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Success of Nigeria’s power ‘Guinea pig’ threatened by late settlement of invoices ... $135m investor equity dividends stranded ISAAC ANYAOGU

he Federal Government has settled the past 10 invoices of the Azura Independent Power Plant (IPP), but it has often come too close to missing the deadline and this is giving investors cause for concern. Azura has been called the ‘guinea pig’ for the long-term development of the sector due to its innovative financing structure which could be a template for other power plants in Nigeria. According to the terms of the Power Purchase Agreement (PPA), the power supply invoice Continues on page 38

Inside Dangote outlines 5 projects in works to boost Africa’s development P. 2

L-R: Olusola Ayodele, head, customer relationship management, Leadway Pensure PFA; Olusakin Labeodan, executive director, sales and investment, Leadway Pensure PFA; Doyin Salami, CEO, Kainos Edge Consulting; Adenrele Oni, MD/CEO, Richway MFB, and Lanre Idris, executive director, operations, Leadway Pensure PFA, at the Post-Election Economic Outlook Breakfast Meeting organised by Leadway Pensure PFA in Lagos.

Nigeria disagrees with IMF over debt concerns T HOPE MOSES-ASHIKE & TONY AILEMEN

he International Monetary Fund (IMF) on Wednesday raised concerns over the risk of rollovers of Nigerian debt and meeting the needs for refinancing, but the Federal Government is insisting that the debt levels are sustainable.

Rollover risk is commonly faced by countries and companies when a loan or other debt obligation (like a bond) is about to mature and needs to be converted, or rolled over, into new debt. Tobias Adrian, financial counsellor and director of the monetary and capital markets department, IMF, who unveiled

the Global Financial Stability Report (GFSR) titled ‘Vulnerabilities in a Maturing Credit Cycle’ at the ongoing World Bank/IMF Spring meetings in Washington DC, admitted that Nigeria has been borrowing in international market with rising rollover risk. “But we worry – so on the one hand, that is very good because it allows Nigeria to invest more,

but on the other hand, we do worry about rollover risks going forward,” Adrian said. He said at the moment, funding conditions in economies such as Nigeria and other subSaharan African countries are very favourable but that might change at some point. Continues on page 38

Thursday 11 April 2019

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NEWS Absa bullish on Nigeria expansion plans, targets second half for take-off OLUFIKAYO OWOEYE

eading South Africa lender, Absa, has revealed that it will make a start on its investment bank-focused expansion into Nigeria in the second half of this year as part of its growth strategy. Charles Russon, chief executive of the division, said the bank will not buy a Nigerian bank but will rather make an entry into the country slowly and grow organically, noting that Absa will leverage on Nigeria’s huge unbanked population, estimated at 60 million by the World Bank in 2017. Absa expressed its desire to double its share of banking revenues on the continent to 12 percent and one of a series of ambitious targets Absa has set as it tries to carve out a name for itself after separating from Britain’s Barclays in 2017 was to commence operations in Nigeria, Africa’s most populous nation. Russon also revealed that Absa’s Nigerian expansion would be focused on its cor-

porate and investment bank (CIB) and has requested his team to develop a strategy within the coming months. “I want the strategy nailed down and approved with our board pretty much at the end of Q2 so that we can start to act on that in the second half,” Russon told Reuters. Speaking on the sidelines of the World Economic Forum in Davos early this year, Maria Ramos, former CEO of Absa, said the bank was unlikely to make acquisitions but it would have to be clear on how to fund its activities without a retail deposit base, adding that building from scratch could be slow. Absa is also setting up offices in London and New York, both with securities licences, to replace some of the global reaches it lost with the Barclays divorce. Both should be up and running by around the third quarter, Russon said, adding similar operations in other regions could follow.

•Continues online at www.businessday.ng

Nigeria’s oil production increases by 11,000bpd to 1.73m bpd in March …as OPEC’s plunges to 4-year low by 534,000bpd JUMOKE AKIYODE-LAWANSON

igeria’s oil production increased in March to 1.73 million barrels per day (bpd) despite efforts by Organisation of Petroleum Exporting Countries (OPEC) to hold back output as part of measures to rein in global oversupply and bolster crude prices, latest report from OPEC reveals. According to independent sources, the 14-member OPEC said Nigeria’s crude oil production increased by 11,000 bpd to 1.73 million bpd in March 2019, from 1.72 million bpd recorded in February. Since 2018 and first quarter 2019, Nigeria’s oil production has hovered around 1.7 million bpd compared to 1.6 million bpd in 2016. Conversely, OPEC’s output fell by 534,000 bpd in March to 30.02 million bpd thanks to Saudi Arabia’s and Iraq’s willingness to aggressively cut production and a further drop in Venezuela’s sanction-hit supplies, according to independent sources cited by the group in its monthly report. This is the lowest since February 2015 when the group pumped 29.97 million bpd. Saudi Arabia, the world biggest oil exporter, took another 324,000 bpd off the market in March, bringing output

to just less than 9.8 million bpd and delivering on Energy Minister Khalid al-Falih’s vow to pump well below 10 million bpd. Iraq’s output declined by 126,000 bpd to 4.5 million bpd, while Venezuela’s output plunged to just 732,000 bpd, recording a decline of 289,000 bpd compared to February. Venezuela had been hit by the Trump administration’s sanctions on state oil company PDVSA. According to US government statistics, the United States imported zero barrels of crude from Venezuela during the final three weeks of March, which was a sharp decline from weekly imports of around 600,000 barrels per day before the sanctions were announced in late January. This year alone, supply from the group has fallen by more than 1.5 million bpd, which is one of the major reasons why Brent crude oil has recovered to above $70 a barrel for the first time this year, with the market now facing a supply deficit despite growing output from the US shale industry. “Any fresh signs of world growth cooling or global supply outpacing demand may end up dragging prices back below the $70 per barrel level,” Lukman Otunuga, FXTM Research analyst, told BusinessDay.

Continues on page 38 www.businessday.ng

Babajide Olusola Sanwo-Olu (m), governor-elect, Lagos State, flanked by Ebenezer Onyeagwu (r), GMD/CEO designate, Zenith Bank plc, and Temitope Fasoranti, executive director, during a courtesy visit to the governor-elect in Lagos, yesterday.

Senate to override Buhari’s veto on 2 bills, reconsider PIGB, 10 others ... as Reps adopts MTEF/FSP OWEDE AGBAJILEKE & JAMES KWEN, Abuja

he Senate on Wednesday resolved to override President Muhammadu Buhari’s veto on his rejection of a constitutional amendment bill that seeks to make it mandatory for the president and governor of a state to lay the annual budget estimates before parliament three months to the end of a financial year. The Senate also said it would override the president’s veto on the Industrial

Development (Income Tax Relief) Amendment Bill. Similarly, the Senate said it would reconsider and pass the Petroleum Industry Governance Bill (PIGB), Stamp Duties (Amendment) Bill and nine other bills earlier rejected by the president and transmit same for presidential assent. The upper legislative chamber also resolved to withdraw four other bills rejected by the president and discontinue further legislative work on them. This comes as the House of Representatives on Wednesday passed the Medium Term Expenditure Framework

and the Fiscal Strategy Paper (MTEF/FSP) 2019-2021 with a benchmark of 2.3 million barrels per day crude oil production target. This followed the adoption of the report of joint Committees on Finance, Appropriations, Aids, Loans and Debt Management, Legislative Budget and Research and National Planning and Economic Development on the MTEF and FSP documents. The House also adopted other benchmarks that include $60 per barrel of crude oil, N305 to $1 as official exchange rate, while a new borrowing to fund budget deficit for 2019 was fixed for N1.6

trillion. The House passage of the MTEF/FSP 2019-2021 followed the Senate’s earlier approval of the document on Tuesday after it had spent 155 days with the legislature. The Senate resolution to override President Buhari’s veto followed the adoption of the report of the Technical Committee on Declined Assent to Bills by the President. David Umaru (APC, Niger), chairman of the panel, while presenting the panel’s report, submitted that out of the 17 rejected bills it scrutinised, 11 of

Continues on page 38

Dangote outlines 5 projects in works to boost Africa’s development MICHAEL ANI

frica’s richest man and president of Dangote Group, Aliko Dangote, said the Group is working on executing five key projects that would help boost development in Africa. In a recent meeting with business leaders in Cote d’Ivoire, Dangote said the projects were already in the works and would cut across different sectors of the economy including oil and gas, fertiliser, agriculture and cement manufacturing. “We have about five major projects that we are aiming to execute that will help in projecting Africa as a major producer and an exporter of key products,” Dangote said in a conversation with Sudanese-British billionaire businessman, Mo Ibrahim, in Abidjan, the Ivorian capital. The meeting was part of the 2019 Ibrahim Governance

Weekend held in Abidjan April 5-7, which debated and discussed African migrations, youth and jobs. Among these five key projects, Dangote said, is the oil refinery located around the Lekki-Epe axis of Nigeria’s commercial hub, Lagos, which is expected to be completed by 2022. Estimated at a cost as high as $13 billion, according to Dangote, the refinery will produce 650,000 barrel per day of crude oil that will help in placing Nigeria as one of the largest exporters of petroleum products on the continent. “What we are trying to do is to replicate exactly what we did in cement. Nigeria used to be number two in the world after the US in terms of cement importation but now we are self-sufficient and by this year, we will be the largest exporters of fuel in Africa with 8 million tonnes of extension,” he said.

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The project will also include building a petrochemical industry that will have the capacity to produce 1.3 million tonnes of polypropylene and polyethene that will enable Africa’s biggest oil producer to become the second-largest exporter of petroleum products in sub-Saharan Africa. The Dangote Group also has in works a fertiliser plant that will enable it to produce as much as 3 million tonnes of urea and ammonia. “We also have the gas pipeline and then we have the cement which we are doing about $2 billion worth of expansion in the cement manufacturing space,” he said. Dangote currently has cement factories in about 14 countries. It has factories operational in 11 countries while some other new cement facilities are currently ongoing. In agriculture, Dangote is building a 1 million metrictonnericeproductionplantwith @Businessdayng

the use of integrated power. Of all these projects, Dangote said the most challenging for the company is the oil refinery as the firm had to resort to building its own port to enable shipment of equipment since the ports available lack the desired capacity. However, the company has been able to navigate through as it opened its eyes to see the lack of infrastructure in Africa. “The real challenge of the project for us is having to build our own port because none of theportsinNigeriacouldactually take the weight,” Dangote said. “We brought in seven regenerators from Korea weighing 3,000 metric tonnes to regenerate the crude. The ports in Nigeria could only take 150 tonnes and we are also faced with the roadsaswehadtobuildaspecial road that all our equipment was going to pass,” he said.

•Continues online at www.businessday.ng

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NEWS

Global remittances hit new record high in 2018

… as World Bank sees biggest external financing source for low, middleincome countries in remittances SEGUN ADAMS

otal amount sent back home by citizens of lowand middle-income countries (LMICs) in Diaspora reached a record high in 2018 and has been bet on to become largest source of external financing for recipient countries, the World Bank says in its latest Migration and Development Brief published Monday. The World Bank says the officially recorded annual remittance flow to the LMICs grew 9.6 percent from its previous high of $483 billion in 2017 to $529 billion in 2018 on the back of “a stronger economy and employment situation in the United States and rebound in outflows from some Gulf Cooperation Council countries and Russia.’’ For 2018, the countries with the top remittance receipt were

India with $79 billion, China with $67 billion, Mexico with $36 billion, Philippines with $34 billion and Egypt with $29 billion. Across sub-Saharan Africa, Nigeria led the front receiving more remittance inflow than next biggest nine countries - Ghana, Kenya, South Africa and the likes. The inflow into Nigeria in 2018 amounted to $24.3 billion (N8.75trn at 360/$), approximately 6.1 percent of the country’s GDP and similar to the proposed 2019 budget of N8.83 trillion. Not accounting for China, the remittances of $462 billion into low-and middle-income countries last year, were more than their total foreign direct investment of $344 billion in the same period, a development the World Bank says would see remittances become the largest source of external financing at a projected $550 billion in 2019. Despite the possible gains

large transfers back home from migrant workers hold, the high cost of moving funds across borders was a major concern the World Bank raised. Average cost of sending $200 to LMICs remained at 7 percent in Q1 2018, compared with the last three quarters of 2018 and more than double the Sustainable Development Goal’s 2030 target of 3 percent while it was lowest at 5 percent in Southern Asia and most expensive at 9.3 in sub-Saharan Africa - even exceeding 10 percent in many areas in Africa and smaller Pacific Island. The World Bank notes that banks are the most expensive way to transfer money. Remittance cost charged often includes a premium, whereas national post offices have exclusive arrangement with a dominant money transfer operator (MTO) and charge less.

‘Western monopoly, aids, one sided trade stifle Nigeria, Africa’s competiveness’ KELECHI EWUZIE

ndustry experts in the field of commence have identified creation of a monopoly by developed economies, constant aids to African countries and one sided trade as major challenges stifling competitiveness of Nigeria and indeed Africa. They observe that aside these identified challenges, the ploy by the West to convince Africa that their wealth lies in continuous production of raw materials, rather than finished goods have significantly contributed to Nigeria and Africa’s backwardness. Bamidele Ayemibo, managing director, 3T Impex Trade Academy, Lagos, observes that Nigeria and indeed Africa are fundamental to the development and prosperity of the Western world. Ayemibo says Africa must come to terms with the fact that its prosperity can never lie in the production of raw materials; it

lies in the production of finished goods not as assisted by nature but production of complex products as assisted by intellectual capacity. Speaking at the 2019 graduation ceremony of trade professional development programmes under 3T Impex Trade Academy in Lagos, Ayemibo says aside the export monopoly game by the West, another tool in the hand of the West to keep Africa small is aids and one sided trade. According to Ayemibo, “They ensure that the underdevelopment in Africa persist by giving aids to keep regimes that will do their bidding in power. Such aids are never given for infrastructure development that will aid intra African trade.” In his presentation on the topic ‘How the West Has Kept African Exports Under 3 percent’ Ayemibo observes that the strength of Africa is its people and the huge markets that this has created. “This is the target of the Western world. Our misery is what

defined their relevance. Their factories are running on the strength of the poverty and underdevelopment of Africa,” he states. He further notes that one of the ways out of this economic slavery is for Africans to grow intra-African trade, adding that this is very important because it is going to make a lot of difference in terms of growth and development among Africans nations if it is taken very seriously. “If Africa can grow its current intra-African volume from below 20 percent to just about 40 percent, it would have succeeded in lifting hundreds of millions of its population out of poverty just the way China have lifted over 200 million of its citizens out of poverty in the last 7 years,” he says. Rufai Oseni, On Air Personality with Inspiration FM, states that Nigeria in particular and Africa in general cannot compete favourably in trade among the comity of nations without first addressing her infrastructure challenges.

Experts seek leeway for Nigerian goods at glocalisation, branding summit IFEOMA OKEKE

rands and communications experts, who gathered at the first Glocalisation and Branding Summit in Abuja, have stated ways to showcase Nigerian goods and services to the global community. The experts, including Adebayo Shittu, minister of communications, Lanre Osibona, senior special assistant to the President on ICT, Oluwakemi Areola, special assistant on new media to the minister of communications, and others insisted that Nigerian goods and services would compete at the global stage if innovation and branding were prioritised. Speaking at the event, hosted by a Nigerian London-based

public relations firm, Vivacity PR, Shittu said there was need for the nation to develop local contents to enable the country compete favourably globally. Describing glocalisation as an all-encompassing platform for the creation of virtual and physical hubs to enhance creativity and promote customised brands, Shittu said: “This cannot be achieved without emphasis on exporting services and focus on Foreign Direct Investments.” The minister emphasised the need for stakeholders to come up with viable recommendations on how to make the country an export hub for creativity and brands in Africa. Areola said the initiative would be extended across the country to spur small and me-

dium scale enterprises, saying, “We are working with MSME clinic (an initiative championed by Yemi Osinbajo, the Vice President,) and other necessary government agencies to educate on enabling environments and processes created for Nigerian SMEs to thrive home and away.” She said the initiative aimed at bringing together global and local brands to explore areas of synergy, discuss financial options, impact of technology and social media on branding and techniques that would make brands stand out and generate required revenue. Osibona said there was need to encourage Nigerians, especially entrepreneurs, to promote and patronise Nigerian goods and services.

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CITYfile Flood: Edo to demolish illegal structures on river banks

Youths protesting over killings at Birnin Gwari LGA, in Kaduna State on Monday.

NAN

Police confirm killing of 21 villagers in Kajuru

he police have confirmed the Killing of 21 persons and rustling of 50 cows in an attack by gunmen in Banono and Anguwan Aku villages in Kajuru local government area in Kaduna State. Spokesperson of the police in Kaduna, Yakubu Sabo, who confirmed the incident, said the latest attack took place on April 8. “We received a distress call that a group of armed

men in large number on motor bikes entered Banono and Anguwan Aku, both are remote villages in Kufana district of Kajuru local government area. “The invaders started shooting sporadically and attacking the villagers. In the process, they shot and killed twenty one persons, injured three others and destroyed ten 10 houses. The bandits also rustled about 50 cows,” Sabo said. He added that combined teams of police

mobile force personnel, conventional police, army and the local vigilante were mobilised to the area, and were able to repel the attackers and evacuated both the dead and the injured to hospital. According to him, efforts are on to apprehend the fleeing criminals, and reinforce police operatives drafted to the area for intensive patrol with a view to forestall further breakdown of law and order or reprisal and arrest

the perpetrators. Sabo said that the CP, Ahmad Abdurrahman is saddened by this attack and has reiterated the command’s commitment to apprehend the culprits. The Command appeals to members of the public to continue to assist the Police with useful information that could help in addressing these challenges and for the possible arrest of these criminals.” Sabo said. NAN

Ekiti invests N3.3bn to boost potable water supply REMI FEYISIPO

251-Kilometre water distribution project has been launched in Ekiti with a total cost put at N3.35 billion. The state governor, Kayode Fayemi unveiled the project, Tuesday, in Ado Ekiti, saying it was designed to guarantee adequate water supply to the people of the state. According to Fayemi, the water project to be comp lete d w ithin 18 months is being co-financed by the state gov-

ernment and World Bank under the Third National Urban Water Sector Reform Project. He warned against activities of vandals and uncooperative attitude of the would-be beneficiaries of the water supply in terms of payment of their bills could mar the sustainability of the project. “Water is life; people can live for a long time without food, but not water. I was in Ero dam a couple of months ago to flag off rehabilitation of the facilities with intention to supply water to nine local governwww.businessday.ng

ments across the state. “Areas like Olorunsogo, Olorunda, Ikingbinsin, Oke Ila and others will benefit from Ero dam extension, even in Ado Ekiti while Ifaki Ekiti axis and Ekiti North senatorial district will benefit from the reticulation project. “The rehabilitated Egbe dam too will supply water to some local governments in Ekiti South senatorial district, particularly uninterrupted water supply to Gbonyin and a part of Ado-Ekiti. “We are going to ensure that there is no arbitrary billing and I want you to

be part of this by protecting public utilities in your domains and paying your bills to enable us to generate more revenue for the state, said Fayemi. The general manager, Ekiti State Water Corporation, Olabisi Agbeyo, explained that the pipeline extension became imperative due to population explosion in Ado metropolis. In an address presented by the 14 joint communities in the area, they appreciated the governor for the gesture and promised to ensure proper use of the facilities when completed.

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s part of measures to avert disasters and losses to flooding, Edo State government is to commence the demolition of illegal structures along river banks in the state. This followed the expiration of notices earlier served on illegal developers for contravening extant town planning laws, which includes erecting unapproved structures and buildings on moats and river banks. The state commissioner for physical planning and urban development, Erimona Oye Edorodion, while making known the position of government on the issue, listed structures to be demolished to include roof eave-extensions, structures erected on the right of way of roads and streets, moats,

river banks, Transmission Company of Nigeria (TCN) high tension lines, all attachments on wall fence, caravans, kiosks and wooden sheds which are scattered all over Benin City. “All illegal developers are hereby advised in their own interest to demolish or remove their illegal structures and reinstate the land to its original status prior to your illegal development.” The commissioner warned members of the general public, especially illegal developers, “that if they fail to comply with the directives, the ministry shall enforce the provisions of the extant town planning laws of state against them and recover the cost of such action from them in a law court of competent jurisdiction and prosecute them accordingly.”

Cultists, thugs behind Rivers’ killings, say police

h e p o l i c e s ay cultists and political thugs are responsible for spate of killings in Rivers State. There has been upsurge in killings in Nigeria’s oilrich state, with many of its residents now living in fears. Nnamdi Omoni, the public relations officer of the police in Rivers, said in Port Harcourt, that the command was aware of the upsurge in crimes and measures being put in place to tackle the situation. He stated that the killings were not strange to the police as politicians who had armed the cultists and thugs have turned their back on them. “The issue is these boys have lost patronage from their paymasters, so they want money via crime by asking for royalty and all manner of payments from residents of the community. @Businessdayng

“We cannot allow that to fester, we will arrest them and bring them to justice. We have penetrated into their ranks, and I can assure you that in no time, they will be roundedup, arrested and brought to justice. They will be overtaken and made to account for their evil,” he said. Omoni confirmed normalcy has been restored in Mgbuodia community in Obio/Akpor local government area of the state after the killing that took place there. “When we got the information, we mobilised our men to the community, men of the Nigerian Navy were also there, so we were able to put the situation under control. “We restored normalcy, and even those that left, we spoke with them, and asked them to return,” he added. He said 10 persons were arrested in the wake of the development are currently helping the police. NAN

Thursday 11 April 2019

BUSINESS DAY

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comment Energy: Why it is important and the way forward

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Wiebe Boer

ood morning ladies and gentlemen. It’s an honour to be giving one of the keynote presentations at the Nigeria Energy Forum. More importantly, as the CEO of All On I am proud to be associated with this fine group of patriotic and passionate Nigerians who have built this forum into one of the most important annual events on the power sector calendar. It’s a great pleasure to speak to a roomful of people tirelessly working to close Nigeria’s energy access gap. I am excited to see that the room is full of a lot of familiar faces. But I am more excited about the new faces, because the new faces signify growth and increasing interest in addressing Nigeria’s number one foundational socio-economic problem – our lack of reliable, affordable power. Last year I published a book on the history of football in Nigeria, one of the key topics that unites all Nigerians in a positive way. Power is also like that – it unifies all Nigerians whether rich or poor, rural or urban, north or south, Christian or Muslim, male or female, young or old. But unfortunately, it unifies us for a negative reason. Those of us in the room today are

here because we do not accept this condition, because we want to change that narrative. We want to transform Nigeria’s power sector from a sector that causes collective national concern to one of innovation, entrepreneurship, and an example where the undying Nigerian spirit came together to successfully address a seemingly insurmountable problem – but in our own way. We’ve done it in telecoms when it was impossible. We did it in financial inclusion. We did it in tech. We did it in entertainment. Now let’s do it in power. So, when I was asked to deliver the keynote on “Energy: Why it is important and the way forward” today, and I was told to send in my slides for a presentation, I thought…no. No slides!!! What am I going to project on slides that you don’t already know? Would it be the numbers or the statistics? Would it be the problems and the challenges? Would it be the enormous potential that this sector portends to solve our energy needs in Nigeria or the potential for economic empowerment through the businesses that solve these needs? But we all know this. So today, I want to go a different route. I want to go beyond the ritualistic presentations and endless slides, and I want us to have a real conversation about energy – on grid, and off grid. I want us to look at how far we’ve come, but also how much further we have to go and how much faster we need to get there. Let’s take a quick look at where we are coming from. Nigeria is coming from over four decades of underinvestment in the power sector, resulting in 120 million Nigerians in either a no-grid or bad-grid situation. That’s

more people than the entire population of the next largest African country – and almost the population of all of the rest of West Africa.The energy gap serves as the foundation for a lot of the challenges the nation faces; health, education, insecurity, unemployment, environmental pollution, amongst others. We have an installed capacity of approximately 10,000 MW and a distributed capacity of just over4,000MW on a good day; to serve a population of about 198million persons in 2019, despite numerous projections to increase capacity over the years that have not materialized. This is not acceptable. We cannot continue to be the nation of perpetual darkness. We cannot continue to normalize this and just accept that in Nigeria power will always be a problem – and the national excuse for why we haven’t achieved what we should have as a nation. We must be the generation that turns this around and leaves no Nigerian in darkness. But is that dream a reality? Can we get there? I argue that we can for 4 reasons – we’ve done it before, the commercial opportunity is enormous, the enabling environment is in place, and finance is available. First of all, it has already been achieved in one small part of Nigeria. NESCO was founded on the Plateau in 1929 and 90 years later, continues to provide 24/7 hydro power to rural communities and industries in 7 local governments in Plateau State where I grew up. If it can work there, why can’t the power sector work across the country? What can we learn from NESCO for the benefit of all of Nigeria? Secondly, the massive challenge also means there is a massive commer-

‘

Just in the last month, three off grid energy companies in Nigeria have raised around $10 million each – this would have been unheard of 2 years ago

cial opportunity. And there is no better way to solve a massive social problem than one that makes money along the way. Let’s think about this: • Energy demand is expected to double over the next 10 years; • Nigerian consumers are willing and able to pay for alternate sources of power; 3x the consumers in India and 2x East Africa; • There are enormous bad-grid investment opportunities in high density low income urban areas – in Nigeria this is not just a deeply rural play; • Research from Dalberg commissioned by Shell in 2015 suggested that Nigerians were already spending $6 billion annually on alternative sources of energy; • More recent research from the REA and RMI suggest that minigrids alone are a $10 billion opportunity; • And if the regulation for the ongrid sector is improved, there are opportunities there also in the tens of billions; Taken together, I doubt there are many commercial opportunities left in the world anywhere, in any sector, at this scale. Third, there is an ever-improving enabling environment – at least for the off-grid energy sector, a sector that didn’t really exist when Ifeanyi and his classmates started GVE in 2012. Seven years later, off grid energy is the trendy new sector that everybody wants to be part of. Note: The rest of this article continues in the online edition of Business Day @ https://businessday.ng/ Dr. Boer is CEO, All On a Shell-seeded impact investment company in Nigeria’s off-grid space

2019 elections: Can the Nigerian judiciary deliver electoral justice?

Samson Itodo

emocracy thrives with an independent judiciary that is insulated from undue interference. The judiciary is the hope of the common man, as well as the political elite. Nigeria has just concluded its general elections in which the contest for political power assumed unimaginable acmes with democratic institutions weakened and sabotaged by the state; rampageous political thugs destroyed election materials, abducted and raped election officials; voter suppression manifested through the arbitrary cancellations of votes and purchase of voter cards from eligible voters; and selective and non-application of electoral guidelines and violence were the order of the day. These elections have come and gone, and attention has shifted from the umpire who may have not sufficiently discharged its constitutional responsibilities. All eyes are now on the judiciary, which is not just the third arm of government but the umpire to adjudicate the petitions arising from the elections. At this point, the critical question to ask is: “Is the Nigerian judiciary ready, and able to deliver justice?” In recent times, the Nigerian judiciary has

been mired in corruption scandals, and their Lordships have been accused of consistently desecrating the sacred temple of justice without reprimand or sanction. Since the Buhari administration came into office, there have been stings targeted at the judiciary, with the most recent being the suspension of the Chief Justice of Nigeria on the basis of the non-declaration of asset. Admittedly, there is corruption in the court, however the attacks on the temple of justice have further eroded the trust and belief in the judiciary as the hope of the ordinary man. This distrust will play out in the election petitions where, even if the courts correctly dispense the law, they are likely to be perceived as partisan and for hire. It is scary to note the pervading fear across board: that justice may be difficult to obtain against a ruling party. It is believed that only an overly courageous judge can muster the audacity to acknowledge an irregularity and annul an election that the ruling party won. This perceived fear of intimidation and accompanying backlash, as well as the fear of the outbreak of violence, are palpable sources of worry for most judges today. It is therefore plausible to opine that instilling fear in judges is a viable tactic employed by politicians to muscle the judiciary and undermine its ability to deliver justice. The judiciary cannot be sequestered from culpability. The number of conflicting judgments issued on the same or similar matters by courts of coordinate jurisdiction is alarming. Some judges are either yielding to corrupt politicians or shying away from their responsibilities and in that guise issuing contentious judgments. Since the conclusion of the elections, we’ve witnessed the abuse of court processes. The first pertained to a judge who ruled on matters falling within the purview of an election

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petition tribunal; subsequently, others started dishing out injunctions prohibiting the counting of votes and restraining the Independent National Electoral Commission (INEC) from organising supplementary elections and sundry matters. If the interest of justice was ever considered, some of the anomalies that unfolded would never have seen the light of the day. The ‘new normal’ is for politicians to perpetrate electoral malpractices and urge their opponents to approach the court for judicial review. The norm is to recruit the services of legal counsel, mostly senior advocates (SANs) with good media profiles. The lawyers are not just adept at using technicalities to subvert the law but are believed to have the ability to bribe judges to procure favourable judgments. In some cases, senior advocates often regarded as veterans with good media profiles and public acceptance are purposely recruited to give legal proceedings a toga of legitimacy, while judges and their conspirators anticipate backlash or substantial public outcries over procured judgements. Another evolving trend is the safety of judges on election petition assignments. For instance, the Osun State governorship election petition tribunals had to relocate its sitting to Abuja for security reasons. It is also important to point out the alarming fears that the location of a court may influence the judgement or ideological orientation of the judges. The Zamfara All Progressives Congress (APC) conundrum and ruling is a pointer in this direction. The judiciary is tasked with the responsibility of dispensing over 639 pre-election cases arising from the party primaries and 736 cases emanating from the just concluded elections. The presidential election has four election petitions, 207 for senatorial elections, 101 for

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the House of Representatives, 43 for the governorship polls and 381 for the state houses of assembly elections. The number of election petitions reveals the heated nature of the electoral contest and the conviction of some actors that they were short-changed in the just concluded elections. It is a welcome development when aggrieved candidates and political parties approach the courts for redress, instead of the resort to violence. It is therefore incumbent on the court to deliver justice. Judicial review is the bedrock of democracy, and without it, the rights and liberty of the people will be jeopardised. It connotes that the court is an impartial umpire in the business of government and it controls the management of societal affairs. It is the constitutional right of the judiciary to review actions taken illegally by the government. It further connotes the reassessment or re-examination by judges, of a decision or proceeding by a lower court or government department. Judicial review must, therefore, advance the cause of electoral justice. Moreover, electoral justice will be attained if only those who are called to dispense justice in the society are themselves part of the democratic system and are imbued with democratic ideas. Therefore, the courts and ministers in the temple of justice must be insulated from the undercurrents of partisan politics. As human beings, they may have their individual political beliefs, but they must divorce their professional personalities from partisan politics if they would be trusted to dispense justice without fear or favour. The Nigerian judiciary cannot afford to fail the Nigerian people. Samson Itodo, an elections and constitution building enthusiast, is the Executive Director of YIAGA AFRICA and Convener of the Not Too Young To Run movement.

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Thursday 11 April 2019

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There is a light in Rwanda Positive Growth with Babs

Babs OlugbemI

t was dark in Rwanda between April to July 1994 when the Hutu led-government killed eight hundred thousand people mostly from the Tusti minority ethnic group. Paul Kagame was the military leader that defeated the Hutu coalition to stop the massive killing of the Rwandans. Rwanda lost almost 10% of her population in the genocide which was tagged one of the worst ethnic killings in the history of Africa. Rwanda marked the 25th anniversary of the killing of the Tusti minority but with a different narrative. The days of darkness where ethnic murder, poor infrastructure, malnutrition, and poverty exist has been replaced by days of hope and celebration of what transformational leaders can do for their people and society. Paul Kagame who was famous for leading the militia that stopped the ethnic killings became the democratically elected president of Rwanda in the year 2000. He was re-elected in 2010. Today, Rwanda has been tagged the “Africa’s biggest success story”. A story of positive transformation from civil war to a nation with a symbol of hope in what African

leaders can do and should be doing at all levels. Not many nations with civil war experience witnessed what is happening in Rwanda. Within a short time, Rwanda history had been written to one with the prospect of becoming a template for good governance. Rwanda under President Paul Kagame is showing traction in all the eight primary characteristics of good governance according to the United Nations standards which are participatory, consensusoriented, accountable, transparent, responsive, effective and efficient, equitable and Inclusive, and respect for the rule of law. From a war-ravaged country two decades ago, a state ranked 150th in the ease of Doing Business in the world is now ranked 29th and 2nd in Africa. Primary Education is universal, meaning 100% of the children have access to free primary education. There is gender equality in the cabinet with thirteen male and thirteen female ministers and the youngest age of thirty-one, the average of forty-eight years. Rwanda recently became the first country in the world to use Drone Technology to transfer blood and medicine to hospitals. The health care in the country is free with mandatory eye care for all the citizens. Kigali became the cleanest city in Africa due to the ban on non-biodegradable plastic and the necessary monthly cleaning exercise since 2008. The giant stride in the education sector of Rwanda is not only in the free school and increasing enrolment at the primary stage.

The public schools are so advanced and effective leading to the low patronage of the private schools. Thus, the game is over for people who see education as an avenue to make money due to the government inefficiency in providing quality education to the citizens. On February 27, 2019, Rwanda launched the first ever satellite in the country to connect schools with internet access across remote areas for ease of learning and the development of pupils with the 21st-century skills. Kigali is now reputed as the cleanest city in Africa. As if the above multiple strides are not enough, the government according to Paula Ingabire, the country’s minister for information and communications technology and innovation, will be open a smartphone factory in Rwanda by Mara Corporation, making it the first country in Africa to manufacture full-scale phones locally. We could continue to count and count the positive components and outcome of the Rwanda transformational journey. One basic fact about Rwanda, Africa’s “biggest success story” is the influence of leadership. John C. Maxwell, the world-renowned leadership expert said all rises and falls on leadership. He was also known for saying that ‘a leader is someone who knows the way, goes the way and knows the way. President Paul Kagame must, therefore, be given credit for his vision and the way his government is delivering the benefits of good governance with a futuristic approach. The future of Africa is not de-

‘

Leaders are to start with why by having a mindset shift and paradigm recalibration

pended on foreign aids and incentives. Africa is a continent with massive potential to help the world. The road to maximising the African potential starts with the right perspective and a paradigm shift. It is welcoming to see Paul Kagame showing the way in his attitude about aids and religion in his country. He was quoted to have made a profound statement relating to foreign subsidies after he closed 6000 religious houses to prevent playing on people’s faith by the spiritual leaders who see their callings as money-making businesses. Kagame’s word ‘I would rather argue, that we need to mobilise the right mindsets, rather than more funding. Africa has everything it needs, in real terms, but Africans remain mentally married to the idea that nothing can get moving, without external finances. We are even begging for things we already have. That is absolutely a failure of mindset.’ is a learning pathway that should be adopted by leaders at all levels. Leaders are to start with why by having a mindset shift and paradigm recalibration. Leadership is about achieving results and making the organisations better than they were before and not working with entitlement mindsets. A change in mindset will go a long way to replicate the light that is shining in Kigali to all the other cities in Africa. Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, the Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.

Strategic importance of the transportation sector to Nigerian economy

Festus Okotie

eveloping nations seeking to develop their economies must as a matter of urgency give priority to the transportation sector. The call for advanced 21st century networks of roads, airports, maritime space, train routes and land transportation networks is important in cities, towns, small communities and the rural areas in such environment. Investments in transportation infrastructure is surging globally and the need for Nigeria to begin to look inwards in investing a sizeable part of its resources in the development of modern transportation systems and structures are essential to drive the economy of our nation upwards as well as upgrade and extend the life of the old structure. Global economies today are driven by digitization and fast moving technological innovations, which in turn drives new and modern systems of transport for goods, services and people. In both urban and rural communities around the world ,the challenge of moving people and cargo efficiently, safely and sustainably

while providing transportation for all segments of society and not just for the rich elite or top government officials alone, remains a challenge which demands new solution in our increasingly globalized ,urbanized , and environmentally compromised society. Long established theories and procedures of transport planning and policy makers must evolve rapidly if they are to help sort out our ever more complex transportation infrastructures. We need to embrace new and modern technological methods if we hope to build and operate a better transport system that can deliver these goals we desire. Also transportation planners and policy makers in Nigeria must accept the fact that a large number of the our nation’s transport systems cannot meet the needs of our rapidly growing population and many passengers expectations in terms of safety, security, ETA ,ETD. Government and its agencies need to urgently call for stakeholders and experts brainstorming sessions on the way forward. They need to find urgent ways to attract more private and public investors into the sector. Investors also need to jettison old and traditional approaches to cost benefit analysis, so that the investments can capture as many of the different positive impacts of transport as possible and it must be done in such a way that balances with high standards and quality. If transportation planners and policy makers can successfully address these challenges, they would have succeeded in adding a major value in our quest of improving the lives of our citizens in different communities large, small, central or remote, while at the same time protecting nature

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and making it possible to deliver the benefits of economic buoyancy in a sustainable and inclusive way. When embarking on transport planning for even the simplest form of transportation, the need to lay out a proposed route for bicycles in a city, town or rural neighbourhood for instance presents diverse challenges. When you scale it up to the city or regional level ,the complexities and challenges involved increases widely ,especially at a time when the megatrends of urbanization, social and economic challenges, climate change, poor power systems, youth and communities unrest, security challenges which bear heavily on the success of even the best laid transport plans. Generally, transportation remains the one industry that keeps all other elements as well as the entire system in constant motion and it is very difficult to conceive of a situation where transportation does not play a major role in the life of any nation or society. Economically transportation provides and enhances the space, time, quality and utility of goods. Socially transportation facilitates the formation of a wider variety of spatial patterns of human activities .In addition, transport promotes national unity, socio –economic integration, stimulating the sense of oneness and mutual understanding in a culturally diversified society like Nigeria. Transportation therefore occupies a very strategic position in modern day life and is often described as that part of economic activity that is concerned with increasing human satisfaction by changing the geographical position of goods, people and services. It is the hub upon which all other activities are spatially arranged.

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The Nigerian government, its agencies in the transport sector, private sector, consultants and professionals within the transport industry must rise up by harnessing ways to develop social, economic, financial and environmental resources that meets the need of the present scenario without compromising the potential of future generations to meet their own needs. My advice and recommendations to the Nigerian government of today, is that no nation, state or local government should embark on a transport planning effort without a guiding principle that takes into consideration the impacts it has against the future generation and for sustainable development. For economic transformation to increase, there is need for deliberate assemblage of all sectors of the economy and natural resources together. Transportation cannot exist in isolation on its own, hence there is need for other sectors to contribute to the GDP of the nation .In ensuring that economic development of the country is pursued and achieved through collaborative approaches , transportation as the GATEWAY of the economy of our nation cannot stand on its own and translate into economic development ,therefore the government needs to reposition the economy in such a way that priority is given to the key drivers of the economy such transportation, education, technology, communication, power, security, mineral and natural resources for us to experience an accelerated growth and economic prosperity. Okotie, a maritime transport specialist, writes via fokotie. bernardhall@gmail.com, Fokotie@bernardhallgroup. com

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Thursday 11 April 2019

BUSINESS DAY

Editorial Publisher/CEO

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

ICPC’s self-indictment on the general elections

iscerning citiz ens should pay close attention to the statement of the Independent Corrupt Practices Commission on the conduct of the 2019 General Elections and its failure to deliver on the promise. Against the backdrop of a consensus on many lapses in the elections, the corruption fighter claims it could not track even one defaulter for voter inducement. It is a curious admission both for what it says about the commission and its larger purport. ICPC Chairman Bolaji Owasanoye stated Thursday, April 4 at a press briefing that the ICPC did not have anyone in custody nor was it investigating any for electoral offences. In 2018, ICPC through the then acting chairman assured that it would collaborate with INEC to arrest and prosecute perpetrators of fraud during the elections. Musa Abubakar, the Acting Chairman of ICPC, made the declaration at a one-day ‘National Campaign Against Vote Buying and other Electoral Malpractices’ the commission organized in conjunction with the Youth Alive Foundation(YAF). Reports said Abubakar de-

cried vote buying and urged Nigerians to shun attempts to induce them. “Such payments are usually made through agents either directly or through phone transfer. Rigging can take the form of falsifying election results by changing figures to favour particular candidates. This is a falsification of official records and punishable under the ICPC Act 2000,’’ he said. “If you allow them to succeed in doing so, they will make sure they steal resources meant for provision of water, healthcare, educational facilities and construction of roads. If such people force themselves on you by bribing you, they will not have your time because they have already settled you.I will also advise you to resist any attempt by such disgruntled elements to use your children as thugs to kill, maim and threaten political opponents”. With such pronouncements, citizens in their various capacities expected so much from ICPC. However, the new chairman says they did not find anyone guilty. Owasanoye stated, “INEC entered into a partnership with Civil Society Organisations and corruption fighting agencies, including the ICPC. I was in the situation room for the election, and we did what we had to do

to ensure that Nigeria had a credible election. There is no suspect under investigation for electoral fraud. For now, we are not investigating anyone for financial crime during the election.” Majority of the reports on the elections confirm that fraud in its various forms played out. One of the frequently cited instances of fraud is inducement of voters. It was generalised, it was brazen, and they carried it out in the open. There was also falsification of results. It raises the question,therefore: where did the ICPC look? Where did it conduct its surveillance and monitoring of the elections? Even players in the process have documented their complaints in essays and interviews. Check columnist and Deputy Governor candidate on the platform of the PDP in Ogun State Reuben Abati. ICPC claims despite these that it could not find one person to indict for this act that the media widely reported. Curiouser and curiouser, said Alice in the Wonderland. With due respect to the ICPC boss, the situation room was part of the field for the election but not a critical one. The melee and the fraud happened at the polling centres. Grappling with the ICPC statement and its denotations is difficult. Even so, we will try.

On the surface, the ICPC chairman’s remarks indict the agency. It says they did not report for duty, despite grandstanding to the contrary, and where they came to work, they failed to do any work. The impunity that has characterised failings in public service delivery is evident in the in-yourface admission by the head of a federal agency that it failed to do its job while showcasing a zero on its scorecard. Other possibilities are disturbing even in contemplation. The conspiracy theor y would be that the ICPC statement is part of an effort to rewrite the story of the elections. Drip by disturbing drip, officials of various arms of government would soon mount the rostrum asking citizens to disbelief the evidence of their experiences. It will not fly. Some of the electoral outcomes are in dispute in various courts. Citizens, as well as heads of public agencies, would be called to serve as witnesses during those trials. The head of ICPC has stated ahead of a court summons that the agency did not witness even one instance of vote buying. It would have been laudatory if true. Unfortunately, it is not the case. The ICPC should brace up for work rather than spew excuses.

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Thursday 11 April 2019

BUSINESS DAY

COMPANIES & MARKETS

Renmoney launches mobile experience centres across Lagos

COMPANY NEWS ANALYSIS INSIGHT

Pg. 15

BANKING

Nigerian mid-tier banks grow most profit to outperform peers on improved asset quality DAVID IBIDAPO & OLUWASEGUN OLAKOYENIKAN

igeria’s midtier banks enjoyed a good run in terms of net income performance in the 2018 financial year by dominating peers in Nigeria’s banking sector, making the big lenders lag behind with lower profit growth. An analysis of the financial performance of all banks listed on the Nigerian Stock Exchange (NSE), excluding First Bank Plc that is yet to release its fullyear 2018 financial results, shows that the significant growths in the bottom lines of the tier-two lenders were largely driven by improvements in their asset quality. The asset quality of a bank measures the credit risk associated with a bank’s financial asset. These assets usually require interest payments such as loans and investment portfolios. Hence, the lower the asset quality ratio, which is measured by impairment loss divided by total assets, the

better for the bank. Amongst peers was Unity bank, a tier-two commercial bank that grew profit the most by 108.5 percent, as the bank rebounded from its loss position of N14.9 billion in 2017 to record N1.26 billion post-tax profit in 2018. Thanks to a 99.6 percent drop in its impairment loss to N161 million from N44.25 billion recorded a year earlier. The major improvement in Unity Bank’s impairment loss position saw its asset quality ratio fall from 28 percent in 2017 to 0.07 percent in 2018, the lowest recorded by any Nigerian lender in the review year. This implies that the spread between the face value of the bank’s assets and cash flow realised from the assets is thinning out. A similar trend was also noticed in other tier-two lenders that reported impressive profit growths in the period under consideration. First City Monument Bank (FCMB) came second on the chart having grown its 2018 profit by

73.9 percent to N14.97 billion from N8.6 billion in 2017. Also, this was mainly

triggered a 38 percent decline in its net impairment loss on financial asset to

N14.11 billion, shrinking the bank’s asset quality ratio to one percent from 2 percent achieved in 2017. Tier-one lender Access Bank, which grew profit by 58 percent to N95 billion, however, joined both Unity Bank and FCMB as one of the top three banks with the highest profit growth in 2018 During the period, Access Bank’s impaired loans and advances fell by 45.3 percent, causing an improvement in its asset

quality from 4.76 percent in 2017 to 2.49 percent. Further checks show that the next tier-one lender on the list, Zenith Bank, came tenth after Stanbic IBTC, Wema Bank, Ecobank, Union Bank of Nigeria, Fidelity Bank and Sterling Bank. Zenith Bank grew its bottom line by 11.3 percent; Guaranty Trust Bank, 10.53 percent; while United Bank for Africa (UBA), 1.37 percent to emerge the top laggards despite dropping loan impairment losses in 2018 by 81 percent, 60 percent and 86 percent, respectively. A closer look at the companies’ financials show that Guaranty Trust Bank’s lower interest income and higher interest expense weighed on its profits despite cutting loan impairment loss. A 68 percent increase in UBA’s fees and commission expense impeded its profit growth for the year, while Zenith Bank profit growth was hampered by a N16.78 billion derivatives loss in 2018 compared with a N68.7 billion income realised in 2017.

MARKETS

Nigeria ASI worsens further, hit 1 year low as investors remain unmotivated DAVID IBIDAPO

he Nigerian all share index worsened to a year low as investors remained unmotivated. Postelection rally expectations of the Nigerian equity market seem to remain a myth as the market continues to show no sign of recovery possibility. The Nigerian All share index (ASI) closed on Tuesday on a bearish note as the performance metric dipped by 0.04 percent to 29,149.46 index point from 29,162.24 index points in previous market close. The current status of the stock market is one we can term as a worsening scenario as last week, the market recorded its worst performance in almost six months which saw investors lose a whooping N548 billion after the ASI fell 4.59 percent week on week (W/W) and a year to date

(YTD) decline by 5.77 percent. The performance of the market worsened further on Tuesday as YTD performance further plunged by 1.49 percentage points to 7.26 percent. Performance was on the back of sell-offs in Ecobank (-6.7%), Dangote Cement (-0.3%) and Dangote Sugar (-2.2%). This however, translates to a year to date loss of a whooping N771.95 billion in investor’s value on the exchange. Despite earnings season, investors on the exchange remained unmotivated as sell pressures prevails against analysts bet that a successful conduct of 2019 elections and dovish stance of the US Federal Reserve would drive performance of the equities market. Analysts at Lagos-based investment bank, Meristem Securities noted that, “the release of mostly unimpressive earnings results further soured the sentiments in the market.” However, some blamed the

behaviour of the market on the delay of MTN listing. “One major thing that would have excited investors is the listing of MTN and it is taking forever.” Yinka Ademowagun, analyst at United Capital explained. Also, analysts blame the performance of the market on no clear policy direction of the present administration stating that since the re-election of the incumbent president, the only policy that has been passed is that of the minimum wage of N30,000, nothing more. “Sentiments from the foreign investor community indicate lack of optimism that the hard decisions on structural reforms will be taken by the reelected president,” an analyst at CSL stock brokers said. Performance across the sector on Tuesday was also bearish as the entire sectorial index recorded negative returns underperforming the market. The insurance index emerged as the worst hit as

performance dipped 1.76 percent, banking index shed 0.48 percent, oil and gas 0.38 percent, consumer goods index 0.13 percent and the industrial index 0.13 percent respectively

according to data obtained from the NSE. Moreover amongst the top 5 advancers were banking stocks which dominated peers. Guarantee Trust Bank (GTB)

led the chart appreciating 7.77 percent in value, Stambic IBTC by 6.48 percent, May & Baker by 3.48 percent, Access Bank by 1.79 percent and Nigerian Breweries by 0.33 percent.

