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news you can trust I **TUESDAY 10 SEPTEMBER 2019 I vol. 19, no 390
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New police trust fund to cost Nigerian firms 0.005% of profits C T
Investors take position as N549.4bn hits financial market this week
OLUWASEGUN OLAKOYENIKAN & FIKAYO OWOEYE
ompanies operating in Nigeria will henceforth contribute a portion of their after-tax profits to the newly formed Nigeria Police Trust Fund aimed at improving funding and training of personnel of the force. This follows the signing of the Nigeria Police Force Trust Fund Act 2019 by President Muhammadu Buhari. While the companies are expected to contribute 0.005 percent of their net profits for a special intervention fund established under the Act, the trust fund would also consist of an amount constituting 0.5 percent of the total revenue accruing to the Federal Account. In addition to that, the fund would consist any take-off grant and special intervention fund as may be provided by the three tiers of government; money as may be appropriated to meet the objective of the Act by the National Assembly in the budget; as well as aids, grants and assistance from international bilateral and multilateral agencies, non-governmental organisations and the private sector. The funds are expected “to
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…CBN may mop up excess liquidity from system
Dapo Abiodun, Ogun State governor, in a warm handshake with Anih Mary, prize winner of “Governors’ Challenge” contest organised in a bid to identify the most creative and innovative ICT idea during the launching ceremony of Ogun TechHUB in Abeokuta.
HOPE MOSES-ASHIKE he Nigerian financial market will be awash with liquidity this week to the tune of N549.4 billion from maturing Treasury Bills and Open Market Operation (OMO) with attractive yields and analysts say they see investors taking position to reap returns. A breakdown of the system liquidity shows that the Central Bank of Nigeria (CBN) will on Wednesday roll over N158.7 billion worth of maturing T-Bills at
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Inside
Xenophobia: Nigeria, South Africa to find permanent P. 2 solution to attacks
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Tuesday 10 September 2019
BUSINESS DAY
news Nigeria’s crude oil export rises to 2.2m barrels daily in August …OPEC uneasy as members pumped higher volumes ISAAC ANYAOGU
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L-R: Remi Oni, executive director, corporate banking, First Bank of Nigeria Ltd; Osaretin Demuren, chairman, GTB Nigeria; Femi Otedola, founder/CEO, Geregu Power plc.; Aliko Dangote, president, Dangote Group, and Lamin Manjang, MD/ CEO, Standard Chartered Bank Nigeria, at the 20th anniversary client dinner/sendforth dinner in honour of past CEO, Bola Adesola in Lagos.
Xenophobia: Nigeria, South Africa to find permanent solution to attacks
…12 SA policemen arrested, 364 Nigerians ready to be airlifted, says Dabiri-Erewa TONY AILEMEN, SOLOMON AYADO, Abuja, & SEGUN ADAMS, Lagos
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igeria and South Africa at the weekend reached an agreement to work towards permanent solutions to end recurring xenophobic attacks on migrants, including Nigerians in South Africa. This is the outcome of the visit by the Special Envoy sent by President Muhammadu Buhari to South Africa in the wake of recent xenophobic attacks on migrants, including Nigerians, according to a statement by Femi Adesina, special adviser to the president on media and publicity, on Monday President Buhari had dispatched Ahmed Abubakar,
director-general, National Intelligence Agency (DGNIA), as his special envoy to South Africa to convey a special message to his counterpart, President Cyril Ramaphosa. The statement noted that the special envoy, who was in Pretoria from Thursday, 5th to Saturday, 7th September, 2019, conveyed deep concern of President Buhari and Nigerians about the intermittent violence against Nigerians and their property/business interests in South Africa. “The Special Envoy also interfaced with his South African counterpart, where they reviewed the situation of foreign emigrants in general and Nigerians in particular,” the statement said. “They agreed to work together to find a permanent
solution to the root causes of the recurring attacks on Nigerians and their property,” it said. The statement said President Buhari has taken note of the report and instructed the minister of foreign affairs to continue to engage with appropriate authorities on the concrete measure the South African government is expected to take. President Buhari has also given instruction for the immediate voluntary evacuation of all Nigerians who are willing to return home. In his message to South African President Ramaphosa, President Buhari had stressed the need for South African government to take visible measures to stop violence against citizens of brotherly African nations. President Ramaphosa, on
the other hand, reaffirmed his stand against criminality and his commitment to do everything possible to protect the rights of every Nigerian and other foreign nationals in the country. Meanwhile, Abike Dabiri-Erewa, chairman and CEO, Nigeria Diaspora Commission (NIDCOM), on Monday disclosed that 12 South African policemen that are connected to the attacks on Nigerians had been arrested and the Federal G overnment was working to ensure they are punished. Erewa said about 364 Nigerians that were attacked in South Africa were already prepared to be airlifted back to the country.
•Continues online at www.businessday.ng
Over 2,400 Nigerian passengers face flight cancellations as BA pilots go on strike …airline may pay up to £600,000 in compensation IFEOMA OKEKE
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ver 2,400 Nigerian passengers who booked British Airways may have had their flights cancelled since Monday when the airline’s pilots union went ahead with a strike. The strike had forced British Airways to cancel “nearly 100 percent” of flights for Monday and Tuesday. The strike was called for by the British Airline Pilots Association (BALPA) amid a heated dispute over pay with the airline. BALPA said Sunday on Twitter that it put forward a proposal to the carrier’s
management last Wednesday but had yet to receive a reply. The airline said it was forced to cancel so many flights because “with no detail from BALPA on which pilots would strike, we had no way of predicting how many would come to work or which aircraft they are qualified to fly”. Customers who had flights booked for Monday and Tuesday would likely “not be able to travel as planned”, British Airways said. The airline also advised customers not to go to the airport. BusinessDay’s checks show that the carrier which operates from Lagos and Abuja airports to Heathrow www.businessday.ng
airport in London every day processes over 300 passengers on each flight. This implies that on a return flight, the carrier processes 600 passengers and for the two daily flights, it processes 1,200 daily passengers. For the two days the carrier cancels its flight, therefore, nothing less than 2,400 Lagos- and Abuja-bound passengers will be affected. Bankole Bernard, president, National Association of Nigeria Travel Agencies (NANTA), who confirmed the development, said passengers and the airline are grossly affected by the development and passengers have had to reschedule their flights.
BusinessDay’s checks show that unlike other regions in the world, the European Union (EU) actually regulates the compensation airlines have to pay passengers in the event of delays or cancellations. This policy, called “EU261”, mandates that airlines pay passengers cash compensation ranging between €250 and €600 depending on how long their flight was scheduled to be, and how badly they were delayed. This compensation has to be paid under a vast majority of circumstances, including mechanical failures, crews showing up late, etc.
•Continues online at www.businessday.ng
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igeria’s crude oil exports rose to 2.2 million barrels per day (bpd) in August, the highest this year, according to Bloomberg tanker-tracking data, showing that rising sabotage of oil infrastructure has not significantly marred production. Another survey by oil markets analytics firm, S&P Global Platts, found that Nigeria which has often pumped more than its cap hit its highest production level since January 2015 of 1.98 million bpd. Production was 1.93 million in July. Despite the NNPC reporting recording 77 percent increase in cases of oil pipeline vandalism in its network of pipeline infrastructure in its latest report, a spike in crude and condensate production in the past six months due to the start-up of the 205,000 b/d deepwater Egina field which came online December 29 has cancelled out losses incurred by sabotage. “Some projects that were in development phase a few years back are coming on
stream while other producers are ramping up production,” an energy analyst involved in one of these projects told BusinessDay The heightened geopolitical tensions fuelled by US sanctions against Iran and Venezuela could be “helping to improve the overall appetite for production increment”, analysts say. Nigeria has also brightened the chances of oil majors ramping production by its commitment to pay its arrears of joint crude oil production with the International Oil Companies, commonly called cash call. Rising production would need to flow in the direction of higher prices to achieve the most value for Nigeria whose economy depends on oil income. Nigeria’s 2019 budget is premised on the production of N2.3 million barrels per day (bpd) and that oil prices will sell at the average price of $60 per barrel. The oil sector posted a real growth rate of 5.15 percent as compared with the corresponding ones from a
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Unified Payments appoints Omagu, Olubiyi, Dan-Ugo as directors ENDURANCE OKAFOR
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igeria’s premier payments and technology company, UP (Unified Payments) has appointed three new directors to lead key Directorates in the company. The new directors are Isa Omagu – director, marketing and sales, Titilayo Olubiyi - director, financial institutions, and Ochanya Dan-Ugo – director/group chief risk officer. The appointments, according to Agada Apochi, MD/CEO of UP, are in line with UP’s growth strategy. ISA OMAGU – director, marketing and sales Isa was a General Manager in Guaranty Trust Bank and later Chief Operating Officer of Glo Mobile Ghana. Isa who started his work career at Coopers & Lybrand, has also handled Senior Management roles at Equatorial Trust Bank, FSB Plc, NAL Bank plc, and as a Non-Executive Director at Guaranty Trust Bank (Sierra Leone) Ltd. Isa holds an MBA from IESE Business School, Spain, Master of Development Finance from University of Stellenbosch, South Africa, and he is also an alumnus of Ahmadu Bello University, Zaria and University of Lagos where he bagged a BSC degree in Chemistry and MSC @Businessdayng
in Economics respectively. He has, in the course of his career, attended many courses in Ivy League institutions within and outside Nigeria. O CHANYA DAN-UGO – director/group chief risk officer Until her latest appointment, Ochanya was the Chief Risk Officer (CRO) for UP, and prior to joining the company in 2005, she was a Chief Superintendent of Narcotics and a Principal Staff Officer, Records Management (Intelligence), National Drug Law Enforcement Agency. A Certified Risk and Compliance Management Professional (CRCMP), she has been serving as a member of Visa Risk Executive Council for the Sub-Saharan Africa since 2012. Ochanya holds a Bachelor of Arts Degree from the University of Jos; Post Graduate Diploma, Education & a Post Graduate Degree in Humanitarian and Refugee Law from the University of Lagos. She has attended several notable trainings within and outside the country including American Bankers Association, School of Bank Card Management, Emory University, Atlanta USA, the Metropolitan School of Business and Management, United Kingdom, IESE Business School, Barcelona, and Lagos Business School, Nigeria. TITILAYO OLUBIYI – di-
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news SON raids warehouses in Imo, confiscates substandard roofing sheets worth N500m Chuka Uroko
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n continuation of its fight against manufacturing and marketing of substandard roofing sheets in the country, Standards Organisation of Nigeria (SON), at the weekend, raided warehouses in Imo State where they confiscated galvanised roofing sheets and aluminium coils worth about N500 million. The warehouses are located Owerri, the state capital, and Okigwe, a major town in the state. Osita Aboloma, directorgeneral of SON, explained that on the spot tests on the seized materials showed that they did not meet the requirements of the relevant Nigerian Industrial Standard (NIS). The warehouses, according to SON, are operated by Prossy Nigeria Limited. The DG, who was represented during the raid by Dele Omolawon, the enforcement team leader, said the confiscated galvanised roofing sheets were low gauges and failed to meet the minimum value standard prescribed in the NIS. Similarly at Okigwe, the impounded coils used for the manufacturing of galvanised roofing sheets showed a non-
conformance and fell below minimum requirements. Omolawon reiterated the SON chief executive’s resolve to rid the nation of substandard products with its focus presently on roofing sheets sector due to safety concerns and economic losses being experienced by unsuspecting consumers of the products, who have been inundating SON with myriads of complaints. The team leader restated that the exercise was part of a nationwide surveillance programme to locate and mop up substandard roofing sheets to ensure that only good quality roofing sheets that meet the minimum requirements of the NIS are displayed in the open markets or stocked in warehouses. “SON wishes that Nigerian consumers can confidently walk into an outlet, warehouse or stockist to purchase roofing sheets knowing that he will get good quality and value for money that would not put their lives and properties at risk,” he said. He, therefore, enjoined Nigerians to seek expert advice when purchasing roofing sheets or visit the nearest SON office in the 36 states of the federation for advice. www.businessday.ng
Lagos seeks banks’ support to grow revenue, strengthen governance JOSHUA BASSEY
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ommissioner for finance in Lagos State, Rabiu Olowo, says the government will be counting on banks in the deployment of digital solutions for optimal governance. According to Olowo, the government will also be expecting supports from the banks in deepening innovative ideas that will further shore up the state’s internally generated revenue (IGR) and development in line with the THEMES agenda of the Babajide Sanwo-Olu’s administration. THEMES is the acronym for: Traffic and Transportation, Health and Waste Management, Making Lagos a 21st Century Economy, Education and Technology, and Security and Governance. Olowo, who received representatives of banks on a visit to his office, said in striving to grow IGR, the government would not discard any ideas but would operate an open-door policy and process advice giving collectively or on one-on-one basis.
He thus enjoined banks to complement the state’s IGR efforts by constantly coming up with creative ways of supporting revenue collection in the state, especially on how to stop leakage and widen the net. “The administration will run the state like a business, and in this regard banks are important stakeholders, especially in advisory and operational capacities,” the commissioner said. While stating that governance is about performance, adding value and making impact on the citizens, the commissioner said, “This administration will create a symbolic relationship that is not parasitic, but that is robust and mutually benefiting: an environment where banks and people will thrive.” He urged banks to bring to “the table” innovative strategies and digital solutions that would impact significantly on Lagos economy, especially on deepening Public-Private Participation (PPP) system, making Lagos financial system more vibrant, promoting traffic and transportation and improving the health status of the people.
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Obaseki orders officials, others not to join issues with Oshiomhole over hostile comments
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do State Governor Godwin Obaseki has ordered officials of the state not to join issues with Adams Oshiomhole, national chairman of the All Progressives Congress (APC), over the hostile comments credited to the former governor of the state. Obaseki, whose directive was conveyed in a statement jointly signed by his special adviser on media and communication strategy, Crusoe Osagie, and the Commissioner for Communication and Orientation, Paul Ohonbamu, said he was pursuing the path of peace for the sake of Edo people. The statement said: “The Edo State Government observed over the weekend, leading to this week, very hostile statements credited to our
revered National Chairman, Comrade Adams Oshiomhole, across the various media platforms, including radio, television, newspapers and the social media. “This onslaught against the governor and government of Edo State, widely publicised, has also been trailed by enquiries about the state government’s response to these attacks, from various stakeholders, both within and outside the country. “Consequently, the Edo State Governor, Mr Godwin Nogheghase Obaseki, has instructed that no state actor, within Edo State Government, should make any comment whatsoever or join issues on the ensuing hostile comments and discussions,” Osagie and Ohonbamu said.
Tribunal sacks Senate chief whip, orders a rerun SOLOMON AYADO, Abuja
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ational Assembly Petitions tribunal sitting in Abia State has declared the election of Orji Uzor Kalu null and void. Kalu represents Abia North Senatorial District in the National Assembly and was elected under the platform of the All Progressives Congress (APC). @Businessdayng
The tribunal on Monday nullified his election and declared it void. It however ordered that the Independent National Electoral Commission (INEC) conduct a rerun. A former senator, Mao Ohuabunwa of the Peoples Democratic Party (PDP) had petitioned the emergency of Kalu in the 2019 National Assembly election.
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news
Suicide cases under-reported, misclassified in Nigeria - experts ... one person every 40 seconds dies of suicide - WHO ANTHONIA OBOKOH
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ne person dies every 40 seconds through suicide, and more people die by suicide every year across the world, according to the World Health Organisation (WHO), which said countries, Nigeria inclusive, need to do more to stop these preventable deaths as the world marks World Suicide Prevention Day (WSPD), September 10. Experts say in Nigeria suicide is more of a social and public health objective than a traditional exercise in the mental health sector. A health industry expert says, “Mental health professionals, doctors and counsellors can be reached out to manage suicidal tendencies. The proactive steps taken by several such professionals in the capacity of leaders has helped and has the potential to help save thousands of lives. “Occurrence of suicide tends to be under-reported
and misclassified due to both traditional and social pressures, and possibly completely unreported in some areas.” According to data from the 2018 Global Suicide rate report by World Population Review, “Nigeria ranks 71 out of 177 countries accounting for 9.9 suicides per 100,000 populations of deaths annually.” Nigeria, however, reported cases of suicide rate in the country has seen numbers at the double by poisoning using pesticides as one of the most effective ways to commit suicide, the WHO says, as it urges governments to adopt suicide prevention plans to help people cope with stress and to reduce access to suicide means. The WHO says restricting access to pesticides is one of the most effective ways of reducing suicide numbers swiftly. Pesticides are commonly used and usually result in death because they are so toxic, have no antidotes, and are often used in remote areas
where there is no nearby medical help. The WHO points to studies in Sri Lanka, where bans on pesticides have led to a 70 percent drop in suicides and an estimated 93,000 lives saved between 1995 and 2015. “Suicides are preventable,” says Tedros Adhanom Ghebreyesus, the WHO’s directorgeneral. “We call on all countries to incorporate proven suicide prevention strategies into national health and education programmes.” The WHO’s report states that suicide is a global public health issue. All ages, sexes and regions of the world are affected (and) each loss is one too many. Suicide was the second leading cause of death among young people aged between 15 and 29, after road injury, and among teenage girls aged 15 to 19 it is the second -leading cause of death among girls (after maternal conditions) and the third-leading cause of death in boys, after road injury and interpersonal violence.
Experts spotlight gender diversity, female entrepreneurship in Africa … as SSA economies lose $95bn annually due to lack of female inclusion Jumoke Akiyode-Lawanson
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omen entrepreneurs and business leaders in Africa have emphasised the critical role of female inclusion – gender equality and equity in the growth and prosperity of African business ventures. During the ‘Together We Lead’ event hosted by MasterCard at the recently concluded World Economic Forum (WEF), Amanda Dambuza – entrepreneur and author, Lee Ann Lancaster – chief growth officer of Mama Money, and Adriana Marais – physicist, technologist, astronaut candidate with the Mars One Project and founder of #ProudlyHuman, joined a panel discussion hosted by Shamina Singh, executive vice president, sustainability and president, MasterCard Centre for Inclusive Growth, to discuss
the challenges faced by aspiring businesswomen across Africa. From making education, technology, and capital more accessible to encouraging cultural dialogue and overcoming gender stereotypes, the discussion at the event focused on ways women’s potential could be used to unlock stronger, more sustainable economies at a time when the failure to integrate women into national economies costs Sub-Saharan Africa (SSA) $95 billion in lost productivity every year. “Today, #Womenpreneuership is one of the largest opportunities for African women. Despite being the only region in the world where more women than men choose to be entrepreneurs, women are still constrained by a shortage of support and resources, training and social acceptance. At Mastercard, we’re committed to
closing the gender gap - whether it’s progressing women to senior leadership roles, building diverse teams, ensuring equal pay, or investing in specialist programmes and partnerships,” said Suzanne Morel, country manager – South Africa, MasterCard. Experts say digitisation of cash will positively impact any economy, as it will bring more people into the formal economy, alleviating poverty and reducing income inequality, which is especially beneficial for women who are disproportionately affected by financial exclusion. They say by helping populations connect to networks that help them save, expand their business and become financially secure, governments and corporate partners contribute positively not only to individuals’ growth, but also to that of local economies.
Deloitte bags top spot in Commercial Services 50 2019 ranking KELECHI EWUZIE
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udit, consulting, tax and advisory services firm, Deloitte, has been named the world’s most valuable and strongest commercial services brand by Brand Finance, the world’s independent brand valuation and strategy consultancy organisation, in its Commercial Services 50 2019 ranking. Brand Finance, after an assessment and evaluation, concludes that Deloitte is the only brand in the Big Four to experience an increase in its brand strength this year. The valuation is calculated using a number of measures, including marketing, brand perception, business performance relative to competitors and overall brand value. Sihlalo Jordan, deputy chief
executive, Deloitte Africa, responding to this latest ranking, says the recognition is a notable testament to the company’s continued efforts to build a more cohesive and differentiated brand. According to Jordan, “It further validates our Africa strategy of adopting a transformative business model, deepening our relationship with clients, and amplifying our impact on society.” Jordan states that this prestigious accolade couldn’t have been achieved without the contribution of the hardworking Deloitte team, “Thank you for your contribution in making our distinctive brand come to life through your work and client engagements,” Jordan says. Deloitte’s value grew a monumental 42 percent yearwww.businessday.ng
on-year, reaching almost $30 billion in 2019. The increase was mainly due to the growing demand of the Firm’s business transformation capabilities and digital solutions. With people working across various industry sectors, Deloitte drives and shapes today’s marketplace - delivering measurable and lasting results that help reinforce public trust in the capital markets, inspire clients to see challenges as opportunities to transform and thrive and help lead the way toward a stronger economy and a healthy society. The firm is proud to be part of the largest global professional services network serving it clients in the markets that are most important to them. It has a network of member firms in more than 150 countries and territories serving four out of five. https://www.facebook.com/businessdayng
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news Nigeria’s ICT to double oil/gas GDP contribution in two years - Pantami Jumoke Akiyode-Lawanson
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ewly appointed minister of communications, Isa Ali Ibrahim Pantami, sayst Nigeria’s Information and Communication Technology (ICT) industry, which currently contributes 13.8 percent to nation’s Gross Domestic Product (GDP), will in the next two to three years double the 8.8 percent contribution of the oil and gas sector to Nigeria’s GDP. The minister, who spoke on Monday at the ongoing session of the International Telecommunications Union (ITU) Telecom World 2019) in Budapest, Hungary, disclosed this. “The recent statistics released by the National Bureau of Statistics (NBS) shows that the future is indeed in ICT. This is a clear indication that at the pace ICT is growing in Nigeria, most probably in the next two or three years, the contribution of the ICT to the GDP will at least double that of the oil sector. This is a country that was relying so much on oil sector but they are not even neighbours now; the gap between the two is wide - eight and 13. The credit should however go to every stakeholder in
the sector including, a driver,” the minister said. As the leader of the Nigerian delegation to the yearly event, Pantami said that the government wanted to sustain the steady growth of ICT in the country, hence the need to attend events like the ITU telecom world, which will enable delegates network and get the best ideas. “And when we return home we put all of them to work towards the development of our country,” he said. The minister commended the Nigerian Communications Commission (NCC) for successfully putting together Nigeria’s participation and told the delegates “to maximise the opportunity provided by the attendance by thinking global and acting local. “I want to thank the NCC for organizing Nigeria’s participation to this very important event. The effort is highly commendable. We hope the tempo will be sustained. “I’ve been saying it and I’ll repeat it again that the future of the world is in the ICT. It is a privilege to be part and parcel of this sector and at the same time to be with the stakeholders of the ICT in Nigeria,” the minister said. www.businessday.ng
No going back on free education in Ogun - governor Iniobong Iwok
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overnor Dapo Abiodun of Ogun State says his administration remains irrevocably committed to free education in all public primary and secondary schools. “As a responsible government we would not eat our words by reneging on promises made to the people. There is no going back on the issue of free education that we promised the people,” a statement issued by Kunle Somorin, the governor’s chief press secretary, said. “The state does not intend to impose any charges or school fees on pupils in Public Primary Schools and has not authorised any Secondary or Technical School Principal to collect levies or charges from any student as being insinuated in some quarters,” the governor spokesperson said. The statement urged “the good people of Ogun State to disregard insinuations that students are to pay some mandatory fees when schools resume next week. We have not authorised payment of any new charges as being peddled by some online platforms.” He added that the people should keep faith with the new
administration that does want to be distracted from providing focused and qualitative governance, adding that the government is not unaware of some “donation” by the Parents/ Teachers Association (PTA). The government said it had no hand in it. “From available records that it was the PTA that volunteered in 2017 and approved the said ‘donation’ of N2,700 per pupil and thereafter, in 2018, the amount was raised by N1,000 and it became N3,700.” According to the parents’ body, the amounts were meant to cover six (6) items: Computer, PTA levy, Insurance, Sport/Jet/Lit, School Materials/Caps/Badges/Beret and File Jacket. “Education is a major pillar of this administration and the governor minced no words when he declared a state of emergency on that sector. Abiodun has moved on to fixing the mess by putting the abandoned Model Schools into positive uses,” the statement said, adding that the governor is very passionate about improving the quality of education and that is why he is not leaving any stone unturned in bringing back the lost glory of the sector,” the statement said.
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Again, DSS issues alert on plans by groups to undermine peace in Nigeria Innocent Odoh, Abuja
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he Department of State Services (DSS) has again alerted the public of plans by subversive groups and individuals to undermine national security, peace, and unity in the country. A statement issued on Mo n d ay by t h e Pu b l i c Relations Officer of the DSS, Peter Afunanya, said these elements were determined to exploit political differences and other occurrences, within and outside the country, to destabilise the nation. The DSS noted in the statement that the groups also initiate narratives to deepen their subversive objectives so as to achieve prefer red illegal outcomes. It added that “the aim is to set the country on fire as well as inflame passions across ethnic and religious divides with expected violent consequences.” @Businessdayng
The Ser vice also expressed dismay over the increasing us e of fake news and unsubstantiated information spread across social media platforms to deceive and incite sections of the populace to civil unrest. “While condemning the unpatriotic and misguided activities of these anti-social elements, the S e r v i c e e q u a l l y wa r n s them to desist forthwith from their unholy acts as the full weight of the law will be brought against them,” the statement said. The DSS, therefore, enjoined citizens to remain l aw - a b i d i n g , p e a c e f u l and report any suspicions likely to inhibit public safety to appropriate authorities. It added that the Service would remain committed in its pursuit of national stability in l i n e w i t h i t s st atu to r y mandate of protecting the country against crimes and threats to its internal security.
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Resurgence of xenophobia: Not in Africa’s interest STRATEGY & POLICY
MA JOHNSON
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s African leaders, business tycoons and members of civil society organizations were arriving Cape Town, South Africa to discuss Sub-Saharan Africa’s future, those who arrived early were greeted with xenophobia. The future of Africans which squarely rests on the ability of its leaders to create inclusive and sustainable growth at a time of rapid transformation in the fourth industrial revolution was to be the main thrust of the 28th World Economic Forum (WEF) on Africa. The scheduled WEF meeting on Africa holding in South Africa themed “Shaping Inclusive Growth and Shared Futures in the Fourth Industrial Revolution” has been poorly attended by African countries as a result of the so-called “xenophobic” attacks. Some African heads of governments were conspicuously absent. When the news, and associated noise generated by the xenophobic attacks in South Africa went viral on social media, it was food for thought as to one of the many reasons why Africa remains underdeveloped. Resurgence of xenophobia is certainly not in Africa’s interest. Xenophobia attack in a digital world is certainly a wrong strategy for survival of Africans in the
global arena. What could have been the remote and immediate root cause of the xenophobic attack at a time when there is hardly any African country that one can boast of as being at the threshold of economic development? Please, kindly permit me to recall that Africa has always been at the sad end of epoch-making events. Although, Africa as a result of the havoc caused by slave trade, lost out during the industrial revolution of the 18th century. One should not waste a lot of energy on reasons why we have not acquired the capacity for our survival. We have no reason to miss the train of the fourth industrial revolution which is now accelerating though the world at a fast rate. Why xenophobic attack in South Africa? Is it because some South Africans feel they are marginalized by foreigners in their own country? I learnt that some South African men, particularly youths, feel that African immigrants are competing with them on dwindling and scarce resources. Some of the scarce resources include beautiful South African girls who chose to befriend wealthy and good-looking foreigners. If this was true, then it is a misplaced anger and such should be condemned totally. Fellow Africans should not see themselves as competitors but fellow compatriots who are working hard to have basic necessities of life. I feel those who are in control of resources and responsible for South Africans misery are not Nigerians neither are they Zimbabweans. They are neither Mozambicans nor Zambians. They are not Tanzanians working in restaurants and Ethiopians running small shops as well as those Africans who work as mechanics. One could see misplaced anger, prejudice and in-
feriority complex created by decades of apartheid and oppression of the black South Africans rearing their ugly heads in the xenophobic attacks. We read and witness retaliatory assaults on South African-owned businesses in other African countries. For instance, in Nigeria, MTN, Shoprite, and MultiChoice outlets were attacked. These attacks are borne out of ignorance. Nigerians who attacked these shops have forgotten that their brothers and sisters are the ones working in these organisations. Consequently, Nigerian families will suffer, unemployment will rise, Nigerian insurance companies will pay and ultimately, Nigerians will lose. Africans do not need a culture of violence. We need a technology-driven culture. The culture of violence has penetrated deep into the fabrics of many African societies because we are ceaselessly preoccupied with very petty conflicts that are of no strategic importance, using weapons designed and produced by developed countries. The ultimate war, which I have stressed in the past five years, is the survival of the black people with full rights and respect within the international community. Regrettably, this has always been ignored by most leaders in Africa. Africans are always fighting the wrong war and that is why the continent of Africa is suffering from economic stagnation. African countries should strategise on ways and means to successfully implement the African Continental Free Trade Agreement (AfCFTA). If xenophobic attacks continue, it will significantly threaten intraAfrican trade because many countries have infrastructure gap. We have 54 countries in Africa with different states of readiness. Currently, Africa has the lowest percentage at
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Rather than focus on xenophobia, Africans should marshal out a continental plan to fight corruption, poverty, hunger, ignorance and misery. The recovery of Africa from economic stagnation should be of concern to all Africans and importantly, those in governments
Johnson is an author and a retired naval engineer who has passion for African development and good governance
New wave of South African xenophobic Attacks: What really happened?
