BusinessDay 11 Feb 2020 by BusinessDay

Indomie maker eyes Nigeria digital lending amid talks with Tala FRANK ELEANYA

… entry to deepen competition in market

olaram Group, the Singapore-based manufacturer of Indomie, Nigeria’s most popular noodle brand, is planning to tap opportunities in the lending space in Nigeria and the rest of

Africa with the launch of Tala on the continent, according to a source very close to the matter. Tala is a US-based fintech company that offers non-collaterised loans of between $10 (N3,600) and $500 (N181,500)

for customers without traditional bank accounts or credit histories via an app. Tala, which was founded in 2012 and launched for the first time in 2014 in Kenya, has reportedly loaned more than $1

billion via its mobile application to 4 million customers in most emerging countries including Kenya, Mexico, the Philippines, India, and Tanzania. It is currently the largest non-bank lender and plans to expand into

five additional countries within the next two years. Tolaram plans to invest in Tala to come into Nigeria, BusinessDay gathered. African counContinues on page 39

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NSE Foreign Reserve - $37.7bn Cross Rates GBP-$:1.29 YUANY - 52.04

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news you can trust I ** tuesDAY 11 february 2020 I vol. 19, no 496

MARKETS

Nigeria set to name transaction advisors for $3bn Eurobond

₦3,564,699.13 -0.89

N300

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$-N 357.00 360.00 £-N 469.00 475.00 €-N 390.00 396.00

Crude Oil $ 53.71

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364.56 306.90

Currency Futures

($/N)

3M 0.00 2.61

NGUS apr 29 2020 362.62

0.00 3.77

0.00

10 Y 0.00

30 Y 0.01

9.90

10.95

12.33

NGUS jul 29 2020 363.55

NGUS feb 24 2021 365.71

Four charts that show how Ghana is pulling away from Nigeria

SEGUN ADAMS igeria will soon be naming the transaction advisors and lead managers for the issuance of its first Eurobond since 2018. The planned $3bn dollardenominated debt comes as the country seeks to tap into cheap global liquidity to plug its budget gaps and fund much-needed infrastructure. “The target client for the issuContinues on page 39

LOLADE AKINMURELE

Inside

BusinessDay Legal Business Unit expands for better service to legal industry P. 2 Benue strange disease suspected to be chemical poisoning, not coronavirus – NCDC P. 37

fgn bonds

Treasury bills

L-R: Alicia Kedzierski, technical specialist, Financial Conduct Authority (FCA); Parma Bains, Nigeria lead, FCA; Mary Uduk, acting director-general, Securities and Exchange Commission (SEC), and AndIsyaku Tilde, acting executive commissioner, operations, SEC, at a meeting between SEC and FCA in Abuja. Pic by Tunde Adeniyi

hana is tearing away from West Africa at a pace that is beginning to outshine even mighty Nigeria, the region’s biggest economy by more than half. Ghana’s fortune compared to Nigeria’s has evolved in ways analysts didn’t see happening so quickly. It’s Ghana, not Nigeria, that is now suggested to become Africa’s top candidate for an economic leap. The following four macroeconomic indicators show how Ghana has moved past Nigeria in recent times. GDP growth Ghana may have only about 10 percent of the Nigerian economy but it takes effort to be posting the numbers Ghana is doing in terms of growth rate. Although its 2019 growth rate ended up being only 7 percent rather than the world-beating Continues on page 39

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news Financial market liquidity seen in N595.3bn OMO, NTB maturities

Daisy Danjuma (l), chairman, Lagos Public Interest Law Partnership Board of Trustees, in a discussion with Babajide SanwoOlu, Lagos State governor, at the Board’s courtesy visit to the governor at Lagos House, Alausa, Ikeja, yesterday.

… as CBN positions to mop up HOPE MOSES-ASHIKE

igeria’s financial market would be awash withliquidityestimated at N595.3 billion from maturities from OpenMarket Operation (OMO) and the Nigerian Treasury Bills (NTB). A breakdown of the upcoming liquidity shows that N440.9 billion will mature from OMO while N154.4 billion will come from the NTB. This week, the Central Bank of Nigeria (CBN) is scheduled to roll over maturing bills worth N154.4 billion through the Primary Market Auction (PMA) across the 91-day (N4.4bn), 182day (N10.00bn) and 364-day (N140.0bn) tenors. Consequently, the apex bank is expected to mop up the excess liquidity through OMO auction this week. OMOsimplymeansthebuying and selling of government securities, which enables a central bank to control the supply of money in the banking system. OMO maturities worth N349.0 billion hit the financial system last week and the CBN intervened through its customary OMO auction. Instruments worth N150.0 billion were offered across the 82-, 180- and 362-day tenors in order to mop

up system liquidity. As seen in recent times, there was “no sale” on the short-tenor bill while the mid- and long-dated bills recorded a total sale of N128.2 billion putting subscription level at 2.0x and 0.8x, respectively. Thus, clearing rate settled at 11.60 percent and 13.05 percent, respectively. The Nigerian Treasury Bills’ performance at the secondary market last week was bearish as investors shied away from the low-yield environment in the NT-Bills space to take position in the relatively attractive FGN promissory notes andcommercial paper issuances. Thus, average yield climbed 12bps to settle at 3.9 percent Week-on-Week. Major sell-offs were witnessed on the 27-FEB-20 (+140bps) and 12-MAR-20 (+94bps) instruments while the 30-APR-20 (-76bps) maturity enjoyed the most buying interest. “We believe yields in the NTBillsspacemaysustainitsbearish stancefromlastweekasinvestors may seek higher yields from the PMAandalternativeinvestments giventhelow-yieldenvironment. Weadviserisk-averseinvestorsto cherry pick bills with attractive yields,” said analysts at Afrinvest Securities Limited.

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Diaspora remittances from US face slowdown on immigration ban

… as America accounts for largest source of inflows

MICHAEL ANI

nalysts are anticipating a slowdown in the amount of money coming into Nigeria from the United States following a decision by the White House restricting citizens of Africa’s largest economy from accessing immigrant visas. The move is expected to hurt the growth of diaspora inflows which global consulting firm PricewaterhouseCoopers estimates to reach $34.8 billion by 2023. “The decision will have a significant impact on Nigeria’s diaspora remittance – which accounts for a sizeable chunk of our FX earnings – as less of its citizens will be in a good position to work and repatriate the much-needed capital back to the country,” said Bongo Adi, senior economist at Lagos Business School (LBS). Adi described the immigration ban as “draconian” as statistics have shown that Nigerian immigrants are the most productive ethnic group in the US. “Our statistics have shown that more than 4 percent of Nigerians have a PhD as opposed to an average of 1 percent of US citizens, while about 17 percent have a Masters compared to 11 percent

of US, showing that Nigerians are outperforming the US average when it comes to skills acquisition,” Adi told BusinessDay on phone. The Donald Trump administration had on January 31 placed Nigeria alongside five other countries on its immigration ban list, citing poor identitymanagementandalackoftransparency in sharing information pertaining to security. Although the new restriction, which is expected to take effect February 22, does not affect Nigerians going to the US on a temporary basis, such as for tourist, business and official visits, it would, however, affect thousands of Nigerians eying to relocate to the US for greener pastures. Nigeria attracted $25.5 billion as diaspora inflows into the country in 2018. In 2017, the United States accounted for the largest chunk of remittances inflows into Nigeria, worth some $6.2 billion, according to data compiled by PwC. That’s about 9 percent of the total $22 billion diaspora inflows which came into Africa’s most populous country in the period. Nigerians living in the United Kingdom sent in $4.119 billion in the same period.

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Gas investments to get easier as FG launches network code

… as Buhari sees country becoming regional, continental energy hub with reforms

OLUSOLA BELLO, ISAAC ANYAOGU & HARRISON EDEH

he Nigerian government on Monday took a significant step in making it easier for investments into the gas sector by launching the Nigerian Gas Transportation Network Code which will ensure that the wrong quality gas does not go into the pipeline, guarantee gas pipeline integrity, open access and common understanding on metering. The National Gas Transportation Network Code was launched by the Federal Ministry of Petroleum Resources as part of the opening ceremony of the ongoing 3rd edition of Nigeria International Petroleum Summit (NIPS 2020) in Abuja. The network code is critical to the government’s objective in firming up the country’s domestic gas obligation as well as promoting export. “The code will also provide a uniform platform in terms of guidelines for agreements

between buyers and sellers which will ensure transparency and eliminate existing bottlenecks,” said Timipre Sylva, minister of state for Petroleum Resources. The network code could assure investors that when they invest, their gas will be operated in best practices and help in boosting the confidence of international financiers to actively look at the domestic gas market. The bulk of Nigeria’s gas production is for exports. Justice Derefaka, technical adviser, gas business & policy implementation, to the minister of state for petroleum resources, said the network code is a gas market liberalisation enabler aimed at ensuring gas pipeline integrity, open access to pipeline and common understanding on metering. It provides a set of rules and protocols designed to govern the operations of gas network players in a way that impacts the gas market as part of efforts towards transparency and efficiency in the operation of pipelines in the country.

“The code will ensure transparency in the industry, guarantee fair and nondiscriminatory access to gas transportation network, attract foreign investors, help to ensure that wrong gas does not go into the pipeline and ensure growth and development in the Nigerian as industry,” Derefaka said. The network code aims to harmonise gas balancing arrangements to support the completion and functioning of Nigerian gas market, the security of supply and appropriate access to the relevant information, in order to facilitate trade and to move forward towards greater market integration. President Muhammadu Buhari, who was represented at the summit by Boss Mustapha, secretary to the government of the federation, expressed concern that despite huge energy resources Africa is blessed with, notably in oil and gas and other forms of extractive minerals, the continent still lags behind in delivering access to power to

its teeming population. He, however, noted that with series of reforms being carried out in the Nigerian petroleum sector, there was high hope of transforming the country to a regional and continental energy hub. “The present administration is embarking on sectoral reforms in the petroleum sector to ensure cost reduction efficiency which would enhance attractive investment in oil and gas value-chain. Your investments are secure in Nigeria and our reforms would guarantee you a large return on investment,” he said. Buhari said his administration has moved to “improve the business environment and drive investments in the upstream, midstream and downstream” as well as “enhance accelerated revolution by developing infrastructure for multi domestic utilisation of LPG and CNG as well as commence the process of gas flare commercialisation and increase of gas to power”.

•Continues online at www.businessday.ng

BusinessDay Legal Business Unit expands for better service to legal industry

u s i n e s s D a y ’s Legal Business Unit (LBU) has been expanded by hiring two additional legal business associates, Onyinyechi Ukegbu and Chuba Agbu, both of who come to the newspaper with at least four years’ legal experience and impressive writing skills. Ukegbu, who graduated in law from Kwame Nkrumah University of Science & Technology, Kumasi, Ghana in 2010, has a Masters in creative writing and poetry from Sarah Lawrence College in the United States.

Ukegbu

Agbu

Before returning to Nigeria, she worked at the New York Public Library as well as Lumina Journal in New York and served as an associate at S.P.A Ajibade and Co. Legal Practitioners in Lagos. From 2007-2011, she spent the summers as an intern

in several law firms in the UK and Nigeria. Agbu earned a Bachelor of Law degree from Nottingham Trent University and a Masters degree in Information Technology Law and Intellectual Property Law from the University of East Anglia in the

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United Kingdom, obtaining a second class upper for his course work on patents and the deontological rights of owners in the context of competition law. He brings to his new role legal and analytical strengths from years as an in-house in a leading technology start-up and from corporate and commercial legal work at top-tier firms. Bu s i n e s s Day L e ga l Business Unit was established last year to curate and distribute bespoke legal business content for Nigeria’s legal community. The department is headed by Theodora Kio-Lawson.

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Adieu! Admiral Patrick Seubo Koshoni, Rtd (1943-2020) A sea power icon leaves behind a legacy of service

STRATEGY & POLICY

MA JOHNSON

ne of the Books of Wisdom- Ecclesiastes- says that “there is time for everything and a season for every activity under the heavens: A time to be born and a time to die, a time to plant and a time to uproot…” Death is the “finality of accomplishment.” Once death knocks on the door, we cannot add anything more to our experience. That is life! Life in itself can be likened to travelling through a tortuous and slippery road. There are potholes and bends that jolt us, alternative routes that can make us alter course, traffic lights and signs warning us of dangers ahead. The destination of the soul and the spirit is of utmost importance to our Creator. So, he offers daily guidance. Some pay close attention to His direction; others ignore them and speed past flashing traffic lights. Whatever the situation may be, everyone will eventually arrive at the final destination: death’s door. Vice Admiral Patrick Seubo Koshoni, the former Chief of the Naval Staff (CNS) of the Nigerian Navy (NN) died on 25 January 2020. He was 76 years. This article is to say “goodbye forever” to an Admiral; “a prodigious professional sailor and a cerebral leader,” who spent the best part of his naval career articulating maritime security concepts. Just like Admiral Alfred Thayer Mahan of the United States Navy, Admiral Patrick Seubo Koshoni was one of the foremost Nigerian naval thinkers and maritime strategists of his time. When Admiral Patrick Koshoni was the CNS in the late 1980s, this writer was a junior naval officer, who from engine rooms of warships, classified the three-

star admiral as a leader made of pure gold, in accordance with Plato’s allegory of the metal. This is because of the Admiral’s outstanding contributions to the development of the NN and maritime defence of Nigeria. An advocate of sea power, he was convinced beyond measure that appropriate sea power is the answer to many maritime security challenges facing Nigeria, and indeed Africa. But before Patrick Seubo Koshoni, it was Alfred Thayer Mahan. Affirmative! It was Alfred Thayer Mahan who first coined the term “sea power,” while at the US Naval War College after analysing a number of naval battles. Mahan, an Admiral, naval strategist, and author of The Influence of Sea Power upon History (1660-1783) which was published in 1890, argues that national prosperity and power depends on the control of the world’s sea-lanes. The forte of Mahan’s scholarship is that whoever rules the waves, rules the world. And that sea power is necessary to facilitate trade and peaceful commerce. That is why a few maritime nations value and respect their navies. Admiral Koshoni’s tenure as the CNS gave the NN a renewed sense of direction. While in office, he professed maritime strategy as he led a very dynamic and vibrant team of senior naval officers who chalked up many innovative and transformational operational orders and directives. This include the often-quoted Nigerian Navy Trident Maritime Strategy, which articulates Nigeria’s maritime strategic imperatives while streamlining the acquisition of platforms for the appropriate size and shape of the NN. The Trident Maritime Strategy was the main guiding principle of Nigeria’s maritime defence for 25s years until 2012 when it was reviewed. The review of the Trident Maritime Strategy gave birth to the Nigerian Navy Total Spectrum Maritime Strategy. The Admiral’s far- reaching impacts include the Manpower Rationalization Plan, training programmes, logistics reforms and morale boosting welfare schemes. He encouraged robust debates through the Chief of the Naval

Staff Annual Conference (CONSAC) which he inaugurated in 1987 to fish out best ideas, engender esprit de corps, and promote camaraderie within the Nigerian naval community. He used the CONSAC to do what navies in democratic societies do: “Take the navy to the people.” He also strongly and repeatedly advocated for uncompromising loyalty of officers and ratings to the Navy and the nation. A cursory look at some of the Admiral’s notable quotations show that the NN should be accorded high priority because: “The economic lifeline of this country is and will be for a very long time to come, maritime-based. If we are therefore to maintain law and order, to protect this economic maritimebased resource, if we are to ensure no illegal expropriation of this resource, if we are to further ensure that international maritime trade passing through the sea lanes……the role of the Navy in establishing and maintaining law and order within our coastal zone of national jurisdiction becomes high on our national defence agenda.” He advised the nation that: “If you do not fund your navy adequately, you will not get your navy to discharge its roles optimally, we are hazarding, willy-nilly, the economic lifelines of this country, which are predominantly offshore based.” On the Code of Conduct for the NN, the Admiral states: “Time was, say about a decade ago, when incontrovertibly the Navy had the best image; as far as the public is concerned anyway. But it seems that over the recent past, we have gravely dented this image. Perhaps, this is a reflection of the general national indiscipline. Naval personnel have acquired very grave antisocial behaviour. If we must redeem the image of being officers and gentlemen, we have to impose very strict code of social behaviour on ourselves. On coast Guard: “I do not believe that in the short term there would be a need to deliberately carve out another service, more or less to be labelled the Coast Guard.” I do not believe the economic situation in the country today can com-

