Internet Protocol address is the number label

assigned to each device connected to a computer network that uses Internet Protocol for communication.

When users volunteer information such as their email address, phone number, address book contacts, and a profile picture, Twitter uses these for things like keeping the account secure and showing more relevant Tweets, people to follow, events, and ads.

Apart from volunteering information, Twitter gets data when users read a particular content, or Like a post, or Retweet. The data is used to determine what topics people are interested in, their age, and the languages they speak.

Twitter says its users have control over the amount of data it collects from them and it uses the information. Users can also control things like account security, marketing preferences, apps that can their account, and address book contacts they have uploaded to Twitter.

“You can always download the information you have shared on Twitter,” the company noted.

The new Twitter Privacy Policy was prompted in part by upcoming General Data Protection Regulation (GDPR) laws in the European Union.

regular usage. The usage during our review included pretty much everything from making calls, messaging, and internet browsing (which as we know really drains battery life). What many people associate the Nokia brand with, and also the first thing that comes to mind when the brand is mentioned is the battery

Operating System The Nokia 7 plus not only runs the latest Android 8 Oreo, but also joins the Android One family, which is often described as a form of “pure or stock android”. It offers unique user experience, especially for those who want the phone as unclogged as possible, so they get to create their own preferences and experiences.

Since the device runs ‘pure Android’, the Nokia 7 plus comes with no unnecessary UI changes or hidden processes that would degrade battery life or slow it down, making it possible to enjoy the phone longer.

With monthly security updates and Google Play Protect built in, Android One devices are among the most secure. Google Play Protect actively scans and verifies over 50 billion apps per day, and uses Google’s machine learning to dynamically prevent viruses and malware.

Thursday 10 May 2018

By shipping with Android Oreo out of the box, users are able to enjoy the latest features, including Picture-in-Picture for multitasking, Android Instant Apps to discover and run apps with minimal friction.

Camera The front camera comes first at 16-megapixel which selfie lovers are sure to be excited about. The quality is quite crisp and images look substantially good. The rear dual-camera system has a 12-megapixel and a 13-megapixel lens, and they both allow for 2x optical zoom, as well as “bothies,” which is when you take a photo or video with the front and rear camera at the same time.

The Pro Camera mode on the Nokia 7 plus makes it possible to easily adjust white balance, focus, ISO, shutter speed and exposure compensation for extraordinary images in ordinary life. But be warned, stick to the regular mode if you don’t know ‘what you’re doing’ here (in pro mode).

Will EU GDPR Rules on data privacy affect Nigerian businesses, remittances?

FRANK ELEANYA

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rom May 25, Nigerian companies whose operations are exposed to data from anywhere within the European Union will need to comply with the landmark EU General Data Protection Regulation (GDPR).

Last week, LegitNG, an online legal content and referral service provider released a ‘Quick Guide to the GDPR for Nigerian Companies’ which it says provides clarity and guide to beginning the journey towards compliance.

There are a number of Nigerian companies whose services are accessible online by anyone in any part of the world, including the EU. Nigeria also receives significant Diaspora remittances from citizens within the EU region.

Companies in that category therefore that choose not to comply could be subject to fines of up to €20 million and blacklisting for business within Europe.

LegitNG explains that Nigerian companies that use techniques such as web analytics, tracking, cookie identifiers, radio frequency identification tags, and geolocation tracking to collect

personal data of EU data subjects will likely be subject to the GDPR. “GDPR awareness in Europe has reached a frenzied pitch and companies will be looking to not only protect data within their control but ensure that they do not share important data with partners who have no structure for data protection. The fact that Nigeria still has no enforceable data protection law till date places Nigerian companies as risky partners for the purpose of data sharing with EU entities,” LegitNG noted.

The GDPR which replaces the EU Data Protection Directive (Directive 95/46/EC) was approved by the EU Parliament on 14 April, 2016, was designed to harmonise data privacy laws across Europe, to protect and empower EU citizens’ data privacy and to reshape the way organisations across the region approach data privacy.

The GDPR defines personal data as any information that alone or in combination with other information has or is likely to identify a living person, or data subject, including an individual’s phone number; home and email address; job title; online identifier; employment history; education and training; and financial

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

and payment details.

The provisions are consistent across all 28 EU member states, which mean that companies have just one standard to meet within the EU. According to an analyst on Quartz Africa, the question to strengthen online privacy rights comes at a time when African governments and activists are battling over issues ranging from information censorship, surveillance, data retention, interception, and internet shutdowns. The current uproar over digital privacy has also been amplified following recent revelations that data mining company Cambridge Analytica harvested millions of Facebook profiles and worked to fix elections in Kenya and Nigeria.

Nigerian businesses covered by the GDPR are required to designate, in writing, a representative in one of the EU member states.

“We believe that one of the most immediate risks for Nigerian companies, especially business-to-business companies, providing services to EU data subjects is that from May 25, 2018, part of the requirements for entering contracts is the requirement to be GDPR compliant,” the LegitNG Guide noted.

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Thursday 10 May 2018

BUSINESS DAY

25

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

SERAP demands accountability for postprivatisation spending on the power sector

M&A experts explain why recession should trigger bolder moves towards expansion and growth THEODORA KIO-LAWSON

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ocio-Economic Rights and Accountability Project (SERAP) has sent a Freedom of Information request to Babatunde Fashola, SAN, Minister of Power, Works and Housing asking him to use his good offices and leadership position “to urgently provide information on specific details of spending on the privatisation of the electricity sector and the exact amount of postprivatisation spending to date, and to explain if such spending came from budgetary allocations or other sources.”

The organisation is also seeking “information on the status of implementation of the 25-year national energy development plan, and whether the Code of Ethics of the privatisation process which bars staff of the Bureau of Public Enterprises (BPE) and members of the National Council on Privatisation (NCP) from buying shares in companies being privatised were deliberately flouted.”

In the letter dated 7 May 2018 and signed by SERAP executive director Adetokunbo Mumuni the organisation said, “Since the privatisation of the power sector, the government has continued to use public resources to subsidise private entities. It is unclear if this spending is drawn from budget-

ary allocations and if these are loans to generation companies (GENCOS), Distribution companies (DISCOS) and Transmission Company of Nigeria.”

The organisation said, “Assuming the funds are given as loans, SERAP would like to know whether appropriate guarantees have been provided to secure such loans, and whether such loans provide value for money for Nigerian tax-payers. Publishing details of spending on privatisation of the power sector and post-privatisation spending on GENCOS and DISCOS would serve the public interest and provide insights relevant to the public debate on combating corruption in the power sector as well as help to improve citizens’ access to regular and uninterrupted electricity supply.”

According to the organisation, “If the requested information is not provided to us within 14 days of the receipt and/or publication of this letter, the Registered Trustees of SERAP shall take all appropriate legal actions under the Freedom of Information Act to compel you to comply with our request.”

To be continued next week

E

xperts in Mergers, Acquisitions & Corporate Restructuring have offered varying perspectives as to why the recent recession in Nigeria should positively impact growth and expansion in the country, particularly with the help of mergers, acquisitions and restructuring.

This disclosure was made at the annual Seminar of the Mergers, Acquisitions & Corporate Reorganisations Committee of the Nigerian Bar Association Section on Business Law (NB-SBL), which took place on May 3rd, 2018 at the Four Points by Sheraton Hotel in Lagos.

Speaking about the theme of the seminar: “Recurring Issues in Mergers and Acquisitions in Nigeria,” the Chairperson of the M&A committee, Olayemi Anyanechi in her opening remarks suggested that recession could and should be a factor which should trigger bolder moves towards expansion and growth.

Citing the recent Sainsbury’s Asda merger move in which both supermarket giants in the UK made decisions to merge, subject to ratification by the relevant regulatory bodies, Anyanechi noted that the propelling factor for this merger, was the 17% fall in average annual profit.

“Needless to say, Shares in Sainsbury’s leapt by as much as 20% in early trading. It is thus no wonder why there was an uproar over Sainsbury’s CEO being caught on TV earlier this week humming Fred Astaire’s “we’re in the money… let’s spend it, lend it, send it rolling along…” she said.

The M&A committee chair thus wondered at the wall of mystery preventing Nigerian corporates from appreciating the enormous benefits corporate restructuring may hold for businesses and for the economy.

She said, “While M&A transactions are not alien to Nigeria, they are yet to become

Olumide Akpata, Chairman, NBA Section on Business Law.

Oscar Onyema, CEO, Nigerian Stock Exchange.

Olayemi Anyanechi, Chairperson, NBA-SBL M&A Committee.

Ag Director General, Securities & Exchange Commission.

the regular vehicle for corporate growth and expansion which they ought to be, in comparison to more developed countries where M&A transactions thrive so excellently and contribute significantly to a buoyant and prosperous economy.

“The overarching goal of this seminar is for interested stakeholders to deliberate on the issues impacting on M&A and tease out how these issues may have contributed to the low incidence of M&A in Nigeria.’

Speaking on a positive note, Dapo Okubadejo, Partner & Africa Head, Deal Advisory & private Equity at KPMG stated that a critical look at the M&A activity in the last 3 years (as displayed on in-

Dapo Okubadejo​​, ​Partner & Africa head, Deal Advisory & Private Equity at KPMG.

fographics) reveal an expected increase in M&A activity in 2018 and beyond” “This will be driven by, improved economic and financial certainty postexit from recession, improved ease of doing business, increased domestic demand for mergers and acquisitions from companies in maturing industries, as well as improved government support for key economic sectors will attract local and foreign investors,” he said, Continuing, Okubadejo added a Continues on page 28

Crossing the Fine Line: Legal Issues of Data Misuse in Nigeria CHUKS OKORIEKWE

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t the heart of the US election probe following recent developments from US Congress’ hearing is the claim that Facebook’s users’ data were misused

by Cambridge Analytica to manipulate voters’ choice. This was also the case in Nigeria where President Buhari’s medical records were said to have been hacked by Cambridge Analytica during the build up to the 2015 general elections.

These issues have revealed one of the downsides of data storage and sharing of personal preferences on social media, particularly with third party applications using the interface/application of a ‘trusted’ platform. This is often the case where websites as part of their Terms of Services (ToS) indicate that they would share user information/data with third parties. It is therefore pertinent to ask whether data holders (DH) could be held liable for breach of contract and criminal breach of trust in instances where data subject (DS)’s

data are used for purposes other than agreed by the DS? For instance, Mr. A is required

by Company B to take a survey wherein he inputs his personal information. Thereafter, he receives a message from Company C (an unrelated company) about the survey he filled, asking for more information from Mr. A or directly marketing a product to him based on the information filled in the

survey. The question that arises is whether Mr. A’s data has been used for the purpose for which it was meant? Simply put, has Mr. A expressly consented to his data being shared with another party?

This article seeks to examine the legal issues of data misuse in Nigeria whilst examining the legal framework for the protection of data as well as possible redress of DS in cases of misuse.

Data Misuse in Nigeria – How Construed?

Data misuse can simply mean a situation where data is inappropriately used as defined when the data was initially collected from DSs. The legal basis for protecting personal data from any form of misuse is the duty to protect the confidence and privacy of personal information. This right to privacy is guaranteed by section 37 Constitution of the Federal Republic of Nigeria 1999 (1999 Constitution) (as amended) “The privacy of citizen, their homes, correspondence, telephone conversation and telegraphic communication is hereby guaranteed.” The sanctity of the right to privacy was reiterated by the Supreme Court in MDPDT v. Okonkwo [2001] FWLR (Pt. 44) 542 where his Lordship Ayoola JSC, stated that “The right to privacy implies a right to protect one’s thought; and one’s body from unauthorized invasion.” Although, the right to privacy is not absolute, any derogation must be within lawful justification (section 45 1999

Constitution).

One of the first attempts by the government to provide a shield for data use is vide section 10(1) (b) (i) Wireless Telegraphy Act Cap. W5 LFN, 2014 which provides that: “No person shall – otherwise than under the authority of the Commission, or in the course of his duty as a servant of the State, either – use any wireless telegraphy apparatus with intent to obtain information as to the contents, sender or addresses of any message (whether sent by means of wireless or not) which is neither the person using the apparatus nor any person on whose behalf it is acting is authorised by the Commission to receive.” Accordingly, any attempt to intercept a message sent by telegraphic or any other (electronic) means without the authorization of the Nigerian Communication Commission (NCC) or the National Continues on page 28 Chuks Okoriekwe is a commercial lawyer and practices with LeLaw Barristers & Solicitors.

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GREYMATTER

PERSPECTIVE

Review of the salient provisions of the meter asset provider regulations 2018

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major outcry, in the Nigerian Electricity Supply Industry (“NESI”), relates to the attendant collection losses and the concerns around estimated billing which has impacted in no small measure, the financial standing of most, if not all of the Distribution Company (“DisCo”) in Nigeria.

Thus, in December 2017, in its bid to end the seemingly perennial challenges with estimated billing in Nigeria, the Nigerian Electricity Regulatory Commission (“NERC or “the Commission”) released the Draft Meter Asset Provider Regulations 2017 (“Draft Regulations”). Thereafter, following extensive consideration of comments from and reactions to the Draft Regulations, as received from relevant stakeholders, the Board of NERC eventually approved the updated Draft Regulations.

Consequently, on March 8, 2018, the Meter Asset Provider Regulations 2018 (“MAP Regulations”) was finally issued under the common seal of NERC and became effective as the governing framework for the metering of electricity consumption in the NESI. In a nutshell, the MAP Regulations establish standard rules which: i. Encourage the development of independent and competitive meter services in the NESI; ii. Eliminate estimated billing practices in the NESI; iii. Attract private investment to the provision of metering services in the NESI; iv. Close the metering gap through accelerated meter roll out in the NESI; and v. Enhance revenue assurance in the NESI. NEW INITIATIVES The MAP Regulations require a licensed DisCo to attain metering targets, as stipulated by the Commission, from time to time. To this end, each DisCo is expected to procure the services of a NERC–licensed Meter Asset Providers (“MAP”), defined in the Regulations as “a person that is granted permits by the Commission to provide metering services which may include meter financing, procurement, supply, installation, maintenance and replacement”.

Further, each DisCo must make regular periodic disbursements to the relevant MAP for the metering services delivered, pursuant to a Metering Service Agreement (MSA) executed between the DisCo and the relevant MAP. In order to ensure proper energy accounting, Eligible Customers, “properly so-designated” under the Eligible Customer Regulations, are also permitted to engage the services of MAPs. For clarity, it is important to note that, although the MAP Regulations are applicable to all DisCos, MAPs, electricity customers and all types of end-user customer meters in

the NESI, same shall not override metering contracts which were executed by DisCos prior to March 8, 2018. However, in the event of a conflict between the MAP Regulations and any other regulations or codes in the NESI, with respect to any matter relating to and or connected with metering, the MAP Regulations take precedence.

Specific provisions in the newly issued MAP Regulations include: Licensing Requirements and Process for Qualification as a MAP Subject to compliance with stipulated criteria covering “Application, Technical, and Technology Requirements”,MAP Permits are issued to successful applicants.

Accordingly, any applicant for the grant of a MAP Permit is required to submit with the completed application form, a set of documents namely: i. certificate of incorporation and memorandum and articles of association (MEMART); ii. tax clearance certificate; iii. certified audited financial statements for three (3) consecutive years prior to the year of application; iv. detailed resumes of the members of the applicant’s board of directors, management and technical staff; v. 10-year business plan; and vi. relevant experience of the applicant in asset finance, metering and other relating business.

Additionally, the MAP Regulations require DisCos and MAPs to comply with all relevant regulations issued by NERC, including the Metering Code and Guidelines for Certification of Metering Service Provider and Related Matters; as well as deploy a minimum back-office systems technology, by which the MAPs can maintain and retrieve financial, inventory, customer data and monitoring usage of deployed infrastructure records (at the minimum), on an on-line real time basis.

This back-office systems technology must be able to interface with the DisCos’ vending platforms.

In order to be granted a MAP Permit, DisCos are required to procure MAPs in accordance with the procedures stipulated in the MAP Regulations. These procedures include: • Request by a DisCo for Expressions

of Interest (“EoIs”) in at least two (2) Nigerian newspapers and the relevant DisCo’s website • Request by a DisCo for competitive proposals for the provisions of meters and metering services from eligible interested bidders; • Preparation of bid documents by a DisCo with specifications for meters and metering services in accordance with the Metering Code and all other relevant Regulations issued by NERC; • Issuance of a bid document by a DisCo to each eligible bidder; • Issuance to the successful bidder of an Offer Letter to enter into MSA for the provision of meters and metering services, upon the completion of bids evaluation by a DisCo; and • Execution of an MSA between a DisCo and the successful bidder, subject to the grant of a Permit by NERC and the submission of a performance bond by the bidder.

Essentially, for a MAP to be considered eligible for participating in the bidding process, it must first apply to NERC for a “No Objection” for the provision of meters and metering services to DisCos. A duly completed application form for “No Objection”,is also required to be submitted with the same set of documents required for application for grant of MAP Permit (enumerated above), with additional documents which include: • VAT registration certificate; • Copies of the academic and professional qualifications of staff; • Proof of warehousing facilities for metering systems; • Proof of ability to secure funds for the procurement of metering systems; and • Proof of the applicant’s previous relevant experience.

The procurement process for the engagement of the first set of MAPs is required to be concluded within 120 days from the day the MAP Regulations came into force (April 3, 2018) while the process, for subsequent MAPs, is to be completed within 120 days from the commencement of the procurement.

Fundamentally, in order to qualify as a MAP, an applicant must have successfully Continues on page 27

GLOBALREPORT City law firm hopes to raise £43m from record IPO

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osenblatt, the fourth firm to float on the London Stock Exchange in its own right, aims to raise £43m from its initial public offering (IPO) – a figure which would make it the most lucrative law firm listing to date.

According to a filing posted last week on the junior AIM market, the firm said it will place 36.8m new shares and £8.4m existing shares at 95p per share.

The IPO represents a 48.3% stake in the firm, meaning existing owners will retain a controlling interest. Institutional shareholders notified to be taking a stake are Fidelity Investments (6.6%), Miton Asset Management (15.8%), Blackrock (6%) and Canaccord Genuity Group (3.6%).

If the quest for £43m is successful

it would surpass the current record sum raised by a law firm set by Gateley, whose listing in 2015 raised £30m. The float would value Rosenblatt at £76m.

The other two IPOs by law firms, Gordon Dadds and Keystone, raised £20m and £15m respectively.

Rosenblatt announced last week it will be admitted to the Alternative Investment Market on 8 May as Rosenblatt Group plc., a holding company for alternative business structure Rosenblatt Ltd. The 20-partner firm, which founded by dispute resolution and corporate specialist Ian Rosenblatt OBE in 1989, specialises in financial services, bank-

Thursday 10 May 2018

ing and real estate. Ian Rosenblatt, who currently owns 59% of the business, will make millions on the sale but remain the largest shareholder with 21.1%.

Among the firm’s recent deals was acting for Daily Express publisher Northern & Shell in the £127m sale of its newspaper business to Trinity Mirror.

The firm’s nominated adviser and broker is Cenkos Securities PLC. Speaking last month, chief executive Nicola Foulston said the firm was ‘focused on improving margins and profitability, compared to traditional legal partnerships run by lawyers, which concentrate on revenue and often lack commercial expertise’.