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he recent xenophobic attacks on foreign African nationals in South Africa has been the top of the news in African media houses and especially on social media. Loads of gory pictures and gut-wrenching videos had surfaced on the internet and it seems to spread angst and fuel riots all over the continent as of today. But the question on everyone’s mind has been; what really happened? How did these all begin? Did these South African guys just stand up and start killing other African nationals? What is the South African government doing about this? Having lived in Europe for some years, I have had the opportunity to make friends with Africans from different countries, South Africa inclusive. So, when this new wave of xenophobia sprang out, I wrote my lovely, intelligent South African friend who is currently an Oxford scholar. We talked on the phone and she was able to give me origin of the current attacks. This whole new wave started in Pretoria. It was reported in South African dailies that in the Central Business District of Pretoria, a South African taxi driver (Jabu Baloyi) witnessed a supposed Nigerian (according to many South Africans, Nigerians are known to sell drugs in the country) selling drugs to a young South African boy by the road side. The taxi driver on his part, tired of the menace that the drug dealers, who they believed are mostly foreign African nationals, tried to stop the drug dealers from transacting busi-
ness as usual.. In the taxi driver’s attempt to do so, he was shot dead. Mind you, transport workers unions all over Africa are known to be aggressive and dare-devils. It is the same with the South Africa taxi driver associations and its members. The death of the taxi driver therefore incited the taxi drivers in Pretoria to go on rampage with the plan to revenge the killing of their colleague and they started attacking businesses of Nigerians and later other foreign African nationals in the Pretoria region. Complaining about the attack on its member, the Chairperson of the Gauteng Taxi Association, Abner Tsebe, was reported saying, “There are allegations that the police were there when one of the drivers was shot dead. Instead of arresting the perpetrator, the police rescued the perpetrator.” The attack on businesses, burning of shops however, helped riff-raffs’ in the society get access to shops and private properties of these foreign nationals to loot. The foreign nationals being helpless also could not stand being persecuted and their lives wasted over the offence of a single man. They wielded dangerous weapons to protect themselves. Johannesburg on his own was an entirely different story. It is no news that there is perceived suspicion of other Africans, especially Nigerians, by the black South Africans. This is very common with human societies, it is still evident in Western world today, many Western Europeans still have a perceived www.businessday.ng
TOSIN ABDULSALAM
suspicion of folks from East Europe, Asia and Africa. Many white Americans still get an air of inconvenience around black Americans and Latinos. Even in Nigeria, many Hausa still look at Igbos with a side-eye. Many Igbos still think of a Hausa man as a lunatic killer. Even the Lagos government recently arrested Hausa men coming into Lagos state. So, with this riot going on in Pretoria, Johannesburg was expectedly charged. Unfortunately, a few days later, there was a fire outbreak in a building in the foreign national-dominated area of Johannesburg called Hillbrow. The charged populace therefore used this incidence as an opportunity to start the Johannesburg round of violence. People got aggrieved and in countries like Zambia and Nigeria, the populace responded with reprisal attacks on perceived South African businesses. The next question is, what is the South African Government and people doing about this? Let it be known that as this xenophobic attack is on-going, the nation is also going through a dark period of some sort of femicide. There seems to be a surge of femicide happening the same time the xenophobic attacks are occurring. The streets of major South African cities aren’t safe even for its citizens. The South African President on his own has been silent on all these happenings. Until Thursday, when he spoke briefly on the attacks, however majored on issues
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barely 18 percent of intra-regional trade in the world when compared with 70 percent in Europe. Many roads, ports, railways and air networks are below acceptable standards in most African countries. So, this is the time for greater partnership and cooperation among African countries, not xenophobic attacks. Having many youths within the working age is an opportunity if well harnessed. It is also, a huge threat if many are jobless. What should be on top of the agenda in any African nation is how to get our youthful population working. This will require massive investments by African countries in order to provide the next generation the skills required for jobs in the services and manufacturing sectors as Africa diversifies away from reliance on volatile commodities. The industry of tomorrow will be driven largely by automation. Rather than focus on xenophobia, Africans should marshal out a continental plan to fight corruption, poverty, hunger, ignorance and misery. The recovery of Africa from economic stagnation should be of concern to all Africans and importantly, those in governments. Africans must not forget that debts are rising and the only way we can get out of this dilemma is having a new spirit and a genuine mind-set to develop ourselves. It is not right for Africans to fight themselves. We must begin to develop capacity for survival as the fourth industrial revolution accelerates. Africans must be seen to be making concerted efforts to acquire the capacity for survival in the global arena.
surrounding femicide. My advice for my South African brothers and sisters however, is to borrow leaf from the Germans on how the people managed a similar situation in Chemnitz late last year. A big majority of Germans rallied round, organising anti-racism concerts thereby overpowering the small pockets of aggressive, angered Germans who thought they needed to kill every foreigner for the death of a fellow German caused by one foreigner. For other African nationals like my fellow Nigerians. A pocket of people breaking South African businesses in Nigeria shows that we are not better than the riff-raffs’ that started this all in South Africa. Breaking ShopRite, MTN and others will do more harm to us and very little will be felt by South Africa. The majority of the shareholders in this companies are Nigerians. The bulk of its staff are Nigerians and the services they render are for Nigerians. The absence of all these businesses will therefore create a void to be felt primarily by Nigerians. And for the future, its either as a human race we learn to drop these prejudices we have against people we don’t see as one of our own or we just wait for the next wave of riots. It might be xenophobia, racism, religious riots, election riots or any other name you decide to call it. But it will come! Tosin Abdulsalam is a scientific researcher at the Friedrich Schiller University in Jena, Germany
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Climate change & conflict in West Africa (2) RAFIQ RAJI
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frica is most vulnerable to climate change The future effects of climate changes are likely to be extremely severe in Africa. As a largely agrarian economy, based on a diverse landmass with wide climatic variations, limited adaptive capacity and political will to manage the consequences of adverse climate change, the continent is inherently vulnerable. Africa’s forests are diminishing: Sub-Saharan Africa’s forest area -as a proportion of total land area - was 27.1 percent in 2015, down from 30.6 percent in 1990. Due to logging and farming, only about 10 percent of West Africa’s coastal rainforests remain. The effects of climate change could be quite severe in these parts, because trees mitigate the effects of climate change. Climate change promises to bring more frequent and intense floods and droughts around the world, with the number of people suffering severe water stress estimated grow from 3.2 billion to 5.7 billion by 2050, depending on the season. In Africa, droughts have become increasingly frequent and persistent. The resultant water stress affects agricultural production and threatens the sustainability of farming communities. Studies have shown that it is almost certain the Africa continent would experience warmer and more frequent hot days, fewer cold days and nights. Agricultural yields are less in warmer environments. There would also be increased insect outbreaks, wildfires, increased livestock deaths
and greater water stress. Climate change has begun to affect food production in Africa and around the world. During the 2017-18 Kenyan drought, semi-nomadic Maasai and Samburu herders reportedly exchanged their daughters for livestock so they could survive. After frequent droughts diminished their livestock, other nomadic Maasai herders in Kenya turned to crop farming to make ends meet. In West and Central Africa, owing to water shortage, 45 percent% of farmers have experienced increase in crop failure, 38 percent have seen decrease of their farm income, 17 percent have observed a reduction in the availability of water for irrigation, while 13 percent of families have seen at least one of their relatives forced to migrate. In most African countries, state capacity is weak and agricultural production is largely rain-fed. Thus, although Africa produces the least amount of greenhouse gases per capita, its people are likely to suffer the greatest consequences. Climate change, conflict & institutional vulnerability in West Africa As climate change impacts the world’s physical landscape, it alters our geopolitical structure. For example, drought will increase competition for a diminishing amount of fertile land. Rising sea levels inevitably force coastal dwellers to move inland, further adding pressure to what is likely to be, increasingly scarce land and water resources. Coupled with other market forces, prices will rise as a result. These forces, generate conflict between supply and demand resources, which may lead to political conflict as the population realizes that prices are rising faster than incomes. When social and political institutions are strong, they can address these conflicts through community lead-
ers, ombudsmen, and other dispute resolution mechanisms. When these institutions are weak, opens the door to violent conflict. The Fragile States Index (FSI) assesses states’ vulnerability to conflict or collapse, ranking all sovereign states with membership in the United Nations. The FSI ranks West African nations Guinea, Guinea-Bissau, Ivory Coast, Liberia, Mali, Mauritania, the Niger, and Nigeria in the highest risk band for the 178 nations in their report, indicating their current vulnerability to conflict, rather than as a predictor of their collapse. However, as the FSI provides a surrogate measure of institutional weaknesses and the potential for climate change to generate conflict, the assessment that half of West African nations are highly vulnerable to internal conflict is cause for concern. Tensions between sedentary farmers and itinerant pastoralists are unsurprising, due mainly to inherent conflicts in their use of the land and other scarce natural resources. Such tensions are present on every continent. Until recently, such conflicts were resolved relatively amicably within the communities involved. However, today’s economic, demographic and political situation is increasingly demanding, with lakes drying up, populations on the move, and violent extremist ideologies poisoning the traditionally accommodative politics of a number of West African countries. Seeking pasture, pastoralists follow the seasons across the region. During the rainy season, many tend to settle in their primary locales in northern semi-arid parts of the Sahel sub-region. When rains are scarce, they move south for pasture and water, having made arrangements with farmers at specific locations governing where and when their livestock can graze and drink. Occasionally, violent conflicts
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Tensions between sedentary farmers and itinerant pastoralists are unsurprising, due mainly to inherent conflicts in their use of the land and other scarce natural resources
emerge between members of the two groups. Historically, however, the relationship tends to be symbiotic. Farmers benefit from payments and livestock excrement to fertilize their crops, and pastoralists nurture their livestock on the land of the farmers. Pastoralists benefit from the crops of farmers for their own nutrition and survival, just as farmers do from the dairy products derived from livestock of the pastoralists. As available fertile land diminishes, farmer-farmer and farmer-herder tensions rise. Lake Chad, once the world’s 6th largest freshwater lake, borders Cameroon, Chad, Niger, and Nigeria. By 2000, its shallow waters had shrunk to less than 10 percent of their area in 1983, with devastating social and economic consequences for adjacent countries. Farmers, pastoralists, and fishermen lost livelihoods. Unsurprisingly, the Lake Chad region has experienced a great deal of conflict; with at least 2.4 million people forced to flee due to food shortages and violence. With more people expected to flee, there is growing international interest in providing support. In March 2017, the United Nations (UN) Security Council identified climate change effects (drought, crop failure, etc.) and ecological changes as key factors responsible for the instability in the Lake Chad. The UN now plans to facilitate the raising of about $50 billion to regenerate the Lake Chad by transferring water from more abundant lakes in Central Africa. The key goal is to create more jobs in the region. In addition to such efforts, however, the other developmental and governance factors which exacerbate climate change effects in the region must also be addressed. “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”
Mario Draghi prepared to pass on the baton at the ECB
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hroughout his eventful term at the helm of the European Central Bank, Mario Draghi has been a pioneer of intelligent reform. Even after his personal interventions brought the euro crisis under control, he has frequently been forced to combat chronic deflationary forces within the eurozone. His response has been to construct a package of unconventional measures to ease ECB monetary policy, as interest rates headed into negative territory. He will bequeath to Christine Lagarde, his nominated successor, a battery of measures that looked inconceivable in the eurozone five years ago. The ECB is now a thoroughly modern central bank. Next week, Mr Draghi will have his last chance to cement a dovish path for monetary policy until the end of 2020. But he is facing resistance from ECB hawks on the governing council, who are increasingly sceptical about the need for emergency action, and dubious about the effectiveness of unconventional monetary easing. At his valedictory speech at Sintra, Portugal, on June 18, the president mapped out his latest plan. He claimed that the ECB still had plenty of monetary “ammunition” in the form of even more negative policy rates, along with dovish forward guidance about future rates and larger asset purchases. He also emphasised that the inflation target of “below but close to 2 per cent” should be viewed as symmetrical, implying that there
should be periods in the cycle when inflation exceeds these rates. Finally, he made a strong case that the EU should design a new fiscal mechanism to stimulate the economy in a severe downturn. Following the Sintra speech, the ECB modestly enhanced its forward guidance on interest rates, and established internal committees to consider all other aspects of Mr Draghi’s proposals. There was an implicit promise of a much bigger package at the September meeting. Since then, there has been no change in the downside risks to economic activity, or the persistence of below target inflation. Consequently, the market is expecting a very significant package next week. Recently, however, there has been a counterblast from hawkish members of the governing council, led by Bundesbank president Jens Weidmann who was the disappointed candidate in the race to succeed Mr Draghi in the summer. In a recent interview, Mr Weidmann said there was no need to panic about economic activity, and added (hawkishly) that any inflation rate between zero and 2 per cent would be consistent with the current formulation of the inflation target. On monetary policy, the Bundesbank chief favoured further cuts in interest rates, arguing that the economy has not yet reached the “reversal rate”, at which further rate cuts become counterproductive by weakening credit from the banking sector. He also agreed with Mr
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Draghi that, in a severe recession, there should be more reliance on fiscal stimulus than any of his Bundesbank predecessors would have liked. However, he was vehement in opposing the “monetisation” of budget deficits, implying that he would not want to endorse a new phase of large scale purchases of government bonds. He also said that major decisions on monetary policy should wait until Ms Lagarde is fully in post, hinting that any announcements next week should be relatively modest. In the past, Mr Weidmann has often staked out a hawkish stance, only to support a dovish consensus driven by Mr Draghi at the meeting itself. Freed of any need to behave in a consensual manner now that he is no longer a candidate for the top ECB job, he may be more intransigent in future. If so, the package that emerges next week may fall short of the scale the markets were expecting after the Sintra speech. The central bank’s key deposit rate may be cut only slightly, from -0.40 per cent to -0.50 per cent, while a small programme of asset purchases, at about €20bn a month for 6-9 months, may be announced. Forward guidance will certainly be strengthened with a great fanfare, but this seems increasingly irrelevant, since the market already believes that policy rates will anyway stay below zero for several years. Finally, there may be a new programme of “tiered” central bank deposit rates similar to the schemes in Japan, Switzerland, Denmark
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GAVYN DAVIES and Sweden. This would cushion the costs to the banking sector from the further cut in the rate paid on overnight deposits held by banks at the ECB. Negative rates on these deposits acts such as a tax on the banking sector, which can be reduced by eliminating the negative rate on a proportion of excess reserves. Although this could be a useful palliative for a temporary cut in policy rates into negative territory, Japanese experience indicates that it cannot realistically safeguard the banks against a permanent drop in the interest earned on their main assets, ie government bonds and corporate loans. The only way of protecting the banks from this form of “Japanification” is to reduce the rates they pay on their main sources of funding. This means that households and small companies would need to earn negative rates, or pay charges, on their bank deposits. Neither central bankers nor government ministers seem ready to handle the political ramifications of such unpopular action.
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Tuesday 10 September 2019
BUSINESS DAY
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Frank Aigbogun EDITOR Patrick Atuanya DEPUTY EDITOR John Osadolor, Abuja NEWS EDITOR Chuks Oluigbo EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, STRATEGY, INNOVATION & PARTNERSHIPS Oghenevwoke Ighure ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai COPY SALES MANAGER Florence Kadiri DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)
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Mugabe’s exit closes two books on Zimbabwe and Africa
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he death of Robert Mugabe, former president of Zimbabwe, on the 6th of September 2019, closed two books on the history of both his country and Africa. Book one concerned the independence struggle up to the early days of the liberation fighters in power. After years of struggle, Robert Mugabe won the crown as “the real revolutionary” and became the first president of Zimbabwe, the land formerly called Rhodesia. Book two, “Failure & the acts of African Leaders,” featured the acts of African leaders and assumptions about their performance. The fall of Mugabe after 37 years in power and his mortal exit two years later explodes all the myths and wrong assumptions.. Zimbabwe was a cause celebre, and Mugabe stood as a star that held a promise of redemption and new beginnings for Africa after the euphoria of the 1960s independence turned sour. Reggae superstar Bob Marley, who performed at the Independence Day event in 1980, prophesied about the future,
warning against divide and rule. Divide and rule marked at least 20 of the 37 years of Mugabe in power. He ended the coalition with Joshua Nkomo of the Zimbabwe African Peoples’ Union with whom he formed government initially. Then he began walking the road to dictatorship, clamping down on opponents, and scorching the earth of the Shona and Matabeleland in precise attacks against opponents. A f r i c a w o u l d r e m e mb e r Mugabe as a symbol of the promise and failure of leadership on the continent. He was a revolutionary, teacher, politician and one of the most certificated leaders of any nation on earth. Experts described Zimbabwe as the “Crown Jewel” of Africa at Mugabe’s assumption of office as Prime Minister. The land was rich but became a basket case; poverty stalked the country with all its vital economic indices – inflation, exchange and interest rates – askew. The teacher and bibliophile in Mugabe came to the fore as he progressed education and healthcare such that today, despite economic degradation of later years, Zimbabwe still
ranks as the country with one of the highest literacy rates on the continent. On the pro-independence journey he embraced Marxism and spoke against white rule in his homeland. The authorities jailed him for treason. He spent those 11 years in jail studying for six additional degrees. When he came out in 1974, he fled to Mozambique from where he led his party in the Rhodesian Bush War against Ian Smith’s white government. The Lancaster House Agreement in 1979 brokered peace, and he won the subsequent election. Emerson Mnangagwa, current president of Zimbabwe, described Mugabe as, “an icon of liberation, a Pan-Africanist who dedicated his life to the emancipation and empowerment of his people,” in a speech, paying tribute to Mugabe, Adding that, “His contribution to the history of our nation and continent will never be forgotten.” Mugabe will never be forgotten indeed for confirming the stereotype of the African leader and busting many myths. The first myth is the notion that poor education is the cause of bad
leadership in Africa –he had seven degrees. Secondly, he argued in support of adequate time for leaders to understand the challenges and issues, device and implement strategies. Mugabe instead overstayed – rigged elections, trampled on opponents, and impoverished his people, who fled as hunger stalked the land while celebrating his increasing years with big cakes as the people sought bread in vain. His tenure made the case that longevity in the office leads to atrophy and asphyxiation of ideas. Mugabe became a byword for Apocrypha. In the social media age, blogs, memes and tweets ascribed to him witticisms, touches of sarcasm or sundry messages. They were often humorous or laconic. They mocked the fact that he never became the African King Solomon. Whence cometh another? Mugabe’s exit would send a valuable message if he were a lesson to the remaining dictators of similar antecedents across Africa and, more significantly if his successor and others would not tread the path of his inglorious later years in power. Adieu, freedom fighter turned freedom denier and emasculator.
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It’s time Nigeria and Africa got tough on xenophobia in South Africa
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any will read with dismay this week’s resurgence in xenophobic attacks against Nigerians in South Africa (SA). For me particularly, this latest episode hits home in a personal way. Nigeria may need to recall its envoy from that country and lead coordinated African responses to stop the mayhem. We can ensure justice and the rule of law for all law-abiding residents of SA, native or foreign.
Dangerous Oblivion I spent this last weekend of 1 September unaware of what had gone on elsewhere in Johannesburg. Reason was my quiet stay-in in the relative comfort of my apartment in secure Edenvale, Johannesburg. It had been my hideaway from the bustling city since arriving there on Saturday 31st August. This two-days stopover before flight to Lagos followed attendance at the African Leadership Forum (ALF) in Dar-es-salaam. There, I had been invited by the former Tanzanian President, Benjamin Mkapa and the Uongozi Institute. I enjoyed my time in friendly Dar, engaged in eye-opening exchanges with President Obasanjo and at least five other former and current African presidents in attendance. I also tweeted excitedly about Dimowo Cosmas, the young Nigerian who emerged runnerup in the ALF awards. Done with my two days of work in Dar inputting into
the leaders’ discussions an expert perspective on African extractive governance, I flew out to Johannesburg for a well-earned rest. I had in total spent six weeks traveling across the Middle East and Europe far from my daily hustle in Lagos. Away with this long background. I actually ventured out on Sunday 1 September to my nearby Festival Mall in Kempton Park, close to OR Tambo international airport in Johannesburg. Not only did I shop for personal items on which I made significant cost savings relative Nigeria, I also bought an emergency phone charger from a shopkeeper who greeted me as I drove up close to his stall entrance. It turns out he is Nigerian. So good had been our business transaction and curtseying that he told me as I was leaving that he has one of the popular Eastern Nigerian names. His shop is located close to the entrance to the famous Kempton Park taxi rank (bus park in Nigerian speak). Near death experiences in paradise I had a close shave with death in South Africa about a year and 9 months ago. I arrived in Johannesburg on Christmas Eve on the way to Pretoria to join my family members who had flown to SA ahead of me. We were all headed for Safari at the Hluhluwe Mfolosi national Park in Kwa Zulu Natal province. My elderly taxi man whose persistence and appearance had convinced me against the more prudent and safer alternative of taking a registered airport car hire or Uber that late in the night turned out to be a murderer. Only a mix of cajoling, prayer and mother luck saw me escape this close shave. He was armed with a pistol! I gladly parted with wads of cash in gratitude for being spared. Similarly, I had lost my laptop to
a gang that specialized in “jamming” remote controlled car keys. This prevents car doors from locking. Once unsuspecting drivers depart under the illusion of having locked up, the hoodlums get free access to valuables in their cars. My encounter with them was at the Sunny park Shopping Centre in Sunnyside, situated close to the Jakaranda-leaf-festooned seat of power in Pretoria, South Africa. I will return to my experience of Sunnyside and its particularly Nigerian flavour that is not to my taste; if only to present an account that is more balanced than the one-sided one that South Africans often peddle of Nigerians. And indeed the unnuanced victim narrative held by many less well informed Nigerians at home. Lest I forget, my car was also wrongfully towed from around this same mall on another visit, recovered only after being extorted. I gave 1000 rands (then worth about $75) to the official-cum-criminal towing gang. Don’t get me wrong. I had called Cape Town, SA home from 2012-15, and took my girlfriend there to live with me after my more than 15 years residency in the UK and Spain. Shaded just by Madrid - which was special in a way - Cape Town too afforded me much professional fulfilment and social stimulation. I still look back to the place with fondness. And I go back every February for the Mining Indaba. My home in Cape Town, with the weekly work jaunts to Johannesburg and Pretoria, in many ways was a midway house between a thriving African city and an orderly European metropolis like Berlin. How can one hate the country where one married his long-time heart-throb and also gave birth to one’s two kids? Nevertheless, of the three times that I have been victim of crime, all occurred in South Africa and the perpetrators were SA citizens.
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I am in no way condoning violence. Just to make the point that the blanket, indiscriminate violence visited on Nigerian shop keepers by SA looters and such acts (which also affects Somalis, Mozambicans, Bangladeshi merchants and others) has really now come to a head
Close shave with death at Kempton? I might have just escaped death by the whiskers. For my charger did not work to my satisfaction and I ventured back few hours after the purchase to see if I could exchange at the vendor’s. On parking right outside the shop, I noticed that the usually bustling shops around Kempton Park taxi ranch were under locks. I inquired first with two sternlooking locals who told me that they were not aware of the reason why all the shops were locked. In retrospect, I realise that my Nigerian kaftan surely gave me away and their merely not volunteering information was in fact some favour from these two. More enquires with a second person, and came back the retort: there had been looting and violence. If I had arrived a few hours earlier, in my full Nigerian regalia, and alighted from my car into the hands of the looting mob, my likely fate is better left to the imagination. Complacency kills I have this week seen at least two videos circulating on WhatsApp of two South Africans wanting foreigners out. One of them ostensibly a senior police functionary, justifying some of the violence against foreigners. The senior functionary was suggesting that foreign-owned businesses took away opportunities from South Africans! He claimed South Africans were neglected by the country’s authorities whilst conferring unspecified advantages on other Africans.
Note: the rest of this article continues in the online edition of Business Day @ https://businessday.ng Dr Bello is Executive Director, Good Governance Africa (GGA). He holds first class BSc Honours and MPhil and PhD degrees from University of Cambridge. Ola is a member African Union’s technical advisory group on mining
Digitalisation: Making Nigerian ports globally competitive
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igitalisation is pushing the maritime industry beyond its traditional limits and it provides many new opportunities that enhances productivity, efficiency, sustainability of shipping and logistics. The maritime industry is a very important sector of the Nigerian economy and as an oil producing and exporting country, as well as a consumer nation, Nigeria depends largely on foreign goods which are mostly imported through the sea ports. Developments and experience across major ports around the world have shown how fast digital innovations can shape the modernisation of ports and there is urgent need for us to work towards achieving competitive advantages in the transformation of our ports. Nigeria is blessed with abundant natural resources, especially crude oil. Crude oil accounts for over 70 percent of our earnings. Exports including cocoa, rubber, palm oil, peanuts and others are responsible for 18 percent of our nations GDP and transporting goods by sea remains the most common way to trade globally. But in Nigeria and Africa, cargo spends abnormally long time in ports before it is moved inland, presenting a serious obstacle to the successful integration of the Nigerian and sub-Saharan economies in worldwide trade networks. Most of the challenges within our ports are caused by the lack of modern digital technology system available in our ports. The concept of smart ports, for instance, aims to adopt modern information technologies system to enable better planning and management of the industry between different ports. One of the strongest facilitators across all our ports that will accelerate higher productivity is the digitalisation of all our ports,
investments in technology and co-operations for promoting information sharing, better coordination and collaboration, which is a very important strategy for our ports to stay competitive, attract shippers and be more viable. There is urgent need for our policy makers to start working on strategies which will put in place accessible and reliable technologies that will increase the provision of ship/shore interface, maritime intermodal interface, provision of modern facilities for berthing, faster anchoring of ships, modern equipment for the transfer of goods and passengers from ships, faster support services for cargoes, passengers, ships and a base for industrial development centred around the activities of the port, freight and movement of goods. Be it intra- and inter-organisational activities it is necessary to foster the adoption and use of modern innovative digital technologies to optimise and maximise efficiency in our ports. The high costs of shipping goods to Nigeria does not correlate with the distance because shipping goods from New York to Nigeria is nearly double the cost of shipping to South Africa even though Nigeria is closer by nautical miles to New York compared to South Africa. Despite Nigeria being the largest economy in Africa with an estimated population of 200 million people and a GDP of $376.284 billion, few of our ports are well digitalised. Few are connected with the latest information technology systems that meet global standards. Putting this in place will help fast track and facilitate the movement of goods and freights across our ports. Looking at the above numbers there are certainly strong indications that we have all the potential to at least triple productivity
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of our ports. Instead shippers are referring their goods to other neighbouring ports with smaller economies, preferring such ports as Cotonou, Togo and Ghana. The high cost of shipping goods to Nigeria is tied up in entrenched inefficiencies within the transportation industry and the local ports, and improving efficiency in the system can be achieved through total digitalisation of the ports and maritime systems. Improvements would also have the potential to reduce the number of containers being moved on our roads. If we increase the number of containers being transported by train and inland shipping it will cause modal shift and we can link more easily to modern ports all over the world. The easier you make it to book a container on a train or inland shipping vessel, the faster it is to achieve this complex modal shift. Thus, the maritime sector holds the key to the country’s growth and development and to perfectly unlock its potential, we must find ways to implement some of the recommendations and programmes that have strong capacity to boost the nation’s economy and make our ports globally competitive to be one of the best ports in the world. Shipping goods to Nigeria by sea from the US currently leaves a big hole in the pocket of the shipper. The cost of shipping both 20-foot and 40-foot containers to Lagos ports from New York is the most expensive globally. The urgent need to achieve competitive edge calls for a large amount of information systems and modern technology system needs to be adopted in our port operations, this will enable more transactions to be carried out electronically and will increase efficiency and productivity. If we are determined and serious, we must put in place the right structures that
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will attract shippers, importers and exporters to our nation’s ports. There is a recently launched online booking portal for container transport that uses algorithms within the Port of Rotterdam to make a direct match between supply and demand in the market. Algorithms are sets of calculations in problem-solving processes and they are present throughout today’s maritime world. Fuel and propulsion optimisation, fleet management, shipping route optimisation and vessel design are just a few examples. The speedy growth of our nations port industry calls for urgent steps to embrace the latest digital technology systems to run and manage the ports because it will create a very huge impact that will help grow the industry, it also has the potential to open the doors for greater efficiency and help maximize output. . It also has the potential to strengthen direct relationships with end customers, helps reduce costs, facilitates the strategy of creating new revenue generation streams, it enables and enhances the facilitation of the operations of a better port system. Okotie, a maritime transport specialist, writes via fokotie. bernardhall@gmail.com, Fokotie@bernardhallgroup. com
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Tuesday 10 September 2019
BUSINESS DAY
COMPANIES & MARKETS
COMPANY NEWS ANALYSIS INSIGHT
CONSUMER GOODS
PZ Cussons’ full-year profit dips 8% on harsh operating environment OLUFIKAYO OWOEYE
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onsumer goods company, PZ Cussons Nigeria, continues to feel the heat of intense competition from smaller brands and shrinking consumer wallets as its profitability continue to tumble. In its 2019 full-year result, revenue plummeted 8percent from N80.552bn to N74.336bn, with net profit declining 40percent to N1.2bn, from N1.9bn in the previous year. The maker of Imperial Leather and Joy soaps saw its cost of sales jumped to N57.235bn in full-year 2019 from N56.097bn in 2018, leaving its gross profit at a meager N17.01bn in fullyear 2019 from N24.45bn in 2018. Administrative expenses, however, declined to N4.132bn from N6.625bn. Further dive into the company’ financials show that revenue from its Home Personal care products show a gory state as it sinks to N47.2bn from 58.48bn in 2018. However, its Durable Electrical appliances, saw revenue ballooned to N27.13bn from N22.069. According to the company, aggressive competitor discounting in the milk business throughout most of the year resulted in sig-
nificantly lower revenue and the business moving from an operating profit to an operating loss. It added that a full reassessment of the business model has taken place with a greater focus now being placed on consumer pack innovation. In July, the parent company announced that a major overhaul was required to get the business back on
track after writing-off £24.8m against its Nutricima milk business and its Australian brand. It added that it will now focus on personal care and beauty brands because they represent its strongest brands across the geographies that offer it the best opportunities for revenue and margin growth. The company hinted at a slimming-down of its Nigerian
operation, where the economy has suffered and disposable income has reduced, to cope with “current economic realities whilst still being ready to take advantage of future recovery”. The slimming down may involve selling off noncore brands, though it did not say which brands. PZ Cussons has a joint venture partnership with Wilmar International aimed
to develop the country’s depleted palm oil industry. Santosh Pillai, managing director of PZ Wilmar, told BusinessDay last year that PZ Wilmar was committed to the development of palm oil industry in Nigeria, stating it had invested approximately $150 million in palm oil plantations in Cross River State alone. PZ Cussons Nigeria man-
ufactures a wide range of consumer products which includes electricals, personal and homecare products, and dairy brands under the Nutricima business line which includes Nunu, Olympic and Coast milk brands. The company celebrated its 120 years in Nigeria in May reaffirming its commitment to the country and economy.
MARKETS
Investors scramble for longer tenure as CBN auctions N400bn OMO bill HOPE MOSES-ASHIKE
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he Central Bank of Nigeria (CBN) mopped-up a total of N322.6 billion out of the initial N400 billion offered to investors via Open Market Operation (OMO) auction. Results from the auction show that Investors scrambled for the longer tenure instrument as the 364 day tenor OMO bill was oversubscribed 63.25 percent. The initial offer for this tenor was N250 billion while the total subscription stood at N408.12 billion. The CBN sold a total of N321.48 billion (364 day)
at a stop rate of 13.50 percent. The investors bided at a range bid of between 13.49 and 14.50 percent for the offer which matures on September 3, 2020. Ayodeji Ebo, managing director, Afrinvest Securities Limited explained that the long term bill offered attractive yield of about 15.6 percent, hence the high interest. The short and medium term OMO bills still look unattractive relative to the secondary market rates. For the medium term bill, a total of N100 billion was offered for 189 day tenor but the sum of N0.48 billion was sold at a stop
rate of 11.79 percent. The offer which matures on March 12, 2020 was undersubscribed at N23.04 billion with investors biding at the range of between 11.79 and 13.30 percent. The CBN offered N50 billion for 84 day tenor but sold a total of N0.64 billion at a stop rate of 11.59 percent. Investors earlier demanded higher rate of between 11.59 and 12.75 percent. The offer which mature on November 28, 2019 recorded low subscription as the Apex bank could not offer a rate higher than the 11.59 percent. However, the overnight inter-bank rate, the rate at
which banks use to borrow and lend from one another, declined by 4.36 percentage point to 5.14 percent on Thursday from 9.50 percent the previous day. Also, Open Buy-Back (OBB), which is the money market instrument used to raise short term capital, decreased from 8.64 percent on Wednesday to 4.21 percent on Thursday according to data from the FMDQ. Last week Thursday, CBN was able to sale N48.05 billion out of the t o t a l a m ou nt o f f e re d (N400bn) the stop rate of between 11.59 percent and 13.00 percent for the various tenor days of the
instrument. The CBN on Wednesday announced that it plans to issues the Nigerian Treasury Bills (NTB) worth N1,002 billion for various tenor buckets in the fourth quarter of this year. The Nigerian Treasur y Bills programme released by the regulator on Wednesday, show that the same amount will be maturing during the same period. However, the CBN noted that auction amounts are subject to change without notice. A breakdown of the NTB programme revealed that N9.62 million will be issued for 91 days tenor
while the same amount will mature during the same period. Investors are expected to position for medium term investment as the Apex bank will auction a total of N90.18 million for 182 days tenor. The same amount will also mature over the same period. For the 364 days tenor, the CBN will auction the sum of N821.84 million to investors, while the same amount will mature in the fourth quarter. The CBN in the third quarter (Q3) 2019 issued a total of N809.4 billion worth of Treasury Bills for various tenors.
Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: Samuel Iduh
Tuesday 10 September 2019
BUSINESS DAY
COMPANIES&MARKETS
15
Business Event
TECHNOLOGY
Carbon, AppZone partners Open Banking on financial service innovation OLUFIKAYO OWOEYE
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riven by the desire to achieve improved customer-centric d i g i t a l s e rvices and increased consumer control of data and unprecedented levels of innovation, Carbon, AppZone, have collaborated with Open Banking Nigeria, towards the attainment of non-partisan and nonfinancial Application Programming Interface (API) standards for financial services in Nigeria. The two financial technology (fintech) players respectively announced their collaboration with non-profit Open Banking Nigeria. Carbon, formerly PayLater, and AppZone join other industry players like Paystack, Flutterwave, Interswitch, Ernest & Young, Fidelity Bank, Global Accelerex, TeamApt, PwC, and Sterling Bank who have partnered with Open Banking Nigeria. The collaboration would, among others, further advance ongoing ef-
forts by various financial industry stakeholders in Nigeria for the maximisation of the rapid increase in digital and mobile payments, with the objective of meeting the yearnings of consumers for flexibility and convenience. “At Carbon, we know that data is more important than oil. We also understand that open banking presents a tremendous opportunity to unlock financial access for millions of consumers and has the potential of transforming the financial services landscape, not only for banks and fintechs but for everyone across the ecosystem,” said Chijioke Dozie, the Co-founder and Chief Executive Officer of OneFi, the parent company of Carbon. According to Dozie, Carbon and AppZone will actively participate in diverse phases of the development of common API standards for Nigeria, testing the APIs for certification, and stimulating the adoption of Open Banking standards across the country. “It follows our innovative leanings as a brand
committed to providing credit to the financially under-served and excluded individuals around Africa. We believe that, with Open Banking, we would be able to extend consumer credit to the 40 million unique bank customers across the nation,” said Dozie. Obi Emetarom, the CEO of AppZone said, “We find open banking critical to the future, especially as we support over 300 financial institutions on BankOne, our banking-as-a-service platform. “Our partnership with Open Banking Nigeria also comes as a result of our understanding that in our fast-rising digital world, the use of standard APIs is crucial to empower verified third party players to securely leverage technology.” Moreso, the adoption of standardised APIs is known to cut cost, reduce connectivity complications and improve turnaround time.” This fintech-Open Banking Nigeria collaboration, Continues on page 16
POWER
Schneider Electric, Partners target 300 electricians for training to improve safety, job creation DIPO OLADEHINDE
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igeria’s Schneider Electric in partnership with Agence Francaise de Development (AFD) and the National Power Training Institute (NAPTIN) will begin the second round of training for Nigerian electricians across the country come September 3. The Managing Director, Schneider Electric, Anglophone, West Africa, Christopher Begat, said the programme was another milestone in the nation’s energy industry. “We plan to extend it to Abuja and Port Harcourt, and train over 300 electricians per year. We plan to give significant boost to a sector with limited local human and institutional capacities,” Begat said. Already, Schneider Electric has trained 1,000 beneficiaries in the last five years and has asked those who do not have background in electrical engineering to also enroll for the up skill programme. “The training is open to all prospective electricians,
beginners and installers, to either learn the profession or consolidate on previous knowledge in key electrical installation subjects,” he said. Isaac Adeleke, Training Project Coordinator at Schneider Electric, said participants can either register for the full course or select specific modules of interest. He also announced a follow-up programme for the trainees to assist them to get jobs on completion of their training. “Yes, we do a follow-up. In fact, one of the graduates of our pragramme recently got a job. The training is 70 percent practical and 30 percent theory, not just for classroom knowledge which will exposed the participants to the right way to do things,” Adeleke said. Adeleke said the plan is to have implementation in three cities: Lagos, Abuja and Port Harcourt ; with Lagos being the pilot city and from there we move to other cities. About 44 people were trained at NAPTIN Ijora Training Centre, Lagos in the
L-R: Isiaka Gbadamosi, director curriculum and examinations, Lagos State Technical and Vocational Education Board (LASTVEB); Sesan Ogunyooye, head, marketing and corporate communications, Alpha Mead Group; Wale Odufalu, group executive director, corporate services, Alpha Mead Group; Olaoluwa Oguntuyi, director, technical and vocational services, LASTVEB, and Temitope Jemerigbe, CEO, DKK, Nigeria during the opening ceremony of a two day professional training and mentorship session sponsored by Alpha Mead Group to improve the quality of artisan skills in Lagos.
first session of the training which started in May and ended in August 2019. The training covers solar power, cable routing, wire installation, energy management systems, metering system and much more. The Marketing Communication Manager, Schneider Electric, Viviane Mike-Eze, told newsmen in Lagos that the initiative was hinged on the desire to empower Nigerian youths and electricians with professional, and practicable skill set. “Incidences of fire outbreaks from faulty electrical installations in Nigeria need to be curbed. It is also our responsibility as an Original Equipment Manufacturer (OEM) to make sure that we give them the best in competency,” Mike-Eze said. She said the training would help to ensure safety in homes and check fires in companies and homes. “Another benefit is employability. We do not only train people in technical skills, we also train them to become employable and better entrepreneurs that will create jobs,” Mike-Eze said.
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L-R: Adedayo Ojo, vice president, Public Relations Consultants Association of Nigeria (PRCAN); Jaiye Opayemi, president, PRCAN; Martha Okpeke, assistant secretary general, PRCAN; Bolaji Abimbola, publicity secretary, PRCAN, and Raheem Olabode, treasurer, PRCAN, during the inauguration of new executives of PRCAN in Lagos.
Babatunde Irukera, chief executive officer, Federal Competition and Consumer Protection Commission (FCCPC), (l) with Mary Uduk, acting director general, Securities and Exchange Commission (SEC), during the signing of MOU between SEC and FCCPC on Merger Review in Abuja. NAN
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Tuesday 10 September 2019
BUSINESS DAY
COMPANIES&MARKETS PRESS RELEASE
Africa Prudential charges cooperative MainOne, CcHub, Others Partner for 2019 societies on technology inclusion PitchDrive Asia Tour Stories
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frica Prudential Plc has charged the cooperative m ove m e nt s i n Nigeria on digital adaptation in their business, culture and structure to properly position them in the new digital economy, and unlock the potential of the sector in sustainable economic development in Africa. The call was made by Obong Idiong, Managing Director/CEO, Africa Prudential Plc while speaking as a Guest Speaker at the 5th Cooperative Summit and 2019 International Cooperative Day, held by the Cooperative Federation of Nigeria (CFN) at Jos, Plateau State last week. While delivering his paper on Cooperatives and the Digital Workspace, Obong noted that digital technologies are changing the lives of consumers. Social Media provides them with a new voice. Mobile devices and online platforms alter what people expect from
businesses, and ‘big data’ is giving organisations the opportunity to understand and fully engage with their stakeholders – whether these are members or customers. He emphasized that the ‘middle-man’ in today’s businesses, including cooperative societies, is technology. The theme this year is, “Cooperatives for Decent Work”, which is aligned with the Sustainable Development Goal 8 (SDG8) which aims to promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all. Khadijat Abdulkadir, Chief Technology Officer, also speaking at the summit, explained that Africa Prudential Plc has added SDG9 to the mix this year as the Company provides innovative value by automating the cooperative sector, and providing access to EasyCoop—an Enterprise Resource Planning
solution which takes care of end-to-end automation and administration of cooperative societies—as a way to drive value for the cooperative sector. Taking its advocacy role further, Opeyemi Onifade, Head, Cooperative Society Business confirmed that Africa Prudential Plc will be at the Global Conference ‘Cooperatives for Development’ and General Assembly of the International Cooperative Alliance (ICA) which is slated to hold in Kigali, Rwanda from October 14 to 17, 2019. It would be recalled that since Africa Prudential’s venture into the cooperative space in 2014, the Company has been championing full automation of cooperatives in Africa with the introduction of EasyCoop. In 2016, Africa Prudential Plc signed an MOU with the Cooperative Federation of Nigeria (CFN), the apex body for cooperative in Nigeria.
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he second edition of Co-Creation Hub’s PitchDrive tech tour is curre nt l y u n d e r way . Te n selected startups utilising hardware and deep technology tools in their businesses are travelling through five Asian cities pitching their businesses to investors in the Asian technology ecosystem and forging partnerships to scale. During the two-week tech tour which will run until September 8, 2019, tech-focused media company, TechCabal is curating the tour in images, videos and blog posts. Tagged PitchDrive Tour Stories, we are happy to announce leading telecom and internet service infrastructure provider, MainOne and
the one-customer bank, Sterling Bank, as sponsors for this segment of the tour. During the tour, (co) founders will interact with deep tech and hardware communities in Singapore, Japan, South Korea, China and Hong Kong, engage in pitch events with Asian tech giants such as Tencent and Transsion, and seek out collaborations, partnerships and potential investment opportunities to help them further grow and scale their businesses. “We find that there’s a lot of interest from Asia in Africa and we believe there are opportunities for collaboration that could help strengthen the hardware and deep tech ecosystem in Africa,” says Damilola Teidi, Director of Incuba-
tion at CcHub. Tayo Ashiru, Head Marketing at MainOne, stated that “MainOne’s interest in sponsoring the tour in borne out of our deep commitment to enable the tech startup ecosystem across Africa with a view towards ensuring that services and skills developed locally will have access to capital and partners required to scale their businesses to reach a broader market.” PitchDrive Tour Stories will curate the tour on-thego and in a documentary production to be released at the end of the tour. The documentary will shed light on the entrepreneurial journeys of each of the founders and as they interact with the technology scene and culture of Asia.
Carbon, AppZone partners Open Banking... Continued from page 15 according to Ope Adeoye of Open Banking Nigeria, would “enable further innovation in our financial services industry where the lack of common APIs standards currently constitutes a barrier to innovation, especially in the areas of digital payments expansion and financial inclusion.” Appzone is a Nigerian firm that provides software solutions for the financial
services industry. Supporting and accelerating growth in the adoption of banking services across the continent, AppZone expands the scope and competitiveness of financial institutions by delivering disruptive innovation on agile technology using best practices. Launched when lending with no collateral or documentation or to non-salary earners was inconceivable,
Carbon raised the bar and pioneered a new phase of consumer lending in Nigeria, becoming the country’s first digital lender. The firm has continued to transform lending services in Nigeria and across Africa. Open Banking Nigeria partners with stakeholders across Nigeria’s financial services industry to define an open and non-partisan set of APIs for financial services in Nigeria.
Osaigbovo Godwin, president, Rotary Club of Jos, District 9125, (3rd, l); Tolu Omatsola, former district governor of Rotary Club of Nigeria District 9125, (l); Sunny Agba, former district governor of Rotary Club of Nigeria District 9125, (2nd, l) with members of the community, during the inauguration of Solar Energy Street Light, donated by the Rotary Club of Jos to Gwaradung Community in Jos. NAN
The global risk brewing in Japan’s ailing local banks
Negative rates and an ageing population leave regional lenders with an incentive to gamble ROBIN HARDING IN TOKYO AND LEO LEWIS IN HONG KONG
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or more than a hundred years, the Shimane Bank has been the economic heart of its remote Japanese prefecture, financing local companies through the vicissitudes of war, earthquake and rapid economic growth. But last Friday, it all fell apart, highlighting an oftenforgotten financial stability risk that could affect not just
Japan but the entire global economy. After years of ultra-low interest rates had slashed its loan income, Shimane Bank announced a sudden blow-up in the securities portfolio it had turned to instead, and an emergency capital raise of ¥2.5bn ($23m) from SBI Holdings. In order to return to profit, Shimane Bank plans to ramp up higher-margin lending to “medium risk” companies, which did not meet its fiwww.businessday.ng
nancial standards in the past. But in a prefecture where the population is already 25 per cent below its peak, and projected to fall another 15 per cent by 2045, good credit risks are hard to come by. The plight of this local stalwart is mirrored across Japan’s vast regional banking system, which accounts for half of the country’s banking assets. In provincial towns across the country, bankers are looking at relentless declines in their
income, leaving dozens of teetering institutions with an incentive to gamble on risky property loans or exotic investments overseas. Holding more than $3tn in assets, Japan’s regional lenders are bigger than the Italian banking system, and their excess deposits make them a crucial buyer of everything from collateralised loan obligations in the US to covered mortgage bonds in Denmark. “Japan has built up the
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world’s largest net foreign lending position. Japanese financial institutions pump this capital out to the rest of the world: they are the beating heart of international capital flows,” said Shannon McConaghy, an asset manager at Horseman Capital in London, who follows the regional banks. “The reduction in their return, due to negative rates, has forced the heart to take on more and more risk to keep on beating. @Businessdayng
The problem arises when this risk stresses the heart so much that capital stops beating out.” The basic business model for Japan’s regional banks is straight out of It’s a Wonderful Life: take deposits from local people, lend them out to local businesses, and earn a small margin. As Japan’s regions aged and declined, however, they ended up with more deposits from elderly savers than loans to growing borrowers.
Tuesday 10 September 2019
BUSINESS DAY
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Tuesday 10 September 2019
BUSINESS DAY
Media business Relief for clients as Signage screens for digital Ad measurement enters Nigerian market Daniel Obi
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n its bid to help advertisers more effectively measure digital ads, Nimbus Media Limited, a leading provider of out-of-home digital advertising in Nigeria, recently unveiled the latest version of its electronic digital advertising board, a 75 inches free standing double-sided LED screen at the Ikeja City Mall in Lagos. The new device features a Content Management Software (CMS) solution, an application used to create, customize, and manage information such as still Image and video advertisement on a digital signage screen. Tayo Osikoya, The Managing Director, Nimbus Media Limited, revealed that one of the unique features of the device is that it has the capacity to measure the amount of audience that views the adverts displayed on the screen with the surveillance cameras attached on the board. “Prior to the launch of this device we have received some feedback from our clients concerning the numbers of reach for their
adverts in order for them to have some degree of measurability, now we are glad to have a device that helps our clients measure the reach of their sponsored posts on the digital screen” he explained. Tayo stated that the software technology introduced into the board allows the device to gather key information about audience: number of viewers, their gender, age group, emotions and attention time. “Social media has been a major competitor with other traditional advertising media because it displays the numbers of views, clicks, likes and shares which makes it possible
for the clients to measure the reach of their running adverts. “In addition, the device allows brands strategically place their advert content on the screen in order to fit a specific target audience as it can choose the duration, time and period it wants the adverts to run, amongst several others.” He added. Tayo further explained that the new technology will help advertisers to get more value for their spend. “We are working towards expanding and introducing new technology such as, touch screens and other technology that provide better services and reach for our clients and audience”
Luzo DN strikes affiliation agreement with international ad network
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foremost Out-ofHome Media Company in Nigeria, Luzo Digital Network & Media Limited, has been signed on as the Nigerian affiliate and partner of NEXNOVO Technology, a global leader in next generation LED application and visual impact company. NEXNOVO Technology is the owner of smart poster brand and other innovative visual and light effect technologies in the digital out-of-Home and experiential marketing industry. The affiliation and partnership arrangement is expected to transform Luzo DN & Media into a mind blowing digital media company. The company has been known for introducing various innovation driven outdoor platforms in the Nigerian advertising industry like the Street Column and BBI onwater and on-land inflatable hoardings. In a statement, Bidwell Nkemakolam Okere, MD/CEO of Luzo DN & Media Limited, said “With this new partnership, LUZO DN has since com-
menced client engagements and discussions on many fields of visual digital marketing communication NEXNOVO technology will bring to the table in revolutionising and shaping how retail point ad communication, ambience advertising and interaction will be like in next few years in Nigeria.” He said “NEXNOVO Technology is the owner of Smart Poster LED, Stage Screen and other Light Effects technologies including the now famous transparent and next generation LED, used majorly in advanced markets. Its application is so wide but targeted at glass
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walls, escalator rail, guardrails, glass-showcase and windows, entrance glass sliding doors, stage rental and display windows.” “Smart Posters have been proven to drive sales more than any other retail point of sales platform because of its interactive, appealing and compelling message presentation capacity and its fast delivery turnaround time because of digital cloud host and remote dissemination of campaign on real time basis,” adding that “the product comes in series with ready to deploy models and custom made-tospecification hardware models too,” the outdoor expert said. Speaking on the usability and adaptability of the new offering, Okere stated that chain stores, fast food, luxury shops, car show rooms, Lounges, restaurants, banks and telecoms call centers will find the product experience worth the while; therefore, “Needless to say the Return on Investment (ROI) of this application is a guarantee,” Luzo DN boss revealed.
Reforms, repositioning top agenda as PRCAN elects new exco
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ublic Relations Consultants Association of Nigeria (PRCAN), has elected a new team of executive to pilot the affairs of the association for the next two years. The election took place during the association’s 2019 Annual General Meeting recently in Lagos. The newly elected executive members include Jaiye Israel Opayemi who is now the President of the association representing Chains Reaction; Vice President, Adedayo Ojo of Caritas PR; Secretary General, Tokunbo George-Taylor from Hill + Knowlton Nigeria; Assistant Secretary, Martha Okpeke from MediaCraft Associates; Treasurer, Raheem Olabode from CMC Connect and Publicity Secretary, Bolaji Abimbola, representing Integrated Indigo Limited. Delivering his inaugural speech, the newly elected President, Israel Jaiye Opayemi, has assured that the Public
Relations ecosystem would be reformed in a bid to accord the profession its deserved rightful place of honour in the league of other noble professions in Nigeria. He vowed that it would no longer be business as usual for unqualified Public Relations practitioners whom he said are tarnishing the reputation of the profession through unwholesome practices. Opayemi decried a situation where the Public Relations profession in Nigeria has become a ‘Banana Republic’ of sorts where anything goes. He stated further that, unlike other professions like Medicine, Law, Accounting and even Advertising, Public Relations in Nigeria is one profession in which the barriers to entry seem to be lower as “practically just anybody can wake up and call himself or herself a ‘PR Consultant’”. He further assured that PRCAN was committed to take on the task of fostering
an environment that enables business growth for PRCAN member-firms through his vision and mission statement anchored on seven pillars: Clearer Identity, Stronger Legislation, Stricter Enforcement, Increased Revenue, Better Value, Fair Trade as well as Professional Dignity. Opayemi also pledged PRCAN’s readiness to offer the professional assistance of its member-firms to the Federal Government of Nigeria in crafting a response strategy and a campaign plan to help the positive story about Nigeria as well as shape the current low perception. Earlier in his valedictory speech, the immediate past President of PRCAN, John Ehiguese, highlighted quackery and non-compliance with set standards as top among the challenges faced by the PR industry in Nigeria, stating that the onus is on PR professionals to come together to stem the tide
Blue Star embarks on expansion drive for market share
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ir conditioning and commercial refrigeration major Blue Star Limited, a wholly owned subsidiary in Dubai, Blue Star International FZCO, has embarked on an aggressive expansion drive for bigger market share in Western African market. The Company, with its comprehensive range of air conditioning and refrigeration products, had commenced operations in Nigeria in association with its local distribution partner, Merald Technology Solutions Nigeria Ltd, in 2017, and now intends
to rapidly expand its business in the Nigerian market. “ Blue Star takes immense pride in being associated with Merald Technology Solutions, a leading player in Nigeria with a strong base in providing engineering services and facility management solutions. “We are confident that with Blue Star’s products that are backed by robust R&D and world-class manufacturing and Merald Technology’s well entrenched network in this region, we will be able to build on and consolidate our presence in this region,” said Dawood
Bin Ozair, CEO, Blue Star International FZCO, at a technical seminar held recently in Lagos to promote its offerings. Ozair opined that the company has adopted zero Ozone Depletion Potential (ODP) refrigerant HFC R410A as replacement to HCFC R22 which is in the phase-out list of The Montreal Protocol. “Considering that HFC refrigerants have high global warming potential, the Company has proactively taken steps to adopt natural refrigerant HC R290 after careful evaluation of safety in certain products,” Ozair disclosed.
BIC ‘Shave, Play and Win ends with commitment to quality offering
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IC has always worked to provide consumers with the best shaving solutions since 1975, offering technological innovations has re-affirmed the brand promise with the just concluded third edition of shave, play and win campaign which produced over 40 winners nationwide. This is in line with keeping up with the quality mark. Known for its affordable variants, which include BIC 1, Comfort 2, Twin Lady, and Flex
3’, the company has been in the market for over 70years. The six weeks campaign, which ran across Nigeria, saw a number of activations including the set-up of viewing center that brought Nigerians together to cheer for the national team during the just concluded African Nations Cup tournaments. As part of the campaign, promotion activities took place across the country giving consumers a chance to win instant prizes of over 10,000 recharge
cards and other gift items. The final draw took place at the General Import & Distribution head office in Lagos, supervised and certified by the National Lottery Regulatory Commission, the Consumer Protection Council, and the Lagos State Lottery Board, and saw an impressive participation of 30,000 entries. The prizes that were won include LED television sets, DSTV explora decoders, mobile phones, tabletop, gas cookers, and rechargeable fans.
Micromedia limited unveils heritage cinemas in Abule-Egba
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eritage Cinemas, a flagship Outof-Home Entertainment product launched by Micromedia Marketing Limited, producer of the drama series, Taste of love, Casino & Oghenekome, recently unveiled Cineplex, to bring cinema experience and out-of-home entertainment to Abule-Egba, a densely populated suburb
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of Lagos. Shileola Ibironke, the MD/ CEO of Heritage Cinemas said the move is aimed at positioning the business interest of the company to offer the best of international and Nigerian movies in a luxurious and stylish environment. “Our core focus is to provide similar cinematic experiences, offered in highbrow and commercial nerve centers @Businessdayng
of Lagos, within mediumincome neighbourhoods with Abule-Egba being a flagship center,” she said. The populace in AbuleEgba and its environs will be offered a range of highly anticipated blockbusters, food concession, entertainment lounge, game arcades, and eGaming arena amongst other offerings to be unveiled later in the year.
Tuesday 10 September 2019
BUSINESS DAY
19
ADVERTISING Nigeria needs to urgently address structural imbalances in economy to avoid being left behind - Okoya Tunde Okoya is the managing director of Lange and Grant, a company that provides cooling insulated panels for processing and storage facilities. He is also Vice President of OTACCWA, an organisation that advances cold chain in W/Africa and advances reduction of $8.5billion post-harvest loses in Nigeria. Tunde’s desire is to play big in the construction of mass housing that are energy efficient and also to help farmers transform from small to large commercial farming by being efficient in storage and processing. In this interview, Tunde, son of renowned Rasak Okoya, the chairman of Eleganza Group of industries looks at challenges confronting the manufacturing sector and provides some solutions. The astute industrialist is also Honorary Consul of Seychelles, the tourism country that is rich in environmental conservation. Tunde’s idea is to bring Seychelles’ experience to Nigeria. Excerpts What is your take on Nigeria’s economy as an operator in the system? he economy is filled with immense promises and opportunities, taking into consideration the population, geographical spread, the size of GDP which is the largest in sub Saharan Africa. There are tremendous opportunities, especially if certain structural problems such as infrastructural challenges, difficulty in bringing goods from the ports, roads and human capital can be strengthened. This will allow manufacturing sector to play its rightful role and contribute more to the GDP. Nigeria’s manufacturing sector does not operate in isolation, if therefore we can correct issues that will enable Nigerian industries compete favourably with their counterpart abroad, the sector will be a major contributor to GDP and forex. What exactly are you expecting from ports to enhance competitiveness? There was a report carried out by USAID which compared the cost and time it takes to transit goods from Kano and other cities to Sea ports in Lagos for export against similar operation in Ghana and other countries. It was taking about18 days but now it is running into several months. The cost is unbearable for people that have to sell for instance cashew or cocoa in the same international market at a fixed price. Taking goods from hinterland to Lagos sea ports is far longer than the time it takes similar farmer in Ghana and this has implications for the sale of the goods in the international market. The cost of clearance is also a huge issue. There should be policies that protect exporters and importers in Nigeria. The Buhari-led government is doing another four years. With all the socio-economic challenges besetting Nigeria, what do you expect from the government? The government needs to pursue policies that should have the largest impact for the largest number of people. A recent report from PwC talked about the size of informal sector in Nigeria and how the size of the formal sector is shrinking yearly because there is no incentive for people to transit to formal economy and start paying taxes. The report suggested real es-
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Tunde Okoya
tate development as a way out. As we have seen in some economies, recession kicks in when there is slightest problem with the real estate sector because it has the largest impact to the widest number of people. Such policies need to be pursued. Secondly, policies such as consumer credit, retail banking, and rural banking that can improve consumer purchasing power need to be pursued. Any time there is doubt in consumer confidence it has a huge impact. We need to release the verve that keeps people in poverty. What should government be doing to address high lending interest rate which is impeding manufacturing sectors’ efforts to perform maximally and impact employment? It is hard to do any business where cost of funds is about 25% and still make a margin. The approach of CBN getting more actively by providing credit to critical sectors of the economy is a good policy in the short term but in the long term, we need to ensure that we curb the excesses that create inflation, and other things that distort the economy such as subsidies and imbalance in the entire fiscal structure of the economy. Such www.businessday.ng
capital needs to be freed and apply it to more productive sectors. The banks need to galvanise deposits and support the real sector such as agriculture, manufacturing, rural areas where people don’t have formal banking. We should remember that manufacturing is not trading; you can’t borrow and start repaying in 12 months. We are also under-estimating the impact of fintechs. Though, we are slightly seeing the impact and we will see more impact from that sector. Nigeria needs to get itself prepared, as Africa is becoming one regional bloc and if we don’t address those major structural
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imbalances in our economy we will end up in a dumping ground. Could you assess this government in its four and half years? Policies in terms of social intervention are noteworthy. Its impact is slow, gradual but it will be felt, though some people don’t agree with those polices. Reports say by 2050, three quarter of the people living below the poverty line will be in Africa and in Nigeria. There are some people living on the fringes and they need to be captured, so in spite of criticisms, those social interventions are critical. There is need to have more improvement where fiscal and monetary policies work together to advance the economy. There is also need to have active involvement of the private sector. It is beyond the capacity of government to fund certain infrastructure and it is essential we have the political capital to make policies that will attract smart money; patient capital and FDI. Could you tell me more about Lange and Grant that operates in the cold chain sector? Lange and Grant plays in various sectors of the economy, because we provide services that are required in agriculture especially in the storage and logistics value chain through the deployment of cold chain in addressing postharvest loses. We provide cooling insulated panels that provide processing and storage facilities. In the meat sector, you cannot build an abattoir without insulated panels because they make the environment clean. Our products can be used to store foods and fruits and prolong the shelf lives. We also play in the construction sector as we have insulated roofing. This provides energy efficiency in a building that helps
It is hard to do any business where cost of funds is about 25% and still make a margin. The approach of CBN getting more actively by providing credit to critical sectors of the economy is a good policy in the short term but in the long term, we need to ensure that we curb the excesses that create inflation, and other things that distort the economy such as subsidies and imbalance in the entire fiscal structure of the economy
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@Businessdayng
protect the environment. We also make insulated panels for low cost housing, for building of factories, auditorium, churches, shopping malls etc. It is a new smart way to build as it is fast, efficient and cost effective. We are opening a new facility that will increase our capacity annually. How have you been able to sustain the business in over 10 years? It has been really tough, but I must confess that we see a lot of prospects that informed recent investments running into several millions of dollars. We have gone through a period when we thought we will shut down, no forex for raw materials, initial low demand in oil and gas sector due to challenges in that sector, reduction of purchase from telecoms sector as the sector had made some initial investments in that area. Due to these challenges, we had to cut down production at a time, but we stayed on the vision. When slight rebound in the economy started coming, there was also rebound in the business. We shifted our focus from those sectors to real estate. The potential is to change the entire building philosophy in the country, build quick and efficiently and energy saving. Due to global warming people will need to insulate their houses and therefore minimise the energy spent on cooling. Percentage of foreign and local source of raw materials is almost 50/50. Due to partnerships, we are blending some our chemicals locally. How can organisations like banks assist to improve the cold chain industry? Cold chain is basically about infrastructure and Organisation for Technological Advancement of Cold Chain in West Africa, OTACCWA has been trying to partner with banks to understand the need. Capital with single interest rate is important for farmers to establish this infrastructure that will help them store and process their produce. The infrastructure can be jointly owned. Countries that have large cold chain facility always tend to have higher agricultural output because they are producing more and storing more and reducing wastages. In this regard we are organising a national conference in November, this year to further advance this course.
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Tuesday 10 September 2019
BUSINESS DAY
Tuesday 10 September 2019
BUSINESS DAY
FEATURE
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Hibiscus farming: Creating wealth for Nigerian communities Since the renewed focus on agriculture, Nigeria seems to have shifted to horticulture as the country seeks to boost its foreign exchange. Hibiscus is one horticultural crop that is no just earning foreign exchange for Nigeria but also creating wealth for communities writes Josephine Okojie
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t the entrance of Babura Local Government Area in Jigawa state is a towering hibiscus farm painting the entrance of the town pink. The exotic look and colourful boom attracted lots of butterflies and birds that feed on the nectar of the bright coloured petals on the hibiscus plants that have grown to about two feet in height. The farmland belongs to Idris Abubakar, a forty five years old farmer. Abubakar who farms only hibiscus in the last eighteen years is unable to meet up with the current demand of the flower from his customers. He resulted to paying other farmers to grow hibiscus for him as the crop continues to gain traction at the international market. “I had to expand my production area and also employ other farmers to grow hibiscus for me by giving them money because I can no longer meet up with my customers’ demand that is increasing daily,” he says. Hibiscus an important perennial herb is fast booming in the Nigerian market as exporters are now exporting a larger percentage of the crop to Mexico, United States, Europe and Asia. Agro allied firms such as AgroEknor are making huge invest-
ment in the hibiscus value chain in Nigeria owing to the ever increasing global demand for the flower. Nigeria is the natural habitat for five varieties of hibiscus and among the world’s top producers and supplier of the crop, experts say. In 2017, Nigeria exported 1,983 containers of hibiscus to Mexico alone, earning $35 million in nine months, according to the Association of Hibiscus Flower Exporters of Nigeria (AHFEN). Hibiscus scientifically called Hibiscus sabdariffa and commonly known as Roselle, grows in many tropical and sub-tropical countries and is one of highest volume specialty botanical products in international commerce, the Food and Agricultural Organisation (FAO) says in its postharvest report. The hibiscus plant is drought tolerant, relatively easy to grow, not suitable for mechanised harvest, labour intensive to process, and can be grown as part of multicropping system. Prices and country production volumes are not tracked like a conventional agricultural commodity and this is why the global industry currently does not have adequate data. But Tunji Lawal, president of Association of Hibiscus Flower Exporters of Nigeria (AHFEN) says that Nigeria is next to Sudan in the
flower to ensure standards are met. Mariana Abdullahi, a worker at the factor says that AgroEknor has empowered her to be able to support her family. “Now I support my family with what I earn and before now I do not have a bank account but since I started working here, the company opened an account for me,” Mariana says. Just like Mariana, AgroEknor is supporting several women entrepreneurs across the hibiscus value chain and this is helping them work their way out of poverty. “Hibiscus is not only promising the country economic development but it can also contributes to the economic empowerment of women and transformation of rural communities,” Tim Oke, executive director-corporate and global growth, AgroEknor Limited says. He says the income generated from the business has help rural producers rise out of poverty and is likely to have wider long-term benefits
A woman cleaning the dried hibiscus flower
production of the crop and that the Africa content is the largest grower of the flower. It takes an average of 3 to 4 months to grow and mainly cultivated in the northern states with Jigawa, Kano and Kastina leading the pack. The flower can stay up to five years if well aerated and kept to avoid moisture.