‘

This article is to say “goodbye forever” to an Admiral; “a prodigious professional sailor and a cerebral leader,” who spent the best part of his naval career articulating maritime security concepts

fortably sustain another service to be labelled the Coast Guard. So long as we (the Nigerian Navy) can configure our own platforms and come up with Standard Operating Procedure (SOP) we should effectively be able to prosecute the roles that will be expected of any coastguard.” Vice Admiral Patrick Seubo Koshoni was a trailblazer, a public policy analyst and three times federal minister during the military regime of General Ibrahim Babangida. He held sway in the ministries of Health; Transport and Aviation; as well as Employment, Labour and Productivity before his dramatic appointment as the 6th Nigerian Chief of the Naval Staff (CNS) from October 1986 to January 1990. During his lifetime of service, he was an accomplished seaman officer with many military honours and national awards. He regarded his coming back to the NN after those extra-military appointments as a return to his “natural professional habitat” where undoubtedly, he left a lasting legacy of service. Three outstanding qualities which Admiral Koshoni was noted for, according to a former Director of Naval Information who worked closely with him are: His intellectual capacity- which he exhibits whenever opportunity permits; his athletic poise, simplicity and boyish look which belie his official status especially in civvies; and lastly, the Admiral’s administrative and procedural strategies for carrying out his official and professional assignments. These skills according to the former Director of Naval Information, made Admiral Koshoni an attractive choice to head many naval and extra-military challenging appointments, committees and task forces. Family, friends, the NN and the nation mourn the loss of Admiral Patrick Seubo Koshoni. The Admiral was a true warrior, a man of honour and committed patriot. The NN has truly lost a great leader and shipmate. He would be remembered for his legacy of service and top-notch contributions to sea power in Nigeria. Adieu great Admiral! Johnson is an author and a retired naval engineer who has passion for African development and good governance

China’s great economic transformation: Lessons for Nigeria (2)

ncentivising Public Service Performance assigning targets to party and state officials and have them evaluated like Chief Executive Officers (CEOs). At the start of reforms in China, as aforementioned, its bureaucracy was predatory. However, across its 5-year developmental phases, Beijing franchised its bureaucracy. Public agencies and institutions were all given economic targets in the form of investments, revenues, industrial outputs, value of exports etc., and respectively evaluated on periodic performance basis. Government officials were evaluated like CEOs in the private sector. Those that generated more revenues had the extras retained which translated into added remunerative benefits for their workers. Those that did not meet targets were penalized. In incentivising its public service, outstanding officials were recognized and promoted. This provided incentives for performance, productivity, innovation, as well as an aggressive drive for revenues and investments, amongst local officials. This is quite essential for every developing country’s bureaucracy. Nigeria has a bloated public service where incentives are lacking and officials often getting complacent. In her bid to reform, Nigeria must incentivise its bureaucracy and have its workers give in their best through targets appropriation and subsequent evaluation. In furtherance- Growing rich from the coastal areas and encouraging industrial transfers to the landlocked locales (flying geese thesis). Massive

regional inequality still exists in China, which was intended from the start. In the words of China’s chief reformist, Deng Xiaoping, “Let some get rich first.” Deng was referring to the coastal locales such as Xiamen, Shenzhen etc. which piloted China’s industrialisation and development agenda, and had the first set of SEZs. The coastal maximisation provided incentives for investors and limited transaction and logistical costs for exporting. First set of market reforms were initiated in these coastal regions. When the coastal regions reached a middle-income status with high labor costs and land values, the Chinese reformers began focusing less on quantity of investments and prioritized quality investments in these areas. This drive for high-end manufacturing in the area, led the migration of low-end industries into the hinterland. Beijing therefore provided the necessary inter-regional infrastructure that made the landlocked regions economically competitive. At the same time, state and local officials from the interior-regions (-non coastal areas) were trained and taking to tours in the already economic prospering coastal cities and local governments. To this effect, Beijing crafted initiatives such as Expo Central China, a convention that matched coastal manufacturers with inland governments. This is in line with the flying geese thesis of the Japanese economist, Kaname Akamatsu. Nigeria can replicate this, through having the hinterland provide the necessary raw materials and low lawww.businessday.ng

bour costs, and establish SEZ in the coastal areas. When the coastal areas eventually take off, the flying geese model applies. But how will this be possible in Nigeria when the country has only one functional seaport. The port infrastructure has to be decentralised with functional ports in other coastal locales in Nigeria. The funding for this is not farfetched if an effective Public Private Partnership (PPP) is operationalized where investors bring in funding for the ports. This is, then again, an amazing strategy Nigeria could replicate. Finally- Fiscal decentralisation and allowing local leaders modify central policies because of divergent local contexts. Nigeria’s fiscal governance is centralised based on its oil dependence. The resultant outcome presents state governments and sub-national governance structures that are barely not functioning fiscal-wise. This must be decentralised so that states can compete, innovate and prosper. Such decentralisation and an overhaul of the country’s exclusive list would provide incentives for state governors to innovate and be creative. The primary export dependence and revenues from oil rents from Abuja has made the state governments (governors in particular) redundant and extractive. Unbundling this would speed up development in the country, have states manage their natural resources, and speed up development. In China, as part of Beijing strategies was directed improvisation, a situation whereby authorizations are dished out from the center about the next economic agenda/phase while

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Chambers Umezulike local leaders adapt the reforms following their contexts. Doing this is inevitable for Nigeria, if the country really aspires to industrialise, modernise and develop. Amongst the significant takeaways from China for developing countries such as Nigeria is that economic development is realizable in a few decades. That development is all about GUTS! East Asian countries were already demonstrating this at the start of China’s take-off in the 1980s. In this regards, the utmost need in Nigeria, is the adequate political will to develop through an aggressive drive for investments starting from Nigerians in the diaspora; fiscal decentralization and establishment of a competitive federalism; crafting of a smart population policy to control the population which has overburdened economic development; establishment of SEZs starting from the coastal locales while ensuring political stability; amongst other strategies interrogated above. Umezulike is a development governance expert and writer. He can be reached through chambers.umezulike@ gmail.com and on Twitter via @Prof_Umezulike

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Zuboff’s surveillance capitalism: Implications for Africa tech policy (2) Rafiq Raji

W Free rein

ith advocacy and activism by probably Zuboff and others, and certainly in light of recent privacy scandals and increased realisation of the huge power big tech increasingly wields, however, it would not be farfetched to reckon surveillance platforms are already planning ahead to ensure they would continue to have free rein. That is, even as America and the West in general, though increasingly tightening the noose around the activities of big tech, still remain largely accommodative. Still, it does not require a stroke of genius to know that there would likely be increasingly less room for

surveillance capitalism to continue in its current form in the West, as awareness about their privacy breaches and likely even more egregious violations become writ large. So if you are an African, and armed with Zuboff ’s robust exposition on the unarguably unscrupulous practices of surveillance platforms, you would be excused if you wondered that the increasing interest in Africa by big tech chief executives might not be unconnected to a search by them for virgin or more relaxed regulatory jurisdictions. If that is indeed the case, what should African governments do? I think a balance would need to be struck. Because judging from Zuboff’s assertions alone, it would probably take a great deal of effort, even by the most advanced regulatory jurisdictions, to rein in the surveillance practices of big tech. But are the potential gains in jobs, technology transfer and so on, significant enough for Africans to make the trade-off? It is probably too late for that kind of sanctimony. Many Africans and almost all others have already signed out their privacy rights for the social benefits – if you choose to see it as such – of social media and the broader internet. If Google, Facebook, Microsoft and others offer us Africans free internet, should we then reason that

because we worry about our privacy, we should decline the offer? Surely not. But an awareness or knowledge of the trade-off would certainly put African governments in a better position to leverage surveillance platforms for better deals for sure. How so? Knowing that Google, Facebook and other surveillance platforms are not offering free internet to all Africans via satellite and other means out of the goodness of their hearts, African governments could with greater confidence make more robust demands, like greater investments, insistence on technology transfer, etc., that would make the trade-off not entirely seem like a rip-off. Pay us for our data Zuboff scoffs at the commoditisation refrain of how the “users [of surveillance platforms] receive no fee for the raw materials they provide.” Her thesis is that what the platforms take away from individuals is far more valuable and priceless to be reduced to a fee. But is this something we should care about as Africans? We lost out on industrial capitalism; not that we really had much of a choice in the matter back then. Now, in the current internet age, however, we do have relatively more say. So, should we allow sanctimony about privacy and human rights by Zuboff and others stop us from extracting as much gains as possible

‘

I think a balance would need to be struck. Because judging from Zuboff’s assertions alone, it would probably take a great deal of effort, even by the most advanced regulatory jurisdictions, to rein in the surveillance practices of big tech

from information capitalism? The question has a striking resemblance to how Africa is now expected to be conscious of climate change, the negative aftermath of industrial capitalism, the gains of which Africa largely missed out on. To be clear, Zuboff’s arguments resonate with me a great deal as much as that about climate change. But for us Africans, the choice is not so simple. Because unlike westerners, who are in relative comfort and are probably motivated by a desire to maintain the ease they currently enjoy for much longer, we Africans are still struggling to come out of the doldrums. In any case, since there are probably not much African governments can do to make surveillance platforms change their ways, we could as well ask that they pay us for the raw material – our data in this case – we provide. And considering the ever-increasing noise on the merits and demerits of a universal basic income, isn’t there a chance to do so for the poorest of the world from the humongous revenues of surveillance capitalists? I think there is an opportunity here for Africa’s poor. African governments should seize it. “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Improving trade relations to boost the economy and transport sector

reliable and efficient transportation system plays a fundamental role in any nation’s economic growth and prosperity. A well-structured transportation system can provide adequate access across the nation, which in turn facilitates the timely movement of goods and services across the entire value chain. Transportation is the critical success factor in economic growth and development, as well as a wealth creating industry on its own merit. Historically inefficient transportation systems limit a nation’s ability to maximize its natural resources, distribute and integrate the manufacturing and agriculture sectors, ensure the supply of education, medical care and the other infrastructural facilities that keeps life going. The importance of effective infrastructure for a nation like Nigeria cannot be overemphasized, especially from a national wealth creation perspective. We are strategically located on Africa’s west-central coast, and the Federal Republic of Nigeria is undoubtedly the biggest economy in Africa. Nigeria is the largest nation in Africa (from a perspective of both economy and population) with a gross domestic product (GDP) of $397.3 billion and a population of over 200 million people (in 2018). As well as being the world’s sixth largest oil producer (and largest in Africa) with proven oil and gas reserves of 37 billion barrels, Nigeria is 192 trillion cubic feet, with over 300 square kilometres of arable land, and significant deposits of largely untapped minerals. GDP from transport in Nigeria increased to $720.241 million in the third quarter of 2019 from $642.927 million in the second quarter of 2019. Transportation contributed 2.49 percent to nominal GDP in Q1 2019, an increase from 1.85 percent recorded in the corresponding period of 2018 and higher than 2.05 percent recorded in the fourth quarter of 2018.In real terms the transportation and storage sector grew by 19.50 percent in Q1 2019.

Nigeria shipped $52.9 billion worth of products around the globe in 2018. That dollar figure reflects a -46.7 percent decline since 2014 but a 29.9 percent gain from 2017 to 2018. Applying a continental lens, nearly a half (43.9 percent) of Nigerian exports were shipped to European countries while 27.7 percent worth was destined for Asia. Another 13.2 percent was delivered to North America while 9.2 percent went to Africa, 4.9 percent arrived in Latin America excluding Mexico but including the Caribbean, and 0.4 percent was sold to importers in Oceania (0.4 percent) led by Australia. From those figures we can see the huge economic potential that exist in Nigeria, combined with vast abundant resources, Nigeria is still a destination for global investment. Although its main challenges range from poor public transportation systems, high corruption, mismanagement of security challenges by past leaders, all resulting in the lack of diversification of our economy. Lack of modern transport infrastructure, especially in the transportation sector (which is still in the low level) has given rise to a great opportunity for global investors to look at. The importance of improving trade relations and Foreign Direct Investment (FDI) are some of the ways of boosting the economy, U.S.A, Australia, China and Vietnam are some examples of nations that grew their economies with such strategy. Although barriers may exist within the host country in the attraction of trade opportunities and FDI, it is very important to establish a transparent, broad and effective enabling policy environment to attract investments and also the ability to build the human and institutional capacities to implement and maintain the growth is very important. The transport sector promotes and supports job creation, makes products cheaper for our internal markets, as well as opening the global market for our products and services, which encourages innovation and greater productiv-

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ity in Nigeria. The current high level of unemployment and folding up of a large number of Small and Medium Enterprises (SME) within the Nigerian economic sector has negatively impacted on the economy because SME’S plays an extremely important part in modern day economies (especially in the transport sector) proving to be the most attractive and tremendous innovative catalysts for the growth of a better economic system and so we must find ways of reviving and bring them back to life for the growth of our economy . In addition, the vital contribution of SME’s to economic development is a reality that has been unanimously recognised globally by experts as it shows the economic and social benefits impacts led to the attention of the SME sector as a field of strategic interest for economies. Transportation and logistics are two key areas which plays an important role and can facilitate the attractiveness of investments of Multi-National Companies (MNC’S) to the economy. There is also need for increased level of economic and social security’s such as building modern transport infrastructures capable of offering better connectivity between different locations across the entire nation. Nigeria and Australia’s are trading partners, it accounts for less than one percent of Australia’s bilateral trading relationship. Both nations relationship has great potentials for improvement. Nigeria is Australia’s 42nd largest trading partner, accounting for less than 0.2 percent of Australia’s two-way trade. Total goods and services trade with Nigeria amounted to $945 million in 2018. Its major exports included wheat, edible products and paper, but the potential of the market is far greater especially in the area of transportation and Logistics, because Australia in particular is one of the World leading nations that owes a lot of credit to its transport and logistics industry as a result of constantly

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Festus Okotie

evolving its freight networks, this has made the nation one of the most prosperous nations in the world, facilitating exports from the core industries that fuels Its economy and bringing high quality ,low cost import goods to retailers and keeps the living costs down to Australia’s consumers. Recently the Australian Logistics Council reported that logistics accounts for 8.6 percent of Australia’s GDP, 1.2 million jobs for Australians and a $130 billion USD annual injection to the national economy and strongly believe it is very important for Nigeria to explore all avenues of improving the trade and investments relationships between both nations, especially in the transport and logistics sector. I would suggest that Nigeria transportation sector adopt the Australian model to drive greater efficiency in its transportation sector to drive greater efficiency and growth of its economy at large. The solution to the economic challenges in the transport sector is the necessity of having well-articulated and flexible government transport policies to attract foreign investors to the sector. Some key elements of such policies should include good tax measures, economic liberalization, an enabling business environment, political stability, modern technological system, and a good security network. Okotie, a maritime transport specialist, writes via fokotie.bernardhall@gmail.com, Fokotie@bernardhallgroup.com

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Tuesday 11 February 2020

BUSINESS DAY

EDITORIAL Publisher/Editor-in-chief

Frank Aigbogun editor Patrick Atuanya

Nigeria growing too slow to outperform Bold pro-growth reforms, larger competitive companies needed

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

ith its current rate of growth of two percent per year, Nigeria cannot achieve upper middle-income status in 50 years – low- and lower middle-income economies that have attained that status grew at 3.5 percent on average over the same period, according to McKinsey, a consultancy. Nigeria has achieved such growth in the past: in the last 50 years (1968-2018) annual average economic growth was 4.2 percent. McKinsey compares Nigeria with 18 “outperformers” i.e. “emerging countries who have been able to generate growth and raise prosperity, through poverty alleviation and the emergence of a new wave of middle and affluent classes.” Some of these outperformers are Malaysia, China, South Korea, Indonesia, India and Vietnam, countries whose rapid economic growth stories Nigeria was expected to emulate and popularised by the acronyms Bric, Next 11 and Mint. The McKinsey list includes recent

outperformers like Ethiopia, Cambodia, Kazakhstan and Uzbekistan, their economies have performed better than that of Nigeria despite great expectations. For Nigeria to join the league of outperformers its growth must be less volatile (i.e. diversified and less dependent on oil). And it must replicate reforms such as those in telecommunications, banking and pension that led to its most prosperous years between 2000 and 2015. Reforms in the telecommunications sector helped diversify the economy. Today the information communications technology sector is thriving. Nigeria has the highest number of internet users and mobile phone subscribers in Africa, and globally, the seventh and eighth respectively. Tech start-ups in Nigeria, especially fintechs, have attracted foreign investors. A pro-growth reform agenda and an increase in the number of large and highly competitive companies are the “ingredients” Nigeria needs to outperform. Outperforming countries invest in talent and infrastructure which attract investment. They are con-

nected to regional and global value chains. They also promote competition which boosts productivity. An increase in wages and better financial performance of companies increases domestic consumption and demand for production. In such a conducive investment and business friendly situation, companies are more likely to expand and multiply which contributes to output and tax revenues. Nigeria has everything it takes to become an outperformer, but it is punching way below its potential. For example, its 90 million strong labour force is young and growing but most are either unemployed or underemployed and unproductive. There are not enough big companies in the country to keep youths busy. There is not enough electricity to keep factories running; huge gas reserves to generate power remain unexploited. There are not enough good roads connecting factories to farms, suppliers and consumers. Agriculture which accounts for about 20 percent of what we produce, employs millions and holds a lot of promise for Nigeria is stunted by outdated

farm practices and low yields. Even though more hectares of land are been cultivated, the amount of tomatoes, rice and cassava per hectare has not increased. On average, economic growth has been negative since 2014. And the private sector which grew during the first two decades of the 21st century and drove the momentum has failed to recover since the recession in 2014. The state of the economy has discouraged foreign and domestic investors; exports as a percentage of GDP has slowed down and banks, until they were arm twisted by the central bank, preferred to buy risk-free government debt than give loans to the private sector. McKinsey lists “eight big bets” that could see a $447 billion increase in productivity and 560,000 fewer households in poverty in Nigeria by 2030: a competent bureaucracy, “drastically” improved human capital, centres of competitiveness, digital transformation, more skilled and educated women, investments in oil and gas and petrochemicals, agricultural transformation and improved infrastructure.