Culled from Law Society Gazette

An assessment of the implementation of Nigeria’s economic recovery and growth plan Continued from last week

The government has established a few initiatives to encourage the proper collation and collection of taxes such as the Implementation of the Integrated Tax Administration System (ITAS); Enforcement of compliance with tax obligations by government officials; and more recently the Voluntary Asset and Income Declaration Scheme (VAIDS). Whilst these initiatives are novel concepts to increase revenue generated from taxes, the government has often defaulted in the effective implementation of these initiatives and properly educating the public.

However, there is renewed hope for the country due to the recently established Voluntary Asset and Income Declaration Scheme. The VAIDS is a time-limited opportunity for taxpayers to regularize their tax status relating to previous tax periods and pay any taxes due. In exchange for fully and honestly declaring previously undisclosed assets and income, tax payers will benefit from forgiveness of overdue interest and penalties, and the assurance they will not face criminal prosecution for tax offences or tax investigations. The Federal Inland Revenue Service aims to raise the current to tax rate to 20% by the year 2020.

• Improve the budget preparation and execution process, focusing on increasing allocation to capital projects and improving the quality of capital spending, with a view to attaining a ratio of Capital Expenditure (CAPEX) to total budget of 30-35 per cent: The 2017 fiscal year total budget amounts to N7.298 Trillion with a capital expenditure budget of N2.24 Trillion including the capital in statutory transfers.

In 2017, the Federal Government released a total of N 1.2 Trillion to finance capital projects in the 2017 Appropriation Act. The Debt Management Office (DMO) stated that the release of such a large amount of capital over a six-month period is a demonstration of the commitment of the present administration to prioritise improvement in infrastructure in order to stimulate economic growth and development.

The DMO assured the public that more funds were yet to be released as the 2017 budget was only finalised in July 2017 and thus was still being implemented.

Furthermore, President Mohammed Buhari presented the proposed national budget for the 2018 fiscal year to the National Assembly in November 2017. The budget total is N8.612 trillion which is 16 % higher than 2017 estimates, while the “total federallycollectible revenue” was estimated at N11.983 trillion. The budget allocates Capital Expenditure of N2.428 trillion (excluding the capital component of statutory transfers). The key spending allocations from that figure includes N555.88 billion for power, works and housing; transportation which is to get N263.10 billion; and special intervention programmes which will get N150.00 billion. Others are defence which has N145.00 billion; agriculture and rural development which takes N118.98 billion and water resources with N95.11 billion.

Yet again, the onus rests on the Federal Government to adequately execute its agenda and ensure that these funds are repatriated to the ministries, departments and agencies, and other industry participants as at when due. Thereafter, the onus shifts to the relevant ministries, departments and agencies to be transparent in the execution of their respective spending allocations.

• Re-balance the portfolio of domestic to foreign debt from 84:16 to 60:40 and

make arrangements to pay off hidden Federal Government debt: According to the NBS, the nation’s foreign debt had risen to $15.05 Billion while the domestic debt portfolio was N14.06 Trillion as at Q2 2017. Comparatively, this represents an increase of the nation’s debt from $11.41 Billion and N14.02 Billion for the foreign and domestic debts respectively at the conclusion of 2016. The NBS in its report on Nigerian Domestic and Foreign Debt (June 2017) stated that the Federal Government was responsible for 74% of the foreign debt while the states and Federal Capital Territory (FCT) were responsible for the remaining 26%.

Overall, the external debt has risen to a record high of 15,352.13 USD Million in Q3 2017 from 15,050 USD Million in Q2 2017. External Debt in Nigeria averaged 7521.67 USD Million from 2008 until 2017, reaching an all-time high of 15,352.13 USD Million in the Q3 2017.

The International Monetary Fund (IMF) predicted that Nigeria’s debt to GDP ratio will increase by 100 per cent: from 12.1% in 2015 to 24.1% in 2018. These figures are alarming because Nigeria’s debt portfolio is now growing faster than its GDP. Nigeria’s public debt data, which comprises federal and state governments debt combined, shows that debt has been growing at double-digit, compared to the growth of GDP at single digit.

In 2013, debt grew at 33% compared to GDP growth of just above 5%. This pattern was repeated in 2014, 2015 and 2016, with debt growing by 12%, 12.5%, and 17.5%, respectively, while GDP growth has remained in single digit with growth rate of 5%, 6.5%, 2.5% and negative growth in 2014, 2015 and 2016, respectively.

According to statistics collated by the DMO, Nigeria’s public debt profile rose to N17.3 trillion at the end of 2016, compared to N12.6 trillion in 2015 and 11.2 trillion in 2014. External debt stood at US $11.4 billion while domestic debt stood at N13.8 trillion.

Although the recession was a contributing factor to the nation’s high debt portfolio, especially due to the fact that the Federal Government released an influx of foreign exchange into the economy in an attempt to curb the effects of the recession; ease the fears of the stakeholders and attract more foreign investors to the country, the government has a duty to be pro-active in order to avoid rendering the country’s debt unsustainable. ii.

The Monetary Policy: The primary objective of the Plan’s monetary policy is to encourage growth without increasing price volatility.

Price stability reduces uncertainty for households and businesses and enables them to plan. However, given the slow growth in 2016, the current challenge is how to balance price stability with growth objectives. In addition, in order to further reduce price volatility, the Government needs to act quickly in order to strengthen the resilience of the banking sector.

Policy objectives: • Reduce inflation to single digit by 2020 • Maintain a competitive exchange rate • Boost foreign exchange reserves • Help banks to embark on aggressive debt recovery efforts.

TO BE CONTINUED. Perspective By George Etomi & partners (GE&P)

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THE YOUNGBUSINESS LAWYER

Administering the bar …A look at the operations of the NBA through the office of the GS MOBOLOJI OJIBARA

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he effective implementation of service compact between any association and its members rests squarely within the purview of the office of the General Secretary. Consequently, the nexus between the office of the General Secretary and effective service delivery to the members is not only critical, but also non negotiable.

The office of the General Secretary defines the standard of service delivery accruable to members. Indeed, the realization of any unifying promise of professional growth or capacity building for members is dependent on the efficiency or effectiveness of the office of the General Secretary.

By the provision of Article 8(5) e of the Amended Constitution of NBA 2015, the General Secretary shall be in charge of the National Secretariat. And by its NEC Resolution of 25th November, 2010, the NBA described the Secretariat as its ‘engine house’ required to be responsive to the needs of its members and to establish its relevance in addressing the challenges of its members in all its branches across the nation, to be coordinated by the General Secretary as the elected officer of the NBA. When Alao Aka-Bashorun, as the President of the NBA, conceived the idea, and established the NBA Secretariat in 1990, there were less than 20,000 lawyers in the country. At this time, interaction and communication between the bar and its members were purely personal and analogue. However, with the call to bar of the last set of law school students into the Nigerian Bar, the secretariat now has well over 160,000 members to cater for.

Not only has the population of lawyers expanded, the demography of bar activities and interactions have also evolved, requiring paradigm shift from analogue style of managing our ‘engine house’ to a 21st century technology compliant, professionalized suave and capacity assured style.

Or how else can we explain a 21st century leading professional association like the Nigerian Bar Association with a website that is neither interactive nor electronic payment enabled?

What is the rationale behind lawyers still queuing up at banks across the country in the name of paying practicing fees at an age when people now engage their banks online in the comfort of their homes and offices?

If committees organising our conferences and conducting our elections can engage members online and electronically, why can’t the ‘engine house’ of our dear foremost association? It is, therefore, time to unlearn the old way of service delivery to members and re-learn a more

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dynamic and result oriented style of managing a 21st century professional bar association.

We cannot continue to engage with the old style in the scheme of things and begin to expect new results. It is time the bar secretariat is brought closer to its members in terms of service delivery to justify membership and involvement in the affairs of the bar. Bi-annual general election should not be the only activity that should ignite our consciousness as members of the Nigerian Bar Association.

Record had indicated that before the introduction of the stamp regime by the Augustine Alegeh-led administration, just about 20% of members of our noble association pay their ‘membership dues’, otherwise called professional fees. The number has merely increased in recent time due to the need for lawyers to be able to apply for the stamp.

To some, the question has always been, and still is, ‘what has NBA offered me?’ The bar is not seen as offering a unifying value based proposition justifying affinity, loyalty and continued involvement in the activities of the association, and the reason for this is simple: the ‘engine house’ of the association is not appropriately positioned to cater for the evolving and dynamic needs of its teeming members.

In order to reposition our secretariat for a result oriented service delivery to the members of the bar, in order to guarantee professional growth and capacity building and required mentorship for upcoming generations of young lawyers, the next General Secretary of the NBA must be a tested 21st century compliant, technology driven, highly skilled, human and capital resources experienced manager. Accordingly, the 2018 NBA election of National Officers coming up in July this year should provide us the answer to the question, ‘what has NBA offered me’?

Dr. Mobolaji Ojibara is a past Chairman of Nigerian Bar Association, Ilorin branch, an Arbitrator and a Fellow of the Institute of Natural and Human Resources.

Now let us talk welfare! (3)

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o, we have walked through the retinue of problems in parts 1 and 2 and following feedback from some readers, I thought it was necessary to look even closer at progressive solutions that would foster change. I will start by drawing a parallel from Mr. John Burton’s thesis on human needs. According to him, humans have need of certain development essentials, which feed their satisfaction and contentment over time. These needs are not hierarchical but simultaneously required and all contribute to wholesomeness. I have categorised the litany of issues previously detailed in broad categories and in alignment with Mr. Burton’s views.

My primary focus for this purpose will be on the following ideals: identity/ personal fulfilment, safety/security and recognition.

Identity: Who is the ideal young lawyer? This is not merely defined by what we agree on paper or the proposals we issue and restate at our conferences. What we really sign up to is what we live out. This reality is seen in the implemented policies, scales and measures that we endorse or enforce over time.

If young lawyers are to embrace and pass along the bastion of quality practice, it is important that there is some intentionality in the way the system grooms, measures and rewards young lawyers. More importantly, the grooming must be in touch with the realities of the markets within which they deal and will deal. Like with the training for royalty or military service, there is a specific regimen that goes beyond theoretical or subject matter knowledge to entrench core values and life skills in the subjects.

This training impacts reasoning, judgment and approach and should start early in the process of legal education. To say the least, there is a gaping hole in the curricula adopted at the various stages of legal education at this time. Until law school, lawyers are hardly in a position to qualitatively assess the value and purpose of the theoretical knowledge garnered over time and for many who scale this ladder, it is more or less a gate-crash through.

Thus, there is urgent need to induce a marriage between practice as it is (or should be) and the legal training process. The skills the global market demands should be intentionally fused into legal training and honed over the 6 years of training that lawyers undergo. More importantly, teaching methods are to be adapted

to suit changes to the market realities as they occur. Where this is done, it comes with the added advantage of equality of opportunity and proactive innovation and yes, more lawyers will thrive.

You may ask what this has got to do with identity, I would repeat the statement made earlier “when purpose is unknown, abuse is inevitable”.

Understanding the journey comes with time, but many lawyers are unable to optimise their opportunity and build upwards towards success because of the discordance between the content of formal curricula and the realities legal practice demands.

In plain terms, the system must be structured in a way that the profile of the ideal lawyer is known per time and the right ingredients for the development of this prototype are fed into the process.

Security: structure, predictability, stability, and freedom from fear and anxiety; these have clear import when we talk about young lawyers’ welfare.

I personally believe that the quality and mode of practice would be largely affected by a market-wide introduction of standards. While I agree that anyone can be a lawyer and I should be at liberty to do work from my bed in view of the technology advantage, the moment I set out to create an outfit where other lawyers would work, it is no longer a personal issue. I have a fiduciary duty (imposed by nature) to ensure that I adhere to minimum standards which account for the personal leanings and aspirations of the persons who sign up to devote their resources (no matter how basic) to my vision. Our profession is fraught with all sorts of absurdities, to say the least and a collective resolution must be made to improve the conditions

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under which a lot of lawyers work. If we must be as granular as prescribing mandating compliance with minimum office space requirements, basic amenities and apply sanctions for non-compliance then we must.

After all, shortlisted Senior Advocates have to show evidence of compliance with stringent standards for eligibility, in my view, nothing makes enforcement at that level more important.

As stated earlier, non-scientific measures which are not based on empirical understanding of the number of lawyers, the regions within which they practice, the predominant nature of the work done within the several regions, the cycle of growth preferably deduced from a proper census amongst other things will not achieve this purpose. Estimating that we all have the same problems, capacities and imposing minimum wages which do not account for the paying power or balance minimum pay requirements with the unavoidable requirement for sustainability of the business of law will also not work.

It will be an ardu0us process, but with all hands on the deck, the benefit to the whole will be reaped in due course.

Recognition and personal fulfilment: dignity means “the state or quality of being worthy of honour or respect”. My next question is “who is worthy of respect”. My answer, “All of us”. Yes, all lawyers deserve to be respected and this is not about what they do or don’t do, it is an inherent worth/value nature has ascribed to every one of us and there is no justification for infraction of this right.

My soliloquy above has nothing to do with accolades like SAN (Senior Advocate of Nigeria), SAM (Senior Advocate of the Masses), Notary Public and many other positional ascriptions for which so many of us strive.

This is however the first layer; like with technology, there is a need for periodic refreshment and upgrade. There are just too many over-skilled “baby lawyers” and it is a global problem. A minuscule number of organisations are challenging the trend but this issue of structuring career progression cannot be over flogged.

In conclusion, this is Part 3 of this conversation and I may not have taken account of some other core issues but I am confident that the larger part of the stakeholders in the legal services community will be ecstatic if these, outlined above, are urgently and properly addressed.

Review of the salient provisions...

Continued from page 26

completed the relevant DisCo procurement process and submitted an application to NERC for a permit to become a MAP. Notably, a MAP Permit issued to an applicant is specifically related to a successful procurement process with a DisCo only. Thus, a holder of a MAP Permit may acquire several other permits under distinct procurement processes conducted by different DisCos. The tenure of a MAP Permit issued by the Commission shall be for a period of 15 years in the first instance, effective from the date of issuance.

The MAP Regulations stipulate that MAPs must mandatorily procure a minimum of 30% of their contracted metering volumes from local meter manufacturing companies in Nigeria. The local content threshold, from time to time, shall be as specified in the NERC Local Content Regulations.

Agreements between Parties Under the MAP Regulations there are two (2) main agreements that must be executed by the relevant players along the value chain.

(a) Metering Service Agreement (MSA): This is an agreement entered into between a DisCo and a MAP for the provision of the relevant metering services; and Service Level Agreement: This is a contract between the MAP and DisCo, which defines the level of service that the DisCo expects the MAP to provide to its customers. (b) In the main, the rights and obligations of parties cut across vital issues, which include: • access to customer meters installed

by MAPs; • use of data derived from customer meters for monitoring; • billing and planning; • development of meter-deployment plans; • payment of metering service charge by electricity customers; • legal ownership of the meter asset until fully amortized through payment of a metering service charge by beneficiary customers; • meter asset specifications and installation standard; • periodic inspection of meters to ensure integrity and reading accuracy;

• repair and replacement of faulty meters; • key performance indicators (KPIs) for MAPs as agreed between parties; • safety of installed meters within the customer’s premises; • willful damage to meters; and • transfer of services within a franchise area.

• Prohibition of Related Party Transactions To ensure good corporate governance and the integrity of processes, the MAP Regulations prohibit a DisCo, its core investors, subsidiaries, affiliates, directors and their relatives from setting up, owning shares or holding directorships and senior management positions in the MAPs. To be continued next week The Grey Matter Concept is an initiative of the law firm, Banwo & Ighodalo DISCLAIMER: This article is only intended to provide general information on the subject matter and does not by itself create a client/attorney relationship between readers and our Law Firm. Specialist legal advice should be sought about the readers’ specific circumstances when they arise.

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TKM Maestro sues MTN over breach of contract …Accuses telecom giant of frustrating dispute resolution process THEODORA KIO-LAWSON

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KM Maestro Nigeria, a base transreceiver site design and construction company has sued MTN Nigeria over what it considers a breach of contract in an agreement for the design and construction of base trans- receiver station and the provision of Turnkey services with MTN. The claimant, TMK Maestro who filed a statement of claim at the Lagos high court, is asking the court to recover damages from the Defendant for “unilaterally terminating the contractual obligations between the parties”, specifically under the Agreement for the supply of Towers and accessories for the 8th of November 2012.

According to this Statement, TKM’s claim is based on MTN’s failure to perform its obligations under the Turnkey Agreement, even after the former met its obligations with a claim to have added value to the defendant’s business by diligently executing its part of the contractual agreement entered into by the parties.

TKM Maestro is also claiming economic losses, due to accruing interests on loan taken out to execute the contract “to the knowledge of the defendant as well as the persistent inability of the claimant to derive any benefit from the contractual agreements,” It stated in its claim.

To this end, the Claimant is asking the court for a number of reliefs to alleviate its hardship occasioned by the

MTN breach.

It asked the court to declare amongst other things that MTN is in breach of the Site Build Turnkey Agreement entered into by the parties; that the Claimant holds all intellectual property rights on products created under the Turnkey Agreement and that the Base Transreceiver Towers currently warehoused under the terms of the agreement operate as guarantee for the repayment of the loan facility undertaken by the Claimant from StanbicIBTC. Further to this, TKM has also asked for an Order directing the defendant to pay the sum of One Billion and Eight Hundred Million Naira (N1, 800, 000, 000 .00) to the claimant as special damages occasioned by the Defendant’s breach of contract.

They have also asked for an Order directing the Defendant to pay all outstanding interest and charges due and payable

on the loan facility with Stanbic IBTC Bank Plc. until final liquidation on award sum.

Other prayers include, an Order directing the Defendant to pay the claimant the sum of Two Hundred Million Naira (N200, 000, 000 .00) being general damages for the Defendant’s breach of contract; an Order of post-judgment interest of 22% on relief on the One Billion and Eight Hundred Million Naira (N 1, 800,000,000.00) above from the date of judgment delivery till final liquidation of the judgment sum and of course the cost of action as well as any other Orders that the court may deem fit.

Attempts at resolving the dispute between the parties amicably through mediation and arbitration have failed severally. The claimant is hoping the court will grant orders that will enable the company recover its losses and get relief for incurred damages.

Crossing the Fine Line: Legal Issues of Data...

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Broadcasting Commission (NBC) is prohibited and punishable.

This is the precursor to the Cybercrimes (Prohibition, Prevention, etc.) Act No. 17, 2015 which criminalises unlawful access to computer, system interference, unlawful interception, etc. with fines and terms of imprisonment.

However, with Nigeria’s increasing internet penetration rate (which has reportedly reached 100.9 million people by NCC, Feb. 2018), there is need to strictly protect the confidence of users’ data shared with online platforms.

In the medical space, the position of the law appears to be settled – a medical practitioner is prohibited from disclosing the data of patients except as permitted by the law. However, owing to technological advancement in health care service delivery (telemedicine), the thin line may have become blurry.