A farmer harvesting the fresh hibiscus flower in gugindu village in Jigawa state www.businessday.ng
For beverage, medicine The extracts from hibiscus flowers and leaves have many uses and benefits, either medically or in industrial production. Its antihypertensive and food colouring properties have continued to attract the attention of food and beverage manufacturers and pharmaceutical industry for the commodity globally. Dry hibiscus flower, locally known as Zobo, can be processed into hot and cold herbal beverages, jellies and confectioneries, among others. The leaves are used extensively for animal fodder and fibre. Medical experts say consumption of Zobo made from the leaves aids detoxification. It helps reduce high blood pressure, cholesterol
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levels, as well as blood sugar levels. It also helps in darkening hair colour and slows aging as it contains anti-aging properties. It induces sleep and has antidepressant properties as well as helping in the treatment of flu. All these numerous health properties have made it one of the key raw materials in the global confectioneries industry. “My father takes hibiscus drink daily to control his blood pressure,” Bimbo Ademola, a buyer purchasing the flower at Ketu market in Lagos says. “The hibiscus flower has been working effectively on my father since he started drinking it. His blood pressure which was high is now normal,” Ademola says. Hibiscus tea is rich in antioxidants minerals and vitamin C and several studies have found that the tea lowers both systolic and diastolic blood pressure. The uses of the flower show the huge opportunity in the subsector for potential investors. With strong global population growth, particularly amongst children and young people, consumption of hibiscus products has been on the increase @Businessdayng
in recent years. Impacting communities Hibiscus production and processing is making big impacts in rural communities. Farmers growing hibiscus flower are now increasing their farming areas to grow more of the crop as demand continues to rise. This is positively impacting their livelihood. An example is the activities of AgroEknor – an agricultural commodity exporting business in its communities of operation.
AgroEknor has invested in farmers in Kano, Katsina and Jigawa states in the form of inputs while also serving as off-takers after the crop has been harvested. Also, the firm has its processing factory in Kano state where it is empowering over 60 women. These women are involved in the various segments across the processing value chain of the commodity. With little or no education, these women clean, sieve, sort and handpick stones, dirt and other foreign bodies from the
Women carrying out first stage cleaning of the dried flower
Strong FX potential Nigeria literarily seats on a hibiscus goldmine as the flower can be grown in virtually all the northern states of the country, according to the Institute of Agricultural Research (IAR) ABU Zaria. The Association of Hibiscus Flower Exporters of Nigeria (AHFEN) estimates the value of the country’s hibiscus industry to worth about $100million. According to AHFEN, hibiscus flower export holds great promise as an economy booster, especially in the era of diversification from oil. Victor Iyama, president of the Federation of Agricultural Commodities Association of Nigeria (FACAN) describes hibiscus as one of the most important crops to the Nigerian economy. “If we adequately harnessed the potential in hibiscus production, the country will boost its non-oil export because the market is huge” Iyama says. “Hibiscus flower farming is a business on the rise and the demand for it is increasing yearly. It can become a money spinner when we address some of the issues limiting Nigeria from fully harnessing its potential,” he says. Low research, awareness still persist Despite the high economic importance of hibiscus, especially it’s potential as a crop with high export value and medicinal properties little attention has been paid to the crop in the area of research for www.businessday.ng
improvement. The research institute mandated with the crop is yet to develop technology that will boost farmers’ productivity and tackle issues of pests and disease outbreak as well as enable the cultivation of the crop in other regions of the country. Many fungal and few bacterial diseases of hibiscus have been reported from various parts of the world including Nigeria. Farmers are still unable to handle the situation when their farmlands are invested by pests and diseases. Production of the crop in the country is still very low because farmers are yet to identify the potential in its production. “We have very few numbers of farmers growing the crop currently and this is because there is still low demand for it locally,” says Adedoyin Adesanya, director of operations, AgroEknor. Despite Nigeria being among the top producers of the crop, farmers have very little knowledge of the plant. Most of them cultivate it to barricade their farmlands. “Nigeria needs to educate farmers of the potential of cultivating the flower and the huge international market for the produce. With this information, lots of farmers will start growing the crop,” Adesanya adds. Standards Mexico is the most prominent destination for Nigerian hibiscus – account for 85percent of the exported crop from the country, but in 2015, it improved checks on Nigerian hibiscus exports, alleging adulteration. Since 2017 Mexico had enforced a ban on Nigeria’s hibiscus export owing to standards and quality issues. As a result, the country is losing billions of dollars it would have earned from Mexico since it was enforced. This further slowed the traction the crop was gaining in the country. “A lot of people go into the exporting of hibiscus without actually knowing the nutty gritty of the business and that is what is responsible for the Mexican ban,” Adesanya who was earlier quoted says. To address the issue of standards, experts say Nigeria needs to set up standard sanitary and phytosanitary labs, as well as increase processing to earn more foreign exchange through value adding. This is what AgroEknor is currently doing by ensuring that standards are met in the production of its product.
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Women putting the dried flowers into a sack
A fully packaged 1Kg retail size of the flower produced by AgroEknor for export
Women hand picking dirty from the dried hibiscus flower
A fully loaded 20 feet truck of hibiscus flower for export
As a result, the company has gained entrance into the United States. The experts also called for the training of farmers, empowering them with finance to produce in larger scale, and the opening of marketing and trade opportunities @Businessdayng
as well as supporting export. “It is needful that we training our farmers and empower them to boost production. AHFEN is currently ensuring that any exporter of the produce met up with the standards of the exporting country,” Lawal says.
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Tuesday 10 September 2019
BUSINESS DAY
EDUCATION
Weekly insight on current and future trends in education
Primary/Secondary
Higher
Human Capital
Why improved entrepreneurial education in varsities presents option for national growth KELECHI EWUZIE
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he harsh economic realities in the country today notwithstanding, Stakeholders in the education sector are still confident that proper orientation and entrepreneurial education is the best option to boost national growth. Educationists insist that deployment of entrepreneurship education across all levels in the education system remains the only strategic step to grow our national economy. They observed that youths represent over 70 percent of the population in the country and unemployment figures among this segment of the population poses a challenge to the development of the country if not tackled. Experts in a chat with BusinessDay, said re-orientating undergraduates on the need to seek entrepreneurial skills while in school would go a long way to setting in motion plans which would in no distant time, boost the economic situation of the country. Tolu Odugbemi, former vice chancellor, Ondo State University of Science and Technology, Okitipupa ad-
Thirteen beneficiaries of the 2019 Shell Petroleum Development Company Joint Venture, overseas postgraduate scholarship for host communities at the award ceremony held in Port Harcourt, Rivers State.
vised on the need for students to learn to employ a good time management technique in their studies, and to also hone their business potential while in school, so that when they graduate, they would be employers of labour rather than job seekers. Odugbemi pointed out that it is important for undergraduates to be determined and know the aspect of their study that would help enhance their
capabilities, while being smart enough to explore the opportunities of generating income around them. “There is, therefore, no gainsaying that the anticipated growth and development of the Nigerian economy will be a little more realistic if majority of the youth are equipped with entrepreneurial skills, which can help them to be self-reliant, after graduation”, Odugbemi said.
Youths battle for $100,000 prize money at 2020 global diamond challenge
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edPrime Hub and House of Diamond Community Initiative of the Horn Entrepreneurship/University of Delaware’s Diamond Challenge in United States have again launched its call for application for the interested schools in Nigeria for the 2020 edition. Offering $100,000 in awards, the Diamond Challenge provides a unique opportunity for teens around the globe to learn about entrepreneurship while putting their ideas into action. Created by University of Delaware Horn Entrepreneurship in 2012, the Diamond Challenge is backed by academic grounding in state-ofthe-art entrepreneurship education methodologies. While delivering her keynote briefings, Rachel Strauss, programme coordinator at the University of Delaware said students within 13-18 age range would have Pitch site events for the 2020 season in 7 states in US and other 21 countries including Nigeria to produce global semi-finalists at the Diamond
Challenge Summit holding at the University of Delaware, United States in April 2020. Speaking at the flag off in Nigeria, Odeogbola Ayodele, the Co-founder and the Global Partnership Lead for TedPrime Hub expressed his delight on the Diamond Challenge framework as one of the top initiatives that advance the strategy of improving young people of Nigeria and the rest of the world as global citizens “This is the era of globalisation and Diamond Challenge for schools globally has positioned itself to be a rallying point in the attainment of the United Nations Sustainable Development Goals 17 - Partnership for Sustainability and TedPrime Hub and Support Initiative is proud to be part or history again in Nigeria,” Ayodele said. On her part, Comfort Georgia Amanyi, programme manager, House of Diamond Community Initiative, expressed the expectations of the two organisations on presenting Nigerian youths at the world stage competition. www.businessday.ng
Amanyi described Diamond challenge as an impactful programme that encourages creativity, critical thinking and develops entrepreneurial tendency among teenagers in secondary school. She added that Diamond Challenge offers practical approach to entrepreneurship education in Nigeria and will put Nigerian teenagers in Secondary schools at the same pedestal with high school students in other parts of the world. “Diamond Challenge is a great complement to our Teen Entrepreneurship Programme (TEP) and we are super excited to be part of this great experience in the history of education” she said. Twenty finalists/Teams shall be shortlisted to attend the pitch event in both Ogun and Kaduna State where Nigeria’s teams for the two categories shall be selected to represent the country through a judging process at the 2020 Horn’s Entrepreneurship Summit in University of Delaware in United States.
Adeyomi Olumide, an entrepreneur told BusinessDay that entrepreneurship education should focus on developing understanding and capacity for pursuit of entrepreneurial behaviour, skills and attributes in widely different contexts. According to him, “Economics that embrace entrepreneurial skills in educational facets can be portrayed as open to all levels of development, and not
exclusively the domain of the high-flying, growth-seeking business person.” Olumide therefore, added that when incorporated into the educational system, entrepreneurial skills would provide benefits to society, even beyond their application to business activity. “Learn to manage your time well so as not to allow your training to suffer,” he advised.
Analysts disclosed that it is an empirical fact that there is high unemployment rate in the country today, adding that entrepreneurship skill garnered in school is a practical proof that graduates with skills don’t lack employment because they are trained to become entrepreneurs who employ others. They urge undergraduates hoping to build their careers in the any profession need to apply themselves diligently and become dedicated to it. On his part, Justus Okpara, an entrepreneur opines that it is one thing for us to want to give young people education, to turn them into professional, but we also need people who can be the conscience of the society, we need people who can share their creativity, their insights and enable us envision the kind of society we would like to live in. He called on government and corporate bodies to continue to support and encourage the teaching and practice of Entrepreneurship education among youths because in his words, “These people are our future and what they have expressed while still in school will showed how people would like to see the future of their country”.
Economic pressure heightens as schools resume Gbemi Faminu
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eptember marks the “Back-to-school” season in Nigeria. It is also a period accompanied by mounting pressure and expectations on parents, as it signifies the resumption of a new academic session after a long vacation from school activities. Ojo Babatunde, principal of Pyramid Schools, says “September marks a new season for every academia, this is also the period where schools can gather enough resources to improve and run through the session.” A report by Coronation Merchant Bank says, “Our macro-economic research suggests that upper middleclass earnings are falling in real terms and that there is downward pressure on private sector wages generally.” With low purchasing power, growing cost and a snailpaced economic recovery, parents are pooling various
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resources to fulfil their obligations, which include school fees and levies, new books among other things. Some resort to obtaining loans at unfavourable cost while others who own stocks may be forced to sell off their positions at a loss now that the Nigerian equity market is at its lows following inherent negative sentiments of investors. This is also the peak period for banks which offer loans for educational purposes like GTbank’s School Fees Advance, Stanbic IBTC’s school fees loan, JAIZ’s education finance, EdFin Microfinance bank among many others. Another report by the World Poverty Clock shows that Nigeria has 86.9 million citizens living in extreme poverty, reflective in the country’s economy as well as the citizen’s standard of living. Parents of returning students can still leverage on old relationships with schools to manage the condition of payments, parents of new-intakes @Businessdayng
into schools have little or no influence in managing the expected payments. Parents, who cannot meet up and do the necessary things required of them, might decide to withdraw their kids and take them to a school with less financial expectations to continue their education. Ijeoma Odey, a level 7 civil servant with a monthly income less than N100 thousand speaking to BusinessDay said “I have to send my son who is to resume senior secondary school to a government owned school as the required payments are becoming increasing outrageous.” Korede Olowu, a mid-level staff in a microfinance bank said “I have twins who are to resume secondary school in a bid to get quality education they are to attend a school where new intakes pay the sum of N65 thousand.” Olowu complained that despite having siblings who passed through the same school and class they are required to buy new sets of books directly from the school.
Tuesday 10 September 2019
BUSINESS DAY
23
EDUCATION How private sector is raising next generation of creative thinkers, writers KELECHI EWUZIE
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etermined to build next generation of leaders with critical thinking and creative writing skills, The Writers Corner, a Lagos based creative writing school for children in partnership with Vuvuzela Communications Limited, has announced the winners of the fourth rising star writing competition for primary and secondary school pupils in Nigeria. Uche Udoji, chief execu-
tive officer, Writers Corner says out of 655 entries received in 2019, 12 pupils emerged first, second and third positions in the primary and secondary categories of poetry and short stories, adding that another 12 entries emerged as honorary mentions. Udoji who is also the coordinator, Rising Star Writing Competition and Awards (RSWCA) sponsored by Greenlife Pharmaceuticals said 15 entries were disqualified for multiple entries, entries coming after deadline, lack of originality, submissions that reflected obvious
adult assistance and those which reflected a vague understanding of the theme, as well as submission with less than 200 and 500 words for the primary and secondary categories. The entries in the poem and short stories categories explored the theme ‘It’s Ok to Say No’, with a 200-word limit for primary school entries and 500-word limit for secondary school entries. Udoji while speaking to Journalists in Lagos to announce the results, said the competition was judged based on plot of the story, vocabulary, content, para-
graphing, presentation and descriptive character; length of work and flow of creativity, in both categories respectively, adding that the students were made to think deeply and write at length on reasons to say no and mean it. According to Udoji, “The theme was a well thought out and intentional move to inspire the children to have a voice as important individuals of the society and stand up for their rights at all times against issues pertaining to all forms of pressure and abuse. Amaka Nwosisi, head,
Human Resource and Public Relations, Greenlife Pharmaceutical Limited on her part, lauded the initiative, pointing out that by participating in the competition such as this, pupils will at an early age develop their literacy and creative writing skills which will further improve their knowledge of the subject matter. Nwosisi called for support to help pupils in government owned schools to fully participate in the competition. Giving a breakdown of the performance of pupils in the competition, Udoji
explained that some of the popular trends as seen from the entries include but not limited to bullying, sexual related and physical abuses, verbal and emotional abuses, drugs, alcohol and peer pressure. She observed that the competition has grown since it was flagged of on the 3rd of December, 2015, adding that it has become popular since inception as more schools and individuals have joined making the entries more competitive because more children are writing and striving to put all the writing devices to better use.
High entries recorded in Babcock varsity tackles power supply 2019 Maltina Teacher of the challenge, to reverse medical tourism Year competition …marks founders day KELECHI EWUZIE
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he submission of entries for the 2019 Maltina Teacher of the Year witnessed a104-percentage increase over the 2018 figures as entries were received from the 36 states of the federation including the Federal Capital Territory (FCT). The figures from the organisers show that a total number of 1,310 entries were received in 2019 as against the 641 entries received in 2018. This year’s entries are also the highest ever recorded by the initiative since its inception in 2015. Sade Morgan, director, Corporate Affairs, Nigerian Breweries Plc while speaking on the development, observes that this year’s performance is a substantial improvement in the level of participation by teachers across the country, which is a confirmation of the growing interest and acceptance of the initiative as a platform for rewarding the efforts and commitments of teachers in the country. Morgan says that as it has always been the practice, the entries were thoroughly scrutinised by the project assessors who pruned them down to 548 valid entries. According to Morgan, “All these valid entries will now be subjected tothe evaluation and assessment of our esteemed Panel of Judges who will determine the applicants to emerge as State Champions based on the set criteria”. “Once the state champions have been determined,
the 10 best entries from the pool of the state champions will be selected and invited for another round of assessment where the Jury will further subject them to rigorous scrutiny against established set criteria in order to determine who truly should be named the Maltina Teacher of the Year. On October 18th, 2019, the winners will be announced and celebrated at a grand event to be held at Eko Hotel & Suites, Victoria Island, Lagos”, Morgan said. The Maltina Teacher of the Year is an initiative of the Nigerian Breweries Plc-Felix Ohiwerei Education Trust Fund-conceived to recognize, celebrate and reward exceptional teachers for their outstanding contribution to the teaching profession in Nigeria. Like in previous editions, the winner of the 2019 Maltina Teacher of the Year is expected to go home with a cash prize worth N6.5 million a capacity training abroad while a block of classrooms will be built at the school where he or she teaches. She added that the first runnerup and the second runner-up for the competition will get a cash reward of N1m and N750,000 cash prize respectively while state champion , will receive a cash reward of N500,000 each. Since inception, the Maltina Teacher of the Year has produced four grand winners: Rose Nkemdilim Obi from Anambra State (2015), Imoh Essien from Akwa Ibom State (2016), Felix Ariguzo from Delta State (2017) and Olasunkanmi Opeifa from FCT (2018). www.businessday.ng
KELECHI EWUZIE
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a b c o c k U n i v e rsity, Ilishan Remo, Ogun State says it has tackled the issue of epileptic power supply on campus as it now runs it own independent power plant (IPP) which generates 4.5 megawatts of electricity and is committed to reverse medical tourism to India and other countries. Ademola Tayo, Vice Chancellor of the institution has said. Tayo stated this at a preevent press conference to announce activities for the 60th anniversary celebration of the establishment of the academic institution as a college, and 20th anniversary as Nigeria’s pioneer private university. He noted that the University spends an average of N80 million every month on power supply which he observes has ensure that the university community enjoy uninterrupted power supply. Tayo said Babcock University is also determined to contribute to seek ways to stem medical tourism adding that the institution had recorded over 95 per cent success in open heart surgeries and orthopedic treatment. “We have done over 300 successful open heart surgeries since 2015 when the Tristate Heart Centre started. We have a 95 per cent success rate. In orthopedic, we are doing total knee replacement surgery and spine surgery,” Tayo said.
L - R:Jermaine Sanwo-Olu, Senior Special Assistant on Diaspora and Foreign Relations to the Governor, Lagos State; Polly Alakija, Founder, Five Cowries Initiative; Taiwo Salaam, Permanent Secretary, Lagos State Ministry of Local Government and Community Affairs and Oluwadamilola Emmanuel, General Manager, Lagos State Waterways Authority (LASWA), at the London launch of the Five Cowries Initiative recently
Speaking on the founders day celebration of the school, Tayo said the university, established on September 17, 1959 as Adventist College of West Africa with only seven pioneer students, metamorphosed to Adventist Seminary of West Africa, and now a university with about 12,000 students enrolment and 19 halls of residence for the students. “After it was handed accreditation certificate in April 1999 alongside two others, the institution became the first private university in Nigeria to admit students on September 13, 1999 and graduated first set in June, 2003”, Tayo said. Apart from medicine, the University Don said Babcock
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was impacting the Nigerian society in many other ways, including through promoting food security, research, and others. He however lamented the multiple taxes the University has to pay to government, calling for a change given the institution’s role in providing education, which is a social service. The Babcock vice chancellor further advocated for relaxation of rules guiding the operations of Tertiary institutions, saying it would allow for creativity and innovation in the academia. Sunday Owolabi, chairman of the anniversary committee with the themed; “The Journey of Grace,” highlighted the activities lined up by the university to include; medical outreach to the host @Businessdayng
community of Ilishan-Remo and other neighbouring towns including Ikenne, Ilara. Owolabi stated the institution plans to hold an anniversary lecture to be delivered by its immediate past vice-chancellor, James Kayode-Makinde with service award for workers on the campus who have spent up to 35 years. “On September 17, which is the D-day, there will be in attendance eminent personalities including governors, philanthropists and supporters, where the vicechancellor would be tracing the journey so far and honour those deserving of awards for standing firmly with the institution,” Owolabi said.
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Tuesday 10 September 2019
BUSINESS DAY
Ageism at work is irksome and makes no business sense Older staff may be expensive, but outperform younger ones on almost every measure Pilita Ckark
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ave you seen this year’s global list of 60 top entrepreneurs over 60? What about the best novelists over 50? Or the winner of the old scientist award? No? That’s no surprise. These things scarcely exist. If you want to know about 30 entrepreneurs under 30, though, look no further than Forbes and its annual list of hot young trailblazers. For 40 under 40, go to Fortune. Lists of best young novelists have been around for more than 30 years. Prizes for young scientists are dished out by everyone from Google to the EU. There is nothing wrong with recognising youthful accomplishment. Young people shackled with explosive student debt and soaring rents in gig economies need all the help they can get. They should be inspired to achieve and their successes should be celebrated. But the same should apply to older people. For one thing, more of them
are expected to keep hobbling into work as generous company pensions fade and state retirement ages rise — along with life expectancy. On top of that, if the over-50s are not kept gainfully employed, the OECD reckons the number who will need to be supported by each worker could jump by about 40 per cent in rich countries between now and 2050. The effect on living standards and public finances would be grim. So it makes a lot of sense to dangle the odd bauble before this greying cohort and give it something to look forward to. It is often left to officialdom to make these offers and the results, I fear, are mixed. As a resident of London, I can look forward to a free bus pass once I turn 60, which is excellent. In places like my native Australia, turning 50 brings a far less cheering government birthday present: a free kit in the mail to test yourself for bowel cancer. Give me a mention on a Forbes entrepreneur list any day. I have to admit I had always thought entrepreneurship was a young person’s game. It isn’t. www.businessday.ng
Older people have been starting new businesses at a higher rate than those in their twenties and thirties in the US for years. And they tend to be more successful, even in the tech sector. A large US study showed last year that, among the fastestgrowing new tech companies, the average founder was 45 at the time the outfit was born. Runaway success was nearly twice as likely for a 50-year-old entrepreneur as a 30-year-old.
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Ageism is doubly irksome considering the state of today’s over60s
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Yet who gets a disproportionate slice of venture capital money? The young. This could be smart business: younger people are usually poorer so investors might favour them in the hope of getting a larger stake in their business. Or it could be that investors have been swayed by those Forbes lists and the myth of young founder genius. Put another way, they are ageist. It is only 12 years since Facebook’s chief executive, Mark Zuckerberg, told an event at Stanford University that “young people are just smarter”. He was 22 at the time, but still. Imagine replacing “young people” in that sentence with “white people” or “men”. Ageism is doubly irksome considering the state of today’s over-60s. They are better educated than their forebears and considerably more durable. A 65-year-old American today has the same risk of getting horribly ill or dying as someone in their mid-fifties a generation ago. Older workers may be more expensive, but experts say they outperform younger ones on @Businessdayng
almost every measure of job performance. They are more conscientious, less absent and have better social skills. They also stick around. The length of time American workers in the 55-64 age bracket stay with the same company is more than triple that of those aged from 25 to 34. So it is a mistake to think investing in the young will be repaid by longer tenure. Yet companies that crow about their commitment to diversity will happily reserve internal fellowships and other career-boosting opportunities for the young. Or plaster the career sections of their websites with photos of glossy youths that deliver an unmistakable message about the preferred age of employees. This needs to change. Finding ways to keep older people happily employed for longer helps everyone — not just those who have discovered that growing old is the one thing that, with luck, happens to us all.
Tuesday 10 September 2019
BUSINESS DAY
25
The skills learnt in hospitality MBAs travel across sectors With so many jobs requiring outstanding customer handling, graduates are in demand
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t Bellevue, a fine dining restaurant nestled in the mountains overlooking Lake Geneva, the clientele are enjoying the veal fillets, salmon and smoked trout ravioli and other delicacies. They are being attended to by students of the nearby hospitality management school Glion. Some of them are MBA students who are there to learn front-ofhouse and people-management skills. The Swiss pioneered formal education for the hotel and restaurant industry, setting up training institutions as far back as 1893. The aim then was to train staff to serve British aristocrats in luxury hotels while on the European Grand Tour. Today the growth opportunity for these schools is training students for a much broader range of service industries. Demand for staff who are adept at handling demanding customers and empathising with their needs under pressure is growing in most sectors. These “soft skills” often top employers’ list of requirements. Whether their staff are managing clients at a real estate business or running a team of coders at Google, employers want their employees to provide outstanding service. Half of Glion’s 14,000 alumni work in sectors other than hospitality. They have roles in finance, real estate and luxury goods, according to Georgette Davey, the school’s managing director. “Recruitment is a very important part of what we do for our students,” she says, adding that JPMorgan, Bloomberg and Cushman & Wakefield were among the biggest hirers of the
school’s graduating students last year. Inez Baranowska, a business development manager at American Express, became a management trainee at the Grand Hotel Kempinski after graduating from Glion’s fulltime MBA programme in 2011. From there she moved to a business development executive position at InterContinental Geneva before being headhunted by one of her clients, a senior executive at American Express. “I told her that I did not have a very strong knowledge of finance,” Ms Baranowska recalls. “She said that they can teach me about how to deal with figures but they cannot teach me the soft skills I had to offer.” She has just been headhunted again, this time by Citigroup, for a similar role to her current one at Amex. Opportunities to move in the financial services industry are plentiful because there are so many jobs demanding good interpersonal skills and so few people able to offer them, Ms Baranowska adds. Clotilde Fonteny, a trainee in the HR department at Richemont, the Swiss luxury goods group, came to study at Glion for a masters in international hospitality business administration and management, hoping to make a career in the hotel industry. However, her first job, at a luxury hotel in London, lasted just three weeks. She left the role, on the advice of Glion’s careers team, after suffering what she felt was harassment by more senior staff. “I thought, ‘oh my god, what have I done’,” Ms Fonteny recalls. However careers advisers at Glion then suggested she look at other sectors and Ms Fonteny, 24, then found her current www.businessday.ng
Inez Baranowska studied hospitality management but found her skills were an asset in the financial services industry
role where she was pleased to find that her people skills were highly prized. “When you are in HR you need to show empathy, just as you would in a hotel,” she says. Generalist masters degrees such as the MBA are a relatively new concept for the Swiss hospitality management schools. MBA accreditation body the European Foundation for Management Development (EFMD) has not yet bestowed its EQUIS quality mark on any Swiss hospitality management school, although Ecole hôtelière de Lausanne (EHL) is a member of the organisation. But the schools are increasingly seen as both a competitive threat and potential partner for leading MBA providers, according to Eric Cornuel, EFMD director-general and chief executive. “We see a hybridisation of management teaching with specialist MBA courses now provided for various sectors, such as healthcare and engineering,” he says. “Hospitality is a particularly good partner for business
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education because caring about others is at the centre of it, and these are skills all sorts of businesses are looking for.” EHL was the first hospitality school to create an executive MBA programme, launching the course in 2001. Two years ago it signed a partnership with Shanghai-based China Europe International Business School to create a joint Hospitality Executive MBA, which it launched in May last year. Only 15 per cent of the students on this course are from the hospitality sector. The attraction is the focus on customer service, applicable as much in banking as in hotel management, according to Achim Schmitt, associate dean of graduate programs at EHL. “Soft skills are part of the DNA of our teaching programmes because we have been preparing students to be good with people, even under pressure.” Another advantage of a school like EHL, which has more than 120 nationalities on its campus at any time, is the diversity of views students will experience. “Everybody wants to employ @Businessdayng
diverse workforces,” Mr Schmitt notes. “Here the students experience it from the first step they take into the building.” Former lawyer Saar Sharon completed an MBA at EHL in 2005, choosing the Swiss institution because he wanted to switch to a career in hotels. After graduation, however, the only hotel management job offered to him was a A$25,000 a year graduate trainee post for the Hyatt group in Australia. “I couldn’t afford it,” Mr Sharon says, noting that his wife was pregnant with their first child at the time. “I had to be a responsible adult.” Instead he accepted a corporate advisory role at the hotel industry division of real estate group Jones Lang LaSalle, about which he has no regrets. He notes that many hotels, particularly in the budget market, have been decreasing the amount of human interaction with guests with innovations such as the ability to check in and out of a room online. “The irony is that the industry seems now to have moved from being about service to providing a product,” he says.
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Tuesday 10 September 2019
BUSINESS DAY
property&lifestyle
Real estate outperforms 19 sectors to post worst growth in Q2’19 ENDURANCE OKAFOR
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he property market in Nigeria is back in the news for the wrong reasons with its performance in the second quarter of 2019 when it emerged the sector with the worst growth, posting 3.84 percent contraction within the period. A recent data from the National Bureau of Statistics (NBS) shows the sector displaced the Public Administration sector which reported contraction of 14.21 percent in the first quarter of 2019. It was slightly ahead of Public Administration sector by -0.45 percent in Q2 to rank the quarter’s worst performer as the latter contracted by 3.39 percent. “There is no liquidity in the market, no one is releasing money,” Tosin Ajose, Lead Advisor at DealHQ Partners, said, adding that it would take two to three years for the sector to fully recover. With a deficit of more than 17 million units, the Nigerian property market contributed 6.44 percent to real GDP in Q2 2019, higher than the 5.57 percent it recorded in the preceding quarter but lower than the corresponding quarter of 2018. However, the sector’s GDP
growth in Q2 2019 is –4.78 percentage points lower, compared to the 0.93 percent it reported in Q1 2019, but is higher than the -3.88 percent recorded in Q2 2018. “The poor performance is as a result of socio-political factors, coupled with the aftermath of the 2019 general election,” Ugochukwu Chime, the chairman of the National Real Estate Data Collation and Management Programme (NRE-DCMP) explained. Chime explained further, “many of the investments in Nigerian real estate industry are mainly by the elite and their stake in the sector was
down owing to their demand for liquid cash to run for the 2019 elections.” In the quarter under review, Nigerian economy expanded by 1.94 percent (year-on-year) in real terms compared to the second quarter of 2018, which recorded a growth of 1.50percent. The growth observed in Q2 2019 indicates an increase of 0.44 percentage points when compared to 2.01 percent in Q1. After contracting for 12 consecutive quarters, Nigerian real estate sector saw the break of dawn in Q1 2019, six quarters after the larger economy exited its 15-month
contraction. The growth recorded in Q1 2019 was the first positive value reported for the property market since Q1 2016 when the state funded bureau started collating the data. “The real estate sector is a laggard, but this is understandable. Not much progress can be made in this sector with a large portion of Nigeria’s population outside the housing market and mortgage still remains too expensive for many people to access and afford,” Adeniyi Akinlusi, CEO, Trustbond Mortgage explained. According to the Association of Housing Corpora-
tion of Nigeria (AHCN), an umbrella organization for all federal and state housing agencies, more than 90 percent of new homes that are built in the country funded from personal savings. A key culprit for the housing challenges in Nigeria is the mortgage rates. Typical mortgage interest rates in Nigeria range between 7-10 percent for Federal Mortgage Bank of Nigeria (FMBN) and between 15-25 percent for commercial mortgage institutions, making it one of the highest in the world. Nigeria has one of the world’s lowest mortgages to Gross Domestic Product (GDP) rate at 0.6 percent. This lags Ghana’s 2 percent, South Africa’s 30 percent and crawls after the U.S and UK rates of 60 percent and 70 percent respectively. “We are nowhere near the place where investments in real estate projects will surpasses or meet our growth projection, this is because the economy is not yet zooming, it is just there,”Chiedu Nweke, CEO of CZAR Project Limited told BusinessDay. In his projection, Chime said the real estate sector will remain flat in the third quarter of 2019. “But we are hopeful that, by fourth quarter, there will be uptick in the sector,” he assured.