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Tuesday 11 February 2020

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Pioneering effort to contain virus outbreak in Megacities

Dan Steinbock

fter the outbreak of a new coronavirus (2019-nCoV) and evidence of humanto-human transmission, central government urged people to stay at home, restricted travel and cancelled major public events. That caused travel to plunge 29 percent on the first day of the Lunar New Year, but likely saved countless lives. China extended Lunar New Year holiday to keep people at home and reduce the risk of the spread, while extending several billions of dollars to help contain the virus. As the number of the infected continues to accelerate and evidence of human-to-human transmission has been discovered in and outside China, the World Health Organization (WHO) has declared global health emergency. While the full effect of the outbreak on the Chinese and the global economy is too early to estimate, probable impact scenarios can be assessed. Despite enhanced capabilities, new risks Internationally, markets have responded to virus outbreaks with sharp but temporary reactions until the spread is halted. Recently, analysts have used as a guideline to these projections the Severe Acute Respiratory Syndrome (SARS) in 2002-3. But that’s premature. In the early 2000s, China’s efforts to control SARS were criticized as the dis-

ease spread internationally before the global outbreak was subdued. A decade later, Chinese response to the Avian influenza (H7N9) was significantly faster, broadly praised and the disease did not spread widely. In recent years, China has significantly strengthened its national and local surveillance systems to prevent and control diseases. Laboratory and hospital capacity have been significantly reinforced. The record in emergency management is varied at local level. However, despite improved Chinese capabilities and Chinese authorities alerting outside bodies, including the World Health Organization, to the novel coronavirus relatively quickly, there are now new risks, due to greater global integration. In 2003, China’s air, rail and road travel was only a fraction of what it is now and most Chinese lived in the countryside. Today, China has the world’s largest logistical hubs and 60 percent of people reside in densely populated cities. That’s the reason for the effort to insulate Wuhan and other urban centers in its proximity, altogether 51 million people – which is comparable to the total population of South Korea. The timing also differs. Unlike SARS, the current outbreak took place before the Chinese Lunar New Year, which is accompanied by the world’s largest human migration. That’s why the government took extraordinary measures to reduce the risk of accelerated spread, which may set a new norm for struggle against epidemics in megacities. Early human and economic costs During SARS outbreak, 8,100 people worldwide were infected, while 774 died mainly in Chinese mainland and Hong Kong; 10 percent of the total. It was determined that the basic reproduction number – the number of people a newlyinfected person is likely to pass the virus to - was about 2-5.

With the coronavirus, there are currently (8 pm Wuhan time, Jan 31) 9,776 confirmed cases in China, while 213 have died; that’s less than 2.2 percent of the total. According to early research, the reproduction number is 3.3-5.5. In other words, despite similar transmissibility, mortality rate in coronavirus seems to be less fatal (currently 2.2 percent) relative to SARS (11 percent) and particularly to Middle East Respiratory Syndrome MERS (35 percent). However, health authorities suggest that symptoms may not show during the 2 to 14-day incubation period for the new coronavirus, which would undermine traditional containment practices. If the new virus can be detected only after considerable collateral damage, there is worse ahead, as Chinese authorities have suggested. The implication is that the exponential stage of the virus is still ongoing. In the mainland, the current outbreak has already hit transportation, tourism and travel, restaurants and retail, which will impair near-term consumption data, while harming stocks most exposed to consumer markets. Globally, the damage was first felt in commodities, which react fast to outbreaks that typically penalize the sales of jet fuel, diesel and gasoline. In the past four weeks, crude oil plunged 15 percent until global health experts called for calm and reason. What analysts are now monitoring is the milestone when the number of new infections begins to decelerate because that tends to signal the turning point for sentiment as well. But that may still be some way ahead. While all early impact scenarios are subject to great epidemiological uncertainty, economic damage in past outbreaks typically hits first household consumption and trade. And it is likely to be compounded in major regional hubs, such as Wuhan, “China’s Chicago.” As government response takes off, outbreak spending will accelerate rapidly in emergency services.

‘

Chinese government has used very strong measures to contain the spread of the coronavirus outbreak in Wuhan. The ultimate economic impact will depend on the eventual diffusion and infectiousness of the new virus

ability to learn, adapt and change, a proven or potential influence on system behaviour. Therefore, system leaders are individuals or organisations that support system-level change. They achieve this by empowering different stakeholders to act together in new ways to accomplish a shared goal – system change. System leaders can be found everywhere, at the local, national, regional and international level, influencing system change both within an institution and across networks of institution. To achieve system change, system leaders need to build and apply these skills – understanding the system where the challenge exists, their ability to engage in and support collective action among relevant stakeholders, ability to listen, learn and lead through coordination with and empowerment of others. In fact, for system change to happen there is a clear framework of bringing it to manifestation. The process of bringing this change to manifestation consist of the following: Convene and Commit – this involves the exchange of ideas by key actors to address a complex issue of common concern. The key actors delineate common interest and goals that they share, and commit to making a systemic change by working together in different innovative. Look and Learn – The key actors of the change process collectively map out the process and build a mutual understanding of the mechanisms, players and impacts that form the system and its present result, creating new intuitions and ideas. Engage and Energize – Different system change actors are involved in continuous communication to develop trust, commitment, innovation and teamwork. What can help drive progress and maintain the energy is encouragement, incentives and indicators (signpost); Act with Accountability – Although it is the collective aims, objectives and values that set the

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Dr. Steinbock is an internationally recognised strategist of the multipolar world and the founder of Difference Group. He has served at India, China and America Institute (US), Shanghai Institutes for International Studies (China) and the EU Centre (Singapore). For more, see https://www.differencegroup.net/ A shorter version of the commentary was published by China Daily on January 31, 2020

shared goals and principles that set the way of the system change initiative, it is the act of accountability that help track the process. Also, as the idea mature, management and governance structure can be created. Review and Revise - Stakeholders should review the progress of the initiative regularly and consequently, they should adopt the strategy accordingly. Implementing an agile, flexible, innovative and learning-centred approach allows for evolution and experimentation. Throughout the initiative, this process may overlap or repeat in a circle, meaning that it must not follow a chronological order. Besides, the journey of system leadership is a process that unfolds over time. Hence Systems leaders across the sectors often encounter similar motivations, experience or realisations in the course of their journeys to achieve system change. These recurring insights referred to as the “Aha! Moments”. While not every initiative or individual experiences the same feeling at every moment of the development and implementation of the system change initiative, one of these moments, frequently appear across many Systems Leadership stories. And they are that: “No one is in control”: individuals and organisations can influence the behaviour of a complex system, but not direct or control the process. In other words, no single entity has authority over the entire system. “It’s up to us”: Stakeholders identify a mutual responsibility to tackle the “system challenge” themselves, Sharing liability for collective and effective action. “Everything is Connected”: By Collectively mapping and learning about the system, new initiatives are generated, thereby helping you appreciate the interplay within complex systems. “That’s our North Star”: The stakeholder com-

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If outbreaks prove protracted, they may penalize companies’ capital expenditures, which are sensitive to demand expectations, and cause disruptions in supply chains as reduced mobility generates temporary outages. Stringent financial conditions in markets are likely to further amplify collateral damage and thereby risk aversion. Impact on economic growth in China Before the outbreak, China was moving toward a mild recovery. Despite US trade war, GDP growth amounted to 6.1 percent in 2019. Given progressive deceleration, which is normal after intensive industrialization, China was expected to grow by 5.8 to 6.2 percent in 2020. After the outbreak, three scenarios prevail. In the “SARS-like impact scenario,” a sharp quarterly effect – down to or below 5 percent - would be followed by a rebound in short order. The broader impact would be relatively low and regional. The impact on annualized growth would be relatively low. In the “accelerated impact scenario,” the adverse impact would be significantly steeper in terms of growth and damage, while a rebound would follow only later. The impact on annualized growth would prove more significant. The broader impact would prove more significant and affect global prospects.

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

Systems leadership: An approach to sustainable system change

oday’s problems, be it poverty, hunger, human health, environmental degradation, and so on, requires coordination among many stakeholders. No one person or organisation can solve these complex problems, but different stakeholders must play their part in developing a shared approach. Solving these complex problems requires coordination, vision, trust-building and innovation; in essence, it needs system leadership. Systems leadership is an approach of achieving goals through innovation, collaboration and action that engage a broad network of different stakeholders to advance progress toward a shared vision of systemic change. This approach requires collective action. Everybody is involved in it, both at the individual level and at the organisational level. It is a set of abilities that any individual or organisation can use to facilitate the process of system-level change. It is a departure from the conventional hierarchical approach to implementing change. Indeed, system leadership is a new term for leadership skills and capacity that can be effective in addressing systemic problems. There are three agents involved in achieving systemic change using this approach. These agents are – the individual, the community and the system. The individuals, as agents, drive Systems-change initiatives and their commitment and effort to sustain it. The community, on the other hand, is made up of stakeholders’ actors who interact and influence one another within the system. Knowledge and insight into the system to be changed are fundamental. For example, the system’s institutional policies and incentives and personal choices and behaviours. A system leadership initiative is characterised by – a systemic view, multi-stakeholder ownership and championship, appointed coordinators and facilitators whose role includes enabling of multistakeholder collaboration within the project, an

Uchechukwu Anagboso munity defines a shared goal or vision to pursue. They guide and align their efforts towards that shared goal. “To Go Far, Go Together”: It is vital to build powerful multi-stakeholder coalition through securing the engagement of an eclectic array of stakeholders “We’ll find a way”: Leveraging on challenges and setbacks can stimulate innovation and collaboration. “I can make a difference”: An individual, small group or organisation can make a significant impact. “We need coordination”: A coordinating team or secretariat is essential as the initiative grows, to support collective action. “Wow! Change is happening”: Celebrating and keeping account of every progress helps maintain the drive. “We are in it together, for the long haul”: For long-term success, there must be a reaffirmation of the commitments, as the needs evolve. Finally, though the systems leadership approach is still in an “early stage of development”, evidence points to some individuals who have shown the embodiments of a system leader. In Africa, we have Nelson Mandela, who inspired collective leadership, leading interventions geared towards addressing the challenges of his country collectively. There is a hunger for real change, and the strategies in place seem not to be effective. Rather than a sense of fatalism, this should galvanise efforts towards seeking new paths and approaches that will ignite more profound change. Hopefully, more system leaders will arise and catalyse collective change. Anagboso wrote this for the Christopher Kolade Centre for Research in Leadership and Ethics (CKCRLE) at Lagos Business School (LBS). crle@lbs.edu.ng.

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Tuesday 11 February 2020

BUSINESS DAY

COMPANIES & MARKETS

Company news analysis insight

Aviation

NAHCO’s Q4 revenue hits N10.14bn, gets Carbo Verde airline deal OLUFIKAYO OWOEYE

igerian Av i a t i o n Ha n d l i n g Company ‘s (NAHCO) fourth quarter revenue for the period ended 31 December 2019, inc re a s e d 3 . 2 5 p e rc e nt to N10.14 billion from N9.82 billion in same period in 2018. Operating cost stood at N6.54billion from N6.65billion, leaving gross profit at N3.6bn from N3.16bn in 2018. Selling and administrative expenses dropped to N2.53bn from N2.93billion.Profit after tax for the period ballooned to N1.04bn from N196.79million Revenue from its passenger and aircraft handling for full year 2019 stood at N5.5 from N5.39bn. This is the incone from passenger handling includes invoices raised for check in formalities, passenger profiling, security

and baggage handling (loading and offloading) Revenue from leasing was N262 million from N276million in 2018. The subsidiary, NFZ ltd is into the leasing of properties and heavy duty equipments Revenue from cargo handling stood at N3.95bn from N3.76bn in 2018. These include invoices raised for; cargo documentation services for airlines, import and export cargo facillitation through Nigeria’s biggest network of customs bonded warehouses in Lagos, Kano, Abuja and Port-harcourt, Kaduna and Enugu, using Galaxy computerisation system, which ensures safe storage and easy retrieval of cargoes. Revenue from equipment rental and maintenance stood at N424.89 million from N387.58million. The Company leases its equipment to airlines for services that are not

covered in the Standard Ground Handling Agreement. The national airline of Cape Verde, Cabo

Verde Airlines, recently appointed NAHCO, to handle its operations in Nigeria. The Nigerian Avia-

tion Handling Company Plc (nahco aviance) was founded in December 1979, and has since grown into a multi – bil-

lion naira company with diversified investments in energy, logistics and development of a free trade zone.

L-R: Wale Odufalu, group executive director, corporate services, Alpha Mead Group; Mutiu Sunmonu, chairman, Alpha Mead Group; Oscar Onyema, CEO, Nigeria Stock Exchange (NSE), and Femi Akintunde, group managing director, Alpha Mead Group, after a courtesy visit by the leadership of NSE to Alpha Mead’s Corporate Head Office in Lagos

Consumer Goods

PZ Cussons announces new CFO amid declining fortune OLUFIKAYO OWOEYE

onsumer goods company, PZ Cussons has announced the resignation of Pedro Barreto, its chief finance officer with effective from 31 March. According to the management, this is to allow him pursue other personal endeavors. Barreto joined the company in February 2018. In replacement, the company has also announced the appointment of Zuber Momoniat, a South African as the new chief finance

officer with effective from 1st April 2020. Momoniat is a certified chartered accountant with over 17 years of experience in account reconciliation, budgeting, internal controls, forecasting, and financial planning. He started his career in audit at PwC and later SABMiller in different countries across various units of finance for 12 years. This is coming few months after the resignation of another director, Alexander Goma in September last year. In the sixties to the

mid-nineties, a lot of Nigerian families were addicted to the array of products manufactured and produced by PZ Cussons Nigeria Plc., such as Imperial Leather Soap, Robb, Premier and Joy soaps and recently, Nunu powdered milk and morning fresh. The ubiquitous influence of these products were felt in the society; in restaurants, offices, conferences, salons, hotels, which underscores a period of bloom for the consumer goods firm. Sadly, the glory days of the company that pro-

duce electrical, homecare, personal care and beauty are over, as a weak macroeconomic environment and stiff competitions are undermining earnings. For the first quarter ended 31 August 2019, PZ Cusson’s revenue dipped by 0.56 per cent to N15.80 billion. Between 2018-17 financial period, its top lines (sales) declined by 15.88 per cent to N15.89 billion, but it was up by 12.77 per cent to N18.89 billion in 2017-16 periods. The slump in revenue can be largely attributed to weakness in the Home

and Personal Care (HPC) Segment as it continues to wrangle with increasing competition from cheaper unbranded products as well as products from unrecognized smaller players which continues to exert pressure on HPC business. Gross profit has reduced by 67.15 per cent to N2.71 billion in the first quarter ended August 31 2019; it dipped by 32.45 per cent to N4.53 billion in 2018-17 financial period, declined by 83.13 per cent in 2017-16. In its second quarter result for the period end-

ed 30th November, revenue dipped to N18.13bn from N19.15bn. Cost of sales surged to N15.05bn from N14.86bn. Loss for the period stood at N484.46million. PZ Cussons operates in an environment where consumers have refused their pulse spring as inflation and fuel hikes have eroded their purchasing power. Last year, PZ Cussons Group UK – the parent company of PZ Cussons Nigeria Plc (PZ), had blamed disappointing results on its Africa operations, especially Nigeria.