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: David Ogar

Thursday 11 April 2019

BUSINESS DAY

COMPANIES&MARKETS COMPANY

First Aluminium clears the air on voluntary delisting move ISRAEL ODUBOLA

irst Aluminium Nigeria Plc (FAN), one of Nigeria’s first listed companies, says its decision to delist its entire share capital from the Main Board of the Nigerian Stock Exchange stems from the fact its shares is no longer creating value for the company and shareholders. The aluminium maker plans to embark on corporate restructuring exercise in no time, to leverage emerging opportunities in the market. It noted that it might consider re-listing in the future if market conditions are favourable. This was revealed in a release filed with the Exchange on Tuesday, April 9. The aluminium maker stated that over the past seven years, there has been trading inactivity on its shares held by minority holders. The share price was dormant at 50 kobo for about six years, depreciating share price and trading volumes. The company recorded a significant drop in average daily trading volume to 2, 918 units between July 2017 and

June 2018, and further dip to 2, 816 units between July and December 2018. “Neither the company nor shareholders have benefited as the company’s shares continue to trade at a significant discount relative to intrinsic value. “Through the voluntary delisting, the Directors of the Company will provide an exit consideration to minority shareholders who do not wish to remain in an unlisted company”, FAN stated in the release. It was revealed that shareholders of the Company at last year’s Annual General Meeting (AGM) were satisfied with the proposal, with 99.87 percent approval rate. The move will become effective upon getting an approval of NSE. FAN lamented that increasing competitive environment and the struggle to defend market share resulted in market pressure to reduce price, saying operating margin might be greatly affected. The company guaranteed stakeholders that the move will not adversely affect business operations in its Lagos and Port Harcourt location, as there are other unlisted

aluminium makers with significant share in the market. FAN further assured that the move will not affect the existing contracts of employment and composition of the Board. The aluminium maker clarified that Alucon Holdings S.A, majority shareholder (with 75.48% stake) are the promoters of the move, and wishes to offer minority shareholders the opportunity to either remain shareholders of the unlisted firm or accept a consideration for their shares which the majority shareholders are willing to purchase. Shareholders can exit before delisting either by trading their shares on the floor of NSE through their nominated broker or receiving consideration from Majority shareholders in exchange for transferring their shares. In line with the rules of the Exchange, cash consideration of 55 kobo, the highest amount at which the company’s shares sold on the exchange within six months prior to the approval of shareholders, will be paid to shareholders wishing to exit in exchange for their stake in the company.

BANKING

Equities market pessimism, unimpressive earnings sees UBA decline the most among peers SEGUN ADAMS

hares of United Bank Africa (UBA) have shed the most among peers on the heels of a bearish sentiment which has characterised the equities market and weak bottom line growth of the tier-1 lender in 2018 full year. Although UBA gained 2.5 per cent to close at N6.15 per share on Tuesday, the stock was down 20.13 per cent Year-to-Date compared to Access Bank (-16.18%), Zenith (-12.58%), First Bank (-9.43%) and GTB (-1.31%). “Their full-year numbers were not up to expectation,’’ Fola Abimbola, Lagos-based Equity analyst at FBNQuest told BusinessDay. UBA posted a profit after tax of N78.61 billion for 2018 full year compared to N77.55 billion in 2017, the weakest bottom line growth among peers. The tier-1 bank grew its bottom-line by 1.4 per cent while the likes of GTB (10.5%), Zenith Bank (11.3%), and Access (58.1%) outperform UBA. Gbolahan Ologunro, Equity Analyst at CSL Stockbrokers said that Investors would definitely not be pleased by the result, ‘’and on the back of that you might expect some investors would want to reduce some of their holdings and move into other tier-1 names,’’

L-R: Abasi-Ekong Udobang, senior manager, program implementation, MTN Foundation; Adewolu Adene, regulatory affairs manager, MTN Nigeria; Alice Osokoya, assistant head teacher, Alapere Primary School; Nonny Ugboma, executive secretary/Chief Executive of the MTN Foundation (MTNF), and Seye Oyelowo, manager, local and state affairs, MTN, at the handover of school learning materials to Alapere Primary School, Alapere, Lagos by MTN Foundation, as part of its What Can We Do Together initiative in Lagos.

COMPANY RELEASE

Lafarge Africa encourages Skills Acquisition for Graduates GBEMI FAMINU

xperts at the joint National Universities Commission (NUC) and the Nigeria Economic Summit Group (NESG) Industry retreat have advocated a better synergy between the town and gown in order to ensure Nigerian university graduates are better equipped and ready for the labour market with the requisite skills after graduating and also contribute their quota to national development. While calling for a symbiotic relationship along skills acquisition and development, the Organization and Human Resources Director at Lafarge Africa, Fidelia Osime, stated that there must be sincerity of purpose among all stakeholders to ensure that they achieve a common goal, which is the development of the Nigerian education system. Speaking at a policy dialogue hosted by the Nigerian Economic Summit Group (NESG) and the Nigeria Uni-

versities Commission (NUC) themed “Making Higher Education Work for Nigeria”, she said “There must be synergy between universities and the industries that will potentially employ their products. Unfortunately, we have discovered that most times, we need to train and re-train graduates who we expect should have an appreciable level of knowledge suitable for the entry level.” “For example, we have the Lafarge Cement Professional Technician Program (CPTP), which is a technical programme, as well as the Lafarge Africa Technical Training School where we expose people to the demands of the industry. This is not just about the engineers; it’s also about other fields. On an on-going basis, we have to make sure that we get people who can actually add value to what we do.” Osime added. On the implication of this situation on a general outlook, Osime noted that “this below average performance of

some of our Nigerian university graduates has constantly put them at a disadvantage when compared with their foreign colleagues. We have observed that graduates from foreign universities need little training as they get to work.” “Among them, the required expertise to excel is usually above average. Majorly, the reason for this is because universities abroad, work closely with the private sector to understand the need in the industry. Their syllabus is tailored to cater to emerging trends in the workplace. For our Nigerian graduates to excel, the academia must adequately understand what the industry needs and take those needs into consideration while training students”. She added. In his remark, the Director of Accreditation at the NUC, Noel Saliu noted that the Nigerian government is adopting the triple helix of UniversityIndustry-Government relationship model as proposed by the NESG.

FINTECH

Upperlink wins CBN awards, ready to provide state governments with improved TSA solutions Despite the shares having been sold off significantly over the last one year, Abimbola says he currently holds a “buy’’ recommendation for UBA. “It is getting to a point where it is becoming oversold but the problems they are facing would soon be behind them,’’ Abimbola added. Ologunro also believes the outlook for the bank still remains positive although he mulls investors’ pricing lower growth in future earnings might be hurting the stock currently. At the start of the week, the Bank’s stock dropped 3.23 per cent to close at N6.00 per share, 1.5 per cent shy of a 2-year low established on May 2, 2017, where price stood at N5.91 per share. The loss was amid a bearish sentiment in the market which weighed on the performance of Nigerian Stocks

across board as the All Share Index plunged to the lowest level since May of 2017 and Market Capitalisation closed at N10.953 trillion, the lowest since June 2017. For the Bank’s performance in 2018, net interest income dropped marginally from N207.632 billion in 2017 to N205.646 billion. However, a significant decline in allowance for credit losses on financial and non-financial instruments in the year buoyed Net interest income after impairment on financial and nonfinancial instruments, which rose to 201.117 billion in 2018 compared to N174.737 in 2017. Despite the improvement, a 9 per cent increase in its expenses across several items was largely responsible for the drag in profit and pared earnings, weighing on the banks bottom-line.

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DAVID IBIDAPO

equel to the 2019 edition of Central Bank of Nigeria [CBN] Electronic Payment Incentive Scheme (EPIS) Efficiency Awards recently which saw Upperlink limited emerge winner, the company has pledged its commitment to provide state governments with improved Treasury Single Account [TSA] solutions. The awards was organised to celebrate financial institutions, fintech firms and other stakeholders who are in the forefront of driving electronic payments in Nigeria by the CBN. In a statement signed by Segun Akano, MD/CEO of the Upperlink limited, “the company is passionate about helping state governments with improved TSA solutions as the conversation with some of the

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states’ ministry of finance have shown that they want an improved TSA over what the federal government is currently implementing.” He explained that the awardwinning e-payment solution, PayChoice-BAMS, is an improved TSA platform, as it keeps all accounts in different banks but “the aggregate balance is visible on one window”. According to Akano, this window gives the states government full control over their funds by “allowing sweeping across banks or across accounts and provides trend analysis about in-and-out movements in each account across all the banks.” In its fourth year, the CBN awards are based on objective analysis of all electronic-payments data collated by the Nigeria Interbank Settlement Systems (NIBSS) over a full calendar year. @Businessdayng

Upperlink emerged winner in the Cashless Driver Award: Non-Bank Payment Operator Award - Payment Solution Service Providers (PSSP) category. “We are proud to be recognized by the CBN for our efforts in driving excellence in electronic payments and providing our clients with a superior non-banking experience across digital touchpoints. “The award serves as extra motivation for us and we will continue to find new and exciting ways to delight our clients in digital payment solutions”, Akano said. He explained that the platform makes disbursement easy to vendors, contractors and to pay staff salaries while allowing the tax components and other deductibles of all payments to be remitted seamlessly in real time to the respective beneficiaries.

Thursday 11 April 2019

COMPANIES&MARKETS

BUSINESS DAY

Business Event

COMPANY

Renmoney launches mobile experience centres across Lagos GBEMI FAMINU

igerian fintech lending company, Renmoney has launched its mobile experience centers across Lagos. This is in line with its commitment to provide improved and more convenient lending and investment solutions for its customers. Each experience centre is equipped to enable customers’ complete end-toend transactions at their convenience. The centres will move across different locations in Lagos to cater to both small business owners and salary earners who need to access credit. Iyayi Oludapo, Renmoney’s Head of Sales described the launch of mobile experience centres as a part of the company’s

efforts to improve its services, foster easy accessibility as well as provide a platform that will bring its clients closer to the company. Iyayi said “These mobile centres were built to provide easier access to people who need to reach us, without them having to travel too far,” Oluwatobi Boshoro, CEO of Renmoney, also stated that “innovation will continue to be a priority for Renmoney.” “As a business, we are continually addressing barriers to financial inclusion in Nigeria and we will continue to find innovative ways to deliver the best service to our customers,” Oluwatobi added. Renmoney is a fintech lending company operating under a microfinance banking license in Lagos,

Nigeria. The company provides loans to individuals and small businesses via its official website, contact centre, agent network, branches and mobile experience centers. Renmoney also offers market leading rates on Fixed Deposits and Savings accounts and is regulated by the central bank of Nigeria (CBN) and insured by the Nigeria Deposit Insurance Corporation (NDIC). It can be recalled that in Q4 2018, the company established its new headquarters at Ikoyi Lagos with a view to providing a more convenient platform for both its employees and its customers. Renmoney since its establishment in 2012 has achieved feats in the fintech space which includes assets, staffs and clientele expansion.

L-R: Yemisi Edun, executive director, Finance, First City Monument Bank (FCMB); Abdulsemiu Kasali, Adeboruwa of Igbogbo town in Ikorodu; Olu Akanmu, executive director, retail banking, FCMB, and George Ogudu, Financial Inclusion Secretariat of the Central Bank of Nigeria, at the launch of the FCMB Easy Account product in Ikorodu, Lagos

ENERGY

Powergas proffers solution to fixing Nigeria’s broken energy value chain AMAKA ANAGOR-EWUZIE

orried by the unstable state of power supply in Nigeria, Powergas Nigeria, Africa’s largest Compressed Natural Gas (CNG) Company, has recommended off-grid and mini-grid as solutions to solving the problems of power generation in Nigeria. Speaking at the just concluded 21st Annual Africa Business Conference held at the Harvard Business School (Boston, MA) in the USA recently, Sumeet Singh, Powergas director of Sales and Strategy, said that off-grid and mini-grid solutions are the most efficient way forward (in the shortterm) towards eliminating Nigeria’s energy troubles. Sumeet spoke as a panelist at the conference, which was themed -“Lighting up Africa – The Broken Energy Chain”. The panel discussion sought to find answers to critical questions on why Nigeria, Africa’s largest economy, has failed to provide adequate access to basic needs like electricity, which is critical for industrialisation and economic development. Sumeet stressed the importance of using innova-

tive technology in improving the lives of people in Africa and creating safer environment on the continent. He identified infrastructural-gap in areas like transmission, distribution, metering or the Natural Gas Pipeline Network as the main challenges facing electricity supply value chain. “While all these issues are being addressed at various levels, with different pace of development, not delivering required results in the short to medium term, quite a few of these gaps can be addressed using solutions like CNG/ LNG under the “Gas on Wheels” model and offgrid/captive and mini-grid power solutions to industries and remote communities,” he said. According to him, offgrid solutions based on CNG fired gas generator and solar/renewable are ideal solutions that provide reliable, affordable and clean energy solutions to not just survive, but to thrive in an economy like that of Nigeria. “There are immense potential in the energy sector especially through natural gas, much of which www.businessday.ng

is flared at various flare sites in the country. This situation will change over time with government initiatives like Natural Gas Flare Commercialisation Program (NGFCP). If Nigeria’s flared gas is captured and processed, it would significantly boost the power generation capabilities to double the current capacity, while significantly improve the quality of the air people breathe,” the suggested. Sumeet said effective utilisation of natural gas is also important for imports substitution of liquid fuel such as AGO (Diesel) and PMS (Petrol) among others. “And that is why we at Powergas are committed to increasing the use of domestically available Nigerian Natural Gas for industries and residents through our innovative ‘Gas on Wheels’ solution.” The panel also held discussions on related subjects like ‘Africa’s Private Sector’s contribution with innovative solutions to balance the supply-demand gap in electricity sector’ and “Can Cleaner/Renewable Based Mini-Grids Leapfrog the Traditional Large-Scale Power Plants in Nigeria’.

L-R: Annabelle Degroot, MD, International Breweries Plc; Dennis Okorie, winner of ib’s distributors national award; Adaobi Okorie, MD, Mac-Den Limited, and Godwin Oche, national sales director, International Breweries Plc, at IB’s distributors’ gala night Lagos, recently

L-R: Adebowale Banzi, group head, marketing & brand communications, Zedcrest Capital; Aminat Sheu, product manager, Zedvance Limited; Adedayo Amzat, founder/CEO, Zedvance Limited/group managing director, Zedcrest Capital Group; and Michael Nwanna, chief technology officer, Zedcrest Capital, at Zedvance 5 Years Anniversary Press Conference in Lagos.

L-R: Peter Okeke, creative arts teacher, Shining Star College; Ade Ojo, MD, Toyota Nigeria; Moyosoreoluwa Tunji-Akeju, winner, 1st position, 8-11years category; Godson Aleofuna, head of school, Shinig Star College; Ofe Imomoh, director of administration, Shinig Star Group of Schools (SSGS); Tunji-Akeju, and V.O Imomoh, executive vice chairman, SSGS, at the 2019 Gathering of Champions presentation of awards/prizes organized by Toyota in Lagos, recently.

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Thursday 11 April 2019

BUSINESS DAY

BUSINESS TRAVEL Nigeria acquires N5bn fire fighting simulator to boost aviation sector Stories by IFEOMA OKEKE

igeria is set to take delivery of an automatic aircraft firefighting simulator. The equipment manufacturers, Messrs Alpine Metal Technology Company, UK has carried out the factory acceptance and pre-shipment inspection and test of the simulator in the presence of top Nigerian functionaries, including Hadi Sirika, the Minister of State, Aviation. The simulator, the first of its kind in Africa, is a modernmulti scenario fire fighting simulator capable of delivering training for different types of operational incidents involving aircraft in the aerodrome and its vicinity. This is in fulfillment of the Nigeria Civil Aviation Authority (NCAA) requirement for training of fire fighters in the airports and will, overall, enhance competence and proficiency in achieving the primary objective of saving lives in the event of a fire incident. The pre-shipment test, which took place in the United Kingdom on Tuesday showcased the full complements of about 28 possible fire/non fire scenarios carried out including; cabin fire simulation, cabin smoke, lavatory smoke and the likes. Other simulation tests in-

clude Turbo prop engine, undercarriage, fuselage side as well as corresponding components of single aisle multiple engine jet aircraft, fuel spill burn pit, internal fires among the vast arrays of simulations it can do. Hadi Sirika, Minister of State, Aviation, who spoke after inspecting the equipment and the company facility with some government functionaries said the simulator was costing the nation about N5 billion and is a safety equipment that is key for airport operations. Sirika said, “The focus of the Buhari-led administration on civil aviation is safety and security, this is therefore a component of it. We take matters of safety and security very seriously. “Before now, we train our

fire fighters in Cameroon and I found myself approving several hundred thousands of dollars for training in Cameroon and I said this is not it. I applied and got approval to procure this fire fighting simulator and Mr President graciously approved it. “It will cost the nation about N5 billion and we started it, now it is completed and it’s ready for testing. It has been tested in front of us and you have seen it, it’s in perfect working order and condition and we will install it at the Nigeria College of Aviation Technology, Zaria (NCAT). “The impact on our nation is that it would improve our safety standards by providing proficient fire fighters. Fire fighting is an important aspect of airport operations

without which we cannot open our airports. The equipment can simulate cabin fire, smoke, cockpit fire, cargo fire, undercarriage fire so this is multi-functional.” The minister expressed pride that once installed the country will be a hub for comprehensive fire trainings from ab initio training, recurrent training to full training and so on. Also speaking, Yasir Tijani Abdullahi, managing director of Glovesly Pro-Project Limited Representatives of Messrs Alpine Metal Tech. Company in Africa, who spoke at the United Kingdom event explained that the simulator is set to be delivered by the end of the month as everything is almost set for the installation in NCAT, Zaria.

Passengers commend integrity, professionalism of Dana Air security team

assengers have commended the integrity and professionalism demonstrated by the Dana Air security team on discovery of valuable items forgotten on-board its aircraft. The airline in a statement issued by its Media and Communications Manager, Kingsley Ezenwa said, “we are not surprised by the recent commendations that our security team has been getting on their constant display of integrity and professionalism on and off the job. “There have been many cases of lost and recovered items like phones, ipads, huge sums of money, Nigerian passports with valid visas and lots of valuable items. We have also returned a lot of missing foreign and Nigerian passports to the immigration, embassies and even sometimes call the owners in the

cases where we are able to track the passenger’s booking with authentic details. This is also one of the reasons we advise passengers to enter their correct details when booking. “Recently, a passenger on one of our flight from Abuja to Lagos left a bag containing $5,000 and some other valuables. On getting to Victoria Island, he noticed he wasn’t with the bag and dashed back to the airport, met the security team who confirmed the item was found. He proved owner-

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ship of the item; completed necessarily documents and got his missing item back immediately. “He thanked the security team for displaying a high level of integrity and professionalism in handling an issue that involved hard currency. He also appreciated the staff for proving all the negative things they hear about Nigerians wrong,” Ezenwa said. Accoding to him, another passenger, Musa Anasemi, who forgot a Nigerian pass-

port with a valid US visa, said he didn’t have an idea where he left the passport, but after about nine days, he decided to check with us. He got his passport with gratitude and praises for the airline and the security staff that found the item and declared it. “We carry out our due diligence in recruitment across board and have invested heavily in training and retraining of staff. We also try our best to keep staff happy in our little way and these are the results. “We are also glad that our staffs have been able to prove to the world that some of the things they hear about us around the world are actually not true. The safety, comfort and well-being of our guests will remain a top priority and we will continue to keep the flag flying.’’

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Nigeria’s travel, transport business to gain momentum with ‘port, rail evolution’

he travel and transport business in Nigeria may be seeing a new phase after the proposed West African Ports and Rail evolution, forum and exhibition which will be hosted in Lagos, Nigeria for the first time on 22 to 23 of July at the Land Mark Events Center in Lagos. With over 1000 expected attendees and over 40 exhibitors from several continents including Asia, America, Europe, America and Africa, the organizers say the event will redefine the future of transport infrastructure, maintenance and expansion in West Africa, thereby making travel experience seamless. The event is coming at a time when Nigeria seems to be in dare need of a transportation system that could help connect the airport, the rail and the ports to make travel experience seamless and movement of goods and services efficient and effective. Speaking during a breakfast meeting to announce the event, Daniel Block, Portfolio Director of Transport for DMG events in Africa, the organisers of the event said, “There is a lot happening in transport infrastructure in Africa. Nigeria is one of the biggest economies in Africa, leading the way in terms of growth and development and there are lots of opportunities in Nigeria. “Rotimi Amaechi, the minister of Transportation, attended our South African event a few years ago and asked us why we were not in Nigeria. So, we have answered the call and we have brought it to Nigeria because we feel there are lots of opportunities in Nigeria and Nigeria is a link to the rest of the region,” Block said. Speaking on how an effective rail system could ease passenger movement at the airport, he said, “If you look at South Africa, they built a passenger rail system from O.R Tumbo airport, which is the main airport in Johannesburg. To drive a car from O.R Tumbo to a city in Johannesburg which could take you about 45minutes, can take just 12 minutes with the fast train. All international visitors that come to Johannesburg take fast trains, not taxi anymore. A passenger rail system will also be talked about at the conference.” On DMG, Block said, “We @Businessdayng

organise transport infrastructure events in Africa. We have our flagship event in South Africa called African Ports and Rail Evolution Forum which brings Port and rail operators and authorities from all over Africa, West East, Southern Central, North to look at the projects and requirements. We are launching in Nigeria. It is our 3rd annual West Africa Ports evolution which is being in Ghana for the last two years. This time, we are bringing the conference and exhibition down to Nigeria. Graham Lawal, managing director, Grolla Port Services said one of the things that is driving the conference is the regional integration policy by the ECOWAS states which puts a lot of demand and importance on the development of multi-model solutions though out West Africa; so, the need to link West African countries together through the Ports and rail infrastructure system. “90percent of goods are transported on rail and ports. To move goods and people around the world in good time in a safe and secure way is the engine that drives economic activities all over the world. You must recognise that Nigeria is the biggest economy in Africa and where else will you have this done rather than the country with the largest economy in the African continent,” Lawal said. He mentioned some of the challenges of rail system to include obsolete track system within the sector, lack of investment over the years within the rail system and political and cultural challenges. “The Ports and Rail event is also going to talk about the single window project, a UN trade implementation policy that brings the ports, rail and the aviation sector into a single window. This means it will help drive efficiency, promote transparency and also help fast-track activities and operations within all the sectors within the transportation space in Nigeria,” the managing director of Grolla Port Services disclosed. Grolla Port Services is the transport consulting to the Federal Ministry of Transportation and the exclusive partners with DMG to promote and market the West African Ports and Rail evolution event.

Thursday 11 April 2019

BUSINESS DAY

Investor

In association with

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

Market capitalisation

NSE Premium Index

N11.721 trillion

Week open 29 – 03–19)

31,924.51 31,139.35

11.612 trillion

2,203.76

Week close (05 – 04–19)

29,616.38

11.124 trillion

2,129.71

Year Open

Percentage change (WoW)

-4.92

Percentage change (YTD)

-5.77

2,241.37

The NSE-Main Board

NSE ASeM Index

NSE 30 Index

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

291.84

2,272.45

1,254.54

1,212.79

NSE Banking Index

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

130.95

723.46

801.09

1,438.19

426.64

1,420.06

807.22

125.98

711.29

290.52

2,267.64

1,239.73

1,188.02

806.54

1,392.65 806.54

403.96

1,345.22

121.12

656.29

283.50

2,154.71

1,159.38

1,123.20

1,456.29

-3.36

-5.27

-0.08

-2.98

-6.57

1.60

-4.92 -6.57

-6.09 -4.91

-3.86 -4.24

-7.73

-2.42

-12.36

-6.20

-4.98 -3.55

-6.48

-5.46

-6.34

-6.98

Still on GSK’s plans to close Agbara factory …stock loses 34.5% of year-open value Iheanyi Nwachukwu

arlier this month, precisely on Tuesday April 2, investors woke up to read the notice issued at the Nigerian Stock Exchange (NSE) by GlaxoSmithKline Consumer Nigeria Plc (GSK) on the approved change in its supply chain model which become effective in third-quarter (Q3) of 2021. The message The notice reads: “Following an extensive review of its product supply operation, the Board of Directors has approved a restructuring of GSK’s current operating model to better serve the Nigerian patients and consumers. This restructuring, which would be effective in Q3 2021, involves working with local contract manufacturers for the supply of GSK’s products, where possible. This would support the building of local expertise, transfer of technical knowledge and improve local production capacities in the country.” “Upon the successful transition of locally manufactured products to third-party contract manufacturing, the current GSK production operations in Agbara would be closed by Q3 2021. The identification of suitable third party local manufacturer would be the subject of another announcement. Until then, it would be business as usual at the Agbara factory as GSK continues to ensure supply continuity for all its locally manufactured brands. These proposed changes do not impact GSK’s broader commitments to global health in Nigeria and across

Africa. GSK Consumer Nigeria Plc will continue to be listed on the Nigeria Stock Exchange,” the notice further reads. The Board of Directors of the company believe that these changes will allow GSK to build a more sustainable commercial business, enabling it to with its ongoing efforts in supporting access to GSK’s consumer health products, medicines and vaccines. About company GlaxoSmithKline Consumer Nig er ia Plc, which is now a science-led global healthcare company with a special purpose, was formed in 2000 as a result of a merger between Glaxo Wellcome Plc and SmithKline Beecham Plc. Although the company’s

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history can be traced back much further than that to London’s Plough Court Pharmacy in the 1700s. In March 2015, GSK global business completed a three-part transaction with Novartis which reshapes its business. GSK acquired Novartis’s vaccines business (excluding influenza vaccines) and combined its Consumer Healthcare businesses to create a new company. By substantially strengthening Vaccines and Consumer Healthcare, GSK can deliver far-reaching benefits to patients and consumers, and further value to shareholders. In addition, Novartis acquired GSK’s marketed Oncology portfolio. GlaxoSmithKline Consumer Nigeria Plc was incorporated in Nigeria on

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23rd June 1971 and commenced business on 1st July 1972, under the name Beecham Limited. The Company was quoted on the Nigerian Stock Exchange in 1977. In 1982, in order to expand its operations in Nigeria, an ultra-modern drinks factory was established in Agbara Industrial Estate, Ogun State, which has since been expanded to include facilities to manufacture Oral Healthcare (OHC) and Wellness products. In line with GSK Nigeria’s commitment to continuous improvement, it regularly updates its facilities to meet the ever-increasing demands of its consumers. On the 30th September 2016, the GSK Nigeria business officially closed a transaction for the divestment of a

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part of its business. The transaction involved the divestment to Suntory Beverage & Food Ltd the GSK Drinks bottling and distribution business and other assets including the factory appropriated to and utilised for the Drinks Business. The business was formally handed over to the new owners on 1st October 2016. One of the objectives of the divestment was to allow the Nigeria business to focus on the same consumer healthcare portfolio as the parent group. Following this handover, the new GSK Consumer Healthcare Company (retained business) includes Wellness (OTC), Oral Healthcare and Nutrition categories. The retained brands include Sensodyne, Macleans, Panadol, Horlicks, Andrews Liver Salts, Voltaren, Otrivin and CAC 1000. Improved earnings fail to spur buy decisions In the financial year ended December 31, 2018 GlaxoSmithKline Consumer Nigeria Plc reported group revenue of N18.4billion as against N16.1billion in corresponding period of 2017. The group’s Gross Profit was higher in 2018 at N6.7billion against N4.4billion in 2017. Profit Before Taxation (PBT) printed at N1.16billion in 2018 against N1.12billion in 2017; while Profit After Tax (PAT) was N617.6million in 2018 against N486.4million in 2017 financial year end. Basic Earnings Per Share moved up from 41kobo in 2017 to 52kobo in 2018. The Board recommended to members a dividend of 50kobo per share to be paid on May 24, 2019.

Thursday 11 April 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

Navigating murky waters of equities… clues from analysts Iheanyi Nwachukwu

he wave of selloff on the Nigerian Stock Exchange recently is a source of concern to many investors. The market became worse off even after the recently concluded successful general elections and inflow of improve corporate earnings in the just ended full year results season. W h i l e t h e p e r s i s t i ng negatives recorded daily on Custom Street continue to create murky outlook for the market, some of analysts’ viewpoints captured by INVESTOR can guide the bargain hunters. Interestingly, with the market now in the negative region of approximately 7percent this year, there is the

possibility of some investors taking position on already beaten down prices across the board. Coronation Research “Buying interest in the equity market is low as fixed income securities still remain the most attractive bet for foreign investors. However, if rates continue to fall and GDP growth picks up, this pattern could reverse”, Coronation Research analysts said in their April 9 note. Afrinvest Research The Afrinvest research analysts noted in April 8 note that their weekly sentiment indicator weakened to 2.9 points from 3.1 points recorded the preceding week. “ D e s p i t e t h e ov e ra l l negative performance last week, we observed increased

buying activity on bellwether stocks, and we expect this trend to be sustained this week as investors seek to take position in attractively priced stocks. However, in the absence of major triggers that could drive positive sentiments, we maintain a bearish near-term outlook”, Afrinvest analysts further said. Vetiva Research Whilst investor apathy in the Nigerian market has persisted in recent sessions, Vetiva research analysts in their April 8 Equity Research expect to see players bargain on appealing price marks across the board this week. Cordros Research In the absence of a positive catalyst, these analysts guide investors to trade cautiously in the short term. However, they noted that stable macroeconomic fundamentals and compelling valuation remain supportive of recovery in the mid-to-long term. Financial Derivatives Company In April 3 note on the outlook for equities market, Bismarck Rewane, CEO, Financial Derivatives Company Limited noted that they expect stock investors to remain conservative due to: weak earnings across most sectors, lack of liquidity, and mixed signals for foreign inflows.”

Investment opportunity in United Capital Eurobond fund

ould you rather keep your dollar funds in a domiciliar y account yielding little or no return or earn a superior return, investing such funds in a dollar investment Product? Do you know that with a minimum initial investment of just $1,000, you can invest in the United Capital Nigerian Eurobond Fund (A US Dollar Fund), which is invested in a broad range of Eurobond instruments, floated by the Federal G overnment of Nigeria, as well as other toptier corporates. “Eurobonds - are essentially mostly dollardenominated bonds issued in the international market. They are issued by Sovereigns, Corporates, and Supranational institutions to diversify their funding mix.” By Investing in the Eurobond Fund, subscribers can expect to receive competitive short to medium term capital gain on their dollar investments, benefit from the expertise of our professional fund managers and also enjoy the freedom to withdraw their Fund at

any point in time (subject to a minimum lock-in period of 90days from the day of investment). Currently, annualised return on the United Capital Nigerian Eurobond Fund stands at 8.2percent, the highest compared to similar funds managed by peers. Though the naira has been relatively stable recently, historical trend shows the naira has weakened consistently, from N152.0/$ in 2010 to N359.7/$ in 2019, against the dollar due to devaluation by the CBN and/or depreciation by market forces. Clearly, depreciation is only a matter of time. As such, for corporates or individuals that engage in foreign currency transactions, investment in Eurobond Fund can help hedge against a potential naira depreciation.Again, The Fund does not serve to benefit only those that currently have a foreign currency account or domiciliary accounts but also investors with naira assets or funds looking to have exposure i n d o l l a r- d e n o m i n a t e d investments. Thus, allowing an avenue for investors to diversify their portfolios across www.businessday.ng

currencies. An additional benefit for investing in The Fund is the tax exemption. The United Capital Eurobond Fund - being a Mutual Fund - is tax exempt. Hence, investors return is not subjected to withholding tax. In addition, aside competitive capital gain on subscriber’s investment, the Fund also pays an annual dividend which is distributed to all investors annually. To put some context to the above, let’s assume current exchange rate at N360.0/$1, a minimum investment of $1,000 (N360,000) in the United Capital Nigeria Eurobond Fund would grow to $1,082 (N389,520), at an 8.2percent annual return. Clearly, this is higher than what the hypothetical $1000 would have earned if the same fund were to be kept in a domiciliary account which pays little to nothing. Notably, the illustration above assumes that foreign exchange is stable at N360/$1. If history is anything to go by, naira cannot remain stable forever, thus if we assume again that the naira depreciates to say N380.0/1$ (that’s 5.3percent depreciation) for whatever reason.

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

Coronation Research

Currency strong, equities in the shadows

here was a small amount of profittaking in the T-bill market last week, but the overall sense is one of mission accomplished – for 2019 – when it comes to reductions in market interest rates, stabilising FX reserves and anchoring the Naira. Equities languish, pending a pick-up in economic growth. FX The Central Bank o f Ni g e r i a’s ( C B N ) F X reserves currently stands at $ 4 4 . 6 8 b i l l i o n . Si n c e the beginning of the year $7.75billion has been injected into the NAFEX market through Foreign Portfolio Investment (FPI) while the CBN’s contribution has been just $1.42billion. We believe that the current reserve level is sufficient for the CBN to defend the Naira exchange rate through 2019. Bonds & T-bills The yield on a Federal Government of Nigeria (FGN) Naira bond with 10 years to maturity rose by 36bps to 14.71percent, and at 3 years rose by 37basis points (bps) to 14.34percent last week. The yield on a 364-day T-bill rose by 3bps to 14.61percent. The yield on a T-bill with 3 months to maturity increased by 107bps to 11.98percent. Following a significant inflow of foreign money into Nigeria’s fixed income markets which brought the 364-day T-bill yield down by 243bps during February and a further 44bps in March, there was a little profit-taking last week. The yields at one and at 10 years now are only 10bps apart. Given that we expect a low issuance level compared with recent months, we think the CBN will be content to see 364-day risk-free rates fall a little further, perhaps to a range of 13.80% to 14.30percent (see Coronation Research: Monetary Policy Committee, Surprise cut to 13.50percent, 26 March). Oil The price of Brent increased by 2.85percent last week to $70.34per barrel (/bbl). The average price, year-to-date, is $64.25/bbl, 10.38percent lower than the average of $71.69/bbl in 2018,

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but 17.35percent higher than the percent $54.75/bbl average seen in 2017. Oil is currently trading above its five-month high and, in our opinion, may continue to rally on the basis of escalation of the conflict in Libya. The risk is of a shortfall in oil supply from Libya, adding to the current supply squeeze from Venezuela and Iran. Equities The Nigerian Stock Exchange (NSE) All-Share Index recorded a loss of 4.59percent last week, taking the year-to-date return to negative 5.77percent. Last week Sterling Bank (+8.33percent), Cadbury Nigeria (+5.00percent) and Stanbic IBTC (+0.54percent) closed positive while UBA ( - 1 9 . 4 8 p e rc e nt ) , C C N N (-14.57percent) and Oando (-12.39percent) fell. On Wednesday last week, shares of UBA became ineligible for its N0.60 final dividend, so week-on-week the adjusted decline stood at 11.68percent. Buying interest in the equity market is low as fixed income securities still remain the most attractive bet for foreign investors. However, if rates continue to fall and GDP growth picks up, this pattern could reverse. Strong FPI, weaker rates, Strong Naira In Coronation Research: Nigeria Weekly Update, 25 March, we highlighted the disruptive influence of $10bn of FPI inflows in Q1 2019 on our forecast of market interest rates. Our base case, then, was for a fall in market rates in Q4 2019. Our most bullish projection was for rate compression to occur in Q3 @Businessdayng

2019. However, strong appetite for emerging market b o n d s, b o t h U S d o l l a rdeno mi nate d a nd l o ca l currency-denominated has changed the picture. We now expect one-year T-bill rates in the secondary market to trade between 250-300bps above inflation, which at present suggests a band of 13.80percent - 14.30percent. Furthermore, activity in the T-bill and OMO markets are converging to average levels. The subscription rate at the 3 April auction for 364-day T-bills was 2.26x the amount offered. At the auction on 27 February it was 11.75x the highest level of demand in more than 10 years. On average, T-bill auctions are oversubscribed 2.51x. Because high subscription levels have been associated with steep interest rate cuts, the return to trend demand at recent auctions is indicative of more gentle changes in interest rates. Moreover, a move to cut rates much below current levels might be counterproductive for exchange rate stability, in our view, provided benchmark rates in the US and other developed markets remain unchanged. While we adjust our view on market interest rates, our exchange rate projection appears more robust than when we first published it on 15 Jan 2019. (See Coronation Research: Year Ahead 2019, A tale of two halves, 15 January). CBN reserves are up 3.63percent this year and an upward swing of 31.6percent in oil prices (Brent) year-todate is positive for our FY 2019 forecast of N362.59/US$1.

Thursday 11 April 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

Rules on Derivatives will be ready soon – Uduk Mary Uduk, Acting Director General of the Securities and Exchange Commission speaks in this interview with journalists including Iheanyi Nwachukwu. Excerpts How many people have mandated for the e-dividend and how many mandated accounts do we have. What is the quantum of unclaimed dividends? bout one year ago, the SEC stopped the free registration exercise, specifically 31st of March 2018. At that time, 2.2m investors had mandated. It is interesting to observe that just because the free registration stopped, members of the pubic appear not to come forward again. As at the CMC Meeting, only about 2.7million investors had mandated their accounts. There is a strategy that is going to be reviewed and developed by the market in concert with the banks and registrars to entice investors. The fee for every approved mandate is N150 but investors are not going to be asked to pay the amount before they are registered. If you have 120 accounts, you just mandate them company by company and the only thing you will pay per company is N150 even if you have dividend of up to N200, 000. It is just a processing fee for maintaining the portal and investors are not to be asked to pay at the point. Please encourage them to proceed to their banks and register. We believe that by the time we are giving report next, we would have improved. Unclaimed dividend in the market is being tackled in minimum of two solid approaches. One of them is e-dividend. For every account that is mandated all accrued dividends are automatically paid. Then there is the use of regularization of multiple accounts. We discovered that while dividend is growing and it is increasing unclaimed dividends, the pace is not as satisfactory as when we observe that multiple accounts which have not been claimed for many years are still being paid dividends. Those people that have multiple accounts can only lay claim on dividends in one account, all the others will keep warehousing dividends as long as they are not regularized. We want to see how far the registrars can go in regularizing the multiple accounts so that we can have a specific figure for the unclaimed dividends. We have a provision in CAMA that if unclaimed dividends stay for a specified time, those dividends should be returned to the paying company and that is what the Commission is doing. Now, any unclaimed dividend that is 15 months and above is returned to the paying company. That way, the shareholders also benefit as those money could be invested by the company and result in more interest for the shareholders. Recently you gave a directive on fidelity bond, what is the level of compliance? Fidelity bond is one of the requirements for all market operators; they have to file fidelity bonds every year. It runs from January to December of every calendar year. We observed that some people were not complying hence we issued a circular. In that circular, the management gave a reprieve of 45 days. We have started compiling the list of those that have not filed, those that filed after the date that we gave as the deadline. All of those persons will be sanctioned according to the provisions of the law. The gambling industry is doing very well, is the SEC looking at introducing a product that will allow youths to invest money as is done in some advanced countries? We presently do not have any laws on gambling, but we have mutual funds and it covers every asset in the capital market. Be it money market, insurance, capital market, real estate,

Mary Uduk

infrastructure among others. The youths can invest in these, rather than leave your money in savings account you can invest in mutual funds. It runs like savings account and after three months you can withdraw your money same way as you do with the banks. We do not have to go and gamble, you need to let them know that there are so many products in the capital market that they can invest in rather than going to gamble and losing their money. We have various products that are very attractive where they can invest their money. We have commenced investor education and enlightenment for Nigerians to understand the benefit of these funds which gives more interest that saving money in bank account. What is the update on margin loans to ensure we do not have the kind of abuses we saw prior to 2008? What is the discussion with CBN so that processes are not abused? Actually when there were such abuses, we did not have a comprehensive margin loans laws but now we have specific rules. After the meltdown, the SEC and the CBN came up with a rule on margin loans and it was after that we came up with comprehensive rules on margin loans. But after the issuance of the rules, we discovered that there were almost zero activities on margin loans. That is why the market suggested that it appears the rules were too stringent and suggested the need to look at the rules again with possibility of amending it. Due to our experience of the past we excluded banking shares from the list of margin loans but we also found out that in other jurisdictions you can give loans to buy bank shares. Due to that we now started engaging with CBN, the engagement is still going on and we believe that at the end of the day we will be able to amend our rules. What is the update on MTN? MTN might be in the market but it depends on the aspect of the market. We all know that a company cannot come to the market unless they are a public company and as we speak, MTN has not yet completed the process. There is a process to coming to the market, first you

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have to be a public company, and you need to have your shares registered with the Commission. However I do know MTN had issues with the Nigerian government and they have been trying to sort it out. I think they have sorted out one aspect of that. I don’t think the other part has been sorted out and because they have committed to coming to the market, they have decided to come through listing by Introduction. I know that they are working hard towards that, they have visited the Commission to explain that and they also assured us that after the Listing by Introduction, once they are able to sort out the other issues they can now come fully. Right now, there is no formal application from them, but people need to understand that there are many processes for coming to the market. It can be either through Listing by Introduction of Initial Public Offering. When they file their application we will be able to give you the right information. Have there been trainings on Derivatives and ETFs for those that will drive the process? Derivatives are very good products to be in the market. As we speak, the Rules on Derivatives will be ready soon and we have been building capacity in-house in partnership with South Korea. We have a Knowledge Sharing programme with them, they have been to the country twice now and our staff are scheduled to travel to their country for more training. Even their ambassador has been to the Commission and all of that is part of building capacity and training the staffs. Even in the market the NSE is doing a lot in the area as well as the FMDQ who are taking some people to India this month on capacity building. All stakeholders including the CBN have been collaborating to ensure that we get it right. What is the position of SEC in regulating crypto currencies? In the last CMC we talked about it and inaugurated a Committee in respect of FinTech. The committee was charged to coming up with a

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FinTech Road map for the capital market community and we also informed you that we now have a dedicated Division in the Commission on that. The Committee is working assiduously to decide what regulations we can make in this area. The commission has the mandate to protect investors. We know that crypto assets are volatile unlike ordinary assets. Since January 2017, we have been asking investors to be vigilant when it comes to that area. We don’t want to get in the way on innovation. Regulators across the globe are paying attention to what is happening in this sphere. On the one hand they want to protect investors and on the other hand they want to support innovation. On all fronts the SEC is looking at development in the FinTech space. There is also ongoing collaboration led by the CBN, there is an inter-agency committee on virtual currencies on which the SEC is working with other market operators. In no distant time, the SEC will come up with regulations on crypto currencies. We are embarking of investor education so that investors understand what it is all about. The market has been down for over three weeks after the elections. Does it mean investors do not have confidence in the market? Market depends on several factors, some are global and others are domestic. Some are industrial and some are also in terms of the company’s performance. You can see sectors that are doing better; you can also see specific sectors that are doing well. Around election, its possible people have different expectations some want to keep their money, some sell their shares to vie for political office, but as elections are over we expect that some of those people that withdrew prior to elections will come back to the market. Around elections in the history of Nigeria, we will see that there is usually a lull in the market. The statistics are not that bad; the day after the elections the market actually moved up and around sub national elections we saw that market came down a bit. There was a time we did 42 percent and there was also a time we did -17 percent, there would always be sentiments. What is very important about the market is that in the long run even though you have fluctuations, do you have something that is looking upwards? The stock exchange index started in 1984 with 100, today we are in over 30,000. There will definitely be ups and downs… How strong has the market been and what has been the Contribution of the market to the economy? In terms of the contribution of the market to the economy we can look at it in terms of capitalization ratio as well as how many new issuances were made in the market. We know capitalization ratio has increased it should be about 21 to 22 percent when you talk about equities and bonds. Last year, we were able to make more corporate bond issuance than the previous year. In 2017 we did about N23billion and in 2018 we did about N323 billion. Going forward, we are hoping to do better. Given the fact that we are working to reduce transaction costs as well as time to market; we also advice subnationals to come to the market so that we can have new issuances in the market. We have seen quite a number of activities in the bond segment recently and we are hoping that we will see more in the equities segment too. Not just private placement and Rights Issue, we also hope we will see more of Initial Public Offerings.