Section 26(1) National Health Act (NHA) No. 8, 2014 provides that: “all information concerning a user, including information relating to his or her health status, treatment or stay in a health establishment is confidential.” Thus, disclosure in this circumstance is prohibited.

This is more so that Para. 9(f) Code of Medical Ethics in Nigeria reiterates confidentiality of patient’s data by stating that “All communications between the patient and the practitioner made in the course of treatment shall be treated in strict confidence by the practitioner and shall not be divulged unless compelled by law or overriding common good or with the consent of the patient.” By clicking to sign up with an online medical service provider, the user

has invariably consented to having his medical records shared with third parties. However, this should not be misconstrued as a blanket consent. Users’ data can only be shared in accordance with the online medical service provider’s ToS and privacy policy.

The NCC through its Draft Consumer Code of Practice (Draft Code), 2018 (an improvement on its 2007 Code) seeks to strictly regulate the use of consumer data

by Telecommunication Service Providers (TSP). Accordingly, section 43(1) Draft Code provides a minimum threshold for data collected from consumers particularly: shall be processed for limited and identifiable purposes; kept not longer than necessary; not transferred to any party except as permitted by any terms and conditions agreed with the consumer, etc.

Also, a licensee (TSP) is required to meet accepted fair information principles including, the choices consumers have with regard to the collection, use, and disclosure of the information (section 43(2) (b) Draft Code). Although these provisions are only applicable to TSPs, it is nonetheless comforting that more than 148 million telephone subscribers in Nigeria would have recourse in ensuring that their data is not used for any other unintended purpose.

The Electronic Transaction Bill (ETB), 2017 which is illustrative of future legislative direction – having been passed by the National Assembly in May 2017 but lacking Presidential Assent and is therefore spent. Section 19(2), (3) and (5) ETB s to the effect that personal data shall only be obtained for specified and lawful purposes and are not to be processed in any manner incompatible with those

purposes. Also, it shall also be adequate, relevant and not excessive for the purpose for which they are processed. In the same vein, regardless of the purpose of obtaining personal data, they are not to be kept for longer than required for the fulfilment of the purpose for which they were obtained. These provisions are instructive as they seek to strictly regulate the use of data collected from DS. Liability for Data Misuse in Nigeria – Culpability in Breach of Contract and Trust?

The relationship between DHs and DSs or Data Objects (DO) is strictly governed by contract, that is, the ToS to which the DS agreed to upon signup. These ToS usually contain privacy policy which stipulate the nature of data obtained from the DS and how such data is to be used. It is noteworthy that any deviation from the ToS would constitute a breach of contract actionable against the DH. According to section 21 ETB, “…an individual shall be entitled to be informed by any such DH where personal data of which that individual is the DO are being processed by or on behalf of that DO….the purpose for which they are being or are to be processed…” A key element recognised under the ETB on data use by DHs is disclosure to the DO and consent to use such data for specific purposes. More so, DOs can validly withhold consent and instruct the DH to stop further processing of his data, section 22 ETB. Perhaps, the liability of DHs were amplified when section 22(3) ETB makes a DH liable to compensate the DO where he has suffered damage arising from DHs breach of the ETB. To be continued next week

Thursday 10 May 2018

M&A experts explain why recession should trigger...

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caveat “With the upcoming elections and increased political risk, market attractiveness may be hampered in the near term.”

The KPMG Partner went on to disclose a number of identifiable M&A motivators to participants. These according to him include, Market share, Diversification, Market size, Market access, Economies of scale & scope, Operating efficiencies, Revenue enhancement, Specialised skills and Technology.

Others are, Financial stability, Better credit ratings; Lower costs of financing, Business risk, reduction, Better operating leverage, Increased shareholder returns & value, Regulatory reforms, Regulatory inducements, Policy initiatives.

Declaring the seminar open earlier, the Director-General of the Securities and Exchange Commission, Mary Uduk spoke of the commission’s mandate to protect investors. She stated that in benchmarking, the SEC has adopted best practices in its protection of the interests of shareholders.

“We are of the view that challenges are best resolved with stakeholderengagement and that very significant stakeholder-engagement such as townhall meetings with trade groups and other extensive consultations through fora such as this, have been very effective in modifying our approach to M&A transactions,” she said.

Uduk further appealed to lawyers to view the commission as an indispensable partner and stakeholder in the securities market towards a brighter business legislation made for the good of the investing problem.

“On behalf of the Securities and Exchange Commission, we assure you that we are willing to work together for public good; and this includes protecting your clients who are also our investors.

The seminar created a platform for regulators, lawyers, business executives and other stakeholders to dialogue on

policies and regulations on M&A, in Nigeria.

Discussing current developments in mergers & acquisitions; structures, regulatory challenges, participants made up experienced M&A practitioners looked at the concept of external restructuring as a process for value enhancement within group Companies. They used case studies, and real life examples to proffer solutions to current challenges in the M&A space in Nigeria.

Other prominent stakeholders present at this event include, Oscar Onyema, Chief Executive Officer of The Nigerian Stock Exchange (NSE), Johnson Chukwu, CEO, Cowry Asset Management Limited; Segun Onakomaiya, Vice President, Synergy Capital Managers; Tolu Osinibi, Executive Director, FCMB Capital Markets Ltd, among others.

The Chief Executive Officer of The Nigerian Stock Exchange, Mr. Oscar Onyema The Chairman of the Nigerian Bar Association - Section on Business Law - Mr. Olumide Akpata The former Chairman of the Mergers, Acquisitions and Corporate Reorganisations Committee, Prof. Gbolahan Elias (SAN) Distinguished Faculty of Speakers and Panellists Leaders of Industries Ladies and Gentlemen, It is my great pleasure to welcome you this morning to the Annual Seminar of the Mergers, Acquisitions and Corporate Re-organizations Committee of the Nigerian Bar Association - Section on Business Law, in Lagos, the Centre of Excellence.

The Theme of the seminar is “Recurring Issues in Mergers and Acquisitions in Nigeria,” and the seminar is being held to provide a forum for regulators, lawyers, business executives and other stakeholders to dialogue on policies To be continued next week

2018 Rosberg executives’ lecture to focus on cross border investments

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osberg Legal Practitioners & Arbitrators is set to hold its Executives Annual Lecture on May 17th, 2018 at Radisson Blu Anchorage Hotel, Lagos.

The Managing Partner of the firm, Greg Nwakogo said that the Executives’ Annual Lecture series is social initiative which brings business executives together annually to stir conversations on topical issues that affect business and governance.

Consequently, the theme of this year’s lecture is - Managing Risks In CrossBorder Businesses: Practical Tips for Nigerian Businesses and Foreign Investors Seeking to Invest in Nigeria.

In a statement issued by the firm it was stated that the firm considered the above topic for this year’s lecture particularly in the wake of scepticisms on the part of foreign investors towards investing in Nigeria.

It read, “It is imperative that we discuss at such fora the necessary safeguards investors need to consider and which should allay their fears and ultimately make our economy prosperous. The event is free of charge but by invitation only.”

Confirmed speakers for the event are Babatunde Irukera, Director General /Chief Executive of the Consumer Protection Council,

Oluwatoyin Sanni, Group CEO United Capital Plc., Jose Ricardo Feris, Former Assistant SecretaryGeneral International Chamber of Commerce (ICC) International Court of Arbitration, Paris, France, now Partner at the Paris office of Squire Patton Boggs and Chinwe Odigboegwu, Head, Litigation and Dispute Resolution, Nigerian Bottling Company. Greg Nwakogo, Managing Partner, ROSBERG Legal Practitioners & Arbitrators, is the Chief Host.

The panel discussion will be followed by a networking cocktail reception.

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CITN 20th Annual Tax Conference Live coverage of the 20th Annual Tax Conference of The Chartered Institute of Taxation of Nigeria

‘There is need to awaken taxation in the consciousness of Nigerians’ Ahead of ongoing 20th Annual Tax Conference, CYRIL IKEMEFUNA EDE, president, the Chartered Institute of Taxation of Nigeria (CITN) in this interview with IHEANYI NWACHUKWU speaks on taxation and the economy. Excerpts on... That is an invitation to question the moral authority of government to demand for taxes which ought to have been used to provide for these amenities in the first place

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he 20th Annual Tax Conference comes at a time when President Muhammadu Buhari empowered the taxman to increase Nigeria’s taxto-GDP ratio. What is your take on this?

Taxes are the means by which we sustain our government and deliver those projects that improve our common existence and purpose. The absence of a government forebodes disorder, anarchy and crisis of various dimensions. For decades, we had neglected this vital fiscal instrument because of petro dollar. As long as monies were coming into the treasury, we conveniently abandoned our most sustainable form of finance.

The Citizens, on their part, could hardly ventilate their opinions and hold their government to account as a result of the seeming invisibility of the flow of oil to merchant ships and return of the proceeds through international systems of settlement. The country has the basic ingredients to be a great country on the continent of Africa and beyond and taxes are a part of that journey.

As a tax professional leading an important institute, how did Nigeria get where it is today in terms of the rate of noncompliance?

As already mentioned above, the ‘Dutch Disease’ caught up with us in a highly contagious manner and it has been very difficult to break away from that cycle. We only attempt to do so when we are down

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on our luck in terms of poor oil price on the global market.

This has been worsened further by ineptitude and corruption which has characterized government and governance placing a wedge between government and her Citizens. The average Citizen therefore feels that his government cannot

be trusted with the tax money he parts with.

News of projects returning uncompleted with huge sums of money supposedly spent also serves to buttress my comment above. When government exposes citizens to cater for their basic needs such as education, health, defence and so

Nigeria’s tax to Gross Domestic Product rate is estimated at 6 percent, one among the lowest in the world, what can be done to improve this?

Vigorous enlightenment and education campaign should be mounted with the combination of voluntary and enforced compliance. This is why the ongoing tax amnesty scheme is welcome. With a low tax to GDP ratio, it simply means a lot of Nigerians have not been complying. Committing everyone to prison is not practicable, so the government have met taxpayers somewhat half way.

Enforced compliance, through detection can then follow with demand for penalties and interest and possible prosecution. It also means that the taxman should rest on his oars and expect the taxpayer to walk through his doors but must actively seek out defaulters while ensuring continued payment by the ones already in the tax net. The Government should also embark on projects, that would not only engender growth and development, but those that impact positively on taxpayers.

The period for Nigeria’s Voluntary Asset and Income Declaration Scheme (VAIDS) has been extended, do you think the Scheme is a good idea, what has it achieved in practice?

Like I mentioned earlier, the Scheme is quite welcome together with its extension. Before the extension, we had publicly canvassed for an extension informed by the realisation of the fact that the other complementary activities to drive the programme was still being put in place even as the window was running. We hope that the Community liaison Officers (CTLOs) would drive the message, as was the original intention.

Do you support Government plans to sell tax defaulters’ assets after expiration of VAIDS? The law must be followed, if it has to come to that. The law provides that the revenue authorities can move against your interest if you are a tax defaulter but must seek due approval of the Courts. Even before then, proper notices must have been served to the taxpayer detailing his tax liabilities and demanding payment within the timeline given for the payment.

What informed the theme of this year’s annual tax conference titled “Institutionalizing Tax Paying Culture in a Developing Economy”?

It is informed by the need to awaken taxation in the consciousness of Nigerians. We reckon that this is the right time to be discussing taxes and our tax culture today for our prosperity tomorrow. We cannot afford to borrow solely into prosperity.

That means leaving our generations yet unborn with the job of paying Continues on page 30

FIRS at SWIT forum suggests separate NASS committee on taxation HARRISON EDEH, Abuja

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he Federal Inland Revenue Service (FIRS) is currently making a case for a separate committee on Tax matters at the National Assembly to ensure taxation issues are prioritised in the Legislature as well as make burden of compliance easier for tax payers.

At the Society of Women in Taxation (SWIT) forum

with the theme “Tax Compliance, Entrepreneurship and National Development”, held during the on-going 20th annual tax conference, Babatunde Fowler, FIRS chairman said a separate Committee for Tax matters in the National Assembly would ensure technical issues on Taxation are giving proper legislative attention.

Represented by Abiodun Aina, his Special Adviser on Tax matters, Fowler said,

“Taxation is critical subjects to Legislature and a Committee to oversee their Affairs separately and ‎address some of the key concerns is very important.”

Federal Government has on several occasions raised concern‎ that Nigerian tax-to-Gross Domestic Product (GDP) ratio is low compared to its peers. The Minister of Finance Kemi Adeosun has at several fora re-echoed this.

“There are lots of technical issues on Tax. The Committee on Finance is there and taxation issue is just a component of what they do, and I think a separate committee would give a wider attention to the issues accordingly,” FIRS chairman said.

According to him, “A separate committee should be able to handle technical nature of taxation and ensure Legislature experi-

enced in the issue of taxation make meaningful impact on some of the concerns being raised. It is a committee that requires brainstorming because it looks at our Laws and addresses all the ambiguities in our Laws, “Fowler adds further.

Speaking further on the impact of the FIRS in raising tax-to-GDP ratio, Fowler expressed optimism that the N6.64 trillion targets by the Service in 2018 is achievable

with the generation of N1.17 trillion in the first quarter which is 51percent higher than what was generated in the first quarter of 2017.

Earlier in his remarks, the president of the Society of Women in Taxation Ezinwa Okoroafor said the organisation would continually support Federal Government’s effort to shore up revenue amid dwindling oil resources through positive contribution on tax matters.

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Thursday 10 May 2018

CITN 20th Annual Tax Conference Live coverage of the 20th Annual Tax Conference of The Chartered Institute of Taxation of Nigeria

‘There is need to awaken taxation...

Continued from page 29

for our comfort today. We must pitch in the little we can to fix the infrastructure upon which our prosperity as well as those of our future generations would be achieved.

What are the mechanisms available for taxpayers to demand transparency and accountability from government?

We need to participate more in the budgetary process. Government expenditure substantially comes through appropriation of the National and State Houses of Assemblies. We must never elect leaders and allow them to turn around and convince us that they know what is good for us, and therefore we should look the other way when matters of budget are being discussed.

We must also hold our public office holders to account whether it is our elected public officials or those working in the civil service because they are all being paid by our commonwealth and must therefore render their accounts of stewardship.

What roles have CITN played in that direction?

We realise that taxes, transparency and accountability are mutually reinforcing factors for increasing the pool of funding available to government. This is why we never relent to call on the government, through our various position papers as well as policy briefs, to open up to the people and do things with more probity. We also try to ensure that outcomes of our seminars, workshops, conferences and meetings relevant for conduct of government business reach them. Sometimes, we invite them to participate at these gatherings to enable them listen to the people directly.

The International Monetary Fund (IMF) said tax potential suggests that a non-oil tax capacity of 16 to 18 percent would be optimal for a country with Nigeria’s economic structure and per capita income levels. This estimate implies space for additional tax collection of 12 percent of GDP. Do you agree with IMF? They must have some metrics which they have used in arriving at those numbers. Otherwise it becomes wishful thinking or spurious estimates. So, until the underlying metrics is evaluated, it is safe to say that such commentary suggests a modest tax to GDP ratio especially as it remains to be seen the impact of the informal sector on government’s tax revenue drive.

What also is your view as IMF says Nigerian Value Added Tax (VAT) does not have the features of a modern consumption tax, adding that over time, extensive exemptions have substantially narrowed the VAT base?

The VAT in Nigeria raises 0.9 percent of GDP in revenue, which is notably smaller than the 3.8 percent of GDP collected by ECOWAS peers.

First and foremost, our VAT rate is undoubtedly the lowest in the region at 5percent.

The list of exempt items under the VAT Act are considered necessary for managing the VAT burden especially in a country with per capita income as low as ours.

Most importantly is the need for an evidence based assessment of the relationship between our VAT, the level of income inequality, basic exempt items as well as the poverty incidence. These are some of the ramifications that would inform a better analysis of our VAT and how it compares not only in the region but in Africa as a whole.

Start-up businesses sometimes complain that tax authorities make it difficult for them to comply because the information needed is not readily accessible.

What is your take?

It is almost a sin for tax authorities or any other public official not to complement business of

all size and structure in the drive towards compliance. This is because they need to encourage the survival of the business, as diligently as possible. By doing this, such public officials contribute in planting the seeds of growth that help to keep the businesses going, thereby growing the tax base and ensuring sustained revenue streams for the government.

What does Nigeria need to do, in order to more efficiently capture and tax the digital economy?

The capture and taxation of the digital economy is still a topical issue with conflicting judicial decisions even in advanced climes.

Recently, the State of South Dakota, United States of America appealed a lower court decision that favored Wayfair Inc, Overstock.com Inc and Newegg Inc, that companies with no physical presence in a state are not required to collect a state sales tax on purchases. The transaction and payment architecture under such markets need to be studied together with lessons from other climes to be able to bring our tax laws up to date with this modern way of doing business now.

The large informal sector of Nigeria’s economy has been underrepresented in the tax net, what concrete strategies can efficiently reverse this trend?

The 2011 amendments to the Personal Income Tax Act, for instance, introduced the presumptive tax regime. Such measure is a strategy for the gradual infusion of those in the informal sector into the mainstream on the tax net. We need more of this complemented by more public enlightenment.

What would you say about multiple taxation in Nigeria?

We understand that multiple taxation is taxing the same tax base more than once. We must however realise that proponents of fiscal federalism do not necessarily see demands of a State made in the course of a company’s operations as multiple taxation. It is therefore important to distinguish what taxes companies pay and others that constitute regulatory fees for renewal of permits or licences needed by such companies.

Ultimately, the taxonomy needs to be looked into with a view to taking out nuisance and arbitrary impositions not consistent with the provisions of the Taxes and Levies (Approved List for Collections), CAP. T2, LFN, 2004.

Tax leakages are big concerns to Nigeria’s tax authorities and professionals, what is the extent and how can they be fixed effectively?

Tax leakages are a function of its form and the conduit through which it is lost. On the tax revenue management side, automation could assist in ensuring that taxpayers can remotely pay their taxes directly to government treasury and obtain a revenue receipt without human interface. Every day, information and communication technology is proving to be the way together and we must all embrace same.

Nigeria in recent times signed some tax treaties to facilitate exchange of information, what is the value of this?

The Automatic Exchange of Information Agreement signed by Nigeria with other countries is to facilitate the ease of retrieval of economic circumstance of persons liable to Nigerian taxes. Before now, it was possible for Nigerians to play loose and fast with the Nigerian Tax Authorities through the movement of untaxed funds offshore and engagement in other activities of interest to the tax authorities in Nigeria. Remember that Nigeria practises the world wide tax system which means our taxes is based on our global income and not necessarily our Nigerian income only for resident individuals and Nigerian companies.

Profile of speakers

YOMI OLUGBENRO,FCTI Partner & West Africa Tax Leader, Deloitte

Y

omi Olugbenro is a Partner and the West Africa Tax Leader at Deloitte, the world’s leading professional services firm with approximately 263,900 people in 150 countries and territories. He is a member of Deloitte West Africa Executive Committee.

Olugbenro holds a First Degree in Accounting and Masters in Business Administration. He is an alumnus of The University of Manchester (UK); Fellow of the Institute of Chartered Accountants of Nigeria (ICAN); Fellow of the Chartered Institute of Taxation of Nigeria (CITN); and Fellow of the Chartered Institute of Stockbrokers (CIS). With over 20 years postqualification experience as a

Chartered Accountant, he has distinguished himself as a seasoned business advisor.