Lagos in aggressive push to tackle housing demand-supply gap …delivers 492-unit Jakande Gardens, to deliver 1248 units more in 6months CHUKA UROKO
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orried by the high level of ‘homelessness’ and the wide gap between housing demand and supply, the new government in Lagos State with Babajide Sanwo-Olu as governor is pushing aggressively to close that gap keeps widening yearon-year in the state. Within the first 100 days of the new administration, the state government has invested time and resources in the completion of on-going housing projects in the state, leading to the completion of one of such projects—Alhaji Lateef Jakande Gardens, which was commissioned last week Wednesday. The housing estate, formerly known as Igando Gardens, is located in Igando area of the state, off LASU Road. It has 41 blocks comprising 1, 2 and 3-bedroom apartments, giving a total of 492 housing units. What this means is that 492 families will be taken off the state’s crowded housing market. At an average of six persons per family, comprising father, mother, four children and two dependants or
domestic servants, it means that 2,972 persons have been provided homes at the estate. Lagos with housing deficit estimated at 3million units has several on-going housing projects at various stages of construction and completion. These projects were, largely, aimed to serve the state’s homeownership mortgage scheme (LagosHOMS) set up in 2012 by Babatunde Fashola as governor. At the commissioning of the Lateef Jakande Gardens Igando, Sanwo-Olu assured Lagos residents that his administration would complete these on-going projects, emphasizing that in the next six months, about 1248 more housing units would be commissioned and given out to home seekers. “In the delivery of various housing projects across the state, government will be consistent and will embrace rigorous planning and financial discipline in ensuring that on–going housing projects are delivered on schedule. “It is the desire of this administration to ensure that every single family with an income below a certain level, provided they meet basic program requirements, benwww.businessday.ng
efit from the mass housing projects in the State; ‘we hope to be able to attain this level with your cooperation and support,”, the governor added. The Sanwo-Olu administration in Lagos has the vision and ambitious plan of transforming the state into a 21st Century economy, recognizing however the place of adequate housing in any thriving economy.
“There is need for government to address the issue of housing in the State,” the governor admitted, explaining that this understanding “informed the continued and significant investments in housing projects”. Earlier in his opening remarks, Moruf Akinderu-Fatai, the state commissioner for housing, had noted that building a 21st century economy
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had indeed begun touching the lives of Lagos people, building confidence and generating hope of a better future in the minds of all. The commissioner disclosed that the state government had started implementing policies that would make the environment more conducive for private sector participation and joint ventures investment in the provision of mass houses, especially in urban areas where the housing deficit was quite acute. “We hereby invite interested investors to come forward to collaborate with government in this regard,” the commissioner stated. For savvy investors, this invitation is quite compelling as investment opportunities in the state’s housing sector is huge. This is a state where the population is over 20 million; housing deficit is about 3 million and over 60 percent of its population lives in rented accommodation. This means that whether an investor is building to let or for sale, the demand is huge. But the government needs to actually walk its talk by making the environment enabling and friendly. @Businessdayng
Build quality in luxury devts earns Cavalli Group recognition at AFRECA CHUKA UROKO
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or its uncompromising quality in luxury developments in upscale locations, the Cavalli Business & Investment Group, the holding company for Deluxe Residences Limited and Global Property Partners (GPP), was recognized and awarded ‘Best Developer in Africa’ at the 2019 Africa Real Estate Conference and Awards (AFRECA) held in Lagos recently. AFRECA is an annual event organised by one of the biggest online property platforms, PropertPro.ng—a member of the To-Let Property Group. The event is designed to proffer solutions in real estate and to celebrate excellence among stakeholders by recognizing the best real estate projects across Africa. The theme of this year’s edition, which attracted many dignitaries and over 1500 international and local delegates, was ‘Bridging Investment Gaps in Africa’s Real Estate Markets for Sustainable Growth’. Cavalli Group emerged tops from among other leading names in the real estate development sector and the award is coming on the heels of the Group’s successful launch of its latest project- the iconic $10 million mixed use development called The Pacific Lagos Towers on Ozumba Mbadiwe Street, Victoria Island, Lagos Emmanuel Odemayowa, the CEO of Cavalli Group, noted that the award attested to the significant strides the companies under the group have made to help reduce Nigeria’s housing deficit through the various quality real estate developments they have undertaken over the years. “The Pacific Lagos represents a practical demonstration of the group’s commitment to ensuring that Nigerians are availed with luxury real estate that compares favourably with similar developments in the advanced economies,” Odemayowa noted, assuring that the AFRECA Award would spur the group to greater heights of achievement. Apart from The Pacific Lagos, the Cavalli Group has successfully developed and completed many real estate projects in Nigeria, all done according to their very exacting standards. Deluxe Residences, particularly, has been at the forefront of developing luxury apartments, high-rise residential developments and terraces in Lagos, with many projects successfully completed and delivered to their various clients. Among these projects completed by Deluxe Residences are The Orchard in Oniru and Lekki axis, Grand Orchard in Oniru, Avant Apartments in Ikoyi, The Vogue Apartments in Oniru and Pacific Heights in Oniru.
Tuesday 10 September 2019
BUSINESS DAY
27
property&lifestyle Why VI remains compelling destination for investors, home buyers CHUKA UROKO
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espite the rise and rise of what has come to be known as ‘new urbanism’ that has seen the emergence of urban communities such as Eko Atlantic City, Gracefield Island, Orange Island, among others, Victoria Island (VI) remains a compelling destination for investors and home buyers in Lagos. This is an affluent island that comprises a former island of the same name that sits between Lekki Peninsular and Lagos Island and the Lagos Lagoon. It is one of the areas under the Eti-Osa Local Government Area of Lagos. Like other areas on the Island, it is surrounded by water, mainly the Atlantic Ocean and the Lagos Lagoon. It is that part of Lagos state that has distinguished itself as a business hub yet maintaining its conduciveness as a residential area. A major reason for VI being a compelling destination is its location. This is a major consideration for investors because the value of a property is highly influenced by its location. Investment experts are of the view that owning
a property in Victoria Island is one of the most valuable investments to make. According to them, owning land on the Island connotes a certain sense of luxury as the purchase value is often very high which is great news for savvy investors. Investors are always looking for areas where property value is appreciating fast. This is part of the strengths and opportunities that Victoria Island market offers. Udo Okonjo, CEO, Fine and Country West Africa, notes that the migration of the high net-worth individuals to Lagos Island has further increased its value, creating a competitive market. Okonjo, whose company is a leading real estate marketing, leasing and advisory firm, added that real estate in Victoria Island offers an investor the opportunity to get significant returns on his investment. “This is possible because VI is in a strategic location and Lagos Island is always experiencing new developments such as new infrastructure, roads, social amenities and many more,” she explained. She advises investors not to be discouraged by the present economic downturn, espe-
cially as it affects real estate which slipped into negative growth territory once again in the second quarter of this year after existing a three-year recession that started in the first quarter of 2016. This advice becomes more instructive considering that in all ages and economic cycles, real estate remains an investment destination where investors will always get value and return on investment, especially if the investment is done in the right place at the right time and for the right reason.
Caring for, regaining newness in leather furniture Temitayo Ayetoto
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urchasing a new set of leather furniture can be exciting, both in the awe of the radiance and the princely feel of comfort stirred by the classy piece of furniture. But the enthusiasm from that sparkling body of leather is often difficult to sustain as many users struggle to refresh the shine after constant use. Experts in furniture making say leather furniture pieces require routine cleaning exercise at least once in three months. This is to save the furniture from falling into quicker aging and faster rate of damage. According to Bedmate Furniture, one of the big players in furniture industry in Nigeria, there are certain tools to get the job done such as a cotton swab, water, alcohol, leather cream, clean cotton cloth and
saddle soap – a soap specifically made for leather materials. Some leather upholstery usually come with a label that specifies the type of material to be used, some recommend solvent or water-based detergent. Other warnings on furniture might state that neither water nor detergent be applied on the surface except professional cleaning. “The truth is, to keep your leather furniture looking radiant for many years, maintenance and prevention should be held in high esteem. If these are not considered, soon there will be cracks and brittles on our beautiful leather pieces. Well, with careful cleaning and conditioning, leather furniture can be brought back to life,” Bedmate officials said. The procedure for remaining mild stain such as dust accumulation should start with dampening a cotton
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cloth in warm soapy water before cleaning the leather furniture carefully. This can be done once in two weeks. But for stains that form a permanent dent and are stubborn to soap and water, alcohol and cotton swab are prescribed. With the cotton swab damp with alcohol, gently wipe the affected area. After wiping, it is important you allow it to dry up the fluid with a clean, dry cloth, before treating it to a conditioner for complete dryness. The furniture maker also advises that leather cream formulations are good applications to protect and nourish the leather. They prevent discoloration and cracks of leather, providing protection to repel water-based stains so that they don’t penetrate the leather. Leather cream can be applied using a clean cloth to wipe the furniture all through.
Bonds, treasury bills, equities, mutual funds, etc are all good investment asset classes but cannot compare favourably with real estate in terms of reliability, flexibility of use and potential for value appreciation over time. Good yield on any investment is very important because it compensates for the investor’s time, efforts and the sacrifice in terms of forgone alternatives to the investment. This is why where to invest and get good yield is critical and this is when VI comes to mind. The National Bureau of
Statistics (NBS) noted some time ago that Lagos records the highest amount of real estate activities at 37 percent followed by Abuja with 22 percent and Rivers state with 6 percent, covering 65 percent of all real estate activities in Nigeria. The Lagos real estate market is distinctively segment into low, middle and high end. Demand is very weak at the low end market because this is where low income earners look for housing. At the midend market, demand is relatively strong, but very strong
at the high end market. Ikoyi, Victoria Island and Lekki, the three island locations, constitute the core of high end submarkets. But to invest wisely and profitably in these locations, an analysis of each location’s strengths, weaknesses, opportunities and threats (SWOT) should be done. In Victoria Island, the strengths are in its excellent location, ease of obtaining approvals for development based on precedent, high rents and return on investments (ROI) based on demand, and a wide mix of support service companies. The weaknesses include poor parking, traffic congestion, lack of supporting infrastructure, high cost of land and approvals, building would be restricted to high rise apartment to enable maximisation of land, and available land for residential development within this axis is extremely small The opportunities in this location include lack of good quality residential and commercial space and demand for this is high; there is also opportunity for corporate entities and individuals to own properties close to their offices.
FG assures on roads infrastructure, deploys Sukuk, other funds for projects
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he Federal Government (FG) of Nigeria has assured of its commitment to ensuring improved roads infrastructure, adding that it is determined to make all geopolitical zones of the country part of the ongoing roads networking project. Funsho Adebiyi, Director, Highways, South West, Federal Ministry of Works and Housing, who gave this assurance in Ibadan, Oyo State capital, also disclosed that funds from the Sukuk bond and other funds have been made available and shared for road projects across the six geo-political zones. Adebiyi who was in Ibadan on inspection tour of federal roads across the South West states, debunked claims that the federal government was paying more attention to roads in the Northern region than the Southern states. “National road projects are spread out based on reports and the status of the road network; therefore it’s impossible for any zone to be left out,” he said, pointing out, however, that differences in topography, soil condition and other things in the North and South are giving people the impression that government is constructing more roads in the Northern zone.
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Funsho Adebiyi, Director, Highways, South West, Federal Ministry of Works and Housing, flanked by other officials during roads inspection and commissioning recently.
“For example, the budget for 100 kilometers road in places like Borno or Kastina will not complete 10 or 15 kilometers in Bayelsa state,” he said, adding that every state in the southwest presently has felt the presence of the federal government regarding road construction and rehabilitation. Among ongoing road projects are Lagos -Ibadan sections I and II, handled by Julius Berger Construction Company and Reynolds Construction Company (RCC), respectively. Others are the new Oyo Ogbomosho road dualisation, being handled by RCC, and the Ogbomosho -Oko-Osogbo road, being handled by Dutum Construction Company. “We also have the Ila Orangun -Ora-Ilale Ekan Meje road; Efon Alaaye Erinmo Iwaraja @Businessdayng
road; Ibadan -Abeokuta road, handled by Kopek Construction Company, and the Shagamu Ore road, handled by RCC,” Adebiyi added, saying, “I am impressed with the level of work done on the inspected roads and I guarantee that they will stand the test of time.” Commenting on the Lagos -Ibadan Expressway, Adebiyi said that government had set aside a dedicated fund that would finish the ongoing construction work and there would no longer be any delay. He advised road users to obey traffic laws and regulations, saying overloading and other traffic offences reduce the lifespan of roads. He also warned residents of communities along roads to desist from drying farm products on such roads.
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Tuesday 10 September 2019
BUSINESS DAY
INTERVIEW
‘Our vision at Onewildcard has been to leverage talents and craft to solve problems’ Kayode Olowu is the founder and creative director of design and branding firm Onewildcard; here he speaks on his challenges and motivations as he pushes the boundaries of design to lead the marketing communications company beyond the frontiers of IMC in Nigeria. Excerpts:
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s the CEO of OneWildCard, could you tell us how the agency started; and what you were doing before then? OneWildCard started as a thought in my head while working at my desk in 2015. I had just finished my portfolio school at Miami Ad School in Hamburg and was newly employed as a creative by Jung v Matt in Germany as well. It was somewhat a crossroad for me because this was a dream job offer from Germany’s biggest advertising agency right after school and me looking back at where I left in Lagos. So I decided to use my time at JvM to immerse myself as much as possible into what’s possible and the quality of work there. Onewildcard began to take shape when after two years in JvM, I decided to move back to Nigeria. It was a huge risk because it meant I was starting over from scratch. This was what in part, informed the name Onewildcard. A wild card in sports simply refers to something or someone not meant to be in the competition but was given a chance at the last minute. I used the advantage I had as a creative to craft the identity myself and envision what the agency is going to become. The idea of Onewildcard is to give clients an “unfair” advantage; could you speak a bit more to that advantage? Yes. Part of our mission at Onewildcard is to give every brand or person we work with an unfair advantage. It’s like you going to an arm-wrestling match with extra power stored somewhere or being in a car race and getting nitro; that extra boost you need to win the race, that is Onewildcard. This is what we bring on board for every brand we work with. We help them solve creative and communication challenges as regards their brand combining cultural nuances, intuition and technology to help them get ahead in spaces where they naturally wouldn’t if they don’t have us on their side. That’s the unfair advantage we bring to the table and sure we do this applying global best practice in everything we work on. With over 14 years experience of working with indigenous and global brands, could you tell us some of the challenges yourself and your company, have faced so far? Well, challenges for myself and the company include the inadequacy of infrastructure needed to propel you to do much more. At the initial stage it was a challenge to get people who are right fit with our culture but we realised in the midst of all the rubble, if you look deep and wide enough, you’ll find the gems you need. The other challenges of course range from the regulars; cost of operation and all of that. Everyday survival in the country in itself has a huge effect on the business and you see this in the kind of demands or response you get from clients when you present ideas to them. The best of ideas can turn into crap when there’s too much “but” , “only if”. This is a hurdle we need to cross all the time especially as a brand pushing for the best level of craft or delivery. You are an art director, graphic designer, conceptual creative, ux designer and many more; are all this self taught? No, not all were self-taught. A good number of them were, but the creative thinking itself is something I’ve always done right from child-
Kayode Olowu
hood. I remember as at age four or five, I used to arrange numbers according to genders I’ve ascribed to them. The curvier ones like 8 were females and ones with more lines like number four were males, sorry sort of synesthesia and this has helped me a great deal. I learnt a lot working with others, during my studies and internships. There was a time I interned at a printing press at Shomolu and that experience formed a very solid base for my graphic design skills because I was right there where I could see the result of my input as a graphic designer from the computer end at the print end after production. I could directly see whether what I created was good or bad. And as I mentioned earlier, I spent two years in Miami Ad school, one of the best portfolio schools you can attend. During my time there I had the opportunity of working and learning from the best minds in the business. We had top level professionals as teachers, Pete Sergent, Global Design Director for BAT took us through brand design, Segey Sidorov, Ina and Christian Behrendt. So while some of my skills are self-taught, I’ve had the opportunity to learn from the best hands in the game. How did you manage to balance and master all this trades while building yourself and your career? Well, you’ll recall I said I’m an old soul. I find myself going in for the long term so I’m not in a hurry. The bigger picture is quite important so I take the time to savour the journey, paying attention to the twists and turns and that’s it for me. The most important thing for me is to find the right mix to paint the picture in my head and this has always worked for me. You began leading Onewildcard in April 2017, what would you say is your vision for the creative agency? The vision has always been to be that agency known to use its craft to solve problems. Like a popular quote, ’everything can www.businessday.ng
be designed’. So, you can design failure or success. At Onewildcard we believe every design has a purpose. Designs are crafted not just because they’re beautiful but as base-line to deliver value to our clients. For them we strive to create visually pleasing designs that are also beneficial to their bottom-line. In Marketing Communications, there’s the creative side, and there’s the business side. Which is the most important element; and how do you merge the two? For me there’s no most important side really. I see it as an equalizer. If you’re listening to music and you’re listening to a song that requires extra bass then you adjust the equalizer to enjoy the song to the fullest. Same for when it’s treble that’s required. There are times when your creativity is more important because you need to add value with your expertise but while doing that you’re mindful of the business side of things. The best is for you to look at the context and what takes precedence at that point in time. You just need to keep equalizing to ensure you have the perfect sound to enjoy what you’re listening to. And when it comes to business, what you’re listening to is the numbers. Everybody loves to listen to profit. From interning to being the head of design down to being a CEO, you’ve played about every design role, how have you managed to achieve this? This is possible because I’ve always loved to play the long term game. I had my first degree in Microbiology at the University of Ibadan. While I was in Ibadan, I loved visual designs and when I left, I went to intern at Olucouger Prints in Shomolu which I mentioned earlier. This gave me an opportunity to learn from scratch and working closely with the boss, Alhaji Olukoga also afforded
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me the opportunity to have a glimpse of what it is like to run a business. Thereafter, I went into partnership with some friends I met while in school to start a business. All these were learning processes in preparation for the future and together with the myriad of experiences I’ve had over the years have made me who I am today. What or who would you say has been your biggest motivation? My biggest motivation is definitely failure. The mere thought of failing in itself gives me the push to put in my all at every point in time. Once I dive into anything the question I ask is ‘are you ready to fail?’ the answer, of course, is no. So I put in all I can to make sure whatever it is I’m doing come out successful and this has worked for me over and over again. Does this mean I win all the time? No. What I do is take that process as a learning experience, and I can only go up from there. Were there moments when you felt like throwing in the towel and how did you come out of those periods? Definitely. There have been moments I’ve thought ‘okay what have I got myself into’. What I do at that point is that I try to take solace in this saying that out of every hardship comes succour. When I look at the challenges of running a business in Nigeria; electricity costs, levies and taxes, I ask myself what exactly I was thinking when I started this.But on the flipside, there are moments of successes, when at the other side of the table clients are nodding to your ideas or sending you messages appreciating the value you’ve brought to the business. These are part of what keeps me going. Sometimes too, I think of where we were coming from, from practically nothing, to where we are now. Does this mean we’ve gotten to where we’re going? Definitely not but it pushes us to do more because it’s evidence that there’s much more to be achieved that what has been. You’re an award winning creative; do you have any words for coming creatives like yourself? I’m not going to answer this to sound like a veteran. Well, to anyone out there who needs this, whatever it is you’re on to, be sure there’s someone on the other side of the world who’s willing to pay the right price for it. Just keep pushing. If what you have to offer today is only getting you peanuts, not necessarily monetary, be sure that if you keep putting in that extra effort you’re definitely getting something out of it. I always give this analogy to my team; at some point in your career it’ll be like working in a mine. You have some guys who go hundreds of feet into the ground, digging out all they could and then bringing back up the rubble and they tell you “go back down again, bring out the rubble”. Meanwhile there’s some dude on the surface who’s just looking through all the rubble that has been brought out, picking out bits and things that he or she has identified as value. With time you realise even if you go back down there to dig, you’re not just going to dig rubble because they told you to. Now you have eyes for what really matters. This takes some time and this is scarce these days but hey, does this mean we don’t have those who put in the extra effort? we do. To those guys, I say keep at it. Go all in, take a bet on yourself.
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BUSINESS DAY
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Nigerian Fintechs: Quick and effective but can they be trusted? AHMED KOLAWOLE
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gochukwu Festus, a businessman at the popular computer village in Lagos was in dire need of cash to clear his newly arrived goods (gadgets and electronics) at the Apapa Port. He was well aware of what delay means and of course, he knew he could not approach his bank for a quick N2,000,000 loan. A friend, who had seen one of the adverts of the digital loan startups advised Festus to approach one of them saying that he would receive the loan between 24 to 48 hours. Armed with all the required documents and confident that he would get the loan as his friend had said, he visited the RenMoney office at Surulere, a highbrow area of the city to apply. Fortunately for Festus, the ‘system did not reject his application’ having overheard that some people’s applications were rejected by the system without any tangible explanations. The service was quick and effective. This is what most fintechs are known for. However, there are still trust concerns surrounding them. Error! Filename not specified. Before going further, let’s identify some fintech companies by sectors: 1.) Payment/Transfer: Paystack, Flutterwave, Wallet.ng, Quickteller, Paga, Teamapt, Cellulant, Jumia Pay and Quickteller 2.) Savings/Investment: PiggyVest, Cow-
rywise, Kolopay and PayDay Investor 3.) Lending: Mines, Lidya, Carbon, Branch, KiaKia, RenMoney and Paymyrent.ng 4.) Insurance: Health Management Organisations and Agric insurance startups among others. Some of the aforementioned functions including payment/transfer, savings/ investment, insurance and lending were unquestionably and exclusively reserved for the banks. These functions are now fully shared by different fintech companies entering Nigeria’s financial space. The disruption in the financial services industry is crucial to ensure that unique & innovative financial products are introduced to guarantee quick rendering of
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financial services without compromising laid down procedures and to enable Nigeria to reach the 60 million financially excluded Nigerians by 2020. This is the target the Central Bank of Nigeria has set for itself. Banks are not sitting back... Innovate or die. This is one of the popular lines you will hear in today’s tech world. It is either a business continues innovating or dies a natural death. Nigerian banks do not want to ‘die’. Many of them have evolved and are literally pushing back with their own financial products and services. A bank like Guaranty Trust Bank now offers quick
credit and salary advance to customers while Wema Bank has Alat, a fully digital bank with an app which you can use to save. Interestingly, many of the fintechs have partnered with these banks. For example, your PiggyVest or Cowrywise savings are kept in the account of these companies with the banks. This makes it possible for anyone to withdraw their monies and save. Customers desire quick and effective services but want to ‘trust’ the Fintechs. After affordability, the next thing that a Nigerian customer is concerned about a company is how quick and effective their services are. The Nigerian customer is impatient.
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Regardless, when it comes to their hard-earned finances, what is always at the back of their minds are two words: trust and reliability. They ask questions like-Is my money safe with them? Are they reliable? For these two reasons, some Nigerians won’t transact with these fintechs. These group of Nigerians prefer to perform bank transactions using their bank’s USSD, bank app, online banking or other allied services associated with their bank or banks. They just do not trust the fintechs from their ownership down to their mode of operations. This is not a question of whether you belong to Generation Z or not.
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How can fintechs become more trusted by Nigerians? The aim of many of the major fintech companies is becoming a bank. But the question is can a customer leave their N1 million savings in their wallet without having to worry? This may be possible but there is still a question of trust. Nigerian fintechs have been known to be effective and quick. Nevertheless, they need to start preaching the trust narrative in their services and campaigns. Not because they want to preach but because they actually are trustworthy and reliable. The Central Bank of Nigeria seeing that fintech firms are being embraced by Nigerians said in a draft policy document in 2018 that fintech startups must have minimum shareholder funds ranging from $275,000 to $14 million before obtaining licenses for their operations. The CBN says these funds will help sanitise the sector. This may or may not invest trust in the system but it will definitely ensure that only serious players enter Nigeria’s fintech sectors. The fintechs are currently having a rollercoaster ride and hopefully, they will embed trust in their mode of operation and ensure that they get Nigerians not only in the urban areas but also in the hinterlands to trust their products & services without having any iota of doubt. Ahmed Kolawole is a financial advisor at PayTech
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Understanding the role of technology in promoting inclusive growth in Africa JUMOKE AKIYODE-LAWANSON
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s the world continues to become more digital, building an inclusive world in which the digital economy works for everyone, everywhere, is crucial. A recent research collaboration between the Mastercard Center for Inclusive Growth and The Fletcher School at Tufts University highlights the strengths and opportunities of six major countries in Africa for harnessing the true potential of technology to drive inclusive growth. With financial support from the Mastercard Impact Fund, the African Leapfrog Index (ALI) – which was launched during the World Economic Forum (WEF) on Africa – uses Egypt, Ethiopia, Kenya, Nigeria, Rwanda, and South Africa as examples to provide insights on key drivers that could accelerate digital inclusion across the continent. The ultimate aim of the report is to help countries across Africa optimize their burgeoning digital evolutions, in order to accelerate economic development. The countries were selected based on their size, economic growth, the median age of residents, quality of governance, and digital momentum. There are many reasons to be optimistic about the transformational potential of digitalization in Africa. According to the ALI, Kenya, for example, has seen the greatest amount of digital change over the past decade of all African countries studied, and currently has over 80 percent internet penetration. Going forward, the country’s
L-R: John Mark Ossai; vice president sales , Semilore Adeosun; client support head, Abraham Tanta; founder and executive chairman and Samuel Oko Igwe; chief executive officer, TantaSecure Limited, at the formal launch of the company’s mobile device and electronic protection platform, held at the company’s head office in Lagos on Thursday 5, September 2019.
potential to leapfrog will benefit from leveraging this digital change to nurture jobs in the digital economy, such as online freelance, ridesharing, and in ecommerce. With nearly 50 million people added to the labour force in the next few years, most of whom will fall somewhere on a spectrum between digitally sentient and digitally sophisticated, the digital economy is poised to be not just the driver of consumption but also of livelihoods. South Africa, in particular, has been highlighted in the research for its ease to create highly skilled digital jobs, primarily driven by strong consumer demand and an institutional environment with friendly regulations. Expanding the integration and use of digital technologies across all segments of society, particularly to those who sit at the lower end of the pyramid, will help the country tap into the
full potential of this environment. Raghav Prasad, divisional president, Sub-Saharan Africa, Mastercard said; “Digitization has the greatest potential to overcome infrastructure barriers to accelerate inclusive economic growth across multiple sectors of the economy. Independent research like the African Leapfrog Index equips policymakers and community leaders with data-driven insights to inform economic development; and it can help other key stakeholders across all sectors better understand the opportunity for – and pathways to – digital inclusion on the continent.” The six countries were examined against three primary variables for harnessing digital technologies to facilitate development and inclusive growth. These variables are “Ease of Creating Digital Jobs,” “Resilience of Governance and Infrastructure” and “Foundational
Digital Potential.” Speaking on the findings of the research, Bhaskar Chakravorti, Dean of Global Business at The Fletcher School at Tufts University said, “The ALI is intended to help countries and stakeholders in Africa recognise where the potential for technology-led leapfrogging is high. This means acknowledging the strengths of each country and which policy areas are prime candidates for intervention to enable stakeholders to prioritise resources appropriately.” Other highlights include: · Leveraging its strengths in governance, digital evolution and mobile money, Rwanda has the potential to benefit from investments in infrastructure, greater internet penetration and online freedoms. · With the largest population of all six countries, Nigeria has a major opportunity to leapfrog through improving the reliability of basic infrastructure. Continuing to invest in reducing power outages and other unintentional disruptions to the internet will be key to Nigeria’s growth potential. · One of Egypt’s primary strengths lies in the ease of creating medium- and high-skilled digital jobs. Continuing to further efforts to drive digital payments and limit the usage of cash will significantly help drive digitalization. · Ethiopia has the potential for greatest digital gain from creating strong digital foundations, improving on its low momentum and moving away from its near-total reliance on cash payments, towards digital payment rails.