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Thursday 11 April 2019

BUSINESS DAY

Thursday 11 April 2019

BUSINESS DAY

INTERVIEW

Our panel’s achievements are many and ongoing - Obono-Obla OKOI OBONO-OBLA, Chairman of the Special Presidential Investigation Panel on the Recovery of Public Property, inaugurated in August 2017, avers that multiple institutions will strengthen the fight against corruption. However, an ad-hoc Committee of the House of Representatives, passed a resolution in July last year, calling on President Muhammadu Buhari to dissolve the panel, claiming it is illegal. But in this interview with BusinessDay team of John Osadolor and Tony Ailemen, Obono- Obla says the Panel’s operation is legal, adding that only corrupt people are fighting the Panel through smear campaigns. Excerpts:

an you bring us to speed on your achievements so far? Our achievements are many and ongoing. The fact that this panel was set up is an achievement for the President Muhammadu Buhari’s administration and also demonstrates the political will of this government to fight corruption. I say this because the law under which this penal was set up, is known as “The Recovery of Public Property Special Provisions Act.” It came on board through a Decree promulgated in 1984, one of those that the current President used to fight corruption and a lot of people were sent to prison, under that regime. When that government was toppled in August, 1985, the law was kept in a state of limbo from that 26th August 1985 to August , 2017, by successive governments for obvious reasons. The law is very strict. If a public officer is convicted under that law, he or she can be sentenced to as many as 25 years in prison, under the law. Even if a public officer has a property in the region of N1m above his earnings, he can be charged under that law. A lot of people confuse the panel with the Code of Conduct Tribunal (CCT). Our functions are different. The law wasn’t repealed when the Military went back to the barracks. It was kept as part of the laws of the Federation of Nigeria. This panel is the only panel that can recover assets of public officers, we have powers to investigate the assets of public officers who have corruptly enriched themselves, misused public trust and have contributed to the economic adversity of Nigeria, including those who have failed to declare their assets in consonance with the laws setting up the CCT. This panel also have powers to investigate private persons. You know that some public officers, when they acquired illicit assets, they use fronts or shell companies. So, we have the powers to investigate such private individuals suspected to be fronting for these public officers, especially their relations etc. You can see that powers of the panel are very broad. Some people think the panel has no powers to prosecute. This panel is a law enforcement panel, so we can investigate as well as prosecute. In addition to investigating public officers, we have been recovering landed properties. A lot of federal government properties are in wrong hands. We have been trying to recover these Federal Government properties and we shall succeed. We have to investigate before we recover. We also have some engagements with Federal Government institutions like the Nigeria Import and Export Bank NEXIM, for example. The bank was set up to facilitate import and export business and create jobs for Nigerians. As usual,

the bank was run down, people collected a lot of money and they could not pay them back. Those who were involved in this were those given the responsibilities to run the affairs of the bank. So, we have commenced recovery of monies from the defaulters. We have recovered over $5 million from them. We are also looking at Aso Savings, who collected money but could not pay back. So far we have also recovered about $3 million from some new generation banks. This was money belonging to NEXIM that was borrowed by the bank, which refused to return it. We have also recovered billions of Naira for Federal Mortgage Bank of Nigeria- money which people refused to pay back. This is a continuous process that is why the figures will continue to change as we recover them. In terms of investigations, can you put figures to the numbers of investigations done so far and possibly convictions? Ok, let me highlight the more important ones. You must have heard of what they call the Paradise or Panama Papers, those were the scandals that broke out not too long ago, and the politically exposed people around the universe

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We may not recover all, but we will try our best because the process is very cumbersome. There are lots of international politics involved. Remember, these people are not interested in our progress. They are using this money to boost their own economy so, it may not be easy to recover all, but we will try our best. We will keep putting pressure on them to help us recover these funds

were affected. They were using tax havens. We are involved in the investigations and we are doing that in conjunction with security agencies. It is wrong to take money out of Nigeria without declaring it. There is also this team set up by the Federal Inland Revenue Service (FIRS) on the Voluntary Assets and Income Declaration Scheme, VAIDS. We collaborated with them by providing information on Nigerians who have properties offshore and who are not paying tax to the government. Most of these people are not paying taxes to the Federal government. So, we provided these information to the FIRS. We are also investigating the bail out funds the Central Bank of Nigeria gave out. This is about $7b and many Commercial banks benefited from this in 2006. As the name implies the money wasn’t a gift, they were expected to pay back. A leading Human Rights advocate in Nigeria provided us with the lead and we are currently investigating that also. We wrote to the CBN to find out if the money has been returned and they said “no”. The money was gifted to the banks under Professor Chukwuma Soludo, the then CBN Governor. How can you give out such huge public funds to private commercial banks? We have interrogated a lot of persons who were on the board of the CBN at that time. They said the money was gifted to the banks. Currently also, we are investigating a Permanent Secretary who did not declare his assets and who has properties he cannot explain. We recovered over 80 vehicles from a Director in the Ministry of Power Works and Housing and other assets from him as well. These are under investigation. Sometimes, we used interim forfeiture to hold the assets pending the outcome of investigations. As a Professional lawyer, how do you speed up the process of prosecution because some of them can go to Court to stop your investigations? Yes, you are very right. Let me give an example of the Nigeria Football Federation officials. There were allegations that they took over N4b, when we arrested them, we granted them bail and asked them to come back the second day. When they did not come, we went to court to get a warrant of arrest, but they had also gone to court before us to stop us. . So, a lot of them go to court to try to frustrate or engage us in war of attrition. But the law says going to court does not stop a criminal investigation. How do you then speed up public prosecutions? Yes, it is very slow and frustrating sometimes. If you look at the Administration of Criminal Justice Act, enacted in 2015, it was meant to fast tract speedy prosecution of criminal matters because Nigeria

with Nigerian Intelligence Agency (NIA) because we do not have the capacity to carry out external investigations outside the country. This was why we were able to gather information on a politically exposed lawmaker in the National Assembly who amassed wealth overseas. He has assets worth more than £100m. Others are also being investigated under what is known as the Unexplained Wealth Regulation in the UK. The law provides that anyone with properties more than £50,000 in the UK should be investigated to know the source of his wealth. The property will be confiscated if the owners cannot explain how they got them. We are currently investigating about 20 politically exposed people who have properties in London and other countries. There is therefore nothing wrong with having multiplicity of agencies. We can act as a check on each other. Corruption is still a big problem. Most monies taken out of Nigeria are yet to be recovered because the process is cumbersome. You saw how long it took us to recover money from the Abacha loot. For a country that wants to fight corruption, there is nothing wrong with having so many agencies. Code of Conduct Tribunal cannot jail someone found to be corrupt. Look at the Saraki’s case for instance, they could not have gone beyond confiscation of his properties and banning him from holding public office for 10 years. But with us, on conviction, you will be sentenced up to 20 years in prison. Code of Conduct is what you call “ non-conviction forfeiture”.

became notorious for dragging up criminal matters which also encouraged impunity as we see today. But most judges have not been following the law. They still allow most lawyers to have their ways. They take advantage of the situation to help their clients and so you cannot blame them. But we also know that the Judge has powers to prevent any lawyer who wants to frustrate the process. There should be synergy between the Executive, Legislature and the Judiciary. Even the Civil Society needs to cooperate with the government to ensure speedy processes. The Executive cannot stampede the Judiciary. The powers of the three arms are spelt out in the Constitution, but l believe that this should not be used to frustrate the other. Just as each branch must act as a check on the others, there is also the need for cooperation for the smooth result. We can only appeal to the Judiciary and provide a conducive environment for them to work. Since your inauguration in

2017, have you been able to get a conviction? No! We have issues. One of the issues is that some people took us to court. The director I said we recovered properties from went to court to challenge our powers. We had gone to court earlier for an order of interim forfeiture pending the determination of the investigations. He went to court to stop us on the ground that the court did not have that jurisdiction over the matter. The issue before the Court of Appeal was whether or not the FCT High Court has power to grant interim orders, but the court delved into other issues that were not even canvassed by the applicant. They were of the opinion that we can investigate but we cannot prosecute. But it was not a criminal but a civil matter. We were not prosecuting but we asked for an interim forfeiture and a lot of people have now taken advantage of that ruling, but we have taken the matter to the Supreme Court. This has slowed us down. You have the EFCC, ICPC and the CCT, it appears you are all doing the same thing. Where

does yours start and end? If you look at the UN Convention Against Corruption which all nations including Nigeria signed, it identified corruption as a problem undermining democracy, rule of law and a disincentive to foreign investment and economic development generally. It also identified corruption as major reason for poverty and the root cause of most insurgency and instability, globally. So, the UN convention postulated that countries with high problems of corruption can go ahead and establish multiplicity of agencies to deal with the issue. Brazil for instance had the same problem with Nigeria and they have used this model in fighting corruption. Recently, we heard that former Brazilian President Luiz Inacio Lula da Silva, was jailed for corruption. Brazil is a third world country like Nigeria, so, if they have been able to apply the same method which is now working for them, why can’t we also do same here. You may think they overlap, but they don’t. Ours is strictly focused on the recovery of looted public assets. We however, share information with those agencies you have mentioned. We work

Is it not possible that you just investigate and leave others to carry out prosecution? Well, l don’t have any misgivings about that. If that will even lessen our work, fine. That was what the Court of Appeal said, that we should just investigate and pass our findings to Mr. President and the President will send it to the Attorney General for prosecution. But sometimes, agencies that have powers to investigate, also have powers to prosecute so that their work is not hampered. Those saying we cannot prosecute are afraid because we have exhibited enough courage to do our jobs. They are fighting back. It is not easy to fight corruption as corruption will always fight back. If you do not even have the heart, you cannot do this job. How will you also react to allegations that the fight against corruption in Nigeria is targeted at the opposition and that you are just being used to witch hunt political opponents? It is mere rhetoric. Even some of the persons we are investigating are serving government offi-

cials. As we speak, some serving ministers are being investigated over contract inflation. The Vice Chairman of the Presidential Committee on North East Initiatives is also under investigation. He is a staunch member of the All Progressive Congress (APC). As a matter of fact, he was the first interim National Secretary of the Party. Hope Uzodinnma who recently carried the flag of APC to contest the gubernatorial election in Imo State, is also under investigation just to mention a few. People try to create that impression to discredit the war against corruption. Since l started this job, nobody has ever told me not to investigate anyone. So this is not true. Another big man we are currently investigating is a former Governor from one of the South South states who is now a member of the APC. He has been very vociferous in support of Mr. President, but he is under investigation. How many cases are ready for the courts? We have concluded our investigations on the one we did with NIA, but the man went to the Federal High Court to stop his prosecution. As l said, it is not easy to investigate big Nigerians because when we invite them, they don’t come. So, if you say corruption is not a problem in Nigeria, you are lying. But you have powers to arrest and compel them? Yes, we do. But they are very powerful and sometimes, they even use the media to attack and frustrate us. They also go to court to try to frustrate us. But our happiness is that this government has shown commitments and ensured that as far as fighting corruption is concerned, there are no sacred cows. Do you see Nigeria winning the war against corruption, given all the scenarios you have painted so far? Yes. I think we are winning the war. Hitherto, it was unheard of that a serving President of the Senate was arraigned before any court of Law in Nigeria. It was also unheard of that a serving Chief Justice of Nigeria (CJN), is suspended and arraigned. It will trickle down. Luckily for us, this government will be around for another four years and Nigerians will by then have imbibe the spirit that nobody is above the law. Whatever you do, you will be accountable. Yes, it is not possible to completely eliminate corruption, but the most important thing is that we are now imbibing the will to fight it. People care now, unlike before. In four years’ time, we would have succeeded in imbibing the spirit to fight corruption. Some very powerful leaders of the National Assembly tried to stop the

work of the panel when they saw that l was investigating some of them. They set up a committee to investigate the legality of my panel. I began to wonder if the House of Reps or the National Assembly has become the court of law. If they had felt that the law setting up this panel was unconstitutional, they should have gone to court or they should have use their powers of law making to repeal the law. But to say that the President has no power to set up this panel is therefore not correct. It is not for them to sit down at the National Assembly under the guise of oversight function to say that the panel is unconstitutional. They don’t have that right. It is not easy to fight corruption which is why we need the support of the media to succeed. Those of us doing this job have been subjected to smear campaigns. I have just received a document from the United States government about how our former National Security Adviser

(NSA), who has $9billion stashed away in the United States. If we’ve $9billion, Nigeria can be like Dubai. So it is a problem and we have to fight it. The person is no more and we will recover it because they are trying to partner with us to recover the money. Nigerian government does not even know how much has been taken away from the country. A lot of assets have been taken out if this country. Since the owner is no more, will it still be possible to recover all that money? We may not recover all, but we will try our best because the process is very cumbersome. There are lots of international politics involved. Remember, these people are not interested in our progress. They are using this money to boost their own economy so, it may not be easy to recover all, but we will try our best. We will keep putting pressure on them to help us recover these funds.

Thursday 11 April 2019

BUSINESS DAY

INTERVIEW

Why Nigerians no longer buy houses Discerning watchers and close observers of the real estate and property sector of the building industry must have keenly noted the drought in the real estate sector vis-a-vis the low volume of potential buyers of built-to-sell houses and apartments by estate developers and real estate practitioners in Nigeria. In this interview with ex-banker-cum-real estate merchant, OTUNBA SAHEED YEMI LAWAL, FCA, the indefatigable Managing Director and Chief Executive Officer of upwardly mobile and top industry player, Seagul Properties Ltd., located in Victoria Island, Lagos, with posh and flourishing estates in upscale areas of Lagos. He proffered reasons and solutions to the nagging issue among many related industry questions that were imposed on him in an exclusive interview with our correspondent recently. Excerpts…

here are reports that many houses are lying vacant without occupants, why are people no longer buying houses? People are not buying houses like before because there’s no money in circulation, and if there’s no money what do we do? The first thing anybody wants to do is to eat, second is accommodation, and most people are buying from investors because money is not flowing; a lot of people don’t have readily available money and that really affected the real estate business. The agricultural sector seems to be taking the shine off the real sector, what is your take on this? I can’t give an accurate submission to that, because I’m not in that sector; but like I said, in every other business, the purchasing power is low, and the government is not spending as much as they should be spending. In any economy, the highest spender is government, and it is only when the government spends money that money can multiply and spread into other businesses. Banks are no longer lending, just as the government is not spending, so there’s no serious activity going on in the economy. But it is not only the real estate sector that is affected. Generally, businesses have fallen abysmally low in the last four years. We are only hoping that, with this new dispensation coming on the way, things will improve, because, with the government’s plan, we saw what they tried to do in the last part of this administration, spending so much money on infrastructure, roads, railways and all that, and I also know that they plan to do a lot of that in their second coming. It is only when they do that and the economy is opened up, that money will flow in again, foreign investors will also come in because they were scared of the election. Now that we’ve had a good transition system, we can hopefully expect the foreign investors to come back in. And by the time there’s optimum activity in the economy, the banks are lending and all of that, it will positively affect the real estate sector, because people will now be able to buy houses with ease without any apprehension. Does this really have to do with the economic policies? I’m not a politician, but I know for one that most of the policies

Otunba Saheed Yemi Lawal

embarked on by the government were only for a short term, in an attempt to recapitulate the humongous money that was syphoned and expended unwisely by the previous politicians. These policies were only put in place to put some fiscal sanity back into the system. Furthermore, because of the high level of corruption, what this government did when they came in was to introduce the use of BVN, the control of the parastatals, the government account and all that. There was serious liquidity in the economy and banks too were affected because most of them were relying on government funds and when the funds were withdrawn they were really affected. They could no longer give out credit to this sector, like any other sector, and that greatly affected the industry. But as we move into the new regime, it is expected that the government will start spending more money on infrastructure, opening up new roads, renewing all the things that have damaged and all that. Politicians that were spending big money before are not doing so any longer because they are afraid of EFCC, that’s in the short term, anyway, because it cannot continue for long, and it can’t be sustained. The government has to re-inflate the economy, spend more money, and once money is spent, it will directly and positively affect the real estate. Statistically, 2019 has been envisioned as a windfall www.businessday.ng

for the real sector, but we are in the third month now and things are not moving in that direction. How feasible is this envision? Yes, it will, but only if the government puts in more money on infrastructure and other related projects; and by extension, this will embrace other allied industries in the sector who will also tap into the accompanying benefits of the more money pumped in by the government. Aside that, like you said that 2019 will be windfall on the real estate, yes it will because the CBN is working hand-in-hand with the real sector to institute a long-term enabling loan for people to enable them to purchase house with ease of repayment, and this idea will surely make the industry to boom and vice versa on the economy of the country. It’s a two-way mutually beneficial thing and is readily welcomed. As a top player in the industry what can you say about the recent collapsed building in Lagos Island, and what do you think the government should do about its recurrence? Like I said, at a stakeholders’ meeting with the government, there are lots of quack developers and operators in the sector; and again over 95% of buildings on the Lagos-Island are weak; over 190 or more buildings have for years been marked for demolition by the government and they have started demolishing them, with the recent mishap

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as the catalyst. If they carry out feasibility and structural test on most of these houses in the core Lagos Island, over 95% of them will fail, because of the location. I’m also aware that they have their peculiar challenges and all that. Part of the responsibility of the government is to protect the lives and properties of the citizens, but as far as I’m concerned, they have not. Look at the number of people that died in that singular incident, all of them wasted away because of the negligence and unprofessional Shylock attitude of some quack developers, whose main interest is to make quick money not minding the safety of tenants of the building they put up hurriedly with substandard materials. I’ve been to that area before, some of these places are not even motorable, and if you ask me, more than 95% of the buildings in the area are structurally weak and need to be reconstructed to be in line with modern building facilities and technology. I sympathize with the owners of the building but human lives are far more important than landed properties. Some of the buildings were built without approval, and not only that, the qualities of materials are substandard. We will continue to have this as long as professionals are not contacted or used in the construction of these buildings. How come we are not having a distressed or collapsed building in Ikoyi, Victoria Island, Lekki, Ajah, where even the topography and soil quality are not as favourable as that of the Lagos Island comparatively. Are the sector stakeholders doing any other thing to address the matter? First, the government needs to be more pro-active in issues that have to do with shelter for human beings, especially the poor masses. The ministry and specific agencies that handle issues of approvals for buildings, licenses for construction and real estate development practitioners must be people with professionals who will never cut corners or can be baited with perks by quacks to have their way, which at the end of the day could have a tragic effect on innocent lives and hardearned properties. Real estate is not synonymous with the usual buy and sells mode of business, it is a specialized industry that a peasant or street-like businessman can just dabble into. Strict rules, regulations with stiff penalties must be promulgated for any erring developer, and no offender must go unpunished to serve as deterrents. @Businessdayng

What is that unique edge of Seagle over other players in the industry? It is the quality and we have been consistent, there is no project we started that we didn’t finish, which is key. We may have one or two delays, which are also normal, but the fact that we deliver what we promise, and the quality of the property we also deliver to our clients; all these jointly and severally give us an edge in the industry. Which do you enjoy more, banking or real estate entrepreneurship? Well, I give thanks to almighty God; though I enjoyed banking and its environs while it lasted; but as an entrepreneur and property merchant; I am fulfilled and happy because I am treading on my passion; it’s always been a dream to empower, give back to the people, support and add value to people’s lives. It’s a dream come true because I’ve empowered many through my workforce of about 300 permanent staff and thousands of contract staff. It has always been my dream to render service to the people. While I was in the banking sector, I was equally rendering service, and even more so now as an entrepreneur, I’m also rendering unquantifiable services, which have always been my dream, desire, joy and ultimate goals in life. As a key player in your sector, what advice do you have for the younger ones coming into the real business? The best thing I will advise anybody or any young person coming into real estate is to first learn the terrain from somebody who is experienced and well-versed in the business; you must as a necessity have experience from an established organization headed by a certificated professional. You must have a mentor. Working in the bank really helped me and I gained a lot. Working for somebody should be for a short period because working longer than necessary could transform into corporate slavery. The best thing you should set out as a goal is to work for yourself. With real estate, I’m pursuing my ambition and I’m happy about it. I love it. I do everything with it and there are so many challenges. If you look at real estate vis-a-viz banking, you are both providing services. I’m happy that I’m providing houses for people to stay in and have a roof under their heads. I’m happy that I’m providing shelter and accommodation and I must ensure I do it very well.

Thursday 10 April 2019

BUSINESS DAY

Corporate Social Impact

Onuwa Lucky Joseph (08023314782) Editor.

Otedola Lifts ‘Chairman’ Chukwu ONUWA LUCKY JOSEPH

hristian Chukwu, dubbed ‘Chairman’ by the inimitable Ernest Okonkwo, for his masterful handling of his defense duties in his days as full back and captain of the then Green Eagles, is down with prostate cancer. But he’s experiencing a gush of goodwill, kindled no doubt by memories of his service to Nigeria both as Captain of Enugu Rangers and the Green Eagles and also as Coach of both Enugu Rangers

and the Super Eagles. All he’s done all his illustrious life was

play football and now in his hour of need, the hands are coming from everywhere to get him back on his once formidable feet. The NFF is pledging to ‘leave no stone unturned’, while Femi Otedola, increasingly becoming accustomed to his interventionist role in such high profile emergency cases, has promised to foot every dime of the bill his treatment incurs. Now, that’s heartwarming stuff. We pray the best for Chairman and wish him speedy recovery. And we pray the best for Otedola and his good heart.

As UNN powers campus with organic waste….

igeria’s ivory towers do not tower much above the rest of Nigeria. Indeed, they are neck deep in the same morass that the general population finds itself, with their condition, especially that of the public universities and polytechnics, tending to be worse. Far from immune from the national power problem, students in these institutions also have to contend with lack of accommodation, potholed roads, terrible toilets, sex-for-marks teachers, and a myriad of issues as they try to navigate their path to a certificate. For reasons too numerous to recount here, our tertiary institutions are not exactly centres of excellence. In fact, they may be said to be of little relevance to Nigeria’s quest for development. The University of Nigeria, Nsukka, is however, trying to buck the trend, and give our tertiary schools a good name again. Recently, the university started generating its own electricity using organic waste to install a 100 KVA Refuse Driven Fuel (RDF) gasification plant for its Nsukka campus. The import, according to its Vice Chancellor, Professor Benjamin Ozumba is that in the not too distant future (and that’s if the project is well managed and sustained), UNN would no longer be a customer of the Enugu Electricity Distribution Company (EEDC). Bravo!!! The proud VC, Professor Emenike Ejiogu, was quick to point out that “This is the first of its kind in the country, using of waste to generate electricity”, adding that “by the time more of the plants are produced that

will cover every part of the university, millions of naira will be saved every month as UNN will no longer pay a monthly electricity bill to EEDC.” Prof Emenike Ejiogu of the Department of Electrical Engineering who led the research team that produced the RDF gas plant said his research team is set to produce 250KVA plants, which will supply the energy need of the entire university and its environs.

Our tertiary institutions, if they show some resourcefulness, can attract grants that make them enablers of the infrastructural change that Nigeria so desperately craves. Another thing, this power generation innovation from UNN should attract corporate support. Despite what the school says, it is not exactly versed in the business of selling. What it has is technical expertise, which

One critical point he made is that, on request, his research team has the capacity to install the RDF plants to any individual, company or office that needs it. “It is cheaper and can carry more load than solar energy installation. With RDF plant in your house or office, it will carry your air-condition, deep freezers, pressing iron and other things in your house, office or company,” he said. That is the way our ivory towers ought to go! One has found it most frustrating that Nigerian engineers have not been as up and doing as we would expect. Come on, did we have to wait for Chinese engineers to come up with stuff like rechargeable fan, etc.?

now requires the marketing expertise that the corporate sector has in abundance. It is the only way to help take this to another level. Without looking too far, a niche the prospective business can corner quickly and profitably is other Nigerian institutions of higher learning that require uninterrupted power supply. It’s not a small market. UNN can become reasonably self-sustaining just by extending this service to other university campuses. The corporate/ campus partnership would clearly be a win-win, but that would be for that corporate organisation that knows how to navigate the customary arrogance of the ivory tower.

Climate change and the heat wave nationwide ONUWA LUCKY JOSEPH

y Issues around climate change have not always been popular, with many believing that the phenomenon is not deserving of a clear and present danger status. Just one of those alarmist curves the UN throws when goaded by NGOs whose agendas are less than crystal clear. There is also the development dichotomy between the West and other developed economies that do most of the ozone layer-depleting emissions viv-a-vis the developing

world which also have to bear in the virulent response that nature has unleashed with heat waves right around the world. Even the cool city of Jos, known nationwide for its near temperate weather, is as on the boil as the rest of Nigeria. It is situations like the one ongoing that drive home the point which a hundred images of melting North Pole glaciers won’t drive home. The heat ‘nor be here’ as we would say in Nigeria. It’s a raging inferno that’s seemingly constantly been fed fresh logs all day and all night. Not to menwww.businessday.ng

tion the pranks of NEPA (or is it PHCN? Or is it DISCO?) which is at its best when working with nature to further fan the embers. The message is clear. Climate change is not the hoax that Donald Trump and co claim it is. Governments as indeed corporates, have the job of sensitizing the populace to the dangers of being involved in activities that can only exacerbate the situation. For a start, the tree planting campaign have to be revved up and monitored to ensure that they are not mere photo-ops.

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The length Stanbic IBTC goes to enable the vulnerable…. ONUWA LUCKY JOSEPH

lobal climate change affects countries differently. The negative consequences such as flooding are usually more pronounced in developing countries, where they create a source of major concern and challenge for governments most of which are already saddled with problems ranging from infrastructure deficit, insufficient power, economic challenges, high rate of unemployment to mention but a few and are then faced with the responsibility of sheltering and rehabilitating the victims amid funding constraints and a myriad of other factors. Most African countries simply cannot cope. Their resources are stretched, not to mention funds misappropriation and misapplication the end result of which is poor or non-existent project execution. Add to this poor urban planning, population

growth and poor regional cooperation in the use of natural resources such as rivers and lakes and you have an idea of the factors that contribute to incidences of flooding, for instance, in Nigeria. The National Emergency Management Agency (NEMA) in 2018 earmarked 12 states as frontline states to be affected by flooding in that year and by September 2018, a national disaster had been declared in the four worst affected states while the others were flagged under red alert. Flooding in Nigeria often leaves devastating consequences in its wake. NEMA in one of its reports in 2018 revealed that of the 327,052 people were directly affected in the 12 flooded states, 77,460 were displaced. 3,544 houses were destroyed while 60,208 hectares of agricultural land were either destroyed or damaged. Sadly, also recorded were 70 deaths and 151 injuries. Another bad statistic, displaced individuals faced a higher risk of contracting diseases such as malaria and cholera on account of living in makeshift/temporary shelters and poor water supply. Along with the efforts of the federal and state governments, succour came to the victims of the 2018 floods in the form of support from notable corporate organizations who responded as part of their corporate social responsibility initiatives. @Businessdayng

One of them was Stanbic IBTC Holdings which made a timely intervention to ameliorate the plight of the flood victims. The institution donated relief materials to victims in five of the affected states namely Jigawa, Katsina, Delta, Rivers and Ogun states. However, what is also commendable about Stanbic IBTC’s intervention is the manner and strategy adopted in ensuring that its donations comprised the most critical of relief materials for the respective states and that such items were delivered to the victims who were in dire need of them. Upon selecting the states that would benefit from the relief materials, Stanbic IBTC immediately deployed staff on ground in these states/regions to conduct thorough impact assessments of the affected locations as well as living conditions in the relief shelters. Major considerations included; food, potable water, health/hygiene and comfort.

The institution also identified and partnered with relief agencies in the respective locations. Therefore in meeting the need for potable water for instance, boreholes were provided in shelters for which potable water was lacking; a major boost to the prevention of water borne diseases such as cholera and diarrhea. In addition, ample supply of water also fosters the attainment and maintenance of better hygiene levels. For the comfort of the victims, Stanbic IBTC provided mattresses with blankets and bed sheets, treated mosquito nets were also provided to prevent the scourge of malaria. Soaps and detergents were also provided, among other essentials. For the displaced victims, many of whose sources of livelihoods had either been completely damaged, adequate feeding was a major issue. For them, non-perishable food items (in packets, tins, etc.) were provided and distributed. Indeed, Stanbic IBTC showed that it gleaned useful lessons from its earlier intervention in 2017 for flood victims in Benue State during which sundry items including mattresses and beddings; food items such as bags of rice and wheat flour, packaged noodles, vegetable oil, tomato paste; mosquito nets among other relief maContinues on page 24

Thursday 10 April 2019

BUSINESS DAY

Corporate Social Impact

Nestle marks world water day with four water projects ONUWA LUCKY JOSEPH

s the world commemorated World Water Day, Nestle Nigeria was doing its bit to ensure that 4 communities were struck off the list of those deprived access to safe drinking water. The communities, all in Ogun State, are Areke, Bara, Owode Egba and the Alamala Military Barracks. For Nigerians in the cities and urban areas who are accustomed to getting their water delivered via borehole or in rare cases, the Public Water Works, it might seem a little farfetched to hear that people in modern day Nigeria still trek impossibly long distances to fetch unsafe water from lakes, streams, springs and rivers. But the Multiple Indicator Cluster Survey (MICS) conducted by the government of Nigeria in 2016/2017, estimated that in the rural areas, about 19 million people go through this ordeal on a daily basis. Which is why it would seem that the Nestle Nigeria action was an apt response to the theme for World Water Day 2019: ‘Leaving No One Behind’. Strong in the belief that water is essential, Nestlé Nigeria has consistently made sure to provide clean safe

water in the communities close to its factories. This, it says, is in line with its purpose to enhance quality of life and contribute to a healthier future. Working alongside government and other stakeholders to improve livelihoods in the communities where it operates

by Creating Shared Value (CSV) for everyone across its value chain, one of its focus areas is water – and so from facilities close to Agbara, Flowergate and Abaji factories, over 7,117,500 liters reach more than 6,600 people annually.

Now with the commissioning of four additional community water facilities in Ogun State today, 7,500 more people can count on access to clean, safe drinking water. The Managing Director and CEO of Nestlé Nigeria, Mr. Mauricio Alarcon, speaking on the topic, said, “We recognize and respect the fact that water is a fundamental human right. Everyone has the right to water, no matter where they are. Individuals and families need water for drinking, personal and household hygiene, laundry and cooking amongst other needs.” He then reiterated “Nestlé’s purpose of enhancing quality of life and contributing to a healthier future” saying “we work alongside other stakeholders to provide access to clean safe drinking water to those who live closest to our operations. As we reflect on the theme for World Water Day, we reiterate our commitment to improving livelihoods in our communities,” he concluded. Speaking at the commissioning of the community water projects Mr. Ibukun Ipinmoye, Nestlé Flowergate Factory Manager, said, “Today is very significant for us as it is another step towards ensuring that everyone in our community has access to clean, safe water for their basic daily needs. We are confident that these 4 new water facilities will go a long way towards re-

ducing the burden of families who had to travel long distances to find water.” Mrs. Agbatiogun Jokotade, Deputy Director Quality Assurance, who represented the Executive Chairman of Ogun State Universal Basic Education Board (SUBEB) at the handover ceremony of NUD Primary school project in Owode local government area, commended Nestlé Nigeria for its continued commitment to the development of the community. He also encouraged the beneficiaries to take care of the new facilities to ensure that they serve them for a long time. The school project comprises a renovated block of classrooms and head teacher’s office, a new block of toilets, a fully equipped playground and a borehole with a handwashing station. The elated Olu of Owode, Oba Kolawole Sowemimo, representatives of Ogun State Education Secretary, community leaders and beneficiaries, also attended the event. “We recognize and respect the fact that water is a fundamental human right. Everyone has the right to water, no matter where they are. Individuals and families need water for drinking, personal and household hygiene, laundry and cooking amongst other needs”. (Mauricio Alarcon, CEO Nestle)

The length Stanbic IBTC goes to enable the vulnerable…. Continued from page 23

terials were donated. Indeed Stanbic IBTC seems to have Corporate Social Investment ingrained in its corporate philosophy and DNA, it says it’s just as critical as adhering to the highest corporate governance principles. It is viewed as part of its business operations. This partly explains why its flagship CSI initiative, tagged Together for a Limb checks all the boxes on novelty, innovativeness and multidimensional approach to transforming the lives of indigent children who have suffered limb loss(es). Beneficiaries are offered prostheses and educational trust funds of N1.5m each. They are thus provided quality education along with the improved quality of life that the prostheses provision engenders. The beneficiaries being young growing children also get a replacement of their prostheses as they grow and as required until they turn 18 years of age. Therefore the beneficiaries receive regular health checks as their usage of the prostheses is monitored and additionally get a comprehensive medical check every time replacement prostheses are to be fitted. Stanbic IBTC goes further to bring attention to the plight of citizens with limb losses through an annual charity walk that is incorporated in its annual events calendar. In fact, the launch of the Together for a Limb initiative in December 2015 was preceded by the charity walk on November 14 of that same year and the charity walk has been held every year ever since, usually preceding the unveiling of beneficiaries for the year to further raise public awareness for the cause. Accurate figures are not available of the number of Nigerians, especially children that are missing limbs how-

ever, since inception; Stanbic IBTC’s Together for a Limb has provided prostheses for 20 young Nigerians and has profoundly raised public awareness of this health problem through the charity walks and other associated initiatives. Being an institution that is very keen on education, Stanbic IBTC CSI efforts in this sector are also very notable. For instance in Surulere, Lagos, the institution rehabilitated a group of schools comprising Primary, Junior Secondary and Senior Secondary Schools, known now as Lagos Progressive Schools. To improve the quality of education and conditions of learning in www.businessday.ng

these schools, Stanbic IBTC renovated blocks of classrooms along with the library which was thereafter equipped with furniture, books and other study materials on relevant subjects, to complement the schools’ efforts and also promote a culture of reading. Also, Staff of Stanbic IBTC regularly provide mentorship to students of the schools. However the footprints of Stanbic IBTC CSI initiatives are nationwide as it continues to make donations and contributions towards improving quality and conditions of learning. Borehole and toilet facilities have been donated to several schools across Nigeria for instance. In addition, several students

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that are inclined towards the arts and crafts have also benefited by having their works exhibited during corporate events. An ICT laboratory, fully equipped with personal computers, backup generator sets, inverters, multimedia facilities was donated to a public school in Abuja. As its tagline, “Moving Forward” suggests, the organization has a desire for a nation with prosperous citizens but also understands that beyond corporate CSI, a lot more mileage will also be covered by the active involvement of individuals. Therefore it has encouraged and actively promoted a staff volunteer scheme for all its employees. Volunteering enables individuals to connect better with their communities to make them better places while offering a lot of benefits to the volunteers themselves. According to the Chief Executive, Stanbic IBTC Holdings, Mr. Yinka Sanni, the staff CSI and volunteer scheme has seen staff contribute and invest over N100 million towards various charitable causes that cover health, education and economic empowerment, which are the core CSI pillars of Stanbic IBTC. Employees with similar interests are encouraged to form groups and raise funds to address the respective causes that each group has identified with. Consequently, the staff volunteer scheme has donated classrooms, libraries, health facilities, boreholes and other social interventions over time across Nigeria. The passion and benevolence of some staff groups created a memorable yuletide season in 2018 for several beneficiaries. In December 2018, the internal audit team commissioned a renovated dining @Businessdayng

room, fully furnished with brand new chairs, while also donating wheelchairs, overhead water storage tank with water treatment facility to the Special Children Centre at Ketu, Lagos. In the same spirit, the information technology team donated a water borehole facility to Farayibi Community in Bariga. The Finance team also made donations to Harvey Road Health Centre and the Ifako Ijaye General Hospital. Prior to the bumper December, the operations team in Personal and Business Banking had in September 2018 donated renovated classrooms, newly constructed classrooms, sanitary facilities (toilets) and other projects at African Bethel Primary School, Ikorodu. And only recently on February 13, 2019, the card operations team commenced a volunteer mentorship program at Ilupeju Senior Secondary School. Along with carrying out its core business operations, Stanbic IBTC has consistently promoted deliberate social investment programmes to improve the lot of individuals and communities across Nigeria. Its 360 approach which has birthed the employee volunteer scheme is further extending the frontiers of and giving a new meaning to CSI in Nigeria. “According to the Chief Executive, Stanbic IBTC Holdings, Mr. Yinka Sanni, the staff CSI and volunteer scheme has seen staff contribute and invest over N100 million towards various charitable causes that cover health, education and economic empowerment, which are the core CSI pillars of Stanbic IBTC.”

(For feedback, contact us at csrmomentum@gmail.com/ 08023314782)

Thursday 11 April 2019

BUSINESS DAY

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

Oil and gas exploration is off to a flying start in 2019 … with Nigeria missing in action Stories by Olusola Bello

il and gas exploration is off to a flying start in 2019, with majors taking a bigger bite of the conventional resources discovered in the first quarter, according to Rystad Energy Unfortunately Nigeria is off the radar of those resource-endowed countries that are making waves in this area. The country has in the last 12 years not engaged in any serious exploratory activities in oil and gas. There is no prospect that such an exercise would happen in the nearest future with the Petroleum Industry Bill that would have helped to unlock the resources being bogged down at the National Assembly. Global discoveries of conventional resources in the first quarter reached a robust 3.2 billion barrels of oil equivalent (boe). Most of the gains were recorded in February, posting 2.2 billion barrels of discovered resources – the best monthly tally on record since August 2015.

“If the rest of 2019 continues at a similar pace, this year will be on track to exceed last year’s discovered resources by 30%,” says Taiyab Zain Shariff, Upstream Analyst at Rystad Energy. ExxonMobil was the most successful, with three significant offshore discoveries accounting for a whopping 38% of total discovered volumes. European majors Total and Eni are also in the fold with successful offshore wells in

South Africa, the United Kingdom, Angola and Egypt. From a global perspective, the push for substantial new discoveries shows no signs of slowing down, with another 35 high impact exploration wells expected to be drilled this year, both onshore and offshore. Three such highly prospective wells are already underway: the Shell-operated Peroba well, off Brazil, with pre-drill prospective resource estimates of 5.3 billion boe;

…it may force countries to depend on domestic sources countries

ing dependent on imported energy can create political risk. “Countries need to have confidence in the security of their gas supplies,” says Dudley. Nigeria LNG is for export with very little for domestic use and if the trade war among countries continues and the customers of NLNG decide to look inward, the country may be in trouble, as it may look inward for what it can convert its gas to, an industry source said. More than eight months after the signing of the Front End Engineering Design contract for Train 7 of the Nigeria LNG Limited, there is still uncertainty as to when the shareholders will take the final investment decision on the project. The Nigeria National Petroleum Corporation, which is one of the shareholders, said in July last year that the FID for the project was expected to be taken in the fourth quarter of 2018. The NLNG Train 7 expansion project aims to increase

the company’s production capacity from 22 metric tonnes per annum to over 30 MTPA by upgrading Trains 1-6 and adding of train 7 and associated infrastructure at an estimated cost of $4.3bn, according to a statement by the NNPC. However the contract for FEED was awarded to two consortia in July 2018. According to Andy Odeh, the FEED work is expected to be completed by the second quarter of 2019. “The NLNG is fully focused on achieving other pre-conditions, which will eventually lead to Final Investment Decision and the success of the project.” FEED is the basic engineering conducted after the completion of conceptual design or feasibility study. After FID on the Train 7 project, construction period would last approximately four to five years. It is expected that train 7 will be operational by 2024. Long-term contracts have been signed,” he added.

Olusola Bello, Team lead, Analysts: Isaac Anyaogu, Stephen Onyekwelu, Graphics: Joel Samson. www.businessday.ng

to 949,000 bpd by 2017 and around 500,000 bpd by the end of last year. In fact, the US imported less crude oil altogether, not just less OPEC crude, from 262.8mn bpd per month at the beginning of 2017 to 226.6mn in October 2018, the last month for which data are available, according to the EIA. Despite the loss of US market share, however, OPEC and its coalition of non-OPEC producers, including Russia, have continued their strong commitment to comply with the output reduction deal agreed in December, namely to collectively cut production by 1.2mn bpd by at least June 2019. According to OPEC Survey, the agreement by the group of 25 producers, known as OPEC+, follows two years of 1.8mn bpd cuts, which succeeded in reversing a three-year oil price slide and restored a certain amount of stability to the market. The strategy has continued to work with Brent prices comfortably holding in the US$60s bbl range since the beginning of this year. Brent closed at US$68.39 per bbl on March 29, 2019.

How hoodlums destroyed power infrastructure, compound electricity outage problems

LNG to be negatively impacted by trade war, BP warns P has warned that Liquefied Natural Gas (LNG) trade war, vulnerability and insecurity in global trade flows could have a particularly damaging impact on confidence in LNG as an energy source. This could also affect the yet to take off train 7 as the market must be viable before off takers entered into any contract for any new deal for supply BP said trade tensions could impact on LNG’s prospects as the world transitions to cleaner energy sources, by encouraging countries to resume a dependence on domestic resources rather than imports, Bob Dudley, BP chief executive, told the LNG19 conference in Shanghai. “Gas is affordable, abundant, cleaner and easily transportable thanks to LNG”, says Dudley, while noting that global trade in the liquefied gas is set to more than double from 400bn m³/yr to around 900bn m³/yr by 2040. But trade wars only serve to remind countries that becom-

Eni’s Kekra well in Pakistani waters, with pre-drill prospective resource estimates of 1.5 billion boe; and the Total-operated Etzil well off Mexico, with pre-drill prospective resource estimates of 2.7 billion boe. “If these wells prove successful, 2019’s interim discovered resources will be the largest since the downturn in 2014,” Shariff remarked. Meanwhile, OPEC+ group compliance has remained

intact despite a decline in US market share OPEC exports to the US are likely to continue trending downwards, according to the majority (88 per cent) of energy executives surveyed by the Gulf Intelligence Despite the loss of US market share, OPEC and its coalition of non-OPEC producers have continued their strong commitment to comply with the output reduction deal OPEC crude exports to the US dropped to a five-year low in January, while US stockpiles climbed to 3.6 mmbbl in February, according to the US Energy Information Administration (EIA). Since 2008, US production has increased by a staggering 140 per cent. Some analysts predict that by 2020, the country could be a net exporter of crude and refined products. In February, US output hit 12mn bpd, contrary to previous expectations that this level would not be reached until the second half of the year. Saudi Arabia, OPEC’s largest oil producer, has seen its crude exports to the US drop steadily in recent years, from 1,361mn bpd in 2012

t is true that Nigerians have suffered unprecedented frustrations in the hands of electricity providers because they are not always there when they are most needed by customers. To compound the problems of the customers is the introduction of crazy or estimated bills that have become the order of the day rather than being an exception. Customers are outrageously billed for electricity they did not consume This situation has generated angers and frustration to which both the power distribution companies and the Transmission companies have refused find an answer. As painful as this could be it does not warrant the invasion of the infrastructure of the distribution companies or attack their staff. It also does call for aggrieved customers to take laws into their hands as some have done in Ilesha, Osun State. This situation must be

checked by the authorities concerned. In the morning of 14th March 2019 a group of hoodlums armed with dangerous weapons like guns, machetes and other sharp objects from Bolorunduro and Olomilagbala communities under Isare Service center, swooped on the office infrastructure robbed and attacked the staff with guns and cutlasses. They shot sporadically into the air to create panic and chaos while their operation lasted. They forcefully gained entrance into the cash office, carted away money from our cash collections and took away mobile phones of some of our staff. The same group attacked the office at Oke-Omiru. The staff around scampered for safety, then the Business Hub Manager who tried to intervene was beaten severally before he was rescued to his office by a youth leader. The hoodlums further proceeded to our Isokun Service unit and wounded

some of the company’ staff whilst some property in the various offices were destroyed and some amounts of money carted away. Because of this unruly behaviour some communities that did not participate in the dastardly act are going to suffer for a long time to come. Right now those communities affected by this destruction carried out on these facilities will suffer indefinite power outages as Ibadan Electricity Distribution Company IBEDC has said that it does not have the financial capacity to replace equipment vandalised by hoodlums in those areas. According the John Donnachie, managing director of the company the current estimate of what was directly damaged by the hoodlums is put at over N250 million, adding that this figure could be higher if it is discovered that the transformers torched by the irate youths are also damaged.

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Thursday 11 April 2019

BUSINESS DAY

ENERGYREPORT Local content would be enhanced through our diversification - Siemens boss Siemens Power Services is a company known as majorly responsible for power generations in the oil and gas industry and a reputable original equipment manufacturer (OEM) in the manufacture of gas turbines and compressors. But recently it opted for diversification of it services. Seun Suleiman, general manager for the company in an interview with Olusola Bello gave an insight into why the company is taking such a step. Excerpts: What can you tell us about Siemens Power Services? t is a business unit that is well known for power generation in oil and gas industry and also a reputable original equipment manufacturer (OEM) in the manufacture of gas turbines and compressors which are used for power generation in oil and gas industry. The gas turbine as the name implies is generating power which is used in the facilities of most international oil and gas companies. The compressors are used to enhance oil recovery because at time there may be the need to pump more pressure to get a better output from and oil well. One thing that is very important to note by all and sundry is that even though Siemens Power Services is known for OEM businesses, it also does non-OEM businesses. In other words it does additional services which complement its core business, hence the establishment of the workshop in Port Harcourt.

If you plan is to diversify,

are you abandoning your primary functions in oil and gas industry? No, no. The company is not abandoning the services for which it is known in the oil and gas industry. It is however looking beyond the sphere of oil and gas industry in order to increase the chances of increasing its revenue base, generate more jobs for Nigerians by using it skills and technology and also actively getting involved in helping to build the much-needed local content development in the country. Carrying out the diversification exercise will provide tremendous opportunities for Nigerians to tap from Siemens technologies, hence the desire of the company to diversify its operation. What is the worth of your workshop? The workshop has been equipped with about three million euros so that we can diversify and provide more services for customers across the country. The services that are being rendered aside from taking care of gas turbines and compressors

lot of machineries they use, especially, those companies that don’t have in – country capacity to do some level of precise precision work. How much of your operations do other companies know? Many companies do not know that such services can be provided by the company because all they understand and know our company for is gas turbine and compressor business.

Seun Suleiman

include but not limited to, making available its 20 ton crane capacity for use for those that may need it, extensive machine shop with a lift which is four-ton load and five metres between centres, lathe machine which does cutting of equipment into different sizes,and a standard workshop equipment that is used for general cutting of tools for different dimension work depending on the output.

Rotor balancing is used to balance steel, pulp, compressors and turbines, and low speed balancing machine. Instrument repair test, calibration and general fabrication works. All these can be utilised by other industries. The food and beverage industries for example can benefit from this new move by Siemens Power Services because they have whole

enabled greater participation of Nigerians in the service value chain. Receiving the award, Managing Director of The Shell Petroleum Development Company of Nigeria Limited (SPDC) and Country Chair, Shell Companies in Nigeria, Osagie Okunbor, described the recognition as an important acknowledgement for the impressive work Shell companies continue to do in Nigeria content development. “This award is a strong recognition of our leadership in the Nigerian content development space. Nigerian content development remains a very important step in our growth aspiration as Shell Companies in Nigeria roll out the next phase of major projects.” Shell’s Nigerian Content Development Manager, Olanrewaju Olawuyi, dewww.businessday.ng

scribed the NOGOF award as well-earned given the pioneering initiatives and strides by Shell companies in Nigeria which he said had put the oil and gas industry in the hands of Nigerians. “We are motivated by the award to continue to pursue in-country value addition in the oil and gas sector as this aligns with the government’s aspiration in local capacity development.” The NOGOF award is a confirmation of the leadership position of Shell in local capacity development in the oil and gas industry. In 2018, Shell Companies were named the Local Content Operator of the Year at the Annual Oil Industry Achievement Awards Dinner of the Petroleum Technology Association of Nigeria (PETAN,) an association of indigenous technical oilfield service

Is the company capable of doing some other functions? The workshop does not only support services of gas turbine and compressor but additional works that would enhance the quality of gas turbines and compressor. For example, the workshop has Lathe Machines which is meant to support additional works. It is a standard machine which does some cutting of steel to different sizes and shredding in the oil and gas industry, alignment and balancing of some equipment are also carried out at the workshop. This is a general technology. It is useful for companies that are not in the oil and gas activities. Many companies do not know that such a service can be provided by the company because all they understand and know the company for is gas turbine and compressor business.

Total Nigeria unveils new set of skills acquisition program beneficiaries

Shell emerges Nigeria’s Most Impactful Local Content Company

hell Companies i n Ni g e r i a h av e emerged the International Oil Company with the most impactful Local Content Initiatives in the upstream category at the 2019 edition of the Nigerian Oil and Gas Opportunity Fair (NOGOF) held in Yenagoa, Bayelsa State on April 4, 2019. Shell beat other competitors, Total and Exxon Mobil, to the second and third positions respectively at the 2nd edition of the fair organised by the Nigerian Content Development and Monitoring Board (NCDMB). The Executive Secretary of NCDMB, Simbi Wabote, who presented the award, singled out Shell Companies in Nigeria for exemplary support to local vendors and suppliers in the oil and gas industry, which, he said,

You said Siemens Power Services is responsible for the life circle of equipment. How? It is the one that is responsible for the life circle of equipment which are supplied to international oil companies operating in the oil and gas industry. After the equipment have been purchased and the customer used them for sometime there would always be a need to service them and look after them just like the way human beings look after their bodies by taking the necessary nourishments. Basically the company is a Port Harcourt-based ser-

vice business units. Meaning that its business is to ensure it looks after customers everyday from the smallest item from bolt to the biggest item of a whole compressor.

FRANK UZUEGBUNAM companies in the upstream and downstream sectors. PETAN had also honoured SPDC with the Distinguished Achievement Award (Corporate) in 2016 while the Managing Director of Shell Nigeria Exploration and Production Company (SNEPCo), Bayo Ojulari, received PETAN’s Professional Award in the same year for his notable contributions to the development of Nigerian content in the oil and gas industry. In addition to awards from PETAN, Shell Companies in Nigeria have also been honoured in Nigerian content development by the Nigeria Oil and Gas (NOG) Conference, the Nigerian Association of Petroleum Explorationists (NAPE), the Nigerian Chamber of Shipping, and at the Social Enterprise Report and Awards (SERAs).

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otal Nigeria Plc has unveiled new sets of The Skills Acquisition Programme (SAP) beneficiaries which is a sustainable youth development scheme where lessprivileged youths of its host communities are trained in vocations of their choice. The Skills Acquisition Program in the Koko community of Delta State debuted in 2006. Under the scheme, the vocations include welding and fabrication, furniture making, hair dressing & makeup artistry, fashion & designing, fish farming, computer studies amongst others. From inception till date, the SAP has empowered a total of 149 beneficiaries throughout the different districts, out of which 59 beneficiaries are in the Koko community. The 2018 batch of beneficiaries, who recently concluded their one-year training, received their Starter @Businessdayng

Packs in a grand ceremony in their honour, hosted by Total Nigeria Plc at its Lubricant Blending Plant in Koko. The five newly empowered youths got a robust collection of profession-based items that would enable them start a viable small and medium scale business immediately, including a shop with a twoyear pre-paid rent. This form of economic empowerment enables them to not only provide for themselves, but also employ others as their businesses grow, leading to a positive economic effect on their community. “I encourage you to continue believing in your abilities and strength to become achievers in your different vocations,” Imrane Barry, Managing Director of Total Nigeria Plc, said in his address to the beneficiaries. He also reminded them that as a responsible corporate company, Total Nigeria Plc knows and appreciates the critical role youth empowerment and community development play in the life of a nation.