He is the Vice Dean of the Board of Indirect Tax Faculty of the Chartered Institute of Taxation of Nigeria and a Member of the Board of Tax and Fiscal Policy Management Faculty of the Institute of Chartered Accountants of Nigeria. He is a highly sought-after speaker and thought leader on fiscal and economic policies issues and speaks regularly at local and international conferences. His clientele include many fortune 500 companies and other globally-renowned and locally strategic brands. He consults regularly for multinational companies around the world about investment and fiscal terrain in Nigeria.

Before assuming the West Africa Tax Leader’s role at Deloitte, he was, at different times, the firm’s Tax Risk Leader with responsibility covering West and Central Africa, Dean of Deloitte School of Tax, Tax Partner in charge of Financial Services Industry and member of Deloitte ThinkTank. Prior to joining Deloitte, he had worked in different sectors of the economy including Banking, Manufacturing and Professional Services.

He is an advocate of tax simplification, education and automation (SEA) and featured regularly on electronic, print and social media where he discusses topical fiscal issues. He runs regular online tax awareness sessions on social media (#TaxWiseNG) which he uses as a vehicle for knowledge sharing and policy advocacy.

Olugbenro enjoys travelling and mentoring of young minds. He is Patron to many Youth Associations in Schools and Colleges and President of Free Indeed Foundation. When at leisure, he devotes significant part of his time for mentoring, counselling and social services. He is happily married and blessed with two boys and two girls.

Assisted Reproduction Technology specialist. He is a scientific researcher, author, teacher and motivational speaker who believes in preventive health care more than curative medicine. Medical director at Care Fertility Hospital; Former Medical Doctor Ob-Gyn at Queen Elizabeth The Queen Mother Hospital; Former Medical Officer at Whipps Cross University Hospital NHS Trust; Former Clinical Phlebotomist at Royal London Hospital. He studied Assisted Reproduction JOHN ENE Technology at University of Nottingham. He studied Health Talk: Preventing Reproductive Health Management at Keele University, and Overcoming Cancer, North Stadfordshire, United Kingdom. Ene studied at Diabetics, High Blood Keele University. He studied Medicine and Surgery at Pressure University of Benin, Benin City, Nigeria. He went to ohn Ene is a UK trained Immaculate Conception College, Benin City, Nigeria Obstetrician Gynaecologist, and Lives in Abuja, Nigeria. He manages Care Fertility consultant Fertility, IVF & Hospital.

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Table of events

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CITN 20th Annual Tax Conference Live coverage of the 20th Annual Tax Conference of The Chartered Institute of Taxation of Nigeria

Institutionalising tax paying culture in a developing economy National Tax Policy as a tool for national economic development include: to promote fiscal responsibility and accountability; to facilitate economic growth and development; to provide the government with stable resources for the provision of public goods and services; to address inequalities in income distribution; to provide economic stabilisation; to pursue fairness and equity; and to correct market failures or imperfections.

2. Tax legislations in Nigeria describe the legal implications of taxation and provides legal backing to the administration of taxation.

The tax legislations also stipulate what constitute offences and the appropriate sanctions for the offences. They are essentially the tax laws enacted by the legislature to govern the national tax system and are subject to amendments as the need arises.

3. Tax administration in Nigeria defines the responsibility of the various tax authorities as established by the extant tax laws.

The Federal Inland Revenue Service is in the forefront of efforts to entrench taxation as a national way of life. Measures aimed at institutionalising a culture of paying taxes are centred around these three focal points.

Conclusion– Role Of Tax Professionals Tax Professionals in their Stewardship role of ensuring compliance with tax laws and regulations, are the drivers of tax compliance. The stewardship should also extend to educating and enlightening clients, employers and employees on taxation in order to encourage organizational culture of voluntary tax compliance.

Tax Professionals in their advisory role act as Influencers in deciding organizational priorities. This should empower tax

TUNDE FOWLER Introduction

T

he topic before us is a very timely and relevant one. This is because now more than ever in our national development, there is a need for citizens to play a significant role in raising sustainable revenue for development.

To institutionalise means to embed a conception (for example a belief, norm, social role, particular value or mode of behavior) within an organization, social system, or society as a whole. Applying this to our topic, we are here looking at the entrenchment of a culture of paying taxes.

In essence, what the foregoing alludes to is voluntary compliance. Voluntary compliance is an assumption or principle that taxpayers will comply with tax laws and, more importantly, accurately report their income and deductions. Voluntary compliance is one of the key indicators of a tax system that is institutionalised.

A large informal economy and taxpayer apathy are some of the challenges that are associated with revenue generating efforts for developing economies. This situation is often mitigated through the application of a ‘Carrot and Stick’ approach.

Punitive/Deterrent Measures Stringent Financial Penalties Proof of Tax Compliance as Requirement to Access Certain Public Services Community Service and Imprisonment for Defaulters Sealing of business premises of defaulters

Institutionalizing Tax Compliance – A Dire Need (Case For Nigeria) According to the Joint Tax Board, there were only 14 million taxpayers in Nigeria as at May 2017, compared to an estimated 69.9 million economically active people while our tax to GDP ratio is rather poor at 6percent.

Institutionalizing Tax Compliance – Federal Inland Revenue Service The Nigerian tax system is a tripartite structure comprising tax policy, tax legislation and tax administration.

1. The National Tax Policy sets broad parameters for taxation and other ancillary matters connected with taxation in the country. It is a clear statement on the principles governing tax administration and revenue collection. It provides a set of guidelines, rules and modus operandi for taxation in Nigeria.

The key economic objectives of the

practitioners to consistently re-iterate the importance of tax compliance by effectively prioritizing payment of taxes.

Tax Professionals play the role of Strategists as they provide services vital to the the growth of the business as a going concern i.e. financial planning, financing strategies, tax operations etc. Tax Professionals through this role should propagate ethical strategies that do not encourage tax avoidance or evasion.

Tax Professionals should be tax ambassadors who raise tax awareness amongst our peers by being exemplary Citizens who also meet their tax obligations timeously.

Fowler, Executive Chairman, Federal Inland Revenue Service (FIRS) Chairman, Joint Tax Board (JTB) Chairman, African Tax Administration Forum (ATAF) 1st Vice Chairman, United Nations International Tax Experts Committee

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CITN 20th Annual Tax Conference

Vice President Yemi Osinbajo, giving his keynote address at the conference.

Cyril Ede, president, Chartered Institute of Taxation of Nigeria (CITN), giving his opening speech at the conference.

Babatunde Fowler, executive chairman, Federal Inland Revenue Service (FIRS), presenting his paper at the conference.

Justina Okoror, chairman, 20th annual tax conference committee, giving her welcome address at the conference.

Olateju Somorin, immediate past president, CITN, presenting her paper at the conference.

Cyril Ede, president, CITN, (l), welcoming Vice President Yemi Osinbajo to the conference.

Emmanuel Ijewere, founding partner, Ijewere & Co, (l), with Oseni Salawe Elamah, executive secretary, Joint Tax Board.

R-L: Dipo Adebule; Wale Shonekan; Faramade Ogunsanya, and Sunday Momoh, all of FIRS.

Sunday Jegede (l), with Quadri Rasaq, past president, CITN

Kamoru Ayodele (l), with Foluso Fasoto, both are past president, CITN. Pictures by Olawale Amoo

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CITN 20th Annual Tax Conference

L-R: David Ajibola Olorunleke, doyen of taxation, his wife Funmilayo, and Gladys Simplice, vice president, CITN.

L-R: Samuel Agbeluyi, honorary treasurer, CITN; Ezra Zubairu, director, FIRS, and Adesina Adedayo, deputy vice president, CITN.

L-R: Adefisayo Awogbade, registrar/chief executive, CITN; Simon Kato, council member, and Ozimede Austin, committee member

Afolake Oso, assistant director, corporate services and marketing, CITN; Taiwo Oyedele, head of tax and regulatory services, PwC Nigeria, and Godwin Oyedokun, council member, CITN

L-R: Justina Okoror, chairman, 20th annual tax conference committee; Abiola Sanni, professor of commercial law with specialty in tax law, University of  Lagos, and Muhammad Lawal Abubakar, coordinating secretary, Tax Appeal Tribunal.

Segun Ajibola, president, Chartered Institute of Bankers of Nigeria (CIBN), (l), with Titus Olukayode Ayewumi, past president, CITN.

Olateju Somorin, immediate past president, CITN, (l), with Nii Ayi Aryeetey, president, Chartered Institute of Taxation of Ghana.

Abiodun M. Aina, coordinating director, FIRS (l), with James Kayode Naiyeju, past president, CITN/former accountant general of the federation

R-L: Ayodele Otitoju, council member, council member, CITN; Kikelomo Otitoju, and Titilayo Fowokan, council member, CITN.

Cross section of the partcipants at the conference.

Pictures by Olawale Amoo

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Inclusion: Path to a new nation Continued from back page gage in lawful business, you will encounter no barriers from this government. If you have a good idea, we will encourage it, we will invest in you regardless of where you came from.

We care less about where you came from. We care more about where you seek to go.

You see, the inclusion I talk about is more than a pretty word to say; so that I sound like some type of enlightened politician.

Inclusion is a principle by which we put to constructive use the full industry and skills of the people; Rich and Poor, Old and Young, Men and Women, Boys and Girls.

This results in greater individual and collective productivity. Reform, change and growth come at a faster clip. Concerted effort and the visible benefits of that collective exertions further divorces the people from the zero-sum mentality that fosters stagnation because it pits us against each other in perpetual friction.

Inclusion is not only the moral thing to do, it is the smart thing as well.

Contrast it with societies that erect walls and impediments to keep certain people from entering important political and socio-economic fields of endeavor.

These societies squander vital energy and waste finite resources in order to hamper segments of their populations from making the optimal

contribution to their personal and collective existences. The energy and resources could have been used to develop society and promote harmony.

Instead it gets used to depress growth, mistreat people and foment discord.

In effect, much of society’s potential for growth and prosperity is used to ensure that growth and prosperity do not come to all.

A favored group seeks to deny another group the adequate enjoyment of its share of the collective work product for unfair reasons of religion, ethnicity or color.

This exclusive society is founded on the cynical premise that one man’s bounty must always come at the invitation of another man’s poverty.

Again, the zero-sum mindset rears its ugly head.

This perspective is a tempting lure for it is simple to understand and it speaks to the element of selfishness that infects every human being to some degree.

But having gone through the rigors of education that this institution requires, all of you know fully well that you cannot accomplish anything of excellent and lasting value by surrendering to base impulses and shallow thinking.

Our duty is not to entertain and exalt the worst of human nature. Instead, we are ordained to cultivate the best of human ideals so that we can abide in fairness, prosperity and security.

This is our objective in Lagos. We have recorded some

progress along this pleasant road. Yes, we still have much to do and far to go. Yet, I am encouraged by the fact that we will do it as an inclusive team linked together by a just and compassionate social compact.

It is my unyielding belief that the principle of inclusion which has served Lagos so well can be employed in other states with similar effect. In effect, our dear nation, Nigeria.

However, for States to give optimal service to their citizens the principle of inclusion first needs to be applied to the division of power between the Federal and State governments.

There recently has been clamor for devolution of power and true federalism. While much of this talk is good intentioned, I believe it misses the crucial point.

The linchpin of good governance is not found in the system deployed but in the quality of its administration.

We must implement the federal system as it was intended to be. Heretofore, too much power has resided in the National government.

This has been to the detriment of the authority and efficiency of both State and Local governments.

This has caused a governance vacuum of sorts. The Federal government is burdened with tasks beyond the reach of its best competencies. The States and Local government are dissuaded from treating many matters of a local nature that are better left in their

hands due to their greater knowledge of local conditions.

We need to shift some functions/responsibilities from the national government to place more of it in the hands of the States. This is how we give federalism the best chance to work. Until we do this, calls to abandon the current system serve not to fix the underlying problem.

If people are imbued with the exclusionary mindset that power must be centralized, any structural reform will be distorted to serve the purpose of those who favor concentration of power.

Hence, I am concerned about the intense focus on wholesale change to our political architecture. Such a thing is inherently time consuming and costly despite the claims that money will be saved.

Additionally, such attempts at enormous and rapid political change causes economic uncertainty and dislocation.

Given our tenuous relationship to prosperity, Nigeria cannot afford this self-affliction.

Prudence counsels that we first attempt a more equitable level of fiscal federalism before adopting drastic alternations that likely plunge us toward the unknown.

There is widespread consensus that too much power sits in the center. We can correct this imbalance by reallocating power and responsibilities between the States and Federal government by amending the list of exclusive and concurrent powers and duties of these governments

to reflect current realities in the nation.

These changes will have beneficial impact visible within a short amount of time.

The impact of these changes, though political in origin, will be economic in nature and it is in our economic life where the nation needs the most help.

Resolving the problems regarding federalism and the herdsman’s, as with so many other problems, requires us to look beyond prejudice and hatred.

Exploiting fear and bias is easy and sings well in the short-run. Over the longerterm, it is a bitter cup that cures nothing but ferments greater hatred and larger problems.

Conclusion To the graduates, I ask that you refuse the old ways of ethnic, religious and regional bias that have plagued our national politics for so long.

If you knew the vastness of the common challenges that face us all as Nigerians and Africans, you would quickly jettison the ethnic pettiness and religious bigotry that threatens to divide us. The rest of the world sees us as Black, African and Nigerian

CHANGE OF NAME

I, formerly known and addressed as Miss Jibrilla Zaliha’u umaru now wish to be known and addressed as Mrs Babajika Zaliha’u. All former documents remain valid. General Public please take note.

and will deal with all of us in the same manner. That larger world cares little about the internal divisions we see as so profound. In this context, we are in the same boat and share the same fate.

Unless we join in concerted effort to help each other toward a better more united Nigeria, we all shall fail in our different ways.

Moreover, you did not attend this fine institution to fail either as an individual or as a nation.

You now assume the active stage of human affairs where what you learn must be put to use and practice. Employ what you have gained here for the good of Nigeria and hold true to the mindset that our ethnic and religious differences makes no one a lesser or better person.

We are linked together in common destiny. Thus let us work together in common purpose in order to make that destiny, the one we truly seek, which is an inclusive and forever just and prosperous Nigeria.

Thank You Akinwunmi Ambode Governor of Lagos State.

CORRECTION OF NAME

This is to inform the general public that my name was wrongly written as Dilinyeli Emmanuel Emmanuel instead of my correct name which is Dilinyeli Emmanuel Chibuzor. All banks and genral public please take note.

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Japaul pulls plug on $350m Milost...

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former pulling the plug on a $1 billion financing agreement, while the latter (Aso Savings) insists a deal was never in place.

All eyes have now turned to the companies that are following through on their deals with Milost.

According to the public announcements that were made by Milost and the affected companies at the time an agreement was reached, real estate firms- Femab properties and Prime Waterview holdings- are the only two companies that remain on course with their dealings with Milost.

Although it was reported April 10 onMilost’swebsitethatoneWilliamsville Sears Management Inc. signed a Letter of Intent for the acquisition of PrimewaterView from Milost in an all-stock transaction subject to the approval by both companies.

Termination costs are typically associated with financing deals that go burst last minute. They serve as compensation fees.

Oladapo only said “Further development regarding this transaction will be communicated in due course.”

Palewater Advisory Group Inc in New York and Banklink Africa Limited in Nigeria were reported to have arranged and negotiated the Japaul deal, but two phone calls to a number found on their website was not answered.

A private equity lawyer with peripheral knowledge of the transaction said the settlement fees could be as high as N10 billion.

That works out to 7.9 percent of the total deal reportedly worth N126 billion.

Several phone calls to a NewYork number on Milost’s website, to confirm if it will press for break-up fees from Japaul, went unanswered.

Japaul’s share price plunged 8.3 percent to 44 kobo, Wednesday, according to Bloomberg data.

“Other companies that have struck similar deals with Milost are likely to follow suit,” a source with knowledge of the matter said on condition of anonymity.

“The matter is an indictment on the regulators, SEC and NSE and the Nigerian companies involved, who should have read the handwriting on the wall.

“The economics of the deals made no sense, as I was convinced after I read your report,” the source added, referring to a BuisnessDay report “The Math does not add up with Milost” that chronicled the ingenuity of Milost’s purported investments in Nigeria.

Four companies, who did not want their name in print, also claimed to have pulled the plug on informal talks with Milost for a mix of debt and equity financing, after reading the BusinessDay report published March 12, 2018.

The article titled “The Math doesn’t add up with Milost” picked holes in Milost’s announced $1.1 billion in real estate firm- Prime waterview, $350 million in oil and maritime services firm, Japaul and $250 million in mortgage bank, Resort Savings and Loans.

Our calculations showed that Milost was offering to buy the shares of publicly listed Japaul and Resort at a premium and questioned the rationale behind a premium investment in a technically insolvent Japaul and a Resort Savings yet to release a financial statement since 2015.

In a bid to get Milost to clear the air, our reporter at New York tried to book an appointment to

visit Milost’s New York office, but the lady who received the call said she would connect him to the appropriate person to speak to but the call was disconnected and subsequent calls ignored.

Japaul announced in February that Milost will invest $250 million in equity and add another $100 million in convertible loans, causing its share price to rally to multi-year highs.

Given that its share price was 35 kobo and it had 6.2 billion outstanding shares, at the time of announcement, February 20, a $250 million (N90 billion) equity investment would imply paying N14 per share, a huge premium by any standard.

The firm went on a 177 percent share price rally after the deal was announced, trading at N0.97 Friday March 09, according to Bloomberg data.

The oil and gas services company closed as the highest gainer on the stock exchange for a second straight week, jumping 53.9 percent in the week ended March 9.

It all came crumbling down afterwards, as the shares began a rapid decline, costing retail investors- who are the heavy traders of penny stocks- millions of naira.

As of Wednesday, May 9, Japaul’s share price plunge which started since the BusinessDay article hit the market, had wiped over N3 billion naira off its market capitalisation.

Japaul’s first quarter 2018 results show a 50 percent decline in revenues to N108.76 million from N221 million in Q1 2017.

Its loss before tax hit N3.2 billion in the period under review from N519.7 million in Q1 2017.

Japaul has been technically insolvent since 2016 with reported losses every year since 2014.

In its 2017 full year report, the auditors of the company questioned the going concern status of Japaul reporting that “a matter of uncertainty exist which may cast significant doubt on the Group’s ability to continue as a going concern.”

Japaul reported losses totalling N13.08 billion for the full year 2017 period, lower than the N21.3 billion loss recorded in 2016, according to the company’s financial statement.

Revenues declined 38 percent to N1.9 billion in 2017 from N3.07 billion in 2016.

For Resort savings and Loans, which announced a planned investment to the tune of N90 billion ($250 million) by Milost, the numbers also sound improbable.

The mortgage provider, which has a market capitalisation of N5.6 billion, said the Milost financing comprises $100 million (N36 billion) equity and $150 million (N54 billion) debt.

Given that Resort’s share price is only 50 kobo (having been suspended since 2015) and it has 11 billion outstanding shares, Milost’s N36 billion equity injection implies paying six times more for each share (N3 per share).