Tecno ushers in new cam-era with release of Camon 12 series JUMOKE AKIYODE-LAWANSON
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opular smartphone company, Tecno mobile has launched a new mobile device under its camera-centric flagship, the Camon series. The new Tecno Camon 12 device, is a testament of the brand’s improvement and development of smartphone photography, as it comes with a number of enhanced features. The Camon 12 smartphone which was launched alongside the Camon 12 pro and air devices at an event in Lagos recently, spots a lot of upgraded features, one of which is the inclusion of an Artificial Intelligent (AI) triple camera as against the dual rear-camera spotted on the Camon 11 Series, which was launched last year. Speaking at the launch event, Jesse Oguntimehin, public relations and strategic partnership manager, Tecno mobile said;
“The Camon 12 is more than just any device, it is the device that comes with a lot of physical and inbuilt upgrades from the Camon 11 launched last year, ranging from its look and feel, to its camera, to its security feature upgrade, the brand has it all covered.” He further stated that; “This is the 7th generation of the Camon Series and with this device, we are unlocking a new era of smartphone photography. This time around, we at Tecno have worked round the clock to make it possible for our users, to see the world through our device.” The Camon 12 Pro gives users more in terms of smartphone photography with its 32 MP and dual front flash, which solves the problem of lowlight selfies. The device also comes with an upgraded beauty mode, which has an advanced 3D stereoscopic facial beauty to make your selfie perfect. The beauty www.businessday.ng
mode also expands its scope to body beauty and video beauty. Far from the usual Selfie DNA of the Camon Series, the Camon 12 spots an AI triple rear camera set of 16MP+2MP+8MP, which is a total upgrade from last year’s Camon 11 experience. Users can now enjoy, up to 120° super wide-angle shots and 2cm extreme macro photography experience, making it possible for the camera’s output to capture the littlest of details when taking pictures with the device’s camera. Other features include Bluetooth 5.0 which makes connecting one device to another easier and transferring files faster; 4G LTE capacity for smooth high-speed browsing; and a sizeable 3,500mAh Battery. The new device comes in three size variants the CAMON 12 with a 64GB ROM+ 4GB RAM (16 MP selfie camera), the CAMON 12 Pro with
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a 64GB ROM + 6GB RAM (32 MP selfie camera), the CAMON 12 Air with a 32GB ROM + 3GB RAM (8 MP selfie camera). The Camon 12 Series is powered by MediaTek’s Helio P22 chipset which makes possible smart AI imaging, AI camera, reliable connectivity and power efficiency—with all the power packed in the Camon 12 Series, it won’t get hot while performing powerful functions. Tecno also revealed that the Camon 12 is currently selling at a retail price of N47,500 while the Camon 12 Air and Camon 12 Pro will be available in the market soon. Attai Oguche, deputy marketing manager, Tecno, who announced an ongoing promotion said; “every consumer who purchases the Tecno Camon 12 series will have a chance to win a trip to Europe as they will be given a raffle ticket once they make a purchase. @Businessdayng
Tech firm seeks to address dearth of trusted mobile device technicians JUMOKE AKIYODE-LAWANSON
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antaSecure Limited an indigenous device protection and Information Technology (IT) company has officially launched its flagship device protection platform, introducing its corporate and individual plans. The company which seeks to give extended warranty services to its customers, offer protection for mobile devices, as well as other electronic appliances, has so far been able to successfully resolve 53 damage/repair issues since the introduction of the device protection solution a few months ago. Speaking to journalists at the formal launch, Semilore Adeosun, director of marketing, TantaSecure Limited said; “We know that the things you protect are more than just things—they’re valuable parts of your life. We also understand that accidents and malfunctions aren’t your fault. That’s why we promise to make filing a claim easier, get it fixed or replaced fast, and help get your life back to normal with as little hassle as possible. We have designed these products with individuals and corporate organisations in mind. We are trying as much as possible to reduce the burden of maintaining, repairing and sourcing for original parts on Nigerians.” Also speaking, Abraham Tanta, chairman and founder of TantaSecure said that the service protects all devices, appliances, electronics and gadgets of various makes and models no matter where or when they were purchased as long as they are in good working condition with a proof of purchase. Addressing the issue of a lack of trusted technicians, Tanta said; “We have been able to put together a network of technicians, experts in different fields and areas of specialties. These technicians are certified and vetted, so you can be rest assured your safety is of importance to us if we invite a technician to come to you.” “We train our technicians to go extremely into detail on every component in any device and to make sure that everything is 100 percent perfect, so that you don’t have a reason to bring your device back to us for repairs.” He added. Tanta also stated that the company has forged partnerships with original equipment manufacturers (OEMs) to enable it perform a complete replacement of faulty components and not just a repair using industry grade components at cheaper rates compared to market prices. With a mobile app available on Google play store, TantaSecure currently covers Lagos with packages that also cater to students with as low as a thousand naira and packages for the family at discounted rates. TantaSecure Limited is a sister company to Tanta Innovative Limited, a custom software development and IT consulting company with 10 years experience and operations in Lagos Nigeria.
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Century Energy in $40m FPSO deal to develop oilfield STEPHEN ONYEKWELU
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entury Energy Services, a Nigerian oil and gas service company has struck a $40 million deal with Kuala Lumpur-based Bumi Armada for a floating production, storage and offloading vessel. In a filing with Bursa Malaysia, Bumi Armada said its wholly-owned subsidiary Armada Oyo Ltd (AOL) has entered into an agreement with Century Energy Services Ltd (CESL) for the sale of Armada Perdana FPSO. Century Energy plans to redeploy the FPSO to another field in Nigeria. TheArmadaPerdanaFPSOwasinitially operated on the Oyo field in Nigeria. Since its previous charterer, Erin Petroleum, and its parent company Erin Energy Corporation, filed for bankruptcy under Chapter 11 of the US Bankruptcy Code in April 2018, the FPSO has been out of contract in Nigeria. According to people with knowledge of the deal, the purchase price comprises a deposit of $5.5 million to be paid by Century Energy to Bumi’s subsidiary Armada Oyo. Of this amount, $4.5 million of this has already been paid with the remaining $1 million payable before the end of 2019. A further $11.6 million
will be used to settle amounts owing. Bumi said $5 million on or before the earlier of six months after the vessel is delivered to Century Energy or when oil is first produced from the field to which the vessel is redeployed. The remaining balance of $17.9 million will be paid within two years of first oil. To secure the unpaid portion of the purchase price, Bumi will hold a mortgage over the Armada Perdana.
MARKET
Axxela’s credit rating improves on better financial position – Agusto & Co ISAAC ANYAOGU
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igerian ratings agency Agusto & Co has upgraded the corporate credit ratings of oil and gas firm Axxela Limited from “Bbb” to “Bbb+” with a Positive Outlook, indicating that the company has improved its ability to settle debt obligations. “This rating upgrade reflects Axxela’s financial and operational stability particularly as we expand our footprints across Nigeria and West Africa,” said Timothy Ononiwu, the Chief Financial Officer of Axxela Limited. Axxela which was fully acquired in April by Helios Investment Partners, a private equity firm focused on investments in Africa, after Oando fully divested from it, is building a $30 million gas pipeline network in parts of Lagos through its subsidiary, Gaslink in partnership with the Nigerian Gas Marketing Company. Ononiwu said the new rating profile is symbolic “as we prepare to embark on a debt issuance program to drive our growth and development projects”. According to Agusto & Co., the upgrade is underpinned by the company’s acceptable profitability, adequate working capital, satisfactory cash flow, moderate leverage and
an experienced management team. To arrive at its rating, Agusto Co, said it took into consideration Axxela’s revenue diversification initiatives resulting in gas trading in neighbouring West African countries, as well as the company’s new ownership with over $3.6 billion funds under management. The rating agency also said it expects the Axxela’s financial performance to improve, leveraging its growing and expanding customer base as well as the positive impact from gas exports. Speaking on the new achievement, Bolaji Osunsanya, the Chief Executive Officer of Axxela Limited, said the company continues to deliver exceptional performance across all the markets in which it operates with an intense focus on excellence and innovative service delivery. Credit rating companies help investors decide how risky it is to invest money in a certain country or security by providing independent, objective assessments of the creditworthiness of companies and countries. Top ratings agencies classify BBB ratings the lowest rating of investment grade securities, while ratings below “BBB” are considered speculative or junk. Axxela’s ratings indicate that it is classified as investments grade with low risk of default. www.businessday.ng
Once the sale has been concluded, Bumi said it will be absolved from its demobilisation obligations. The gain to be recognised in the financial statements for the financial year ending 31 December 2019 will be about $5 million. Bumi Armada suspended operations on Armada Perdana in June 2017 after irregular payments from Erin Petroleum Nigeria Ltd but allowed continuing oil produced to
flow into Armada Perdana and a one-off cargo intake by Erin. In April 2018, Bumi Armada received a notice from Erin advising of a purported “Force Majeure Event” and requesting immediate shutdown of operations on the FPSO Armada Perdana. The company was also served a notice to seize the entire crude oil produced and stored in Armada Perdana in Nigeria. However, the oil and gas industry
players want clarity in the industry in order to best make investment decisions for both now and in the future. Lack of clarity has had Nigeria lose deals to African peers. Anthony Okoroafor, chairman of Petroleum Technology Association of Nigeria (PETAN), captures sentiments in the oil and gas when he suggested conducting bid rounds for mainstream and marginal fields were long overdue because “there is no time as oil is going out of fashion and we have to monetise it fast”. Okoroafor said delays in enacting the Petroleum Industry & Governance Bill (PIGB) and other reforms were major factors in deterring project sanctions “We must have sanctity of contracts under the rule of law, licences should not be removed without due process and tax officials should not be sent out to harass companies as this sends out the wrong message to investors,” he said. “Fiscally competitive terms are needed to unlock the deep offshore, while last year’s proposed production sharing contract (PSC) Amendment Bill to hike revenue royalties to 50 percent will drastically reduce net present value and further crush internal rate of return, driving investment to other countries,” he said.
Why Marginal fields account for just 6% of Nigeria’s crude production DIPO OLADEHINDE
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espite huge potential, a report from Nigeria National Petroleum Corporation (NNPC) has revealed Nigeria’s marginal fields’ accounts for just six percent of Africa’s biggest oil-producing country’s total oil production of 60.00million barrels of crude oil & condensate representing an average daily production of 1.94million barrels. Marginal fields are oil fields that have been discovered by major international oil companies (IOCs) in Nigeria in the course of exploring larger acreages and which fields have not been developed for more than 10 years. An investor’s guide to Marginal Oil field acquisition says Nigeria has an estimated 2.3 billion barrels of crude oil reserves in over 183 fields classified as marginal however despite these potentials, Marginal field still contributes miserly to Nigeria’s total production. According to data from NNPC, out of May 2019 total Production of 60.00million representing an average daily production of 1.94million barrels, Production Joint Ventures (JVs) and Production Sharing Contracts (PSC) contributed about 28.99 percent of 17.4 million barrels and of 45.40 percent of 27.2 million barrels respectively. While Alternative Funding (AF), Nigeria Petroleum Development Commission (NPDC) and marginal fields operators accounted for 10.77percent of 6.5 million bar-
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rels, 8.12 percent of 4.8million barrels and 6.71percent of 4 million barrels respectively. “When you look at the market the feeling is that the money is not there so who will develop those fields? Luqman Agboola head of infrastructure at Sofidam Capital Limited asked. Data gathered from the Department of Petroleum Resources (DPR) revealed only 9 marginal fields are currently producing from the 30 fields awarded during the last bid rounds. The active fields according to DPR includes Egbaoma oil field, owned by Platform Petroleum Ltd; Ibigwe oil field owned by Walter Smith Petroleum Ltd/Morris Petroleum Ltd; Uquo oil field owned by Frontier Oil Limited; Ajapa oil field owned by Brittania-U Ltd; Umusadege oil field owned by Midwestern Oil & Gas/ SunTrust oil & Gas Ltd; Ebendo oil field owned by Energia Limited/ Uni@Businessdayng
petrol Pet. Development company; Umusetti oil field owned by Pillar Oil Limited; Ebok oil field owned by Oriental Energy Resources Ltd, and Ogbelle oil field owned by Niger Delta Petroleum limited. “Perhaps owing to lack of experience and due to the fact that it was the first marginal field licensing round, some of the licensees entered into financial and technical arrangements with foreign partners without proper due diligence which, in turn, failed to bring some of the aspirations of the licensees to reality,” Bloomfield law Practice Investors Guide note on Marginal fields bid round said. “It is very important that the local awardee carries out extensive due diligence on its intending partner, on the level of their technical and financial ability, as this will in most cases determine the success of their venture,” Bloomfield’s Investors Guide note said.
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ENERGY INTELLIGENCE INTERVIEW
Only credible talent will get oil industry out of present challenges - Emielu Emmanuel Emielu is the cofounder and co-convener of the Africa Oil & Gas Talent Summit which started in 2015, focused on the issues of human capacity development in the oil industry in the African continent. He tells BusinessDay expectations about this year’s conference holding in Lagos on October 30 and 31. Let’s know more about the summit he vision that birthed the summit – in the first year we were called the West Africa Oil & Gas Talent Summit. But, following the success of the first edition, we decided it should not be restricted to West Africa but continent-wide. Oil is a global industry; talent movement is global; movement of finance is global, investment is global, technology is global. When we looked at Africa, we are taking one chunk of the estate called the global oil industry. For us, considering the Africa socioeconomic context, we find that the type of conferences in the industry focus on technology solutions, government policies and regulations, as well as conferences on finance. We realized that there were no specific conferences for the people that put these things (technology and finance) to work in the industry. Not only that, the oil and gas industry in Africa as a bloc does not own the technology or the finance. It owns the people. Since 2013/2014, we have been asking for special attention to be paid to the people, which is where we have the competitive advantage. People are the third leg of the tripod – the others being technology and finance. Policy can be operative in any of them. We want to bring the people discuss into the front burner, like technology and finance. Looking back, we realized that it was a great and bold decision we took then. We see what has happened since 2015/2016 that neither technology nor finance is saving the industry, but the people and their innovation, resilience, strategy, change leadership and change readiness. More and more, we see that people are the pivot
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Emielu
in getting the industry out of the present challenges that we face. For Africa, that should be an area of attention giving the type of people we have. This summit is about promoting issues around people, performance, and leadership that can take the African oil industry through the challenges and disruptions that we are beginning to see in the industry globally. This year’s summit focuses on leadership, can you elaborate on those that will be in attendance?
We are talking about leadership in the industry. As a business, the industry needs to cope and overcome challenges in the system. We need to survive, prosper and thrive. We will depend on quality human capital. They hydrocarbon sector is going through challenges right now by competing substitute products, policies, and environment (climate change). Will all the oil companies shut down because Europe is increasingly adopting electric cars? Answers to questions like this will come from innovative human capital that
creates the technology adoption. We are making efforts to reach out to the political stakeholders (government) in the federal, state and national assembly levels. We are also reaching out to those in the human capital development segment of this country to bring everybody to the table. The third aspect of this equation would be the individuals themselves; people understanding the possibilities and potentials ahead of them. We want to catalyze them to open their minds and reach out for bigger, higher visions
than just becoming subsistence entrepreneurs for example. One of the sessions we are going to have is called the millennial voice, which is a forum to hear everyone share views. In the process, we might be able to reengineer some of their minds to think bigger and better. So, we shall have government, industry practitioners, the academia and talents together on the same table to extrapolate the policies the policies that have worked or not in order to properly gauge how to improve on the human capital of the African continent. In terms of diversity of the audience, who should be expected? We want the business leaders, CEOs and directors in the oil industry. We want the policy makers in the political class – ministers, government agencies, regulators like NCDMB (Nigerian Content and Development Monitoring Board), PTDF (Petroleum Training and Development Fund), ITF (Industrial Training Fund), and other stakeholders at the summit. We also expect the functional leaders, i.e. HR which is the mill where people are transformed into human capital. Those in this category include HR managers and directors, training and development leaders, curriculum developers, consultants in the recruitment service, digital service providers that aid human capital development etc. This event is coming up on October 30 and 31 at the Four Points by Sheraton in Oniru, Victoria Island, Lagos. There is an award session that will cap it all up. A number of persons have been identified for special recognition. We are expecting between 200 and 300 participants, including senior level students who will come for the panel session.
Sustainability is central focus of Energy Institute Nigeria conference ISAAC ANYAOGU
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ow to combat the dual challenge of meeting the demand and the supply side of energy on one hand, as well as being environmentally responsible and sustainable on the other hand, will the central focus of this year’s Energy Institute Nigeria conference holding next month in Lagos. The theme of the conference
which is held in partnership with the UK Department for International Trade is “Energy Landscape: Minimizing Risks and Maximizing Opportunities”. The organisers said the conference seeks to enable knowledge transfer, foster relations, and sharpen skills of participants through specialist hubs, breakfast sessions and various industry specific panel sessions. Speakers expected at event scheduled for October 16 and 17 www.businessday.ng
at the Lagos Oriental Hotel include Tony Attah, managing director, Nigeria LNG Limited; Sanya Bajomo, Department of Petroleum Resources; Ed Ubong, managing director, Shell Nigeria Gas; Soji Awogbade, principal partner, Aelex Legal Practice and Justice Derefaka Programme manager, Nigeria Gas Flare Commercialisation Programme among others. Osten Olorunsola chairman of Energy Institute Nigeria the challenge of sustainability while main-
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taining current production levels means that practitioners have to devise a means of pulling in two opposite directions at the same time. “This is the reason we gather all players across the energy spectrum to co-create solutions to global energy challenges,” said Olorunsola. Tackling climate change while meeting the energy needs of a growing and developing economy is matter of urgency. But this dual objective is highly complex and @Businessdayng
fraught with risk. What is certain is that it will require a fundamental change in the way we produce and consume energy. Energy Sustainability Conference 2019 is organized by the Energy Institute Nigeria, is the chartered professional membership body bringing global energy expertise together. It is network with insight spanning the world of energy, from conventional oil and gas to the most innovative renewable and energy efficient technologies.
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Tuesday 10 September 2019
BUSINESS DAY
OFFGRID BUSINESS
INNOVATION
Nigeria remain on fringes as offshore wind market approaches $225bn STEPHEN ONYEKWELU
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igeria’s renewable energy industry has made progress in harnessing the sunshine but still struggles to figure out how to make the most the country’s abundant wind resources as global offshore wind market races on. Offshore wind market could grow to be worth about $225 billion annually by 2025, bigger than the current offshore oil and gas market, based on a development cost of $3 million per gigawatt, with a global generating capacity of 70 GW. Offshore refers to inshore water zones such as seas, lakes and sheltered coastal areas. Offshore wind comprises wind resources within these locations. Offshore wind power or offshore wind energy is the use of turbines installed offshore, usually on the continental shelf, to harvest wind energy for electricity generation. As a result of the high wind speed available in offshore sites compared to onshore, offshore wind power generation is higher. According to Jarand Rystad, founder of research consultancy Rystad Energy, the current cost of floating wind schemes is estimated to be about $5 million-$10 million
per GW, double the price of fixed offshore turbines and in comparison to onshore costs of between $1 million and $2 million per GW. Rystad data show that Europe, North America and Asia will dominate this growth market over the next decade. There is no mention of Nigeria, Africa’s biggest economy. But Kenya, East Africa’s biggest economy is already building Africa’s largest wind project, which will cost $775 million. The project is aimed at reducing electricity costs and dependence on fossil fuels, nudging the nation to meet an ambitious goal of 100 percent green energy next year. The sprawling wind farm of
365 turbines on the shores of Lake Turkana in northern Kenya was designed to boost electricity supply by 13 percent, giving more Kenyans access at a lower cost. In Nigeria however, Research and Development (R & D) tailored towards Wind Energy Technology (WET) have been few, slow and not encouraging. The available data have not also been adequately employed to develop physical models that would translate the huge resources of wind to power. Until recently, what was available was a small data system pointing to the availability of wind as a source of potential electricity production within the nation. Ba-
sic researches into the act of tapping wind for electricity have been non-existent within the country. This is because such practices involve funding and such funds have not been available anywhere for access by wind energy researchers. More so, research tailored to development of low-cost materials for wind turbines and other renewable energy technology applications should begin. This will invariably eliminate the huge initial capital involved in starting Wind energy business and also further reduce the operating and management cost of the technology. According to results from re-
searches and wind data from Nigerian meteorological stations, it has been established that wind speeds are generally weak in the southern part of Nigeria, except for offshore areas from Lagos through Ondo, Delta, Rivers, Bayelsa to Akwa Ibom States have prospects for harvesting strong wind energy throughout the year. States like Jos, Katsina and Maiduguri, possess high wind speed amidst condition such as topography and roughness of surfaces. Further research revealed that wind speed of about 8.07 meters per second (m/s) can be harnessed from the northern part of Nigeria.
Calls for energy transition action rings at World Energy Congress
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he International Renewable Energy Agency (IRENA) says renewable energy is driving a shift in the way the world generates, distributes and consumes energy — powering economic growth, enhancing energy security and combating climate change. IRENA also says it brings widespread socioeconomic benefits including millions of skilled jobs and boosts domestic industrial capacities, globally and in the GCC region. These are central message the group will bring to the 24th World Energy Congress hosted by the United Arab Emirates from 9-12 September 2019 in Abu Dhabi. Achieving a timely, managed energy transition presents an unprecedented challenge. In two plenary sessions of the Word Energy Congress, IRENA’s Director-General Francesco La Camera will address opportunities of the ongoing global
energy transformation based on renewables. On 9 September he will speak at a panel on “New visions of energy: Succeeding in a context of disruption” and on 11 September he will make a key intervention on “Power, policies and purpose: a
new era of energy geopolitics”. La Camera will also speak to leaders at the World Energy Council Italy on “Pathways to regional energy transition in the Mediterranean area. On 11 September 2019, IRENA will organise two programmatic
ANALYSTS: Isaac Anyaogu (Team Lead), Stephen Onyekwelu, Dipo Oladehinde
SIDE EVENTS at World Energy Congress. Together with partners from the Clean Energy Ministerial (CEM) secretariat, IRENA will put the role of scenarios and planning center stage at a joint event at a joint event on the energy transformation and
regional integration of power systems (15:30-16:15). The focus will be on how regional integration scenarios better inform national level long-term energy scenarios and vice-versa. Furthermore, IRENA will organise a side event on how to create an enabling environment for attracting investments in renewables and maximising socioeconomic benefits (15:30-17:30). The discussion will focus on the transformative actions needed to align energy policies with climate objectives, unlock investments, scale-up renewable energy projects, and strengthen local capacities and public acceptance. Participants will also reflect on how to broaden policy frameworks to maximise the socioeconomic benefits of the energy transformation. IRENA will also engage with participants and present the Agency’s work at its booth in the exhibition hall.
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Tuesday 10 September 2019
BUSINESS DAY
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Live @ The Exchanges Market Statistics as at Monday 09 September 2019
Top Gainers/Losers as at Monday 09 September 2019 LOSERS
GAINERS Company
Company
Opening
Closing
Change
N397.7
N426
28.3
NESTLE
SEPLAT UACN GUARANTY PZ FBNH
N6.05
N6.6
0.55
STANBIC
N26.15
N26.5
0.35
DANGSUGAR
N5.6
N5.9
0.3
OANDO
N4.35
N4.65
0.3
ACCESS
Opening
Closing
Change
N1205
N1136
-69
ASI (Points)
27,089.84
DEALS (Numbers)
N37
N36
-1
N8.75
N8.5
-0.25
VOLUME (Numbers)
N4.1
N3.91
-0.19
VALUE (N billion)
N6.9
N6.8
-0.1
MARKET CAP (N Trn)
2,900.00 290,490,871.00 4.294 13.178
Global market indicators FTSE 100 Index 7,235.81GBP -46.53-0.64%
Nikkei 225 21,318.42JPY +118.85+0.56%
S&P 500 Index 2,981.94USD +3.23+0.11%
Deutsche Boerse AG German Stock Index DAX 12,226.10EUR +34.37+0.28%
Generic 1st ‘DM’ Future 26,878.00USD +70.00+0.26%
Shanghai Stock Exchange Composite Index 3,024.74CNY +25.14+0.84%
Stock market hits new lows Stories by Iheanyi Nwachukwu
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igerian stock market reached new lows on Monday September 9, 2019 as the value of listed equities dropped by N28billion to N13.178trillion as against the preceding trading day high of N 1 3 . 2 0 6 t r i l l i o n . At t h e close of trading, the stock market’s year-to-date (YtD) return moved further into t h e n e g a t i v e re g i o n o f -13.81percent. The stock market started this week on a negative note, extending last week’s bearish trend. The NSE All Share Index (ASI) came down by 0.21percent to 27,089.84
points as against 27,146.57 points in the preceding trading day. In 2,900 deals, equity traders exchanged 290,490,871 units valued at N4.294billion. GTBank, FBN Holdings, Transcorp, Access Bank, and UACN were actively traded stocks. The market fail e d to rally despite that bargain hunters rushed to raise their stakes in values stocks liked that of Seplat Petroleum Development Company Plc (SEPLAT). Seplat advanced most from N397.7 to N426, adding N28.3 or 7.12percent. UACN advanced from N6.05 to N6.6, adding 55kobo or 9.09percent, while GTBank moved from N26.15 to N26.5, adding 35kobo or 1.34percent. PZ Cussons and FBNHoldings also
advanced. Nestle, Stanbic, Da ng o t e Su ga r, Oa n d o, and Cutix were top losers. Nestle dipped most, from N1205 to N1136, adding N69 or 5.73percent. Stanbic IBTC Holdings dipped from N37 to N36, losing N1 or 2.70percent. Despite the positive market breadth witnessed in the market on Monday, some analysts still expect the market to continue its bearish trading trend on Tuesday in the absence of any major (positive) news that could drive buy sentiments. “Investors sentiment in the market remains weak as cautious trading strategy is being adopted by local players in the seemingly persistent bearish trend,” Lagos-based equity analysts at Vetiva said on Monday.
SEC, FCCPCC pledge collaboration on mergers
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he Securities and Exchange Commission (SEC) a n d t h e Fe d e ra l Competition and Consumer Protection Commission (FCCPCC) have agreed to continue to work together in a bid to simplify the processes of Mergers of companies in Nigeria. This was disclosed by the Acting Director General of the SEC, Mary Uduk during the signing of a memorandum of understanding between the SEC and FCCPCC in Abuja. Uduk expressed the need for both organisations to work together to ensure that there is no vacuum in a bid to ensuring that the
collaboration would lead to a more stronger economy for the country. “We are happy with the work the FCCPCC has done so
Mary Uduk, acting director general, SEC
far and on our part as the SEC, we are willing to provide you with any relevant assistance you would need to hit the ground running and improve our nation’s economy” she said. The Acting DG disclosed that the Commission presently has capacity in the area of mergers and would be willing to share knowledge with the new organisation. In his remarks, the Director General of FCCPCC, Babatunde Irukera Commended the DG for the leadership the SEC has provided and for the friendship and collaboration that has helped to bring both organisations this far. According to him, “We
would like to commend the way you have approached your work, especially the merger review, I think it has become examplenary to everyone and the rest of the country and both internationally and domestically, and your mode of leadership made it possible. “The work between the two organizations has created a master stroke and without your leadership it would not have been possible. “Not only has that helped this new institution to begin to get its bearing correctly it has also helped the investment community to see what the real possibilities are available in Nigeria”
Sahara Group takes ‘Africa energy access’ narrative to World Energy Congress
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lobal conversations and collaborations geared towards promoting access to safe, clean and affordable energy need to consider the “unique situation in Africa”, Wale Ajiabade Executive Director, Sahara Group has said ahead of the 24th World Energy Congress in Abu Dhabi.
Themed “Energy for Prosperity”, the Congress kicked off on September 9, 2019, offering participants a platform to “explore new energy futures, critical innovation areas, and new strategies.” Ajibade said the achievement of Sustainable Development Goal 7 which targets “access to energy for all” will be accelerated if all www.businessday.ng
stakeholders are committed to adopting tailored solutions for Africa. “The global push to expand access to energy through renewables and responsible mining of hydrocarbons is commendable. However, the situation in Africa is dire. Africa has the least electricity access rate in the
world with over 640 million Africans having no access to energy. I believe Africa is central to the achievement of a c c e ss to e ne rg y f or all and I will be making a strong case for an African Energy Access Agenda at the Congress while we continue to shore up the progress being recorded across other parts of the globe,” he said.
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SEC, Unilag hold conference on economic growth
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he Securities and Exchange Commission (SEC), as part of its Market Development efforts is set o hold a two-day conference in partnership with the University of Lagos (UNILAG). The programme themed ‘Leveraging the Capital Market for Economic Growth and Development’ is scheduled for tomorrow September 11 and 12, 2019 at the Tayo Aderinokun Lecture Theatre, UNILAG, Akoka, Lagos. According to the Acting Director General SEC, Mary Uduk, the conference is being organised as one of the Commission’s efforts in consolidating on Capital Market growth and development adding that the event seeks to stimulate exchange of ideas between the academia and the industry. The Governor of Lagos State, Babajide Sanwo-Olu is expected as Special guest of honour while Femi Lijadu, the Chairman of the board of the SEC; and Mary Uduk, the acting Director General of the SEC, are the guests of honour. The chief host of the event is the Vice Chancellor of UNILAG, Prof Toyin Ogundipe, while the
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host is Prof Owolabi Kuye, the Dean, Faculty of Management Science, UNILAG Various guests speakers are expected at the conference and they include, Oscar Onyema, the CEO of the Nigerian Stock Exchange (NSE); Bola Onadele Koko, the MD/CEO of FMDQ Securities Exchange; and Adedapo Adekoje, the President of Chartered Institute of Stockbrokers (CIS) Nigeria. Others are Bola Ajomale, the MD/CEO of NASD Plc; Akin Akeredolu-Ale, the MD/CEO of Lagos Commodity and Futures Exchange; Toyin Sanni, the Group CEO of Emerging Africa Capital; and Taiwo Adeniji, the Senior Director Investments Group at the Africa Finance Corporation (AFC). Also expected to address the gathering are Uche Uwaleke, a professor who is also the Commission for Finance, Imo state, Haruna Jalo-Waziri, MD/CEO of Central Securities Clearing System (CSCS) Plc; Ayo Olowe, a professor who is the Conference Co-Chair and Head, Department of Finance, UNILAG, and Edward Okolo, Conference Co-Chair and Director, Market Development SEC, amongst others.
A4 BUSINESS DAY
Tuesday 10 September 2019
news
Malaria can be eradicated by 2050 - experts
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alaria can be eradicated within a generation, global health experts have said. In a major report on Sunday, 41 specialists said a future free of malaria – one of the world’s oldest and deadliest diseases – can be achieved as early as 2050. This contradicted the conclusions last month of a malaria review by the World Health Organisation and the experts urged the WHO not to shy away from this “goal of epic proportions”. To meet that target, however, governments, scientists and public health leaders need to inject more money and innovation into fighting the disease and the mosquitoes that carry it, the report said — something that will require “ambition, commitment and partnership like never before”. “For too long, malaria eradication has been a distant dream, but now we have evidence that malaria can and should be eradicated by 2050,” said Richard Feachem, director of the Global Health Group at the University of California, San Francisco, who co-chaired a review of malaria eradication commissioned by The Lancet medical journal. “We must ... challenge ourselves with ambitious targets and commit to the bold action needed to meet them,” he
added. The Lancet Commission’s view comes a few weeks after the WHO published its own report on whether malaria can be wiped out, concluding that eradication cannot be achieved soon, and that setting unrealistic goals with unknown costs and endpoints could lead to “frustration and backlashes”. In contrast to the Lancet Commission, the WHO report said the priority now should be to lay the groundwork for future eradication “while guarding against the risk of failure that would lead to the waste of huge sums of money (and) frustrate all those involved”. The Lancet report, however, said that rather than slogging on with steadily reducing malaria cases — all the time under the threat of resurgence — global health authorities could “instead choose to commit to a time-bound eradication goal that will bring purpose, urgency and dedication” to the fight. Malaria infected about 219 million people in 2017 and killed around 435,000 of them — the vast majority babies and children in the poorest parts of Africa. Due to ongoing transmission, half the world’s population is still at risk of contracting malaria, and globally, it kills a child every two minutes. These figures are little changed from 2016, but global case numbers had previously
fallen steadily from 239 million in 2010 to 214 million in 2015, and deaths from 607,000 to around 500,000 from 2010 to 2013. Martin Edlund, head of the campaign group Malaria No More, said the world should do everything possible to eradicate the disease.