Thursday 11 April 2019

BUSINESS DAY

BOOK SERIALISATION

W H Y N OT Citizenship, State Capture, Creeping Fascism, and Criminal Hijack of Politics in Nigeria

Continued from yesterday

Chapter II

Back To The Beginning

he politician of 1959 was a modest person greatly ambitious for his people, typically an ethnic tribe. They were often self-sacrificing but enormously aggressive, for the development of their ethno-language regional group. Michael Okpara, Obafemi Awolowo and Ahmadu Bello epitomized this breed. That tendency was well captured by Robert Melson and Howard Wolpe in their idea of “competing ethnic nationality groups seeking who would bring the most progress to their people” the so called Competitive Communalism. The politician of 1999 was far from modest and enormously ambitious for himself with only legitimizing self-serving concern for the constituents. The evidence was all over the map, but one of the most obvious pieces of evidence was the most frequently repeated statement in the budget speech: “to diversify the economy away from a mono-economy with over-reliance on Crude Oil.” Every year pretty little was done to achieve that often stated goal. The Oil-dependent economy is more suited for state capture and politicians more interested in self than in service, and the common good. I conceived of Patito’s gang to reverse the trend and create new tribes in which mass education and mass entrepreneurship or people’s capitalism help escape serfdom and hold power accountable to the point that those who lead are the modest who are ambitious for the Common Good. The engineering of a new tribe is not easy business. To build a coalition of stakeholders to bring about such a new order, especially when very powerful groups profited from the old order, is an even taller order. Having Machiavelli, and that powerful remark from “The Prince” in mind, I knew that nothing was more difficult than to bring about a new order; because those who profit from the old order would do everything to prevent the new order from coming about and that those who could profit from the new order do not do enough to make it come about, because man is incredulous by nature, not wanting to try new things until they have witnessed experience of it. But have faith shall travel and Patito’s Gang’s journey of faith resumed, not anticipating that the influence of Television would wane within a decade, especially for the

generation next whose entrepreneurial and social consciousness/civic instincts we hoped to sharpen. How to create a new moral tribe of citizens with a social and political consciousness of the freeborn, in human solidarity and encouraging of the work ethic, the spirit of enterprise and the principle of subsidiarity or the decentralization of authority to levels closest to the people would be a twodecade enterprise I would persevere on. The Delta decision was in some ways a chance to give teeth to ideas. But the trouble with the hijack of politics by people who close out the democratic process through political party control is that the issues had to be submerged below the process, which they forge and form as they go along. Today it will be Direct Primaries, tomorrow it will be Indirect, and the third day it would be a combination of both or a Consensus decision by Party bosses. A few months later I created a 90 minutes Television Talk Show. It had several segments from the core that gave the show its name. There was a panel of quick-talking people passionately taking on a current subject either from politics, the economy or the society. The style of the segment borrowed some elements from Capital Gang and McLaughlin and Co in Washington DC in the United States. A third segment was a Vox pop from the street on the subject of the episode. The final segment took the form of a parliament in which the 20 to 30 participants who were younger people, often undergraduates, vented on the issues. The show would capture the imagination of the nation. I was host and executive producer. We aimed for world class quality. The director was an American of long experience in major TV markets in the US who had come to Nigeria as part of a team to restructure the Nigeria Television Authority. But the commercial model for the show was challenged. Not only did we have to produce the show at very high cost, we also had to pay the television stations to air it. That was the model in Nigeria. Absurd as it may seem, the reality was that instead of being paid by the stawww.businessday.ng

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The director was an American of long experience in major TV markets in the US who had come to Nigeria as part of a team to restructure the Nigeria Television Authority tions for purchase of content, the producer paid the station to the content it cost him much to produce. The logic was that he was free to attract advertising and profit from the difference between his cost and revenues. The day after the first episode aired, the pioneer Director-General of the Nigerian Television Authority (NTA), Vincent Maduka, saw me at

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the Hilton in Abuja. He was full of praise for the programme content and quality of production but warned that we could not sustain the programme. The level of quality, in his view, was too ambitious; it was not sustainable, he thought. I had faith that it would attract eyeballs and that a model dependent on advertising revenues would keep it going. Besides, the object was the promotion of the common good and I could not see why it could not attract patronage on its own merit. That expectation lasted only until after the third episode. I got a call from my old friend and banking mogul, Jim Ovia. He was calling to congratulate me on the show. I seized the opportunity to tell him we would be banking on him for advert support. He paused for a moment and responded with candour, “You know you guys are so candid on that show. I would not want someone in government to think I am the one sponsoring you. Just let me know when the subject is sports and I will pay twice as much.”

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Patito’s Gang would be a financially crippling initiative, but I refused to give up and 19 years on Patito’s Gang is still on air every week. It had gone from 90 minutes, to 60 minutes and then 30 minutes, shedding all the other segments but for the core panel borrowed from McLaughlin & Co and Capital Gang in the United States and the Vox Pop segment. Had I invested the personal fortune I spent keeping it on air, I could have been a fairly well-off person. But I made a choice on the social purpose for the investment. This was impact investing. Better that the kitchen of ideas, was out there, in the public space, than that I fly around in a private jet. It was a choice I made willingly at the cost I was willing to incur without it bordering on my primary commitment to giving my family a decent roof over their heads and my children a decent education. Many times, though, that willingness to sacrifice for what I like to think is the common good, actually came close to crossing from the hen’s contribution to breakfast, to the pigs. As the joke goes about the conversation between the hen and pig regarding their commitment: The hen who was complaining about her high-level commitment to breakfast with all those eggs men eat, was reminded by the pig that for him to supply bacon, his death was a requirement. So, she was making a partial commitment while he was making a total commitment. The struggle for social justice in Nigeria has claimed many heroes. A good number of them perished in automobile mishaps on Nigerian roads as they ran around to rally the people. The civil rights activist, Chidi Ubani and Festus Iyayi in the University Teachers Union Movement, ASUU are some examples. I had a few close-calls in my various criss-crossings across Nigeria. The 2018 Delta campaigns when I crisscrossed the state into remote nooks and cranny of the badly maintained roads in the State is worthy of note. They were risks I managed with faith in the goal of the reasons I accepted to run. But I was always mindful that I had been in an accident that nearly claimed my life on one of those roads years before. My life leading up to 2017/2018 experienced several near-death events, from a 1991 auto crash near Asaba where I arrived the operating theatre in a state of shock with no observable breathing or evident pulse, to two near-plane crashes, one of which was two burst tyres at take-off, escaping a terrorist bomb on the London Underground near Edgware Road on July 7, 2005 and escaping at least two assassination attempts as authoritarian regimes tried to silence voices of dissent, I should have had enough reasons to gently step aside and avoid the kind of troubles that come from running Continues on page 28

Thursday 11 April 2019

BUSINESS DAY

BOOK SERIALISATION W H Y N OT

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Continued from page 27

in a wild territory like Delta State. Instead, my desire to make a difference made me overlook all the past problems and I asked to myself: why not, who will save us if we do not risk it all? To be fully honest, I am also driven by guilt. I feel guilty that if I had made a different choice in 1998, Nigeria may not be in the disaster zone where it is currently domiciled. One unspoken truth about why I am motivated to fight for real change is the guilt I feel for current reality. I like to take responsibility for the mess Nigeria has become. It is guilt from omission rather than commission – it is an offence all the same. This sin goes back to the days of euphoria when the military beat a hasty retreat following the death of Chief Moshood Kashimawo Abiola whose victory in the presidential election of 1993 brought out the soldier in some of us, and the maximum ruler, General Sani Abacha, who held Abiola captive, showed he was ready for a fight. In some ways my group and I could take some of the credit for the military becoming uncomfortable with staying on in power. Our campaign as concerned professionals and my own personal lead on the public lecture circuit, weekly newspaper columns and television appearances had earned me the prize of various assassination attempts and the great survivor label. When the Abdulsalami Abubakar military council decided to withdraw, we called a meeting to discuss a way forward. At that meeting, Waziri Mohammed proposed that we found a political party and implement the ideas that we had been propagating in those advertorials that we published so frequently and which ultimately upset the Abacha government. The group chose to debate the matter. In the end it was agreed that the traditional political class whose direction for the country was truncated when the military intervention in December 1983 took place should be preferred, lest we be seen as opportunists that came to do citizens-duty but got caught the “greed bug.” One of those who did not agree with the position which I had supported, was Donald Duke. He quietly told me he was going to build a platform to shape Cross River State. With two others, he successfully took over. It did not take long for many of us to realise that we had made a big mistake. First, the traditional politicians with some sense of service and compassion for the people had been reluctant to engage believing the military was just making a tactical retreat and would find some excuse to return in a not too distant future so they refused to participate. This left the room for the money-bag sponsors of the politicians just out of military uniform, cult boys who did not fear to dare, and many who had nothing to lose, to enter the political arena. Even General Obasanjo could not run things without plenty of damage. To make things worse, oil

prices went through the roof from a crash into single digits in 1998 to triple digits. The new lords of the manor simply pillaged the resources flowing in and used money to erect barriers against entry into politics. The downhill journey since then has been a burden on my conscience so that when in the exercise of best short-term self-interest, I am better off staying away from the political arena, while leveraging my reputation to make a personal fortune in business, I have often challenged the status quo. This has been either from civil society initiative, as a so-called public intellectual, on the lecture circuit, or from the media through Patito’s Gang and my frequent op-ed pieces and columns. At times it was a lonely struggle. At other times many joined in. When this burden came to a head, I agreed to run for President in 2007 in order to reset the agenda. One of those that reacted to that choice was Chief Ayo Adebanjo, the untiring Awolowo faithful. He was the one, who on the edge of his 90th birthday, crisscrossed the country canvassing a restructuring of the federation to return to the agreement reached by the independence fathers of the Nation which had been altered under military rule. Chief Adebanjo had through the years tried to persuade me that a transition from activist to being a politician was necessary if one wanted to make significant impact and leave a lasting legacy. He seized the moment and pressed home the point. How can we save Nigeria, I asked? His response was let’s mobilise people into a movement of progressives and with a party at the heart of that movement, find a way forward for Nigeria. In the meantime, Chief Anthony Enahoro, the veteran nationalist, had called me to a meeting during which he urged that I take active part in fashioning a movement of progressives. Chief Enahoro died not too long after and the movement was formed. The Social Democratic mega movement would, under the guidance of Chief Olu Falae, become the Social Democratic Mega party. For reasons best known to

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In some ways my group and I could take some of the credit for the military becoming uncomfortable with staying on in power

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the party elders, I was chosen to be chairman of the party whilst I was out of the country. In a similar manner, I was also picked to be the presidential candidate whilst away from the country. My choice, I was informed by Wale Okunniyi, the chief foot soldier, was because it was thought that I was the least divisive of the potential candidates and one most likely to put self aside in forgoing the choice of a consensus candidate amongst all the presidential candidates. The lasting lesson, for me, was the motives behind my inability to bring together the original Yoruba leaders, Awo champions, with the former Governor of Lagos State Bola Ahmed Tinubu. I had tried to encourage Chief Falae and Tinubu to cooperate and work together and then create a new Pan Nigerian Coalition. In the end, I argued that size mattered and that since Tinubu had more of the leaders in the southwest with him, I would continue to water my relationship with his group while deepening the effort to bring the groups together. Chief Adebanjo never gave up on trying to let me know the challenge in trusting the Tinubu group. He kept pointing to Tinubu’s obsession with self-interest and his challenged ethics. How best to discharge the burden of guilt that all of this effort may have been unnecessary, if I simply voted for those that wanted the concerned professionals to step into the fray in 1998 and show the way continued to define me. With the benefit of hindsight, it may have been a better track because I was close enough to former Vice-President Alex Ekwueme who led the G34 that would ultimately birth the People’s Democratic Party (PDP). On many occasions, I still ponder on what path the country could have travelled had the kind of quality in the concerned professionals’ group been the principal organisers of a party in which Alex Ekwueme, an enlightened leader, was candidate for president in 1999. But would the champions of state capture who installed Obasanjo have accepted such? I guess the answer will keep blowing in the wind, but the guilt was steady in me. The why not, in response to the question of why run, was partly about that guilt. In the end I was glad I said ‘why not’ because I could not have found out how rotten the apple was and how close Nigeria is to a criminal hijack of the political parties by the three gangs of actors. These are, those in the enterprise of transacting around public office for material gain; the cultists who have bullying as their way and hope to intimidate others; and the new fascists whose high comes from total domination of others. For the last group to oppress others probably provides an Adrenaline surge. Their ways were emerging as the norm in politics. All of these groups pose grave and present danger to the demo-

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The danger they constitute comes significantly from the sense of entitlement that they have developed from the imposition of their will on others and dominating them

cratic process in Nigeria. The danger they constitute comes significantly from the sense of entitlement that they have developed from the imposition of their will on others and dominating them. This new fascism is palpable in their loss of sense of shame regarding their inability to serve well those in whose name they exercise this entitlement. My not feeling any discomfort at the Gale-storm I ran into in choosing to run rather than keep my personal peace flows largely from my belief that the time has come to confront this shameless group. They take up public office, pay themselves obnoxious amounts of money directly and indirectly. These public officials through all kinds of spurious allowances, in the name of elected and appointed agents of tens of millions of people who inhabit arguably the most miserable place to live on this planet earth, appropriate for protocols for their comfort monies that will amaze leaders of truly wealthy nations and then turn a deaf ear to discuss them. It is ranked the second most terrible country for open defecation in the world, with all kinds of attendant health consequences, it is a country that has now overtaken India as the biggest collection of the absolute poor on earth according to the 2018 study of the Brookings Institution. This is coupled with a terrible laggard poistion on all Sustainable Development Goals of the United Nations whilst earning significant revenues from oil. I had had enough of Nigeria’s elite. And a broader canvas to confront was attractive. This power elite is clearly an embarrassment to the human community. That they feel no shame running around in multicar motorcades and squandering resources that could help millions escape misery, on foreign traps from which they seem to learn nothing, qualifies them for public scorn. Confronting the impunity with which they use the system to frustrate anybody they think is not a brigand like themselves or available to be used to further compound the beggarly conditions of the people, suggest a duty on the part of patriots that are still left, to challenge them and help the people find their voice. Having listened to views from my teenage years that you can

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make change more readily from inside and that muckraking and iconoclastic methods keep away the goal of social justice sought, I have tried to become comfortable with those who dominate power without allowing myself to be sucked into their ways. If through that I could influence them to act right for the people or be in position to affect policy for advance of the common good then I would have played down on the anger of my youth. These teachings allowed me to play with and sometimes within the establishment. But I was quick to observe their discomfort for those that remain their own person. It is as a result of this that I have had the good fortune of being able to say I have managed a one-on-one relationship with everyone who has been head of state or government in Nigeria since I was 19 years old, except of course, General Sani Abacha. In all of that, I have never used access to them to profit myself materially and have even turned down an offer of appointment when I was convinced that position could be utilised effectively to advance the common good if there was not a team of enough committed people to bring change about. It is this strategy that has brought me into the proximity of many of the people who betrayed sacred trust in making party primaries across the board in Nigeria in 2018 a show of shame that proves Nigeria’s current contrivance cannot be called a democracy. Thankfully, no one need rely on my word for this. On Thursday November 8, 2018, The Federal House of Representatives had a session in which all kinds of unprintable adjectives were used to describe the primaries. There is no question that it was grand treason against the Nigerian people. Should people guilty of high crime not be prosecuted? I am convinced that while my experience is not exceptionally important, it will take someone like me to catalyse a process of bringing such people to book so justice can be done to the people. One of my colleagues on the board of an insurance company who felt I should stay away from the crazy politics of Nigeria dominated by cultists, 419ers and soldiers of fortune, used local experience to illustrate. He cited the experience of the chairman of the Board of his company who was literally robbed of his victory in the Osun primaries of the PDP and the scandalous bribes of up to a billion naira demanded from him in order for him to be given back his unequivocal victory. But my reply was measured. There comes a time in the seasons of one’s life journey that the duty to save the voiceless is greater than the duty to save self. This, should come through service, and if need be, the giving of life, one must be assured, such life lost will be gained back in the multiplicity of abundance. We are in such a time and my heart is open to that mission, I told him to his chagrin. Continues on Friday

Thursday 11 April 2019

BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

INSIDE Hong Kong lawyers ‘at risk’ over new extradition laws, Law Society warns

An outlook on the Nigerian Data Protection Regulation 2019 The following paragraphs review the impact and key features of the new legislation as well as the potential liability or risks corporates (or their officers) operating in Nigeria are exposed to under this regime.

OYEYEMI ADERIBIGBE

31 Eight women in 34-strong A&O partner promotion round

31 Energy experts discuss merits of flare gas regulation at Syncrest Energy, GEP workshop

ith the increased penetration of digitization, financial technology and interconnectivity, the volume of data mined through corporate communication channels has grown exponentially and along with this, an increased risk of exposure to consumer dissatisfaction and potential liability for breach of data privacy rights for companies. Recent global trends indicate significant consumer activism and advocacy for strict sanctions for companies who fail to adopt stiff data protection controls for personal information shared via digital platforms and websites. This advocacy has triggered aggressive legislative action with governments taking steps to hold persons who control, transfer, store and use data to a higher standard of accountability and provide for liability in the event of breach; governments no longer pay lip service to data privacy and Nigeria is not excluded. The Nigerian Information Technology Development Agency (NITDA) the regulatory authority responsible for matters relating to technology recently issued the Nigerian Data Protection Regulations

2019 (NDPR) and has created a legal framework which imposes additional responsibility and outlines sanctions for failure to comply with specific protocols when handling data. By implication, Nigerian corporates or third parties dealing

with them are to be concerned to ensure that proper data processing methods are introduced to prevent undue exposure and potentially, financial loss arising from breach of data privacy rights in the course of their business.

Legal Framework for data Protection in Nigeria Before the NDPR was issued, the general rhetoric was that there was no framework for data protection in Nigeria, but this is not wholly correct as there are extant provisions which protect certain information from unauthorised use. The question however, was whether these were adequate, given the complexities arising with the use, retention, processing and control of data. Also, the question of sanction was largely remote as there was little definition to the processing protocol to which companies were subjected. The general provisions of these laws include: The constitution: Section 37 of the constitution provides for the protection and guarantees the “privacy of citizens, their homes, correspondence, telephone conversations and telegraphic communications “. The ambits of this provision are wide enough to

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UK legal services trade mission seeks partnership with Nigerian lawyers …says BREXIT will create opportunities for African businesses THEODORA KIO-LAWSON

s Nigeria and the UK legal sectors continue to develop close working relationships to facilitate trade and investments between the UK and Nigeria, a UK legal services trade mission has visited Nigeria to discuss possible collaborations and business opportunities post BREXIT. The mission organised by UK Ministry of Justice, the British Deputy High Commission in Lagos, the UK Department of International Trade and Hook Tangaza (a research and consulting firm for the UK legal services sector) involved a 25-man delegation, which engaged members of the Nigerian legal community for three consecutive days in Lagos. Speaking about this collaboration, a member of the trade mission organising team Nankunda Katangaza, described the visit to Lagos as an exciting one for the UK legal services sector. She said, “The three-day programme presents an excellent opportunity to strengthen

L-R, Mena Ajakpovi, Partner, UUBO, NBA L-R, Seni Adio, SAN, Chairman, NBA-SBL, George Cynthia Lareine of ILFA, George Etomi, Femi Fadahunsi, Partner, president, Paul Usoro, SAN and Pioneer Chair Etomi and Jeremy Cape of Squire, patton & Boggs. GEP, Chinyere Okorocha, Partner, JEE, Seni Adio, SAN Nankunda of the NBA-SBL, George Etomi, Katangaza and Oba Nsugbe, QC, SAN, both members of the UK Legal Services Trade delegation.

existing relationships and forge new ones.” The organisers further expressed hope that the mission would deepen the collaborative relationships between the UK and Nigeria legal sectors, with prospects of future businesses and new partnerships. It would be recalled that on a visit to Nigeria in 2018, the UK Prime Minister, Theresa May launched the ‘UK Legal Services are GREAT’ campaign. The current mission is a build-up to the prime minister’s visit. www.businessday.ng

Welcoming the delegates to Nigeria, the President of the Nigerian Bar Association (NBA), Paul Usoro, SAN, who spoke at the joint seminar organised by the Nigerian Bar Association Section on Business Law (NBA-SBL) UK Legal Services are GREAT, in Lagos, stated that it was important for the partnership between Nigeria and UK legal firms to be a win-win deal. In his opening remarks, the Chairman of the NBA Section on Business Law (SBL) and Partner, Seni Adio SAN, stated that the col-

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laboration and a possible assent to the African Continental Free Trade Area (AfCFTA) agreement will bring lots of opportunities to African lawyers and by extension, infrastructural development. The event, which consisted of four panel sessions had an array of discussants who touched on legal and economic issues ranging from ‘Regional Integration and the AfCFTA; new Challenges for Lawyers and their clients; facilitating future UK/Nigeria trade investment with focus on ease of doing business; @Businessdayng

regulatory issues; risk management; FDIs; Project Finance and accessing capital. A member of the first panel, Jeremy Cape of Squire Patton Boggs spoke positively, stating that the collaboration between UK and Nigerian law firms will bring loads of opportunities for domestic firms, with objectivity and equality at the fore of every deal. Buttressing this fact, Aelex partner, Soji Awogbade stated that the

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Thursday 11 April 2019

BUSINESS DAY

PERSPECTIVE

LegalBusiness

An outlook on the Nigerian Data Protection Regulation 2019 Continued from page 29

accommodate any claim for breach or violation to personal rights to data. However, an assertion in this regard would be conditional on a subjective assessment of unauthorised interference, breach or misuse. The more complex issues around retention, storage, processing and control of personal information and other online content are not addressed holistically in a specific legislation. • NCC Consumer Code of Practice: this law requires telecommunications operators to take reasonable steps to protect customer information from disclosure (including accidental disclosure). It also restricts the unauthorised transfer of personal information. • The Child’s Rights Act: reasserts the right to privacy as it relates to children. Freedom of Information Act (2011): prohibits public institutions from disclosing personal information unless the individuals whose personal identifiable information is to be published consent to it. • The Consumer Protection Framework issued by the Central Bank of Nigeria in 2016 also restrains financial institutions from disclosing personal information of customers. The Official Secrets Act: Section 3 provides that persons who reproduce, retain, transfer or classified information are guilty of an offence. The introduction of the NDPR (pursuant to the Nigerian Information Technology Development Agency Act (2007) enables clarity on the specific protocol for handling personal data and clarity on what amounts to breach in a manner akin to the provisions of Europe’s General Data Protection Regulations (GDPR). For clarity of analysis, key provisions of the NDPR are outlined below: Scope of application of the NDPR The NDPR applies to all transactions involving the processing of personal data and to possession of personal data, notwithstanding the means by which the data processing is conducted or intended to be conducted in respect of natural persons in Nigeria. By implication, commercial contracts, information displayed or transmitted on a company’s websites are subject to the provisions of the NDPR. The NDPR is also applicable to Nigerians who are resident outside Nigeria. It is yet to be seen how this would play out due to territorial limitations that may apply when the NITDA seeks to enforce the provisions of the NDPR arising in this regard. 1. Compliance provisions arising under the NDPR • Authorised Processing of personal identifiable information subject to the following parameters: Personal data is to be collected and processed in accordance with a specific, legitimate and lawful purpose and the Consent (any freely given, specific, informed and unambiguous indication of the Data Subject’s wishes by which he or she, by a statement or by a clear affirmative action, signifies agreement to the processing of personal data relating to him or her) of the Data Subject (an identifiable person by reference to an identification number or to one or more factors specific to his physical, physiological, mental, economic, cultural or social identity;) excepting such instances where further processing is required in the interest of the public or in connection with historical research or collation of information for statistical purposes. Lawful purpose is defined to include circumstances where processing is necessary for the performance of a contract to which the Data Subject is party or in order to take steps at the request of the Data Subject prior to entering into a contract; where processing is necessary for

where the Attorney General has earmarked such jurisdiction as not having sufficient or reciprocal data protection measures. By implication, in many cases, the Attorney General’s permission would not be required.

compliance with a legal obligation to which the Controller is subject, where the processing is necessary to protect vital interests of the Data Subject or another natural person; where processing is necessary for the performance of a task carried out in the public interest or in the exercise of official public mandate vested in the controller; • Consent is to be processed without undue influence, fraud or coercion. The Data Controller (a person who either alone, jointly with other persons or in common with other persons or as a statutory body determines the purposes for and the manner in which personal data is processed or is to be processed) must be able to show that the Data Subject had legal capacity to give consent. • Mandatory inclusion of a privacy policy which must be clear, conspicuous and concise in such a manner as to enable understanding of the Data Subject. • Data processing by a third party is to be governed by a written contract between the party and a Data Controller. • The Data Controller must develop mechanisms to provide sufficient protection of the personal data. 2. Duty of Care to provide a process for objection by Data Subjects: • A Data Subject has a right to object to the processing of personal data. As such, a Data Controller has a duty of care to Data Subjects and is accountable for acts and omissions in respect of the data processing. • A Data Subject also has the right to withdraw Consent and data cannot be processed subsequent to such withdrawal. Additionally, a Data Subject has a right to request the erasure of personal data. 3. Duty to conduct due diligence and ensure security: • Consent may not be issued for the purpose of child’s right violation to ensure prevention of liability in this regard. • Liability for actions or inactions of third-party contractors inures in the event of breach. • The Data Controller is to ensure that measures which ensure security of the data are applied. 4. Transfer of personal data to a foreign country Transfer of information to a foreign country or an international organisation is subject to the provisions of the NDPR under supervision of the Attorney General of the Federation (AGF) who is to review and make a judgment as to the adequacy of the safeguards for personal data in the subject jurisdiction. It is mindful to note that the Attorney General’s and/or the NITDA’s prior review would not be required in respect of any personal data which is to be transmitted in connection with a Lawful Purpose excepting such instances

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5. Timeline for publication of data protection policies: The NDPR provides that not later than March 2019, public and private organisations that control personal data must publish and make their data protection policies to the public. This would include parastatals and private organisations and there are no exclusions provided in this regard. 6. Appointment of a Data Protection Officer: A Data Protection Officer is to be appointed by the company for the purpose of ensuring adherence to the NDPR. Data Controllers are also obligated to ensure training of their officers. 7. Periodic self-audit: By June 2019, all organisations are to conduct an audit of their privacy and data protection practices and where such organisation processes personal data of more than 1000 (one thousand) individuals in 6 (six) months, a soft copy of the summary of the audit is to be submitted to NITDA. 8. Annual Returns to the NITDA: Annually, persons who process data of at least 2000(two thousand) subjects within a period of 12 (twelve) months are to submit (not later than the 15th of March of the following year) a summary of the audit conducted for this period. It is useful to state that the NDPR mandates immediate compliance. These timelines stipulated appear impracticable and the regulator must be mindful to review the potential impact of non-compliance and where feasible, provide for extension of the period to enable proper compliance. Also, the requirement to notify and obtain permission from the Attorney General is another potential limitation that may inhibit easy flow and transmission of information as such it is necessary for the NITDA to review its objective in this regard and provide a more commercially savvy requirement which facilitates compliance. Increased exposure and attribution of personal and corporate liability for breach The NDPR provides that companies may only store, use, transfer or process information subject to the minimum standards stipulated above. Verbose privacy policies which are difficult to access or understand will not meet the requirement of prior Consent are to be revised. Additionally, it is not enough to state that the responsibility for protecting personal data is contracted to a third party, it is important to note that any such transfer of the responsibility must be governed by a contract which meets the minimum requirements. The NDPR specifically defines parties to include directors, shareholders, servants and privies of the contracting party. Accordingly, the distinction between legal and natural persons for the purpose of limiting due diligence is irrelevant. More importantly, companies who by virtue of their services have to mill through data to provide reports or use data in the course of product production have to confirm that personal information controlled or transmitted in such circumstances are sourced without breach of data protection requirements outlined above to prevent exposure to business crippling fines. Penalty for Default Non-compliance with the provisions of the NDPR could ground liability (in addition to any criminal or administrative liability) t0:

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• in the case of a Data Controller dealing with more than 10,000 Data Subjects, payment of the fine of 2% of Annual Gross Revenue of the preceding year or payment of the sum of N10,000,000 (ten million naira) whichever is greater. • in the case of a Data Controller dealing with less than 10,000 Data Subjects, payment of the fine of 1% of the Annual Gross Revenue of the preceding year or payment of the sum of N2,000,000 (two million naira) whichever is greater. The NDPR provides that NITDA can set up administrative redress panels to investigate allegations of breach and issue administrative orders, it is expected that where such panels are set up, they would operate as quasi-judicial panels and in the event of breach, such entities may impose sanctions. The defences that would enure for defaulting companies are not expressly outlined as such, this would be clear in due course. Conclusion The NDPR is a step in the right direction as it provides further clarity on the protocol for data processing. Where the NDPR is implemented strictly, it would promote transparency, consolidate accountability of Data Controllers and ensure that individuals are empowered to exercise control and demand compliance with their preferences where personal data is to be processed. While the NDPR is indeed a welcome development, it is important to reiterate the need for strategic enforcement as clarity on the minimum safeguards and infrastructure that must be deployed to ensure safe and transparent processing of data will only be attained when the NITDA implements these regulations with practicable measures that are flexible and clear. As such, while it is in its early stages of application, it is expedient for companies in Nigeria to begin to outline protocol for data protection and adopt technology that enables seamless incorporation of protective measures into their operations. Inevitably, companies who do not take preliminary measures to ensure compliance will be at risk of breach and liable to fines as deemed appropriate. The fines applied by the NITDA in the event of breach are significant and more importantly, the increasing global reproof for negligence in this regard will trigger stricter legislation. For any company seeking to level down risks and ensure full compliance, its data protection protocol surely matters. Corporate organisations may mitigate the risks accruing in this regard by undertaking the following: • immediate drafting and publication of simple and holistic data protection policies via all the channels for communication, including but not limited to websites, email signatures and contracts. • Appointment of a Data Protection Officer with significant skill and understanding of the companies’ requirements. • Conduct internal training for employees and officers to ensure due communication of the potential liability arising in this regard. The risks may not be totally obviated but strict adherence to the provisions of the law will limit exposure of companies to the consequences of non-compliance.

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

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Thursday 11 April 2019

BUSINESS DAY

GLOBALREPORT

Hong Kong lawyers ‘at risk’ over new extradition laws, Law Society warns

he Law Society has warned that plans by the Hong Kong government to change extradition laws, so that suspects could be transferred to mainland China for trial, may put lawyers at risk. Hong Kong is in the process of changing its law so that requests from authorities in mainland China, Taiwan and Macau will be considered. The changes are included in the Fugitive Offenders and Mutual Legal Assistance in Criminal Matters Legislation (Amendment) Bill 2019. Hong Kong hopes to have the new law in place by July. Any extradition request, which would be decided on a case-bycase basis by Hong Kong courts, would only apply for suspects accused of criminal wrongdoings, such as murder and rape. Political or religious offences would be exempt, Hong Kong says. But Society president Christina Blacklaws warned that individuals who defend human rights are often charged with other offences – for example, under criminal or anti-terror legislation. ‘We have on many times raised concerns with the Chinese government regarding the arrest, and prosecution of lawyers and human rights

defenders, as well as their imprisonment at undisclosed locations where there have been reports of torture and ill treatment. In many cases, detainees have not had access to a lawyer of their own choosing,’ Blacklaws said. Hong Kong’s Bar Association (HKBA) – which represents barristers operating in the special administrative region - has also expressed concern. In a summary of observations on the proposed law seen by the Gazette, the HKBA said rendition of fugitives to mainland China is ‘a complex legal matter and a controversial issue that has been in abeyance since 1997’ [when Hong Kong moved to Chinese control under the ‘one country two

systems’ regime]. ‘HKBA is concerned that the government is now “jumping the gun” by seeking to put in place ad hoc rendition arrangements in apparent breach of its commitment for full consultation on this delicate matter,’ it said. Blacklaws added: ‘Everyone has a right to a fair trial. Any extradition to a country where the person extradited would face torture or ill-treatment is a violation of international human rights law.’ This week, the FT reported that two US politicians have said the planned law could ‘erode Hong Kong’s reputation as a centre of commerce governed by the rule of law.’

LegalBusiness

Lawyers are second most stressed professionals, research claims

awyers are the second most stressed professionals in the country, a survey of 1,000 British workers has found. According to the findings, produced by insurance firm Protectivity, 63% of respondents active in the legal industry are reporting stress on a daily basis. The most stressed age group was the 35-44 category, where 28% of respondents reported daily stress at work. Among 16-24 year-olds, stress levels were more linked to issues in their personal lives. Overall, women reported higher stress levels. Cardiff was the most stressed city, followed by Edinburgh and Manchester. London was ranked 10th. Newcastle was the least stressed city, with 70% claiming they are only a little stressed or not

stressed at all, followed by Bristol (66%).

The most stressed profession was Human Resources, with 79% reporting daily stress, while the least stressed were those working in manufacturing and utilities.

The survey coincides with the latest findings of the Law Society Junior Lawyers Division’s (JLD) annual resilience and wellbeing report. Published this weekend, the JLD report reveals that one in 15 junior lawyers have experienced suicidal thoughts. Of more than 1,800 respondents, 48% said they had experienced mental ill-health in the last month, up from 38% last year. Some 93.5% of respondents said they experienced stress in their role. A quarter of those experienced ‘severe/extreme’ levels of stress.

Eight women in 34-strong A&O partner promotion round

agic circle firm Allen & Overy has announced its latest global partner promotion round – but the number of women promoted appears to fall short of its long term goals. Of the 34 promotions, eight are female (24%), including four in London. Among the promoted lawyers in London is Shruti Ajitsaria, head of Fuse, the firm’s tech innovation space. In total, 14 City lawyers have been given the nod to become partner. By 2021 the firm wants 30% of

its partnership candidates to be women. However, when the Gazette asked how many candidates in this round were women the firm was unable to say. At the moment, the London partnership is 20% female and globally the figure is 18%. Those figures do not include the latest round of promotions. Global managing partner Andrew Ballheimer said: ‘The breadth of this group, both in expertise and geographically, is testament to the growth we are seeing across our

PHOTOFILE

4th international Lawyers Forum of the German Federal Bar

Justice Oke leads Valedictory session to honour late colleague Photos from the Valedictory Court Session held in honour of the Late Justice Christopher Olatunde Segun, which held at the Foyer of the Lagos High Court, Igbosere, recently. In the photo, the Chief Judge of Lagos State, Hon. Justice Opeyemi Oke and the Attorney General of Lagos State, Adeniji Kazeem are seen delivering speeches at the occasion.

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global platform. It’s fantastic to have such a depth of talent across the firm and I would like to extend the warmest welcome to the partnership to all our new partners.’ The proportion of women in A&O’s latest promotion round is higher than its magic circle rival Freshfields Bruckhaus Deringer. The firm revealed last week that of eight promotions in the City of London, one had gone to a female lawyer. Globally however, six of 22 promoted lawyers (27%) were female.

L-R: Emeka Obegolu, President, Pan African Lawyers Union (PALU), Yuri Pilipenko, President of the Russian Federal Chamber of Lawyers; Johan Rijlaarsdam, President of Netherlands Bar; Dr. Ulrich Wessels, President of the German Federal Bar; Christina Blacklaws, President of the Law Society of England and Wales; Mellisa Pang, President of the Law Society of Hong Kong; and Louis-Bernard Buchman, Chairman of the European and International Affairs Committee of the French National Bar Council, at the 4th international Lawyers Forum of the German Federal Bar.

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Thursday 11 April 2019

BUSINESS DAY

INDUSTRYFILE

LegalBusiness

UK legal services trade mission seeks partnership...

L-R, Yuri Botiuk, Partner, Candey; Charlie-Louise Akintilo, Associate, Olisa Agbakoba Legal and Victor Nwakasi, Partner, Olisa Agbakoba Legal.

Continued from page 29 regional integration was already working. “What the government needs to do, is to put a cloak around it for it to be strengthened,” he said. A panelist and member of the UK trade delegation, Oba Nsugbe Q.C. SAN, who is a Nigerian lawyer based in the UK, made a case for knowledge exchange between Nigeria and the UK – a development which he says, would benefit young lawyers from both jurisdictions. At the Second Session, chaired by Rimini Makama of Microsoft, the panel which had John Naughton, Chief Operating Officer, institutional Protection Services, and Basil Udotal of Technology Advisors, discussed “New Challenges for Lawyers & their Clients- Navigating Technology”, while the third panel discussion touched on “Facilitating Future UK/Nigeria Trade & Investment” with special focus on regulatory issues, risk management, ease of doing business, business immigration and conversations ‘beyond Oil & Gas’. The third Session which was chaired by Nakunda Katangaza (Hook & Tangaza), had the Vice Chairman of the NBA-SBL and Partner, Detail Solicitors, Ayuli Jemide on it. Others were, Marcia London, Partner at Kingsley Napley, Laura Tainsh, Partner at Davidson Chalmers, and Chinyere Okorocha, Partner at Jackson, Etti & Edu. The Fourth and last session on Facilitating Future UK/Nigeria Trade and Investment II, with focus on Accessing Finance, Foreign Direct Investment, and Project Finance, was chaired by the President of the Nigerian Stock Exchange, Abimbola Ogunbanj. He was joined on the panel by Yinka Edu, Partner, Udo, Udoma & Belo-Osagie (UUBO), Oliver Mellman, of PJ Legal Europe Limited, Matthew Wood, Partner, Ashurst LLP, and Dr. Tominiyi Owolabi, partner, Olaniwun Ajayi LP. The panel submitted that there have been good reforms in the capital market in Nigeria like diversification of product offerings in the market, SUKUK, Green bond, Derivative, Net-

George Etomi, Pioneer Chair of the NBA-SBL, Theodora Kio-Lawson, Chair, NBA-SBL Committee on Media & Communication and Dr Adeoye Adefulu, Secretary, NBA-SBL.

ting Rules and many others. According to Yinka Edu, Fintech was a huge industry, which has gained traction and attracted huge investments; adding that Crowd funding was an aspect of financing yet untapped and which must be adequately explored. In addition to this, Matthew Woods spoke overcoming financing challenges, stating that Nigeria has a lot to gain if BREXIT falls through. On his part, Oliver Mellman, enlightened participants on the Financing of Commodities. Highlighting current trends globally, he observed that there was increased focus on renewable lending, lender bias towards established names, and lender bias towards deals involving international trading firms. Buttressing Woods’ position, he reaffirmed that BREXIT would enable UK firms seek partnerships elsewhere especially in Africa, and also create opportunities for African businesses. Also speaking on the same panel, Dr. Tominiyi Owolabi, noted that infrastructural development would require a lot of funding in Nigeria and should be at least 70% of the GDP. He added that $30 trillion has been estimated to get infrastructure working perfectly with $30 billion spent annually on it. He gave reasons as to why investments aren’t coming into Nigeria. According to him, investors aren’t just looking for opportunities but bankable opportunities because they need to make money; ease of doing business in Nigeria should also be critically looked into as taking security is still a challenge here; government support and credit enhancement, stressing that the government is still reluctant in this area and lawyers have to enlighten them on the many benefits it has. He said, “We need to support capacity building in the country and provide support to agencies to create bankable deals.” The event was closed with remarks from the chairman of the last session, Jean Macaroy, who thanked the NBA-SBL for putting the event together; stating that she was confident

PHOTOFILE

NBA-SBL Council Member, Sam Aiboni, George Etomi Muthupandi Ganesan of Scarmans Solicitors and Aelex Partner, Soji Awogbade.

that collaborations between Nigerian and UK businesses and law firms will record an all time high after the trade visit. Nigeria and the UK have a strong relation-

ship which dates back many years, with trade between the two nations worth £4.2 billion in 2017. A recent research shows that this figure is set to double in 2030.

Energy experts discuss merits of flare gas regulation at Syncrest Energy, GEP workshop

t a workshop organised by GEP Law Consults in partnership with Syncrest Energy limited, George Etomi & Partners and the Federal Ministry of Petroleum Resources in Lagos recently, experts in the field of energy have highlighted the advantages of the 2018 Flare Gas Regulation. The two-day workshop which was facilitated by energy experts from Wycliffe Advisory & Consulting Services, Tranergy & Co, The Nigeria Gas Flare Commercialization Programme (NGFCP), George Etomi & Partners, Primera Africa Legal and Pioneer Energy, touched on gas monetization strategies, gas dynamics in Sub-Saharan Africa and other regional markets, the Nigeria Gas Flare Commercialisation Programme, the Gas Flare Regulation, transnational and commercial structures, Project bankability, among other things. At the programme, which had in attendance key players in the industry, investors, representatives of the Ministry and Regulatory bodies in the oil and gas sector, experts hailed the gas flare regulation, which was signed into law in July 2018 by President Muhammadu Buhari. They held the view that gas flaring in Nigeria was a tremendous waste of scarce natural resource and fuel and as such, the gas commercialisation programme would do well to provide a framework to eliminate gas flaring through gas utilisation projects, which are technically and commercially sustainable. In her remarks, Abimbola Olufore of Wycliffe Advisory & Consulting stated that, “with respect to commercialisation of gas,

there was a nexus of gas with virtually all sectors of the economy, from the power sector to the healthcare sector, the agriculture sector and the textile industry”. Ann Norman of Pioneer Energy showcased extensively the benefits of various remotely operated modular flare gas processing solutions, while Abolaji Femi-Ishola of Tranergy & Co. in discussing the gas-energy nexus made projections for gas deals. He said, “As gas prices come close to market prices, there will be an increase in gas deals” and “the core of gas production goes to power consumption to ensure that power plants are not stranded and have enough gas as feedstock” Israel Aye, Partner, Primera Africa Legal, enlightened participants about the legal and regulatory expectations within the Regulation while Ivie Ehanmo of George Etomi and Partners discussed regulatory, transactional and commercial structures and strategies for flare gas commercialisation and sale to off-takers. Also speaking at the occasion, Justice Derefaka, programme manager of the NGFCP, stated that projects in the gas commercialisation programme would be developed by competent third-party investors, who are being invited to participate in a competitive and transparent bid process. “The first stage of the bidding process commenced in January 2019,” he said. The NGFCP is hoping to attract investment of about $3Billion USD, creating over 300,000 direct and indirect jobs and reducing CO2 emissions by over 20,000MT yearly.

Lagos Chief Judge receives PEBEC Award Hon. Justice Opeyemi Oke receives an a PEBEC award for Establishing the 1st Small Claims Court in Nigeria during the Presidential Enabling Business Environment Council (PEBEC) Awards Ceremony at the State House Conference Hall, Abuja.

L-R: George Etomi, principal partner, George Etomi and Partners; Justice O. Derefaka, program manager, Nigerian Gas Flare Commercialization Program (NGFCP); Abimbola Olufore, managing director, Wycliffe Advisory and Consulting; Wale Ogunbufunmi, managing director, Syncrest Energy and Gas Limited, and Jide Laoye, executive director, Syncrest Energy and Gas Limited, during a 2-day workshop on taking advantage of the flare gas (Prevention of Waste and Pollution) Regulations 2018 organised by George Etomi and Partners and Syncrest Energy and Gas Limited in Lagos, yesterday. Pic by Olawale Amoo www.businessday.ng

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Thursday 11 April 2019

BUSINESS DAY

RESEARCH&INSIGHT

In association with

A WEEKLY PUBLICATION OF BUSINESSDAY RESEARCH & INTELLIGENCE UNIT(BRIU)

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Outlining pros and cons of the National Housing Fund Act 2018 AMAMCHUKWU OKAFOR

s of 2012, the level of housing deficit was already estimated to be as high as 17 million units. Different policies, ministries, and agencies at federal and state levels have been established to manage the situation, but rapid population growth and urbanisation instigate a rising demand for houses against non-increasing housing provision. This widening demand and supply gap has stymied efforts towards effective housing provision and regulation. Thus, enter the National Housing Funds (NHF). The National Assembly recently passed the National Housing Fund Act 2018. The Act is a review of the extant Act, NHF 1992, 2004 which required that every individual earning above N3,000 per annum to contribute 2.5 percent of their monthly basic salary to the NHF. Like the previous Act, the NHF Act 2018 mobilizes funds that would be made available to the contributors for housing development.

Source: RMB Nigeria Stockbrokers

It also introduces a 2.5 percent levy on cement manufacturers and importers. The Implication for banks An analysis by Rand Merchant Bank foresees a neutral effect on earnings or Capital Adequacy Ratio (CAR) of banks.This position stems from the treatment of the cash amount to be set aside–10 percent of profit before–as an asset and not as an expense. That is, the 10 percent equivalent will be credited to cash and the resultant debit will be an investment, unlike the AMCON charge that is an expense as the banks have no recourse to the AMCON fund. Hence, it is neutral to PAT or retained earnings. Based on the estimated funds to be set aside by selected banks, the analysis also reports the impact of the bill on returns on equity ROE) and

earnings per share (EPS) growth to be insignificant. Hence, it is unlikely to have any material changes to our expectations and valuations on this basis. However, we have highlighted the risks the bill poses to the banks below. On taxation, the expected PBT contribution by financial institutions would is granted the equivalent tax exemption. This means that 10 per cent of banks PBT would not contribute to the total taxable income. This has some positive implication for the banks from a tax-shield perspective in the short term.The tax-shield benefit over opportunity cost (yield on 1-year Nigerian Treasury bill at 14 percent) is estimated at about N1billion. However, in the long term, over the life of the fund, the opportunity cost is likely to outpace the tax shield as the investments accumulate in the NHF (see figure 2).

12734BDN

The key provisions of the Act include: • A mandatory 2.5 percent contribution of monthly income by employees earning minimum wage and above across sectors, public or private to be deducted and remitted monthly by all employers. • Any self-employed individual earning minimum wage and above shall contributes 2.5 percent of their monthly income to the Fund. • 2.5 percent levy on cement, locally produced or imported. • An interest rate of 2 percent per annum or as may be determined by the bank shall be payable on the contributions. • All banks, insurance companies and pension fund administrators shall invest a minimum of 10 percent of their profits before tax (PBT) into the Fund at an interest rate not exceeding 1 percent above rate payable on current accounts by banks. • A penalty for non-compliance of up to N100 million for corporates and N10m for individuals. • Sanctions include cancellation of operating licenses of banks, insurance companies and PFAs for violations. • A 2 percent interest per annum on contribution for withdrawal by contributors who have attained the age of 60 years or 35 years of service. • The Fund and any refund of contributions are exempted from payment of taxes. Unlike the extant Act, the NHF Act 2018 rests on the minimum wage rather than on the basis of N3, 000 per annum in the previous Act.

Source: RMB Nigeria Stockbrokers

The downsides of the Bill to contributors The bill has some grey areas which effectively have implications in the banking and financial sectors: • The withdrawal terms of the NHF are unclear.While the bill references banks as being able to access the NHF, the terms and conditions are unclear. The accounting treatment of the contribution is not clearly specified. • The bill does not specify protection for banks contributions/investments. This implies that in the event of a massive credit default in the housing mortgage market, it could result in an asset quality crisis. • Banks have expressed liquidity concerns over the NHF Act that could impact dividend pay-outs. At the moment, it is unclear if the proposed contributions to the NHF will qualify as a liquid asset especially given that the contributions will go towards long-term housing provision. If liquidity impact is established, this may force banks to reduce dividend payout to accommodate the liquidity constraints and also to buffer the impact of the lost income as result of the lower yield on the fund investment. • Allocation of mortgages to individuals is still largely unclear. In Kenya where a similar bill has been tried, a lottery scheme was applied in the allocation of mortgage units. This implies that not all who applied or contributed would get mortgage units. • The bill is a tax imposition on workers. Although contributors are expected to benefit from the scheme, in reality only a tiny proportion of contributors will (ever) benefit from it while the vast majority can only withdraw their contributions after attaining the age of 60 years or 35 years of service. However, the 2 percent interest payable is grossly insufficient, being well less than the rate of inflation simply implies a form of indirect taxation and confiscation of income. • The introduction of 2.5 percent tax on cement is a penalty on housing production. It would simply be carried over to the developers and eventually to the final rental pricing. It is not consistent to tax building materials in a bid to make rental units affordable. In conclusion, the NHF summarises to establish a “block of funds” for housing development. It attempts to rely on the population of the working class and the strength of the financial institutions to mobilize funds towards housing provision. However, as the Bill awaits president’s assent, it is pertinent to reconsider the downsides before it passes into law.

WIDE OPEN MINDED RMB Nigeria. Solutionist Thinking.

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We believe in stretching ourselves. In broadening our horizons and embracing the unconventional to consider every possibility. Solutionist Thinking means deliberating together and collaborating with our clients to unlock exceptional prospects for the future. It’s the magic that inspires everything we do.