The motivation to incur this premium was particularly questionable, especially since Resort Savings and Loans has not released a financial statement since the 3rd quarter of 2015 when it reported net profits of N34.2 million on revenues of N1 billion and shareholder funds of N2.92 billion.

Total assets for the mortgage provider for the period came in at N10.1 billion.

Both firms reacted to the article with harsh words for Business Day reporters.

According to Paul Jegede, the

chairman of Japaul “We don’t really know where the dailies got their variables that do not add up mathematically about Milost math.

They should have watched and see what happens about the issue of performance.”

Resort’s chairman Sunday Fajinmi also had a thing or two to say about the article.

“It is sad to realise that a few grumbling, half educated individuals are against the recovery of the Nigerian economy through resuscitation of dying businesses,” Fajinmi, said.

According to Fajinmi, Milost “has been verified to be a very credible investor in developing economies like Nigeria. Their track record which speaks for itself, attest only to their credibility. Their understanding of the peculiarity of developing economies in Private Equity financing is amazing when compared to others who are the paymasters of the journalist, the author of the fake news.”

If these companies really did think Milost had a track record free of any blemish, then our second article probably triggered a change of heart.

BusinessDay’ssecondarticletitled “Milost sued in New York for fraud, violating US securities exchange law,” was published March 24.

The article gave an account of a pending court case between Milost and one Alex MacGregor who sued the former in September 2017 for alleged fraud, according

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to a document filed at the New York Southern District Court and obtained by BusinessDay. In the Case No. 1:17-cv-06691 filed on September 1, 2017, MacGregor through his counsel {Law Offices of Nolan Klein} sued Milost for damages alleging wire fraud, common law fraud, conversion, breach of contract and civil conspiracy.

The allegations also include violation of the US securities exchange law by making material misstatements of fact related to a filing with the Securities and Exchange Commission.

MacGregor, the President and CEO of Canada-based KGIC Inc., (a publicly traded company on the Toronto Venture Exchange), seeks the refund of some $560,000 (N201 million) paid to Milost under a financing deal worth $25 million.

The Plaintiff is also seeking punitive damages against Milost, and all reasonable attorney’s fees, litigation expenses, and costs.

Two phone calls to a number on Milost’s website and an email seeking comment went unreplied.

According to the court documents MacGregor’s company, KGIC, had been experiencing significant liquidity problems and needed to raise funds to recapitalize its operations.

After a plan to raise some USD$20.2 million from Canadian lenders in August 2016 failed, the company got commitment from Milost, which contacted MacGregor with a proposal to provide

funding through a friendly takeover bid worth $25 million.

Milost proposed a buy-out using a U.S. OTC publicly traded company called PHI Global.

To execute the transaction, an agreement, called “Milost Equity and Subscription Agreement” (“MESA”) was entered into between both parties on October 30 2016.

After execution of the MESA, Milost requested that MacGregor form a special purpose private company to acquire the assets as well as to purchase an existing U.S. OTC shell Company identified by Milost as KMRB II Acquisition Corp, owned by one Florida-based Brian Kistler.

Inthisregard,Milostrequestedthat MacGregor pay a retainer of $80,000 for its services in locating KMRB and facilitating the transactions.

MacGregor alleges that it paid Milost the retainer of $80,000 and says he would go on to pay a total $250,000 in two separate payments for the acquisition of KMRB. The suit also alleges that he also coughed up $70,000 as payment to complete the financial audit of the company (KMRB) as directed by Milost. The total amount received

by Milost from MacGregor, excluding any sums received pursuant to the earlier KGIC–Milost agreements, was $560,000, the court document showed.

MacGregor has since requested a full refund of all monies allegedly paid to Milost and the case remains in court.

R-L: Kennedy Uzoka, GMD/CEO, United Bank for Africa (UBA) plc; Laurent Landowski, product manager, artificial intelligence unit, Facebook; Dupe Olusola, group head, EMDOS and GIS, UBA plc, and Austine Abolusoro, group head, online banking, UBA plc, at the recently concluded F8 Facebook Conference 2018, where Facebook’s founder, Mark Zuckerberg acknowledged UBA’s artificial intelligence Leo ‘Chat Banker,’ in San Jose, California, USA.

Senate declares Inspector General of Police unfit...

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unfit to hold public office within and outside Nigeria.

This followed his non-appearance before the Senate for the third consecutive week.

The resolution was arrived at after a closed door session by the upper legislative chamber on Wednesday.

Idris was expected to appear before the Senate over the alleged inhuman treatment meted out to Senator Dino Melaye as well as killings across the country but he was conspicuously absent to brief lawmakers at Wednesday plenary.

But arising from a closed door session which lasted for over 30 minutes, Senate President Bukola Saraki who presided over the session, noted that the IGP’s non-appearance is not only a disrespect to the institution but to constituted authority.

Saraki also pointed out that his earlier refusal to appear before the investigative committee was

overruled by a competent court of jurisdiction in April this year.

“The Senate therefore views this persistent refusal as a great danger to our democracy. Therefore, the Senate resolves to declare the IGP as an enemy of democracy and unfit to hold any public office within and outside Nigeria,” Saraki said.

“The leadership of the Senate was also mandated to look into the matter for further necessary action,” he said.

Earlier in their contributions, Senate Leader, Ahmad Lawan; Deputy Minority Leader, Emmanuel Bwacha; Chairman Senate Committee on Navy Isah Misau and his counterpart in Power, Enyinnaya Abaribe, described the IG’s absence as an abuse of power.

Specifically, Lawan disclosed that he made several attempts to reach the IGP but to no avail.

Meanwhile despite assurances

by Senate President Bukola Saraki that the 2018 budget would be pre-

sented this week, both chambers of the National Assembly adjourned till Tuesday, May 15, 2018 without presenting the proposal.

On Monday, Saraki had told State House Correspondents after a meeting with President Muhammadu Buhari and the leadership of the NationalAssemblythatthelong-awaited federal budget would be laid within the week and passed by next week.

Senate Leader, Ahmad Lawan, who moved the motion for the adjournment at the upper legislative chamber, attributed the development to the forthcoming local government congress of the All Progressives Congress (APC) scheduled for this Saturday.

In the same vein, the House after the consideration of motions and adoption of the report of the House Committee on Justice on “A bill for an Act to amend the Extradition Act, 2004,” resolved to adjourn till next week Tuesday.

•Continues online at www.businessdayonline.com

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Apapa: Fresh challenge to economy looms CHUKA UROKO

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nother round of challenge to both Apapa and the wider economy is lucking around the corner as truck drivers say they are being pushed to return to the Apapa and Ijora bridges, citing brazen extortion by security operatives enforcing the vacation order given to them by the Nigerian Navy.

A concerned police officer, who pleaded anonymity, walked into BusinessDay premises Wednesday morning, alleging that truck drivers were being prevented from going to the ports because they had not paid money demanded from them by the security operatives.

When BusinessDay visited the port gate to ascertain the truth of the allegation, a truck driver who identified himself simply as Azeez confirmed that security officers were making coming to Apapa Ports a bit of hell for them, especially since they were asked to vacate the bridges.

“To reach this port gate, each truck driver pays between N15,000 and N60,000 before it is allowed to enter the port to carry his goods.

This is aside the money he will pay inside the port,” Azeez said.

A couple of months ago, the Nigerian Navy, led by SAG Abbah, a rear admiral and flag officer commanding Western Naval Command, ordered the trailers and tankers to vacate the Apapa and Ijora bridges where they had been ‘resident’ for months.

Compliance to that order was almost total and for motorists, businesses and residents of Apapa, it was a new dawn as they could, once again, drive freely on those bridges. The trucks had occasioned a snarling gridlock that made living in and going to the port city a nightmare.

Apapa was literally under siege and it was so much so that many businesses died; some relocated and those resilient enough to withstand the pain and stress had their productivity halved with worn out workforce; landlords relocated and became tenants in other parts of town. Both residential and commercial houses became desolate.

Property values dropped significantly.

All these impacted on Apapa as a maritime business hub. “The economy of

Apapa is over N20 billion a day. To allow this kind of situation to be impacting on the economy means a lot of money is being lost on daily basis not only by the businesses, but also by the country,” Paul Gbadedo, group managing director, Flour Mills Nigeria Limited, said at the peak of the trucks menace.

Both police and navy authorities who have been commended for sustaining their success in chasing the trucks away from the bridges should call their officers to order because if the truckers make good their threat of returning to the bridges if the extortion continued, the consequences would be graver.

It is not only that the economy, especially those of Apapa, will bleed again, Nigerians who are the ultimate consumers of the imported products, which the truck drivers come to Apapa for, will have to pay more.

“These officers are not thinking of the impact of their action on the drivers and Nigerians who will have to pay more for goods; they are only after themselves and this is where it pains me so much,” said the police officer who reported the case to BusinessDay.

Thursday 10 May 2018

Stolen mace: Police accuse lawmakers, security agents of internal conspiracy KEHINDE AKINTOLA, Abuja

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he Divisional Police officer in the National Assembly, Zulu-Gambari Abdul, on Wednesday described the invasion of National Assembly as an act of internal conspiracy among some security agencies and some of the lawmakers.

Abdul said this during an investigative hearing into the stolen mace by joint Senate and House of Representatives’ ad-hoc committee investigating the invasion of the Senate.

“There should be a synergy between security agencies and the lawmakers, but in this case the attack came from the roof as the senators are not helping security matters.

“On April 16, there was an earlier hint that a group planned to invade the National Assembly and disrupt activities, which called for a build-up of security with two units of mobile police mobilised to the complex.

“However on April 18, at about 10:11am, my attention was drawn to a group protesting at the gate, while I moved to address the group, I was informed that some

people were running away with the mace.

“I signalled all the entry points that nobody drives in or out but three men approached me identifying themselves as security operatives and requested to be allowed to go.

“The strain of blood on their clothes made me become suspicious and I ordered they be arrested. In all, six people were arrested same day and handed over to the Force Headquarters alongside charms recovered from them.

“In addition, an unmarked Prado SUV and a Toyota Hilux were impounded and they are with the Police. It was later that I observed that the protest was a diversionary attention to move me out and that the protesters were same group with those that attacked,” Abdul told the lawmakers.

He, however, said there was no communication from the Sergeant-at-Arms during the invasion by the thugs.

In his remarks, Brighton Danwalex, sergeant-at-arms at the National Assembly, said report after the incident accused Senator Ali Ndume of instructing the men assigned to protect the mace not to touch it during the

invasion.

According to Danwalex, it was wrong for them to take orders from Ndume.

“Security men are having challenges with some legislators because they don’t want to follow checks,” he observed.

Danwalex said that security men were overpowered due to lack of non-functional security gadgets to enhance operational capacity.

“There is no functional walkie-talkie; we would have alerted all the exit points. The CCTV is not functional and there is only one operational patrol vehicle and the entrance into the white house requires biometric doors,” he argued.

In his intervention, Bala N’allah requested the Police to furnish it with copy of station diary where entry of the crime was made, as well as copies of crime routine diary, pictures of those arrested and the transfer register explaining where the invaders were transferred to.

On her part, Betty Apiafi, co-chairman of the adhoc committee, blamed the invasion on negligence of the sergeant-at-Arms, and accused them of failing to raise alarm having observed something unusual.

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CityFile Victims cry out as windstorm wreak havoc in Jigawa ... 100 houses destroyed, 7 injured ADEOLA AJAKAIYE

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ictims continue to count their losses following the destruction of over 100 houses estimated at millions by a windstorm in Dutse local government area of Jigawa State.

Ado Musa and Baffa Shehu, heads of two of the villages affected, who spoke to journalists in Dutse, decried the level of havoc wreaked on their neighbourhoods.

Musa, who is the village head of Warwade community, said that the windstorm destroyed about 27 houses in Sayasaya, a village under Warwade, and blew off the roofs of some schools and mosques.

He added that the windstorm had rendered about 30 families homeless, while destroying several local silos containing assorted foodstuff.

“Each year, we experience cyclone, windstorm or rainstorm at the beginning, middle or end of every rainy season but the storms have not been as damaging as the recent one. This time around, the windstorm is so heavy that it completely brought down some houses and blew up roofs of schools, mosques and clinics.

“Over 20 villages are affected by the disaster but the worst-hit is Sayasaya where between 30 and 35 households are affected,” Musa said on Tuesday.

He said, however, that no death was recorded in the incident but that seven persons were injured by roofing sheets blown off by the wind.

“Some of the victims had multiple fractures in different parts of their bodies and were taken to Dutse General Hospital for treatment.

At least, the value of what the people lost in Sayasaya is about N5 million and some of the affected families are currently taking refuge in the village primary school,’’ he said.

Speaking also, Shehu, the village head of Jidawa community, said that the windstorm destroyed over 80 houses in his domain. He added that the windstorm which lasted for close to an hour, destroyed several fences and blew off the roofs of houses, schools and a clinic.

“The rainstorm began around 5:30 p.m. and lasted for about an hour. At least, 80 houses were affected and we thank God it did not injure or kill anyone here but it caused a lot of damage in Sayasaya and Warwade villages that are close to us.

“The windstorm could have destroyed the whole area if it continued for more than an hour; in fact we have never experienced such a severe windstorm before. It was accompanied by heavy rainfall and we started planting crops the following day because of the level of rainfall the previous day. Several fences were also affected, thereby exposing the belongings

of the affected households,” he said.

Some of the victims of the damage said that they needed urgent assistance, in terms of shelter and food aid.

In Jidawa village, Garba Adamu and Malam Kawu Yakubu, expressed concern about problems the residents would face following the impact of the rainstorm.

They said that the entire area had been thrown into confusion as a result of the damage done to the residents’ properties.

“Most of the houses suffer from one dent or the other, no matter how little it was. As you can see, some roofs were blown off, while some fences were completely brought down,’’ Adamu said.

In Sayasaya village, Malam Ali Beza, the head of a household, said: “We slept outside that day, as the wind blew and pulled down the roof of our house.

“Up to this moment, we have never been able to sleep comfortably; this is a large family house as you can see. “We are 19 in the house: my family and the families of three of my children.’’

Ibrahim Danjuma, another resident of Sayasaya village, said: “My two-year-old child was almost killed as the roof the building fell on him; three of my rooms as well as the silos containing foodstuff and one sheep were destroyed.

“Many people have vacated their homes due to the level of destruction caused by the windstorm because we cannot live in houses without roofs.

Domestic violence: Group partners telecos on toll-free-lines for victims

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he Women Arise for Change initiative, a non-governmental organisation, says it is partnering with telecommunication companies for toll-free lines to lodge complaints against domestic violence.

According to the group, the move will allow victims of domestic violence to freely call for help without paying.

Joe Okei-Odumakin, the president of the NGO, disclosed this at a rally in Yaba, Lagos, to demand justice for the murder of Zainab Alizee and her daughter, Petra.

The deceased and her daughter were allegedly killed by her husband, Peter Nielson, a Danish based in Nigeria, on April 5 at Banana Island, Ikoyi, Lagos.

According to Okei-Odumakin, killings of women and children are heinous and have become a reoccurring decimal which must be put to an end.

“We will like to use this medium to say that our campaign against domestic violence will be pursued with renewed vigor in order to stop this menace that is consuming our families.

“We will be working with the Nigeria Telecommunication Commission and telecommunication companies in Nigeria to facilitate the provision of a toll free number for domestic violence.

“This is so that we can help save lives and prevent further tragedies. We will also work with all stakeholders to develop a framework as well as engage the public and private sector to step up the campaign for domestic tranquility,’’ she said.

Okei-Odumakin challenged women to know that marriage was not a “do-or die’’ affair and urged families not to use culture to keep their children in turbulent and abusive marriages.

The rights activist called on members of the public to always be their brothers and sisters’ keeper, to be on the lookout and kill the culture of silence and hypocrisy.

Okei-Odumakin said that her group would ensure that the alleged murderer of Alizee and her daughter would not get preferential treatment in the prison.

Ambode tasks workers on information mgt

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Members of Women Arise during a demonstration to demand for justice for the alleged gruesome murder of one Zainab and poisoning of her son Petra by a Danish citizen at the Yaba Magistrate Court, in Lagos on Tuesday. NAN,

Insecurity: Plateau elders warn of food shortage

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olitical elders in Plateau have warned of imminent food shortages following persistent attacks on farms and farmers in rural communities.

John Mankilik, spokesman of the Plateau Political Elders Forum, who briefed newsmen on persistent insecurity in the state, urged the Federal Government to adopt urgent measures to check the trend, adding that farmers have deserted farms due to fear of attacks by herdsmen.

“The rains are here, but farmers are afraid of being attacked in the farms; a lot of them that have been displaced are still roaming

around and cannot return home out of fear.

“Very fertile lands are wasting away.

Those affected by the violence are farmers whose only job is tilling the land. If they cannot do that, the effect will be massive,” Mankilik said in Jos. Mankilik, who described the killings as “very unfortunate and unacceptable”, regretted that most of the states affected had a large number of farmers that had fed the nation over the years.

“The reports one reads in the papers are not palatable. This morning, we heard that 45 people were killed in Birnin-Gwari in Kaduna State. Benue, Taraba, Nasarawa

and Adamawa are also under siege.

“As elders in Plateau, we are not happy with the security situation. Many people are already poor and hungry. The incessant attacks have worsened an already bad situation,” he said.

The elders also expressed fears that politicians could take advantage of the situation and eliminate rivals “especially now that elections are fast approaching”.

They urged President Muhammadu Buhri to protect the nation’s democracy from people with evil intentions, and challenged security agencies to double efforts to rid Nigeria of bandits.

overnor of Lagos State, Akinwunmi Ambode has urged workers in the state to embrace effective information management as a tool to better serve the public.

Ambode gave the charge in a keynote address titled “information management for positive perception of Lagos State government programmes: the role of civil service,” delivered a training session for a group of civil servants in Lagos.

Represented by his commissioner for establishments, training and pensions, Akintola Benson Oke, Ambode said while it might be true that what sustains a system of government is the will of the people, it must be considered that what influences the will of the people is information and the way it is managed.

He noted that in most democracies of the world, civil service represented “ a permanent government’ that must be equipped to adequately advise the government of the day, implement policies and effectively communicate the reasoning behind government’s programmes to the citizens.”

“The net effect is that if civil servants are well-equipped to discharge these tasks, the programmes of government will be positively perceived by the populace and will thus receive the needed support for success,” he said.

Thursday 10 May 2018

FT

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FINANCIAL TIMES Novartis paid $1.2m in fees to Trump lawyer

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Oil price shoots higher as Trump quits Iran nuclear deal Page A5

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World Business Newspaper

Argentines shocked by IMF loan request Many still traumatised by 2001 crisis and consider ‘Fund’ a dirty word BENEDICT MANDER AND JOHN PAUL RATHBONE

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eventeen years ago, economic policies backed by the IMF brought Argentina to its knees.

Five years later, then-president Néstor Kirchner severed IMF ties, swearing never again. This week, a run on the currency forced President Mauricio Macri to return to the international lender.

On Tuesday, in a televised address to the nation, a sober-faced Mr Macri said assistance from the International Monetary Fund would help “avoid a crisis like the ones we have faced before . . . [it] will allow us to strengthen our programme of growth and development”.