“If we double down on ending malaria now, the world will reap massive social, humanitarian and economic benefits and save millions of people from needlessly dying from mosquito bites,” he said in a statement. Winnie Mpanju-Shumbusho, a Tanzanian doctor who
co-chaired The Lancet Commission, said malaria eradication was “a public health and equity imperative”. To stamp out the disease by 2050, the report’s authors proposed three ways to speed up malaria’s decline. Existing malaria-fighting tools such as bed nets, medi-
World Literacy Day: Edo harps on promotion of language, digital learning Governor Godwin Obaseki of Edo State has emphasised the need to prioritise the promotion of Edo language and use of digital learning tools as strategies to drive literacy and make learning functional and pleasurable in the digital age. Governor Obaseki said this in commemoration of International Literacy Day marked every September 8, by the United Nations (UN) and its organs. The governor, who noted the state government’s efforts in driving digital learning and promoting Edo language in schools across the state, stressed the need for other policy makers and civil society organisations (CSOs) to join government in promoting literacy and multilingualism, especially among school children. The governor said the theme for this year’s commemoration, Literacy and Multilingualism, mirrors the focus of his administration in promoting indigenous languages, noting that efforts to get more Edo children to learn their mother tongue would be intensified. According to him, “As we commemorate the International Literacy Day, I want to use this opportunity to emphasise the need to promote Edo language so as to ensure that our children do not lose their identities and forget the essence of our great, indefati-
gable civilisation. “The state government has ensured that Edo language is taught in schools and the Benin Heritage Center is partnering with the government for summer classes on Edo Language for students. The Center for Edo Studies is also working to promote literacy in other Edo languages.” He added that with the ongoing reforms of Edo schools through the Edo Basic Education Transformation (EdoBEST) programme, the state would leave no stone unturned in ensuring that children are conscientised to learn indigenous languages and cultures. According to the UN, “International Literacy Day 2019 is an opportunity to express solidarity with the celebrations of the 2019 International Year of Indigenous Languages and the 25th anniversary of the World Conference on Special Needs Education, at which the Salamanca Statement on Inclusive Education was adopted. “International Literacy Day 2019 focuses on ‘Literacy and Multilingualism.’ Despite progress made, literacy challenges persist, distributed unevenly across countries and populations. Embracing linguistic diversity in education and literacy development is central to addressing these literacy challenges and to achieving the Sustainable Development Goals.” www.businessday.ng
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cines and insecticides should be used more smartly, it said, and new tools such as vaccines should be developed. Thirdly, governments in both malaria-affected and malaria-free countries need to boost investment by about $2 billion a year to accelerate progress.
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BUSINESS DAY
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Airtel Africa maintains growth momentum as earnings surge BALA AUGIE
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he contribution of Airtel Africa Limited to Nigeria’s economy cannot be overemphasized, even as it operates in a harsh business landscape. The telecommunications giant has been surmounting the tempest, as it stayed afloat during a severe dollar scarcity that tipped the country in its first recession in 25 years. The company just released its financial statement for the first quarter ended 30 June, 2019 that showed marked improvement in key performance ratios, delivering a higher returns for shareholders on form of share appreciation. With a strong working capital position, solid asset base, and robust cash flows, the company is a position to leverage on the country’s rising population to increase market share. It has continued to invest in its 4G network, adding early 1,500 sites; now more than half of its sites are 4G. The telecommunication giant is about to launch its Mobile Money business in Nigeria, securing approval of the brand name, an important step as it awaits approval for its payment service bank license. Airtel has a market capi-
talization of N1.26 trillion as at August 7, 2019, making it the third largest company by market value. Financial Performance of Airtel Africa For the first quarter ended June 2019 (Q1-2020), Airtel Africa’s revenue increased to $795.90 million from $744.50 million the previous year, with constant currency growth of 10.20 percent. This was the 6th consecutive quarter of doubledigit constant currency growth. Revenue growth of 10.2 percent in constant currency was driven by double-digit growth in Nigeria and East Africa, partially offset by a decline in revenue in Rest of Africa The company recorded growth across business products as it continues to stamp its across Africa. Voice revenue, the company’s largest business prod-
uct, was up 3 percent, largely driven by 9 percent growth in its customer base, as customer base nears 100 million. Data revenue, the largest contributor to growth, was up 36 percent as an increasing number of customers relied on the the company’s highquality and high-speed LTE network. As a result of the aforementioned high-quality and highspeed usage, data usage was up 79 percent. Mobile Money revenue, the company’s fastest growing business, increased by 42 percent as it expanded it distribution reaches. Airtel Africa has spent less in producing each unit of products as total expense ratio fell to 56.78 percent in Q1-2020 from Q1 2019, while operating expenses increased by a mere 3.20 percent to $452.30 million in the period under review from $438.40 million the previous year. A breakdown of expenses shows depreciation and amortization increased by 15.40 percent to $148.40 million in the period under review as against $128.20 million the previous year. The company’s operating earnings can cover interest expense, which means it is not exposed to financial risk. Its interest coverage ratio is 2.29 times earnings, which is higher than the 1.50 times international benchmark. However, finance costs moved to $81.5 million in Q1-2020, largely as a result of lapping one-off benefits incurred in the prior year and foreign exchange impact on debt, which more than offset some derivative gains and a 20 percent decrease in interest costs as a result of lower debt. Total debt increased by 1 percent to $4.88 billion in the
period under review as against $4.83 billion in Q1-2020. Airtel Africa’s earnings before interest taxation depreciation and Amortization (EBITDA) were up 9.70 percent to $347.60 million in the period under review from $316.90 billion the previous year. The growth in EBIDTA was largely driven by currency growth. Underlying EBITDA margin was at 43.7 percent, an improvement of 101 bps as operating efficiencies in network expense and other overheads, more than offset inflation costs and the one-off impact from the quality of service charge in Gabon. Airtel Africa’s profit before tax surged by 108.80 percent to $167.40 million in the period
The growth in revenue was largely driven by stable foreign exchange environment. Access to foreign currency has improved following the introduction of the Investors’ and Exporters’ window in 2017. A breakdown of revenue shows Voice data increased by 12.7 percent, mainly driven by double digit increase in customer growth, as it continued to leverage its efficient distribution system and leading 4G network to acquire new customers. Data revenue, the largest contributor to revenue growth, was up 73.1 percent while Data growth was driven by a 21 percent increase in customer base and growth in ARPU. Data growth was also driv-
lion the previous year. EBITDA margin in constant currency moved to 53.30 percent in the period under review as against 45.90 percent the previous year. Margin expansions is as a result of revenue growth and operating efficiencies in the network expenses and other overheads. The company company’s capital expenditure surged by 285.16 percent to $53.20 million, as the business continued to expand and invest in the 4Gnetwork, with the number of 4G sites increased fivefold, representing 60 percent of total sites. With a free cash flow of $113.50 million, Airtel Nigeria has the financial strength to pay dividend, settle its debt, and
under review as against $80.20 million; thanks to cost curtailment and exceptional items. The company has been contributing to the country’s economy since it was entered into the market in early 2000, and the telecommunication has become a pivotal the economic growth. The Information and Communication accounted for 63 percent of growth in second (Q2-2019) quarter gross Domestic Product (GDP). Strong growth in Nigeria operation Airtal Nigeria Limited, a subsidiary of Airtel Africa Limited, recorded a 22.13 percent increase 22.12 in revenue to $312.90 million in Q1 2020, from $256.20 million as at Q1 2019.
en by increased penetration of 4G data customers as the business benefited from the roll out of the 4G network. Data revenue in the quarter ended 30 June 2019 accounts for 30 percent of the Nigeria revenue, compared to 21 percent in the prior year. Airtel Nigeria’s cost control strategy has yielded fruit as margins improved, as it recorded double growth in operating profit. Earnings Before interest, Taxation, Depreciation, and Amortization (EBITDA) spiked by 41.90 percent to $116.70 million in Q1 2020 from $117.50 million the previous year. Earnings Before Interest and taxation (EBIT) was up $120.90 million in the period under review from $63.10 mil-
fund future expansion plans. The growth potential of Airtel’s business is huge considering mobile penetration rate of 86 percent as at the first quarter of (Q1’2019) 2019, which could help in driving voice (accounting for 74.9 percent of revenue as of Q1 2019) and data revenue (accounting for 16.6 percent of revenue as of Q1 2019). Nigeria’s population demographics evident in its youthful population also serve as an opportunity for growth in data revenue given the growing usage and acceptability of social media and internet surfing for communication. A rebound in consumer spending, which is also a boost for data bundle consumption, will help underpin Airtel’s earnings earnings.
BD MARKETS + FINANCE Analysts: BALA AUGIE www.businessday.ng
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news Investors take position as N549.4bn... Continued from page 1
the Primary Market Auction. This consists of N15.00 billion for 91-day tenor, N14.002 billion for 182-day tenor and N129.65 billion for 364-day tenor. Also, inflows from maturing OMO bills worth N390.7 billion are expected to hit the system thereby bolstering system liquidity. The expected stop rates for the maturing treasury bills range between 11.0011.15 percent, 11.60-11.70 percent and 12.85-13 percent for 91-day, 182-day and 364-day tenors, respectively. “We expect the CBN to maintain its pace of excess liquidity mop-ups to keep system liquidity in check. Investors are therefore advised to take position in T-Bills and OMO offers with attractive yields,” analysts at Afrinvest Securities Limited said. The yield for short-term bills offered by some investment firms as at Monday ranged between 10.31 and 10.47 percent per annum. For medium-term instruments, the yield ranged between 12.01 and 12.32 percent, while the yield for longer-term bills stood at between 13.47 and 13.71 percent per annum. Yield refers to income realised on an investment over a particular period of time, while stop rate refers to the maximum interest rate preferred/issued by the CBN out of all the bids submitted within a bid window. Last week saw further increase in demand in the Treasury Bills secondary market as system liquidity remained elevated at about N862.2 billion positive as at Thursday, amidst the OMO auction that was conducted by the apex bank on the same day. Although system liquidity opened the week negative N68.0 billion spurring sell-offs, liquidity from matured OMO bills bolstered demand across the yield curve during the
remaining trading sessions of the week. Consequently, yields remained pressured as average yield across tenors dipped further by 51bps Week-onWeek to settle at 13.3 percent on Friday from 13.8 percent the previous week. Major buying interests were witnessed at the short and medium end of the curve, particularly 24-Oct-19 (-126bps), 10-Oct-19 (-126bps) and 12Dec-19 (-111bps) maturities. Last week Thursday, the CBN mopped up a total of N322.6 billion out of the initial N400 billion offered to investors via OMO auction. Investors scrambled for the longer-tenor instrument as the 364-day tenor OMO bill was oversubscribed by 63.25 percent. The initial offer for this tenor was N250 billion while the total subscription stood at N408.12 billion. The CBN sold a total of N321.48 billion (364-day) at a stop rate of 13.50 percent. The investors bid at a range bid of between 13.49 and 14.50 percent for the offer which matures on September 3, 2020. At the Bond market last week, the bullish run in the FGN bonds market was reversed as investors sold off on their medium and long positions to take advantage of anticipated attractive rates at the OMO auctions. Thus, average yield across all instruments closed at 14.2 percent from 14.0 percent the previous week improving 20bps W-o-W. Major sell-offs were witnessed at the 12-Sep-20 (+129bps), 20-Sep-20 (+126bps) and 10Oct-20 (+117bps) maturities. “We expect to see tapered demand within the bond market on the back of bargain hunting as investors may take advantage of long-term OMO offerings with attractive rates. Investors are therefore advised to take advantage of bonds with attractive yields and trading at a discount,” the analysts said.
Unified Payments appoints Omagu, Olubiyi, ... Continued from page 2 rector, financial institutions Titilayo has over two decade hands on experience in Marketing, Sales, Channel management and General management. Until her appointment she was Group Head, Business Development in Market & Sales Directorate in UP, and the pioneering Group Head for PayAttitude, she also has an excellent track record working with UACN, MTN, Nokia West Africa with several performance awards and Samsung Electronics West Africa. She has an MBA in Marketing and BA Hons English from Obafemi Awolowo University. She is an Affiliate
member of Chartered Institute of Marketing (UK) and a Member of Nigeria Institute of Marketing. She has attended several notable trainings within and outside the country including Cornell University, USA, IESE Business School, Barcelona, and Lagos Business School, Nigeria. UP is Nigeria’s premier Payments & Financial Technology Company founded in 1997 by a consortium of leading Nigerian banks. UP operates as a shared infrastructure for the banking community in Nigeria and Payments Service Provider within and outside Nigeria, with a vision to be the most preferred e-payment service provider in Africa. www.businessday.ng
L-R: Funmi Sanni, marketing director, Dangote Cement plc; Titus Adesola Jegede, star prize winner; Olakunle Alake, group managing director, Dangote Industries Limited; Tunde Mabogunje, regional sales director, Lagos/Ogun, Dangote Cement plc, and Adeyemi Fajobi, national sales director, Dangote Cement plc, during the star prize presentation in the ongoing Dangote Cement Bag of Goodies National Consumer Promotion in Isolo, Lagos, yesterday
New police trust fund to cost Nigerian firms 0.005%.. Continued from page 1
among other things, provide funds for the training and retraining of the personnel of the Nigeria Police Force (NPF), provide state-of-theart security equipment and machineries to improve the general welfare of the personnel of the force”, according to an explanatory memorandum of the Act seen by BusinessDay. But analysts think the move will further stifle companies who are already reeling from harsh operating environment. “Are they going to kill the companies?” Igbuan Okaisabor, vice chairman and CEO, Construction Kaiser Group, queried. “The Tertiary Education Trust Fund established some years ago has not improved Nigeria’s education sector, rather it has been going worse. What is the guarantee that Nigeria Police will improve?” According to the Act, the fund would covers all personnel of the NPF, including its auxiliary staff in Nigeria and abroad. However, it would only operate for six years from the commencement of the Act and shall, at the expiration of that period, cease to exist unless it is extended for any further period by an Act of the National Assembly.
Also, the Nigeria Police Trust Fund would consist of grants, donations, endowments, bequests and gifts, whether of money, land or any other property from any source as well as money derived from investments made by the Trust Fund. “The Trust Fund shall be utilised for the construction of police stations of living facilities, such as quarters or barracks for the NPF; to finance the procurement of books, instructional materials, training equipment for use at Police Colleges and such other similar training institutions; to meet the cost of participation by the personnel of the NPF at seminars and conference relevant to, or connected with, policing or intelligence gathering,” the Act reads in part. The upper chamber of the National Assembly had passed the Nigeria Police Trust Fund Bill on April 9, 2019, and it was signed into law by President Buhari on July 2, 2019. While Okaisabor agreed the NPF need to be properly funded, he pointed out that the approach adopted was not right and could make the objectives of the fund suffer setbacks. “Since Nigeria emerged from recession, companies have been struggling and people are losing their jobs,”
Nigeria’s crude oil export rises to 2.2m barrels ... Continued from page 2
year earlier, says the Nigerian Bureau of Statistics. The NBS data further said that the sector contributed 8.82 percent to total real GDP in the second quarter of 2019, up from levels recorded in the corresponding period of 2018 but down compared to the preceding quarter. OPEC’s second biggest producer, Iraq, also saw a jump in production by 100,000 bpd recording output of 4.88 million bpd, according to S&P Global Platts report, figures that could further derail the cartel’s plan to stem
fallen crude prices. Saudi Arabia, the biggest producer in OPEC and cochair of the agreement to curb supply along with Russia, pumped 9.77 million bpd in August, the survey found, as tanker-tracking data showed a rise in its crude exports and satellite imagery suggested a build in inventories. Yet, the kingdom remains 540,000 b/d under its agreed quota of 10.31 million b/d. With August’s rise in output, OPEC’s overall compliance fell to 103 percent among the 11 members with output caps from 117 percent in July, according to Platts’
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Okaisabor said. “It is just going to add more burdens on the business and further worsen the nation’s unemployment rate.” A similar Act called “The Lagos State Security Trust Fund (LSSTF)” Act was passed by the Lagos State House of Assembly in September 2007 as a direct response to the security challenges in the state. The trustees of the fund were appointed by the governor, mainly from the private sector and operated independently of government. However, the fund did not receive any subvention from the government; rather the government made donations in kind to the fund. In addition, the account of the Trust Fund was audited by international auditing firms currently Ernst & Young and published annually for public information at the yearly town hall meetings on security with the governor where the LSSTF renders its account of stewardship. But whereas the LSSTF gets its funding mainly from voluntary donations from individuals and private companies, the Nigeria Police Trust Fund proposes to compel firms to part with a chunk of their profits. Dapo Abiodun, Ogun State governor, also announced plans to re-launch calculations. Reuters survey found that August output rose actually rose by 80,000 bpd 29.61 million bpd. This is despite an agreement it had with members and a group of non-members to curb output into 2020 to raise prices and brighten demand outlook in the face of rising shale production in the US. Analysts say rising production could make it difficult for OPEC to manage the perception that it can balance markets where demand is declining. It could also create internal problems for OPEC because Iraq is leveraging on sanctions against Iran’s production to grow output. @Businessdayng
the state’s security trust fund. “The new security trust fund will have all the governance that it requires. It will have a chairman, executive secretary, board. It will have a commitment from a few financial institutions of note and a few people from the private sector that are committed to serving on the board. We are also committed to funding this fund. We on the part of the state will also commit to our funding as well,” Abiodun said. Godwin Obaseki, governor of Edo State, recently unveiled the Edo State Security Architecture, a new framework to boost security in the state. The governor launched the Edo State Security Trust Fund, with the state government committing N2 billion as seed fund. Femi Onashile, a Lagosbased manufacturer, said the new Nigeria Police Trust Fund Act is not the first time the government is coming up with an intervention programme for the personnel of the Nigeria Police Force. According to him, most of the funds from the trust fund have always ended in private pockets with funds diverted for other personal use. “If you remember the Police Equipment Foundation (PEF) headed by Kenny Martins, the funds realised were eventually mismanaged and culprits are still walking free on the street,” he said.
“Whenever Iranian production is under pressure and Iraqi production increases, keeping the peace within OPEC becomes incredibly difficult to do,” Dave Ernsberger, global head of commodities pricing at S&P Global Platts, told CNBC. Oil prices have struggled to break much above the $60/b level in recent weeks, but the markets welcomed news of the appointment of Saudi Arabia’s new energy minister, Prince Abdulaziz bin Salman, who promised that the kingdom will remain a responsible producer. Brent price rose marginally to $61.87 and WTI $56.87.
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news
Arla Foods signs $100m deal with Kaduna to source milk locally MICHAEL ANI
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rla Foods, world’s largest producer of organic dairy products, has signed a memorandum of understanding (MoU) with Kaduna State government to source milk locally. The deal would enable the Denmark-based diary firm change livestock production into business through the use of modern tools, Nasir el-Rufai, governor of Kaduna State, said on his official twitter account. “Today, we signed an MoU with Arla for a project that uses modern tools to change livestock production from a culture into a business, sedentary the nomads and promote jobs, economic development and security,” Elrufai said on his official twitter account. A source noted also that
“with the proposed restriction by the Federal government on forex, firms are being are compelled to get their milk here just like they do in their Indian plant.” The deal was led by Steen Hadsberg, vice president, Sub-Sahara Africa region, and managing director, Arla Global Dairy Products Africa, and witnessed the presence of the Ambassador to Denmark, Jesper Kamp. “I thank Jesper Kamp, the Ambassador of Denmark, for his support for our efforts to use a business model to promote jobs and development in our agriculture sector. We are delighted by his presence at the MoU signing,” El-Rufai said. FrieslandCampina WAMCO is the first company to start local sourcing of raw milk through its Dairy Development Programme (DDP) in Oyo State.
AXA Mansard promotes healthy living with FESTAC Volleyball tournament
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XA Mansard, a member of AXA, a leader in insurance and asset management, has supported the FESTAC Volleyball Club on its FESTAC Volleyball tournament. The event held on August 17, served as an opportunity for residents of FESTAC and its environs to come together to participate in the sporting activities and network, inspire physical activity and fitness among residents and to encourage the spirit of community among the residents. Four teams played a total of 6 games in order to get a winner. The event was attended by over one thousand people. Commenting on the event, Chukwuma Ibobo, the head of distribution sales support at AXA Mansard, said, “AXA Mansard Health is excited to be a part of tournaments like this that engender togetherness, positive recreation, and healthy living in our communities. “Playing sports is a physical, mental and emotional
CBN tasks BDCs on AML/CFT compliance … seeks ABCON advice on market intelligence HOPE MOSES-ASHIKE
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entral Bank of Nigeria (CBN) has advised the Bureaux De Change (BDC) operators to ensure compliance with extant Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) laws and regulations to mitigate the risks and vulnerabilities in the sub-sector. This is coming as the regulators also challenge them to play stronger role in the industry by leveraging effective self-regulation. Mustafa Haruna, CBN deputy director, Other Financial Institutions Supervision Department (OFISD), said this in Lagos, during the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) mutual evaluation exercise sensitisation/workshop for South West BDCs. He said ABCON should de-
velop and implement a Code of Conduct for members to promote ethical practices and transparency in the sector while also continually advising the apex bank on market intelligence on key industry issues. Also speaking, Aminu Gwadabe, ABCON president said ABCON had consistently advised BDCs to put in place and implement, a system of internal policies, procedures and controls including Know Your Customer (KYC), Customer Due Diligence and reporting of all suspicious transactions to regulators. The ABCON is also training BDCs on regular basis on the need to keep transaction records, and get a designated compliance officer that has dayto-day oversight over AML/CFT programme, he said. He said the Compliance Officers had been taught the rules in preparing Suspicious Transaction Reports (STRs), and rendering STRs’ returns to the Nigeria Financial Intelligence Unit (NFIU).
The ABCON boss said the group had over the years, established itself as a key player in the BDC industry, and has also made several commitments and sacrifices to ensure that the sector continues to thrive and its members follow global best practices in the retail of foreign exchange to end users. The BDCs have met and will continue to meet a number of compliance requirements specified by Financial Action Task Force (FATF) and local regulators, he said. The operators, he added, have conducted enhanced due diligence, a major compliance requirement on some high-risk customers. The collation and reporting of foreign currency transactions and suspicious transactions by BDCs are now fully automated. He said that ABCON had in February, launched its Live Run Automation Portal in Lagos. The technology automates all BDC Operations with those of Nigeria Inter-Bank Settlement System (NIBSS), NFIU and the CBN to
exercise. The health benefits of playing sports include an increase in lean body mass, an increase in basal metabolic rate, and an increase in bone density, which assists in getting healthier body composition. Playing sports is a favourite activity and stress relief for many people as it provides us with enjoyment and entertainment. There are many health benefits derived from playing sports including reduced rate of diabetes, improved heart function, better blood sugar control, lowered cholesterol levels, improved blood circulation, lowered rate of hypertension, and lowered stress levels.” Ibobo concluded by saying, “Not only does sport contribute towards healthy living, it also has an incredible ability to serve as a focal point for engagement in the community and can come with a great sense of achievement and pride. AXA Mansard is proud to be associated with the successes achieved at the FESTAC Volleyball Tournament.”
NAICOM grants licence to two Takaful insurance firms Modestus Anaesoronye
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ational Insurance Commission (NAICOM) on Monday said it had granted approval in Principle to Cornerstone Takaful Insurance Company Limited and Salam Takaful Insurance Company Limited as Composite Takaful operators to transact both family and general Takaful businesses in Nigeria. The insurance regulator disclosed this in a statement made available by its head, corporate affairs of the Commission, Rasaaq Salami, that the new development brings the total number of wholly Takaful operators to four, having earlier in 2016 granted
licence to Noor Takaful and Jaiz Takaful, respectively. The Approval in Principle to the two new companies is in line with the Commission’s drive for inclusion towards increasing insurance penetration in the country. A final operating licence will be issued to the companies upon provision of evidence of the following: Conducive business environment as their Head offices; an appropriate IT infrastructure and appointment of a head of IT; appointment of key personnel, and Submission of first set of products for Commission’s approval. The Commission is currently processing more applications for possible approvals. www.businessday.ng
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improve the level of compliance of the BDCs with set regulations. The platform allows BDCs send their reports online real time, thereby removing the challenge of manual rendition of reports that has been confronting operators for decades. The project is also boosting the perception towards BDCs in Nigeria especially in the eyes of international investors. Continuing, the CBN director Haruna said the BDC subsector was a critical component of the Nigerian financial market adding that the cashbased nature of the transactions and other identified deficiencies make it highly vulnerable to ML/TF risk. “Simply put, money laundering is the process of making dirty money look clean. It is the concealment of the true nature, source, location, disposition, movement, rights with respect to or ownership of property knowing that such property is derived from criminal offense”.
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news Malaria can be eradicated by 2050 - experts
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alaria can be eradicated within a generation, global health experts have said. In a major report on Sunday, 41 specialists said a future free of malaria – one of the world’s oldest and deadliest diseases – can be achieved as early as 2050. This contradicted the conclusions last month of a malaria review by the World Health Organisation and the experts urged the WHO not to shy away from this “goal of epic proportions”. To meet that target, however, governments, scientists and public health leaders need to inject more money and innovation into fighting the disease and the mosquitoes that carry it, the report said — something that will require “ambition, commitment and partnership like never before”. “For too long, malaria eradication has been a distant dream, but now we have evidence that malaria can and should be eradicated by 2050,” said Richard Feachem, director of the Global Health Group at the University of California, San Francisco, who co-chaired a review of malaria eradication commissioned by The Lancet medical journal. “We must ... challenge ourselves with ambitious targets and commit to the bold action needed to meet them,” he
added. The Lancet Commission’s view comes a few weeks after the WHO published its own report on whether malaria can be wiped out, concluding that eradication cannot be achieved soon, and that setting unrealistic goals with unknown costs and endpoints could lead to “frustration and backlashes”. In contrast to the Lancet Commission, the WHO report said the priority now should be to lay the groundwork for future eradication “while guarding against the risk of failure that would lead to the waste of huge sums of money (and) frustrate all those involved”. The Lancet report, however, said that rather than slogging on with steadily reducing malaria cases — all the time under the threat of resurgence — global health authorities could “instead choose to commit to a time-bound eradication goal that will bring purpose, urgency and dedication” to the fight. Malaria infected about 219 million people in 2017 and killed around 435,000 of them — the vast majority babies and children in the poorest parts of Africa. Due to ongoing transmission, half the world’s population is still at risk of contracting malaria, and globally, it kills a child every two minutes. These figures are little changed from 2016, but global case numbers had previously
fallen steadily from 239 million in 2010 to 214 million in 2015, and deaths from 607,000 to around 500,000 from 2010 to 2013. Martin Edlund, head of the campaign group Malaria No More, said the world should do everything possible to eradicate the disease.
“If we double down on ending malaria now, the world will reap massive social, humanitarian and economic benefits and save millions of people from needlessly dying from mosquito bites,” he said in a statement. Winnie Mpanju-Shumbusho, a Tanzanian doctor who
co-chaired The Lancet Commission, said malaria eradication was “a public health and equity imperative”. To stamp out the disease by 2050, the report’s authors proposed three ways to speed up malaria’s decline. Existing malaria-fighting tools such as bed nets, medi-
World Literacy Day: Edo harps on promotion of language, digital learning Governor Godwin Obaseki of Edo State has emphasised the need to prioritise the promotion of Edo language and use of digital learning tools as strategies to drive literacy and make learning functional and pleasurable in the digital age. Governor Obaseki said this in commemoration of International Literacy Day marked every September 8, by the United Nations (UN) and its organs. The governor, who noted the state government’s efforts in driving digital learning and promoting Edo language in schools across the state, stressed the need for other policy makers and civil society organisations (CSOs) to join government in promoting literacy and multilingualism, especially among school children. The governor said the theme for this year’s commemoration, Literacy and Multilingualism, mirrors the focus of his administration in promoting indigenous languages, noting that efforts to get more Edo children to learn their mother tongue would be intensified. According to him, “As we commemorate the International Literacy Day, I want to use this opportunity to emphasise the need to promote Edo language so as to ensure that our children do not lose their identities and forget the essence of our great, indefati-
gable civilisation. “The state government has ensured that Edo language is taught in schools and the Benin Heritage Center is partnering with the government for summer classes on Edo Language for students. The Center for Edo Studies is also working to promote literacy in other Edo languages.” He added that with the ongoing reforms of Edo schools through the Edo Basic Education Transformation (EdoBEST) programme, the state would leave no stone unturned in ensuring that children are conscientised to learn indigenous languages and cultures. According to the UN, “International Literacy Day 2019 is an opportunity to express solidarity with the celebrations of the 2019 International Year of Indigenous Languages and the 25th anniversary of the World Conference on Special Needs Education, at which the Salamanca Statement on Inclusive Education was adopted. “International Literacy Day 2019 focuses on ‘Literacy and Multilingualism.’ Despite progress made, literacy challenges persist, distributed unevenly across countries and populations. Embracing linguistic diversity in education and literacy development is central to addressing these literacy challenges and to achieving the Sustainable Development Goals.” www.businessday.ng
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cines and insecticides should be used more smartly, it said, and new tools such as vaccines should be developed. Thirdly, governments in both malaria-affected and malaria-free countries need to boost investment by about $2 billion a year to accelerate progress.
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FINANCIAL TIMES
World Business Newspaper ARTHUR BEESLEY IN DUBLIN
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ritain can strike a new Brexit deal with the EU to avoid crashing out without a deal, Boris Johnson insisted at talks with the Irish taoiseach on Monday, describing a no-deal Brexit as a “failure of statecraft”. Despite the upbeat message, the UK prime minister’s first trip to Dublin since taking office highlighted the sharp differences between him and Leo Varadkar over the Irish backstop, which aims to prevent a hard border on the island of Ireland. “I have one message that I want to land with you today, Leo, that is I want to find a deal, I want to get a deal,” Mr Johnson said at a press conference ahead of the meeting. “Be in no doubt we can do it and will address it enthusiastically.” Mr Varadkar replied that he was ready to listen to “constructive ways” to settle the issue, but added that Dublin needed legally binding and workable proposals, which his governmenthas not yet received. “What we cannot do, and will not do, is replace a legal guarantee with a promise,” he said. “In the absence of agreed alternative arrangements, no backstop is no-deal for us.” The backstop, a key component of the deal agreed with the EU by Mr Johnson’s predecessor, Theresa May, is opposed
Brexit differences on show at Johnson-Varadkar meeting
Irish prime minister says he is ‘ready to listen’ but that ‘no backstop is no-deal for us’
© Charles McQuillan/Getty Images
by Northern Ireland’s Democratic Unionist Party, which has propped up the minority Conservative government in Westminster. The DUP believes it could divide Northern Ireland from the rest of the UK.
Dublin saw the meeting between the two leaders as an opportunity to assess what exactly Mr Johnson has in mind to break the logjam, but no breakthrough is expected until a summit of EU leaders on October 17, only a
fortnight before the UK is due to leave the bloc. In a joint statement after the talks, the British and Irish governments said divisions remained despite some progress. “While they agreed that
the discussions are at an early stage, common ground was established in some areas although significant gaps remain.” Mr Johnson, who claimed to have an “abundance of proposals” to replace the backstop, said his plan centred on an all-Ireland agricultural zone and trusted trader schemes. However, these measures have already been rejected by Dublin. Ireland is open, however, to the idea of replacing the all-UK backstop rejected by Mr Johnson with a backstop covering only Northern Ireland. But this option is much wider than the agricultural plan the UK premier has proposed — and it has been repeatedly rejected by the DUP. Mr Varadkar has also indicated that he wants to hear from Mr Johnson whether he can actually get any new deal over the line. The British prime minister has lost his parliamentary majority, suffered ministerial defections and faces the prospect of losing a Westminster vote later on Monday on his demand to call a snap election next month.