Tuesday 11 February 2020

BUSINESS DAY

COMPANIES&MARKETS Manufacturing

Cormart to invest N2 billion in 2020 to develop new products line SEYI JOHN SALAU

hemical and food raw materials focus company, Cormart Nigeria Ltd said it will be investing N2 billion this year to increase local manufacturing of its product offerings in Nigeria. Cormart, a member of the Tropical General Investments (TGI) group, is investing more in its research and development (R&D) department that continuously seeks to improve the quality of products by introducing better alternatives into the market. Johannes Flosbach, the general manager, Cormart Nigeria limited, said the company has enjoyed a 30 per cent growth annually in the last three years despite the challenging environment, and expect a 40 per cent growth in 2020. According to Flosbach,

Cormart main goal is sustainability of the business model to ensure its operation continue and grow stronger. He opined that the company’s management is keen on contributing to the industrial development of others. “…when it comes to the industrial development of Nigeria; Cormart is in the center of it all,” said Flosbach. Martin Middernacht, MD, Cormart Nigeria limited said the company’s philosophy is built on reinvesting its profits back into the business year-on-year. This he said was responsible for Cormart growth in the last 40 years in Nigeria. According to Middernacht, access to forex was a major challenge to the company’s operation in 2019, which forced it to innovate its product offerings with animal feeds for export substitution to earn forex

to offset its Letter of Credit (L/c). Speaking further on the challenges faced in emerging market like Nigeria, Middernacht stated that Nigeria’s biggest problem is education, as it is responsible for finding the right-fit human capital. “Human resource is a key challenge to business development in Nigeria; Power, finance constitute a barrier to business development,” said Middernacht. According to him, clearing cost negatively impact businesses in Nigeria, as the company paid N400, 000 more to get goods off the ports in Apapa. He further disclosed that Cormart could not export some of its products to Ghana in 2019 because of the ports congestion and had to recall its container after about two months at the ports for road transport.

Business Event

L-R: Wale Ajayi, partner, KPMG; Adenike Adeyemi, executive director, FATE Foundation; Laoye Jaiyeola, CEO, Nigeria Economic Summit Group, and Max Menkiti, CEO, Millennium Apartments/president, FATE Alumni ExCo, at the 2020 FATE Business Outlook held in Lagos.

Energy

FCMB deepens empowerment of SMEs in Ogun State Michael Ani

ier-2 lender, First City Monument Bank (FCMB) has restated its commitment to the productivity and profitability of Small and Medium Scale Enterprises (SMEs) through funding, capacity building, advisory and other forms of support that would boost their overall contributions to economic development. FCMB, which is rated as the number one Bank for SMEs in Nigeria in the latest Banking Industry Customer Experience Survey report by KPMG, gave the assurance at a free and comprehensive capacity building and empowerment programme it organised for women entrepreneurs in Ogun State. This was done in partnership with the Office of the First Lady of the State, Bamidele Abiodun, on February 5, 2020. It is a follow-up to similar ones organised by the Bank in other parts of the country since 2018. The programme, themed, ‘’Supporting Women Businesses to Scale Up in 2020’’ and under the auspices of FCMB’s SME Advisory and SheVentures initiative for women entrepreneurs, was attended by hundreds of existing and start-up entrepreneurs across Ogun State, seasoned professionals from the Bank of Industry (BoI), National Agency for Food and Drug Administration and Control (NAFDAC) and Federal Inland Revenue Service (FIRS), among others. It focused on business and skills development, marketing, finance, taxation, cost and revenue management, business plan writing, in addition to other topical issues. Speaking at the open-

ing session, the Executive Director, Business Development of FCMB, Bukola Smith, said the Bank recognises the increasing role and impact of SMEs, especially womenowned ones. According to her, ‘’it is a fact that in Nigeria, several women have risen through various challenges to become top entrepreneurs. Through resilience and innovation, they have taken the front seat in driving growth in this sector and by extension the larger economy. However, we believe that women can do better in the SMEs ecosystem if provided with the requisite skills and other resources. Overall, SMEs in Nigeria have what it takes to compete at the highest level in the international market, but without the requisite exposure and other forms of empowerment, it can be very difficult to succeed locally and internationally’’. Smith added that, ‘’as the number one Bank for SMEs in Nigeria, we have built a strong base in this segment by consistently offering various cutting-edge solutions under our key pillars of support, which are, access to capital, capacity building, advisory services, networking opportunity and technology. We are excited that these interventions have tremendously impacted individuals, businesses and the nation’s economy, especially through job and wealth creation. We will continue to assist SMEs to overcome the challenges they usually face, especially at the take-off stage, because we want to be part of their success story’’. She expressed gratitude to the Ogun State Government and the Office of the First Lady for providing the enabling

environment for businesses to thrive, while urging the participants to take advantage of the opportunities provided by the training and its associated empowerment benefits to develop and take their respective businesses to greater heights. In her keynote address, the First Lady of Ogun State, Abiodun, said, ‘’as a firm believer in initiatives that focus on boosting the economic capacity of women and offering both financial and nonfinancial support to womenowned enterprises, I consider this programme as a step in the right direction. I was excited when I was informed about the FCMB SheVentures initiative. Financial empowerment remains one of the most important means of eradicating poverty among women in the developing world, as seen in Bangladesh, Kenya and Nigeria’’. She added that, ‘’we have had numerous empowerment programmes in Nigeria. Many were driven by capacity building programmes followed by loans and grants to women to start-up businesses. However, studies have shown that these initiatives, while having some value failed to reach their full potential because of one missing ingredient, which is financial education as a vehicle to actualise the full value of any business venture. And here today, FCMB through its efforts to ensure that women owned businesses in Ogun state and Nigeria as a whole are not left out in the development of the nation’s economy, has delivered this very much sought after Financial Education to us on a first class level amongst an array of financial solutions’’.

Godswill Akpabio (r), minister of Niger Delta Affairs, in a handshake with Adesola Adeduntan, CEO, First Bank of Nigeria Limited, at a courtesy visit by a delegation from FirstBank to the minister.

L-R: Jacobs Moyo Ajekigbe, chairman, Friesland Campina WAMCO Nigeria Plc.; Wale Olaoye, group managing director, Halogen Group/guest speaker; Olasupo Ayokunle, awardee, president, Christian Association of Nigeria (CAN), and Osaretin Demuren, awardee, Chairman, Gtbank Plc, at the 12th Founder’s Day annual lecture and awards ceremony of the Bible Society of Nigeria held at the MUSON Centre, Onikan, Lagos

L-R: Muyiwa Ayojimi, company secretary/general counsel, International Breweries (IB) Plc.; Yetunde Arobieke, commissioner, Lagos State Ministry of Wealth Creation and Employment; Boladele DapoThomas, permanent secretary, Lagos State Ministry of Wealth Creation and Employment, and Temitope Oguntokun, country lead, sustainability and stakeholder engagement, IB Plc. at the opening of the maiden edition of the LSTEF employment summit co- sponsored by IB Plc. in Lagos.

Tuesday 11 February 2020

BUSINESS DAY

INTERVIEW Sensitising Nigerians on nutritional benefits of pork will help stimulate industry’s growth’ Muyiwa Folorunso is the co-founder of Porkmoney, leaders in Nigeria’s pork industry. In this interview with LINDA OCHUGBUA, he speaks about Porkmoney and its plan to build Nigeria’s biggest private pig farm in 2020 and how the country can fully harness the potential in its livestock value chain.

orkmoney started two years ago. Can you tell us what birthed the initiative and how far you have come? Porkmoney was birthed out of the desire to create value in the agricultural ecosystem through pig farming which is highly viable, profitable and sustainable. Many may wonder why Pigs. It’s simple. Pigs are very prolific and resilient and also have the potential to give birth fast, as much as twelve live births every 6 months that grow to 60kg in 8 months. They also have the highest feed to meat ratio of any livestock.

far, we have partnered with over 400 individuals and employ over two hundred full staff across our efforts in Nigeria.

What was the initial investment in Porkmoney and what is the worth of this enterprise today? Porkmoney was simply an idea I had over 7 years ago that wouldn’t have attained this much success without handwork, dedication and the unrivalled support from our staff and partners. We started with very little, basically off the profits of my previous businesses. In two going on three years, our contribution towards the Nigerian agricultural ecosystem has positioned us the leading pig farming enterprise in the country, having farmed over 15,000 pigs in that period. I believe we are well on our way to becoming a good example of what is possible for the youths who decide to dedicate their energy and creativity towards developing opportunities in the Nigerian agricultural landscape.

What are the risks associated with pig farming and what measures have you put in place to guarantee the safety of investment? One major risk that comes with all livestock farming is a threat to the life of livestock. Even though we know pigs properly managed are very diseases resilient we still see that PorkMoney pigs are insured by the Nigerian Agriculture Insurance Corporation (NAIC) to protect from livestock loss and against unforeseen circumstances. We also ensure that those who play an essential role in every phase four farming process (Factory workers and Farmers) adhere to our stringent procedures, towards the success of our farming cycle.

Can you highlight the opportunities in pig farming for the economy and individuals? We cannot deny that agriculture has and will always be a major contributor to the nation’s economy, with livestock farming playing a very significant role. Pig farming contributes largely to the food production and security of the country as well as the generation of revenue by localising the production of pork products thereby bringing to a minimum our heavy reliance on its importation. This is a billion-dollar opportunity that when done well in providing job and investment opportunities for Nigerians and this is what PorkMoney is about. We are tapping into a market that has seen us inject life into the forgotten pig farmers, protecting and growing the livestock sector. How can Nigeria take advantage of the opportunities inherent in pig farming? Where are the challenges and what support would be necessary for accelerating the potentials? Pig farming in Nigeria is one of the lucrative and profitable livestock businesses. Commercial pig farming is beneficial since pigs are prolific breeders and can deliver 10 to 14 piglets in a single birth. They also have the highest

You have a partnership plan that promises up to 30 percent ROI. How does it work? Yes, we offer our partners around the world, an avenue to create wealth for themselves by providing them with as high as 15-30 percent return on their capitals. The sponsorship from our partners allows for the purchase and breeding of pigs from birth till maturation. The pigs are then processed, packaged and sold with returns given after 11 months.

feed to meat ratio with pigs being not too picky about what they consume. For most small scale pig farmers, the unavailability of adequate finance has become a ball and chain. The government can encourage the practicality of the pig farming value chain by providing access to funding and the formulation of policies that create an enabling environment for pig farming to thrive. Government-sponsored facilities for the farming of pigs would be a smart move with great consequences for the pricing of this most valued animal protein. Education of the masses of the economic and nutritional benefits is perhaps the most important tool for waking up this industry and its immense potential. Porkmoney estimates annual consumption of pork to be $3bn in Nigeria and Ghana alone. What are the health benefits of pork? There are many health benefits of pork but I’ll highlight a few. The Vitamin B6 present in pork meat helps in the metabolism of fats, proteins, and carbohydrates and keeps proper functioning of the nervous system. It is also important for the formation of red blood cells. Pork is a good source of protein and amino acids. Also, the zinc present in pork boosts the immune system and improves body resistance against numerous diseases. It is also essential for a healthy brain. Of all the animal proteins, pork has the most uses and it is ironic that in Nigeria it is the most frowned upon, but that is likely due to religious reasons alone. Tell us about your plan to build Nigeria’s biggest private pig farm in 2020? Our goal for 2020 is to own the largest non-government owned pig farm in Nigeria. Outside of the controlled and cost-efficient farming effort, this allows, it also allows for the training of the fu-

ture of pig farming in the country. Our resources and efforts would see us encourage thousands of people to become vested in this sector of the livestock agricultural ecosystem. We have currently purchased a 100-acre property in the Epe area of Lagos for this purpose. What lessons have you learned in your journey of building a successful pig farming business? The first one is that a business must add value. Making money is a huge motivator in all of our lives, but I have learned firsthand that you should never travel down a road just because there is a promise of financial gain. You need to have a real passion for what you are doing and the decisions you are making for these decisions to be worth it. Another is that there is power in starting small. So many people are afraid to get started because they think they need a lot to achieve success. Don’t be afraid to start small. Everyone has to start somewhere, and you don’t need a lot to do it. Start with what you have. In terms of impact, how would you access Porkmoney? How much employment have you created across the value chain and in terms of training and capacitybuilding, how many successful pig farmers have you raised? Porkmoney had impacted the livestock farming sector, especially in the pig farming niche. Since our launch, we have been able to empower hundreds of farmers (Over 500) with the resources they need to thrive, ensuring that they are well informed about new and modern pig farming practices and also equipping small scale farmers with a platform to expand. We also provide them with free training opportunities to ensure that they are well armed with all the information they need. So

So far, how has that partnership plan been; how much investment have you been able to pool and what percentage has completed the investment cycle? Our partnerships are in different phases and cycles. We have set times where we accept partnerships from people. So far, we have been able to partner with over 450 individuals across the different cycles, farmed over 15,000 pigs and generated over N1billion in funds towards our pig farming value chain. Does Porkmoney have plans to leverage technology (like mobile phone applications) in encouraging private investment and furthering trust in agri-investing? At Porkmoney, we ensure that we are up to speed with technological advancements and make improvements on the go. We are a digital agribusiness platform with a fully functional website and a good social media presence because we understand the power of technology and its importance in the digital era. One of our plans is to build a mobile app for a much better user experience and help us establish our brand value in the market. This is something that we would achieve before the end of the second quarter of 2020. Your retail product, Porkoyum, means the focus is not just on rearing pigs but cre-

ating also value-addition. Beyond livestock, why is it important that Nigeria stops exporting most of its agric products in raw form and starts value-adding? Value addition is the only way to get real value for our work. The story of Africans shipping off its raw materials only to buy them back for way more when processed form should not continue to become our story. For PorkMoney it was important for us from the jump that we can be in charge of all the possibilities inherent in our value chain. To this effect, we created our retail brand, Porkoyum, where we supply finished products in the form of our Porkoyum Bacon and Sausages and Diced Pork to homes and restaurants and hotels. We currently are looking to employ over 1000 merchandisers across the state to further strengthen our retail arm. What has been the reception of Porkoyum products in the market? Ve r y re ma rkab l e ! Si n c e w e launched Porkoyum in 2018, we have been able to produce three delicious exciting products - The Porkoyum Bacon, Porkoyum Sausages and Porkoyum pork cubes retailing at the fairest prices in the market. Our products are now being sold in over 300 stores in Lagos. We believe that this number will triple when we expand our geographical reach this year. What are the measures in place to ensure that your pigs and healthy and your products are of quality? All Porkoyum products are produced under highly safe and hygienic conditions. We place very high importance on this also and various critical control checks are done by the Quality Control officers. For our raw materials, they are sourced from the best vendors of the most reputable pedigree. All raw materials used in producing Porkoyum products undergo laboratory testing. We ensure that the pigs used are healthy. Our Porkoyum products are NAFDAC approved and freshly produced. Any expansion plans? Our short term goal is to own the largest privately owned pig farm in Nigeria. We have purchased a vast land space in the Epe area of Lagos which is a step in the right direction. In 5 years, we also want to be a key player in the Agri sector and at the forefront of the livestock farming industry. Our e-commerce brand, Porkoyum currently retails The Porkoyum Sausage, Porkoyum Bacon and our product, the Porkoyum Pork cubes. We are working towards expanding our product line as well as broaden our geographical distribution to being beyond Lagos State and finally across the country. We expect to achieve this success in the next two years.

Tuesday 11 February 2020

BUSINESS DAY

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Tuesday 11 February 2020

BUSINESS DAY

Media business Destination marketing: Assessing Lagos State reactive measure on okada Most actions of government are directly or indirectly towards destination marketing. But when the actions are reactive rather than proactive, as the case of Okada proscription, they are always costly to business. Daniel Obi writes

here is heavier cost usually associated with policy inconsistency. Also, more damages are often incurred when government is reactive rather than being proactive. Experts have linked these two factors as major constraints to economic growth. These factors often frighten investors in any society. Typically, being reactive is when events dictate the agenda. Often times, government officials in many states have allowed motorists to commit offences before arresting them or other individuals to build multi-million Naira houses on pathways, only to turn around to demolish them. Many of such instances occur with heavy losses. Customarily, every government supposed to be proactive in its governance, set up and implements policies for the citizens to allow smooth administration. But when it is reactive perhaps due to lack of initiative, this becomes costly and pushes the citizens to criticize and react violently. Analysts agree that “The problem we have is that for quite some time, we have not really been very consistent in our policies. The repeated changes in government policies in Nigeria have posed a number of threats to the country’s development economi-

cally and socio politically” The recent proscription of the use of okada for commercial transportation across several parts of Lagos State is seen as either policy inconsistency or reactive measure which has “worsened the country’s reputation as a difficult environment for business for small and medium enterprises”, says Olanrewaju Rufai in his comment in BusinessDay. Over the years, Lagos State has, due to political, economic considerations or unwittingly allowed influx of okada riders from Mali, Niger, Chad and all parts of Nigeria to the state without formal registration only to suddenly realize that they constitute nuisance.

Within this period, investors such as Gokada, Opay, Max.ng and Oride and others raised multi-million Naira to provide okada commercial transportation services towards augmenting movement in Lagos. In the process, they employed many people who will now be laid off due to policy somersault. A marketing communication expert who prefers anonymity said the blanket proscription of the use of okada amounts to policy inconsistency and a reactive measure. “Government should have checkmated the entry of okada for commercial transportation through strict registration, but it opened the doors only to

turn around to proscribe them”, he said. He warned that such policy inconsistency and reactive measures by government do not favour investors who have committed or want to commit huge sums of fund in such environment. The marketer was however in support of any move to enhance destination marketing but said that such moves must be proactively taken. According to him, it is right for any government to take steps towards good governance but said government needs to be proactive because shifting goal post when the match is on is always costly and creates confusion to players.