It was a stunning reversal for the 59-year-old former businessman who came to power in December 2015 vowing to make Argentina a “normal country”, after 12 years of leftist rule

by Mr Kirchner and his wife Cristina Fernández. In a country where many still feel traumatised by the phrase “IMF”, it was also a major psychological shock.

“When you talk about the IMF in Argentina, you are talking about a crisis,” says Carlos Germano, a political analyst, who says that “Fund” has become a dirty word in Argentina. “The Kirchner government worked hard to [demonise] the IMF. The vast majority now believe it is synonymous with crisis and usury.”

There are few countries with as chequered a history of IMF relations as Argentina. Many Argentines associate it inextricably with the social and economic chaos that followed the country’s 2001 devaluation and $100bn debt default.

The crisis was so bad that one of five Argentines lost their jobs. The peso, which had been tied to the dollar, lost two-thirds of its value. Banks froze deposits. More than 20 people died in protests and looting. In just two weeks, the country had five successive presidents.

So, while Mr Macri’s decision to return to the IMF for a reported $30bn credit line may calm investors worried about his ability to stabilise the economy after a string of interest rate increases failed to stop a two-week run on the

peso, locals are less convinced.

“It’s Macri’s first serious crisis, the first big bump along the road,” says Juan Cruz Díaz, managing director at Cefeidas Group, a Buenos Aires risk consultancy. “On Wall Street they may think this a good thing, but it will be much harder to sell this politically.”

Mr Macri’s popularity has already taken a battering and seeking IMF help will not help it recover. As investor confidence in Argentina has, in some part, been predicated on the possibility of Mr Macri winning a second term in 2019, that is also a potentially serious blow.

Walter Stoeppelwerth, head of research at Balanz Capital, a local investment bank, says Mr Macri has set in chain a process whose end is uncertain.

“Argentina is not going to access $30bn from the IMF unless the currency is at much weaker levels and it is willing to accept the political liability of adjusting the fiscal deficit more aggressively,” he says. “There will be a quid pro quo that may not be acceptable for Macri.”

Still, Argentina is very different from what it was in 2001. Over the past twoand-a-half years, the government has made great strides in re-building market confidence. Last year, it even sold a heavily oversubscribed 100-year bond to international investors. This year, it is heading the G20.

Attempts by critics to compare recent events to the run-up to the 2001 crisis are exaggerated, analysts say.

“No one seriously thinks that,” says Mr Díaz. “We are a long way from 2001.

It is still a solid government — with problems, yes, and there have been a lot of criticisms of the way economic policy has been handled — but no one is questioning the strength or the capability of the government to run the country, which is what was happening in 2001.”

The country’s finances have also changed radically. The exchange rate is floating, not fixed. Most bank deposits are in pesos instead of dollars, points out Martin Castellano, head of Latin America research at the Institute of International Finance. Almost half of public debt is also held by public institutions such as the central bank. In 2001, it was mostly in private hands.

Gina Haspel pledges not to restart CIA torture programme Trump’s pick as intelligence chief faces grilling at Senate confirmation hearing COURTNEY WEAVER, KATRINA MANSON AND MARK ODELL

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S president Donald Trump’s pick as the new head of the CIA has vowed not to restart the torture programme that the agency implemented after the 9/11 terrorist attacks if she is confirmed by the Senate, in what is set to be a close vote.

The promise by Gina Haspel came in opening remarks at her confirmation hearing on Wednesday, where she is facing questions over her role in the so-called enhanced interrogation techniques on terrorism suspects at clandestine overseas detention facilities.

“I understand that what many people around the country want to know about me are my views on CIA’s

former detention and interrogation programme,” Ms Haspel said. “Having served in that tumultuous time, I can offer you my personal commitment, clearly and without reservation, that under my leadership, [the] CIA will not restart such a detention and interrogation programme.”

The intelligence committee has indicated it will give Ms Haspel a tough hearing, with most Democrats telegraphing that they will vote against her confirmation.

At the hearing, Republican committee chair Richard Burr threw his support behind Ms Haspel, calling her the “most prepared nominee in the [agency’s] 70 year history”. However, Mark Warner, the ranking Democrat Continues on page A4

Christine Lagarde, managing director of the IMF and Mauricio Macri, president of Argentina

EU to seek exemptions from new US sanctions on Iran European companies will be urged to keep investing despite threat of US fines ANNE-SYLVAINE CHASSANY, MICHAEL PEEL AND TOBIAS BUCK

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U leaders said they would press Washington to exempt European companies from fresh US sanctions as transatlantic tensions rose over President Donald Trump’s decision to pull out of the Iran nuclear deal.

Jean-Claude Juncker, the EU Commission president, attacked Washington over its decision, saying the US was turning its back on multilateral relations and friendly co-operation “with a ferocity that can only surprise us”.

He said in a speech in Brussels the US “no longer wants to co-operate with other parts of the world” .

The EU is committed to salvaging the 2015 deal intended to curb Iran’s nuclear ambitions and Tehran has said it would stick to the agreement.

But to save the deal EU capitals have

to convince European companies to keep investing and signing deals with Tehran despite the threat of extraterritorial US fines.

French diplomats said on Wednesday they would use the next three to six months before US penalties are fully reinstated to seek carve-outs for EU companies.

European officials are examining options to safeguard business links with Iran and provide an alternative to US dollar financing of deals. They could tap the European Investment Bank or bilateral sovereign credit lines with Tehran, like the one the Italian government has put in place.

They are also looking at reactivating legislation that would block the effect of US sanctions, a more aggressive response. But the threat of being in the crosshairs of the US government may be enough to steer business away from Iran altogether.

Iran’s supreme leader Ayatol-

lah Ali Khamenei said the Islamic republic’s commitment to the deal would depend on “sufficient guarantees” from France, Germany and the UK. Otherwise, continuation of the nuclear agreement “is not logical”.

The foreign ministers of Britain, France and Germany are expected meet their Iranian counterpart next week to discuss ways of underpinning the 2015 accord.

A French senior diplomat said: “The US administration announced a gradual reinstatement of the sanctions. We’re going to do everything, in connection to our companies, to defend their interests.”

He added: “We’re going to need time.”

Bruno Le Maire, France’s finance minister, said he would suggest “exemptions” and “grand-fathering measures” for existing contracts and investments when he talks with US Treasury secretary Steven Mnuchin this week.

The big chill: the alarming decline in US-Russian relations A candid expert account suggests little will change under the current leadership MARY SAROTTE

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oviet-era jokes are fashion­ able once again in Russia.

Thus: a man walks into the headquarters of the Federal Security Service — the FSB, successor to the KGB — and says, “My pet parrot is missing.” An agent responds, “Why are you wasting my time?

Complain to the police or animal control!” Man adds hastily, “Sorry, I told them already. I’m informing you because, if they find my parrot, I want you to know that I do not agree with its view of President Vladimir Putin”.

That Russians should once again have to worry (and joke) about the consequences of the state discovering their true feelings about their leader speaks volumes about the status of domestic politics in Russia today.

And although Michael McFaul’s new memoir From Cold War to Hot Peace has a great deal to say

about Moscow’s foreign policy, it is ultimately Russia’s domestic politics that the author blames for the decay in relations with the US. The central irony and tragedy of this book, of which the author is all too painfully aware, is that McFaul, a senior policymaker both hugely knowledgeable about and admiring of Russia, found himself personally presiding over that decline as the US ambassador to Moscow between 2012 and 2014.

Revisiting this relationship is particularly worthwhile now, given the present whiplash-inducing nature of US attitudes to Russia.

While President Donald Trump frequently praises Putin, his top aides promote sanctions and confront­ation instead, prompting the Russian president to rattle nuclear sabres in response — all while an investigation grinds on into alleged election collusion between Trump’s campaign and Moscow. It is a far cry from the

high watermark of US-Russian co-operation at the end of the cold war, and McFaul makes for an expert guide down the path of decline from then until today.

McFaul gained his extensive know­ledge of Russia as a student at Stanford, as a democracy activist in Russia and as a professor of politics. At the urging of his friend Susan Rice, a future US national security adviser, he joined Barack Obama’s 2008 campaign. In office, Obama rewarded him with a spot on the National Security Council and then the ambassadorship in Moscow.

Now back at Stanford as a scholar, McFaul laments that “my life’s work of trying to bring our two countries closer . . . seems like a failure”. Even worse, “I am now persona non grata in a country I love.” Not since George Kennan, his long-ago predecessor, has a former US ambassador been banned from returning to Russia.

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American detainees in North Korea en route to US Trump says three long-held men flying back with Pompeo ‘in good health’ ADAM SAMSON

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hree American detainees who were being held in North Korea are on their way back to the US, Donald Trump said on Wednesday in the latest sign

of thawing relations with the Asian country.

Mr Trump tweeted that the men appear to be “in good health”.

“I am pleased to inform you that secretary of state Mike Pompeo is in the air and on his way back from

North Korea with the three wonderful gentlemen that everyone is looking so forward to meeting,” said Mr Trump.

The president added that a date and location of the summit between him and North Korean leader

Kim Jong Un had been set after Mr Pompeo had a “good meeting.”

The apparent progress made with North Korea starkly contrasts the breakdown in diplomacy over Iran.

Mr Trump announced on Tues-

Walmart confirms $16bn stake in India’s Flipkart

Gina Haspel pledges not to restart CIA torture...

Continued from page A3 on the committee, was quick to raise concerns about her role in the CIA’s torture programme.

“Many people — and I include myself in that number — have questions about the message the Senate would be sending by confirming someone for this position who served as a supervisor in the Counter Terrorism Center during the time of the Rendition, Detention, and Interrogation program,” Mr Warner said.

Ms Haspel spent 32 years as an undercover agent and ran a “black site” in Thailand in the aftermath of 9/11 where detainees were subjected to techniques described by many as torture.

Her assurances in the hearing will be critical given Mr Trump had floated the prospect of bringing back waterboarding early in his presidency.

The president said torture “absolutely” worked, although added that he would defer to advice from his cabinet, including defence secretary Jim Mattis who opposes torture.

Ms Haspel’s background and her position on torture has been the subject of intense scrutiny, with some Democratic members of the Senate intelligence committee saying they were concerned about her actions.

She had considered withdrawing her nomination over the furore, said Charlie Allen, a retired senior CIA official who worked with her. Ms Haspel’s initial inclination to withdraw was first reported by the Washington Post “She was concerned about the workforce’s morale and the reputation of the agency, but the White House affirmed strong support for her nomination and she’s agreed to see this through. She loves the agency; she loves the country,” Mr Allen told the Financial Times.

Mr Allen, who attended Wednesday’s hearing, said Ms Haspel was a deeply respected intelligence professional who was considered in her judgments and willing to speak truth to power. He defended her actions in the wake of the 9/11 attacks, when he said the CIA had no interrogation specialists and raced to go on the offensive against al-Qaeda.

“She was not among the decision makers that led to the rendition, detention and interrogation programme,” he said, adding there was no need for Ms Haspel to apologise for her role at the time. “We’re not going to apologise for what we did, we have nothing to apologise for — that may not sit well with some people but we served the country in a way which was legal and which we were directed to do.”

Ms Haspel has the respect of many former and serving CIA colleagues, including Barack Obama-era appointees, who have roundly endorsed her.

At her hearing, Evan Bayh, the former Democratic senator and governor of Indiana, spoke on her behalf.

day afternoon in Washington that the US will pull out of the nuclear accord that was one of the hallmarks of his predecessor’s administration and marked a show of unity between America and several key allies.

Record foreign direct investment will pit retailer against Amazon

SIMON MUNDY AND PETER WELLS

W Michael Cohen, lawyer for President Donald Trump, was hired by Korea Aerospace Industries as part of its effort to meet US accounting standards, the defence company says.

Novartis paid $1.2m in fees to Trump lawyer AT&T and Korea Aerospace also say money to Cohen was for legitimate consulting RALPH ATKINS , KADHIM SHUBBER AND BRYAN HARRIS

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lobal healthcare group Novartis paid Donald Trump’s personal lawyer a consulting fee of $1.2m which was among a series of payments from multinationals to a company that provided “hush money” to adult film actress Stormy Daniels.

The Swiss-based company was one of three global corporations, including AT&T and Korean Aerospace, which insisted the fees were for legitimate business purposes for their US operations.

Novartis admitted it had entered into a one-year agreement with Essential Consultants in February 2017, shortly after the election, involving instalments of $100,000 a month. It said it believed Michael Cohen, Mr Trump’s lawyer, would be able to guide the company on how to approach US healthcare policy.

Essential Consultants was set up in 2016 and was used to pay $130,000 to Ms Daniels, whose real name is Stephanie Clifford, before the US election in return for her silence about an alleged 2006 affair with Mr Trump. Mr Trump’s attorney, Rudy Giuliani] , has said the president reimbursed Mr Cohen for the payment; Mr Trump has denied an affair.

Novartis said that after its first meeting with Mr Cohen in March 2017 it “determined” that he and Essential Consultants would be “unable to provide the services that Novartis had anticipated related to US healthcare policy matters and the decision was taken not to engage further”.

But the payments continued to be made until the contract expired in February 2018, the company said, as it could not be terminated for cause. A Novartis official described the agreement as “regrettable”.

Novartis was at pains to point out that the arrangement was struck before

the present Novartis chief executive, Vas Narasimhan, took over the top job, and that he was in no way involved. The company said he had “no involvement whatsoever”.

After a dinner at Davos attended by corporate leaders in January this year, Mr Narasimhan described the Trump administration as having a “very constructive mindset”.

In November, special counsel Robert Mueller’s office requested information about the arrangement from Novartis, which said it “co-operated fully”.

The payments from the company were first revealed in documents released by Ms Daniel’s lawyer, Michael Avenatti, on Tuesday, showing a series of bank transactions involving the international corporations.

Korea Aerospace Industries, a South Korean defence company that is vying for its biggest-ever contract with the US government, maintained that it hired Mr Cohen as part of its effort to meet American accounting standards.

Facebook seeks right formula as it courts dating market Huge user base gives social network edge but it faces data trust issues HANNAH KUCHLER

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acebook has the largest network of singles in the world, a mission to bring people closer together and, research has shown, so much data that it knows users better than their partners do.

So when Mark Zuckerberg, chief executive, unveiled a foray into online dating last week, hearts may have soared. And shares in the market’s main listed incumbent, Match Group, dropped dramatically.

Commentators who were already questioning Facebook ’s social dominance now feared it would monopolise our love lives, too. Kevin Carty — a researcher at the Open Markets Initiative, which has called for regulators to break up the company after the Cambridge Analytica

revelations — said Facebook’s data hoards gave it a “head start” over any other entrant to the market.

Facebook stores data about what people do on its app and on other websites. Because dating apps such as Tinder and Bumble use Facebook’s platform to identify and connect people, it also theoretically understands how people are using those apps.

Ultimately, the biggest threat to dating apps that use the Facebook platform is that the company moves to cut them off. But as Facebook is under public scrutiny for its market dominance, that seems unlikely for now.

“We don’t want Facebook to expand into new markets, leveraging their monopolies into new monopolies,” Mr Carty said.

Having thrown off the stigma and become the main way to meet for many people, the online dating industry is an attractive market for Facebook. The number of people using dating apps is expected to soar in the next few years, with annual growth of 30 per cent until 2022, according to research group E-Marketer.

Match Group is the largest online dating company with more than 45 brands including Match.com, Tinder and OkCupid. On Tuesday, it reported its highest quarter-onquarter revenue growth since its initial public offering in 2015. Total revenue increased by 36 per cent to $407m. Net income was up more than 300 per cent to $100m, or 33 cents per share, partly because of tax benefits and exercises of stock-based awards.

almart has agreed to pay $16bn for a majority stake in Indian ecommerce company Flipkart, a record foreign direct investment for India that will pit it against US rival Amazon.

The Arkansas-based retailer will buy 77 per cent of Flipkart, with the remainder being held by existing shareholders including Tencent, Tiger Global Management and Microsoft. Japan’s SoftBank has sold to Walmart the stake in Flipkart that it acquired last year, its chief executive Masayoshi Son told investors earlier on Wednesday.

Calling India “one of the most attractive retail markets in the world”, Walmart chief executive Doug McMillon said that it was backing “the company that is leading the transformation of ecommerce in the market”.

Walmart said its investment included $2bn of new equity funding, which will be used partly to fund an expansion into online grocery sales, according to a person close to the deal. It revealed that Flipkart had recorded a sales volume in its marketplace of $7.5bn in the year to March 31, with the company’s own reported net sales standing at $4.6bn — more than 50 per cent higher than a year before.

Analysts believe Flipkart’s sales are the highest in the Indian ecommerce sector, but over the past five years it has faced a strong challenge from Amazon, which considers India its main target market in India. Analysts at Forrester Research say that Indian ecommerce sales last year amounted to only $21bn, but predict that its growth rate will outpace larger markets such as China over the next five years.

Walmart’s Indian operations already count 21 Best Price cashand-carry stores and one fulfilment centre, but the two companies will maintain distinct brands and operating structures.

Should the deal close by the end of Walmart’s second quarter in July, the US company expects a negative impact on financial year 2019 earnings per share of between 25 cents and 30 cents. Ahead of this morning’s announcement, analysts forecast EPS of $4.90 for the full year, according to a survey of analysts by Thomson Reuters.

Walmart shares were down 2.7 per cent in pre-market trade on Wednesday in New York.

Thursday 10 May 2018

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ANALYSIS Bond trading: Technology finally disrupts a $50tn market

Fixed income is being dragged into the 21st century with a shift towards electronic trading on exchanges ROBIN WIGGLESWORTH AND JOE RENNISON

A President Donald Trump declared the US would re-impose sanctions on Iran’s petroleum sales in November © Bloomberg

Oil price shoots higher as Trump quits Iran nuclear deal

bbie has enjoyed a brilliant start to her new job as a junior fund manager at AllianceBernstein, a $500bn investment group in New York. In her first three months she has handled thousands of bond trades worth nearly $19bn, never complaining, messing up or even taking a break.

That’s because she is an algorithm.

AllianceBernstein’s latest robotic employee did initially have a problem understanding some of the niceties of her human bosses — at first Abbie was stumped by what

with their own legal and financial idiosyncrasies. Bigger chunks of debt are especially hard to trade without human finesse: sceptics compare it to how people might be comfortable buying a TV online, but not a house.

But if modern regulations have plunged bond trading into a funk, then modern technology has handed the finance industry the means to turn the predicament into an opportunity. Stocks may be fundamentally different from fixed income, but that does not mean the latter cannot benefit from advances in data science and artificial intelligence.

Moreover, electronification is just one facet of how bond trading is being dragged into the 21st century, with banks and investors exploring

Long-term impact of sanctions on the commodity will depend on how other countries GREGORY MEYER AND DAVID SHEPPARD

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il prices jumped to the highest level since 2014, topping $77 a barrel after US president Donald Trump announced he was pulling out of the nuclear deal with Iran and reimposing sanctions on the country.

Prices shot higher as traders digested the impact on Iran’s oil exports, which currently stand at more than 2.5m barrels a day or about 3 per cent of global demand.