Losers from Argentina rout are not giving up Elliott takes $3.2bn stake in Wall Street investors back a rebound, citing historical precedents COLBY SMITH IN NEW YORK AND ORTENCA ALIAJ IN LONDON
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und managers recently burned by Argentina are doubling down on the country’s bonds, saying that prices have dropped to levels that should offer solid returns. Many investors endured big marked-to-market losses in the wake of August’s primary election, which paved the way for a return of a Peronist government. Stocks and bonds plunged, while the peso dropped lost more than onefifth of its value against the US dollar. But some say the market overreacted, arguing that Argentina is better positioned to avoid a repeat of its chaotic default on $100bn of debts almost two decades ago. Prices of the country’s sovereign bonds are now below levels some investors believe are in line with potential recovery values, once the debts have been restructured. “If you look at where pricing is for sovereign bonds, about 40 cents on the dollar, there is some asymmetry here,” said
one emerging markets investor who lost money in the rout. “Think about the restructuring for the 2001 default where you had recoveries in the low 30s, Argentina has different circumstances now. They still have a lot of debt but less than you had back then.” Robert Gibbins, the chief investment officer of hedge fund Autonomy Capital, agreed that the election fallout presented an opportunity to take positions in Argentina’s $50bn of longer term debt, the majority of which is held by foreign investors. “The starting position here is just very different than where everyone remembers from 2001,” he said. His $6bn fund, an emergingmarket specialist, fell 16.3 per cent in the first two weeks of August, more than wiping out its gains from earlier in the year. John Morton, a portfolio manager at New Jersey-based fund Lord Abbett, highlighted Buenos Aires’ progress in eliminating its budget and current account deficits. “It came at a great expense . . . but I think [Peronist candidate Alberto Fernández] is inheriting a situation probably as good as it’s been in probably eight years.” www.businessday.ng
AT&T and calls for shake-up
Shares rise after activist discloses acquisition and dubs telecoms group ‘disappointing’ LINDSAY FORTADO, ANNA NICOLAOU AND ORTENCA ALIAJ IN NEW YORK
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ctivist investor Elliott Management has taken a $3.2bn stake in AT&T, one of its largest-ever positions, and is pushing for a strategic overhaul at the US telecoms group, which it says has been a “disappointing investment for shareholders”. Paul Singer’s $38bn hedge fund has taken aim at AT&T’s merger strategy, including its $80bn takeover of Time Warner, saying the US telecoms group has embarked on a “questionable” acquisition strategy. “What has attracted our attention, as well as the attention of other shareholders . . . has been the prolonged and substantial underperformance of AT&T as an investment relative to its potential,” Elliott partner Jesse Cohn and associate portfolio manager Marc Steinberg said in a letter on Monday to AT&T’s board. Over the past decade, the company “has not only failed to keep pace with the broader market, but has actually underperformed by over 150 percentage points”, they added. The size of the AT&T stake is one of the biggest ever taken by Elliott or
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any activist hedge fund. Elliott, one of the most formidable and prolific activist investors, has grown larger than any of its rivals, allowing it to build a war chest to take on companies the size of AT&T, which has a $275bn market capitalisation. Shares in AT&T were up more than 4 per cent to as high as $38.14 in early Wall Street trading. Elliott says its plan will see AT&T’s share price go above $60 by the end of 2021. Donald Trump, who was critical of AT&T’s takeover of CNN owner Time Warner last year, cheered Elliott’s move, urging them to overhaul CNN’s coverage of the White House. “Great news that an activist investor is now involved with AT&T,” he tweeted. “As the owner of VERY LOW RATINGS @CNN, perhaps they will now put a stop to all of the Fake News emanating from its non-credible ‘anchors.’ Also, I hear that, because of its bad ratings, it is losing a fortune.” Elliott said it sees an “irreproducible collection of leading businesses” at AT&T, including its wireless business and its media franchise. The fund managers praised the company’s “rich and pioneering history” and its “hard work, ingenuity and passion of its dedicated employees”. The fund asked for a meeting @Businessdayng
with the company and was seeking to work with them, it said. In the letter, Elliott outlined a four-part plan to tackle what it described as the company’s long-term underperformance by increasing strategic focus to win back market share of wireless revenues, improving operational efficiencies and cost-cutting and enhancing the company’s leadership by stemming the tide of executive departures. After buying Time Warner, AT&T appointed John Stankey, a company veteran, to run its entertainment business. Mr Stankey has overseen a tumultuous management shake-up as three of the four leaders of Time Warner have left — an exodus that Elliott described as “alarming”. HBO chief Richard Plepler quit after determining he would not be given the same level of independence in the new regime, while Turner head David Levy also left. Mr Stankey initially promoted Kevin Tsujihara, the chief of the Warner Bros film studio, only to see him abruptly resign two weeks later in light of misconduct allegations. Mr Plepler’s exit in particular raised alarm bells with analysts, because he had been credited with leading HBO’s successes through the past decade.
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PenCom, NECA urge informal sector to embrace micro pension JOSHUA BASSEY
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he National Pension Commission (PenCom) and the Nigeria Employers’ Consultative Association (NECA) have urged Nigerians in the informal sector to embrace the recently introduced micro pension plan to secure their future. The micro pension was launched in March 2019 by PenCom. Unlike contributors in the formal sector with defined income, persons in the informal sector are not obligated by law to sign on to the Contributory Pension Scheme (CPS). The micro pension plan, therefore, is targeted at the informal sector whose incomes are not fixed, though still voluntary. At an interactive session with members of the organised private sector, jointly organised by NECA PenCom in Lagos, the director-general of NECA, Timothy Olawale, emphasised the need to retain contributors’ confidence in the CPS. He noted that stakeholders and employers were concerned about the implementation of the scheme. Olawale, represented by the director of projects at NECA, Selina Oni, said contributors
needed to be kept abreast of the regulatory, legal, social and economic issues as they relate to contributors’ funds as well as information on recent development within the commission. “This will not only boost the confidence of stakeholders, it will increase the level of compliance and ensure the continuous implementation of the act. “It is our hope that recent developments in the CPS, such as the PenCom compliance guidelines on life insurance by contributing employers, the rising pension assets, agitation by contributors for safety and inclusiveness in the administration of the scheme will be addressed,” said Olawale. Aisha Dahir-Umar, acting director-general of PenCom, observed that with the continuous dialogue with the OPS, the administration of the CPS so far had been impactful. She said through the support of the OPS, the pension industry had emerged one of the fastest growing in Nigeria, boasting of N9.03 trillion. She disclosed that the registration and remittance of contributions into the micro pension plan had commenced and urged people to take advantage of the plan.
L-R: Henry Chukwu, programme specialist, EFInA; Uche Uzoebo, SANEF’s head of distribution and engagement; Daramola Atanda; Shuru Kabiru, Central Bank of Nigeria officials, and Attai Ohiemi, Association of Mobile Money and Bank Agents official, during financial services agents forum in Abuja.
IGP warns IMN, says procession by group amounts to terrorism Innocent Odoh, Abuja
Slok refutes claim on issued share capital of FIB
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lok Nigeria Limited has denied media report that the issued share capital of First International Bank (FIB) Group Limited has been sold by the former Abia State governor, Orji Uzor Kalu. The statement signed by Obinna Kalu, legal adviser (FIB Group Limited), said: “This is to inform the general public that the online report credited to Premium Times that a former Governor of Abia State, Orji Kalu has sold the issued share capital of his banking groupFirst International Bank (FIB) Group Limited, The Gambia, is misleading. “To set the records straight, Slok Nigeria Limited has not sold any of its issued share capital in FIB Group Limited, The Gambia to any person or organisation. “Be it known that Slok Nigeria Limited remains the legal/ genuine owners of FIB Group Limited and its subsidiary banks. “Recently, an illegal attempt by one Lilium Grays Limited to take over the subsidiary banks of FIB Group Limited was dismissed by the Supreme Court of The Gambia via a judgment delivered on 30th July, 2019, thus reaffirming that Slok Nigeria Limited is the legal/genuine wholly owner of FIB Group Limited and its FiBank subsidiaries in Guinea, Gambia and Sierra Leone.” The online news platform had reported that Kalu had sold the entire issue shared capital of his banking group, FIB Group Limited, The Gambia. According to the online media, documents seen by the newspaper showed that the transaction, which has never been made public, was concluded between 2015 and 2016.
The documents revealing the transaction was obtained in a leaked data obtained by German newspaper, Suddeutsche Zeitung, and the International Consortium of International Journalists (ICIJ) from two offshore secrecy providers (Appleby and Asiaciti Trust) and 19 secrecy jurisdictions around the world. The leaked 1.4 terabyte data, named Paradise Papers, consist of 13.4 million records and is no doubt one of the biggest leaks in history. According to one of the documents — the term sheet reflecting the terms and conditions in relation to the acquisition of shares — the bank was bought by a New York-based investment fund, Lilium Capital. Prior to the transaction, Slok Nigeria Limited and International Insurance Company Limited held 80 percent and 20 percent of the issued share capital of FIB, respectively. Details of the term sheet showed that Lilium Capital acquired the entire issued share capital of FIB from Slok and IICL for $10 million. Similarly, it issued shares representing an aggregate of five percent of the issued preference share capital of the company to Slok and IICL with the condition that the two firms and its owners will have no say in the running of the acquired banking group. Lilium also proposed to make annual payment of $1 million to Slok and IICL for a period of 5 years. The term sheet revealed that the restructuring detail stipulated that shares held by the banking group in each of the insurance subsidiaries in countries it operates would be transferred to a separate entity that is not a part of the company. www.businessday.ng
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nspector General of Police (IGP) Mohammed Adamu has warned members of the Islamic Movement in Nigeria (IMN), otherwise known as Shiites, to desist from their planned procession on Tuesday, stressing that such action would be treated as terrorism. The IGP gave this warning in a statement issued on Monday by Force Public Relations Officer, Frank Mba, adding that the group remained proscribed by the law. The Shiites planned to observe their annual Ashura Procession on Tuesday to commemorate the death of Hussein Ibn Ali in the battle of Karbala in Iraq. Imam Hussein is revered among the Shiites as a martyr. But the Police, which have had some hard times containing the activities of the sect in recent times said, “It has come to the knowledge of the Nigeria Police Force that some members of the proscribed Islamic Movement in Nigeria (IMN) intend to embark on a nationwide procession, ostensibly to cause disruption of public peace, order and security in the country. “The Force notes that in line with the Terrorism (Prevention) Proscription Order Notice 2019 of 26th July, 2019, the activities of the Islamic Movement in Nigeria have been proscribed. Consequently, all gathering or procession by the group remains ultimately illegal and will be treated as a gathering in the advancement of terrorism,” the statement said. The Police said further that to this end, the IGP has directed the Commissioners of Police in all the States of the Federation and the Federal Capital Territory (FCT), Abuja as well as their supervisory Assistant Inspectors-General of Police to put in place concrete measures to avert any planned procession and/or disruption of public peace by the Islamic Movement in Nigeria, anywhere in the country. According to the statement, the IGP also enjoined
the public to avail the Force with useful information as regards the activities of the proscribed Islamic Movement in Nigeria. The police boss also advised parents and guardians to prevail on their children and wards not to be cajoled into embarking on illegal and illmotivated activities by anyone or group of persons, under any
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guise whatsoever. But the group through its spokesman, Ibrahim Musa, told BusinessDay on Sunday that the procession would go on because it was a religious activity and the right of the Shiites as enshrined in the Nigerian constitution. He dared the police to prepare more bullets because the group would
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hold the procession. The police have battled the group, especially when their leader in Nigeria, Ibrahim El-Zakzaky was detained in 2015, following a clash between the sect and soldiers in the convoy of Chief of Army Staff, which led to the death of many members of the sect in Zaria.
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Toughest business job in South Africa up for grabs at Eskom New boss will have to turn round a stricken utility and handle political interference JOSEPH COTTERILL IN JOHANNESBURG
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t is the toughest job in South Africa. And whoever takes the helm of Eskom will not only have to lead a rescue of the stricken electricity monopoly, they will also have to tip-toe around a gaggle of squabbling politicians. President Cyril Ramaphosa’s government is nearing the end of a search for a chief executive for the state-owned utility, which is deep in the red and unable to sustain its $30bn debts, despite selling nearly all the power in South Africa. Ravaged by graft under Mr Ramaphosa’s predecessor, Jacob Zuma, the many failings of Eskom imperil Africa’s most industrialised economy. Strong leadership is needed to oversee the proposed break-up of one of the world’s largest utilities. Tito Mboweni, finance minister, is among those demanding separation into more manageable units to ensure that R128bn ($8.6bn) of state bailouts for Eskom in the next three years will not be wasted money. But Mr Ramaphosa’s African National Congress is deeply divided over how, or even whether, to pursue the break-up. Eskom has gone through ten chief executives in as many years because of political meddling and corruption scandals. “We have literally run out of people” to run Eskom like a normal business, said Khaya Sithole, a political analyst. The job has attracted applications from experienced Eskom alumni such as Andy Calitz, the South African former head of a vast LNG project in Canada. Mr Calitz began his career as an electrical engineer at Eskom. He has declined to comment publicly on the Eskom process. However, “it is not just your business clout or acumen [that is needed] but your ability to navigate the stormy waters of politicians and unions”, Mr Sithole said. As Phakamani Hadebe, previous chief executive, said when he resigned in May after just over a year in the job: “It is no secret that this role comes with unimaginable demands.” When Mr Hadebe took on the task of fixing Eskom’s parlous finances, he had a reputation as a skilled former bank executive and civil servant. But his fate was effectively sealed after his political masters overrode a plan to contain Eskom’s spiralling wage bill. It had angered the ANC’s trade-union allies. They are also opposed to any form of break-up. Eskom suffered severe power blackouts towards the end of Mr Hadebe’s tenure that underlined the scale of its debt crisis. The outages were caused by lack of maintenance for ageing plants
after money was diverted to paying debts and spent on expensive projects that were crippled by corruption. “If we do nothing, Eskom will collapse and bring down South Africa,” Jabu Mabuza, Eskom’s chairman who has temporarily taken on the chief executive’s duties, told managers in a recent leaked presentation. “Eskom ran out of cash and came close to complete collapse on multiple occasions in 2019 . . . Eskom’s importance to South Africa is the only reason why [it] still exists,” he said. Despite Eskom’s crucial role in driving the economy, there has been no urgency in finding a replacement for Mr Hadebe. His post was only advertised in August, months after he left. It has infuriated business leaders. “That means another three months, at best, without a permanent CEO. This lack of urgency is disturbing,” said Sipho Pityana, president of Business Unity South Africa, a representative group. At stake are fundamental decisions on Eskom’s break-up, such as whether it should begin with the relatively well-run transmission grid, or first tackle the huge debts attached to the power plants. “It is still unclear how the unbundling would happen, but I suspect that generation will be prioritised,” economist Thabi Leoka said. “What will be tricky is the segregating of debt because creditors extended loans to Eskom as an entity.” Last month Mr Mboweni’s Treasury shook up the debate with a paper on economic reforms that advocated the outright sale of Eskom’s coal power stations. The paper argued that a selloff could raise R450bn, enough to clear Eskom’s debts. It would mean convincing outside investors to take on the risk of ageing coal power stations as well as newer plants that have serious faults. “In reality this is completely unworkable . . . there would be no buyers,” said Peter Attard Montalto, analyst at South Africa’s Intellidex research firm. However, the Treasury’s proposal might be “useful as a political baseball bat” to end the torpor in government regarding Eskom’s fate, Mr Attard Montalto said. Next month Mr Mboweni will deliver an updated medium-term budget that is set to reveal more of the damage done to state finances by the bailouts. He will be under pressure, particularly from rating agencies, to link the cash to tougher demands for Eskom’s separation. But if Mr Mboweni cannot even point to a new chief executive by then, Mr Sithole said, “it will simply tell the markets and everyone else out there that they still don’t know what to do with Eskom”. www.businessday.ng
Hiroto Saikawa’s departure may open the door to closer co-operation with Renault © AP
Nissan chief executive Hiroto Saikawa to resign after pay row
Interim boss named for Japanese carmaker following revelations of excessive payments
KANA INAGAKI IN TOKYO
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issan said its chief executive Hiroto Saikawa would resign on September 16 following revelations of excessive payments and a plunge in profits in the wake of the ousting of Carlos Ghosn on allegations of financial misconduct. Following a board meeting on Monday, the company said it would install its chief operating officer Yasuhiro Yamuchi as interim chief executive until it found a permanent replacement for Mr Saikawa by the end of October. The change in Nissan’s management came after the company concluded a 10-month
internal investigation into the finances of Mr Ghosn, saying alleged misconduct by the former chairman caused financial damages of Y35bn ($327m) to the company. Mr Ghosn, who was arrested and ousted in November, has denied all charges of financial misconduct. Nissan’s nomination committee has compiled a list of more than 10 candidates, which include current executives such as Jun Seki, its performance boss, as well as external candidates from Renault and other companies. The investigation has found that several of its senior executives, including Mr Saikawa, received excess payments as part of an incentive scheme that paid
out cash depending on Nissan’s share-price performance. Although the excess payments were not illegal and Mr Saikawa is not accused of any wrongdoing, the operation of the incentive scheme was described by Mr Saikawa as “different to what it should have been”. Removing Mr Saikawa from his position clears one of the big barriers to closer co-operation between Nissan and Renault, as relations between him and Renault chief executive Thierry Bolloré have soured. A change at the top of Nissan may potentially open the door to further talks between Renault and Fiat Chrysler about a future combination, months after the pair called off negotiations over a €33bn merger.
Putin’s party loses more than third of seats in Moscow poll Voters deliver strong rebuke to Russia’s president after a summer of rising discontent HENRY FOY IN MOSCOW
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ussia’s ruling party has lost more than a third of its seats in Moscow’s city council as angry voters delivered a strong rebuke to President Vladimir Putin after a summer of discontent in the country’s capital. The local ballot followed months of protests against falling living standards, government corruption and moves to suppress opposition politicians, despite a police crackdown against demonstrations. Candidates backed by a broad opposition movement claimed 20 out of 45 seats in the Moscow city council, according to official election data, while candidates backed by United Russia won 25. At the last election in 2014, the party took 38 seats including 10 won by independent candidates it had backed.
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“I called on everyone to come to the polls and choose deputies worthy of their opinion, and this is the opinion of Muscovites,” said Valentin Gorbunov, chairman of the city’s electoral commission. “Our task is to organise a vote in accordance with the law . . . Let political scientists evaluate the results.” While the result of the normally low-key local elections will have little impact on how Moscow is governed, Sunday’s ballot was seen as a barometer of dissatisfaction with Mr Putin, ahead of parliamentary elections in 2021 and his potential handover of power in 2024. The ruling United Russia party was also routed in elections for the local parliament in the far eastern coastal region of Khabarovsk, winning just two out of 36 seats. However, its candidates comfortably won all the contests that took place on @Businessdayng
Sunday to elect regional governors, amid allegations of ballot stuffing in some areas. Eleanor Bindman, at Manchester Metropolitan University, said it was important not to exaggerate the significance of the poll results “given that pro-Kremlin candidates in the more important gubernatorial elections elsewhere, such as St Petersburg, were elected as planned”. But she added that the strong performance showed that the opposition was “capable of working together” and gave them “the opportunity to prove themselves at the local level”. While some of the opposition parties that won council seats are considered to have the Kremlin’s backing, the results suggest that a campaign led by activists to encourage citizens to vote tactically to stop United Russia candidates was successful.
Tuesday 10 September 2019
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FINANCIAL TIMES
COMPANIES & MARKETS
@ FINANCIAL TIMES LIMITED
KPMG partners quit in wake of WhatsApp row Departures hit firm’s key financial services consulting division TABBY KINDER, MADISON MARRIAGE
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wo of KPMG’s most senior financial consultants have quit the Big Four firm after Tim Howarth, their boss, was ousted following an investigation into his conduct. Mike Walters, who was head of compliance at UK lender Barclays until he joined KPMG in 2013, and Harps Sidhu, KPMG’s head of capital markets consulting, will both leave the business at the end of this month. Their departure comes weeks after an investigation by KPMG into alleged misconduct by Mr Howarth that scrutinised his use of WhatsApp messages. One KPMG insider said the three senior exits had “knocked out the effective chain of leadership” within the firm’s financial services consulting division, which has turned into “a bit of a disaster zone”. “The core leadership of one of the most profitable areas of the business has just been taken out. People want to know what will happen to their careers,” the insider said. KPMG’s financial services work, including consulting and audit, made revenues of £681m last year, making it one of the firm’s largest business lines. The departures have sparked a reshuffle within the senior ranks of the division, which advises some of the UK’s biggest financial institutions, including Lloyds Banking Group and Nationwide. Mr Howarth, who ran KPMG’s financial consulting business, was forced out in August as KPMG convened a disciplinary panel. Mr Howarth told the Financial Times he had already resigned and he vowed to appeal the outcome.He said there was no complainant and he did not believe the internal process was fair or would lead to a just outcome. Two people close to the matter said he was ousted after complaints
about messages he had sent on WhatsApp. A number of KPMG insiders said the investigation into Mr Howarth had led to tensions between partners and unsettled some staff. “It is not a happy place to work at the moment,” said one financial services partner. “A lot of people were asked questions about whether we had seen any misconduct by Tim. We thought it was wise not to speak to each other or to Tim during that time.” The insider said partner infighting had increased since it emerged in June that another senior partner, Sanjay Thakkar, had taken a leave of absence from KPMG’s deal advisory division after being accused of bullying. KPMG has since encouraged all staff to speak up about any concerns relating to inappropriate behaviour, triggering a large number of complainants to come forward. Mr Walters reported into Mr Howarth. He joined KPMG as head of financial risk management in 2013 after eight years at Barclays where he led its compliance function, which included 1,300 employees. Previously he worked at Deloitte, another Big Four accounting firm, for 16 years. Mr Sidhu was a partner at EY before he joined KPMG in 2013. He is in charge of KPMG’s capital markets consulting practice and is head of the financial services regulatory change unit, as well as the firm’s global lead for Mifid II with its bank and asset management clients. A person close to the matter described him as a “rainmaker”. As part of the reshuffle Lisa Fernihough has taken over from Mr Howarth as head of financial services consulting for KPMG UK, and Liz Claydon has been appointed as UK head of deal advisory in place of Mr Thakkar. Mr Walters and Mr Sidhu have not yet been officially replaced.
British Airways punished by damaging 48-hour pilot strike Shares and profits hit as pilots stage first walkout in airline’s history, grounding 1,700 flights DANIEL THOMAS AND BETHAN STATON IN LONDON
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ritish Airways was left counting the costs of a damaging 48-hour walkout by its pilots on Monday, with about £100m forecast to be wiped off profits and its chief executive admitting that the unprecedented strike action would “punish” its brand. Shares in IAG, which owns the UK airline, dropped around 3 per cent on Monday morning as BA grounded almost all its 1,700 flights, hitting 195,000 customers. The fall wiped off more than £200m from its market capitalisation as investors worried about the impact of the walkouts, with one top 10 shareholder admitting “you do get concerned” about the situation. With only five BA flights planned on Monday, Heathrow’s
Terminal 5 was almost deserted on Monday morning. In other terminals, passengers who had rebooked journeys with other airlines said they faced unexpected stopovers and shortened trips. The few passengers that turned up for flights were quickly offered seats in the BA lounge for staff to offer alternatives. BA chief executive Alex Cruz said on Monday that the row with pilots over pay was “going to punish our brand” but the airline confirmed no new talks were yet scheduled to resolve the next walkout, planned for September 27. Mr Cruz refused to comment when asked by the BBC on whether his own job was at risk. The strike comes after a damaging cyber attack on BA last year and IT problems this summer that hit hundreds of flights. www.businessday.ng
Arturo Herrera, Mexico’s finance minister, concedes that a testing international outlook has forced officials to rejig their calculations © Reuters
Mexico’s ‘overly optimistic’ budget raises concern Government says plans are realistic but analysts see revenue forecasts as too ambitious JUDE WEBBER IN MEXICO CITY
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exico’s government has unveiled what it called a “realistic but conservative” 2020 budget that targets a 2 per cent rise in economic growth and a wave of social spending, but analysts warned that some of its key assumptions were too optimistic. Arturo Herrera, finance minister in the leftist administration led by President Andrés Manuel López Obrador, acknowledged a difficult international outlook had forced officials to rework their calculations after an escalation in US-China trade friction led to a weakening of the peso and oil prices. But he stressed that he was not increasing taxes or debt and insisted in his presentation to Congress that the budget was “very, very responsible”. Mexico, Latin America’s second-biggest economy, is teeter-
ing on the brink of recession after a 0.2 per cent contraction in the first three months of this year. The 2020 growth projection in the budget would represent a jump from 0.6 per cent to 1.2 per cent this year and is based on assumptions of a 15 per cent rise in oil production and an increase in tax revenues that some analysts warned were too optimistic. “The 2020 budget . . . aims to appear as standard and responsible, as has been the norm, but under the hood some worrisome signs exist,” said Citi analysts in a note. “Contrary to tradition, the macro projections err more than [typically] on the optimistic side, revenue projections look hard to reach and there is still reliance on expenditure policy compressing physical investment.” While analysts said the increased oil production target of 1.95m barrels per day might be overambitious, they welcomed the fact that it included output from the private sector rather
than Pemex alone. The state oil company has suffered 14 years of falling production and produces around 1.7m b/d. Mr López Obrador’s government has sought to reassure markets that it has strong fiscal discipline since it presented its first budget last December — despite some decisions that shocked investors, such as the abrupt cancellation of a partially built $13bn new airport for Mexico City. The finance ministry said it would meet this year’s goal of generating a budget primary surplus (excluding interest payments) of 1 per cent of GDP and set a target for next year of 0.7 per cent, within a 2.1 per cent overall budget deficit in 2020. The government has implemented swingeing cuts to state bureaucracy in order to spend more on Mr López Obrador’s signature social programmes. But the moves have hit growth, which came in at zero in the second quarter.
Kenya’s Equity announces deal to buy Congo’s second-largest bank TOM WILSON IN LONDON
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enya’s Equity Bank said it plans to acquire the second-largest lender in the Democratic Republic of Congo as part of the east African group’s strategy to expand across Africa. The bank’s parent company, Equity Group Holdings, has entered into a non-binding agreement to acquire a controlling stake in Banque Commerciale du Congo, the company said in an emailed statement on Monday. “The proposed transaction
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is an opportunity for EGH to deliver the vision of building sub-Saharan Africa’s premier financial institution through delivering innovative products and services to customers, including, in particular, the effective use of technology,” the company said. Founded as a provider of mortgage financing in the 1980s, Equity bank has expanded rapidly in the last 15 years by targeting previously unbanked, lowincome depositors and is now Kenya’s biggest lender by market value and Africa’s largest bank by @Businessdayng
customer numbers. Equity acquired Congo’s seventh-biggest bank, ProCredit Bank Congo, in 2015 and in April agreed to buy Atlas Mara’s banking operations in Rwanda, Zambia, Mozambique and Tanzania, in a deal worth about $106m. Equity now has operations in eight African countries. It did not disclose how much it will pay for the stake in BCDC, which was founded in 1909. BCDC had total assets of $706m at the end of 2017. The Congolese government owns a 25 per cent stake in the lender.
leaderSHIP With Robert Mugabe gone, only the young can save Zimbabwe
BUSINESS DAY Tuesday 10 September 2019 www.businessday.ng
The country needs nimble technocrats, not the old warhorses of the liberation struggle David Pilling
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he story of Robert Mugabe has echoes of Shake sp ea re’s tragedy Othello. In the bard’s version, the Moorish general, dignified and irreproachable at the play’s outset, is tricked into believing Desdemona has betrayed him. He strangles her to death. In the Zimbabwean version, the role of Desdemona is played by the white settlers and the British government. Mugabe believes they have betrayed him. He strangles Zimbabwe to death. Mugabe, who died last week at the age of 95, is indeed a tragic figure. His flaw was both personal and archetypal. And his downfall was laid out brilliantly by Heidi Holland in her book Dinner with Mugabe, which charts the descent from liberation hero to villain. Mugabe was an Anglophile who adored the Queen. At liberation in 1980, he promised reconciliation with the former white oppressors who had jailed him for almost 11 years, denying him even compassionate release
to attend the funeral of his only son. “The wrongs of the past must now stand forgiven and forgotten,” he said. The whites did not forgive nor forget. White Zimbabweans
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Breaking free of the patterns of history is hard. Political scientists call it “path dependence”. Colonial roads went straight from mines to port. So did postcolonial ones
refused to vote for a black man, however much he had sought to emulate them. The British government, under Tony Blair, refused to provide the funds that Mugabe wanted to help redistribute white land to impoverished black farmers. Instead, Mugabe sent thugs to seize farms, sending the once productive agricultural sector into a tailspin. Hunger and hyperinflation ensued. Zimbabwe’s economy, like Desdemona’s corpse, was reduced to a lifeless shell. Mugabe’s tragedy is also the tragedy of liberation movements everywhere. Their transition from armed opposition to government rarely goes well. The Chinese Communist party just about managed it, though that took a massive reset by Deng Xiaoping in the late 1970s after 30 years of Zimbabwean-style flailing under Mao Zedong. In Africa, there is virtually no example of a liberation movement that has repeated in office the successes forged on the battlefield. That is partly because the struggle and government are different. The secrecy and
single-mindedness required to unite an underground movement do not translate well into the pragmatism and openness necessary in office. Too often, having overthrown the oppressor, liberation heroes have merely stepped into the shoes of their former overlords. They have taken the trappings of power for themselves, as reward for the hardship they suffered. Breaking free of the patterns of history is hard. Political scientists call it “path dependence”. Colonial roads went straight from mines to port. So did postcolonial ones. The habits of power relations proved equally hard to divert. One exception in Africa came in Ethiopia. The liberators who freed Ethiopia from Emperor Haile Selassie in 1974, the Marxist Derg, imposed a “red terror” and used famine as a weapon of war. But the Ethiopian People’s Revolutionary Democratic Front, which overthrew the Derg in 1991, brought Chinese-style dedication to development that laid the foundations of one of Africa’s most promising stories. Perhaps more typical is South Africa where the African National Congress has ossified in power. Under Jacob Zuma, the former president, party membership became a licence to loot the state. Even Cyril Ramaphosa,
the current president bent on restoring the ANC’s moral standing, cannot reverse the metastasis of party corruption into every crevice of the body politic. In Zimbabwe, too, Zanu-PF, the party that has dominated power since independence, is unsalvageable. Like Mugabe, all it has are the battles of the past and the pecuniary possibilities of the present. The median age of Zimbabwe’s population is 20. Emmerson Mnangagwa, the man who shoved Mugabe aside two years ago, is nearly four times older, at 76. That youthful population wants competent and honest government by young technocrats, not the tired ideology of old soldiers. Young people will make mistakes too. But in a continent where most rulers are above 60 — and many considerably older than that — young leaders would be less burdened by history and freer to imagine solutions to the problems of the present. Speaking of Zimbabwe’s opposition Movement for Democratic Change, whose leader Nelson Chamisa is 41, Mugabe said: “The MDC will never be allowed to rule this country — never ever. Only God will remove me.” God has now done his part. It is up to Zimbabweans to do the rest.
Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Advert Hotline: 08034743892. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Patrick Atuanya. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.