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Thursday 11 April 2019

BUSINESS DAY

Retail &

consumer business Luxury

Malls

Companies

Deals

Spending Trends

COMPANIES

Domino Pizza thrives amid headwinds as Mr. Biggs, others strive BALA AUGIE AND BUNMI BAILEY

he ambience at the Domino Pizza store was animated as personnel clad in blue polo shirts were excitedly attending to swarming customers. One could see the tiredness and anxiety on the faces of the servers as they had to contend with energetically playful kids who clutched onto their ice screams. The sun that slanted through the stutters mixed with the sweet aroma from the kitchen to give the room an invigorating illumination sooth the nerves of customers who were listening to cool music. Domino’s Pizza, a subsidiary of Eat ’N Go is an American company which came into Nigeria in 2012 with just two branches. And now it has 90 branches which comprises of 43 Domino’s pizza stores, 39 cold stone creamery and 8 pinkberry gourmet frozen yoghurt stores. While the economy has been growing sluggishly

since the country tipped into its first recession in 25 years in 2015, a young population that crave for consumption is an upside for quick service restaurant operators. Eat and Go Restaurants have come to the realization that Nigerians love spicy food and this accounts for why the company is continuously introducing variety of snacks. But experts fret Domino Pizza may not be able to maintain these high standards because the likes of Mr. Biggs and other fast food giants who had controlled the Nigerian market over a decade ago are struggling for their lives. Around 1986, United Africa Company of Nigeria (UACN) foods introduced Mr. Biggs with a view to providing a cool place where hard working people could relax during lunch time while enjoying their snacks. The franchise kicked the ground rolling as it became a household name among Nigerians. Families and friends visit the place after Sunday service. The chain witnessed rapid expansion after becoming one of the first Nigerian companies to sell franchises

to investors, with Mr. Bigg’s outlets established in about 170 locations in Nigeria, including the country’s first drive-through restaurant, with other four locations in Ghana. How e ve r, M r. Big g s outlets have shrunk while parent company UACN has shut outlets across the country, sighting harsh operating environment and

poor management for the strategic decision. Experts have disagreed with the management of UACN on the aforementioned reasons saying that the decision of the consumer goods giant to go into franchise was a colossal mistake since the Nigerian market wasn’t ready for such a model. These franchisees are no-

torious for poor services as quality of food deteriorated while the environment is increasingly becoming insalubrious. The infrastructure decay is so endemic that toilets have no water to flush. An industry expert who spoke to BusinessDay on the condition of anonymity said unbridled corruption and poor management skills is responsible for floundering

performance of quick service restaurant operators. Another QSR grasping for breath is Tantalizer, the only fast food company quoted on the floor of the bourse. It also started operations on a sound footing before capitulating to huge operating expenses, receding sales and spiralling debt. Tantalizers opened its first location in Festac Town, Lagos, in 1997. They were known for their hamburgers initially but became a top name for all things fast food all over the country. Tantalizers still has active branches. The economic situation have forced a lot people to cook at home, and high unemployment rate means only few have money in their pockets to hit the fast food joints. The World Bank has said that the Nigerian economy has been slipping since 1995 and this continued till 2018. While gross domestic product (GDP) grew by 2.38 percent in the fourth quarter of 2018 from 2.10 the corresponding period of 2017, the growth rate is lower than the 7.50 percent recorded over a decade ago.

SPENDING TREND

Huawei poses to increase market share as revenue spikes OLUFIKAYO OWOEYE

pple and Samsung have r uled the high-end phone market for several years, launching models with advanced features and technology which made them the toast of buyers. Interestingly, China’s largest tech company by sales, Huawei, is going allout to change the narratives. The intense competition in the global phone market has become very intense in recent times as brands which until now play on the fringes of the market are currently challenging the market leadership of brands such as Samsung and Apple. Despite being at the center of global scrutiny from

the United States, Huawei posted a 25 percent jump in its 2018 profit. The electronics giant posted net income of 59.3 billion yuan ($8.8 billion) in 2018 as it won more customers for its smartphones and networking gear, while revenue for the year jumped almost 20 percent to 721 billion yuan. Revenue from its consumer business, which includes smartphones, jumped 45 percent to 348.9 billion yuan while sales in the carrier unit was little changed at 294 billion yuan Huawei is facing trade tension and accusations that the company makes it possible for China to spy on other western countries. Pressure on the Shenzhenbased company climaxed in December 2018 with the arrest of a senior executive of the company, also www.businessday.ng

its Chief Financial Officer, Meng Wanzhou remains in Canada pending potential extradition to the U.S. as the company also faces criminal charges for intel-

lectual property theft and an American push to shut it out of fifth-generation wireless networks. Despite the challenges, Huawei is winning custom-

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ers for its equipment as it contends with Apple and Samsung for leadership in the smartphone global market. It has also seen revenue climbed 36 percent in January and February this year compared with the year earlier. The growing intense competition in the global phone market has seen a drop in the market share of giant manufacturers such as LG and Samsung. Recently, Samsung announced that it was heading for its lowest quarterly profit in more than two years as a glut in memory chips, slowing panel sales, and rising competition in smartphones hit margins. According to Samsung, its first-quarter operating profit would tank 60 percent from a year earlier, missing market expectations and @Businessdayng

putting it on track for its weakest quarterly profit since late 2016. Jeremiah Okafor, an IT enthusiast noted that Samsung can bet on its new line-up of smartphones which includes the foldable handset model which was launched recently and a 5G-enabled model. “But its latest phones are expensive to make, weighing on profitability even as it sells faster than its predecessor” he said. Another giant, LG Electronics Inc. says its operating profit for the first quarter would fall by 19 percent. This may be unconnected with LG’s longtime lossgenerating smartphone business, in the red for seven quarters, and intensifying price competition in the global TV market likely weighed on earnings.

Thursday 11 April 2019

BUSINESS DAY

Retail &

consumer business

company

Government taxes is a double-whammy for brewers hit by sluggish economy BALA AUGIE

ederal Government’s decision to hike excise duties on alcohol will add to the woes of brewers already hard hit by a non performing economy. Industry giants like Nigerian Breweries Plc, Guinness Nigeria Plc, and International Breweries Plc, are grappling with deteriorating profit margin and intense competition, while receding cash margins means they are running out of cash to fund expansion, reduce debt and pay dividend. President Muhammadu Buhari, in a bid to shore up government revenue after a sharp drop in crude price of mid 2014 deal a blow on external reserves, is to embark on a downward review of the 2018 excise duties imposed on brewing companies in Nigeria. It has been argued that incremental rises in these products (alcohol and tobacco) somewhat aligns with global best practices, because most Governments around the world generally tax alcoholic drinks and tobacco for the dual purpose of revenue generation and discouraging the harmful effects of such products. However, an increase in taxes on these products could further hurt the sales of firms that are already struggling with to low

consumer purchasing power and decrepit infrastructure. For instance, Nigeria Breweries recorded a 26.15 percent reduction in net income to N9.98 billion in December 2018 while revenue fell by 6.13 percent to N324.38 billion in the period under review. The company is inefficient in using cash in generating a Naira in sales as operating profit margin fell to 19.30 percent in December 2018 from 30.14 percent the previous year. Operating cash flow margin is a cash flow ratio which measures cash from operating activities as a percentage of sales revenue in a given period. It tells how well the company converts sales to cash—and cash is of critical importance because it’s required to pay expenses. Guinness Nigeria, beset by competition, recorded a 3.96 percent reduction in sales as at nine month ended September 2018 while gross profit margin to 30.23 percent as at September 2018 from 34.01 percent the previous year. International Breweries Plc recorded a loss of N7.13 billion for the period ended December 2018 while earnings before interest and tax otherwise known as operating profit margin fell to 3.34 percent in September 2018 from 11.57 percent the previous year.

Price Tracker

spending trend

Intense competition, currency volatility top Jumia’s risk factors on operations OLUFIKAYO OWOEYE

International Breweries, the local unit of AB InBev, is running out of cash as it recorded a negative operating cash flow of N36.80 billion in the nine month to September 2018. The negative cash position is largely due to losses, overinvestment in fixed assets without corresponding increases inflows, and huge receivables as a sluggish economy has hindered customers from paying debt owned. International Breweries shares have shed 22.95 percent since the start of the year while market capitalization stood at

N202.0 billion as of Tuesday 2:00 pm. Guinness Nigeria’s share price has shed 16.67 percent since the start of the year while market capitalization stood at N131.42 billion. Nigerian Breweries’ share price returned -42.03 percent year to date (YTD), valuing it at N481.41 billion. Consumers have remained sensitive to price movement in the past few years and they are getting poorer while rate of unemployment rate is rising as consumer products are increasingly becoming inaccessible. Nigeria with a population of 180 million people has 87 million people, nearly half its population, in extreme poverty; as high inflation environment continues to erode discretionary income. The World Bank has said that the Nigerian economy has been slipping since 1995 and this continued till 2018. While gross domestic product (GDP) grew by 2.38 percent in the fourth quarter of 2018 from 2.10 the corresponding period of 2017, the growth rate is lower than the 7.50 percent recorded over a decade ago. With the environment still challenging, brewers are scambling to increase their share of drinks exempted from excise duties. Guinness plans to increase its share of income from spirits, and Nigerian Breweries is focusing on its premium Heineken, stout and malt drinks for growth.

-commerce platform, Jumia in its listing prospectus has highlighted some of the risk factors facing its operations on the continent. According to Jumia, the e-commerce business model is new in the markets hence competition for market share may intensify as the company notes that competitive pressures from current or future competitors are a clog in the wheels for the company. “We also compete with a large and fragmented group of offline retailers, such as traditional brick-and-mortar retailers and market traders, in each of the markets in which we operate,” the report noted. The report acknowledges that new competitors may emerge, or global e-commerce companies, such as Amazon or Alibaba may choose to enter into, or expand across our markets, and such competitors may have greater access to financial, technological and marketing resources than we do. “We also face competition from transactions taking place through other platforms, including via social media sites such as Facebook group,” the report noted.

Jumia said it also faces challenges with failed deliveries, excessive returns, late collections, unrecoverable receivables and voucher abuse by customers and as of December 2018, the platform has accumulated losses of 862.0 million Euros. Jumia’s listing on the NYSE will make it the first African-based technology company to list on the exchange. It further noted that the success of its business on the continent depends largely on consumer spending especially in Nigeria and Egypt where it generates a larger portion of its Gross Merchandise Volume GMV. GMV is the total volume in dollars of sales over a given time period on an e-commerce site. “Currency volatility and high inflation in any of the countries in which we operate could increase the cost of goods to our third-party sellers while decreasing the purchasing power of our consumers. If sellers are unable to pass along price increases to consumers, we could lose sellers from our marketplace. Similarly, if consumers are unwilling to pay higher prices, we could lose consumers,” Jumia said. The e-commerce which platform started operation in 2012 said the future of e-commerce platform on the continent is dependent on the growing internet penetration.

rices of various consumer goods moderated at 0.20% Month-on-Month to 111.8 pts in March compared to 0.28% Month-on-Month in February as prices were relatively muted across the board, with just slight increases in the brewery and commodities goods. The average price in the commodities goods recorded a slower pace of increase over March with prices rising by 0.16per-

cent Month-on-Month. Prices of vegetable oil and rice were higher by 0.96percent Month-on-Month and 0.54percent Monthon-Month respectively. Also, Palm Oil prices continued to decline 1.74 percent over the month following an improved harvest and supply to the market. As expected, palm oil prices are usually at the lowest point in the year during the months of March and April due to harvest season.

Analyst: Bunmi Bailey Graphics: Fifen Eyemisanre Famous www.businessday.ng

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Thursday 11 April 2019

BUSINESS DAY

MADE in aba

NEPC eyes increased non-oil export through Aba entrepreneurs GODFREY OFURUM

he Nigerian Export Promotion Council (NEPC), the country’s non-oil export promotion outfit, has advised entrepreneurs in Aba, the commercial hub of Abia State, to look towards export to boost their businesses. The NEPC believes that doing that will improve Nigeria’s non-oil export numbers and bring in the much needed foreign exchange into the economy. Amaechi Okechukwu of the product and market division of the NEPC, Aba Smart Office, gave this advice at a-day enlightenment seminar on “Export Potential of Made-in-Aba products”, organised by the Nigerian Shippers Council (NSC), South-East Zone, in collaboration with the Abia Shippers Association (ASA), recently in Aba. Okechukwu, while delivering a paper titled ‘Harnessing Export Potential and Boosting Economic

Base of Entrepreneurs’ at the seminar, observed that the non-oil sector would contribute towards the aspiration of the Federal Government in making the country one of the 20 strongest economies in the world by year 2020, if well harnessed. He appealed to the business community in Aba, especially manufacturers of shoes, belts, bags and trunk boxes, to take advantage of the presence of the NEPC Smart Office in Aba, to expand their businesses, through export. The Aba Smart Office of the NEPC is working towards stopping informal trade at the Aba finished leather cluster. Ab a l e at h e r c l u s t e r exports finished leather goods to neighbouring West and Central African countries. However, their transactions have been done unofficially, denying them export incentives. O k e c h u kw u s t a t e d that the non-oil export sector of the economy is

vital to the generation of foreign exchange, income, employment and poverty reduction, stressing that the sector has untapped potential which, if adequately harnessed, would boost the economic base of entrepreneurs and the nation at large. According to him, “Export trade boosts the economy, especially where it outstrips i m p o r t s . A c o u n t r y ’s gross domestic product is

powerfully positioned, if it encourages exportation of its products and services against importation”. He stated that g ov e r n m e n t i s t a k i n g deliberate steps to promote export, particularly nonoil sector, which according to him, makes significant contribution to the nation’s GDP. He explained that Nigeria remains one of the largest markets in Africa, a gateway

to the rest of West Africa countries. “Nigeria presents enormous export opportunities in agriculture, solid minerals, handcraft, manufactured products and services. “These opportunities are further supported by government policies and programmes, aimed at diversifying the economy. “Some of these programmes include

offering help in product and market development to intended and existing exporters, pre-shipment and post shipment financing, training, payment guaranty scheme, among others. “This strategy for economic development stresses expanding exports, by assisting expor ters using export subsidies and incentives,“ he said. He explained further that the Federal Government, I n re c o g n i t i o n o f t h e importance of export in the development of the economy, established the Nigerian Export Promotion Council, with a mission to spearhead the diversification of the economy by expanding and increasing non-oil exports for sustainable and inclusive economic growth. Nigeria’s non-oil export has remained significantly below $3 billion per annum since 2013 as the major export products remain commodities such as cocoa, rubber, among others, rather than finished products.

Boosting Aba products to achieve local, international competitiveness Gbemi Faminu

ade in Aba’ is an expression which many Nigerian consumers can associate with. Aba has over 120,000 manufacturers, but their potential is not yet fully exploited due to a number of man-made clogs in the wheel of progress. However, as much as these problems exist, Aba manufacturers have a key role to play. The first port of call is the regular business and entrepreneurial training. Most of the artisans know how to produce shoes and trunk boxes within the shortest possible time but lack entrepreneurship training. Experts believe that manufacturers in Aba should acquire adequate training that will improve their handwork, but they also need to learn business nuggets such as accounting, preparation of business plans and marketing. They will need to work on rebranding and repackaging their products for higher and wider c o n s u m e r a t t ra c t i o n / acceptability.

“Branding is important because it helps to change the perception of consumers who think that Aba products are inferior,” said Amanchukwu Nwankwo, a shoemaker in Aba. Artisans also need to form partnerships with local and foreign businessmen. This will help in terms of sourcing for raw materials and export. Such partnership will provide a wider market reach, more funds for expansion and raw materials for production. Currently, one million pairs of shoes are produced by more than 80,000 leather makers on a weekly basis in Aba. With 48 million pairs produced each year, access to state-of-theart machines and better infrastructure will allow for higher production. Despite its capacity, most businesses in Aba are not registered formally with the Corporate Affairs Commission (CAC). This hinders easy access to loans, national and international opportunities, leads to less business visibility and opens an avenue for such businesses to be cheated in various ways. Most of the businesses www.businessday.ng

in Aba are worth more than the owners are aware of. Development of these businesses will not only promote the ‘made in Nigeria’ brand, but will help all the stakeholders achieve financial stability, grow the naira, create more

job opportunities, boost the reputation of local products, and create an avenue for wider market. It will equally generate more revenue for the government and also grow the economy. Accessing loans and

Okezie Ikpeazu, governor, Abia State https://www.facebook.com/businessdayng

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financial aids is quite difficult for those in the industry as banks consider the players as high risk. Okezie Ikpeazu, governor of Abia state was re-elected recently. The governor has, for the past three years, paid attention to Aba and has highlighted various policies to develop the commercial hub. Despite this, Aba manufacturers are still in need of facilities and tools to achieve their potential. As a returning governor, his aim should continue to be how to further develop the Aba market. Infrastructure is very important for any business to thrive. Making footwear can be easy with the use of sophisticated machines and production tools. Absence of infrastructure, however, makes production difficult and hurts capacity to create jobs and boost the gross domestic product (GDP). Roads in Aba are still poor while power is not readily available. The impact of this is that the majority of Aba shoe makers are using power generating sets to power their factories. Furthermore, the industry lacks tools to foster productivity. Experts want Ikpeazu to work on infrastructure in @Businessdayng

the state in order to improve production and reduce the costs. Furthermore the industry is in need of investors and partners that will inject funds, knowledge, experience and innovations into the business. Nigeria’s shoe hub, Aba, needs to partner with international companies in order to foster the desired growth and development needed. In 2017, Ikpeazu, signed a $1.5 billion deal with Huaijan Group, a Chinese shoe manufacturing firm. This was in a bid to improve the industry. The company is not yet in Aba. Ken Anyanwu, national s e cretar y, Ass o ciation o f L e at h e r a n d A l l i e d Industrialists of Nigeria (ALAIN), told BusinessDay in Aba that entrance of f o re i g n i nv e s t o r s a n d partners would enable the industry to compete globally and make funds for expansion easily accessible. Analysts also say Aba getting more investors and foreign partners could reduce its infrastructure deficit as new investors will throw in money to improve it. They add that it will attract funding to small-scale players.a

Thursday 11 April 2019

BUSINESS DAY

POLITICS & POLICY

INEC conducts Kogi, Bayelsa guber polls November 2

...Reviews 2019 general elections May/June James Kwen, Abuja

he Independent National Electoral Commission, (INEC) is to conduct governorship elections in Kogi and Bayelsa States on Saturday, November 2, 2019. INEC will issue official notice for both elections on 1st August 2019 while political parties intending to sponsor candidates are to hold their primaries for the nomination of such candidates from 2nd 29th August 2019. Festus Okoye, INEC National Commissioner and Chairman, Voter Education and Publicity, who announced this at the end of the Commission’s meeting in Abuja, said public campaigns by political parties shall commence 2nd August and end on 1st October 2019. “The Commission at its meeting held today approved the Timetable and Schedule of

Activities for the Governorship elections in Kogi and Bayelsa States which will hold in both states on Saturday 2nd November 2019. “The official notice for both elections will be issued on 1st August 2019, while political parties that intend to sponsor candidates are to hold their primaries for the nomination of such candidates from 2nd 29th August 2019. “Campaigns by political parties in public shall commence on 2nd August 2019 and end on 1st October 2019. The parties sponsoring candidates are required to submit the list of their agents not later than 2nd October 2019. “The stated timelines are in line with the provisions of the 1999 Constitution (as amended) and the Electoral Act 2010 (as amended). All stakeholders are urged to take cognisance of and adhere strictly to them. Details of the Timetable and Schedule of Activities for the election are

Mahmood Yakubu

on the Commission’s website”, he stated. INEC also at the meeting resolved to review the 2019 general elections in May/June to evaluate its performance during the last polls. “The Commission met today and approved a proposal to conduct an extensive review

and debriefing on the 2019 general elections. In line with its existing practice, this is intended to evaluate the Commission’s performance of the key activities of the general elections. With a view to addressing identified challenges and strengthening operational and institutional capacities to

conduct free, fair, credible and peaceful elections. “The review will focus on the planning, organisation, conduct and coordination of the general elections, particularly on the following: logistics, procurement and deployment of personnel and materials. Continuous Voter Registration and Collection of permanent voter’s cards, Legal environment of the elections, particularly the legal challenges experienced over nomination of candidates and conduct of elections. “Processes of party registration, party primaries and nomination of candidates; Quality of ad hoc staff, Relationship between the Commission and diverse stakeholders, including political panics security agencies, civil society organizations, the media and development partners; and Quality of inclusivity of the elections, particularly regarding persons with disability, lDPs and gender balance.”

Atiku to APC: ‘Desist from shameless lies, focus on defending your electoral heist in court’ Innocent Odoh, Abuja

ormer Vice President and Presidential Candidate of the People’s Democratic Party (PDP), Atiku Abubakar, has dismissed as “total fabrication” the latest allegation instigated by the Buhari campaign that he spent $30,000 to hire a US lobby group to persuade the US Congress to stop the inauguration of President Buhari. Reacting to what he calls “shameless lies”, Atiku’s Media Adviser, Paul Ibe, said in a statement that the latest dirty propaganda against the former Vice President “didn’t come as a surprise to us because lying has so far become their only bragging rights of

competence.” In the statement released in Abuja on Wednesday, Ibe explained that “lying has become a culture to the APC administration and therefore, we are not surprised by their latest diversionary allegations.” The statement added that “since Atiku resisted pressure not to go to court, the APC has been behaving like a cat on hot bricks because the outcome of the 2019 elections has exposed and shattered the facade of their dubious integrity.” According to Ibe, “The APC are behaving nervously like a thief living under the fear of being exposed and shamed”, and that “they are now using fake news against Atiku instead of focusing on defending themselves in the court.”

“For a party that has broken the worst record in election rigging, the APC doesn’t have any iota of integrity to be taken seriously by anybody”, the statement adds. According to Ibe, “Atiku’s court case has become their biggest burden because it exposes their integrity as a sham, and instead of defending their stolen mandate in court, they are now using fake news to divert public attention from the historic electoral heist they have committed against Nigerians.” The statement added that no amount of diversionary propaganda and fake news campaign by APC will stop Atiku Abubakar from continuing the court action he started to reclaim the stolen mandate.

Bauchi PDM suspends chairman, secretary over alleged anti-party activities Haruna Ningi, Bauchi

he Bauchi State chapter of People’s Democratic Movement (PDM) has suspended its state chairman and secretary over alleged anti-party activities. The Chairman, Alkali Abdu and Secretary, Sani Mohammed Waziri were replaced by the PDM Chairman, Katagum Local Government, Muhammadu Jaudo as acting chairman and Adamu Hassan, PDM chairman, Ganjuwa Local Government as acting secretary. Their suspension was con-

tained in a letter addressed to the party’s National Chairman, notifying him of the dissolution of the party’s State Working Committee. The letter, which was signed by the acting chairman and secretary, was copied to the State Resident Electoral Commissioner (REC), State Commissioner of Police, Director State Security Service and the Chairman, Bauchi State Council, Nigeria Union of Journalists (NUJ). “As a result of a letter of suspension dated 4th April, 2019 by PDM chairmen of all the local government in Bauchi State, an emergency www.businessday.ng

meeting of PDM Bauchi State Executive Committee held on Monday, 8th April, 2019 has resolved to dissolve the State Working committee under the leadership of Alkali Abdu and the State Secretary, Sani Muhammed Waziri,” the letter read. In the letter of suspension, the suspended chairman and Secretary were accused of, among other things, putting the party into unending crises. It stated that their leadership failed to call meetings to solve simple problems which couldn’t have escalated into crises. https://www.facebook.com/businessdayng

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According to him, “Two sets of activities are envisaged in the reviews as follows: (a) internal reviews involving National Commissioners, Resident Electoral Commissioners, Electoral Officers, Collation and Returning Officers, as well as other key staff of the Commission; (b) Review meetings with key stakeholders such as political panics, civil society organisations, security agencies, the media and development partners. “These reviews and debriefing will take place between May and June 20l9. The Commission has commenced work on a comprehensive report of the 2019 general elections and has mandated its Electoral Institute to undertake detailed researches into various aspects of the elections. It is the Commission’s hope that the outcomes of these reviews and studies will feed into further electoral reforms and its preparations for handing and future elections”, Okoye said.

Thursday 11 April 2019

BUSINESS DAY

NEWS Nigeria disagrees with IMF over debt... Continued from page 1

“There is a risk of whether these needs for refinancing can be met in the future,” Adrian said. The total public debt of Africa’s biggest oil producer stood at N24.387 trillion or $79.437 billion as at December 31, 2018, representing a year-on-year growth of 12.25 percent, data from the Debt Management Office (DMO) shows. The Federal Government on Wednesday, however, dismissed fears about the debt profile, saying “it is sus-

tainable”. Minister of Budget and National Planning, Udoma Udo Udoma, in apparent reaction to increasing criticisms of government borrowing programme, however, admitted that Nigeria has a revenue challenge which it is addressing. Udoma stated this while briefing State House correspondents after the weekly Federal Executive Council meeting presided over by Vice President Yemi Osinbajo. “With regard to our debts,

theyaresustainable.Wedohave a revenue challenge and we are focusing on that. Once the revenues come up, it will be obvious that we don’t have a debt problem at all,” Udoma said. “We are working on a number of initiatives to increase our revenues. We are looking at initiatives to widening the tax base,” he said. Udoma also said that government is looking at initiatives to increase efficiency in collections, using a single window, which will help to increase efficiency in custom collections. These efforts are geared towards boosting Nigeria’s non-oil revenue and

relieving an over-dependence on petrodollars. The IMF said Nigeria has one of the lowest ratios of nonoil revenue-to-GDP at around 3.4 percent in the world. “One of our main recommendations for Nigeria is the need for a comprehensive tax reform that would sustainably increase non-oil revenue,” the IMF financial counsellor/ director said. Responding to questions after presenting the Fiscal Monitor report to the media, Adrian said total tax revenue to GDP at around 8 percent is also very low compared to peers. The report ranked Nige-

ria and Qatar the lowest in the use of sovereign wealth fund. “As you know, the needs for infrastructure and for spending on human capital are very large,” he said. Adrian emphasised on improving exercise taxes to shore up the country’s revenue. “I think there have been some steps in that direction, but there is a scope for expanding the coverage of excises to other goods and also higher rates on excises,” he said. Another important area, he said, is aggressive streamlining of tax incentives and exemptions. The IMF said large finan-

Success of Nigeria’s power ‘Guinea... Continued from page 1

should be settled within 15

business days after the invoice date by the Nigerian Bulk Electricity Trader (NBET), Ministry of Finance (MoF), and Central Bank of Nigeria (CBN). But the FG has settled past invoices within 30 days, and although this is not in breach of the PPA, it is playing it too close to the margin and threatens the project’s project completion date (PCD). The project’s completion date is important for contracts with a lien or bond claim deadline “driven by completion”. BusinessDay has learnt that at present, the PCD definition requires that NBET must have paid within five business days of due date for six consecutive months. Sources tell BusinessDay that given the structural realities of the NBET/MoF/ CBN payment processes, it is unlikely that this hurdle will ever be met. “This means a relaxation of the PCD definition is required,” a source said.

Other criteria to achieve PCD have been met by Azura IPP, including the plant being in operation for nine consecutive months, operating in excess of PPA performance levels, all financial covenants being met or exceeded, lower than budgeted project costs, and early operational cash flows. BusinessDay understands that the late payments are stirring investor concern as it is now assumed that the PCD will never occur in the foreseeable future because the FG has only settled the invoice within 30 days, according to a project document seen by our correspondent. According to the document, if the PCD is not achieved for three years, Azura will accumulate $135 million of stranded cash, shareholder internal rate of returns (IRR) would be impacted by 95 basis points (bps) even assuming this amount was then subsequently distributed. The company’s position will be severely impacted if the naira suffered depreciation similar to 2016 and share-

Senate to override Buhari’s veto on... Continued from page 2

them should be reconsidered and passed by the National Assembly, four others should be withdrawn, while the President’s veto on two bills should be overridden. The two bills include the Constitution of the Federal Republic of Nigeria, 1999 (Fourth Alteration, No. 28) Bill, 2018 and the Industrial Development (Income Tax Relief) Amendment Bill. The president had in 2018 declined assent to the Constitution (Fourth Alteration, No. 28) Bill on the grounds that Section 2 (b) and 3 (b) of the proposal “appear not to take full cognisance of the

provisions of Section 58 (4) of the 1999 constitution”. But in a 34-page report, the panel submitted that the bill is not in conflict with the 1999 Constitution, as claimed by the President. The purpose of the bill, the committee explained, is to ensure that Nigeria reverts to the January to December budget cycle. “It should be understood that this Bill seeks to make it mandatory for Mr. President and Governor of a State to cause to be prepared and laid before parliament, estimates of the revenuesandexpenditureofthe Federation for the next following financial year, not later than ninety (90) days to the end of a

Nigeria’s oil production increases by... Continued from page 2

Rising oil price is good news for Nigeria in the short term. More than any other country, Africa’s biggest oil producing economy needs the oil price to rise and, in the worst case, remain steady at any price above the $60 benchmark of the 2019 budget.

To achieve this, the country needs to avoid disruptions in crude production and also hope that the alliance under OPEC achieves its objective, even though many are yet to comply with the output cut, including Nigeria, analysts say. “I will not expect Nigeria to www.businessday.ng

cial institutions and governmental agencies around the world including central banks and even the IMF are under constant cyber threats. “So in general, we do expect more cyber-attacks. The question is, are authorities taking the right steps to prevent any adverse developments after these attacks?” Adrian asked. He said the Fund has started to provide technical assistance on that particular purpose. “And we are helping our membership to develop a policy framework around cyber-attacks,” he added.

holders could potentially lose more than $65 million, though the project will be insulated from ruin. Azura is the first Nigerian power project to benefit from both the World Bank’s “Partial Risk Guarantee” structure ($237 million of debt used to build the plant), the political risk insurance supplied by the Multilateral Investment Guarantee Agency, Azura delivered on budget and ahead

of schedule by seven months. The challenge for Azura is how to adequately incentivise shareholders so they continue to perform their obligations because starving the shareholders of a reasonable return could potentially enhance operational risk instead of de-risking the project. Azura may have been the guinea pig for the long-term development of the sector but replicating the feat has been

difficult. “Unless the Federal Government grants the same sovereign risk guarantees Azura enjoys, it will be difficult to replicate,” Dolapo Kukoyi, partner at Detail Commercial Solicitors, said. Azura project has been challenged by naira depreciation which has made it difficult to raise tariff and improve cash flow, an industry-wide malaise that has seen short-

falls rise to over N1 trillion. To keep the project alive, Nigeria will need to migrate to a price deregulated atmosphere and operationalise the eligible customer policy, interim additional support from the Federal Government, more support from the World Bank and other lenders, said the document. Azura is critical to Nigeria’s quest to deepen energy access. It contributes 10 percent of grid capacity but concerns remain about the ability of the Federal Government to sustain payment for Azura Power considering the huge cost involved in executing the project. “The issue is, how can the government pay for the power in an electricity market that is not liquid?” Chuks Nwani, energy lawyer, said. Azura secured a $900 million debt financing from a consortium of 15 banks from nine different countries, including most of the European development finance institutions, to build a 450MW Open Cycle Gas Turbine in Benin City, Edo State, Southern Nigeria.

financial year. And for the parliament to pass the Appropriation Bill before the commencement of the next financial year,” the report partly reads. The committee also rejected the President’s decision to decline assent to the Industrial Development (Income Tax Relief) Amendment Bill. According to the committee chairman, the President’s rejection of the bill on the grounds that there are ongoing consultations to propose a new bill does not hold water. BusinessDay reports that bills to be reconsidered, passed and transmitted to the President’s assent include Constitution (Fourth Alteration, Numbers 8, 15, 20, 22 and 24 as well as Stamp Duties (Amendment) Bill, Petroleum Industry

Governance Bill (PIGB) and National Institute of Hospitality and Tourism (Est.) Bill. In the same token, other bills include the National Research and Innovation Council (Est.) Bill, National Agricultural Seeds Council Bill and Agricultural Credit Guarantee Scheme Fund (Amendment) Bill. Although Section 58 (5) of the 1999 Constitution provides that two-third of both legislative chambers of the National Assembly (73 senators and 240 members of House of Representatives) are required to override the President’s veto, political commentators say this would be a tall order considering the fact that both chambers are polarised along party lines.

At the House of Reps plenary, Babangida Ibrahim, chairman of the House Committee on Finance, in his presentation said the joint committee recommended that the government increase the tempo of collectable revenues in all its Ministries, Departments and Agencies (MDAs) with a view to reducing budget deficit. On the N305 to $1 exchange rate, he said, “The CBN should be encouraged to vigorously develop strategies that would strengthen the naira and bridge the gap between the official and parallel market rates.” On debt management/ new borrowing, he said the joint committee adopted the recommendation of N1.64 trillion as new borrowing to

fund the budget deficit and advice relevant agencies to continue exploring ways of generating additional revenues for government to bring down the fiscal deficit. “Also, the Federal Government should harness the full optimal potential of the Federal Ministry of Mines and Steel Development in terms of revenue generation to minimise the level of new borrowing. In his remarks, Speaker yakubu Dogara said the government should rather consider lowering tax on SMEs to boost the economy. According to him, increasing tax on SMEs would lead to unemployment as the sector has the capacity to create more employment if the economic environment is conducive.

start tweaking with the budget at higher oil prices than what they already have. In fact, Nigeria should take advantage of such peak oil prices and save it for the rainy days,” said Wunmi Iladare, a professor of Petroleum Economics and Policy Research at the Centre for Petroleum Energy Economics and Law, University of Ibadan.

Another driver for higher oil prices has been the bullish bets made by hedge funds and other financial players. After going bearish on oil last year, these trend-following traders have gone long on crude in recent months. Those speculative positions can exaggerate price swings. In March, OPEC said the performance of product mar-

kets typically follows seasonal patterns, with refining margins recovering during the driving season in the Northern Hemisphere. “Looking ahead, product markets are expected to come under pressure as refineries resume operations following peak spring maintenance due Asian gasoline and diesel demand growth, and year-on-

year change higher product availability,” OPEC said. OPEC pumps about a third of the world’s crude, and the biggest of its 15 members is Saudi Arabia, one of America’s closest friends in the Middle East. While the group doesn’t target a specific oil price, it adds or removes supplies in the market and therefore can affect the cost of crude.

L-R: Abdul Momodu, general manager, Online Integrated Solutions (OIS); Seun Runsewe, CEO, Switch Nigeria, and Tunji Adeyemi, head, diaspora business, Sterling Bank, at the MoU signing between Sterling Bank and OIS where Sterling Bank will be represented at OIS offices worldwide.

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Thursday 11 April 2019

BUSINESS DAY

NEWS

Labour urges Buhari to sign Minimum Wage Bill into effect JOSHUA BASSEY

mid rising cost of living and attendant impact on the extant N18,000 minimum wage, organised labour has urged President Muhammadu Buhari not to further delay the implementation of the new national minimum wage of N30,000 recently approved by both chambers of the National Assembly. The implementation of the new minimum wage can only commence if the President signs the bill into law. Members of the organised labour under the aegis of the Trade Union Side (TUS) of the Joint National Public Service Negotiating Council (JNPSNC) said on Wednesday that they expected the Presidency to expedite action on the matter given that the new minimum wage had been due since 2016. Recall that the House of Representatives and the Senate approved N30,000 monthly minimum wage

recommended by the 30-man tripartite committee on the National Minimum Wage set up by the Federal Government in 2017. Labour believes that President Buhari should do the needful by signing the bill into Law. AbdrafiuAlani Adeniji, chairman, TUS, and Alade Bashir Lawal, secretary, who spoke in Lagos, said the tripartite committee on National Minimum Wage and the National Assembly having played their roles, it was now left to the President to sign the bill into effect. “All that is now left is for the President as the father of the nation to sign the bill into law and bring the National Minimum Wage to a positive conclusion. “The Nigerian people including millions of workers gave President Buhari a resounding victory at the poll for his second term in office and as such we expect Mr. President to reciprocate this gesture by signing the N30,000 monthly wage bill into law without further delay,” they said.

NGA Business Forum to reinforce gas impact on economy

igerian Gas Association (NGA), under the leadership of Audrey Joe-Ezigbo, will host energy industry’s most prominent and influential executives involved in the oil, gas and power generation value chains. This includes governments, off takers, developers, gas upstream suppliers, pipelines, construction firms, equipment providers, and financiers to its first Gas Business Forum in 2019, with the theme; “Evaluating the place of Gas as a Prioritised enabler of Nigeria’s economic diversification agenda”. The event will take place April 16, 2019, in Lagos at the Civic Centre. According to the statement signed by Violin Antaih, publicity secretary, NGA, expected speakers that will discuss and debate at the Gas Forum include - Paul McGrath (chairman, OPTS); Saidu Mohammed (group executive director - Gas & Power; NNPC); Kabiru Rabiu (group executive director, BUA Group), and Folarin Alayande (SSA to the President of Nigeria on ERGP). Others are Ed Ubong (manag-

ing director, Shell Nigeria Gas); Maryam Shehu (deputy general manager-commercial, Total E &P Nigeria) and Chima Ibeneche (former president, NGA). “Policies play a key role in supporting or constraining the progress of natural gas in countries’ energy mixes. There is evidence that the adoption of measures favourable to natural gas could accelerate the penetration of this source of energy and achieve many economic, technical, social and environmental advantages,” Audrey Ezigbo, president of NGA said while explaining the choice of the theme. The key measures that are expected to be adopted in this regard are; market reforms that aim to improve competition and attract gas investments in the upstream and midstream sectors; the facilitation of permits and administrative processes for gas project developments; and pricing or mandated fuel switching to natural gas”, the NGA boss added. Meanwhile, the 20th annual general meeting of the association will follow immediately after the business forum event at same venue.

Agric reform: Edo, CBN partner to boost state’s agripreneur programme JOSHUA BASSEY

etermined to provide farmers with access to funding and other inputs to increase productivity, the Edo State government has partnered the Central Bank of Nigeria (CBN) on a synergy between the Anchor Borrowers’ Programme and the state’s Agripreneur Programme. Special adviser to the Edo State Governor on Agriculture, Forestry and Food Security Programme, Joe Okojie, disclosed this during a day sensitisation programme for farmers in Owan West and Ovia North East Local Government Areas of the state. The programme is aimed at

creating awareness on the use of modern techniques in rice and maize farming, urging the farmers to adopt Good Agricultural Practices (GAP) to attain high yields, he said. The governor’s aide stressed that the state government will leverage on the CBN Anchor Borrowers’ program to redefine her agripreneur and agribusiness programmes. Stressing that the state is working with some strategic partners to strengthen the agriculture value chain, he said the government has secured financing for the projects, which can only be assessed by the farmers when necessary requirements have been met. www.businessday.ng

Michael Orimobi, global chairman of Tokunbo Orimobi Legal Group, meets with Md. Shameem Ahsan, ndc, Bangladesh high commissioner to Nigeria. The business meeting was centred on promoting business and trade relations between the two countries.

FG mulls expansion of Housing Fund to include informal sector HARRISON EDEH, Abuja

ederal Government on Tuesday said plans were underway to include the large chunk of Nigerians in theinformalsectorthatdesire to own a home into the National Housing Fund programme. Minister of Power, Works and Housing,BabatundeFashola,gavethe information while he undertook an inspection tour of three housing projects in Gwagwalada and Zuba in the FederalCapitalTerritory,restatingthe commitment of the Federal Government to housing as the construction ecosystemformassemploymentand economic prosperity in the country. The minister, who visited the Federal Mortgage Bank of Nigeria (FMBN) Ministerial Pilot Housing Scheme and National Housing Programme in Gwagwalada as well as the Federal Housing Authority (FHA) Residential Layouts in Zuba (AbujaMassHousingScheme,Zuba), disclosedFederalGovernment’splan toexpandtheNationalHousingFund (NHF) to include people in the infor-

mal sector who wish to save money and acquire their own homes. Interacting with newsmen after the inspection of the three sites, Fashola said, “One of the things we are planning to do is to see how we can expand the NHF to include people who do not work in government but who earn a living, such as traders, carpenters, transporters and others like that who want to save money so that theycanuseittoacquirehousingunits for themselves and their families.” One other way government would ensure that low-income earners benefit in the current Housing Schemes was the introduction of “Rent-To-Own Scheme,” which, according to him, is targeted first at low-income earners, reiterating that affordability is based on the mortgage system being put in place by government. “Affordability,” he said, “is not only based on how much you pay, it is also how you pay. We expect that those who will take up these houses will have mortgage finance”, adding, “If you have mortgage finance from Federal Mortgage Bank and you are

working for the next 20 years, N10 Millionwillbeaffordableforyouifyou pay monthly deductions over your career and the house is already yours because you contribute.” The minister, who noted that government had also reduced equity contribution to the Fund to make it easier for the low income to participate, added, “But if you put your N10 million in your pocket and say you will go and buy your own house off the shelf, even I would find it difficult to assemble such money. So, affordability is not just how much you pay, it is also how you pay. “We have reduced the equity contributionofthatmortgagesystem. Quite aside that, we are also looking at Rent-To-Own so that if you can’t buy and you can pay mortgage you can rent and start to contribute until the day you qualify to use mortgage.” Pointing out that the three sites represent the different ways government was addressing housing development in the country, Fashola also explained that the Federal Mortgage Bank Housing Development site was one of the Estate Development

financed loans, a different concept from both the National Housing Programme and the FHA Housing project, adding that the bank not only lent money to people who seek to acquire homes but also lent money to developers to build. He said the site has produced a total of 218 single dwelling apartments comprising 3,2 and 1 bedroom apartments adding that 70 of the houses have been subscribed under the National Housing Fund “which means that people have been granted mortgageloanstoacquirethemwhile the Bank wants to use the balance of 148 to experiment on the Rent-toOwn-Scheme for people who cannot affordmortgagesandwanttopayrent”. Speaking on the FHA Abuja Mass HousingprojectatZuba,Fashola,who said the Authority had not compromised on quality, pointed out that the projectwasthefirstsetofbuildingsthat theAuthorityhadcommencedunder the present dispensation, assuring that the ongoing projects would meet global minimum competitive housing standards for pricing when they are finished.

Assembly passes funeral ceremonies control bill in Anambra Emmanuel Ndukuba, Awka

nambra State House of Assembly on Wednesday passed Burial and Funeral Ceremonies Control Bill into law to guard against extraneous activities during burial ceremonies in the state. Chief sponsor of the bill, Charles Chukwuma Ezeani of Anaocha 2 State Constituency, said the bill when in full operation would curtail the ostentations and unnecessary display of wealth during burial ceremonies in the state. Ezeani, who spoke with newsmen shortly after the passage of the

bill, said it would equally address unnecessary pressure mounted on bereaved persons to borrow money in order to carry out burial activities and thereafter incur debts they cannot pay back. He said the passage of the bill was a milestone achievement for him as a legislator in the sixth assembly and that the bill in question was geared towards cutting down in totality the cost of burial activities in the state. He said many bereaved persons had not been able to bury their people due to high cost of the ceremonies, noting that the passage of the bill showed that the

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lawmakers really wanted the law to come into force. He affirmed that burial ceremonies should be mourning periods not a time when people should look for finances to bury the dead, saying the use of caskets costing huge amounts of money would no longer be tolerated in public glare. “From the commencement of this law, no person in Anambra State shall in any way showcase a casket in such a way that people will see it along the road,” he said. He observed that the state was littered with caskets showcasing that people were more interested in dying rather than staying alive. @Businessdayng

According to Ezeani, by the existence of the law, public display of caskets would be grossly controlled. He said the law on control of burial and funeral activities implied that people should celebrate their loved ones when they were still alive and not spending fortunes buying golden caskets upon their demise. Consequently, the law seeks to protect poor masses from the exploitations of the rich and mighty upon the death of their loved ones. He said the rich most times subject poor masses to excruciating financial conditions in the guise of helping them perform funeral rites for their bereaved family members.

Thursday 11 April 2019

BUSINESS DAY

RESEARCH&INSIGHT

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Thursday 11 April 2019

BUSINESS DAY

ECONOMIC MONITOR A WEEKLY PUBLICATION OF BUSINESSDAY RESEARCH & INTELLIGENCE UNIT(BRIU)

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Analyzing PMS importation and consumption in 2018 troleum consumption is basically one point basis increase as seen in the graph below. In 2016 Ghana PMS consumption stood at 92.6 thousand barrel per day from 91.4 thousand barrel in 2015 and 89.1 thousand barrels in 2014 which accounted for 1 per cent increase through the years under review from 2010 to 2016.

ISAAC ESOWE

igeria is richly blessed with an abundance of natural resources, particularly hydrocarbons. As the 7th largest oil producer in the world, the production of crude oil amounting to 1.954 million barrels per day while its export of crude oil amounts to 1.835 million barrel per day in January 2019 as shown in Knoema data, an online source. Data released by the National Bureau of Statistic (NBS) on petroleum importation statistics shows that 4.79 billion litres of Premium Motor Spirit (PMS), were imported in the second quarter of 2018, (Q2’18). It was also recorded in the report that 1.11 billion litres of Automotive Gas Oil (Diesel), 43.79 million (mln) litres and 200.39 million litres of household kerosene (HHK) and aviation turbine kerosene(ATK) respectively were imported in the reviewed period. In Q3’18, Nigeria’s importation of refined petroleum products rose by 5 per cent to 5.56 billion litres from 5.3 billion litres recorded in the Q2’18. The petroleum products importation statistics for Q4 2018 reveals that5.32 billion litres of premium motor spirits (PMS), 1.30 billion litres of automotive gas oil (AGO); 114.19 million litres of dual purpose kerosene (DPK); 267.80 litres of aviation turbine kerosene (ATK); 50.73 million litres of base oil; 42.38 million litres of bitumen; 10.63 million litres of low pour fuel oil (LPFO) and 331.78 million litres of Liquefied Petroleum Gas (LPG) were imported into the country in Q4’18. Cumulative Import Volume (LTR) Q4’18 Also, 5. 3 billion litres of PMS were imported, while AGO, 1.3 billion; DPK ,114.2 million litres; ATK, 267.8 million litres; base oil, 50.7 million litres; bitumen,

42.4 million litres and LPFO Low Pour Fuel Oil(LPFO), 10.6 million litres, which is the lowest import in terms of volume as at Q4’18. Monthly trend in fuel importation The largest volume of PMS imported into the country in Q2 2018 was recorded in the month of April 2018, at 1.78 billion litres.

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June 2018 recorded the highest volume of diesel at 408.15 million litres just as it was the month for the highest importation of household kerosene which was at 43.79 million litres. The largest volume of aviation kerosene was also imported in June, with a volume of 200.38 million litres. Nigeria is the one of the members of the Organization of Petroleum Exporting Countries (OPEC) still importing significant amount of fuel for its daily needs. This can be attributed to the nation’s refineries that are not operating at its full capacity. Nonetheless, measures are been put together by the authorities to attract private investment with initiatives such as by upgrading the existing refineries, licensing modular refineries, among others. Hence if these initiatives are judiciously implemented, that will in a way curtail the volume of (PMS) im-

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portation. The highest volume of PMS consumption was recorded in May 2018 which amounted to 820 barrels per day, while the lowest consumption was recorded in 2018 was in December at 476 thousand barrels per day, thus, the high consumption of PMS was majorly driven by transportation and power. Cross country analysis of PMS consumption PMS consumption in Kenya as reported by the CEIC on its official website and compiled by BusinessDay Research and Intelligence Unit (BRIU), shows that Kenya PMS consumption amounted to 92.880 metric tonnes (MT) in Sep 2018. This was a decrease of 33.21 MT from 126.090 MT in August 2018. According to the Ghana portal data, the trend in Ghana total pe@Businessdayng

Interesting highlight of OPEC activities in 2018 OPEC is made up of 14 petroleum exporting countries. In 2017, world crude oil production declined by 701,000 barrels per day, or 0.9 per cent, as compared with 2016, to reach 74.69 mb/d, marking the first yearly decline since 2009. OPEC crude oil production fell year-on-year by 926,000 b/d, or 2.8 per cent, while crude production by nonOPEC countries registered gains. The information and data used in preparation of this section was sourced from OPEC Statistical Bulletin for 2018. Also, world oil demand averaged 97.20 million barrels per day (mb/d) in 2017, up by 1.7 per cent year on year( y-o-y), with the largest increases taking place in Asia and Pacific regions (particularly China and India), Europe and North America. The 2017 oil demand in Africa and the Middle East grew by around 100,000 b/d, as compared to 2016, while oil demand declined in Latin America for the third year in a row. Total exports of crude oil from OPEC member countries averaged 24.86 mb/d in 2017 declining by 406,000 b/d, or 1.6 per cent, as compared with 2016. As in previous years, the bulk of crude oil from member countries was exported to the Asia and Pacific region, in the amount of 15.56 mb/d or 62.6 per cent. Significant volumes of crude oil were also exported to Europe, which increased its imports from OPEC member countries from 4.40 mb/d in 2016 to 4.64 mb/d in 2017. North America imported 3.21 mb/d of crude oil from member countries, which was 82,000 b/d, or 2.5 per cent, less compared to 2016 volumes. Total world proven crude oil reserves stood at 1483 billion barrels (bn b) as at the end of 2017, decreasing slightly by 0.4 per cent from the level of 1,489 bn reached at the end of the previous year. Total proven crude oil reserves among OPEC mebers decreased by 0.3 per cent to 1,214 bn barrels at the end of 2017.