La Casera stirs Nigeria’s competitive CSD market with Bold products …Unveils Kano Nwankwo as brand ambassador Daniel Obi

merging from volatile business cloud, The La Casera Company Plc, which came in the Nigerian market in year 2000, is scuffling and pushing with ideas, product innovations and stronger alliance with trade partners to reclaim lost grounds. The company, the first to introduce soft drink to be offered in a PET bottle in Nigeria, last weekend in Lagos, where it hosted its trade partners across Nigeria, launched Bold carbonated soft drink with four variants –Bitter Lemon, Orange, Tropical and Ginger flavoured. This is to satisfy various tastes. The new offers are in addition to its existing products such as La Casera Apple drink, Smoov Chapman and Nirvana water. The company also signed Kanu Nwankwo, the delightful and bold Nigerian former professional footballer who through his boldness won laurels in his football career as its brand ambassador to promote the Bold drinks. Speaking at the event, the managing director of the company, Chinedum Okereke told the trade partners that the new drink was out of research on what the consumers need. “The innovation is to bring excitement to our portfolio of brands to satisfy the consumer”. He acknowledged that the company went through tough time in the last three years, but commended the dealers for staying and encouraging the company. “We are therefore

Kano Nwankwo

interested in you because you are interested in us”. He appealed to the dealers to join hands with the company to grow it. “Join us today as we hold hands together for the next level”, he said. Also speaking on the new product, the marketing director Emma Agu said the company ventures into new territories. He said the company doesn’t just introduce products, but it builds products around the experiences of the consumer. The company rewarded over 500 of its dealers in categories with various amounts ranging from N100,000 each to N5m. For instance about 300 trade partners got N100,000 each; about 200 dealers were rewarded with N250,000 each while over 50 trade partners got N400,000 each and another set of about 50 dealers got N500,000 each. For the bigger awards, the company announced Fasaq Fortune as winner of N4.8 m; Son Emmanuel got N4.5 m. other awardees include Sufaye who got N3.6 m; CIF Nigeria Limited N3; Ayi Global N2.4 m. other winners emerged from all the regions.

Our focus is promoting African tech start-ups – Yadel Media Consultant After practicing business journalism for several years, Jonah Solomon recently set up a PR firm, Yadel Media to assist start-ups with marketing communication strategies to weather the turbulent Nigerian environment. In this interview, Jonah speaks on opportunities in tech PR in Nigeria and other issues. He says the firm offers customised solutions with varying budget options for start-ups – Excerpts What are your expectations and projections for business this year? f you look at the macroeconomic analysis of the global economy, you will realise that growth is projected to get stronger due to strong recovery in emerging market countries, which include Nigeria. Quite a few businesses will continue to show strong growth whether oil prices dropped or continue to rise. So, businesses here will continue to do well this year. Our business, for instance, is focusing on the technology start-up space, and what we have seen over the years is, whether growth projections in the global economy are negative or positive, the sector continued to show growth. So, I think that this is a year of expansion for the start-up scene

in Nigeria. Several start-ups are looking to expand across Africa and beyond. So, we are likely to see more series A and B rounds. It is also a year of Brexit, so we will see many start-ups positioning for opportunities as UK investors look to tap into the rising opportunities in the sector in Africa. There are numerous PR agencies offering almost similar services, what differentiates Yadel? What Yadel is doing is unique in several ways. First, we primarily focus on technology and financial services start-ups. Second, unlike other agencies, we offer customised solutions that allow just about any start-up with any budget to use our services. Although we have a structure that allows us to deliver www.businessday.ng

efficient services to our clientele, it doesn’t discriminate between a rich client and poor client. We can work with your start-up no matter your budget. And we deliver the corresponding result. Yadel was established when other operators are

Jonah Solomon

facing challenges due to economic downturn, what is your secret of survival? Yadel was established in 2014, when the Nigerian economy was averaging 6 per cent growth, so I wouldn’t say it came when there was an economic downturn. However, despite the economic downturn, we have weathered the storm. We have lost and gained clients within the period, just as other agencies. What has worked in our favour is the essential nature of our services at the early stage of any start-up. Because we are reliable and cost-effective, most start-ups, before even raising their seed round, can use our services as part of their marketing mix. We have been lucky as some continue to use our services as they grow.

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Are you considering affiliation to foreign or local big PR agency? We are open to partnerships with other agencies, but not an affiliation in the strict sense of the word. As a matter of fact, we are already doing this unofficially, as we have partnered agencies in Kenya and South Africa that handle our press distribution in those markets. We also have local partners for some of our experiential marketing needs of our clients. But an affiliation is not something we are in a hurry to get into as our company is still an evolving brand and we are careful about the brand’s identity. We need to get to that point where such a partnership will not consume the brand before taking the plunge. In the meantime, we’ll have to rely on such partnerships at the level @Businessdayng

we are doing it just to get our jobs done. Where do you see Yadel in the next 5 years? In the next five years, Yadel will be more than a decade old. And I would like to see Yadel that has become what it set out to be - which is to become an integral part of the tech ecosystem in Africa; delivering affordable and relevant marketing campaigns to our clients leveraging the day’s most effective PR and marketing tools. Tell us more about Yadel Yadel started out as a oneman media relations consultancy side hustle. Initially what we did was offer media relations advisory services and syndicate press releases across the markets our clients operate in, which include Nigeria, Ghana and Kenya.

Tuesday 11 February 2020

BUSINESS DAY

Branding By expanding, we are gradually transforming Nigeria’s automotive industry – Enyo Manager In this interview, Olabanjo Alimi Corporate Development Lead, Enyo Retail and Supply, spoke about how the company is harnessing technology to build trust and customer experience, how the launch of Auto-Centres is geared towards developing the currently fragmented automobile industry in Nigeria. Excerpts. Could you give us an overview of Enyo Retail and Supply? t is customer-focused, technology driven downstream company which was established in 2017 as a result of our unrelenting desire to expand trademark professionalism in the downstream energy space thereby creating the most exciting fuel retail brand in the country. Our primary focus is to integrate first level customer service experience with fuels retailing and renewable energy products in Africa. We are pioneering the technology revolution in the downstream to see what additional value can be created to support the massive industry. Your recently launched an Auto center, could you tell us more about it and Vehicon? Vehicon is our auto-maintenance and car repair business, established to revolutionize vehicle maintenance services. In a bustling city like Lagos, transportation is one of the most fundamental aspects of day-to-day activities. In light of this, we realize the importance of assets such as cars and how essential it is to ensure they are well taken care of. Today marks the unveiling of a world-class auto center at Ogolonto birthed from Enyo’s partnership with Cars45. This AutoCenter was established to provide our customers with the quality service that they desire for their Vehicles. The center will offer customers quality automotive services such as vehicle maintenance, servicing, inspection, sales, swap with other value-added services. Cars45 has harnessed technology to provide customers easy access to buy, sell and swap cars and we believed that we could include our expert auto-maintenance services to offer customers a 360 exceptional

Olabanjo Alimi

car services experience. With this, customers can inspect, diagnose and service the vehicles offered by Cars45 with Vehicon expert technicians. Why the focus on Car repairs? It is important to note that without vehicles, the oil&gas business cannot thrive. Not only is it important to provide quality fuels, it is just as important to provide quality services, spare parts and oil for these Vehicles. We want to be able to assure our customers that when it comes to auto repair and maintenance, we are the best-in-class. Prior to the launch of

this Auto-Center, Vehicon was situated solely at our service stations. By expanding our expertise, we believe we can gradually transform Nigeria’s automotive industry. Why the partnership with Cars45? In 2019, Enyo and Cars45 agreed to a partnership to facilitate the ease of car business by providing consumers with opportunities to buy, sell or swap their cars at all Enyo service stations nationwide. The partnership enabled consumers experience unrivalled automotive

services at Enyo retail outlets while increasing visibility for Cars45 value offerings across foot and vehicular traffic channels. Both organizations involved in the partnership have deeply invested in technology and customer satisfaction, and it was only natural that we further our partnership to develop the currently fragmented automobile industry. The synergy between both organizations has been seamless since inception and we hope to roll out similar initiatives that can enhance the automotive industry in Nigeria. What are the challenges you envisage with the consumers and car owners? A key challenge we face in this industry is manpower. There are few highly skilled Mechanics in Nigeria, and as a brand that stands for excellence, we have to create a solution in order to offer our customers the best services. This inspired Enyo’s Mechanic Technician Academy MECHTECH which is a corporate investment and skills development programme targeted at bridging the skills gap amongst Mechanics in the Nigerian auto-repair industry. We source Mechanics from the Mechanic and Technician Association of Lagos, put them through a 10-week intensive course and select the most capable who are suited to work with Enyo, which gives us rest of mind. Consumer confidence and trust was an issue but once we were able to prove to our customers that we are a credible brand, with our oil and gas business, we thought to transfer the same level of expertise to this business. How many stations should we be expecting at the end of the year and what is the spread across the

country? In 2019, we added 40 more stations to what we had. Currently, we have 84 stations in Nigeria. At minimum, we are expected to do as much as we did last year. Enyo came into the market three years ago. What gave you the confidence when you started out that you will compete favorably in the market? From inception, we were very clear on what gaps existed in the market and our aim was to bridge those gaps. The downstream industry had a negative perception and we believed that customers were being taken for granted and not getting enough value for their money. There was the need for someone to emerge and change the narrative, which is what Enyo is doing. We identified that trust was a huge issue and certainly, I do not know any other industry that does over 5bn turnover yearly with little to no technology. Ours was so until we came along and we have drastically changed the narrative. In Enyo, what drives consumer attraction? Technology and people; people in the organization who work tirelessly to improve the industry standard. Our shareholders, our Board and our Chairman; Tunde Folawiyo of Folawiyo Energy, who is vastly experienced in this business. Our Managing Director, Abayomi Awobokun, is also a very professional young man, who has had extensive experience in working in this field and he is very passionate about people especially young talents. Our business has too many moving parts, the only way you can stand out is through trust. Therefore, you must have a back end that ensures trust.

Felix King Foundation moves to produce new set of African women entrepreneurs …Awards $10,000 seed fund to best business ideas Daniel Obi

s consideration towards women empowerment and female entrepreneurship gains more interest among organisations, Felix King Foundation, which is at the forefront of championing business drive for widows and rural women is moving a step further to produce a new set of young women entrepreneurs in Africa. The foundation founded in 2014 by Felix King Eiremiokhae, the CEO of Oracle, foremost experiential marketing agency based in Lagos is organising a 2-day Startups Africa business conference in Lagos March 27 28, 2020 at Federal Palace Hotel, with the aim of bringing together over 1,000 female African startup entrepreneurs, world class mentors, business experts, investors, bankers, government leaders and

the media to support and encourage female-led businesses. “One of the objectives of this programme is to facilitate the growth and success of women-led businesses

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by providing them with pitching, training, mentorship and networking opportunities”, he told BusinessDay. He said the Startups Africa Conference entitled ‘Unleashing the Power of

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Female Entrepreneurs’ is designed to unite female startup entrepreneurs in all stages of business development, exposing them to topics and subject areas in branding and marketing; networking and business strategy as well as organizational structure and access to market. The event, he said will feature training and certification session by TIUA School of business, Georgia, USA, top-tier speakers, master-classes, expert discussions and a business-pitching sessions where successful pitchers with revolutionary ideas will win up to $10,000 non- refundable in seed funding investment to be disbursed in instalments. He said the winning business ideas should be good enough to provide employment for another woman and impact the community. According to him, the startups Africa 2020 live event is projected to be the largest gathering of African @Businessdayng

female entrepreneurs in 2020. On why women only, he explained that often times, women find it difficult to compete with men and the foundation also believes that the more women are empowered, the faster the pace of development in the community. King who said he sets certain percentage of his business profit for the foundation believes that the startups Africa hub ultimately will serve as a canvas for women to showcase their masterpiece to the African content as entrepreneurs. The businessman believes strongly in the ability of young Africans to birth the innovative business ideas that can change the world for the better. “We are willing to provide the help and support needed to actualize this. I have always believed that if you are a billionaire and all you think about is your immediate family; then you are a poor person in your soul.

Tuesday 11 February 2020

BUSINESS DAY

Take control of your career in an uncertain world A good strategy is to minimise worry about external events and focus on personal goals Jonathan Black

n the current turbulent global political climate, a job or a career for life for those just starting out in the workplace is no longer guaranteed — or even desirable. Add in the climate crisis and wider anxiety about the future, and the feeling of worry and lack of control could potentially become overwhelming. How can students, new graduates and those who advise and recruit them find a meaningful way to plan for the decades ahead? The traditional versions of sage and sometimes staid advice — go into the professions, train for something, get a job with a good pension and so on — that was given to older Boomers, Generation X and even Millennials now seems quaint and often redundant for Generation Z (born 1995-2010). One of the marked changes in response to uncertainty — one we have seen at Oxford university, where I head the careers service, and at other universities — is a clear increase in the numbers of students making an early start on their career planning. Compared with 2018, twice the number of students visited the general, non-industry specific, careers fair at Oxford in autumn 2019 or attended employer presentations, while 65 per cent continued to open our weekly careers emails. We undertake an annual survey of all undergraduate and graduate students asking them their frame of mind and industry interests — if any. This year, only 25 per cent of first year students at Oxford reported that they were postponing all their career plans, compared with a stable level of 35 per cent over the past few years. Brexit and climate change Brexit and the climate crisis are the two external uncertainties already having an impact on students’ lives. In late 2018, Anna Olerinyova, an Oxford doctoral student in Biophysics, considered quitting her research studies and drastically changing career path because of these twin worries. She decided to stay on, but says: “On reflection, Brexit will just make staying and finding research funding more difficult, but not impossible.” She had worried that her research in medical diagnostic tools would be irrelevant because “there was a good chance that there would be no money in

future for this work as it would all be focused on climate problems, coupled with the fact that my subject would be less relevant leaving little point in continuing”. Ms Olerinyova is now engaged in climate activism, and it has had a positive effect overall. “It has made my life much more interesting, bonding together with a whole new community of people.” She feels freed from career expectations and much more open-minded on where life will take her. She is now determined to complete her PhD, seeing a “glimmer of hope in the use of my research.” A little further on in her career, Sarah McGill, who leads a climate change research policy programme at Oxford’s Smith School of Enterprise and the Environment, is working on short-term contracts and, as she puts it, has a feeling of veering off the “straight and narrow path my classmates at Columbia University followed into law school and Wall Street”. Since she holds research degrees in economics and the environment, Ms McGill’s uncertainty focuses on a single question: “How can I make a meaningful impact with my career? There is no obvious job title to search for, and those that www.businessday.ng

might look impactful don’t pay a living wage.” Competition is increasing Alan Percy, chair of Mental Wellbeing in Higher Education, a working group of experts, and head of the counselling service at Oxford university, observes that one of the causes of increasing uncertainty is the wider economic environment in which everyone must be more competitive. “The classic defensive psychological reaction is to create certainty by controlling things; this is a poor action to take as it increases rigidity of thinking,” Mr Percy says. Given that is impossible to be in control of most things (Brexit, climate crisis, politics) such rigidity creates more anxiety, while at the same time giving power to external forces. Mr Percy suggests that to reduce such feelings of powerlessness and hopelessness, people can aim to “concentrate, appreciate and celebrate what they have and what they can control”. Some young professionals are embracing uncertainty as a positive force. Christine-Marié Louw studied law, then took a masters degree in music and currently works as an analyst at BP. She is able to combine her work with a semi-professional

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music career. “I have a high appetite for ambiguity,” she says. “And I try not to let external forces control me.” Having decided not to buy a property, she invested instead in an ambitious expedition with her brother, exploring the tributaries of a river system in Indonesia. Each day they would set off and had to choose which tributary to take. She says that the experience created valuable insights: “The uncertainty of the outcome generated possibilities; I was comfortable with failure — just making the decision to choose a specific path was enough,” she says. Ms Louw followed the popular path from undergraduate to a masters degree. There are three main reasons that students give for immediately following an undergraduate degree with advanced study. It can be a way to increase career choice, or to keep studying because the student enjoys it and is fulfilled. Finally, for the undecided it is a way to postpone the entry to work for a year or two. There has been a marked drop in the proportion of Oxford undergraduates taking this route, from 35 per cent five years ago to 30 per cent now. More students are opting to go straight into work after graduation. @Businessdayng

Setting up a business The most uncertain path for new graduates is that of starting their own business. Even so, it is a choice being considered by more than a fifth of Oxford students, across men and women equally. However popular start-up culture has become, the young may not have an advantage here. A study, led by Pierre Azoulay of MIT and Benjamin F Jones of the Kellogg School of Management, of 2.7m founders from 2007-2014, established that those under 25 have the lowest likelihood of a successful exit or creating a top growth firm. The most successful founders were aged 46-55, with more skills and experience to navigate the many uncertainties of business. There will always be uncertainty around future events and people will always react in different ways, from feeling powerless to thriving. And it helps to know this is not a new phenomenon. Victor Hugo, the 19th century French novelist, captured a positive and rather uplifting way to view and manage uncertainty: “Be as a bird perched on a frail branch that she feels bending beneath her, still she sings away all the same, knowing she has wings.”