Brent crude oil, the international benchmark, rose as high as 3.1 per cent to $77.20, in early trading in London on Wednesday while WTI, the US benchmark, jumped by a similar amount to $70.93.

While there are six months before sanctions take full effect on Iran’s oil, some in the industry are already predicting Iran’s exports could fall by more than 1m b/d, though others believe the fact that European powers have remained in the deal could damp the impact.

The risk of so-called secondary sanctions on non-US companies is seen as having a chilling effect on international banks’ willingness to finance trades. That could essentially cut off some of the world’s largest independent commodity traders from the country, who had played a key role in helping Tehran raise its exports after the nuclear deal was agreed in 2015.

“This will largely shut down trade with Iran for those who got back in early,” said one executive at a major commodity trading house.

“There may eventually be some wiggleroom carved out between the Europeans and the Americans but for now it will quickly become a no-go area, especially for banks who have financed the trades.”

The US declared it would reimpose sanctions on Iran’s petroleum sales in early November, after a 180day period allowing existing deals to be wound down. At the White House on Tuesday, Mr Trump said the US would be “instituting the highest level of economic sanction” on Iran.

“Trump really went for the chokehold on this by reinstating all the sanctions that applied before

the 2015 deal,” said Behnam Ben Taleblu, a research fellow at the Foundation for Defense of Democracies. “But because it has not got multinational buy-in, the US will find it a lot more challenging than under the old regime: it will be harder to implement the sanctions and will require more management and tinkering.”

A previous round of international sanctions imposed on Iran in 2011-12 took a maximum of 1.4m b/d off world markets at their most effective. Those restrictions eased after 2015, when Iran reached a deal with the US, the UK, France, Germany, Russia and China to curb its nuclear programme.

US decision on Iran nuclear deal ‘humiliating’ for Europe The new round of US sanctions could be less effective in blocking Iran’s oil exports, analysts said. The five other powers that signed the nuclear deal with Iran continue to back it. While some analysts are predicting more than 1m b/d could be lost, others are forecasting as little as 200,000 b/d, illustrating the uncertainty in oil markets.

Oil contracts for later delivery rose by a similar amount, with Brent for delivery in December up 2.5 per cent.

The rising oil price has rippled out across stock markets in recent weeks, with the S&P 500 Energy Index up 10.4 per cent this quarter. Europe’s Stoxx oil and gas index has gained 15 per cent in the same period.

The US Treasury said it was seeking “a commitment to decrease substantially” purchases of Iranian crude oil. Richard Nephew, of Columbia University’s Center on Global Energy Policy, who worked on the earlier sanctions in the Obama administration, said the impact of Mr Trump’s decision would depend on how other countries responded.

“Now we have the million-dollar question of what kind of co-operation we are going to get from the rest of the world’s companies,” Mr Nephew said. “Companies are going to be exploring their options.”

He estimated there was likely to be a varying degree of compliance, with Iran’s oil exports cut by perhaps 400,000-500,000 b/d. Some

countries are likely to try to avoid cutting their purchases of Iranian oil for as long as possible. “China will completely ignore this,” Mr Nephew said.

Marwan Younes, chief investment officer of Massar Capital Management, a commodities hedge fund in New York, said the shortterm impact of US sanctions would probably be on where Iranian oil flows rather than how much. This could affect the price relationships for oil in different delivery locations.

“Exports will be rerouted to counterparties . . . that have a higher risk tolerance for taking in these imports,” he said. The consequences for world oil balances would be felt later, when financial sanctions curtail investment in Iran’s oil sector, he added.

Questions for the oil market were further muddled on Tuesday when US Treasury secretary Steven Mnuchin revealed that Washington was communicating with alternative suppliers — and Saudi Arabia, the world’s leading crude oil exporter, stepped forward to help.

When the oil sanctions take full effect later this year, world oil demand is expected to top 100m b/d for the first time. Set against this bullish scenario, however, is the prospect of added supplies: notably from Saudi Arabia and the US. The Saudi energy ministry said the kingdom would work with producers to “mitigate the impact of any potential supply shortages”.

The kingdom has more than 2m b/d of spare production capacity as it holds back output as part of the Opec cartel.

US shale fields offer another source of additional supply in the months ahead. The Energy Information Administration forecast US crude oil production would average 11.9m b/d in 2019, up by 2.5m b/d from last year. While the US is a net oil importer, its crude oil exports have been running at more than 2m b/d. When the first round of sanctions were in place, surging US shale production helped keep a lid on world oil prices.

“If you lose any barrels from the market, I think you could see the US be the first responder,” said Michael Tran, energy analyst at RBC Capital Markets.

they meant with the word “please” — but she already handles about 35 per cent of their bond trades. The asset manager, which is considering the relocation of its headquarters to Nashville, Tennessee, is optimistic that Abbie will soon be able to automate large parts of the work of its two dozen human assistant portfolio managers.

Abbie might seem unremarkable to observers who have seen a series of technological revolutions reshape the stock market. But the bond market has historically been a vast but old-fashioned corner of the financial system, with little transparency and trading often conducted by phone.

Yet a confluence of factors is now beginning to have a profound impact on the $50tn fixed income market.

Banks complain that more onerous regulations have hamstrung their ability to play their traditional role in lubricating activity in the bond market. That has spurred efforts to explore new ways to trade debt. The hope is that modernising the market’s technological architecture can cut costs and improve its efficiency.

The “electronification” of the bigger government debt markets — such as US Treasuries or UK Gilts — is already well under way, and some experts predict that less traded markets such as corporate, municipal or emerging market debt will be the next to succumb to the march of the machines.

There is still scepticism that bonds can ever trade in a similar fashion to equities. Doubters point out that a company might only have issued one stock, but dozens of unique bonds. In fact, there are only 43,000 stocks in the world, but there are millions of bonds, each

myriad ways to modernise the entire fixed income market — as Abbie attests to.

“Before the crisis the technology available was pretty archaic.

But the liquidity available was so good that we didn’t care. Then 2008 happened,” says Douglas Peebles, AllianceBernstein’s fixed income chief. “We want to make the market better, stronger, faster.”

When Richie Prager started on Wall Street in 1981 he had to punch trades into a Telex machine, the keys so cumbersome it felt like they were fighting back. The majority of bond deals were arranged by phone and trading floors resembled boisterous street markets.

Today Mr Prager oversees trading at BlackRock, the world’s biggest investment group, where quiet data scientists have replaced many bellowing traders, and workstations look more like a desk at Nasa. “The technology [change] is like night and day over the past five years,” Mr Prager says. “It’s hugely exciting.”

BlackRock is one of several firms that are pouring money into technology in order to cut costs and improve the efficiency of its bond trading operations — a trend catalysed by concerns over the health of the bond market. While debt issuance has surged, traders say liquidity has deteriorated sharply in recent years, as a torrent of regulations forced banks to reduce their trading desks.

Putting precise numbers around this decline is tricky, as liquidity is an ephemeral concept. Asking a dozen traders will typically yield at least as many answers. But broadly speaking, liquidity is how easy it is to trade a financial asset without significantly moving its price. Most experts agree that liquidity has atrophied for bonds — especially at times of stress in the market.

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Markets + Finance ‘Providing proprietary research, commentary, analysis and financial news coverage unmatched in today’s market. Published weekly, Markets & Finance provides all the key intelligence you need.’

Zenith Bank delivers strong performance despite tough operating environment BALA AUGIE

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ne lender that has consistently grown earnings despite macroeconomic headwinds is Zenith Bank Nigeria Plc. Each time there is turbulence and the economy is unstable, the lender, through focus and marker penetration strategy, excellent risk management strategy, continues to record double growth at the top (profit) and bottom lines (revenue).

Zenith has delivered a stellar performance in the first quarter of the year as it recorded improvement in key ratios while its Non Performing Loans (NPLs) is below the regulatory threshold despite exposure to aviation and 9 mobile (formerly Etisalat Limited).

Little wonder the lender’s shareholders have been drinking wine from the golden goblet as they continue to be rewarded for investing in the bank.

Financial Performance for Q1 2018 For the first three months through March 2018, Zenith Bank’s net income spiked by 25.52 percent to N47.07 billion from N37.50 billion the previous year.

The growth in profit was largely driven by increase in interest income in the period

under review.

Interest and similar income grew by 20.70 percent to N142.61 billion in March 2018 as against N118.09 billion the previous year; largely driven by a N50.85 billion income from treasury bills (T-bills).

In short there was an 88.88 percent surge in interest income from T-bills compared to the corresponding period.

However, interest income from loans and advances dipped by 2.19 percent to N77.08 billion in March 2018, which means Zenith is less aggressive about lending.

Nigerian banks have turned off the tap on lending as they swooped on short term government securities when yields were around 18 percent and 22 percent for between April and September last year.

Zenith Bank’s loans and advances to customers dipped by 25.53 percent to N1.75 trillion in March 2018 from N2.35 trillion the previous year.

Analysts say a drop in those yields from record highs in August means that 2018 will be more challenging for lenders, despite the positive macro backdrop.

“We can see that the banks are not lending as much as they used to do and that explains the shrinking interest income on loans and advances,” said Ayodeji

Peter Amangbo, managing director, Zenith Bank

Ebo managing director and CEO of Afrinvest Securities Limited “Interest income from government securities will also moderate as a result of reduction in yields and we expect that to continue to the next quarter. In summary, it is the combination of declining income from lending and reducing investment securities,” said Ebo. Yields on net Treasury Bills (NTB) is around 11 and

12 percent in 2018 as Fitch, a global ratings agency cavert that this year could be challenging for lender as government slowed down issuances and opted for foreign borrowing through Eurobond issuances.

“We expect falling T-bill yields and lower issuance to put pressure on Nigerian banks’ profitability in 2018.

The CBN’s latest issuance schedule shows N1.1 trillion (USD3.6 billion) of rollovers

in the first quarter of 2018 against N1.3 trillion of maturing bills,” said the ratings agency.

Zenith has an excellent risk management strategy as nonperforming loans (NPLs) stood at 4.30 percent as at March 2018, which is lower than the 5 percent threshold.

Cost of fund was down to 0.9 percent in March 2018 as against 1.30 percent the previous year.

The lender has taken a haircut of 60 percent on its N62 billion exposure to Arik Air, and has collateral against the outstanding value of the loan.

Deposits to customers fell by 1.20 percent to N3.35 trillion in March 2018 from N3.43 trillion in the period under review while cost of funds fell to 4.10 percent in March 2018 as against 5.0 percent the previous year.

Zenith has yielded returns higher than the risk free rate of return, the market rate of return and the inflation rate respectively as return on average equity (ROAE) increased to 24.20 percent in March 2018 from 21.50 percent the previous year.

BD MARKETS + FINANCE (Business Team lead: PATRICK ATUANYA - Analysts: BALA AUGIE and LOLADE AKINMURELE)

Return on assets (ROAA) followed the same growth trajectory as it increased to 3.3 percent in March 2018 from 3.20 percent as at March 2017.

Net interest income (NIM) increased to 9.30 percent in March 2018 from 7.70 percent the previous year; demonstrating the Group’s ability in delivering optimal pricing for its interest-bearing assets and liabilities even in a declining yield environment.

Zenith’s capital adequacy ratio of 22.30 percent and liquidity ratio of 70.50 percent in the period under review are well above the regulatory limit of the 15 percent and 30 percent regulatory limit.

The management of Zenith Bank Group stated: “The first quarter of 2018 was a continuation of the strong financial performance we delivered last year as our business demonstrated growth across key metrics.

“The macro-environment continues to improve and we remain optimistic about the stability and liquidity in the FX market, declining inflation rate and firm crude oil prices to support economic growth. We aim to strategically explore all available opportunities to expand our customer base and businesses while consolidating on our industry position,” said management.

Zenith Bank Plc offers its clients a wide range of corporate, investment, business and personal banking products and solutions. It is one of the biggest and most profitable banks in Nigeria.

The bank was established in May 1990 and started operations in July same year as a commercial bank. It became a public limited company on September 17, 2004 and was listed on the Nigerian Stock Exchange on October 21, 2004 following a highly successful Initial Public Offering (IPO). Zenith Bank listed on the London Stock Exchange via a non-capital raising GDR on March 21, 2013. The Bank presently has a shareholder base of over one million, an indication of the strength of the Zenith brand.

BUSINESS DAY

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GARDEN CITY BUSINESS DIGEST Enough! Private sector, with 60% voting power, must dictate 2019 deliverables •Business captains to meet May 28 to harmonise demands IGNATIUS CHUKWU

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section of the private sector says it can no longer wait for political parties and their candidates to decide what the deliverables for 2019 would be. Instead, the Rivers Entrepreneurs and Investors Forum (REIF), which is spreading in flowing fashion like a river across Nigeria, says it would rather be the private sector that should tell the aspirants and candidates what the needs of the business sector were and what the deliverables should be.

In an exclusive interview with BusinessDay, the president of REIF, Ibifiri Bobmanuel, CEO of Bob Group, admitted that political campaigns were back and that the aspirants have started arranging manifestoes of what they think the masses wanted.

Bobmanuel said it should be the businesses that should rather table what they needed from anyone aspiring to govern next time around.

REIF, which organized what has been acclaimed as the best political debate in Nigeria in 2015, said politics was too important to the economy for the CEOs to leave it to the politicians to nominate candidates and decide issues as they wanted.

Bobmanuel said: “I think we in the private sector should play a role. It is time for us

to dictate the manifesto and agenda. We should give them input on which to build their manifestoes. Arriving at these pegs is what we should be doing now. We in REIF are organizing series of seminars that would reach out to stakeholders in the industry. We would hold dialogues at roundtable forums and arrive at the salient points for us investors going forward.”

The construction magnet said businesses have internal and external forces that affect them a lot. “We find out that the external influence is bigger. We have identified the political decisions that come from the parliament, the federal government, and all of that. So, we have to set the right narratives. This is the appropriate time to meet and school them on what we want.

This would determine what the political parties should be focusing on.”

Whether we like it or not, the private sector has over 60 per cent of the electorate (voting population); the markets, the artisans, the investors, manufacturers, etc. But, we have not been able to activate the 60 per cent to drive home our core needs. That is what we are doing this time at the investors’ forum”.

The roundtable for Port Harcourt scheduled for May 28, 2018, would look to doing same in other parts of the country through their partners. “We will come up with a communiqué that would form

Ibifiri Bobmanuel

the kind of questions we would ask the candidates of the political parties, just as we did in the 2015 elections. This would give insight on how to address the problems of the private sector.”

In the past, Bob said, the group had not had a coconscious effort to dispassionately decide on how the political leaders could provide better service to the businesses or how the industry could provide better service to them. “We pay the taxes and we create the jobs, so we expect them in turn to provide the enabling environment. When they do not do this, what it means is,

how do they provide this to you? If they do not know, they won’t give it. So, we help them to understand what we want and this helps them to decide the kind of person they want to nominate to run for them.”

On whether, from signals, the political leaders and the aspirants would give a hoot to the war songs of the private sector, the REIF president said anybody who wanted to win election henceforth must have to take the private sector seriously. “What we want to do now is to bring the private sector together and aggregate our interests. We will have to

act together and consider the interest of all. We need to sit down in a more cohesive manner and discuss with the governments at various levels on what our needs were.

That way, it would yield better dividend. If we go individually, we end up shooting ourselves on the foot. It does not make sense. If we bring the interests under one umbrella, it would take a politician without foresight to avoid us. It would be better for any politician to come to the table, and this is for free. We just say, address these issues and create enabling environment and we will employ more people, pay taxes, etc. It is for whichever political party.”

Explaining the sequence of events henceforth, Bobmanuel May 28, 2018, would feature the roundtable that would have the presence of the international community; the European Union (EU), the British High Commissioner, captains of industries, and major players in the economy. He said there would also be heavy presence of the various government functionaries. “Next, we set the framework of action that would take going forward.

We would come up with a communiqué which would provide all what we expect from the political parties.

If we could identify from the communiqué what is expected from the political parties, we present it to them to form their manifestoes.

We sell it as far and wide as we can for the debates that would be organized around the country.”

REIF is not afraid of the heavy presence of leaders of the international community that have been pressing for Nigeria to open its borders or sign trade deals that may not favour local production.

He is not scared of charges that the EU and others were teleguiding the investors.

Instead, he said REIF is 100 per cent private sector led body that has never received a token from the multinationals. “All our aspirations are simple and open. The international community does not have a say in determining the outcome of the communiqué.”

He went on: “But, you know that the world is going global. It is wrong to think we can stand in one place and make it. We cannot be the giant of Africa without selecting our areas of advantage and press from there. It has more benefit that way.

Market must always be open, else, you eventually lose out.

You need to articulate where you benefit the most and maximize your strength there. It would serve your economy best, that way.”

Back to elections, the REIF boss called for peaceful electioneering processes devoid of bitterness and rancour. He said candidates must be those who understand the aspirations of the private sector.

The questions I could not ask Obo, Rivers new INEC boss

Port Harcourt by Boat With IGNATIUS CHUKWU

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he Boatman found himself at the INEC state headquarters in PH along Aba Road close to the NDDC headquarters (as if both had any connection).

They could have. Successful passage through INEC could mean successful passage into the NDDC such that some of the booty could end up in your boot. After all, if you failed at the ballot box, you could end up as director; those who beat you at the polls could beg you or stand afar to salivate.

So, this Monday, the board of trustees of the Rivers Entrepreneurs and Investors Forum (REIF) headed by the

indefatigable investor, Ibifiri Bobmanuel, paid a visit there. He may soon visit the NDDC, too. The newly posted Resident Electoral Commissioner (REC), Obo Effanga, happened to command huge respects at the at the investors forum. REIF was on hand to push the electioneering process from the private sector point of view.

After the preliminaries handled by INEC’s Geraldine Ikeneme, the REIF boss explained the huge interest that the private sector, which he said constituted about 60 per cent of the voting force (investors, entrepreneurs, manufacturers, engineering sub-group that plays deep in the oil sector, market people, artisans, etc) has in who becomes the next ruler. He said the private sector now wants to tell the 2019 aspirants what should be the agenda on the table, especially to explain what ‘enabling environment’ truly means and how to provide it for more jobs, more taxes, happier society. Thus, they would no longer fold their hands at elections. They

offered ways of collaboration.

Elated, the new REC agreed that the private sector had great stake in smooth elections. To him, it is wrong to think that another name for election is violence. He dreamed of the day when elections would go on without having to shut down businesses; a day when voting would be just another normal exercise or a celebration of choice! He welcomed REIF’s hand of fellowship.

It was time for questions/ remarks and a female reporter asked about reported cases of violence during the ward congresses and primaries but Effanga parried, saying violence was violence, political or not, and should be handled by the law enforcement agencies. By the time other persons made their remarks, the stormy rains came and noise took over. Light even went off.

It was obvious that more remarks or questions would be impudent. But, a journalist, let alone a columnist, has other ways. He could ask his questions (on air).

I hereby ask the new REC how he felt stepping into the shoes of those who walked through that office before him such as Okoiwak and Gesila Khan, in bitterness.