Thursday 11 April 2019

BUSINESS DAY

NEWS

Labour urges Buhari to sign Minimum Wage Bill into effect JOSHUA BASSEY

Lagos, said the tripartite committee on National Minimum Wage and the National Assembly having played their roles, it was now left to the President to sign the bill into effect. “All that is now left is for the President as the father of the nation to sign the bill into law and bring the National Minimum Wage to a positive conclusion. “The Nigerian people including millions of workers gave President Buhari a resounding victory at the poll for his second term in office and as such we expect Mr. President to reciprocate this gesture by signing the N30,000 monthly wage bill into law without further delay,” they said. According to the TUS, the current N18,000 monthly minimum wage has become very much inadequate and workers are finding it extremely difficult to cope with daily challenges thrown up by skyrocketing prices of goods and services. This underscores the need for Mr. President to sign into law the N30,000.000 bill so that appropriate bodies that will work out the consequential adjustments arising from the new national minimum can be put in place. They argued further, “State and local governments should also be prepared to implement the National Minimum Wage so as to boost the morale and productivity of their workers.”

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FG mulls expansion of Housing Fund to include informal sector HARRISON EDEH, Abuja

hola said, “One of the things we are planning to do is to see how we can expand the NHF to include people who do not work in government but who earn a living, such as traders, carpenters, transporters and others like that who want to save money so that theycanuseittoacquirehousingunits for themselves and their families.” One other way government would ensure that low-income earners benefit in the current Housing Schemes was the introduction of “Rent-To-Own Scheme,” which, according to him, is targeted first at low-income earners, reiterating that affordability is based on the mortgage system being put in place by government. “Affordability,” he said, “is not only based on how much you pay, it is also how you pay. We expect that those who will take up these houses will have mortgage finance”, adding, “If you have mortgage finance from Federal Mortgage Bank and you are working for the next 20 years, N10 Millionwillbeaffordableforyouifyou pay monthly deductions over your career and the house is already yours because you contribute.” The minister, who noted that government had also reduced equity contribution to the Fund to make it easier for the low income to partici-

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pate, added, “But if you put your N10 million in your pocket and say you will go and buy your own house off the shelf, even I would find it difficult to assemble such money. So, affordability is not just how much you pay, it is also how you pay. “We have reduced the equity contributionofthatmortgagesystem. Quite aside that, we are also looking at Rent-To-Own so that if you can’t buy and you can pay mortgage you can rent and start to contribute until the day you qualify to use mortgage.” Pointing out that the three sites represent the different ways government was addressing housing development in the country, Fashola also explained that the Federal Mortgage Bank Housing Development site was one of the Estate Development financed loans, a different concept from both the National Housing Programme and the FHA Housing project, adding that the bank not only lent money to people who seek to acquire homes but also lent money to developers to build. He said the site has produced a total of 218 single dwelling apartmentscomprising3,2and1bedroom apartments adding that 70 of the houses have been subscribed under the National Housing Fund “which meansthatpeoplehavebeengranted

@Businessdayng

mortgageloanstoacquirethemwhile the Bank wants to use the balance of 148 to experiment on the Rent-toOwn-Scheme for people who cannot affordmortgagesandwanttopayrent”. Speaking on the FHA Abuja Mass HousingprojectatZuba,Fashola,who said the Authority had not compromised on quality, pointed out that the projectwasthefirstsetofbuildingsthat theAuthorityhadcommencedunder the present dispensation, assuring that the ongoing projects would meet global minimum competitive housing standards for pricing when they are finished. “They are not luxury apartments as you can see; they are mass housing projects,764ofthem,2and1 bedroom flats”,the Minister said, adding that the aim of government was to get what wouldfitintothepocketoftheordinary man, who, according to him, “President Buhari and the Nigerian government are very determined to reach”. He declared, “It will meet those standards of safety; It will meet those standards of protection from water, wind and flooding. It will be efficient but it is not luxury. You can now create your own luxury as you furnish, but it will meet the global minimum competitive standards for public Housing in terms of quality and in terms of finishing.

Thursday 11 April 2019

BUSINESS DAY

NEWS Labour wants Buhari to sign Ajaokuta Steel Mill completion fund bill Joshua Bassey

rganised labour has urged President Muhammadu Buhari to sign the Ajaokuta Steel Company Completion Bill, as the return to full operation of the steel mill will reduce unemployment and add to further improve nation’s economy. Two unions in the iron and steel industry - Steel and Engineering Workers Union of Nigeria (SEWUN) and Iron and Steel Senior Staff Association of Nigeria (ISSSAN), which made the call, insist that the presidential assent to the company’s completion fund bill, 2018, will positively impact the Nigerian steel industry. Leaders of the unions, Kasemu Kadiri, general secretary of SEWUN, and Bello Itopa, ISSSAN president in Lagos, said in reaction to President Buhari’s decline to assent to the bill. Recall that the President on April 2 declined assent to the bill, saying the nation could not afford to commit $1 billion to the rehabilitation of the company because of other priorities. According to the President, appropriating $1 billion from the Excess Crude Account is not the best strategic option for Nigeria at this time of budgetary constraints. In 1971, the Federal Government established the Nigeria Steel Development Authority (NSDA) in order to advance de-

velopment of the steel industry. On September 18, 1979, the company was established and became the successor of NSDA, which was dissolved through Decree No. 60 of the same year. Kadiri said the President and lawmakers should block all loopholes and ensure that the company begin operations. According to Kadiri, the project was envisaged to generate socio-economic benefits and increase the production capacity of the nation through linkages to other industrial sectors. The labour leader said if the steel company would be allowed to operate well, it would create more employments, earn foreign exchange and increase revenue generation. He added that the rehabilitation of the steel mill was stalled over the years because the Seventh National Assembly cancelled a contract between the Federal Government and Global Infrastructure Holding Limited (later Nig. Ltd). “The concession agreement was cancelled because of outstripping of assets. The government discovered that Global Infrastructure was taking away important machinery, and the matter was taken to court. “Both parties later agreed to settle out of court through the intervention of former President Goodluck Jonathan,” Kadiri said. He noted that the steel company was built by Tyanjpromexport

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(TPE) of Russia and later Global Infrastructure, an India firm that took over the management. He further explained that the money needed to complete the steel company was huge though the project was less than 5 percent completed. Kadiri said when fully revived, the company would have over 30,000 persons in its workforce. Itopa, ISSSAN president, also appealed to Buhari not to delay in resolving the financial issue in the bill and ensure commencement of operations. According to Itopa, out of the 43 component units of the company, the primary units to be completed for the steel company to function optimally are cokeoven, black furnace, steel making shop and power plant. “If all these equipment are put in place, Ajaokuta will be set for operations and we will get raw materials to produce steel from the National Iron Ore Mining Company, Itakpe in Kogi. The union leader said it was important to revive the steel company inaugurated by the late President Shehu Shagari, noting that it had important areas such as light section mill, wire rod mill, billet, medium section and structural mill. According to him, the medium section and structural mill could be used to produce the rail lines in the country. He urged Buhari to sign the bill to enable the company to create thousands of jobs.

CBN enhances liquidity in FX market with $210

… as foreign debt stood at $25.27bn in 2018 Hope Moses-Ashike

entral Bank of Nig e r i a ( C BN ) ha s again injected $210 million into the interbank Foreign Exchange Market in continuation of its sustenance of liquidity in that segment of the market. Figures obtained from the CBN on Tuesday, indicated that authorised dealers in the wholesale segment of the market were offered $100 million, while the Small and Medium Enterprises (SMEs) segment received $55 million. Similarly, customers requiring foreign exchange for invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA), among others, were also allocated $55 million. A statement from the bank’s spokesman, Isaac O ko ra f o r, re i t e rat e d t h e CBN’s commitment to continue to boost interbank foreign exchange market to ensure liquidity and stability in the market.

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It would be recalled that on Friday, April 5, 2019, the bank injected $247.8 million and CNY34.8 million into the Retail Secondary Market Intervention Sales (SMIS) segment. Meanwhile, the naira on Tuesday, exchanged at an average of N360/$1 in the BDC segment of the market. Meanwhile, the National Bureau of Statistics (NBS) says Nigeria’s foreign debt stood at $25.27 billion as of December 31, 2018. This is according to “Nigerian Domestic and Foreign Debt data” for fourth quarter 2018 posted on the NBS website. The NBS said disaggregation of Nigeria’s foreign debt showed that $11.01 billion of the debt was multilateral. It said $34.63 million was bilateral from Agence Francaise de Development (AFD) and another $2.75 billion bilateral from the Chinese Exim Bank, Japanese International Cooperation Agency, KFW Development

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Bank and India. In addition, $11.17 billion was commercial, basically Eurobonds and Diaspora Bonds. According to the report, Lagos State has the highest foreign debt profile among the 36 states and the FCT, accounting for 5.64 percent. It said Edo was the second state with highest debt, accounting for 1.09 percent, followed by Kaduna (0.90%) and Cross River with 0.75 percent. Similarly, the bureau said total domestic debt was N16.63 trillion in the quarter under review. It said Lagos State accounted for 3.19 percent of the total domestic debt stock while Yobe State had the least debt stock in this category with a contribution of 0.17 percent to the total domestic debt stock. The data for the report was supplied administratively by the Debt Management Office, verified and validated by the NBS, according to the News Agency of Nigeria.

Thurssday 11 April 2019

BUSINESS DAY

NEWS

OPEXA calls on FG to implement over N29bn budgetary allocations for EEG HARRISON EDEH, Abuja

rganised Private Sector Exporters Association (OPEXA) has commended the Federal Government for making provision in its annual budget for Export Expansion Grant (EEG), but however decried the non-implementation for two years allocations amounting to N29.28 billion. OPEXA says diversification of the economy is a policy imperative and the government should be commended for reviving the moribund EEG scheme. In 2017, the scheme was revamped to improve its effectiveness and ensure sustainability. The older version of the scheme was marred due to reluctance of Customs to forego the revenue and the government was forced to recall the huge backlog of unutilised NDCC’s (Negotiable Duty Credit Certificates) from exporters. The certificates were issued

to exporters in lieu of cash payment and could be used for payment of import duties. The export grant is meant to cushion the impact of infrastructural cost disadvantages faced by Nigerian exporters. Executive secretary of OPEXA, Jaiyeola Paul Olarewajuin, made this known in a statement obtained by BusinessDay on Tuesday in Abuja. Olarewajuin said making provision for EEG in the country’s annual budget “creates transparency and boosts the confidence of non-oil investors in expanding processing capacity and employment generation.’’ He said an Inter-ministerial Monitoring Committee meeting was organised at the instance of the minister of finance, Zainab Ahmed, where the association expressed ‘deep’ concern over non-implementation of the EEG budget since 2017. He explained that the EEG budget allocation for 2017 was

N16 billion, which was not implemented and it elapsed probably due to non-utilisation. `Ìn 2018, the budgetary allocation of N13.28 is yet to be implemented and we understand that less than N2 billion has been approved for disbursement by March 2019. `Àlso 2019 budgetary allocation for EEG was surprisingly reduced to N5.12 billion, which appears arbitrary and inconsistent with government policy to grow non-oil exports,’’ he said in the statement. The association also suggested the retrieval of unutilised 2017 budgetary allocation of N16 billion and mitigate the shortfall in the 2019 EEG budget through a supplementary provision. `Ànnual budget allocation should be in the range of N60 billion but not less than the provision for 2017, in any case since exports are growing and we want the government to make a clear statement on future policy for EEG,’’ he said.

South Africa decries attacks on foreigners OBINNA EMELIKE

... assures on safety

racism, xenophobia, homophobia and sexism. We wish the injured a speedy recovery, and appeal for calm, and end to violence and restraint,” Moroe said. “It is our view that criminal elements should not be allowed to take advantage of the concerns of citizens to sow mayhem and destruction.”. However, he assured that the Justice, Crime Prevention, and Security Cluster (JCPS) was working tirelessly on the issue of attacks on foreign nationals. “To this end, three people have been arrested for the recent incidents in KZN and Limpopo and law enforcement agencies remain steadfast to bring perpetrators responsible for these crimes to book.” In the interim, Moroe said the police had been directed to work round the clock to protect both foreign nationals and citizens, and to also arrest looters and those committing acts of violence. As well, government has urged communities to assist the police by providing information on the incidents that have taken place

s the world condemns the recent attack on foreigners and their properties in some parts of South Africa, the government of South Africa has continued to condemn the violent acts in the strongest possible terms. While describing the recent acts of criminality that resulted in the displacement of foreign nationals in the KwaZulu-Natal (KZN) and Limpopo Provinces as regrettable, the government noted that the attacks violate all the values that South Africa embodies, especially the respect for human life, human rights, human dignity and Ubuntu. Speaking on the issue during a media parley in Lagos recently, Bobby J. Moroe, acting high commissioner, South African High Commission, Abuja, explained that no amount of frustration or anger could ever justify the attacks on foreign nationals and the looting of their shops. “Our country stands firmly against all intolerances such as

so that the perpetrators can be brought to justice. Speaking further, the acting high commissioner noted that government cautioned that the spread of misinformation, fake pictures and videos on social media as well as fake websites might be fuelling tensions in the communities between South Africans and foreign nationals. “Certain messages and images that appear on social media are old and unrelated to any of the reported incidents of alleged attacks on foreign nationals over the past few days. For instance, a message being circulated about foreign nationals burning South African owned trucks in Limpopo Province is not true,” he said. According to Moroe, government respects the right to freedom of press and freedom of expression, but has consistently condemned fake news websites masquerading as authentic news websites. We call for greater efforts of awareness in society about fake news and fake social media posts.

Investors urged to harness global digitisation, empower startups, SMEs OLUFIKAYO OWOEYE

he Annual Investment Meeting (AIM), a platform for Foreign Direct Investment (FDI), has kicked off in Dubai. On the sidelines of the meeting was the Future Cities Show, which witnessed the presence of H.E. Abdulla Alsaleh, undersecretary of Ministry of Economy along with President of Bolivia, Evo Morales, and President Muhammadu Buhari of Nigeria Speaking at the opening ceremony, Adeeb Al-Afifi, director of the National Programme for SMEs and Projects, Ministry of Economy, says AIM Startup offers a great platform to business, entrepreneurs, banks and financial companies to network and connect with right individuals. “AIM has started today under the theme – Harnessing Global Digitisation to Empower Start-ups and SMEs, and in partnership for National Program for SMEs and Projects as both are the fruits of innovative ideas that help in boosting the national economy. This event is a great opportunity for startups and young companies to know more about investment opportunities and close them,” Adeeb Al-Afifi states. A 2018 survey conducted by Bayt.com and YouGov Siraj showed that 71 percent of respondents below 35 would want to become entrepreneurs compared with 58 percent of those aged 35 and up who said they would consider entrepreneurship. Walid Farghal, directorgeneral of Strategic Marketing and Exhibitions, organiser of AIM Startup, notes that the UAE was a fertile ground for startups against the backdrop

of its steady economic development and numerous business incentives and support in line with Vision 2021. The UAE’s economy is predicted to expand to 3.7 percent in 2019, as per the latest estimates of the International Monetary Fund, while the government continues to develop an entrepreneurial ecosystem conducive to startups. “We have a number of young talents in the country who are eager and inclined to use their skills in establishing unique startups with significant socio-economic impact. AIM Startup is a platform to give them an international venue to meet and engage with investors, expand their networks, and learn and explore opportunities as they work to turn their dreams into a reality by starting their own businesses,” Farghal says. At the AIM Startup event, young entrepreneurs from different parts of the world exhibited their innovations at while the Future Cities Show focused on five leading future city solutions, namely AI, blockchain, smart infrastructure, smart mobility, and sustainability. It also provided a platform to ensure that the latest technological projects had the opportunity to secure medium- to large-scale investments. In addition to the UAE, the start-up scene in Saudi was a highlight of discussion on the first day of the event. Saudi is the most promising market in the region with a lot of scopes for startups and small business enterprises. Currently, there are 950,000 SMEs in the region and it is anticipated that SMEs contribute to around 35 percent of the GDP. www.businessday.ng

Godwin Ehigiamusoe, MD/CEO, LAPO Microfinance Bank, presenting award plaque for Overall Best Union, South West Region, at the CLIENTS FORUM organised recently by LAPO Microfinance Bank in Ibadan.

FIRS proposes VAT charges in lottery sector Gbemi Faminu

ederal Inland Revenue Service (FIRS) in its efforts to generate revenue for the government has proposed VAT charges in the lottery and gaming sector. The VAT charges will be exercised according to the tax laws with a 5 percent charge on every stake of the consumer. This was made known at the stakeholder’s engagement on VAT automation of the lottery and gaming sector between the FIRS and the National Lottery Regulatory Commission (NLRC) held on Monday in Lagos. Speaking at the forum, executive chairman of the FIRS, Babatunde Fowler, stated that although the lottery space had been in existence for some time, it was time for the industry to give back to the society, as the use of VAT would be a more convenient

as well as transparent approach to carrying out its civic duties. Te taxes will be paid by the consumers of the service and not the operators, Fowler said, adding that regular payment of taxes will provide more privileges and opportunities for the citizens, highlighting that Nigeria has one of the lowest tax rates in the world, which is used in encouraging taxpayers “Tax has to do with law and the law says that for every transaction that is VATable, 5 percent should be charged. You have to be aware that we are automating collection in all industries. This is not a tax on the business, but on a bettor who hopes to win. You also have to realise that 85 percent of VAT goes to the state, which are supposed to be closer to us. In this case, we are all winners,” Fowler said. Present at the forum was Lanre Gbajabiamila, NLRC directorgeneral, who stated that lottery and gaming operators collect

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VAT from users of the industry’s services without remitting such to the government, a situation resulting in revenue losses. A presentation of the VAT payment platform by the Zurich Technologies Team showed that a software was developed to achieve a stress-free transaction between the FIRS and the lottery operators, adding that the software will have an automated system that will show the operator the VAT due after 21 days of transaction. The bill is then settled through the online platform, as the software allows operators file VAT returns and is flexible enough to accommodate disputation over the figures, which operators can resolve with the FIRS through the provision of documents to back such claims. The software, which has a user-friendly interface, will be accessible to operators, lottery regulators as well as the FIRS, further @Businessdayng

transactions will become more transparent and documented with the software. Industry operators, however, argued that automation has the potential of killing the industry, as the additional 5 per cent charge for VAT could discourage punters from using their services with the frequency they currently do. Speaking on behalf of lottery and gaming operators, Akin Alabi, founder of Nairabet and House of Representatives member-elect, said the potential reduction in hoped-for winnings, especially on low-odds bets, will drive customers from regulated operators into the hands of unregulated ones. He argued that the FIRS should have consulted operators before taking the decision to impose 5 per cent VAT and the automation of collection adding that the FIRS should also see to the development of industries with the same passion used to collect taxes.

Thursday 11 April 2019

BUSINESS DAY

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Thursday 11 April 2019

BUSINESS DAY

Thursday 11 April 2019

BUSINESS DAY

INTERVIEW

PASCAL GABRIEL DOZIE

Interview with Private Sector Leaders

80 years of Pascal Gabriel Dozie PASCAL GABRIEL DOZIE, founder of Diamond bank (which has now merged with Access bank to form a bigger entity), co-founder of African Capital Alliance and Kunoch Limited, opened the doors of his plush office to a team of reporters who wanted a glimpse into the life of the business colossus on the verge of turning 80 in a country where average life expectancy is put at 56 years by the World Health Organisation. PGD, as he is fondly called by friends, is the father of five sons and says he has gotten over wishing for the daughter he never had, as his married sons meant he now had five daughters. On the strenuous task of raising five boys, PGD says we should ask his wife. He now spends most of his time giving back to community. He turns 80 on April 9. Excerpts from the interview are as follows:

Life through PGD’s eyes ife has been interesting. I have found this country very interesting, if I don’t find it interesting I would lose. I am finding this way because of self-preservation. It is difficult to say it, I love my county. If you travel the length and breadth of the country, you will appreciate the beauty, natural landscape, and the people. Unfortunately, things have changed and we are now beginning to have a contactless society, where banking is done on phones away from the halls. The more we do things that separate contact, the more life becomes difficult. We need to build relationships because unless we have a discussion, it will be difficult to know how the mind of other people works. Families don’t visit each-other again as everyone is looking for personal comfort, most are even afraid to travel to their village because of what they heard or read. That is where the media must work assiduously to mould opinion and thoughts. We must live our lives the way our forefathers wanted us to do as evident in the National anthem. The majority are not true to that national anthem. We need to re-evaluate our value system which is fast eroding before we lose it completely. Unfortunately, because of the exigencies of life and its struggle, we have stopped thinking. Our value system has changed completely. Sometimes I wonder how we descended to where we are now. Reengineering our value system is not going to be easy, because some people have made up their mind to go with the status quo, but we must try. But where there is a will there is a way, so we need people who would champion this. Not many would be interested in this cause, because it is a job that does not give you prominence. The society must also start asking questions on how they acquired their wealth. In India for example, if you have a very big and lavish wedding, the next morning the tax people will be at your door. We say we are fighting corruption and charging people who took government money but is corruption only about money? If I am not fair to my staff, that is corruption. In my life, I have a good relationship with everyone from different tribes. I agree with the fact that we are only human and hence they are fallible. We need selfless people in our politics. To produce selfless leaders in this country, it would require education. The media must educate the leaders that they are there to serve the people and not to enrich themselves. The media must talk about the depersonalization of our public offices. Our offices must function with or without the presence of the head. The media

must do a lot in this regard through investigative journalism. Igbo marginalization I hate when the Igbos complain of marginalization, because they don’t seem to realize what they have. If you look at the resources they have, I wonder what they mean by marginalization. Is it because they are not the President of Nigeria? It is only one person that can occupy that seat and it has to be a politician. I am not a politician and I don’t see why I should leave my business for a politician’s job. If the Igbos realize the enormity of the resources they have, they would stop complaining. Media not doing enough in their reportage The pen is mightier than the sword. I am sure you are not hearing this for the first time. The media has the power to shift public opinion wherever they want it. No administration in power can withstand the onslaught of the media. Take the on-going Brexit battle as an example. This week, they have raised 8 motions in the parliament thinking they would find a solution to the debacle but they couldn’t pass any of them. Why? Because the press was working by coming up with informed analysis which to a large extent shaped the opinion of the parliamentarians. The fact that your friend has a divergent opinion doesn’t make him your enemy. As individuals, we need to ask ourselves what is best for this country and the media should play a bigger role regarding agenda setting and holding government accountable. I have a lot of expectations and disappointment in our media. The media must help society do better by pointing out faults; although I know it is not easy and could

Pascal Gabriel Dozie also be risky. However, the government must ensure that journalists are properly educated. I said this few years ago that the private sector has not performed because it has not been developed by the government. Relationship with sons My sons tell me I have spoilt their lives that they don’t have any private life as they can’t go hiding. I say it is not my fault. I had wanted to have a daughter as my first child because I have a friend Maxell Ubani, whom I used to admire his daughter then in the U.S. When I told him mine was coming, he would respond jokingly “You no fit get a daughter, daughters are for special people.” When I was expecting my fourth child, I hoped for a daughter and said her name would be Ngozi Pascal. When it turned out to be a boy I said his name is still Ngozi Pascal. Family Business Pet project A lot of SMEs are family based and we have not been able to transit our business from one generation to another. We lose so much in this country as a result. Where are the Fajemirokuns, Ojukwus, Abiolas Ugo Foam, etc.

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Look at Heineken and Mercedez, whose founders have died a long time but because they have built structures that outlived them the brand is still out there. We are working closely with the LBS and host of other partners from Massachusetts Institute of Technology (MIT) to bring the knowledge of how to manage the family business. As part of my 80th birthday, LBS has partnered with other parties in Switzerland to organize a one-day seminar on sustainable family business. We hope to endow a chair for the study. The nitty-gritty that makes a national economy is the SMEs and must be sustainable. My wife’s foundation, the Janet Dozie Foundation for indigent widows, is also making impact with over 500 beneficiaries. Ease of business in Nigeria Doing business in Nigeria is like taking part in an obstacle race. That is why smart people like to short-change the system. It is not easy if you want to do it the right way. Pan Atlantic University: Days of humble beginnings A group of us went to a Business School in Madrid, Spain When the Lagos Business School was about to be established, first thing myself and the founders did was to go to a Business School in Madrid,

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Spain. They talked to us about the ethics of doing business and how to do the right thing. On the side-lines of the meeting, we decided to go back to Nigeria to build what we called an “Oasis of Sanity” and with time the Oasis will come together to form a mighty movement. But one problem in Nigeria is the instability of policies; you need predictability in any system. We don’t know the trajectory of government policies. A businessman can deal with risks but not uncertainties. So it depends on how you accommodate the challenges and climb the steps which require patience or cut corners to get things done. Unfortunately, those who cut corners often find themselves at the front and nobody asks questions. MTN and early struggles Before I met the MTN team, they had tried on their own and were already convinced about coming to Nigeria. But the people they were relating with were not corporating. So when they met me, we agreed to work together. I did not know anything about mobile telephoning and with my experience with NITEL; I felt it was not the right way to go. The process of bidding was very interesting. If you belong to one box

you cannot be in another box but my name came up in more than one group which should automatically disqualify me. During that period, my name came out in every newspaper, saying I belong to several groups and boards which was illegal. So MTN wrote me a letter saying that we don’t want to have anything to do with you again because you belonged to a lot of groups. I said thank you very much and they left. I still have the letter they sent to me which I didn’t reply to. I have not destroyed the letter because there are some things in a man’s life you don’t destroy. After a while, MTN came back to me saying they were sorry for accusing me wrongly while they found out that people I asked to work with me were the ones who tried to tarnish my relationship with MTN. This is because they wanted to be chairman. Fortunately, the then Chairman of MTN was going back to South Africa with the Chief executive of one of the competing groups and she asked, “How did you find this man called Pascal Dozie? He is everywhere and part of many groups”. The man answered and said he had never seen, met or spoken to me before. So they did their investigation and found out that the accusation against me was false. The moral lesson here is “patience”. I didn’t need to fight anyone trying to know who did what because it wasn’t necessary and I didn’t “want” nor “need”. All the problems Vodacom had, we also had in MTN. It took us 5 years to sign shareholders agreement but nobody heard any noise about it. I had and still have one of the best boards in the organization. I had no reason to want a different board. They do their jobs effectively and efficiently and we have a very good relationship. Diamond bank license came 5yrs after application I put in the application for a licence for Diamond bank in 1985 and I got it approved in 1990. Could I have gotten it earlier? Yes, but I didn’t want to short circuit the system. Not because I am an angel, I didn’t even have the capacity to short circuit the system. At a particular point in time, those who agreed to go into banking with me, some of them left. In those days you have to have 2/3rd of your membership from every part of the country, so you are forced to relate with everyone. Because I didn’t have the capacity to short circuit the system and I didn’t intend to, Diamond bank stayed 5 years in incubation. I was running a consulting firm, African Development Consulting Group, and we www.businessday.ng

planned certain things about banking. We watched television, listened to the media. Remember in those days, you will go into a bank and they will give you a tally which I perceived was nonsense. When we set up Diamond bank, it became technologically driven right from the world go because we wanted to change the system and eradicate the delay in making transactions. Diamond bank has been people-oriented right from the word go. So we came up with the first DIBS (Diamond Bank Integrated Banking System) which eliminated the need to carry cash when trying to perform a transaction. All you needed was to prepare your cheques and when you arrive at your destination, you get your cash.A year or two later, we came out with a payment card which led to value card. The rest they say is history. Advice for new Access bank If they work hard, they would achieve a lot. There is a Latin phrase that says “Festina lente” (make haste slowly). Also, the hood does not make the monk. Everything should be evaluated on its impact on the citizens. Every policy should have the people in mind because governance means the welfare of the people. I have no doubt that they will uphold the highest standards in running the new entity. I am a stickler to good corporate governance which I did by allowing every managing director to run the affairs of Diamond bank without any form of interference. I have never been part of the selection of chief executives since I left diamond bank.

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Even when my son became chief executive, I wasn’t part of it. The chief executive before my son was selected when I was in an Intensive care unit (ICU) in Washington. I was very sick and couldn’t care less if there was any bank or not. In fact, as at that time, Nigeria and the world meant nothing to me. Travails with Septicemia (Septicemia, also known as sepsis, is a lifethreatening complication that can happen when bacteria from another infection enter the blood and spread throughout the body. It needs urgent hospital treatment, as it can quickly lead to tissue damage, organ failure, and death). I had septicemia. After a biopsy, the doctor said everything was fine that I didn’t have any cancerous cells in me. However, a day or two after, we were going somewhere and I began shaking. I couldn’t even sign my signature where I went to. Then I was taken to the emergency room. It was so critical that I was given the last sacrament given to Catholics. After that I didn’t know where I was, I was secluded from others and only my wife and my niece could get through to me. I became a risk to everyone for three weeks in the ICU. They were pumping antibiotic into me and taking blood samples every three hours. Then I developed something in the heart and they had to take me for operation and put into me a pacemaker used to treat some abnormal heart rhythms (arrhythmias) that can cause your heart to either beat too slowly or miss beats.

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Thursday 11 April 2019

BUSINESS DAY

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Thursday 11 April 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Merkel calls on EU to give UK more time on Brexit May reiterates goal of leaving bloc next month as she arrives in Brussels TOBIAS BUCK AND JIM BRUNSDEN

ngela Merkel has called on fellow European leaders to give the UK more time to avoid a disorderly exit from the EU, even as Theresa May repeated her desire for Brexit to be completed next month. In remarks that highlighted Berlin’s conciliatory stance ahead of this week’s crucial European summit on Brexit, Ms Merkel warned: “We have only 59 hours to avoid a disorderly UK exit from the EU. That scenario of a disorderly Brexit is not in our interest.” Speaking to the German parliament on Wednesday, she said that the British prime minister had assured her during a visit on Tuesday “of her firm intention to find a way out of this situation together with the opposition in the House of Commons”. Ms Merkel said: “We know that such cross-party negotiations require endurance and the ability to compromise. That is why the [German] federal government believes we should give the two parties a decent amount of time so that an orderly Brexit can be achieved together with the UK.” As Mrs May arrived in Brussels for talks with European leaders on a Brexit extension, she said that she

still hoped Britain would be able to leave the EU by May 22 and avoid taking part in European elections. The UK prime minister said her priority was to ensure that any deal to delay Brexit would still allow the UK to leave as soon as parliament passed the withdrawal agreement she has negotiated with the bloc. “I know many people will be frustrated that the summit is taking place at all, because the UK should have left the EU by now”, Mrs May told reporters as she arrived for the meeting. “I and the government continue to work to find a way forward. We have been talking with the opposition and these have been serious and constructive talks.” Mrs May has come to the summit with a proposal for a Brexit extension until June 30, with Britain currently poised to crash out of the bloc on Friday unless leaders grant more time. “What is important is that any extension enables us to leave at the point at which we ratify the withdrawal agreement. So we could leave on May 22 and start to build our brighter future,” Mrs May said. But her proposal has won little support, with many other leaders instead backing a far longer extension. Speaking earlier in the day, the

Microsoft worked with Chinese military university on artificial intelligence

icrosoft has worked with a Chinese military-run university on artificial intelligence research that could be used for surveillance and censorship. Three papers, published between March and November last year, were co-written by academics at Microsoft Research Asia in Beijing and researchers with affiliations to China’s National University of Defense Technology, which is controlled by China’s top military body, the Central Military Commission. Samm Sacks, a senior fellow at the think-tank New America and a China tech policy expert, said the papers raised “red flags because of the nature of the technology, the author affiliations, combined with what we know about how this technology is being deployed in China right now”. “The [Chinese] government is using these technologies to build surveillance systems and to detain minorities [in Xinjiang],” she added. The US government is debating whether research collaborations, particularly in sensitive areas such as artificial intelligence and augmented reality, should be subject to stricter export controls. Ted Cruz, the Republican senator for Texas, said: “American companies need to understand that doing business in China carries significant and deepening risk. In addition to being targeted by the Chinese Communist party for espionage, American companies are increasingly at risk of boosting the Chinese Communist party’s human rights atrocities. “The CCP then appropriates that

technology to oppress the Chinese people, including through surveillance or censorship,” he added. “The US and China should not stop trading with each other, but at a minimum we must ensure that American business interests are not enabling the CCP’s oppression.” Adam Segal, director of cyber space policy at the think-tank Council on Foreign Relations, said: “USChina academic partnerships are increasingly under the microscope as the FBI focuses on the threat of espionage from students and scientists, and the defence department [focuses] on the possibility that frontier technologies might eventually make their way to the PLA [People’s Liberation Army].” Last week, the Massachusetts Institute of Technology cut ties with telecoms group Huawei and launched an “elevated risk” review process for its Chinese collaborations. Microsoft said its “researchers, who are often academics, conduct fundamental research with leading scholars and experts from around the world to advance our understanding of technology”. It added: “In each case, the research is guided by our principles, fully complies with US and local laws, and . . . is published to ensure transparency so that everyone can benefit from our work.” One of the papers co-authored by Microsoft and researchers affiliated with the NUDT described a new AI method to recreate detailed environmental maps by analysing human faces, which experts say could have clear applications for surveillance and censorship. www.businessday.ng

German chancellor did not spell out how long exactly such a Brexit extension should last, but suggested it was likely to be longer than the three-month delay proposed by Mrs May. “We will discuss what kind of extension we want to give the UK. It is possible that this will be a longer

one than the prime minister asked for,” Ms Merkel said. “I think the extension should be as short as possible but it should also give us a certain degree of calm so we don’t have to deal with this issue every two weeks.” Any extension, she said, would also require certain commitments

from the UK side. “We also have our own expectations, above all that the European institutions can continue to function without friction,” Mr Merkel said. In addition, the UK would have to hold European elections and would have to show “readiness to take part constructively in decision-making”.

Carbon pricing should drive African development, not hinder it

Concerns raised on research that could be used for surveillance and censorship MADHUMITA MURGIA AND YUAN YANG

Three policy priorities to help the region lead the transition to a clean economy NGOZI OKONJO-IWEALA

overnment leaders often ask me how they can achieve development goals, such as expanding energy access, while tackling climate change. Some say, “Shouldn’t we use our coal resources to give people electricity first, then go low-carbon later?” The answer is no. A mounting body of evidence shows that development and climate action go hand-in-hand. In fact, research from The New Climate Economy shows that bold action on climate could deliver $26tn in economic benefits globally between now and 2030. With such unequivocal evidence, the question shifts to “how?” This week, representatives from government, business and civil society are gathering at the Carbon Pricing Leadership Coalition’s High-Level Assembly to discuss how carbon pricing can be used to shift investments towards lowcarbon and climate-resilient projects, and how carbon pricing can address broader social concerns. These issues are salient across the world, in developed and developing countries alike. But developed countries need to set the example, by moving faster and quicker on carbon pricing. That said, African countries can benefit, too. Carbon pricing offers African economies, in particular, a powerful vehicle for delivering on other social and economic priorities. I

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urge African countries to focus on three priorities, and carbon pricing plays a key role in each of them. First, deliver electricity to those without it. In remote areas of Africa, installing standalone renewables (such as solar home systems) can provide electricity more quickly than connecting to the traditional grid. With new battery technology and mini-grid systems, decentralised renewables can deliver reliable energy to whole communities at a time, helping to grow inclusive, rural economies. At the same time, building utility-scale renewable power plants is now cheaper than building coal plants in most regions. After factoring in the health costs of air pollution, the calculus tips further towards renewables. Africa’s wealth of solar, wind and geothermal resources gives us a big natural advantage. And while we need to consider a carefully planned transition to rely on these abundant resources, we must phase out fossil fuel subsidies and begin pricing pollution, to remove the man-made disadvantage currently baked into the system. Second, prioritise resilient infrastructure. Mozambique, Malawi, Zimbabwe and Madagascar recently brought home the terrible tragedies that more frequent, more intense storms can cause. The Red Cross estimates Cyclone Idai damaged or destroyed up to 90 per cent of the city of Beira. For the sake of our lives and our livelihoods, Africa’s new infrastructure, including @Businessdayng

early warning systems, must be able to withstand a changing climate. In our need lies our opportunity. The world is expected to invest $90tn in infrastructure by 2030, with most of the growth in emerging and developing economies. Since Africa is constructing much of our infrastructure now, we have the chance to make it sustainable, efficient and resilient from the start, leapfrogging over the challenges other countries face as they upgrade dirty and dated infrastructure. To finance this need, carbon pricing programmes offer an important avenue for generating revenues governments can invest in resilient infrastructure. For instance, Colombia introduced a carbon tax in 2017, generating $127m that year. The government will use the revenues to support essential environmental and rural development projects. Third, create the conditions for the right investments. A shrinking oil market will deliver shrinking revenues for fossil-fuel rich economies relying on oil exports for growth. As more and more countries and car manufacturers commit to phase out internal combustion engines and switch to electric vehicles, the reality is that their assets could soon be stranded. India and France will end sales of non-electric cars by 2030 and 2040 respectively. Volvo aims for 50 per cent electric sales by 2025, and Volkswagen will stop producing petrol and diesel vehicles in 2026.

Thursday 11 April 2019

BUSINESS DAY

NATIONAL NEWS

UK Supreme Court rules Zambians can sue miner Vedanta Lawsuit over alleged pollution brought by 1,800 villagers to be heard in London

JANE CROFT

housands of Zambian villagers can bring a legal challenge in the English courts against mining company Vedanta over alleged pollution in Zambia, the UK’s highest court ruled on Wednesday. The Supreme Court said that the lawsuit brought by 1,800 Zambian villagers can be heard in London despite arguments by Vedanta that the case should be tried by the Zambian courts. It ruled that the lawsuit could proceed in England because the claimants, who are all living in poverty, would struggle to access justice in Zambia and the country does not permit “no-win, no-fee” arrangements for claimants to pay legal fees. The ruling is significant because it paves the way for more environmental claims to be brought in London against large multinationals with global operations — particularly from claimants living in poorer countries where there is a difficulty in accessing legal funding. The ruling also indicates that companies have a duty of care to third parties for the commitments they make publicly regarding their subsidiaries. Lord Briggs, a Supreme Court justice, said that “the non-availability of access to justice in Zambia means that the proceedings against both defendants must continue in England”. He added that the parent company of a subsidiary has a duty of care to third parties “if in published materials, it holds itself out as exercising that degree of supervision”. The Zambian case relates to allegations by those living near the huge Nchanga Copper mine, owned by KCM that is a subsidiary of UK-based

Vedanta. The Zambian villagers claim their health has been damaged and their livestock, farms and drinking water have been affected by poisonous emissions from the mine into local rivers over many years. The villagers are suing Vedanta and KCM for compensation. Martyn Day, senior partner at Leigh Day and representing the Zambians, said the ruling “will send a strong message to other large multinationals that their Corporate and Social Responsibility (CSR) policies should not just be seen as a polish for their reputation but as important commitments that they must put into action”. Samarendra Das of Foil Vedanta, an activist group, said the ruling could make it possible for many of the Indian communities affected by alleged pollution and human rights abuses by Vedanta to also to seek justice in the UK. “As the UN’s Sustainable Development Goals recognise, sustainable development and access to justice go hand in hand. The judges ruling today recognises and enforces that principle,” she said. Vedanta said that Wednesday’s ruling was “procedural” on whether the English courts could hear the claim. “It is not a judgment on the merits of the claims. Vedanta and KCM will defend themselves against any such claims at the appropriate time,” it said. The ruling could also affect a number of ongoing cases. Leigh Day also represents 40,000 Nigerian fisherman who are bringing a claim against Royal Dutch Shell about alleged oil spills in the Niger Delta. The Nigerian claimants are appealing to the Supreme Court about whether the case can be heard in London.

Algeria’s appointment of interim president sparks protests Upper house speaker Abdelkader Bensalah seen as regime insider HEBA SALEH

lgeria’s parliament has appointed upper house speaker Abdelkader Bensalah as the country’s interim president, to lead the government as it prepares for fresh elections. The 76-year-old regime insider takes over a week after the resignation of Abdelaziz Bouteflika, the ailing president who was forced to step down after more than a month of mass protests. Mr Bensalah will lead the gas-rich North African country for a period of three months, as elections are planned. In a televised speech on Tuesday night, he pledged to organize free and fair elections and to consult with the political class and civil society to build a “new Algeria”. But while Mr Bensalah’s switch to the presidency is in line with the constitution, his appointment has already been rejected by protesters who are demanding sweeping democratic reforms. They say the arrangement is a ploy by a corrupt and unaccountable Algerian establishment to ensure its survival under a new leadership. Thousands of students angry at the appointment demonstrated on Tuesday in several cities including the capital Algiers where, for the first time since the start of the protests, police cracked down hard, using batons, tear gas and water cannons to disperse demonstrators. The continuing protests are a challenge to Ahmed Gaid Salah, the

army chief of staff who had been an ally of Mr Bouteflika before belatedly ditching him when it became clear that the protests were gaining momentum. The military delivered the final push to dislodge the 82-year-old after backing his candidacy for a fifth term as president. The army is the most powerful institution in the country and has long played the role of arbiter between political factions and their associated networks of vested interest. But while the armed forces insists it wants to stick to the constitution to preserve stability, the protesters believe an entire hierarchy of officials should go to make way for new faces in a reformed political system. Yet the military is unlikely to be comfortable with calls for radical reforms to dismantle a deeply entrenched system in which it is a central pillar. In addition, the generals are likely to view any attempt at extensive change as destabilising in a country with weak political institutions. Algeria has a fragmented political opposition that was marginalised under Mr Bouteflika. It cannot claim to speak for the protesters who have come out in their hundreds of thousands every week to signal their frustrations. With little sign that the demonstrators are prepared to back down and more protests expected, analysts believe Gen Salah may be forced into further concessions. www.businessday.ng

There is deep disdain for Boris Johnson among many European governments, which see him as leader of a Brexit campaign built on false promises © PA

Britain and EU wrestle with Boris Johnson question

Cross-party talks and bloc focus on proofing deal against hard-Brexit government SEBASTIAN PAYNE AND ALEX BARKER

n London and Brussels, in talks that could determine Britain’s future, negotiators are homing in on a common goal: how to rein in the actions of a future pro-hard Brexit British government. The focus in discussions between the UK’s Conservative and Labour parties is on providing assurances that a new Tory prime minister does not rip up any cross-party accord on future relations with the EU. Diplomats in Brussels are concerned with a similar issue, as the EU’s 27 other member states consider Britain’s request to delay its departure from the bloc. A big preoccupation ahead of a crucial summit on Wednesday is how to prevent a more Eurosceptic UK government from disrupting the bloc’s affairs from within. Both sets of concerns are personified by one politician in particular: Boris Johnson, the former UK foreign secretary who led the triumphant Leave campaign in the 2016 EU referendum and who hopes to succeed Theresa May as prime minister in the near future. Labour is worried that a prime minister Johnson could discard any agreement by Mrs May that commits the UK to closer post-Brexit relations with the EU than the UK government currently seeks. Other EU governments — notably France — fret that if the UK is granted a lengthy delay to its Brexit date, the country could wreak havoc with decisions in the European

Commission, the European Council of member states and the European Parliament, particularly if a fullblooded Eurosceptic is in Downing Street. But the problem for the LabourConservative talks, perhaps also for the deliberations in Brussels, is that restricting the conduct of a future British government is far more easily said than done, particularly if the UK decides to go down a more antagonistic path. “The idea of a ‘Boris lock’ is ridiculous,” said a senior Conservative MP. “Parliament can’t bind its successors, no matter what the prime minister might agree with Labour or the EU.” Labour remains agitated about Mr Johnson as Westminster is absorbed by speculation that Mrs May’s last days as prime minister are approaching. Although Mrs May has said she would only resign once her Brexit deal is passed by parliament, most Conservative MPs believe she will leave office in the autumn. Others believe she will have been pushed out by the summer Mr Johnson is the favoured candidate of the party’s grassroots, according to surveys by the ConservativeHome website. He is also the favourite in the betting markets — followed by former Brexit secretary Dominic Raab and environment secretary Michael Gove. All three are strong Brexit proponents, and Mr Johnson and Mr Raab are fierce critics of Mrs May’s

exit deal with the EU, although they voted for it in the House of Commons at the third time of asking. Hence Labour’s fear that, without strong guarantees, any deal with Mrs May might fail to last out the year. While Labour’s negotiating team acknowledges that a future parliament could renegotiate any agreement, it wishes to ensure that the next Conservative prime minister cannot change the deal before an election. Rebecca Long Bailey, Labour’s spokesperson on business, told the BBC at the weekend that any deal with the Conservatives must be “entrenched so that a future Conservative leader wouldn’t be able to rip up the changes that have been agreed” — in other words, “Boris-proofed”. John McDonnell, Labour ’s shadow chancellor, said on Tuesday that any protections to stop a deal being unpicked also had to be in a treaty. “It’s more than it being in legislation, it’s about the agreement we have with the EU,” he said. Meanwhile there is deep disdain for Mr Johnson among many European governments, which see him as the wayward leader of a Brexit campaign built on false promises. But that is offset by growing impatience with Mrs May’s government, which lacks the authority in Westminster to see through on agreements made in Brussels. “Give us anyone who has a majority,” said one senior EU diplomat, who hoped for a quick resolution to the Brexit saga, one way or another.

ECB renews vow to hold rates steady until ‘at least’ end of 2019 Central bank warns of persistent weakness in bloc’s economy CLAIRE JONES

he European Central Bank has left interest rates on hold at record lows and reiterated its commitment to keep monetary stimulus in place until the eurozone’s economic slowdown reverses course. In its latest monetary policy announcement on Wednesday the bank’s governing council kept its benchmark main refinancing rate at zero and its deposit rate at minus 0.4 per cent. The council said it expected to keep official borrowing costs for the region on hold “at least through the end of 2019”. The 25-member body also

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s a i d i t p l a n n e d t o re i nv e s t bonds maturing under its €2.6tn quantitative easing programme “for an extended period of time past the date when it starts raising the key ECB interest rates, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation”. The decision to leave policy unchanged was widely expected after the bank unveiled new stimulus measures at its March policy vote. Wednesday’s announcement came as the ECB acknowledged that the eurozone is still struggling to recover from a slowdown @Businessdayng

that started in the second half of last year. On Tuesday the International Monetary Fund became the latest organisation to cut its 2019 forecast for growth in the region — bringing it closer to other estimates, including the ECB, which now forecasts an expansion of just 1.1 per cent. The central bank’s policymakers think growth is more likely to miss that target than exceed it, warning that risks to the outlook have “moved to the downside”. ECB president Mario Draghi has so far insisted that the eurozone’s return to stronger growth has been “delayed” rather than “derailed”.

Thursday 11 April 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

US-China trade dispute still hot air for some investors Notion that risky assets will rip higher once Xi and Trump sign a deal may be faulty KATIE MARTIN

nce the US and China successfully wrap up their trade talks, global markets are in for a further rally. Or so the theory goes. After all, you can already see it in the world-beating 30 per cent rally in the Shanghai Composite stock index so far this year, and in the way global stocks bob higher and lower on smoke signals from the talks. It is a simple and compelling argument. But the notion that risky assets are poised to rip higher once President Donald Trump and President Xi Jinping sign on the dotted line, may be faulty. In part, that is because the so-called trade war is still, to some investors, hot air. “Global trade wars are the dog that didn’t bark,” wrote Sonal Desai, chief investment officer for fixed income at investment house Franklin Templeton, in a recent note. “Global trade hasn’t collapsed, and the global economy hasn’t stalled.” Also, many investors do not buy the idea that talks are about to fall apart without an agreement. (See also: Brexit.) A broadly positive outcome is already baked in. “The consensus is that there will be a deal,” said Eddie Perkin, chief investment officer at Eaton Vance, the $450bn-in-assets fund manager. “So I think it’s a ‘sell-the-news’ event now,” he said, especially if the deal delivers little more than bragging rights to Mr Trump.

Of course, complacency can be bad for the health, and it is a brave assumption that Mr Trump’s determination to reset trade relationships will stop at China. The next destination could well be Europe, with potentially grim ramifications for export-heavy German stocks, in particular. Having already raised the possibility of tighter controls on imports of European cars, the US president has cranked up the pressure. “The World Trade Organization finds that the European Union subsidies to Airbus has adversely impacted the United States, which will now put Tariffs on $11 Billion of EU products!” he said in a tweet this week. The fear of a lurch lower in markets if talks fail to bear fruit, does serve some purpose. In 1993, President Bill Clinton’s adviser James Carville famously observed that he would like to be reincarnated as the bond market, with its awe-inspiring power to force change from the government. “The stock market is now the vigilante,” said Mr Perkin. “If the trade deal does not seem to be happening, then markets sell off, and that gets people back to the negotiating table. Trump regards the stock market as a key constituency.” Mr Trump would doubtless love nothing more than to see a rally for which he can claim credit. If he strikes a deal and global stocks still head the other way, the adviser tasked with explaining it to him will not have a fun day.