Tuesday 11 February 2020

BUSINESS DAY

Inside information: MBA student Sónia Vaz advises applicants to ask questions of alumni before attending selection day interviews © Anna Huix

How to make your MBA application count From choosing a school to preparing for admission tests, careful planning is vital Ian Wylie

he Graduate Management Admission Test was the worst part of the MBA application for Sónia Vaz. On top of the intense study and mock tests, the computer she was given during her final exam was broken. The GMAT test result was disappointing. “My final grade was not what I was hoping for, but I had no other option than taking it,” says Vaz. “I had to give everything to the assessment day and interview.” The good news for Vaz — and other candidates worried about their scores — is that the GMAT and the alternative Graduate Records Examination (GRE) are just one part of the application to study an MBA. Vaz is now an MBA student at highly ranked Iese Business School in Barcelona. A high test score helps but it is no guarantee of acceptance. Business schools look at all components of the application process — from essays to interviews — before making a decision. “During the assessment day I met the MBA admissions officers at Iese and they could see me as a person, not just a piece of paper or a set of test results,” says Vaz. Schools advise that prospective students apply only to insti-

tutions that match their needs and values. They should look at the core subjects and electives a school offers and consider how the academic programme will help them fulfil their goals. They should also talk to current students, faculty and alumni to determine whether the school is the right fit. It is important that wouldbe applicants think about the diversity of a school’s typical cohort since much of an MBA’s value lies in learning from, and networking with, peers and alumni. The same goes for faculty. Anyone interested in working in a specific industry should establish the staff and school’s connections to that sector. Decisions must be made over whether to go for a one- or twoyear course, as well as full- or part-time study. Full-time MBAs provide a chance to be immersed in study, but there can be financial snags such as leaving a salaried job while incurring hefty tuition fees and living expenses. A high GMAT test score helps but interaction with admissions staff can be just as critical The format of the course also needs to be considered. There are plenty of options to complete MBA courses either fully or partly online, but these can mean less time networking on campus and fewer opportunities to take part in lectures, tutorials www.businessday.ng

and workshops in person. Contacts made while choosing a school can help with the application. For Vaz, the most critical interaction during her application was not between her and the test computer, but rather with Iese admissions staff, current MBA students and alumni, all of whom shared information that helped during the assessment day and interview stages. “Rely on the alumni to clarify every question you might have,” she advises. “Everyone will be happy to help you.” Networks can be established at MBA fairs, but some business schools have schemes to help prospective students build contacts. HEC Paris has 60 MBA student “ambassadors” who offer one-to-one consultations and campus visits to anyone interested in studying at the school. “We connect candidates with students, either from their region or professional sector,” explains admissions director Benoit Banchereau. “The majority of people who join our MBA programme have met or interacted with a student or alumnus prior to making their decision.” Since most programmes take a holistic approach to reviewing applications, prospective students should place equal emphasis on all parts of the process, says Jamie Wright, an adviser with admissions consultancy

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Accepted. “Each question is asked for a reason,” she says. “For example, if a question about career aims asks for just 100 words, candidates shouldn’t breeze through this just because it has a low word count.” Applying for an MBA course: an insider’s guide Applications to MBA programmes are down 6.9 per cent year-on-year, according to the Graduate Management Admission Council. However, competition for places remains fierce at top institutions where acceptance rates are as low as 6-10 per cent. The key to a successful application is weaving together seemingly disparate components — test scores, CVs and essays — into a compelling narrative, says admissions adviser Jamie Wright. Here are her tips on how to do that: The test This shows your aptitude. Your GMAT or GRE score enables business schools to be confident that you can handle the academic rigour of an MBA. Allow sufficient time for test preparation. Ideally give yourself six or seven months so you have time to retake the exam, if required. “It is worth taking your time to prepare properly,” says MBA student Sónia Vaz. The CV Your résumé should high@Businessdayng

light your soft skills, such as leadership, communication and teamwork. Provide examples of your character and success stories. How have you overcome obstacles and learned from adversity, for example? Avoid industry jargon, however — MBA officers should not need a translator. The essay While the test demonstrates your aptitude and the CV shows you are accomplished, the essay is your chance to tell admissions officers about who you are as a person and what your goals are. It connects the dots of what could otherwise seem like a collection of disparate life experiences. Write in an authentic way that allows the admissions team to get to know you and how this specific MBA — whether it is a full-time or part-time programme — will get you from A to B. The interview Be prepared to flesh out any details given in your application and arrive armed with insightful questions that show you have thoroughly researched the programme. Your goal is to show that you are self-reflective and interesting. Your interaction with the interviewer will speak volumes about what kind of student you will be if you are enrolled on the programme.

Tuesday 11 February 2020

BUSINESS DAY

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Why foreign exchange loss through overseas studies worry experts KELECHI EWUZIE

Human Capital

Greensprings school recommits to grooming students with vital life skills, academic excellence … Marks 35-year milestone KELECHI EWUZIE

he quest for quality education in the country has consistently been on the increase. The situation is not helped by the huge number of candidates who yearly write the university admission examination but are very unlucky to get placements in the nation’s 158 citadels of higher learning. It has been observed that government loses huge foreign exchange to overseas countries through the fees Nigerian students pay to acquire academic certificates. Some education watchers and stakeholders have expressed serious concern that an increasing number of Nigerian parents now encourage their children to study abroad even within Africa because of infrastructural challenges which subsequent governments have failed to address. Florence Obi, former Deputy Vice Chancellor, University of Calabar, disclosed that African governments in general and Nigeria in particular have failed to realise the huge potential inherent in the development of education as a possible huge foreign exchange earner for the economy. Obi noted that it is instructive that government today embraces education as a business as this development would spur innovation and creative production toward solving the huge foreign reserve loss to other countries. According to Obi, “A lot of the problems we have in Africa can

Higher

G L-R: Abdulrazaq lsa Kutepa, Chairman, Waltersmith Petroman Oil Limited; Prince Dapo Abiodun, Ogun State Governor and Sam Nwogu, General Manager, Operations, Katchey Company, during the inauguration of Waltersmith Science Laboratory Complex donated to Muslim College at the 70th Anniversary & Luncheon/Awards of the College organised by the Old Students Association in ljebu Ode recently.

be solved creatively if we are practical in our approach by creating support solution for education”. Obi is, however, saddened by the fact that African government does not consider education as a business even though it is such a huge avenue for foreign exchange. Isaac Adeyemi, former vice Chancellor, Bells University of Science and Technology Otta, Ogun opines that why don’t we consider education as business? The problem is that if government is running education, they run it down; the facility are poor and they don’t service orientation toward education because if they have service orientation toward education,

they will do it in such a way customers would be attracted to that educational institution,” he said. Adeyemi urged government to consider creating an education hub somewhere, noting that with the huge resources at the country’s disposal, government can put in the infrastructure, make electricity stable, good roads, water and other social amenities and invite some of the top universities to set up campuses there including Nigerian universities. “Once these top universities are certain of the presence of the necessary infrastructure and enabling environment, the universities will come and once

they establish their presence in the country, this will attract not only Nigerians, but people from all over that globe and that means education has become a business and it will contribute to the economy,” he said. The university don added that the solution to the huge loss and lack of foreign patronage of universities is for government to toe the line of technology and have a hub that would be dedicated to education. “Lots of people need education but because the environment is not suitable, they take their children abroad, and by so doing the country is losing huge foreign exchange,” Adeyemi added.

reensprings School, one of the foremost British International schools in Lagos and Nigeria has reiterated her commitment to providing a well-rounded education that enables students to develop vital life skills and excel academically. The school in the last 35 years as the first thinking school in Nigeria has demonstrated its commitment to shaping world leaders. It has moved from pre-school to developing the total value chain of education stretching to setting up to a teacher training college. Lai Koiki, executive director, Greensprings school in her speech at the 35th Anniversary celebration of the school held at Anthony Campus, Lagos says it has been 35 years of consistently providing worldclass education in Africa. Koiki observed that the school started in 1985 with pre-school but has now grown into 5 campuses Anthony campus, Lekki campus which is the flag ship school; Ikoyi campus; Anthos house and the Greensprings teacher training college. The educationist further says that over the years, the teaching methodologies continue to change, stressing that the management of the school recognises that children especially the 21st century need to be taught in a different way the school need to continue to involve in approach to teaching methodology to reflect this

current trend. “We are looking at a future that will be ruled by artificial intelligence and big data and we need to prepare our children for that so that is what we are trying to do. We recently commissioned the career college and university readiness center. We have started building the tech laboratories such as the virtual reality laboratory, sea laboratory in these laboratories, students can conduct research, discover and learn about all aspects of our ecosystem. They will also explore flying using simulators because we need to prepare them for that future we need”, Koiki said. Koiki further assured that the school will continue to support and provide funds to improve public school around the community where they are location adding that such is where the most help are needed. Bola Kolade, head of Anthony Campus, Greenspring school says in the last 35 years, the school management has put in place initiatives, innovations and the passion to work with children to move them from where they are to where they should be. Kolade opines that education is a transformation vehicle, adding that the best resources any nation has is in her human resources and if that human resources are well trained, well skilled, well looked after, it can made progress in their development. On the contribution of Greensprings school to education, Kolade says the school has first class education and character building.

Waltersmith Petroman deepens STEM education with N50m 3-D science laboratory donation KELECHI EWUZIE

etermined to strengthen capacity in teaching and learning of Science Technology Engineering and Mathematics (STEM) in Nigeria, Waltersmith Petroman Oil Limited has donated a N50 million worth 3-D Science laboratory to Ijebu Muslim College, Ijebu-Ode, in Ogun State. The donation was also part of activities to mark the 70th anniversary of the school as education in the state take a new shape. Kayode Sote, National

President, Ijebu Muslim College Old Students Association (IMCOSA). expressed excitement about the tremendous support the old students had made towards developing the school and improving the education system. Sote while speaking at the commissioning of the laboratory by the Executive Governor of Ogun State, Prince Dapo Abiodun. stressed on the need for teacher’s capacity building to improve the standard of teaching in the state, just as he admitted that knowledge will shape all sectors of the country geared towards development. According to Sote, “The new global order is knowlwww.businessday.ng

edge economy and any country that is not knowledge driven or unwilling to join the bandwagon risks being left behind with adverse consequences for her economy and people. Nigeria must add value to her natural resources through the application of knowledge because market for such free endowment may shrink, business may collapse but her citizens must not perish because of lack of knowledge and will-power of the government to promote knowledge revolution in all its ramifications. On the school’s infrastructure, the President reiterated the association’s commit-

ment and devotion to the development of the institution while calling on the government for relevant assistance and reintroduction of Parents and Teachers Association (PTA) levy. In his remarks, the Executive Governor, Ogun State, Prince Dapo Abiodun, applauded IMCOSA on the school’s 70th anniversary and the Chief Executive Officer, Waltersmith Petroman Oil Limited, Abdulrasaq Isa, who is also a member of IMCOSA, for donating a science laboratory to the school. “I must say that in developing the society, everyone has a role to play. The founders of this institution rather than la-

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menting, saw the need to work hand-in-hand for speedy development. Ijebu-Ode Muslim College has produced great people in the society who are worthy ambassadors and are doing well in different spheres of life.” Sam Nwogu, General Manager Operations, Katchey Company and the Laboratory Consultant said the science laboratory donated by Waltersmith Pretroman Oil Limited, is one of the its kind in Nigeria that will boost the education system. “Science Technology Engineering and Mathematics (STEM) is a new trend in science and it has not really been deployed in Nigeria. It’s @Businessdayng

a way of teaching science in junior secondary school. In the western world, STEM is a course on its own. As a new trend coming up in science, for us who are in this industry have asked Waltersmith to do something that is innovative and worth doing well. “Basically, we are looking at how to teach students to analyse and interpret data faster instead of spending time acquiring numbers, conducting experiment that will take almost forever. But here it will allow the technology get the data for you while the students sit and interpret. With this, teaching of science becomes for much easier”, Nwogu said.

Tuesday 11 February 2020

BUSINESS DAY

EDUCATION How far do parents’ social, economic attainments take children in education? STEPHEN ONYEKWELU

recent tweet by Dipo Awojide, founder @BTDTHub and a senior lecturer in strategy, careers, employability and SME made Ota-based Covenant University to trend last week. “Why are Covenant University grads doing relatively better than grads from other institutions in Nigeria?” Awojide asked. After 37, 240 votes were cast, 20.1 percent believed it was academic knowledge/ skills; 22 percent held that it is mentality and mindset that made the difference. Networking abilities garnered 27.3 percent of votes while 30.6 percent voted for influential parents as the determining factor for CU graduates. Why always Covenant University? “Well, because they produce some of the most employable graduates all over Nigeria. And this isn’t about academic performance. It is about commercial awareness, networking skills and general exposure. We should be having these discussions,” Awojide said. A study using data from the Programme for International Student Assessment (PISA), the Organisation for Economic Cooperation and Development (OECD) showed

L-R: Aje, father of the winner; Oyindamola Aje, InterswitchSPAK 2.0 winner and Mitchell Elegbe, CEO/Founder, Interswitch Group at the finals of the InterswitchSPAK 2.0 held recently in Lagos.

that while many disadvantaged students succeed at school, socioeconomic status is associated with significant differences in performance in most countries and economies that participate in PISA. Advantaged students tend to outscore their disadvantaged peers by large margins. The strength of the relationship varies from very strong to moderate across participating countries, but the relationship does exist in each country. In Australia, students from the highest quartile of

socioeconomic background perform, on average, at a level about 3 years higher than their counterparts from the lowest quartile. Cognitive ability is deemed to be a genetic quality and its effects only influenced to a small degree by schools. Much of the body of research particularly that is generated from large-scale international studies would seem to contradict this reasoning. “If the role of education is not simply to reproduce inequalities in society then

we need to understand what the role of socioeconomic background more clearly,” Sue Thomson, an education researcher said. “While much research has been undertaken in the past 50 years, and we are fairly certain that socioeconomic background has a significant effect on educational achievement, we are no closer to understanding how this effect is transmitted.” People familiar with Nigeria’s public and private sector universities say for any university to stand out, it

must have the right entrepreneurship ecosystem. Nigerian universities need to start to create this atmosphere to produce versatile and readily employable graduates. Someone within the university, not necessarily the vice-chancellor or the dean of the college of business but anybody at all who is passionate about entrepreneurship needs to champion the course. “I think influential parents and networking ability are the main factors. Individuals from a rich and supportive home

UITH matriculates 227 students, tasks them on commitment, excellence SIKIRAT SHEHU, Ilorin

niversity of Ilorin Teaching Hospital (UITH) has matriculated a total of 227 students of the school of Health Information Management (SHIM), the School of Orthopaedic Cast Technology (SOCT) and Community Health Officers Training Institution (CHOTI). Speaking at the 2019/2020 joint matriculation of SHIM, SOCT and CHO held at the school complex hall recently, Abdullahi Da-silva Yusu, a professor and the chief medical director, UITH charged the new students to take excellence, dedication and commitment as their watchwords

in their sojourns for the new academic session. Yusuf equally admonished the students to use the opportunity before them to train themselves, as he assures that he will make available all the necessary modern infrastructural materials needed and appropriate man-power for academic development. The CMD who was represented by the deputy C-MAC (Training and Education) of the Institution, Adeniran A. S congratulated the students and stressed the need for them to be good ambassadors. In his welcome remarks, Emmanuel Yemi Oyinloye, the registrar of the school, promised the students of conducive environment www.businessday.ng

for their academic success which he says can only be achieved through punctuality to lectures, research exercises, high performance at continuous assessment, reading culture and above all, prayer to God Almighty. Oyinloye who presented 60 (ND) and 108 (HND) students of SHIM, 24 SOCT students and 35 CHO students, totaling 277 students to the Management, noted that the Matriculated students have gone through the conditions set for the admission into the schools. The School Registrar also appreciated University of Ilorin Teaching Hospital Management under the leadership of Yusuf for creating an improved conducive learning environment in the

complex, as well as other continuous support, assistance and encouragement for both students and staff of the Institution. In his Goodwill message, David Segun Odaibo, director of administration admonished the students to remain focused, attentive and avoid associating with groups that can influence them negatively. Esther Ikupolati, the Kwara State Director of NYSC, in her message, emphasised the need for professionals to always keep abreast of every situation around them as the world is going to the realm of appreciating them more. The climax of the occasion was a display of skill acquisition and entrepreneur-

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are bound to excel even in the face of intimidating odds. These rich families also tend to belong to a network of rich and like-minded fellows,” Chimere Elele Assoc @Chimere_Elele, a PhD candidate at Australia’s University of Wollongong tweeted. Some graduates of Covenant University have pointed out in a fury of tweets that the university is home to students from divergent socioeconomic backgrounds, contradicting the view that only children of influential parents can afford to send their wards to the school. “There were people who only ate garri and indomie and people who were on David Oyedepo scholarships. The Student Council sometimes had to crowdsource funds to pay fees of students nearly every session and provided welfare support for some. Not all had influential and wealthy parents, many didn’t,” @rotimi_olopade tweeted. On BusinessDay’s recent list of Nigeria’s top 10 most expensive universities, Covenant University ranked 6th, sandwiched between Skyline University in Kano State (5th) and Adeleke University in Osun State (7th). At Covenant University in Ota, Ogun State, the most expensive course of study is Accounting at N857, 500. The school was founded in 2002.