Those fellows suffered huge attacks from both sides, even arrest, detention, suits and soot. Is he scared, humbled, or excited to make a difference? He is sitting in an INEC office that may be occupied by protesters any time, by security agencies, etc. It is a place where votes may be counted, recounted, cancelled, re-cancelled, and recounted one more time up to many courts, yet the answer may never be correct, and the REC may never be correct. Has he guarded his moral loins?

Next question, could he please chip in this suggestion at the national INEC level? Can a time come when some persons can vote digitally from their homes by internet through their BVNcleared bank accounts? So far, nobody has broken the BVN code of identification.

Cant this be integrated such

that those who choose this can vote the same way they transfer funds from their homes. This way, the huge middle class and the weak that are scared of going out to violence with endless stress can still vote in a different system that cannot mix up with those voting manually. Both would have different accreditation systems that would not allow the e-accreditation to mix with the other. With this, the swath of humans on election duty from INEC ad-hoc staff, election monitors, security teams, press, etc, would still vote. Can dear Effanga help put this suggestion through in Abuja?

Finally, would INEC watch for ever as party primaries and congresses keep messing Nigeria up? Is it not clear that impunity and rigging start at the primaries and congresses? Would INEC not play greater roles to ensure that things are done correctly at that level? Is INEC not aware that while external democracy (general election) is getting

better, internal democracy (primaries and congresses) is getting no better since 1960?

So, how can one leg grow up and the other leg is still an infant (Chief Zebrudaya et al)? This is where the shareholders, not stakeholders, of political parties share out the fiefs and impose evil persons so that at the end, two devils would stand at the general elections, and one must win to rule. Option A4 once eliminated this. If INEC, police, Army, observers, etc, all join at the primaries, most of the evil we see today we will see no more. Most of the problems that went up to the Supreme Court came from the primaries; Jime in Benue, Ararume in Imo, Amaechi in Rivers, etc. When will sanity come to the primaries that give birth to the general elections?

If the rains did not sap my courage, perhaps, I would be presenting both the questions and the answers he gave, and that would have helped to test Effanga’s inner strength and resources. But, I missed out!

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Lagos APC chieftain accuses party of manipulating ward congress INIOBONG IWOK

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major crisis seems to be brewing in the Lagos State chapter of the All Progressives Congress (APC) following the botched ward congresses in the state last weekend.

Fouad Oki, vice chairman central, has also accused the party of manipulating the exercise.

Oki, who was the directorgeneral of the Akinwuni Ambode’s 2015 Governorship campaign organisation, said that the ward congresses held last Saturday in the state was not in line with the party’s constitution and its rules, demanding that the results should be cancelled and that a free and fair exercise devoid of manipulation be organised.

Oki, who is the founder of Broom Movement of Nigeria (BMN), stated this during an interaction with journalists in Lagos while accusing the organising committee of side-tracking the State Congress Committee sent by the party’s national headquarters from Abuja of committing a lot of shenanigans to ensure that their preferred candidates were elected into office.

The party chieftain, who described the Lagos exercise as a travesty of justice that must be fought and redressed, said that appointment of senatorial electoral officers and local government electoral officers to

Fouad Oki

serve as returning officers instead of the State Congress Committee was against the Nigerian Constitution and that of APC as well as its rule.

He further alleged that “the Organising Committee did not wait for the State Congress Committee before they started selling the forms to people they considered must be elected into offices.”

He lamented the lack of internal democracy in the party in the state, while urging the leadership of the national leadership of the party to intervene and restore the confidence of party members in the ongoing congress.

“Those who wanted to buy forms were turned back at the party secretariat until the State Congress Committee

chairman directed that forms must be sold to all those who were interested in contesting.

“There were lists of candidates being bandied about as names of those that were sanctioned by our leader (Asiwaju). I made attempts and discovered that it was not true, but rather Asiwaju wanted proper, free and fair congress to hold.

“These jaundiced elements only were trying to drop his name to achieve their selfish objective, whereas he (Asiwaju) was committed to moving round to see that genuine congresses were held,” Oki said.

The party chieftain also faulted holding of the Saturday’s ward congresses in 374 wards instead of 245 wards

of the 20 local government areas of the state as constitutionally recognised, even as he gave kudos to party leaders who refused to sign the results sheet on mere photocopies, but insisted that they would only sign on real paper as doing otherwise would allow the results to be manipulated.

“Zonal Returning Officers, Local Returning Officers that were involved are alien to the constitution of the party and the rule guiding the holding of the congresses of the party.

They used them as vehicles to undermine the process. They cannot hold because the expectation of members is that congresses should hold in 245 wards.

“It is the introduction of those bodies that were alien that necessitated chaos during the exercise,” Mr. Oki added.

While demanding that the Saturday’s exercise must be cancelled by the APC national headquarters and fresh one organised, Oki vowed that he was ready to fight what he described as “this travesty of justice.”

“We are demanding that the State Congress Committee on behalf of the National Secretariat of our party should not accept the concocted results of the exercise.

We are not appealing, we are demanding that the results be cancelled and fresh congresses organised. It is unjust.

I believe the State Congress Committee has the capacity to do it,” he demanded,” Oki said.

Group refutes Fayemi’s allegation on botched Ekiti APC guber primary

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k i t i Reb i r t h O rganisation (ERO), the campaign group of Babafemi Ojudu, an aspirant for the governorship seat of Ekiti State on the platform of the All Progressives Congress (APC), has refuted the allegation contained in a statement by Kayode Fayemi, minister of mines and steel development, that the crisis that marred the party’s primary last Saturday was masterminded by Ojudu.

A statement signed by Gboyega Adeoye, cam paign coordinator, on behalf of Ranti Adebisi, ERO director-general, described Fayemi’s allegation as “another tantrums from Fayemi whose political fortune has taken a deep slide in recent times, and whose entire campaign strategy was built on lies, orches-

trated violence and cheap anti-democratic tricks.”

Adebisi referred to the statement by Fayemi’s special adviser on media, Yinka Oyebode, in the wake of the disturbances, alluding that Ojudu and another aspirant, Bimbo Daramola, masterminded the violence and destruction of ballot boxes, having realised that the former governor was already in a clear lead in the four local councils that had cast their votes.

Adebisi pointe d out, “The entire incident that happened at the stadium was caught on camera and broadcast on national television. We implore the security agents who made several arrests at the scene to make public the identities of the people arrested and their sponsors. I can tell you 100 percent that they have no link whatsoev-

er to the Ojudu campaign.”

He s a i d Fa y e m i h a d been the one threatening violence “since he joined the race last month. He threatened to cripple the state if not given the party ticket. He deployed security agents to intimidate delegates even during the conduct of the primaries.

“He is the aspirant that has been avoiding democratic test of popularity, the chronology of events that culminated into the stampede at the Oluyemi Kayode Stadium, is known to the public, as some of them were also captured on camera. Those videos are everywhere on the social media for everybody to see.”

The ERO director-general further said, “If there is anyone desperate, that person is Kayode Fayemi, the stakes are high for him

as a former governor who lost his seat wholesale and as a serving minister. It is his degree of desperation that has caused the latest show of shame in Ekiti.

“Ojudu has no reason whatsoever to want the voting disrupted since we were projected to win. But we are appealing to our delegates and supporters across the state to remain calm.

“Fayemi came late into this very contest to realise that the boat has left the shore. He is now looking for any straw to hang unto. He was shocked to realise that his much advertised hold on the state executive was a fluke.”

According to Adebisi, “He was shocked that Ojudu was coasting home with a landslide so he has to haphazardly change from one rigging strategy to the other but Ekiti people know better.”

Abiola Ajimobi

I will continue to do the best for Oyo, APC – Ajimobi AKINREMI FEYISIPO, Ibadan

O

yo State Governor, Abiola Ajimobi has advised aggr ieve d stake holders in the just concluded ward congresses of the All Progressives Congress (APC) to explore the party’s internal organs for seeking redress rather than engaging in actions capable of further sowing the seed of discord within the party.

As leaders and stakeholders in the party, the governor said it would be counter-productive to engage in actions and utterances that tend to further divide the party, adding that he would on his own part continue to do the best for Oyo State.

A statement issued by the Special Adviser, Communication and Strategy, Bolaji Tunji said the advice became necessary in view of the utterances credited to the Minister of Communications, Adebayo Shittu and his supporters in the aftermath of the ward congresses held on Sunday.

The governor said that the minister should be the one to be afraid of going to jail in view of the damaging allegations made against him by all his aides who resigned en mass following his refusal to pay their emoluments.

“In any case, Shittu should be the one that should be afraid of going to jail in view of many allegations made against him as minister. Few of these are his alleged illegallyacquired property in Ibadan and Abuja and sudden unexplainable and stupendous wealth not commensurate with his emoluments.

“In addition, his recent attempt to covert and appropriate a parcel of land belonging to Saki community, which was stoutly resisted by his own people, has shown his level of greed, avarice and penchant for appropriating what does not belong to him.

“Governor Ajimobi remains a distinguished Senator of the country who had successfully traversed the

corporate world and got to the peak of his career as the Managing Director and Chief Executive of a multinational; a position that requires a high degree of integrity, ability and capability,” it said.

“All these attributes have reflected in the way he has successfully managed the affairs of the state in the last seven years, which has transformed the face and fortunes of the state and had attracted unmatched number of investors to the state.

“Similarly, Governor Ajimobi’s track record in his first term earned him an unprecedented second term, a feat for which he would forever remain grateful to the good people of the state.

“Something that cannot be taken away from Governor Ajimobi is his unrepentant commitment to the assurance of peace, safety and security across the length and breadth of Oyo State, which had hitherto been under the control of some erstwhile garrison commanders,” it further stated.

Having consistently won elections over the years, Ajimobi remains a man to be rivaled by politicians who are known to be serial election losers and now desperate to become the governor of Oyo State where governance has been raised beyond the limit of people with mediocre ability.

In the last seven years, Ajimobi has managed the affairs of Oyo State prudently and with the fear of God, and will not be distracted from his well-articulated programmes of security, safety and peace as well as the developmental strides which the administration has been known for; until May 29, 2019 when he will hand over to a worthy, capable, seasoned and tested successor.

“Ajimobi remains the leader and father of the APC and will continue to work towards the success of the party at the state and national levels, and the progress of the state.

BUSINESS DAY

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NEWS YOU CAN TRUST I THURSDAY 10 MAY 2018

Opinion

I

thank the Vice Chancellor, Professor Oluwatoyin T. Ogundipe and the Senate for the singular and profound honor of addressing this convocation. The positive role the University of Lagos has played in Nigeria and Africa cannot be overstated. Through its halls have walked leaders and innovators in all academic disciplines; people who have devoted their knowledge and abilities to making our lives and this nation better.

Drawing students from across Nigeria, UNILAG is an institution fertile with the type of social and educational interaction and inclusion vital to forging a robust and progressive country.

To declare that UNILAG is the best school in the land, is not an empty boast nor is it a hopeful prediction to be left for future evaluation. It is a present fact. Thus, you, the graduating class of 2017, are but the latest inheritors of a lineage of academic and civic excellence.

In 1984, I attended a convocation much like today’s.

On that day, I sat where you, now sit. I was an eager yet apprehensive young man set to graduate at 21. Although ready to tackle the world and make my mark, I was also a bit uncertain about what that world and life would bring.

I knew I was blessed to have attended this University with its sterling faculty, leadership and staff, fine traditions and robust student body. Now looking back, I realize that this school had prepared me better than I prepared myself for the challenges and opportunities that were to come.

If you ask me a thousand times if I would have matriculated anywhere else, a thousand times I would have said “No, I will stay right here.”

I am forever grateful for the chance to have studied and learned here.

34 years later, I now look at you only to see myself. You are as I was, except for one important thing: You are better.

Whatever my generation has achieved, you must go further and do more to build a new and better nation.

True, I stand before you as the first UNILAG graduate to become Governor of Lagos. I am humbled by this distinction and elated to be the first to walk this path. But I know I shall not be the last to walk it.

I will not be the last graduate of this excellent school to become Governor of this State that is the Center of Excellence of our beloved nation.

Yes, all of you cannot be State Governors. Yet, in your own way, you must be leaders that correct the direction of our nation by improving our social attitudes and by relying more on conscience than on cunning in the conduct of its affairs.

We must break down old walls in order to erect a better home.

Yet good things do not just happen. Bad and evil come easily because they are the product of common human failings and lapses left too long uncorrected. But good and

Inclusion: Path to a new nation The University of Lagos 2017 Convocation Lecture delivered by his excellency Goverrnor Akinwunmi Ambode, Governor of Lagos State on Tuesday, May 8, 2018 at J.F. Ade Ajayi Auditorium, University of Lagos, Akoka. fine things are more difficult because they always must be crafted with adept care.

Excellence is never by accident. It is the product of wise exertion.

For you to answer the call of this nation for your generation to be better than preceding ones, you must strap yourself to courage, you must peer beyond the immediate to envision a better future and you must have the enlightened decency to refuse to yoke yourselves to ancient and irrational biases and hatreds that have no place in the nation we seek to build.

We all must understand this important reality: None of us chooses the world into which we are born. Yet we can choose to make of that world what we want it to be.

None of us can influence the place and time we are born or of the family or nation into which we come.

Some will say that a person is of this or that ethnic group, nationality or faith by incident of birth as if these things occur by cosmic whim or the roll of dice.

I don’t believe in accidents.

Instead, I believe we all have been placed here by Godgiven design and purpose.

If our presence is surely born of God’s hand then we have not been placed on earth to hate another person simply because they were born of a different ethnic or religious stock. We cannot allow ignorance to fuel hatred in us. If we do, then we shall hold fast to a damaging ignorance because we have grown comfortable in hating one another.

So comfortable in disliking others and so eagerly basking in our own ignorance, we do grave disservice to ourselves.

We have not been placed here to oppose, obstruct and destroy our fellow man.

We honor the God who made us and we honor ourselves by honoring the rights of others and being concerned with the welfare of others as well.

We are here to uplift and improve everything around us. This requires compassion for each other.

Sadly, human history is checkered with examples of peoples and nations that have taken the wrong path by embracing the lessons of injustice and meanness. These places too diligently studied war, prejudice and division even among fellow citizens.

Eventually, all such peoples and nations fade away, destroyed not so much by external threats but by their own strong but ignorant hand.

Fortunately, there are examples of nations and peoples that rose above pettiness to become great through unity, collective purpose and intelligent effort.

We, as Nigerians, have a

Akinwunmi Ambode

choice. We can follow the path of folly or we can follow the road to our appointed destiny.

For me, there is no choice.

Yet, to assume the right course is also to depart from how we have misgoverned ourselves for much of our history.

Colonialism brought many groups together into one country but manipulated our fears so that we suspected the worst of each other.

We were wise and courageous enough to retire colonialism but we were too weak and imprudent to excise the

gains must come at the expense of another. Your gain is my loss and vice versa.

Such a mindset is injurious to any household, be it a single family or a vast nation.

It leads to constant bickering and battle. For it tells us there are no solutions that benefit all. There is only contestation about who shall win and who shall lose.

This mindset constructs enmity and friction as if it were a national monument.

This perspective implies things cannot get better. That

We have not been placed here to oppose, obstruct and destroy our fellow man.

We honor the God who made us and we honor ourselves by honoring the rights of others and being concerned with the welfare of others as well divisive mindset that colonialism brought.

Thus, we live in the same house but not as members of the same family. We have known each other all our lives but behave as if we are abject strangers. In this house, we live in discomfort. We sleep with one eye open, one foot on the ground and our bedroom door locked if not also bolted.

The minute something happens, we jump to hurl the worse accusations at fellow citizens of other ethnic and religious groups.

This is because we have been taught to view the world as a zero-sum environment.

According to this forlorn outlook, whatever one person

people cannot work together to produce more wealth, prosperity and opportunity so that everyone can reasonably expect to get a larger share of an expanding flow of wealth as the future unfolds.

Cynical people tacitly believe the supply of wealth, prosperity and all good things is static if not diminishing.

Thus, competition grows more intense by the day as more people compete for possession and enjoyment of static number of valuable items.

Dig deeper and this mindset reveals something terribly barren in those who hold to it. They believe we are not in possession of the intelligence, ability and vision to improve

our political economy in order to create more jobs and elevate the standard of living for most Nigerians.

Things will always be as is they are is their motto.

Well this flaccid motto cannot be our motto and the cynical ways of these people cannot be our ways.

Instead, I hold to the proposition that we shall become the best of who we are.

We do this by keeping our fellow man in heart so that we do not end up lunging at each other’s throat.

Here, I offer Lagos State as an example of what is possible for all Nigeria and Nigerians when we practice the governance of inclusion instead of the old, malign ways of exclusion.

Since the return of civilian rule in 1999, Lagos has been a fount of economic progress and social understanding and tolerance.

Led by Asiwaju Bola Ahmed Tinubu, a group of dedicated and committed Lagosians developed a blueprint for the transformation of the State. So much of the State had fallen down and decayed.

The State’s glory seemed a thing of the past.

But we have steadily repaired it. First, the administration of Asiwaju Tinubu and then that of Babatunde Raji Fashola, moved the master plan from concept to concrete reality.

My administration is both a beneficiary of their work as well as a continuance of that work. We strive to go further because we have the opportunity to build upon what they have done.

Through the years, we have steadily repaired our State, modernizing and retooling things to the point where we now talk about turning Lagos into a Smart City.

In every way, our infrastructure is improved. Our

roads are better, our mass transportation has expanded, hospitals give better care to the sick and afflicted, education is improving and more affordable housing is being constructed before our very eyes.

The face of Badagry is changing. The makeover of Oshodi will cause you to marvel at the transformation that can take place even in densely populated urban space when there is the political will and determined creativity to give the people the infrastructure they deserve.

We are improving and expanding the Airport Road so that a trip to and from the airport no longer takes more time than your flight itself.

The Lekki-Epe axis was once an isolated, inactive tract of land. Now it bustles with energy, activity and prosperity due in large measure to the roads and other infrastructure our State has constructed.

We have and will continue to build bridges linking parts of Lagos that have not been linked before so that commerce, transport and communication among Lagosians will be facilitated.

We aim to make this state fully integrated so that one part is well connected to any other.

All of this work is underpinned by the belief that Lagos belongs to all of us. Lagos is not an exclusive club. It is an inclusive family.

What makes you truly Lagosian has little to do with where you were born, the origin of your surname or which Holy Book, if any, you read.

What makes you Lagosian is whether or not you are of the right civic and individual spirit. If you want to innovate and make things better, then you are Lagosian in heart; If you seek to establish business, give jobs to people, and enrich the world around you, you are Lagosian at heart; If you do not mind if a person of a different group or religion prospers so long as you too have the fair chance to do the same, then you are Lagosian at heart; If you don’t mind hard work for yourself but also believe that everyone has the right of quiet enjoyment of the fruits of their legitimate labor and toil then you are Lagosian at heart.

It is in this spirit that we build Lagos anew. It is in this spirit that we can build a new Nation.

The roads that are built are for everyone. There is no such thing as a Yoruba, Igbo or Hausa road. Everyone equally suffers a bad road and equally benefits from a good one.

In Lagos, there is no legitimate business or trade you cannot enter because of ethnicity, gender or religion.

There is no place you cannot go. There is no section where you cannot live.

The door is open to all whether you come from North, East, West and South or just across the street.

As long as you seek to enContinues on page 34

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