The big tech companies are smothering small start-ups Minor changes to a platform’s algorithms can harm a business’s traffic overnight ALAN PATRICOF

rom my vantage point in the venture capital industry, it is apparent that many start-ups are failing or changing their business models because of their dependence on Amazon, Facebook or Google. The situation has progressed to the point where venture capitalists discount companies that rely on a digital platform to reach their markets. It’s no secret that these corporations rule their overlapping corners of the digital landscape and control the data that flows through them: Amazon captured almost 50 per cent of ecommerce transactions in 2018; Google owns 90 per cent of online search; and Facebook rules social media with more than half of the US market. Advertisers follow the traffic, giving these platforms a combined 65 per cent of online ad revenue. Cash and customer data are like the stone walls and moat of a medieval fortress — the one unbreachable, the other unsurpassable. Amazon’s plans to open a chain of bricks-and-mortar grocery stores separate from Whole Foods is a case in point. It reads

like a new game from the same playbook Amazon used to develop the discount online bookselling model that helped shutter independent bookstores, after which Amazon launched a chain of bricks-and-mortar bookstores — the height of chutzpah. With grocery, the company is well-positioned to analyse data from its digital platform and set up the infrastructure to address demand well ahead of the competition. Though Amazon hasn’t announced the locations for its new grocery stores, reports suggest it is looking at existing shopping centres and ex-urban main streets, ostensibly filling the holes left by failing chains and mom-and-pop stores. Perhaps even more concerning is that Amazon is developing its own products in books, housewares, clothing and cosmetics — and can arguably nudge customers to them. Anyone who thinks Amazon is uniquely positioned to undermine competitors should consider that the EU has levied more than $10bn in total fines against Google for breaches of competition law (decisions the search group has appealed against). www.businessday.ng

US president Donald Trump during a trade meeting with Liu He, China’s vice-premier, in the Oval Office in February © Bloomberg

ETF investor inflows tumble 28% in first quarter Lyxor and State Street Global Advisors among worst performers so far in 2019 CHRIS FLOOD

his year’s battle between providers of exchange traded funds to drum up new business has made an anaemic start with worldwide investor inflows down more than a quarter in the first three months. The weaker growth from almost all ETF managers comes in spite of a 13 per cent first-quarter rally for the S&P 500, the US equity benchmark, and strong gains across other equity markets globally. Investors ploughed $99.1bn into ETFs (funds and products) in the first three months, down 28 per cent on the $136.8bn registered in last year’s first quarter, according to preliminary data from ETFGI, the London consultancy. Lyxor, the Paris-based asset manager, reported the weakest quarterly performance with outflows of $3.1bn. It followed a disappointing 2018 performance for Lyxor’s ETF business when it gathered just $2.7bn over the whole of last year. Arnaud Llinas, head of Lyxor’s ETF business, said there were “significant outflows” from EuroStoxx 50 ETFs as well as indi-

vidual country funds tracking stock markets in France, Italy and Spain. Jobs will be cut this year at Lyxor after its parent Société Générale said it would reduce staff numbers by 1,600 as part of a plan to cut costs by €500m. Société Générale declined to disclose how many jobs would be cut at Lyxor. State Street, the third-largest ETF provider globally, also made a weak start with net outflows of $1.8bn while China Asset Management registered $1.9bn in ETF withdrawals. New business for BlackRock’s iShares division, the world’s largest ETF manager, dropped 13 per cent to $29.3bn. Pennsylvania-based Vanguard, the nearest rival to BlackRock, attracted ETF inflows of $19.2bn, a decline of 19.2 per cent. The unexpected shift in monetary policy by the US Federal Reserve, which signalled last month that it would refrain from raising interest rates for the rest of the year, stimulated inflows into ETFs linked to fixed-income markets. Bond ETFs gathered record inflows of $56.4bn in the

first quarter, more than double the same period last year and taking assets in fixed-income ETFs closer to the $1tn milestone. Matthew Bartolini, head of Americas research at State Street Global Advisors, said the interest rate shift by the Fed and other central banks should further support risk assets such as equities and high-yield bonds. “Just don’t expect the pace of gains [seen in the first quarter] to continue this late into the cycle,” he said. Bank of America Merrill Lynch said investor optimism appeared to be improving with clients rotating out of single stocks into ETFs for a fourth consecutive week ending April 1. The consensus forecast among Wall Street analysts is for earnings growth for the S&P 500 to slow to 3.5 per cent in 2019 from about 21 per cent last year due to weaker US growth and trade tension between Washington and Beijing. Savita Subramanian, head of US equity and quantitative strategy at BofA, said the outcome of the trade negotiations with China was “the key factor” for US earnings in 2019.

About that $100bn+ Saudi Aramco order book COLBY SMITH

n Tuesday, Saudi Arabia’s state-owned oil company Saudi Aramco achieved a remarkable feat for its first ever international bond. The company received more than $100bn in orders for its $12bn debut, a record in the emerging world and leagues above the $67bn of demand Saudi Arabia saw for its first government bond issuance in 2016. The $100bn+ figure is no doubt a headline-grabber, and according to Hans Humes at Greylock Capital, quite an accomplishment: My sense is that the objective was to make this the largest order book in the history of the capital markets,

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and you have to give them credit for doing that. But, there’s a risk of reading too much into the size of the order book. More often than not, it is a skewed metric of demand. Here’s how it plays out according to one veteran distressed debt investor: Asset managers not only have to keep tabs on the fundamentals of a deal but how it is feeling in the markets. That momentum can build on itself, and when you see $100bn in orders, you have to do the arithmetic. If it’s X times oversubscribed, you’re going to juice the books. What this means is that investors seeking a certain portion of a deal will go in with a larger order than @Businessdayng

they really want, anticipating that their actual allocation will be smaller and more in line with what they were seeking in the first place. The hotter the deal, the more investors have to overstate their order, according to another investor: Once a deal gets the feel that it is hot, there’s this idea that you have to put in ten to get one. Still, $100bn+ is a lot -- a “home run” as Humes puts it. Plus, he says you can’t argue with the fundamentals of Aramco, which is the most profitable company in the world according to recent disclosures. The bonds were trading down today, though. Perhaps investors know they should take the order book with a grain of salt.

Thursday 11 April 2019

BUSINESS DAY

ANALYSIS

Israel’s Netanyahu cements his reputation as a political survivor Prime minister’s gambles in divisive campaign deliver him fifth term MEHUL SRIVASTAVA AND ANDREW ENGLAND

s the first ballots were counted, it appeared that the crown was about to slip from Benjamin Netanyahu’s head. His rival, Benny Gantz, a retired military chief and political newcomer, even claimed victory based on what he saw in exit polls. But by the end of night the man nicknamed “Bibi” was back in the ascendancy, virtually assured of a fifth term in office and a chance to become Israel’s longest-serving leader. His Likud party now heads a ragtag pack of rightwing political groups — including ultraorthodox Jews, anti-Arab racists and free marketeers — that emerged large enough to form a governing

with a typically toxic strategy, launching relentless attacks on Arab leaders and the left — who he painted as Mr Gantz’s base — while avoiding policy discussions and eschewing the traditional media that he distrusts. “He’s a political genius,” said Emmanuel Navon, a professor at Tel Aviv University and a fellow at the rightwing Kohelet Policy Forum. “He’s basically unbeatable — he has the dream coalition to stay on, even with an indictment.” He also displayed a ruthlessness with his former coalition allies, seeking to win votes from rightwing luminaries Ayelet Shaked and Naftali Bennett, whose new pro-settler party appeared doomed to fall short of the 3.25 per cent of the vote required to enter parliament.

Israeli prime minister Benjamin Netanyahu embraces his wife Sara during a Likud party gathering after the elections © AFP

coalition with up to 65 seats in the 120-member Knesset. “You brought us an achievement beyond imagination, almost incomprehensible, despite a hostile media,” Mr Netanyahu told supporters. Victory has cemented his reputation as an unrivalled political strategist, but also eases his next urgent campaign: fighting back against corruption allegations that could ultimately land him in jail. The threat of an impending criminal indictment for corruption prompted Mr Netanyahu to take his first audacious gamble, which was to call early elections in December. It was an apparent bid to outrun the attorney-general in a two-year investigation that has placed Mr Netanyahu at the centre of a corruption scandal involving allegations of cosiness with tycoons, media manipulation and tales of champagne and cigars being traded for favours. Mr Netanyahu has denied the allegations. Instead of shying away from the scandal, he met the investigation head on, transforming it into a rallying cry for his base. In Mr Gantz, head of the Blue and White party, he was taking on a man with impeccable security credentials who had wooed centrist and left-leaning voters and offered hope to those who yearned for an end to the reign of “King Bibi”. But Mr Netanyahu responded

It was a risky move that boosted Likud to the second highest number of seats — 35 — that it has secured since the party was established. Mr Gantz’s Blue and White party also garnered 35 seats but it lacks sufficient coalition partners in Israel’s fragmented political landscape, underscoring how the right has come to dominate Israeli politics on Mr Netanyahu’s watch. The 69-year-old prime minister was relentless: on Tuesday he showed up at Israeli beaches, exhorting sunbathing supporters to go to the polls. Idan Oron, a political adviser to a member of Blue and White, said Mr Netanyahu’s goal had been “delegitimising” the opposition. “In the last day, he made sure his supporters [were mobilised with] ‘god forbid the leftwing will establish a coalition’. My belief is that his largest crime is in the way he has divided and separated Israelis.” Mr Netanyahu also cashed in on the largesse of his most powerfully ally, US president Donald Trump, who delivered the recognition of Israel’s claim to the Syrian Golan Heights and a red-carpet welcome at the White House just weeks before the elections. That was followed up with a trip to Moscow where the prime minister held talks with Russian president Vladimir Putin. Voters consistently praised Mr Netanyahu’s relationship with global leaders. www.businessday.ng

Portugal: a European path out of austerity?

The economy has rebounded since the centre-left government reversed post-crisis budget cuts PETER WISE AND BEN HALL

urope is still struggling to find a label for the new brand of socialism that has lifted Portugal’s fortunes over the past three and a half years. In the Portuguese media, the term geringonça, meaning “an odd contraption”, has stuck. Peter Mandelson, the British Labour peer, has suggested “the fourth way”. António Costa, the prime minister who gained office by forging a surprising partnership between the moderate and hard left, simply calls it “turning the page on austerity”. One of the few successful centreleft politicians in Europe, Mr Costa is on course for re-election this year, having presided over an economic turnround that has restored confidence to Portugal, a country that the European debt crisis brought to its knees. Unemployment has halved to 6.7 per cent and the budget deficit could be eliminated this year for the first time in over 40 years. Across the continent governing centre-left parties have been crushed by austerity policies. France and Italy were unable to kickstart their weak economies as they stuck to the EU’s tough public deficit limits. Greece’s far-left Syriza government won power by railing against the detailed austerity measures required under its bailouts fromthe EU and IMF — only to implement many of them once in office. Portugal’s centre-left government took a different course. It initially clashed with Brussels by reversing public spending cuts and allowing the deficit to swell well above agreed objectives, before ultimately proving to EU officials that by putting more money in people’s pockets it could lift growth, and make it easier to meet budget targets. “People were highly sceptical about our economic policies,” Mr Costa tells the Financial Times. “But we have shown that it is possible to raise incomes, lift private investment, cut unemployment and still have sound public finances.” As he heads towards an October general election with a double-digit poll lead, some European politicians now see Mr Costa as something of a model for Europe’s beleaguered social democrats. “Public spending has stayed under control, unit labour costs have been reduced, hence they have been able to attract more foreign direct investment and increase their exports,” says Ivan Scalfarotto, a former Italian trade minister and centre-left MP. “Costa, also, is a good communicator: he stressed the idea that ‘sacrifice was over’ and has been effective at keeping his leftwing coalition together.” Portugal will also be an important voice in a highly charged debate about overhauling the eurozone’s fiscal rules. Most eurozone mem-

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bers believe the rules have become too complex and critics see them as either too rigid or weak. Mr Costa believes he has shown there is another way. In Brussels, Mário Centeno, Mr Costa’s finance minister, stands at the centre of EU economic policymaking as president of the eurogroup of finance ministers. His election to the role, seen as recognition of his fiscal success, came after Wolfgang Schäuble, then German finance minister, described him as the “Cristiano Ronaldo” of his EU peers, after the Portuguese football star. For many on the European left, Mr Costa is the prime minister who showed that the financial crisis could be tackled without destroying jobs and living standards. As he himself puts it: “It’s no longer a matter of political discussion, it’s a matter of fact”. For others, Mr Costa has merely had the good fortune of being lifted on the tide of a global recovery, falling oil prices, a tourism boom and a sharp fall in the cost of servicing one of Europe’s heaviest debt burdens — a turnround, they say, that would have been impossible without the European Central Bank’s government bond-buying. “While Costa’s political acumen cannot be denied, it should not be forgotten that his government has faced very favourable macroeconomic conditions over the past three years,” says Antonio Barroso, deputy director of research at Teneo Intelligence. Daniel Traça, dean of Lisbon’s Nova School of Business and Economics, whose gleaming new campus is itself testament to Portugal’s recovery, believes Mr Costa’s main accomplishment lies in ensuring that the recovery has benefited the most vulnerable people. This, he says, has convinced the country that “sound public accounts are compatible with social cohesion”. For his political opponents, however, Mr Costa’s claim to have overturned austerity is mere rhetoric for what is, at best, “austerity lite”. They charge him with fiscal sleight of hand, offsetting income tax cuts with higher indirect taxes and balancing the books by restraining public investment. Pedro Passos Coelho, the former centre-right prime minister, recently accused the PS government of cutting health and education spending even more than he did during the bailout. “Things have improved, but life was much better before the crisis than it is today,” says Filipa Bivar, an insurance worker. “The PS is managing the economy well, but has benefited enormously from the difficult decisions made by the previous government.” She fears popular measures could lead to “big problems down the road”. Chart showing Portugal – recovery is well entrenched @Businessdayng

In the public sector, workers are pressing Mr Costa to go much further in overturning austerity. Hundred of thousands of state workers, from nurses and teachers to police inspectors and prison guards, have been staging strikes and protests to recover earnings lost during the crisis. “It’s normal that after a period of great pressure everybody wants everything right now,” says Mr Costa. “A good government has to manage social needs [in keeping] with its fiscal capacity and political priorities.” Although not as traumatic as the experience of Greece, Portugal’s rescue was bruising. In an effort to control ballooning debt, stabilise precarious banks and introduce growthfriendly reforms, Lisbon negotiated a 2011-2014 austerity programme with the Euorpean Commission, IMF and the ECB — the so-called troika — in return for a €78bn bailout. Years of economic pain followed. The then centre-right government under Mr Passos Coelho made drastic cuts to health, education and welfare spending, along with state pensions and bank holidays. Taxes were increased. In the public sector, working hours were extended while the minimum wage, salaries, recruitment and career progressions were frozen. Under the troika’s “fiscal consolidation strategy”, Portugal’s budget deficit fell from 11.2 per cent of gross domestic product in 2011 to 4.5 per cent per cent in 2014, excluding one-offs. The current account moved into surplus as domestic demand collapsed and companies were forced to export. Public debt, however, continued to increase, reaching 130.6 per cent GDP, an all-time high, in 2014. Tens of thousands of businesses went to the wall in the country’s worst recession in almost 40 years. The welfare net was stretched to breaking point as unemployment soared above 17 per cent, leaving more than 40 per cent of under-25s out of work. Hundreds of thousands of mainly young, skilled workers, emigrated — a loss of more than 4 per cent of the working age population between 2008 and 2016. Mr Costa, who was Lisbon’s mayor during the crisis years, accused the Passos Coelho government of using the bailout as “cover” for a neoliberal agenda of rolling back state services, cutting labour costs and privatising public assets. The bailout had impoverished the nation, he railed in 2015, “creating jobs for nurses, but in the UK, not Portugal”. Once in office, he set about turning back the clock. “The troika cut public sector wages and state pensions by 30 per cent, we gave that 30 per cent back,” he says. He also reversed austerity measures affecting working hours, holidays and taxes, at the same time lifting the minimum wage by 20 per cent over two years.

Thursday 11 April 2019

BUSINESS DAY

GARDEN CITYBUSINESS DIGEST Online gangsters: FIDA moves to sanitise PH markets for safety of women IGNATIUS CHUKWU & GLADYS NWEKE

ederation of International Women Lawyers (FIDA) in Rivers State has moved to sanitise markets in the state to protect women going to do shopping. It has emerged that some gangs now push for huge online traffic by posting live-strip shows. In the absence of real scenes, their members lurk around markets in the cities and select females as targets. They pounce on one, accuse her of stealing, and their members begin to beat her and soon, she is made naked. They film the striping and soon, the video goes viral. They now cash in with huge traffic. It has happened in Anambra State and now in PH. Now, FIDA says it has uncovered the trick. They have investigated one incident that took place at Mile 3 Market in PH and found it to be a hoax. The woman did

not steal anything. Some of the persons tricked into joining the beating are pleading for forgiveness. FIDA and some other human rights groups have insisted on the full wrath of the law. They have pledged to get justice for a middle-aged woman identified as Margaret Alex who was stripped naked on Monday 1st April 2019 at the popular Mile 3 market park for alleged stealing. The chairperson of FIDA, Anthonia Osademe, said Margaret’s matter has been reported to FIDA. She said that the women lawyers would take up the matter and pursue justice for Margaret. She said last week it was in Anambra and this week it’s Port Harcourt. She called on the police to urgently conclude investigation on the Mile 3 incident and charge all suspects to court for prosecution. However, the Civil Rights Council of Nigeria has joined to condemn the stripping of a married woman in the Mile

PORT HARCOURT BY BOAT

IGNATIUS CHUKWU

s cars and commuter buses ferry fast past the entrance to the University of Nigeria Teaching Hospital in Enugu (UNTH) on Aba-PH Expressway near Ihe in Awgwu Local Council Area of Enugu State, the shrubbery formed by cashew trees frame the beautiful gates and adjoining buildings along the Apian Way to give the impression of serenity and pure heaven. This image will remain so in your mind forever until you have cause to step inside. Pray that nothing takes you there. The first shock that will hit you is that you are on your own. Let’s look at water situation. Enugu is atop the hill; that is why it is called Enugu (Hilltop) town. So, water likes to find its level and the level is always at the base of a hill, not on the top. So, the city has issue with water. Often, they prefer tanks. In the UNTH, water is always scarce. Relations looking after patients engage in water hunting or expeditions. Those staying upstairs usually climb down at night and hunt around and often find ways to open some locked tanks and ‘steal’ water. Many hospitals discourage people to stay with patients. They provide for food and all other support facilities so that relations can come sparingly. Not in UNTH. If you do not stay there, your patient can only die; and must suffer very much in the process. Attention to patients is the real issue. Being a teaching hospital, they assign patients to particular lecturers-

3 Market area in Rivers State. The spokesperson of the Civil Rights Council, Prince Wiro, described the act as a barbaric and backward attitude of hoodlums at the Mile 3 Park in Diobu, Port Harcourt. Margret Alex, whose striping and the video were recorded and published on Facebook asked her accuser to show proof of what she stole that led to the barbaric

manner in which she was dishonoured publicly on allegations or face the law. The mother of two whose wounds and scars are still obvious to all was wrongfully accused of stealing at Mile 3 Market and stripped naked. She is seeking justice. Alex, when contacted, said she went to the said market to buy items to restock her little table she used in

trading at home and to also buy provision for her family. According to her, she was shocked as she was lifting things from a particular shop when she remembered that her purse was not where she kept it. “I immediately dropped the items and tried to re-adjust my things to locate my purse so as not to lose money in the market since Mile 3 was notorious for pickpockets. At that moment, one of the hoodlums accused me of stealing.” “He started shouting thief! thief! Before I knew it people gathered me; before I know it they started beating me from every corner, asking me to bring it out. The next thing, one union man later identified as John striped me naked and they started filming my nakedness. “Before the other union people came and intervened in the matter, they searched my bags, asked the man who said I stole to show what I stole from him. He didn’t see

anything. “I was not allowed to even speak or defend myself. I was beaten to stupor and even so weak to help myself. Later the union people came to tell me sorry and gave me my clothes to wear and go home just like that.” She told BusinessDay that her naked pictures circulating on social media are tearing her family apart. “Since my husband saw the pictures, he has not eaten. He has gone to the union people to ask them why they did this to his wife and they pleaded with him to let by-gone be by-gone but my naked pictures are still online and circulating. ”I just want justice in this matter. Government should come and help me so that they can stop circulating my pictures online. Ask my husband here, I have never stolen his money not to talk of going to the market to steal where I was trying not to be a victim of pickpockets. I need justice”’

UNTH: The gateway to agony doctors. These lecturer-doctors are difficult to get. It is only the student-doctor attached to each case that may be serious and present. When the lecturers come, they gather around your file to review the clamping and teach everybody with your matter, which is not an issue. What is important is when these lecturer-doctors will have time for you. Disaster! The most threatening matter in the UNTH is space to admit patients. Often, a patient will visit for a week before space can come out for admission, but who cares? Sometimes, patients give up the ghost while coming and going without space. Being a teaching hospital and tertiary medical institution, most of the patients come from far places, having been referred there. They are often strangers in the place, only to find they have no space to be admitted. This situation has made patients to be admitted randomly instead of being kept in dedicated sections according to their ailments. Disaster number two: Nurses do not take or give blood. A strict rule in UNTH is that nurses will not take the patients blood or give, but 95 per cent of cases need blood samples. In the face of absence of your own doctor that is assigned to your case, and nurses that will not take your blood sample, how would a patient be treated? This is how cases deteriorate until death do them part. You will have tests waiting to be done but there is nobody to take your blood sample. The rule may be for a reason but if a qualified nurse cannot take one’s blood sample, what was she being taught in school for al the high fees they pay? When you procure blood, there would hardly be anybody to transfuse it. Every doctor will handle his or her own patient and nurses cannot touch you. You lie down there in agony and curse the UNTH, the Government, www.businessday.ng

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humanity, until you either die or miraculously survive. Many eventually die at the test centres or relocate or flee. Even when you buy the blood, they may reject it, on ground that you bought it from unreliable blood banks. These are people who do not have any bank only to discriminate. Were not supposed to teach the lower hospitals? Most clinics would have been saying, ‘go to UNTH so we can be sure of the blood’. Drugs and tests are not done there. A tertiary medical institution ought to be the centre of laboratory fascination and highest point of disease investigation. For where? In the UNTH, you must trek out to buy eve™ry single drug, do every single test. Sometimes, a patient buys the entire equipment so she can be tested. Patient™s travel to the city every now and then to be tested because the highest medical centre in Eastern Nigeria does not have functional labs. So, if you are a relation, get ready to travel and trek all day and night hinting for drugs, labs, water, and everything you need. Toilets: If you are eating right now, please forgive us. The UNTH has centres of disease distribution called toilets.

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The most threatening matter in the UNTH is space to admit patients. Often, a patient will visit for a week before space can come out for admission, but who cares

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In the absence of water, everything dumps there for the whole day. If you come, you add your own and increase the dumpsite and help to incubate strange diseases. Disease plus disease, you get cured. Instead, it is Park Lane Hospital, a government hospital, which helps out, instead of the other way round. People frustrated and neglected at the UNTH escape to Park Lane for some help. Wait oh! We seem to forget that the UNTH is owned by the UNN, assumed to now be Nigeria’s most decadent university. It is a university where you know when you come in but will never know when you go, if ever you will graduate. It is not because you failed any course but because nobody keeps any kind of records. You may spend three years after graduation searching for your results. The issue is, who supervises people in the UNN and UNTH? Nobody seems to. A lecturer teaches if he wants to, he scores you if he wants to, he submits the result if he wants to, and so on. The admin staff members keep your results if they want to. You may think sorting should solve it. No way. It’s not about bribes. If you want to give, who will take? This is because the person has no idea where to find the results. So, every year, thousands graduate, but thousands more do not graduate, and yet, somebody heads that university and people were education ministers. Once in a while, the UNN would manufacture one thing, such as the biogas fuel that may generate autonomous power supply in the school and environs, and the news would go far and wide, masking their rot. This is at a time when universities abroad are fabricating human beings through cloning and robotics and sending people to the moon for research.

Thursday 11 April 2019

BUSINESS DAY

Investing in Rivers State Gov Wike fired on for more development in his 2nd term • Says no more business as usual, some ministries to merge latory visit by the Forum of Permanent Secretaries at the Government House, Port Harcourt on Saturday, Gov Wike urged government officials to use their experience to enhance development in the state. He said that the State Government is likely to merge ministries for greater efficiency, pointing out the number of existing ministries is no longer sustainable. He thanked God for ensuring that he emerged victorious despite all odds. He said: “We will review so many things, so that we protect our State. I urge you to sit up because it will no longer be business as usual. We will work to see that things continue to improve in the state”. Governor Wike noted that Rivers people should expect the next

Stories by Ignatius Chukwu

any have complained that funds were not flowing freely in the present administration in Rivers State but the governor, Nyesom Wike, has promised even tighter belts, saying it will no longer be business as usual. He has revealed plans to merge some ministries. He has also declared that his second term is another opportunity to further serve Rivers people and intensify development across the state. Wike declared that the governance structure in the state would be reviewed and energised to serve the people and check inefficiency of public officials. Speaking during a congratu-

Governor Nyesom Wike

Rivers to strengthen building subsector to attract investments

Stop patronizing roadside drugs – NAFDAC

• News measures to stop building collapse soon

roperty and estates constitute a huge sector of the Rivers State economy. This sub-sector is however considered still at the budding stage with high-rise buildings still at average of three storeys. The tallest building in the Niger Delta remains Point Block at the Rivers State Secretariat (Alfred Diete-Spiff) complex although a 19-floor affais is struggling to rise up in Yenagoa to smash the PH record. The problem has been poor supervision of building construction and subsequent crashes of towers. Some 15 years ago, rash of crashes seized the Garden City and regulations were instituted to stem it. Now, the crash of a 7-Storey building on Woji Road in PH seemed to quake the building world in the Nigeria especially for the fact that the soil nature is implicated. This has warned other Niger Delta states on the danger of putting towering buildings any how in the region. The state government set up a judicial panel which has named those to be blamed and pointed some additional regulations to reform the built-up industry in the state. As the government finds its voice again after the elections, it has released the white paper from the report. The Rivers State Government declared that in line with the recommendations of the Judicial Commission of Inquiry it will comprehensively reform the procedures

and processes relating to building approvals and actual construction of buildings to eliminate failure of buildings in the future. The government added that the collapsed 7-Storey building was not covered by any approval and that the one obtained in July 2014 was for a four-five floor building. “Government accepted to push for a reviewed law to punish any developer whose building collapses due to negligence or other acts resulting in deaths. The Rivers State Executive Council noted that 18 persons died while 22 others suffered various degrees of injuries. Thus, the state government has

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directed the State Attorney General to prosecute Francis Allagoa, the owner of the 7-Storey building that collapsed in Port Harcourt. The Rivers State Government also directed the State Attorney General to prosecute any person whose actions constituted criminality as established by the Judicial Commission of Inquiry that investigated the collapsed 7-storey building. Briefing journalists after the State Executive Council meeting presided over by Gov Nyesom Wike last week, Commissioner of Information and Communications, Emma Okah, announced that the council accepted that it will be

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strata of development, which will improve the living condition of the people. He gave example with the collapsed 7-storey building, saying the disaster occurred because of the inefficiency of officials of the State Ministry of Urban Development and Physical Planning, who failed to carry out their assigned roles. Head of Ser vice of Rivers State, Rufus Godwins, said that the visit was in solidarity with the Governor over his historic victory at the poll. Chairman of the Rivers State Forum of Permanent Secretaries, George Nwaeke, described the victory as well deserved and the will of Rivers people. Highpoint of the visit was the presentation of a congratulatory card to the Rivers State Governor by the Permanent Secretaries.

inappropriate to recall the Commissioner of Urban Development and Physical Planning, Reason Onya, because of the inappropriate actions he took and commissions he committed. He said: “The Rivers State Government accepts that the owner of the building, Francis J. Allagoa should bear all liability regarding compensation to families of the deceased persons and individual expenses of those injured. “Allagoa is also to bear the cost and make good the damage done to the adjoining property owned by Edna Ezekiel Hart”, the government said. The Rivers State Government directed the State Civil Service Commission to take disciplinary action against Town Planner Edmund Obinna, Director of Buildings and Plan Approvals because his actions fell short of expectations. The Council also directed the State Civil Service Commission to take disciplinary action against Rev Dr. Mina Aprioku, Director of Development Control for professional deficiency. The Attorney General of the State was directed to prosecute Engr Adeniyi Ibiyeye and Architect Timiebi Reuben for professional misconduct. The Council resolved to report Engr Ibiyeye to the Nigerian Society of Engineers and the Council for the Regulation of Engineering in Nigeria for necessary disciplinary action. @Businessdayng

he National Agency for Food and Drug Administration and Control (NAFDAC) has advised Niger Delta people to stop buying drugs from hawkers and unauthorised outlets. Chinelo Ejeh, NAFDAC’s SouthSouth Zonal Coordinator, gave the advice while hosting some secondary school students from the Bridge School in Worji, Port Harcourt. Ejeh, who lectured the visiting

students on the agency’s mandate, regulatory duties and how to identify NAFDAC number on products, also reminded them that hawking of drugs was prohibited. She also taught the students how to use the Mobile Authentication System (MAS) inscribed with silver panel on anti-malaria drugs and antibiotics to identify fake or genuine drugs. They were also told the processes involved in clinical trials before drugs are fit for human consumption and registered, a statement by Mr Cyril Monye, the Public Relations Officer for the South-South Zone.

Thursday 11 April 2019

BUSINESS DAY

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Thursday 11 April 2019

BUSINESS DAY

TECHTALK Innovation

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

Broadband Infrastructure

Bank IT Security

Nigeria, other African countries take digitalization message to the world in Dubai FRANK ELEANYA, Dubai

igeria, Ghana, Cameroon, Mali and many others were among the countries that seized the opportunities presented by the ongoing Annual Investment Meeting (AIM) in Dubai to showcase their countries’ potentials to investors from over 100 nations. The three days event which is in its 9th edition was initiated by the Ministry of Economy under the patronage of Sheikh Mohammed Bin Rashid All Maktoum, UAE Vice President, Prime Minister and Ruler of Dubai, to bridge the gap between emerging countries and investors in the developed economies. The AIM 2019 also provided an opportunity for small businesses to meet and pitch to potential investors. “Every developing country must identify the gaps

in its preparedness are the digital divide – what are your data privacy and consumer protection laws, how much are you investing in fiber optics, etc,” Mukhisa Kituyi, Secretary General of the United Nations Conference on Trade and Development (UNCTAD), said on a panel on the first day of the event. He further disclosed that Egypt had enlisted the UNCTAD in their quest to become the ecommerce capital of

Africa. Nigeria was ably represented by President Muhammadu Buhari who was also the special guest of the Prime Minister and Ruler of Dubai. During his keynote address, the President urged governments around the world to prioritize regulation of the digital sector in view of the daily threats its misuse poses to public and private institutions. The President noted that

Brother International moves to revamp share in Nigeria’s printers market FRANK ELEANYA

s demand for futuristic printers technology grow in the Nigerian market, global brand Brother International (Gulf) FZE in partnership with Skysat Technologies has introduced a range of new products and pledging to become a multi-business enterprise with resilient DNA, and a track record of success that continually evolves to deliver profitable growth by meeting the challenges of changing times and environments. At a recent dealers meeting in Lagos, the company representatives from different parts of the world had the opportunity to engage local retailers, educate them on the functionality of a new range of products in

Nigeria as well as address customer feedback. Some of the products on display included Brother’s latest Ink Refill Tank System series which delivers enhanced print quality, paper handling capabilities and page yields for small businesses and large corporations. Specifically targeted for high print volume home offices and small workgroups, the new products have been designed to cater to the ever-changing needs of the consumer who is always looking for quality and cost-effective document management solutions. In a statement, BusinessDay received, the company noted the products capacity to adapt to different power source conditions. The products can be transported to where electrical work is in progress and controlled with

a laptop or through mobile apps, enabling customers to print labels in the market. “Labels printed on TZe tapes work well in industrial environments as they are resistant to water, grease and harsh conditions,” Brother International explained in a statement. “Labels of up to 24mm in width are accepted, supporting a wider range of applications.” The company also launched a new generation of feature-rich network scanners, designed to improve employee productivity and business efficiency. Developed for the heavy-duty scanning demands of the small and medium scale businesses, all offer full network functionality, which allows the machine to work harder for multiple users on various devices, without the need for a link to a central personal computer.

the digital world which is both intangible and real has borderless powers to impact the lives of billions of people, no matter how remote their physical locations are. He acknowledged that despite the threats it portends if unregulated, it represents enormous opportunities. “On the one hand, it has made the human race more productive and more efficient,” he said “Today we have digital banking, vir-

tual currencies and many social platforms that connect people and cultures. On the other we have seen platforms hijacked and manipulated as evidenced by the steady rise in fake news and cybercrimes.” Although Nigeria did not have an exhibition booth, Ondo and Niger states filled the void with separate exhibitions. A public official from Ondo state told BusinessDay that the government was prioritizing its gasification project to attract foreign investments into the state. The authorities believe that the state’s immense natural gas deposit remains very attractive in a future where fossil fuel is facing extinction. Officials from Ghana also had a major message for investors at the AIM 2019. According to one of the officials who will not be mentioned, the Ghanaian government is increasing its investment in digital technology to accelerate faster, cheaper and easier

way of doing business in the country. For instance the country now has a paperless port which ensures that clearance of goods at its national port is less time consuming for businesses. Kituyi noted that African governments have little to fear with digitalization in terms of losing their control on the economy. “Digitalization builds new efficiencies and creates new opportunities. There might be dislocations – but digitalization does not kill traditional economies,” he said. Adewale Tinubu, Group CEO of Oando Group said digitalization becomes more beneficial when the government and private sector work together. For him the role of government is to provide an enabling environment – ease of doing business – patent protection and crash the price of broadband because a costly bandwidth does not help inclusion.

Five cool things you should try in Gmail CALEB OJEWALE

mail turned 15 last week, and some new features though already existing for a while, were highlighted for users to optimise their usage and experience. Rev ie w attachments without opening mails: It is no longer necessary to open or scroll through long conversations to see attachments - with just a simple tap in your email, you can quickly view what has been sent to you. Also, you can hover over a message and RSVP to a calendar invite, archive an email thread or snooze an email until you’re ready to respond to it. Reminders to follow up on messages: With Nudging, Gmail will remind you to follow up and respond to

messages at the right time so nothing slips through the cracks. Google says nudging prevents 8 per cent of Gmail users from dropping the ball on an email each week and prevents 1.6M dropped balls for Enterprise users each month. Reply smartly: This has been available on mobile, and Smart Reply is now available on the web. It saves you time by suggesting three quick responses to emails you receive. Smart Reply uses machine learning to give you better responses the more you use it. So if you’re more of a “thanks!” than a “thanks.” person, it’ll suggest the response that is more authentic to you. Eliminate Junk with ease: That newsletter you thought would be really cool but turns out it’s not and you

haven’t had time to unsubscribe? Sorted! Gmail will proactively suggest when to unsubscribe from newsletters or offers you no longer care about. With one simple tap, you can declutter your inbox. Google says unsubscribe will lead to 60 per cent of Gmail users having fewer low-value emails in their inboxes. Control what happens to sent messages: With the confidential mode, you can set message expiration dates, revoke previously sent messages and limit recipient actions, like attachment downloads and forwarding. This extra layer of control makes you feel safe and secure when you share information with others. This is available to consumers now and will be available to business users later this year.

management modules. • TAG Heuer, Seedstars World official timekeeper, partnered with Seedstars Summit to reward the Innovation Prize to Wobot. The Indian startup allows companies to automate their surveillance systems with Artificial Intelligence. • Seedstars Vaccine Delivery Challenge was awarded to the South African startup Iyeza, by the Bill and Melinda Gates

Foundation. $10,000 will be provided to improve their web platform for the delivery of Human PapillomaVirus (HPV) vaccine to young women. • Also with the Bill and Melinda Gates Foundation, the Seedstars Malaria Challenge was awarded to Medsaf, through their platform, the Nigerian startup connects pharmacies and hospitals with safe and cost-effective medication.

Nigeria’s Medsaf wins Seedstars Malaria Challenge as Argentina’s Blended emerges Global Winner CALEB OJEWALE

igeria’s representatives at the Global Seedstars Competition may have put up their best efforts, but Blended, the leading school platform in Latin America, has emerged winner at one of the biggest technology startup competitions focusing on emerging markets and fast-growing

startup scenes. Blended, which improves communication between schools and families with a simple technology, came tops at the sixth edition of the Global Seedstars Summit, held in Lausanne, Switzerland. For the feat, Federico Hernandez, CFO & Founder of Blended clinched the $500,000 in equity investment prize dedicated to emerging economies’ startups. In addition to the $500,000

investment prize for the Seedstars Global Winner, Seedstars and its partners awarded seven additional prizes, including one clinched by Nigeria’s Medsaf: • Public Prize by Vaud: SPEI allowed the Summit attendees to vote for the best tech startups among the Seedstars Global Competition winners. YNMO from Saudi Arabia is a SaaS that allows disabilities service providers including schools, centers

& clinics to design and monitor individualized treatment plans. • Labeskey / Schoolap, from the Democratic Republic of the Congo, won the Transforming Education Prize by TRECC and the School of Management Fribourg, winning access to the Seedstars Growth Program worth $50,000. The online platform provides tools to improve the education system with school administration

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

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Thursday 11 April 2019

BUSINESS DAY

SPECIALREPORT on

Fund Management in Nigeria

Brief history of Mutual Fund management in Nigeria

n recent years, there has been a significant increase in the number of mutual funds in Nigeria. Mutual Funds are investment entities that pool money from several investors with

the aim of investing in money making opportunities such as shares, Treasury Bills, Bonds etc. The first Mutual Fund, “Massachusetts Investors Trust”, was set up in 1924 in the United States of America and

is still in operation. Mutual Funds in Nigeria came to the limelight in the 1990s and currently, there are over 80 Mutual Funds in Nigeria divided into several categories to cater for investors with different risk and return objec-

tives; religious beliefs; age group and income levels. Interestingly findings by BusinessDay show that ARM and IBTC were among the pioneers in the mutual funds industry in Nigeria.

Thursday 11 April 2019

BUSINESS DAY

SPECIALREPORT on

Fund Management in Nigeria

Savings culture in Nigeria as opposed to other African and advanced economies

avings, according to investopedia, is defined as the sum left over after the cost of a person’s consumer expenditure is subtracted from the amount of disposable income (income after tax) he earns in a given period of time. The only problem with this definition is that it gives prominence to expenditure first over savings. However, Warren Buffet, American business magnate, and one of the most successful investors of all time has a different approach to this. According to him, prioritise savings over meeting daily wants and expenses. “Do not save what is left after spending, but spend what is

left after savings,” he advised. Several great men have long emphasised the importance of savings for individuals and for nation-states. Wealthy nations have also learned the principles of savings. Norway is credited to have the largest Sovereign Wealth Fund which is put at $1 trillion. The fund invests the revenues of Norway’s oil and gas production and is a global investor with stakes in some 9,000 companies across 72 countries. Sadly, despite several awareness initiatives and the central bank’s target of reducing the unbanked population to 20 percent by 2020, the savings habit of an average Nigerian has been abysmally poor. Recent data provided by the World Bank

in its Global Index Database report show 118 million Nigerians do not have bank accounts. According to the report, only 40 percent of Nigerian adults have bank accounts. Globally, there is a very strong correlation between savings and economic growth and general wellbeing. In recognition of this, several economies and governments offer a number of saving and investment schemes that are tax-exempt in order to promote the culture of savings in the country. By investing in such saving schemes, the individuals can save a considerable amount of tax and the government in return invests the earned capital in various development projects that help to build a better economy.

2018 (N)

NAV: Net Asset Value Source: SEC www.businessday.ng

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Thursday 11 April 2019

BUSINESS DAY

Thursday 11 April 2019

BUSINESS DAY

SPECIALREPORT on

Fund Management in Nigeria

Purpose of investment in Mutual Funds (why do people invest)

nvestors generate money by earning interest on what they set aside or by buying assets that increase in value,Â and investment in mutual funds allows an investor to buy part of a pool of investments with the primary aim but not limited to getting returns on investment. Â Some of the reasons why mutual funds are a choice of investment for investors include: Income distribution: Mutual Funds distribute income periodically to its investors depending on the guidelines as stated in the Prospectus and Trust Deed. These distributions are done monthly, quarterly or annually. Risk and return: A mutual fund investor has the choice to either choose to invest in a safer class of assets, but with a lower potential return than other types of mutual funds or invest in an asset class that has higher risk but has the

Source: SEC

tendency to grow returns faster than other funds. Also, the return on a mutual fund is usually tracked as the change in its total value as a result of the performance of the underlying assets. Professional management: Investors may not have the skills and knowledge to manage their own investments or want to spend the time. Mutual funds allow them pool money with other investors and leave the specific investment decisions to a portfolio manager. Portfolio managers decide where to invest the money in the fund, and when to buy and sell investments. Corporate governance & Regulatory oversight: In Nigeria, the Securities and Exchange Commission (SEC) provides regulatory oversight of mutual funds, and there is a clear separation of roles in the administration of mutual funds. The Registrar is responsible for maintaining the

register of investors as well as processing distributions to all investors in the fund. They are also involved in the processing of redemptions and subscriptions into the fund. The regulation and governance of the sector makes investors confident in putting their resources in the various asset classes that are deemed best for them. Â Meanwhile, the fund managers hold the assets of the fund in favour of the investors while the Trustee ensures the fund manager and other parties of the Fund adhere to the guidelines and terms of the Trust Deed. Variety and liquidity: Investors have the option of redeeming their investments without any penalty after the minimum holding period. Although in Nigeria, most mutual funds have minimum holding periods, investors can also select a Fund aligned to their objectives and goals from a variety of mutual funds in the country.

Thursday 11 April 2019

COMPANY PROFILE Alpha Morgan Capital Managers Limited

lpha Morgan Capital is regi s t e re d a n d regulated by Securities & Exchange Commission (SEC) as Investment Banking Institution to operate as Portfolio/Funds Managers and Issuing House.

returns on our products and well supported by our passionate Wealth Managers and robust Technology. The Alpha Morgan IVY League product, our flagship product stands out from other competitors with a unique selling proposition. It offers competi-

is very close. These will include technology and large foreign funds managers. The fast growing funds mobilization technique by FINTECH would seriously disrupt fund managers. There would also be mergers and acquisitions resulting from;

Ade Buraimo, MD/CEO, Alpha Morgan Capital Limited.

Alpha Morgan has won lots of awards including the Lagos Commerce of Chamber and Industry (LCCI) Emerging Investment Banking Institution Award. The investment banking outfit has operated for almost a decade. Alpha Morgan manages funds/ wealth for High Net-worth Individual (HNI) and Institutional Investors. We are also a member of Funds Managers Association of Nigeria (FMAN). The interest of the retail Investors is growing geometrically resulting from literacy campaign, awareness of Securities & Exchange Commission and the growing easy access to on-line investment platforms, powered by technology and the interest of the millennial to save. Uniquely, we offer our clients good relationship management, creative solutions and advisory services, we also offer good

tive interest rates for investors in different categories (Gold, Silver and Platinum) catering for their income brackets and lifestyles. It offers exclusive additional incentives to investors including access to lounge and oversea tickets. In our financial inclusion drive, we have successfully trained through our ALPHA MORGAN ACADEMY, about 60 participants monthly on-line for the past 3 months. Graduates have opportunity to work with us or be recommended to other institutions or operate sorely as entrepreneurs. We also developed an online investment application, Alpha Morgan Invest App which will be launched in April, 2019 and will accommodate, appeal and attract everyone including the millennial to save, invest and grow wealth from their comfort zones. Disruption in the sector

Local collaborations Increased capitalization in quest for cost reduction, efficiency& market share requirement by regulations. Foreign inclusion/collaboration or footprints purposely for economies of scale, and industry leadership race. The Group Managing Director of Alpha Morgan Capital, Ade Buraimo who was Managing Director GTBank Sierra Leone where he won “Bank of the Year” Award, Chairman Ethics, Rules and Regulations of FMAN and was recently appointed 1st Vice President of the Nigeria National Advisory Council (NAC) of the Chartered Institute of Securities & Investments (CISI) UK. The CISI said “the future of funds/wealth management in Nigeria is very bright, but operators should be getting ready/prepared for disruptions, mergers & acquisition and foreign funds managers inclusions”.