Top five websites to look for scholarship in Nigeria

ship products to the management and other guests on the occasion. Some of the products that were showcased are; the branded carrot oil, liquid soap, peanut, cake and many more which were unveiled to the world market by the CMD. Aisha Fakunle, one of the tutors from the General Studies Unit of School Complex pointed out that the Entrepreneurship and skill acquisition became necessary to enhance their academic sojourns to have full responsibilities and add value to their lives. She, therefore, urged the management of the institution to patronise the products to serve as a source of encouragements. @Businessdayng

etting a scholarship takes away all your financial concerns. It gives you more time to study, gain knowledge and secure better grades. Earning a scholarship is prestigious. Since you get a scholarship on merit, getting one will leave a good impact on your future employers. Some competitive scholarships are so good that you can list them on your resume under accomplishments. Here are five websites that can get you started on your search for a scholarship that suits your purpose. www.scholarshipair. com; www.scholastica.ng; www.afterschoolafrica. com ; www.worldscholarshipforum.com; www. scholars4dev.com. Good luck with your search.

Tuesday 11 February 2020

BUSINESS DAY

Markets + Finance

‘Providing proprietary research, commentary, analysis and financial news coverage unmatched in today’s market. Published weekly, Markets & Finance provides all the key intelligence you need.’

Cadbury Nigeria surmounts headwind as earnings surge BALA AUGIE

hile early earnings releases by consumer goods firms have been disappointing so far, Cadbury Nigeria Plc has bucked the trend as it recorded strong earnings to end 2019 financial year. The beverage producer attributed the growth at the top (revenue) and bottomline (profit) to its cost-cutting measures, effective marketing strategy, and superlative performance of its various brands. For the year ended December 2019, Cadbury revenue increased by 9.39 percent to N39.32 billion from N35.97 billion the previous year. The revenue growth was largely driven by the contribution of diversified product portfolio, as the company mulls the launch of more market penetrating products. Also, the Cadbury Hot Chocolate 3-in-1 brand, a treat portfolio, recorded substantial growth, driven by its unique offering, while its gum and candy brands also recorded success in their respective categories. The beverage makers’ cost of sales were up 11.04 percent to N31.11 billion in the period under review from N28.01 billion the previous year; the expansion in cost of sales is lower than the 11.98 percent December inflation figure. Gross profit rose by 3.62 percent to N8.21 billion in December 2019 as against N7.95 billion as at Dec ember 2018, which means the company is efficient in managing direct costs attribute to projects. Administrative expenses were up 10.60 percent to N6.94

billion in the period under review as against N6.27 billion as at December 2018. Cadbury’s net income surged by 53.59 percent to N1.26 billion in December 2019, the highest in five years. The company recorded a loss of N296.12 million in 2016 financial year, a period when a severe dollar scarcity hindered consumer goods firms from importing raw materials and machinery. Net profit margins increased to 3.22 percent in

the period review from 2.28 percent the previous year; this means the beverage producer has translate top line impressive performance into bottom line growth. The company is efficient in the use of shareholders machines and equipment to generate higher sales and profit as fixed asset turnover increased to 2.71 times in December 2019 from 2.60 times in December 2018. The fixed asset turnover ratio is an efficiency ratio that

measures a companies return on their investment in property, plant, and equipment by comparing net sales with fixed assets. In other words, it calculates how efficiently a company is a producing sales with its machines and equipment. Cadbury and its peers operate in an environment beset by a weak consumer spending, poor job creation, border closure, and eroding impact of double digit inflation would hurt earnings. The latest earnings releases by companies were unimpressive, but analysts had said that this quarter could be the worst in close to a decade. Nascon Allied Industries Plc, saw a 56.75 percent drop in profit, the worst results in five years as revenue growth couldn’t cover or absorb spiralling cost of production. The company wasn’t able to generate much net income from each naira of sales as

profit margins fell to 7.01 percent in December 2019 from 17.15 percent the previous year. Guniness Nigeria Plc’s net income dipped by 32.45 percent to N1.74 billion as at December 2019, while net margins dipped to 2.55 percent in December 2019 from 3.80 percent the previous year;however, an in increase price of key products could underpin future revenue as brewers in the country are the hardest hit from a harsh and unpredictable macroeconomic environment. UACN Nigeria Plc’s recorded a loss of N9.23 billion in December 2019 from a profit of N9.58 billion it recorded the previous year. Unilever Nigeria Plc posted a loss of N60.75 billion in December 2019, a disappointing result that cast a pall on future divided payment. International Breweries Plc posted a loss of N9.138 billion as at December 2019, as the brewer continues to struggle with intense competition from producer of cheap brands, a weak sales volume, spiralling debt, and mounting cost of production. Analysts at CSL Stock Brokers say FMCGs particularly businesses with product portfolio skewed towards personal care will continue to struggle with volume growth in 2020 as familiar challenges continue to bite. The research house added that beverage producersparticularly cocoa related)would witness significant pressure on margins in 2020 as the cartel formed between Ghana and Ivory Coast (both of whom control 60 percent of world cocoa output) would keep cocoa prices high, hence significantly impacting material costs. Nigerians are getting poorer as over 50 percent of a population of 200 million live on less than $1.98 dollars a day, which means they have little in their pockets to go shopping. According to data from Fitch solutions, household income is estimated to have grown by 8.8 percent year on year to $4,252 in 2019 from $3,908 2018. 2019’s 8.8 percent years on year growth

BD MARKETS + FINANCE Analysts: BALA AUGIE www.businessday.ng

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@Businessdayng

comes comes in lower than the 10 .7 percent years on year (y/y) growth in 2018. Inflationary pressures and the hike in fuel price continue to hurt consumers’ ability to increase expenditure which in turn continues to pressure consumer companies’ revenue. Inflation for the month of December accelerated to 11.98 percent, the highest in 7 months as price of basic food stuffs skyrocketed on the back of border closure. High levelof unemployment at 23 .1 percent as at Sept 2018 and poor job creation continues to pressure expenditure levels. “They have lost considerable amount of value in the last two years. Their earnings have been reducing but share price has been reducing faster,” said Wale Olusi head of research at United Capital Research Limited. “Investment sentiment for them is poor and will remain so because competition from cheaper brand. Consumer wallets will remain squeezed on the back of hike in VAT,” said Olusi Abiola Gbemisola, consumer goods analysts at Chapel Hill Denham Limited said that the new minimum wage, it spread across the country, would invigorate consumer wallets as they would have more money in their pockets. He added that the New Loans to Deposit (LDR) would make it easy for consumers to access loans, hence paving the way for them to open their purse string in the short term. “We see continued deterioration in margins but a price increases in price of key product could underpin bottom line,” said Gbemisola. Analysts at United Capital Limited said the possible gains from the full implementation of the new minimum wage are likely to be erased by upward tax reviews and sticky-upward product prices. “Amid all the above-highlighted downside risk, we believe much of the growth we are likely to see in 2020 will be driven by higher prices (inflationary), rather than higher consumer demand,” said Analysts at United Capital Limited.

Tuesday 11 February 2020

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

Insights into how margins of downstream firms performed in 2019 the year. “Ex the disposal gain, TOTAL would have reported a c. N341.4mn loss,” analysts at Lagosbased CardinalStone said in a note to clients Revenue of Total was dragged by a 7.39 percent year-on-year decline in the company’s main segment involving sales of petroleum products (82 percent of total revenue) while segment for Lubricants and other products (18 percent of total revenue) rose 4.1 percent year-on-year. Analysts at CardinalStone say the revenue setback was a fallout of growing competition in the downstream sector. Oando and Conoil financial statement were not available as at the time of analyzing the reports.

DIPO OLADEHINDE

eeping businesses afloat in the downstream oil and gas sector has become extremely tough. A lot of companies have divested and the few existing ones have reduced their labor force to stay in business. BusinessDay analysis of four of the major companies operating in the downstream sector namely Eternal Plc, MRS oil plc, 11 Plc (formerly Mobil), and Total plc revealed the performance of key profitability margins in 2019. Eternal Plc lubricant business offers bright prospects Result of annual 2019 financial result showed Eterna Plc’s p ro f i t a f t e r t a x p l u ng e d t o N85.52million in 2019 from N1.01billionn in the previous year while Profit before tax fell sharply from N1.9 billion in 2018 to N125 million. 2019’s Revenue fell from N251.8 billion to N229.4 billion in 2018 while the cost of sales also reduced to N224 billion in 2019 from N247.2 billion in 2018. The company was able to reduce its trade and receivable from N30.8 billion in 2018 to N12.7 billion in 2019. Further breakdown of the company’s revenue showed income from Trading decreased from N164.6 billion in 2019 compared to N193.7 recorded in the previous year while Revenue from fuel also increased to N55.7 billion from N50.8billion in 2018.

Revenue from lubricants increased to N8.6 billion from N5.7 billion in 2018. Another bleak year for MRS Oil Nigeria M a j o r p e t r o l e u m m a r k e ter, MRS Oil Plc, may be in for another bleak financial year, for the second time in a row. Results for the 12 months ended December 2019; show that revenue fell from N89.5 billion in 2018 to N64.7 billion in 2019. The firm made a loss before tax of N1.58 billion, as against a loss before tax of N1.42 billion in 2018. Proceeds from petroleum products, which accounted for about 74 percent of the oil firm’s total top-line, plummeted 33 percent to N46.6billion, from N62 bil-

lion recorded a year before, while revenue from Aviation Turbine kerosene (ATK) increased to N8 billion from 6.4 billion recorded in the previous year. Revenue from Automotive Gas Oil (AGO) reduced to N5.8 billion in 2019 compared to N9.4 billion in 2018, while revenue from Lubricant increased to N3.9 billion, compared to N3.4 billion recorded in the previous year. Unusual capital expenditure for 11plc In 2019, 11 Plc (formerly known as Mobil Oil Nigeria) revenue grew by 16 percent to N191.6 billion however profit before tax declined by 4 percent to N13.1 billion while profit for the year declined by 5 percent to N8.8 billion.

The major concern for 11pc 2019 financials is the increase in capital expenditure by 512percent to N18.2 billion from 2.9 billion recorded the previous year while total assets also increased by 29 percent to N91.1 billion from 10.6 billion recorded the previous year Assets sales boost Total’s profit margin Unaudited result of Total, which distributes and markets refined petroleum products and fuels showed profit slumped by 69.6 percent year-on-year to N2.4bilion in 2019 after revenue declined 5.6 percent, the biggest contraction in sales since a 13.5 decline in 2015. Total’s underwhelming result comes despite a one-off asset disposal gain of N2.8billion in

Overview Stakeholders blame this negative performance on old perennial environmental, operational and regulatory challenges. These include poor governance and management of refining assets, low operating margin for operators leading to low Return On Equity (ROE), huge debts/receivables on account of unpaid accumulated subsidy and unpaid interest, and foreign exchange differentials on product importation. To overcome these challenges, the umbrella body for the major oil marketers suggested some important strategic steps which include introduction of corporate governance, full deregulation of the sector, and introduction of guilds which will increase the availability of skilled workmen and artisans in the industry.

Opening or closing opportunity: Nigeria International Petroleum Summit …lessons from African peers STEPHEN ONYEKWELU

igeria’s third annual International Petroleum Summit started on February 8 and is expected to attract about 5000 international energy industry executives, but can Africa’s biggest oil and gas producer seize the day. The country can either take advantage and open up its petroleum market or inadvertently close them up by disregard for the sanctity of contracts. NJ Ayuk, executive chairman of the African Energy Chamber and chief executive officer of the Centurion Law Group has reasoned that this is the most opportune space for Nigeria to communicate its growth and development plans in Nigeria wants to reach the goal of making 2020 a gas year. Last month, Timipre Sylva, minister of state for Petroleum Resources, declared 2020 as the Year of Gas for Nigeria. “Following the recent $10 billion investment on Train-7 which will enable the Nigeria Liquefied Gas (NLNG) processing unit to remain the fifth-largest supplier of LNG in

the world, Nigeria is right to build on this momentum,” Ayuk. The 2020 edition of the NIPS conference anchors on the theme, “Widening the Integration Circle: Technology, Knowledge, Sustainability and Partnership.” It hopes to present strategies and opportunities for growth in oil, gas and energy technologies as well as showcase major contract signings. Other African countries have always taken advantage of such summits to promote their oil and gas sectors to a global audience of investors, suppliers and other key holders. Last year, at Africa Oil Week event in Cape Town, South Africa, Mahamadou Makhtar Cisse, Senegal’s oil and

energy minister used the platform to launch, for the first time in the history of petroleum exploration in his country, a licensing round of three blocks of sediment basin. The licensing round would be promoted at international oil conferences in London, Houston, and Dakar during a first phase of the process, while energy companies would be able to evaluate the blocks’ potential between the end of January and the end of July 2020, the minister said. Senegal has seen predominantly natural gas discoveries offshore in recent years, most of which are shared with neighbouring Mauritania. Angola’s newly formed national oil, gas and biofuels agency, (ANGP),

announced that the country has formed a consortium with five international oil companies, including Eni and Chevron, to develop liquefied natural gas (LNG) for its Soyo plant. The consortium’s project, costing an initial $2 billion, is expected to start production by 2022. Irene Muloni, Uganda’s minister of Energy and Mineral Development led a delegation of private and public sector players from Uganda’s oil and gas sector to AOW. During the week, in a National Showcase, Uganda highlighted the on-going second licensing round for oil exploration, which covers five highly prospective blocks with relatively good seismic and other data, Muloni said. Ghana told AOW delegates that plans, revising its laws on oil and gas licenses, sent to Parliament last week, is an effort to spur production and will revoke licenses from four companies that have not developed their assets. “No country helps another, therefore, you must position yourself strategically to attract a fairer share of global resources through active participation in world trade and

investments. This is the conversation we should be having now because as you can see none of these conferences has helped Nigeria’s economy in any fundamental way,” Majeed Dahiru, a public affairs analyst and columnist told BD Sunday, BusinessDay’s Sunday title. Nigeria has been described as having a reputation for blatant violation of the international rule of law and for acting with impunity in breach of its international legal commitments. These may pose changes to the country’s ability to attract the much needed foreign direct investments (FDI). For instance, although a longstanding contracting party to the World Trade Organisation (WTO), and the Economic Community of West African States, (ECOWAS), Nigeria is widely seen in these institutions of international economic governance as an unreliable adherent to the treaty rules, said Olu Fasan, a visiting Fellow in the International Relations Department of the London School of Economics (LSE), and a member of the LSE’s International Trade Policy Unit.