BUSINESS DAY

Thursday 11 April 2019

BUSINESS DAY

INTERVIEW Mutual Funds are generally less risky and provide an opportunity for investors Investment One Funds Management Limited, a wholly-owned subsidiary of Investment One Financial Services Limited. The company is licensed by S.E.C to manage Mutual funds/Collective investment schemes and also provides investment products that are tailored to meet the unique investment needs and goals of their clients. TOPE OMOJOKUN, managing director of Investment One Funds Management , in this interview with DOLAPO ASHIRU speaks on the various issues regarding the Funds Management sector of the Nigerian economy.

indly intimate us of your mutual funds and underlying investment philosophy

Mutual Funds are generally less risky and provide an opportunity for investors, commonly referred to as Unitholders, to capitalize on the power of pooling funds and skills of the Fund Manager to achieve their investment objectives/goals. The unitholders own all the underlying assets and the returns generated by the assets in the Mutual Fund less fees. Mutual Funds cater to investors with different risk and return objectives, religious beliefs, age groups and income levels. The various Funds assist investors to achieve; capital preservation, income-generation and capital appreciation through investments in financial instruments such as money market instruments, bonds, stocks and other alternative asset classes depending on the objective and investment strategy of the Fund. Mutual funds can either be opened or closed ended. In Nigeria, there are several categories of mutual funds. These include: Money Market Funds, Fixed Income Funds, Real Estate Funds, Mixed Funds, Infrastructure Fund, Bond Funds, Equity Based Funds, Exchange Traded Funds (ETF), Ethical Funds What are the challenges affecting the fund management industry in Nigeria, how have you been able to manage the risks inherent? The challenges affecting the industry are: Knowledge gap/low investor education, High level of risk apathy and Distribution: as Mutual funds are sold not bought. We have managed these challenges through advocacy and investor education. The risks inherent are dependent on the underlying assets which would be discussed subsequently What are the average returns across the various asset classes of the types

location of resources across assets? The asset mix that can be prescribed is dependent on a number of factors some of which include: The client’s risk profile, The life cycle stage, Time horizon, Objective/ Purpose etc. It is important to take cognizance of these factors when recommending any type of mutual fund. How do you intend promoting financial inclusion in Nigeria

Tope Omojokun, managing director, Investment One Funds Management

of mutual funds you mentioned earlier? Mutual funds in Nigeria are broadly categorized as Money Market Funds (MMF), Fixed

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Technology allows providers ease of carrying out transactions. The swiftness, traceability and accountability promotes business efficiency and endears trust from investing public

Income Funds (FIF), Balanced/ Mixed Funds (BF), Pure Equity Funds (PEF), Dollar Denominated Funds (DDF), Shariah Compliant Funds (SCF). The asset mix/allocation of these various categories as approved by the Securities and Exchange Commission (SEC) are specified in the Trust deeds of the various funds. Over 70% of the Net Asset Value (NAV) in the industry is accounted for by MMFs. These are invested in a broad range of money market securities such as Treasury Bills, Commercial Papers, bank placements, etc. and offer relatively higher interest rates when compared with rates on savings accounts with commercial banks. It is noteworthy to mention that Money Market funds in Nigeria are rated by a SEC approved risk rating company. The industry average net return is currently about 13% per annum as per daily price list for mutual funds published by the Funds Managers Association of Nigeria (FMAN). The current performance does not guarantee future results. For other categories of mutual funds, bid and offer prices per unit change daily as they are determined by the values of the underlying assets in the portfolio and total

number of units of the Fund. How would you rate the participation of retail investors in fund management, what can drive their participation? The level of participation by retail investors in Nigeria is still very low with the bulk of investments attributed to institutional participation. There is need to create a lot more awareness across all level levels. Our regulators - the SEC has been driving financial literacy and is encouraging capital market operators to do likewise. Tools including virtual simulators, publications, seminars/forums, and platforms such as social media, webinars, short educational videos and so forth, could be used to drive investment education. Likewise, the use of Unstructured Supplementary Service Data otherwise known as USSD codes and strategic alliances can also trigger higher retail participation. Influx of Fintechs’ in Nigeria and their millennial-appeal cannot be ignored; a lot can still be done to attract this segment. Is there a best mix or ratio in creating portfolio for clients, how do you advise their al-

The Securities and Exchange Commission (SEC) and Fund Managers Association of Nigeria (FMAN) amongst others are part of the National Financial Inclusion Steering and Technical Committees. The Financial Inclusion strategy was adopted by the Central Bank of Nigeria (CBN) in 2012 to provide the road map that will guide and support stakeholder activities in advancing financial inclusion in the country. This strategy was created with defined KPIs based on access, usage, affordability, appropriateness, financial literacy, consumer protection and gender. This platform is very laudable as it has created a path for Fund Managers to follow in terms of promoting financial inclusion in the system. As a company, we use a number of channels to drive financial literacy – with emphasis on investment education at the retail level. Technology has also become a necessity and an enabler in this respect. What role does technology play in improving efficiency and service delivery? Technology allows providers ease of carrying out transactions. The swiftness, traceability and accountability promotes business efficiency and endears trust from investing public. Financial literacy is low in Nigeria hence a poor savings culture, what are the programs you have to improve this culture? Education – starting from primary schools, then universities and advocacy in workplaces

Thursday 11 April 2019

BUSINESS DAY

INTERVIEW

The Nigerian Fund Management industry has grown by a CAGR of 97% over the last 3 years FBNQuest Asset Management Limited is a subsidiary of FBNQuest Merchant Bank. The company offers a range of investment products and services across various asset classes while also providing its clients with strategies best suited for their investment goals and portfolios. IKE ONYIA, managing director/CEO FBNQuest Asset Management, in this interview with DOLAPO ASHIRU speaks on various issues regarding the Fund management sector of the Nigerian economy.

hich of your various funds has received the most subscription from your clients and what reasons are given for this selection? Within the Nigerian Mutual Fund industry, low risk investments have received the highest patronage from investors and the story is no different at FBNQuest Asset Management. Within the Firm, we offer pooled solutions across the risk spectrum and our lowest risk solution, the FBN Money Market Fund, has received the highest inflows from clients. Over a two year period, 2016 - 2018, the FBN Money Market Fund saw its Assets under Management grow exponentially by over N100bn (c. 430%). The Fund has therefore been one of the fastest growing funds within the market. Investors have cited the safety of the Fund due to the underlying assets of the Fund. The Fund is invested in money market instruments such as treasury bills, fixed deposits and commercial papers. Investors have also referenced the liquidity of the Fund. Investors within the Fund are able to redeem cash efficiently, particularly, when using our app, FBN Edge. The relatively attractive yield of the Fund is another benefit. The Fund allows investors invest as little as N5000 and still earn the attractive returns available within the Nigerian money market space. Can you give us an idea of your various funds and their performance? FBNQuest Asset Management currently offers 5 mutual funds to investors across the risk spectrum, invested in various asset classes including bonds and equities. The FBN Money Market Fund is a low risk solution for investors looking for attractive yields, liquidity, income and capital preservation. The Fund’s average yield over 2018 was 13.4%, outperforming its benchmark, the average 90 day treasury bills rate of 12.4%. The FBN Fixed Income Fund is a low – medium risk solution for investors that wish to enjoy the capital appreciation and income that comes from investing in the Nigerian fixed income market. This Fund may appeal to investors who need regular income from their savings while providing the potential to shield their capital from the corrosive effects of inflation. In 2018, the fund returned 12.9% (total return), outperforming its benchmark which gained 10.3%. The FBN Heritage Fund is a balanced Fund with exposure to Nigerian fixed income instruments and equities. The inclusion of equities allows investors participate in the capital appreciation of Nigerian equities. This solution is attractive for investors looking to build a nest egg over time. The Fund generated a total return of 39.6% in the 2 years to December 2018, outperforming its benchmark which gained 27.6%. The FBN Nigeria Smart Beta Equity Fund, the first of its kind in Nigeria, is a multi-factor equity fund, whose constituents are determined by a proprietary quantitative model. This is a high risk strategy designed for investors who wish to have strategic exposure to equities. The Fund has provided a total return of 61.0% to investors since its inception in 2016, outperforming the NSE30, its benchmark, which has gained 7.1% in the same period.

Ike Onyia, managing director/CEO, FBNQuest Asset Management

We also offer a solution for clients who wish to invest and earn attractive returns in US dollars. The FBN Nigeria Eurobond Fund was the first Eurobond Fund in Nigeria and has allowed investors with as little as $2,500 participate in the returns available in the Eurobonds market. Since inception in 2016, the Fund has earned a total return of 25.3% in US Dollars versus a benchmark return of 20.1%. What kind of Equities are included in your equity fund and the criteria for their inclusion or removal Two funds within our suite of mutual funds contain equities. The FBN Heritage Fund is an actively managed fund. The Portfolio Managers follow a fundamental, value biased, quality focused strategy when selecting stocks for the Fund. Companies listed on the Nigerian market are firstly screened to remove illiquid stocks. Following this, the buy-side research team analyses each company’s financials and business model and makes a determination about the value of the company, its future prospects as well as its strengths, weaknesses, available opportunities and any threats. This allows the Portfolio Managers make a determination as to the relative attractiveness of the company vis-a-vis its current market valuation and the macroeconomic situation. A preference is given for names with relatively high return on equity (ROE) and low leverage as we believe that in the Nigerian market, quality names offer the best long term growth. Tactical trading positions may be taken where an arbitrage opportunity is identified. Within the active strategy, names are excluded when they become overvalued (that is, the current price no longer justifies the expected future returns of the stock) or when the macroeconomic environment no longer supports investments in the company. The FBN Nigeria Smart Beta Equity Fund’s equity positions are determined by a proprietary quantitative model. The model was created as a result of extensive back-testing of various factors which have been known to drive equity market performance and capitalise on market inefficiencies. This strategy is commonly known as smart beta investing. Consideration is also given to the liquidity of the stocks in question. Essentially, the Portfolio Managers draw constituents from the largest 40 stocks (by

market capitalization) and screen these stocks based on the identified anomalies. Weights assigned to stocks are screenrank-driven and the top-20 stocks form the constituents of the Fund. The portfolio is rebalanced semi-annually and names that no longer satisfy the criteria are removed whilst new names that fit the criteria are included. Where do you see the fund management industry in the next 5 years? The Nigerian Fund Management industry has grown by a CAGR of 97% over the last 3 years; driven by increasing awareness of the benefits of collective investing and a rise in the number and sophistication of available products as Fund Managers themselves become savvier. We expect this trend to continue to be supported by a collaborative regulator, an increased use of digital platforms to distribute more efficiently and the proliferation of more complex products. We also expect that the importance of transparency to investors will increase. As the industry matures, clients will begin to demand and expect transparency in the investment management relationship across a number of vectors including investment performance, detailed and timely investment factsheets, transparency around the total fees charged within each solution and the comprehensiveness of the information provided by Fund Managers. How are you leveraging on technology via digital & mobile platforms to further increase your reach and serve clients better? We realise that digitalisation though, disruptive, is an effective enabler for innovation across the value chain of the investment management process. We have assessed our business operating model and have crafted a well-defined digital road map, which will ensure that clients are better served. This road map is designed to ensure that our solutions are customer-centric and efficient. Digitalisation to us, means that we can measure the quality of our service more precisely, interact with and serve our clients all the time through a digital and Omni-channel platform to provide valueadding investment solutions. We have a mobile platform that provides customers access to our traditional asset management products (mutual funds).

What are your views on the emergence of Fintech companies and do you feel threatened by their emergence? The emergence of Financial Technology (FinTech) in Nigeria poses vibrant opportunities for the country’s financial services sector. Increasingly, a crosssection of the Nigerian population are using technology to make payments, invest, and borrow, through USSD and Mobile platforms. In 2018 alone, the value of transactions done via USSD in Nigeria grew significantly from 25% usage in 2017 to 35% usage in 2018. Technology is making it easier for consumers to access financial services, without going into a brick and mortar store. Regulators have also embraced the use of technology as a driver for increasing financial inclusion through initiatives such as the Central Bank of Nigeria’s (CBN) National Financial Inclusion Strategy (NFIS). We think that given the population of Nigeria, FinTech and technology are critical even more today in providing solutions to consumers at large. At FBNQuest Asset Management, we fully embrace technology’s role in evolving Banking and Investment Management business models. We have a mobile platform that gives customers access to our traditional asset management products (mutual funds). We are keen on continuing to build and maintain relationships within the FinTech ecosystem, to help us provide value-adding solutions to our customers. As technology continues to enhance and simplify customer experiences, we expect the financial world to become even more data driven. We will continue to work together with regulators and FinTech innovators to provide the best solutions to our customers. What is driving patronage for Fund managers especially from the retail client segment? The rising interest of retail clients in the services of Fund Managers is driven by a number of factors. Firstly, the use of Fund Managers allows all investors access to the professional management of their investments. Fund Managers are governed by strict regulatory guidelines and have a fiduciary duty to manage their clients’ investments in the best interest of the clients’ and in line with the agreed investment objectives and risk profile of the Fund in question. Additionally, the availability of Fund Managers also allows investors access the returns within the Nigerian financial markets with as little as N5,000 investible capital. These monies can be invested in the pooled solutions offered by Fund Managers. This means that investors need not be concerned with having a large pool of investible capital before they are able to participate in the financial markets. Fund Managers are also increasing the public’s awareness of the benefits of investments by way of a variety of marketing campaigns. This, in addition to the proliferation of various digital avenues to access Fund Management services, causes an increase in the interest in Fund Management services, especially from retail clients. What is the average return on portfolio like in the various Asset Classes? The performance of the various asset classes are driven by the macroeco-

nomic situation of the country. When the economy is booming and incomes are growing, risky assets such as equities are more likely to perform better. However, when the economic performance is weak, there is a general flight to safe assets and returns in those assets outperform the risky assets returns. Using 2015 – 2018 for example, Nigerian markets have been relatively volatile with equities underperforming fixed income instruments on average. Given the relatively high yields obtainable in the treasury bills space, the returns to the average 91 day Treasury bill over the 4 years totalled over 60%. Within the Nigerian sovereign bond space, the average total return over the same period was about 72%. Returns to equities lagged, with the total return to the Nigerian Stock Exchange All Share Index over the 4 years closing at 8.5%. It is difficult to compare the returns across the various funds due to lack of information around distributions made to investors over the years – a key component of any total return computation. In advising clients what determines your portfolio structure/ Asset mix for the different categories of clients? There are a few broad factors that drive a client’s portfolio structure/asset mix. These factors are blended to form the investment objective of the client. The first point to note is the client’s aversion to risk, that is, their ability and willingness to stomach large swings in the value of their investments (especially swings to the downside). Secondly, the client’s expected return is important. This allows the manager understand how the client is thinking about investments and temper expectations accordingly. When the client would like to withdraw the money is another key consideration that speaks to the client’s liquidity needs. Where the liquidity needs are high for example, it means that a large proportion of the monies are best invested in liquid, safe assets. How long the investment is intended to last for i.e. the time horizon affects the potential asset allocation. Other factors include tax considerations and any unique needs the client may have. What are the current challenges being faced by Fund managers in Nigeria? And how are you mitigating against those challenges The level of investor education is relatively low in Nigeria. Whilst investing is becoming more mainstream, there is still a long way to go in ensuring that investors are armed with the skills and the expertise needed to meet their financial goals. Improving financial awareness is key to empowering the population of the country. The point around investor education goes hand in hand with improving the financial literacy level in the country. Low financial literacy hinders the use of investment management services. The final challenge is the limited knowledge of financial products. We find that product knowledge is low, especially for more complex products. At FBNQuest Asset Management, we mitigate these challenges by focusing on education. By way of thought leadership sessions, as well as one on one interactions with clients and the general public, we aim to up-skill individuals and empower all to make sound investment decisions.

Thursday 11 April 2019

BUSINESS DAY

INTERVIEW For 3 consecutive years our funds have outperformed their benchmark ARM Investment Managers provides professional global asset management services across a wide range of traditional and alternative investment options including equities, fixed income securities, cash and real estate. In this interview the KAI ORGA, Acting Managing Director ARM Investment Managers. speaks with DOLAPO ASHIRU on various issues regarding the Fund management sector of

ow are you leveraging on technology via digital & mobile platforms to further increase your reach and serve clients better? In cognizance of the fact that digital is the future, ARM Investment Managers started on a journey a few years ago to overhaul our platforms, systems and processes to make them more customer friendly, improve our service delivery and reduce transaction turnaround time. We are implementing an omni-channel approach whereby solutions delivered are consistent across the various platforms, facilitated by a harmonized customer service. Today, we have multiple channels to serve our clients – a web client portal, mobile application, Quickteller, GT USSD, E-Bills Pay, GT Collections, Shortcode to name a few, which are all being utilised by clients to execute transactions with us. We are able to onboard new clients easily and in real-time, and an integrated mobile application is also underway, as we make a conscious effort to move away from having multiple applications operating in silos. Adding to our portfolio of channels, we launched PayDay Investor last year, an investment application that enables our customers to invest seamlessly in the ARM Money Market Fund while providing convenience, and excellent user experience to our customers. We are however mindful of the inherent risks associated with financial technology and the need to ensure that customer data is kept safe and managed appropriately, therefore, we have strengthened our risk management processes by including IT security as a focus area within our risk management framework. What are your views on the emergence of Fintech companies and do you feel threaten by their emergence? The emergence of Fintech companies has paved way for technical innovation in the finance and investment industry and has given rise to simpler and more customerfocused processes and solutions utilizing faster and better technology as well as harnessing customer data. As a firm that is keen to embrace change, we do not view their emergence as a threat, but rather as an opportunity to learn, adapt and collaborate towards offering better services to our clients. What is driving patronage for Fund managers especially from the retail client segment? The main drivers of patronage are returns and diversification. Retail clients have numerous options for saving and investing their funds, however the service fund managers offer over and above banks, stockbrokers and other savings and investment platforms is the ability to invest in multiple asset classes and have their investments professionally and actively managed, even with very minimal funds. Through fund management vehicles, investors are exposed to equities, fixed income, money market instruments, real estate and even alternative investments such as infrastructure. Clients are even able to gain access to offshore investment vehicles. What is the ratio of retail Vs Institutional Vs HNI clients in the Fund management space?

sons are given for this selection? Most Nigerian investors are risk-averse, so products in the fixed income space which are capital guaranteed and provide a steady stream of income are usually preferred. Consequently, our money market fund is by far the highest subscribed fund in terms of assets under management and customer base. Can you give us an idea of your various funds and their performance? ARM Investment Managers currently manages 4 different mutual funds: Ag-

Kai Orga, acting managing director, ARM Investment Managers.

The assets under management of ARM Investment Managers is currently split almost equally among the 3 investor types – i.e. retail investors, high network individuals and institutional clients. It is difficult to estimate the split for the industry as a whole; however, there is a concerted effort by fund managers to grow their retail products. What is the average return on portfolio like in the various Asset classes? In 2018, bond and Treasury bills yields were 14.16% and 13.92% on average, respectively. As for equities, the Nigerian Stock Exchange (NSE) which comprises all listed securities in Nigeria had a negative return of 17.8% in 2018, after a positive return on 42.3% in 2017. The stock market in Nigeria is especially very volatile, which means there is significant opportunity for returns but the accompanying risk is also high. Stock selection is key when investing in equities as some specific stocks have a better performance history and are better able to withstand shocks in the market. In advising clients what determines your portfolio structure/Asset mix for the different categories of clients? Our financial advisers profile clients majorly based on three categories being: The clients’ investment objective; risk profile (how much risk the client is willing to take in order to achieve returns; investment horizon (how long the funds are available for investment). All of these affect the investment advice given as some investments have a minimum holding period while some investments are very risky and should only be undertaken by individuals that have enough assets to sustain them should the investment turn bad. We also carry out an assessment of the clients’ peculiar circumstances – that is their age, marital status, number of dependents, income and net-worth, which feeds into our investment advice. One other important factor in structuring client portfolios is the performance of the various asset classes (both current and outlook) as we

always strive to ensure optimal returns for our clients. What are the current challenges being faced by Fund managers in Nigeria? And how are you mitigating against those challenges? The Nigerian financial market is still relatively small with a lot of potential for growth. The main challenges we face as fund managers are around the implementation of ethical standards and effective corporate governance, as these factors ultimately have a major impact on the integrity of our financial market. Another key challenge is the depth of the market. While the industry has come a long way, low financial literacy and awareness has hindered growth of the industry. There is only so much development that can take place in terms of developing new products and asset classes unless we have a population that is ready to accept this. ARM Investment Managers does its bit by working with the regulators to improve financial literacy through series of financial planning presentations to targeted audiences. How challenging is it to assess risk in the Nigerian Financial markets given our level of development and data availability? The Nigerian financial market is still relatively small but with a lot of potential for growth and development. The regulators have done a lot of work in terms of investor protection, and this is helping to reduce the inherent risks in the market. This is the reason Fund Managers’ investment universe is limited to listed companies and securities that are well regulated and monitored. However, while the non-bank financial services industry has come a long way, we still have challenges and inefficiencies surrounding transparency and disclosures as well as unfriendly practices. Furthermore, there is still a certain element of market risk that cannot be eradicated even in developed countries. Which of your various funds has received the most subscription from your clients and what rea-

gressive Growth Fund, Discovery Fund, Ethical Fund and Money Market Fund. Each fund has its own risk and return objectives which ultimately determines the required asset class allocation to meet those objectives. The ARM Money Market Fund is a capital protected fund which guarantees investors’ capital while the Aggressive Growth Fund is our riskiest fund on account of its high allocation to stocks (80-100%). The ARM Mutual Funds usually outperforms their respective benchmarks. as well as other Funds in the industry with similar asset allocation profiles. For instance, ARM Money Market Fund yielded 13.74% as at end of March 2019. For 3 consecutive years our funds have outperformed their benchmark. Brief description of the different funds and their performance over the last 3 years is as stated below: ARM Mutual Funds • The ARM Discovery Fund is an investment that provides capital growth primarily through investments in equity, real estate and fixed income securities in the Nigerian market. The Fund Manager maintains a minimum equity position of 40% and a maximum of 65%. The Fund is suitable for investors who have a moderate risk tolerance level. The minimum investment is N10,000 and additional investment is N5,000. • The ARM Aggressive Growth Fund invests in stocks (80%-100% maximum) and money market instruments (0%-20% minimum). It is suitable for high risk takers who expect capital appreciation over the long term. The minimum investment is N50,000 and additional investment is N10,000. • The ARM Ethical Fund invests in shares of Shari’ah compliant companies quoted on the Nigerian Stock Exchange, real estate and other investments compliant with Islamic Finance. Certain sectors that hold stocks such as Tobacco, Breweries and Entertainment are excluded from the Fund’s portfolio. It is suitable for investors who would like to invest according to their moral beliefs and also wish to achieve long-term capital growth. The minimum investment is N10,000 and additional investment is 5,000.

• The ARM Money Market Fund (MMF) is an open-ended fund that invests in money market securities such as Bankers’ Acceptances, Certificates of Deposits, Commercial Papers, Short term debt securities issued or guaranteed by any Federal or State Government of Nigeria (such as Treasury Bills). The Fund is structured to preserve capital invested and provide income which is payable quarterly.

What determines the inclusion of an asset class and the weight assigned to it in a Fund? Each Fund registered with the Securities and Exchange Commission (SEC) has a trust deed which clearly states its risk and return objectives, as well as the asset classes the Fund can invest in and the Fund’s allocation to the various asset classes (ranges). The actual weights assigned to the asset classes however is determined by the fund manger’s assessment of the market and expectations of future performance. What kind of Equities are included in your equity fund and the criteria for their inclusion or removal? ARM invests primarily in blue-chip securities that have demonstrated the ability to provide steady returns over a period of time and also have high liquidity (that is stocks that are actively traded on the Stock Exchange). We invest in securities that we believe are priced below what we consider to be their true business value, to gain significant returns for investors when the price of the stocks rise to reflect the true value of the underlying company. In the same vein, we tend to sell stocks that we believe to be overpriced. Where do you see the fund management industry in the next 5 years? We are confident that the regulators’ actions and efforts will ultimately serve as an impetus for faster growth in years to come. We see an increased interest in securities trading and in mutual fund products as investors become more financially aware, which should hopefully lead to the market becoming more dynamic with the inclusion of more asset classes and more securities on the Exchange. This in turn is expected to lead to increased competitiveness on the part of fund managers as we strive to improve our service delivery, leveraging on all available technology, and to focus on develop innovative products that resonate with our target market.

Thursday 11 April 2019

BUSINESS DAY

Thursday 11 April 2019

BUSINESS DAY

SPECIALREPORT on

Fund Management in Nigeria Types of investors

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nvestors are basically classified into two segments: the risk-averse investor. This is the kind that tends to avoid relatively higher risk investments such as stocks, options, and futures. They prefer to stick with investments with guaranteed returns and lower-to-no risk. The other one is a risk-seeking investor. This type does not mind investing in high-risk funds like equity, as long as the asset class has the tendency of giving good returns. They are intrigued by the market volatility, viewing it as an opportunity to realise a higher return on their investment. The various types of investors fall under three different age groups, that is: a young investor with a stable income and many years to invest and feels comfortable taking more risks to achieve greater potential return. The other is the mid-career investor trying to balance risk and return more moderately and could invest in aÂ balanced mutual fundÂ that buys a mix of stocks and bonds. The last on the list is an investor approaching retirement, and might be less comfortable with risk and more interested in fixed-income investments.

Source: SEC

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Source: SEC

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Thursday 11 April 2019

BUSINESS DAY

SPECIALREPORT on

Fund Management in Nigeria Asset classes and risk profile of each

igeria has a number of asset classes listed on the Securities and Exchchange Commission’s website and they fall under the list stated below:

Money Market Funds The money market fund consists of safe (risk-free) short-term debt instruments, mostly government Treasury bills. This is a safe place where the risk-averse investors put in their money. They don’t get substantial returns, but they don’t worry about losing their principal. Under this asset class an investor gets a typical return that is a little more than the amount they would earn in a regular checking or savings account. Fixed-Income Funds Income funds are named for their purpose: to provide current income on a steady basis. These funds invest primarily in government and high-quality corporate debt, holding these bonds until maturity in order to provide interest streams. While fund holdings may appreciate in value, the primary objective of these funds is to provide a steady cash flow to investors. As such, the audience for these funds consists of conservative investors and retirees. Because they produce regular income, tax conscious investors may want to avoid these funds. Bond Funds Bond funds invest and actively trade in various types of bonds.

Bond funds are often actively managed and seek to buy relatively undervalued bonds in order to sell them at a profit. These mutual funds are likely to pay higher returns than certificates of deposit and money market investments, but bond funds are not without risks. Balanced Funds The objective of these funds is to provide a balanced mixture of safety, income and capital appreciation. The strategy of balanced funds is to invest in a portfolio of both fixed-income and equities. A typical balanced fund will have a weighting of 60 percent equity and 40 percent fixed income. Equity Funds Funds that invest primarily in stocks represent the largest category of mutual funds. Generally, the investment objective of this class of funds is long-term capital growth. There are, however, many different types of equity funds because there are many different types of equities. The size of an equity fund is determined by a market capitalisation, while the investment style, reflected in the fund’s stock holdings, is also used to categorise equity mutual funds. Equity fund tends to be riskier than a fixed-income fund. This is because this fund mainly invests in stocks and they are

generally riskier than bonds. Usually, the higher the risk, the higher the potential returns. Global/International Funds An international fund (or foreign fund) invests only in assets located outside an investor’s home country. Global funds, meanwhile, can invest anywhere around the world, including within their home country. It is tough to classify these funds as either riskier or safer than domestic investments, but they have tended to be more volatile and have unique country and political risks. Specialty Funds This classification of mutual funds is more of an all-encompassing category that consists of funds that have proved to be popular but don’t necessarily belong to the more rigid categories. These types of mutual funds forgo broad diversification to concentrate on a certain segment of the economy or a targeted strategy. Sector funds are targeted strategy funds aimed at specific sectors of the economy such as financial, technology, health, and so on. Sector funds can therefore be extremely volatile since the stocks in a given sector tend to be highly correlated with each other. There is a greater possibility for large gains, but also a sector may collapse (for example the financial sector in 2008 and 2009).

Source: SEC

Introduction of the NSE Mutual Fund Trading & Distribution Platform – Leveraging on Technology to increase visibility, transparency & trade volumes

he Nigerian Stock Exchange (NSE) on Friday February 22, 2019 in conjunction with Fund Managers Association of Nigeria (FMAN), Association of Stockbroking Houses of Nigeria (ASHON), and the Central Securities Clearing System (CSCS) Plc launched the NSE Mutual Fund Trading & Distribution

Platform. This platform is a new channel for accessing Mutual Funds which are listed on the NSE. It is also aimed at creating more visibility for Mutual funds. By leveraging on this newly introduced trading platform, both institutional and retail investors have the benefit of a single view of their Mutual

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fund portfolios while being able to invest with multiple Fund managers through a single stockbroking firm. The Mutual fund trading platform will bring together market participants to facilitate transactions with seamless interaction between NSE, CSCS Fund Managers and Broker Dealers. @Businessdayng

Thursday 11 April 2019

BUSINESS DAY

SPECIALREPORT on

Fund Management in Nigeria Ethical Fund

thical fund is a type of mutual fund that provides investment option for individuals who value ultra-ethical principles in their wealth creation,

particularly Islamic investors, with long-term capital growth goals. The fund allows investors to put in their monies into a portfolio of investment securities in line

with ethical Islamic investment principles. The fund uses morality as a standard for making asset selection into investment portfolio.

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Source: SEC

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Exchange Traded Fund (ETF)

Issue of Investor Education

n Exchange Traded Fund is an investment instrument traded on Stock Exchanges much like Stocks. An ETF holds various assets such as stocks, commodities or bonds and generally operates with an arbitrage mechanism designed to keep it trading close to its net asset value, although deviations can occur. Most Exchange Trade Funds track an index such as stock index, bond index, commodities index, currency index. They are attractive as investments because of their low cost, tax

efficiency and stock-like features. It is a type of fund that owns assets and divides ownership of itself into shares that are held by shareholders. The shareholders indirectly own the underlying assets of the fund and are entitled to a share of the profits such as interest or dividends. Examples of ETF’s listed on the Nigerian Stock Exchange are Lotus Halal 15 ETF, Stanbic ETF 30, Vetiva Banking ETF and Vetiva Consumer Goods ETF.

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(Why most Nigerian don’t invest)

any Nigerians don’t understand the financial markets and the opportunities that lie therein. Investor education is therefore critical to bringing in more domestic participation in the fund management sector. There needs to be structured platforms and a coordinated effort to deliver investor education to Nigerians, which will be determined by their interest, level of exposure and needs.

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Influence of technology in making investments in Mutual Funds easier, convenient and transparent Technology as an enabler has always facilitated the delivery of services to suit the lifestyle of people. In today’s fast-paced world where there is increasing need to act upon information in real time, coupled with the desire to make investment decisions on the go, technology plays a vital role in helping people achieve such level of efficiency. This however, is just one side of the coin. For instance, India in the aftermath of the 2008 global financial crisis was able to shake-off sluggish performance of the Mutual Fund Industry by leveraging technology to eliminate cumbersome paperwork and enable faster transactions. This helped Fund Managers improve client base, manage the cost involved in service delivery and improve earnings. In addition, KYC was relatively seamless in the industry as the availability of “e-KYC” process allowed non-KYC compliant investors to register from the comfort of their homes. The use of technology boosts investors ‘confidence as they have access to monitor the performance of their investment, rebalance portfolio, and compare performances of fund managers from such instruments as mobile devices and personal computers, whilst creating the economic incentive for fund houses to become more efficient. (N)

Source: SEC

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Advantages of Investing in Mutual Funds Besides being the most popular investment vehicle for average investors, mutual funds serve as an opportunity to diversify investment by offering efficient means to reduce investment risks of a serious monetary loss should a company face problems. This is because one mutual fund has an advantage of holding securities from varieties of issuers. As a result, shares in a mutual fund are liquid and can be traded easily, thus providing investors with easy access to their money. A mutual fund is cost-efficient and it does not require investors to conduct research of thousands of securities in the financial markets or constantly monitor returns from their investments, making it a preferred option for most investors. Mutual funds are managed by experienced industry professionals with the requisite education, skills and resources to research diverse investment opportunities. In addition, the professional portfolio manager also known as fund manager trades securities and makes investment decisions by deploying relevant strategies on behalf of the investor.

Thursday 11 April 2019

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Wednesday 10 April 2019 Company

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Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 207,939.57 5.85 2.63 288 37,561,279 UNITED BANK FOR AFRICA PLC 215,456.35 6.30 2.44 268 19,569,979 ZENITH BANK PLC 646,767.77 20.60 2.23 314 11,672,261 870 68,803,519 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 263,830.40 7.35 2.08 282 22,217,042 282 22,217,042 1,152 91,020,561 BUILDING MATERIALS DANGOTE CEMENT PLC 3,169,534.38 186.00 0.54 92 1,149,467 LAFARGE AFRICA PLC. 186,045.04 11.55 - 31 126,238 123 1,275,705 123 1,275,705 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 347,182.29 590.00 - 10 28,950 10 28,950 10 28,950 1,285 92,325,216 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 11,300.89 45.20 - 1 9,447 UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 - 1 8,500 2 17,947 2 17,947 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 2 17,947 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 76,312.80 80.00 - 8 3,317 OKOMU OIL PALM PLC. PRESCO PLC 62,750.00 62.75 - 4 2,193 12 5,510 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,650.00 0.55 10.00 14 401,000 14 401,000 26 406,510 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 820.66 0.31 - 8 10,194 202.36 0.52 - 4 7,267 JOHN HOLT PLC. S C O A NIG. PLC. 1,903.99 2.93 - 3 7,332 TRANSNATIONAL CORPORATION OF NIGERIA PLC 47,151.67 1.16 3.57 102 174,548,567 20,169.08 7.00 -2.10 53 1,458,012 U A C N PLC. 170 176,031,372 170 176,031,372 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 36,300.00 27.50 - 29 151,652 ROADS NIG PLC. 165.00 6.60 - 0 0 29 151,652 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,313.34 1.66 - 11 135,003 11 135,003 40 286,655 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 10,334.94 1.32 - 4 22,730 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 131,422.97 60.00 - 32 45,360 INTERNATIONAL BREWERIES PLC. 202,002.76 23.50 - 2 7,180 NIGERIAN BREW. PLC. 481,413.50 60.20 - 86 282,364 124 357,634 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 40,000.00 8.00 -5.88 52 701,157 DANGOTE SUGAR REFINERY PLC 162,600.00 13.55 0.74 53 892,148 FLOUR MILLS NIG. PLC. 69,706.45 17.00 - 32 134,680 HONEYWELL FLOUR MILL PLC 9,119.73 1.15 4.55 21 563,744 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 2 2,399 NASCON ALLIED INDUSTRIES PLC 50,471.80 19.05 - 20 4,960 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 180 2,299,088 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,969.84 10.10 -3.81 20 115,365 NESTLE NIGERIA PLC. 1,149,351.57 1,450.00 - 35 60,282 55 175,647 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,815.75 3.85 - 12 95,606 12 95,606 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 35,138.72 8.85 -9.69 11 107,020 UNILEVER NIGERIA PLC. 195,330.18 34.00 -2.86 69 1,474,335 80 1,581,355 451 4,509,330 BANKING ECOBANK TRANSNATIONAL INCORPORATED 194,505.24 10.60 0.95 74 1,144,411 FIDELITY BANK PLC 53,313.63 1.84 -0.54 96 5,785,976 GUARANTY TRUST BANK PLC. 987,416.06 33.55 -1.32 280 22,888,777 JAIZ BANK PLC 14,142.84 0.48 -4.00 10 583,910 SKYE BANK PLC 10,687.83 0.77 - 0 0 74,855.09 2.60 - 55 48,808,587 STERLING BANK PLC. UNION BANK NIG.PLC. 189,284.89 6.50 - 35 70,613,215 UNITY BANK PLC 8,533.22 0.73 - 16 189,968 WEMA BANK PLC. 27,002.13 0.70 1.45 24 806,586 590 150,821,430 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,712.54 0.68 4.62 21 736,247 AXAMANSARD INSURANCE PLC 21,000.00 2.00 - 5 3,611 1,869.90 0.23 -4.17 2 240,000 CONSOLIDATED HALLMARK INSURANCE PLC CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 2,945.90 0.20 -4.76 7 512,292 GOLDLINK INSURANCE PLC 2,001.98 0.44 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 487.95 0.38 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC LASACO ASSURANCE PLC. 2,197.03 0.30 -3.33 8 3,495,100 LAW UNION AND ROCK INS. PLC. 2,320.02 0.54 5.88 9 1,422,000 LINKAGE ASSURANCE PLC 4,000.00 0.50 - 1 2,000 MUTUAL BENEFITS ASSURANCE PLC. 1,760.00 0.22 - 7 594,166 10,561.01 2.00 -4.76 8 250,610 NEM INSURANCE PLC NIGER INSURANCE PLC 1,547.90 0.20 - 8 219,758 PRESTIGE ASSURANCE PLC 2,960.40 0.55 - 0 0 REGENCY ASSURANCE PLC 1,533.81 0.23 - 7 349,102 SOVEREIGN TRUST INSURANCE PLC 2,001.80 0.24 -4.17 52 8,101,708 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 2 21,833 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 1 500 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 2 1,050 WAPIC INSURANCE PLC 5,353.10 0.40 - 19 171,836 159 16,121,813 MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,361.36 1.47 8.09 5 254,780 5 254,780

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 3,780.00 0.90 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 2 100 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 2 100 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,440.00 3.72 2.76 55 616,880 CUSTODIAN INVESTMENT PLC 39,408.49 6.70 9.84 12 136,616 DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 37,229.10 1.88 2.17 120 5,569,045 ROYAL EXCHANGE PLC. 1,389.25 0.27 -6.90 6 337,891 STANBIC IBTC HOLDINGS PLC 469,017.32 45.80 -0.43 16 2,045,302 UNITED CAPITAL PLC 15,600.00 2.60 1.17 44 583,794 253 9,289,528 1,009 176,487,651 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 817.22 0.23 - 9 1,650,945 9 1,650,945 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 1 760 1 760 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 6,375.00 4.25 4.94 8 152,750 GLAXO SMITHKLINE CONSUMER NIG. PLC. 10,224.74 8.55 -10.00 55 2,336,652 MAY & BAKER NIGERIA PLC. 4,313.09 2.50 5.04 22 657,444 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,063.53 0.56 - 7 9,755 556.71 3.62 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. PHARMA-DEKO PLC. 325.23 1.50 - 0 0 92 3,156,601 102 4,808,306 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 1 100 1 100 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 648.00 6.00 - 0 0 TRIPPLE GEE AND COMPANY PLC. 346.47 0.70 - 0 0 0 0 PROCESSING SYSTEMS CHAMS PLC 1,314.90 0.28 3.57 65 20,944,982 E-TRANZACT INTERNATIONAL PLC 11,088.00 2.64 - 0 0 65 20,944,982 66 20,945,082 BUILDING MATERIALS BERGER PAINTS PLC 2,622.90 9.05 - 12 7,443 CAP PLC 23,625.00 33.75 0.15 14 78,805 CEMENT CO. OF NORTH.NIG. PLC 210,296.02 16.00 -5.88 21 175,655 FIRST ALUMINIUM NIGERIA PLC 675.31 0.32 - 6 66,115 MEYER PLC. 286.87 0.54 - 4 10,497 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,999.41 2.52 - 2 150 PREMIER PAINTS PLC. 1,279.20 10.40 - 1 55 60 338,720 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,853.34 1.62 -10.00 22 612,920 22 612,920 PACKAGING/CONTAINERS BETA GLASS PLC. 29,173.37 58.35 - 1 295 GREIF NIGERIA PLC 388.02 9.10 - 0 0 1 295 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 83 951,935 CHEMICALS B.O.C. GASES PLC. 1,577.57 3.79 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 1 6,200 1 6,200 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 55.00 0.25 - 0 0 0 0 1 6,200 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 4 506,802 4 506,802 INTEGRATED OIL AND GAS SERVICES OANDO PLC 60,292.35 4.85 2.06 82 760,012 82 760,012 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 61,661.79 171.00 - 13 13,992 CONOIL PLC 15,960.90 23.00 - 12 12,880 ETERNA PLC. 5,673.03 4.35 2.35 25 862,024 FORTE OIL PLC. 35,101.87 26.95 - 36 114,907 MRS OIL NIGERIA PLC. 6,354.80 20.85 - 2 1,710 TOTAL NIGERIA PLC. 66,546.28 196.00 - 35 62,622 123 1,068,135 209 2,334,949 ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 3 252 3 252 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 1 100 1 100 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 376.43 0.32 - 2 4,570 2 4,570 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,242.23 5.50 - 7 129,800 TRANS-NATIONWIDE EXPRESS PLC. 351.64 0.75 8.70 8 321,624 15 451,424 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 2 220 IKEJA HOTEL PLC 4,261.53 2.05 -9.29 6 119,776 7,862.53 3.50 - 0 0 TOURIST COMPANY OF NIGERIA PLC. TRANSCORP HOTELS PLC 41,042.18 5.40 - 3 9,020 11 129,016 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 199.58 0.33 - 4 141,800 LEARN AFRICA PLC 1,126.32 1.46 8.96 6 201,000 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 780.85 1.81 - 7 413,982 17 756,782 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 795.70 0.48 - 0 0 0 0

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Opinion

The allegory of Rochas Okorocha The Public Sphere

CHIDO NWAKANMA

he more he struggles with the reality of the outcome of his electoral iberiberism, the more Rochas Okorocha positions as an allegory for constant retelling for generations to come. The trajectory of Okorocha is a narrative for folklore. He replicates all the elements in those moonlight tales depicting wisdom, foolishness and the many paths not trodden. Rochas Okorocha was the main loser of the governorship poll in Imo State on March 23, even as INEC did not list him officially as a contestant. Uche Nwosu was one of the candidates on the ballot. The outgoing governor of Imo State sought to extend his eight-year tenure through the husband of his daughter. It was a very bold gamble typical of persons who take brazen risks such as Okorocha. At the same time, Okorocha wanted to go to the Senate to represent Imo West

Senatorial District. He pursued the quest with bravado and overwhelming confidence in his capacity to intimidate and overwhelm. He then met an electoral officer who looked both he and his gun in the face and lived to tell the story. Returning Officer Innocent Ibeabuchi announced Rochas Okorocha winner of the senatorial race with a resounding caveat. He stated, “I have been held hostage here for days so I’m trying to ease off and take my life home back to my children and for the sake of that I am calling these results under duress.” The Independent National Electoral Commission has held on that to state that it would not recognise Okorocha’s “election” as Senator. “Under duress” haunts and taunts Okorocha today as does the victory of Emeka Ihedioha as the person to succeed him at Douglas House, Owerri. Ihedioha is one of those Okorocha defeated in 2015. He kept at it, and the people of Imo State have welcomed his victory with so much approbation and enthusiasm. Okorocha is now under pressure from the “under the duress” of Returning Officer Ibeabuchi. He is casting about for blames. He likes to blame his former “my people, my people” of Imo State and the rest of Igboland. He hauls imprecations at the Igbo, accusing them of naivety and swearing how the Igbo cannot be president. The people respond, some-

Abike Dabiri: Mind your sef!

ik MUO

ur people say that if you want to know what a neighbor thinks of you, just pick a quarrel with that neighbor, especially if it happens to be a woman.. Abike Dabiri-Erewa has just mistakenly picked up a quarrel with a cantankerous group of neighbours and they have told her everything, including the ones she can’t remember-about herself. When Abike Kafayat Oluwatoyin Dabiri left the NTA and joined the very lucrative business of Nigerian politics, I was saddened. Not because I did not wish her well but because I believed that we have lost the rare opportunity of producing a Nigerian Amanpour. I don’t know how she managed to rise so quickly in our sharkinfested political environment. I don’t think she is one of the ‘owners’ of Lagos or APC but I believe that she has been favoured by the owner! She started from the top as many of them usually do: it is only in Nigerian politics that a person without a First School Leaving Certificate starts his or her career as a DG or a professor. From the NASS, she became a Senior Special Assistant on Foreign and Diaspora affairs (2016) and just the other day I heard her being addressed as Executive Chairman of Nigerian Diaspora Commission( 2018). She has been very visible and her journalism background and camera friendly visage have facilitated her rising profile. That was why she boldly stepped on the toes of the Foreign Affairs Minister and easily got away with it (she had my support on that matter, for whatever it was worth). But our ways are always baffling to me, may be because I am not in politics or govern-

ment. How and why should a government with a full-fledged Ministry of Foreign affairs have another person in the Presidency occupying the big post of adviser on foreign affairs? Well, that is by the way. All has been going well with Abike until, in the normal course of her official responsibilities, she informed the statehouse correspondents of the ‘pathetic and tragic’ case of a Nigerian woman executed in Saudi Arabia, (the 8th to be so executed), 20 others on death row and 12 others already sentenced to various prison terms. All these were anonymous; she did not know their names or didn’t feel that their names would add value to the story. But while the case of the unknown woman was pathetic and tragic the case of the five boys who foolishly (yes; foolishly!) went on armed robbery in a high-wired environment like UAE was not only disgraceful and embarrassing, she went ahead to name names: Chimuanya Emmanuel-Ozo, Benjamin Nwachukwu-Ajah, Kingsley Ikenna-Ngoka, Toochukwu Leonard-Arusi and Chile MicahNdunagu. And that was when and how she picked up an unpremeditated quarrel with her neighbours. My mouth is too holy to repeat some of the things her neighbours said about her or the kind of captions they gave to their agitated interventions. But I will try to give the general picture even though our people say that whoever tells you about slanderous statements from other people, is actually the person who slandered you. Madam Abike knows that I am not the purveyor of these stories because she knows I cannot do a thing like that and because she has seen those remarks herself. So what did these her offended neighbours say, beyond all the unprintable names they called her and all the adjectives they used to describe her? They asked why she forgot the names of some offenders but readily remembered the jaw-breaking names of others; why the case of one guilty party was pathetic while the offence of others was disgraceful and to save her the hassle of desk-research, they gave her the names of those already executed for drugs and on death row in Saudi Arabia.

times with hubris and no equivocation, that they want a functional polity that restructuring would yield rather than the presidency of a dystopia such as Nigeria. Okorocha’s trajectory contains many lessons. Here is a successful executive in the Nigerian tradition, an entrepreneur with claims to many ventures. He lived out the notion that success favours the brave. He pursued the presidency even when it sounded like a wild goose chase. Then he zeroed in on his state. Onyekwe chi yaekwe, as the Igbo say, and a complex of factors worked in his favour. Okorocha became Governor of the state with the most professors in Nigeria. He then rode roughshod over the land, playing on their intelligence. Across Imo State are several abandoned projects signposting plans for hospitals or other people-centric ventures. They did not happen because there seems in retrospect that the plan did not include the execution of the projects. Okorocha’s first tenure rode on the wave of these seemingly ambitious grassroots projects. Then he returned for a second tenure and switched off the lights. The people groaned. Okorocha not only ignored them but hatched a scheme to perpetrate dynasty. In an earlier intervention last year, I urged the people in the All Progressives Congress in Imo to ensure they did not allow Okorocha subvert Imo culture. A friend and double schoolmate Theodore

‘

What is bad is bad but as our people would say, Abike should rescue the chicken from the hawk before asking it ‘why did you stray into the hawk’s path?

‘

When the people cook for one man it is a suicidal dinner as against when one man prepares for the mass

They then went ahead to remind her of some Nigerian brethren of the disgraceful five, who have made Nigeria proud in recent times, wondering why she forgot their stories. These include Wendy Okolo, the first black woman to earn a PhD in Aerospace Engineering, Emelife S C who broke a 100-year record in University of Mysore, India, winning all the available 20 gold medals and 5 cash prizes at the UOM 99th convocation, Anwuli Aniemeka, a quintessential teacher who won the Peace Marshal Recognition during the 63rd ordinary session of the UN Commission on the Status of Women (UNCSW63), Chika Nwobi who was recognized as one of the most influential black young men by the United Nations; four students of St Johns College Alor,(Ugwuishi Meshack Ogonna, Chuka-Umeora Onyedika Anthony, Nwachukwu Chukwualuka Daniel and Machi Chukwuagozie Dominic) who won the bronze medals at the International Festival of Engineering in Tunisia, beating contestants from technologically advanced countries like Canada, Italy, South Korea, Turkey, China, Sweden, Ukraine, Malaysia, Brazil, Bosnia Herzgovina, Indonesia, Tunisia South Africa etc, and five girls from Regina Pacies Secondary School Onitsha, : Promise Nnalue, Jessica Osita, Nwabuaku Ossai, Adaeze Onuigbo and Vivian Okoye, who won the gold medal at the World Technovation Challenge in the Silicon Valley in San Francisco Abike Dabiriis a journalist and in journalism, the news is when a man bites a dog. But I don’t think this mindset would do in diplomacy, though she is not a diplomat! She should not specialize in giving us bad news only. A few days after the contentious press interchange, she called the press again and declared (gleefully?) I have another bad news for you…! If what the foreign media see about Nigeria are insurgency, corruption, and political signs and wonders, must we join them in demarketing ourselves? She should desist from doing the job of other countries. I have not heard about the South Africans celebrating the xenophobic attacks carried out by their people or China celebrating the fake products produced by some of their

Ekechiwas in the forefront of those who foiled it. But Okorocha would not heed the whistle. There are many lessons. Ambition and the courage to pursue it are still valuable traits. They can fetch the intrepid high office such as the Governorship of a significant state. In Nigeria, people can take advantage of the low standing of the people on the Maslow hierarchy. However, our people would play Pavlov’s dogs only so far and no further. Civil society and the electorate are growing their sinews and will punish failure in governance. More importantly, they will punish those who take them for granted and accuse them of iberiberism. They respond with ohashierism (when the people cook for one man it is a suicidal dinner as against when one man prepares for the mass). No one person is so politically savvy he dwarfs or envelops his constituents. Even in Nigeria, power flows from the people. There is only so much citizens should stomach from their leaders. Our stomachs even in the physical have limited elasticity for condoning maladministration and malfeasance. Nwakanma is a Visiting Member of the BusinessDay Editorial Board and serves on the Adjunct Faculty at the School of Media and Communication, Pan Atlantic University, Lagos. Email chidonwakanma@ gmail.com.

people. Even the five robbers are innocent until proven guilty! She also made a case for possible visa restriction against Nigerians by the UAE authority! Is she working for us or for UAE? What is bad is bad but as our people would say, Abike should rescue the chicken from the hawk before asking it ‘why did you stray into the hawk’s path? Anyway, my overall advice to Madam Abike is mind yoursef! As for those who stood accused (named or anonymous) and those planning to toe their lines, the grass is not always greener on the other on the other side and criminal entrepreneurship does not pay in the long run. Our youths, and those not so young, must eschew the get-rich-quick mindset and remember that whatever thou sowest, thou shall reap! The society should also stop celebrating wealth and the elders should model the right mindset to the youth: honesty, hard work, sowing before reaping and that money is not all there is in this life!( NB:My treatise on the maturation of Nigerian democracy continues next week) Other matters: Like Onoghen, Like Ajanah! Our people say that whenever the mothergot is chewing cod, the younger ones watch and learn. The disdain with which the current Federal Government holds our democratic institutions, especially the judiciary, is public knowledge. The President became tired of blaming the judiciary for lack-luster outcome of his k-legged war against corruption and decided to act. The action included the midnight invasion of Supreme Court Judges and the recent Onoghen-must-go antics. While all these was going on, the Kogi State Governor was watching and learning. Recently, there are reports that the Government of Kogi State has disconnected water and electricity supply to the residence of the state Chief Judge Justice Nasir Ajanah as part of the pressure to force him out of office. Continues online at www.businessday.ng

Ik Muo, PhD. Department of Business Administration, OOU, Ago-Iwoye 08033026625; muoigbo@yahoo.com, muo. ik@oouagoiwoye.edu.ng

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.