Tuesday 11 February 2020

BUSINESS DAY

ENERGY INTELLIGENCE

Nigeria faces tough competition as LNG prices tumble to historic low

gest importer of LNG declaring force majeure on some contracts on Thursday. China’s National Offshore Oil Corp (CNOOC) announced it had suspended contracts with at least three suppliers on Thursday, Reuters reported, citing two unnamed sources. According to sources close to the gas spot market, traders are looking around neighboring countries to Asia with some already spotting India which

has scope for more purchase and has recently commissioned an LNG terminal but is restrained by inadequate pipeline infrastructure. While countries in Europe might also be an option due to their strong seasonal winter gas demand. “Europe absorbed most of the incremental LNG supply in 2019,” James Taverner, director at research and consultancy firm IHS Markit said. Major buyers in Japan and South Korea such as Korea Gas Corporation (KOGAS) and Japan’s energy company (JERA) could benefit as they are able to tap demand from utility companies, but overall consumption levels there are also limited due to mild weather, sources said. In Nigeria, natural gas sector in Nigeria is oriented towards the export market, which is determined by economic fundamentals as against a regulated domestic regime, with LNG being the major revenue earner for the country in the gas industry. Two months ago, Nigeria LNG Limited took the longawaited final investment decision on the company’s Train 7 project, after over 10 years of delay. The Train 7 project aims to increase the company’s production capacity from 22 MTPA to about 30 mpta, and will form part of the investment of over $10billion including the upstream scope of the LNG value chain, according to the company.

under-cutting, though less likely as far as we see it) what the market will actually end up needing, at least for short periods of time.” The firm said that as of now, it sees demand growing by 750,000 bpd in 2020, which is about the same as what occurred last year. “So, again pretty weak,” JBC wrote. Meanwhile, Libya still has 800,000 bpd offline, “which continues to be largely underreported/under-appreciated in the oil sphere,” JBC concluded. Energy markets are in turmoil, even as broader equities are moving on. “While the (Western) stock markets appear to have already overcome the ‘coronavirus crisis’ again and in some cases have achieved new all-time highs, the concerns on the oil market are likely to persist

for some time yet,” Commerzbank wrote. “This is because China and its imports are simply too important in terms of the global oil market for the massive decline in demand and possible mediumterm consequences (e.g. continuing transport restrictions and reduced new car registrations) to be ignored, even if the coronavirus epidemic can be contained effectively.” That helps explain the muted reaction to the news that OPEC+ would be cutting deeper. The cuts are “hardly likely to be enough to drive prices up,” Commerzbank said. The drop in Chinese demand, after all, “is considerably higher” than what OPEC+ is proposing. Oil closed out the fifth consecutive week of losses on Friday.

DIPO OLADEHINDE

ecord low prices for liquefied natural gas (LNG) are roiling the global gas market, creating havoc as traders rush to find alternative locations for cargoes with Chinese buyers rejecting shipments amidst the coronavirus epidemic. Nigeria is reputed to be a rich gas province producing a little oil. Conservative estimates say the country’s proven reserves of over 202 trillion metric standard metres (TCM) of natural gas outstrip the potential of crude oil equivalent by 10 times over, a development that puts Nigeria among the top 10 largest exporters of LNG in the world, with a capacity of 22 million through Nigeria LNG Limited. Sources said traders are struggling to find buyers of LNG in Asia outside China, the biggest buyer of LNG, where spot purchases of LNG and other energy products have almost stopped, leading to glut in the market and its attendant lower price. Data from Bloomberg terminal showed natural gas price, the benchmark for Nigeria’s natural gas, fell by over 47 percent to $1.87 as at Friday while in Asia, the benchmark JapanKorea-Marker (JKM) spot price for LNG closed at a low of $3.00 MMBtu for the second consecutive session on Thursday, according to

data provided by S&P Global Platts. Gas export through Liquefied Natural Gas (LNG) provides high returns to the Nigerian government through tax receipts and dividends for an equity stake as global LNG market contends with additionally depressed demand due to the lower industrial and economic activity in China in the wake of the coronavirus outbreak. Ademuyiwa Adegun, an Abuja-based gas commer-

cial advisor, said lower NLG prices pose risks to major gas exporting countries like Nigeria who might struggle to find buyers which might translate to a loss in revenue. Nigeria LNG has over the years paid dividends of over $36 billion out of which 49 percent went to the Federal Government courtesy of its shareholding in the company via NNPC, the company said in its 2019 report. Gas proceeds from NLNG as at June 2019 stood at N82.8

billion. Latest Nigeria National Petroleum Corporation (NNPC) said about 3,190.16 mmscfd or 95.46 percent of the export gas was sent to Nigerian Liquefied Natural Gas Company (NLNG) Bonny for October 2019. Disruption and curtailment fears in China as a result of the fast-spreading coronavirus have also compounded the pressure on LNG prices, S&P Global Platts said, with China’s big-

OPEC+ cuts fail to boost oil prices

fter deliberations, Russia appears set to support Saudi Arabia in the push for deeper production cuts. OPEC’s Joint Technical Committee met on Tuesday, and it was only supposed to be a two-day affair. The expectation was that the JTC would conclude that the oil market was oversupplied and that OPEC+ should cut more. But Russia was unconvinced and asked for more time. The talks stretched on, and the prospect of the negotiations ending with no result sent oil prices down towards the end of the week. But Russia’s top diplomat ended the week by voicing support for more production cuts. The leading idea is another 600,000 bpd in cuts, which come a little more than a month after OPEC+

introduced the last round of cuts following the December meeting in Vienna. The problem that some analysts have raised is that while the demand hit from the coronavirus is really deep, but it may only be temporary. China’s oil consumption, by some estimates, is off by a massive 3 million barrels per day (mb/d). That’s a huge hole in the market that, on its face, almost certainly would force OPEC+ to act. But if the virus is contained, demand

could return quickly. By the time OPEC+’s new cuts are phased in, China could be back to normal. Still, with Brent down below $55 in recent days, OPEC+ (and especially Saudi Arabia) feels that they need to take action. In a worrying sign for the market, Russia’s support for more cuts did little for crude prices on Friday. The longer-than-expected deliberations in Vienna may delay the ministerial meeting that would finalize the

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reductions. Prior to the JTC meeting, the rumor was that the full forum would convene as early as next week. At the time of this writing, nothing had been scheduled yet. The coronavirus is still raging (although the rate of spreading is showing signs of slowing), and global oil demand has taken a significant hit. But the severity and duration of the slowdown is incredibly unclear. There is “a wide range of outcomes on different timescales still possible,” JBC Energy wrote in a note. “The difference for OPEC+ is that its supply taken as a block is arguably significantly less responsive than refiners and their purchasing behaviour over a period of days to weeks, meaning there is more of a risk of over-cutting (or

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Tuesday 11 February 2020

BUSINESS DAY

offgrid Business

Off-grid energy company Impala banks on Nigeria’s electricity industry …stakes $1bn on Sub-Saharan Africa STEPHEN ONYEKWELU

actors such as NERC’s inability to consistently execute policies and insolvency of electricity distribution companies have slowed down the transition of Nigeria’s electricity industry into one that is market-driven. But Impala Energy has seen some opportunities in the sector and moved in. Impala Energy is a power development company focused on small-to-medium sized clean and renewable power projects in Sub-Saharan Africa; including solar, wind, geothermal, hydro and gas and has been doing this for the last 10 years and has installed 50 – 55 megawatts (MW) of electricity across Sub-Saharan Africa countries. Nigeria offers vast opportunities for such power projects. The off-grid energy company plans to service big manufacturing companies in the range of Nestle. According to the African Development Bank (AfDB) Nigeria has the largest offgrid population on the continent with more than 100 million people lacking access to grid electricity. Most are concentrated in the country’s rural regions

(where the average electricity access rate is 41.1% compared to the urban rate of 86%, (AfDB). Mini-grid systems, comprising hybrid or pure solar mini-grids ranging from 50 kW to 1 MW, are deemed a sustainable solution to address rural energy access shortage in communities with productive loads and/ or decent spending power. Last year, the Manufacturers Association, of Nigeria (MAN), said that its

members have spent N20.8 billion on alternative power to run production in the past 3 years. The association also said that the manufacturers are constrained by high electricity tariff charged by Electricity Distribution Companies (DisCos). Backed by Copenhagenbased A. P. Moller Capital that oversees $24.14 billion, Impala Energy is seizing opportunities in the industry segment of the market to finance, operate and main-

tain independent power plants for eligible customers. Eligible customers in this segment are those that qualify under the Ministerial Directive on Eligible Customers (2017), which outlined four categories of end-users who can buy directly from electricity generation companies (GenCos). In the second quarter of 2019, A.P. Moller Capital acquired Impala Energy Holdings (“Impala”) which has comprehensive experience

and capabilities as well as a strong pipeline of opportunities within captive power projects. Together, Impala and A.P. Moller Capital, through the African Infrastructure Fund, will focus on supplying clean and reliable power in Nigeria. The firm sees infinite potential in captive power projects in Nigeria and potentially other countries in Africa. A.P. Moller Capital owns 90 percent of Impala Energy Holdings with

the remainder owned by Pegasus Capital LLC (who seeded Impala in 2015) and management. With total installed electricity capacity of 10 MW in Nigeria, the company operates a virtual pipeline, with projects in Lagos, Ondo and Ogun States. It takes companies with a minimum electricity consumption threshold of 2 – 5MW. “We are technology agnostic. We simply invest in greenfield captive power projects and save manufacturers money in electricity through medium and longterm power purchase agreements,” Chudi Obianwu, vice president A.P. Moller Capital told BusinessDay. In 2017, Nigerian manufacturers under MAN had considered independent power projects (IPPs) in industrial clusters to enhance sustainable electricity supply. Flour Mills Nigeria Plc, Lafarge Holcim, Tower Aluminium, Cadbury Nigeria Plc and many others depend on independent power plants for energy. Th e M A N I P P p i l o t scheme targeted areas where gas is available like Lagos, Ogun and Rivers states, while solar energy would be deployed in the northern region of the country.

Costa Rica enjoys 300 days of strict reliance on renewable energy, Nigeria can learn DIPO OLADEHINDE

n Costa Rica, renewable energy has exclusively covered electricity consumption for 300 days, a development oil-rich Nigeria faced with electricity challenges can learn from. One nation that inspires hope for the future is Costa Rica; with a population of 4.9 million, slightly less than Adamawa State, the country celebrated using renewable energy for 300 days and is also committed to becoming 100 percent carbon neutral this year. For the third consecutive year, Costa Rica covered its electricity consumption almost exclusively thanks to renewable sources. This is confirmed by the Costa Rican Institute of Electricity (ICE Group), the state company responsible for

electricity and telecommunications services. Data from Costa Rica’s National Center for Energy Control showed the country has been using clean energy for only 300 days. This figure is even better than in 2015 and 2016, years in which power from renew-

able energy had supplied the country for 299 and 271 days respectively. Obviously, size and the environment help the small South American country that is not willing to fall asleep on the laurels. The Government has set a clear objective for 2021: to be-

come completely neutral in terms of carbon emissions. To help reach that goal, it is considering several initiatives that will boost the number of electric vehicles on its roads. It is also considering further development of its geothermal energy resources, according to Think Geo Energy The plan also includes t ra n sp o r t at i o n . At t h e congress, there are two legislative proposals for alternative mobility that, if approved, would introduce tax exemptions to the importation of electric cars, create a national network of charging stations and force the electrification of a part of the public car park. Grupo ICE, Costa Rica’s national utility company, says it does not foresee an expansion of demand for

Analysts: Isaac Anyaogu (Team Lead), Stephen Onyekwelu, Dipo Oladehinde

electricity beyond current capacity but will look to add geothermal resources as existing facilities reach the end of their expected service life. “While Grupo ICE will not enter into the construction of new projects in the coming years, the analysis and planning of the energy matrix dictates that by 2027,” says Hazel Cepeda Hodgson, General Manager of the utility. Of course, it could be argued that Costa Rica’s efforts to combat climate change have little impact because it is a small nation and well-endowed with natural resources. Yet it’s pointing to other countries like Nigeria ways to achieve cleaner energy. Faced with a population that has sent carbon emissions soaring and stretched power supplies to breaking

point, oil-rich Nigeria is turning to renewable energy in tackling climate change. Africa’s most populous country needs more than 10 times its current electricity output to generate supply for its 198 million people, nearly half of whom have no access at all, to achieve this the government must find an efficient way to bring power to rural communities and also help clean up a country with some of the world’s worst urban pollution rates. Nigeria is endowed with huge energy resources, yet it perennially suffers energy poverty. Also, the reliance on fossil fuel to meet Nigeria’s energy need has been attended with many problems such as physical deterioration of energy transmission and distribution.

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Tuesday 11 February 2020

BUSINESS DAY

INTERVIEW ‘With right information, Nigerians can make huge returns investing in crypto-currencies’ Rume Ophi is a partner and a brand strategist of Vorem Nigeria, a blockchain company transacting digital assets to fiat, which is known as over the counter trade (OTC) market. He is the founder of The Cryptopreacher fellowship, a platform where newbies in the Crypto space undergo mentorship on trading cryptocurrencies and blockchain technology. In this interview with IFEOMA OKEKE, he speaks on the prospects for investing in cryptocurrencies and ways to differentiate Ponzi schemes from genuine ones.

hat is your niche as an entrepreneur? I am popularly known as the Cryptopreacher. I tell people the reasons why they need to invest in crypto and understand what they are investing in. My niche is generally more on the young people because for me it is a way to make young people and adults financially independent. The population of Nigeria is mostly made up of young people, so it is a motivation for the young people. Last year I was at the African Blockchain Conference in Kampala and I was the only Nigerian there. I needed to see things for myself and understand what is going on outside Nigeria and it was an eye opener for young people into block chain, cryptocurrency amongst others. You teach about cryptocurrency. How far is your reach in this regard? I have students across Africa, Europe and the US. When I started, I wasn’t really too sure of what I needed to study. In 2016, it was off and on for me; then I was in the Telco space, in Huawei Nigeria to be precise doing Airtel project. I was trading in cryptocurrency but I was still trying to get my feet. I had a crypto asset investment but unfortunately I lost close to $5,000 and I realised eventually that happened because there was a knowledge gap. I needed to get better so I started studying. When I heard about the African Block Chain Conference, I wasn’t so sure I was going to attend. When I eventually attended, I was happy I did because I learnt a lot. We have a self-regulated organisation in Nigeria called Stakeholders in Blockchain Association of Nigeria (SIBAN) and I am a member. I am also a researcher. Why did you leave Huawei Nigeria, a renowned tech organisation, to settle for cryptocurrency? When I was in Huawei, I felt that there was something in me that wasn’t fulfilling because from my childhood days, I have always dreamt about sitting down in my computer and making money without scamming anyone. I am from Warri and I actually enrolled for a programme back then but my parents couldn’t afford to pay the fees. That night, I cried throughout but today, I have all those certifications, even more than 10 of them. My idea is to get a computer, have the internet and work. The stress level for the average Nigeria is very high. We work round the clock. So, crypto is more like it for me. How long have you operated in the cryptocurrency

antee that they will make high end profits. Imagine promising 20 to 30 percent profit, when treasury bills which are issued by Federal Government is less than 10 percent. Another way to know Ponzi schemes is that they make their finance structure very complex so that people don’t understand properly. Also, there is this affinity that goes with Ponzi scheme. For instance, people testifying of others that have made it through the scheme. There is this religious or social undertone in this.

space? I have been in this space officially for three years. I took one year to study the cryptocurrency space. I have some friends in the US and some mentors that helped me with materials to study. At about last year ending, I did a programme with someone in the US on Block chain consultancy and content development. The technology is really fascinating. I bought books worth 1,500 dollars in and out of Nigeria. People have diverse perceptions of cryptocurrency. Some say they have lost a lot of money investing in this space and others think it is the way to go. What is your opinion? I love the situation where people acquire some knowledge when they want to invest in something. For me, I go all out to get the knowledge. People feel disappointed when they have lost money. In 2016 and 2017, there was a rush for acquisition of bitcoin. Bitcoin is influenced by demand and supply. In 2015 one bitcoin was about $200-$300 but today, bitcoin is sold for $9,393, which is about N3,000,330. This is just for one bitcoin. You can get fractions of bitcoin because it is calculated in Satoshi value. So, those people that lost money are actually those that invested at the peak of the bubble because bitcoin rose to N7 million. At some point, some exchange platforms sold bitcoin for $20,000. So without knowing, they got into it but when the bubble ended, they lost money. After every four years, bitcoin value increases because there is always scarcity. This happened in 2016, so towards ending of 2016 and beginning of 2017, the price increased. Those people that came in that time didn’t know what they were investing in and some of their friends influenced them

into investing in bitcoin. But if you are patient and you don’t sell, the value will increase but the time it will increase, you don’t know. So it is not like they lost their money, they only lost the value of Satoshi. For instance, if they bought the bitcoin for N1 million at a point in time because of the high demand, the bitcoin that was bought for N1 million now becomes N3 million. So, if they bought it when it was sold for N3 million and eventually the value drops again because of demand and supply, they will say they have lost money. This is how the value of Satoshi works. That is why I said people need to have that knowledge. However, there are other crypto assets you can invest in aside from bitcoin. There are more than 5,000 cryptocurrencies and some of these Ponzi guys code their own cryptocurrency and put it out in the market. Their own obviously will not add value because their intention is to get money off people. If people fall for this, they will lose money. How can those interested in investing in cryptocurrency differentiate the good guys from the bad ones so they don’t fall into the wrong hands? Some years ago, I did a research about Ponzi and I discovered that the MMM thing was a specific case for Nigeria. Apart from cash, MMM paid people with bitcoins and then bitcoin was about $200$300. Because of this, the Ponzi thing robbed off on bitcoin then. Some people had up to 10 bitcoins but they didn’t understand the value and that it will appreciate in few years but some sold theirs very cheap. When you are asked to bring in people to gain some good amount of money, just understand that there is a Ponzi scheme in that. Ponzi schemes give their benefactor a lot of guar-

What can a potential investor do to ensure they acquire the right knowledge to operate in this space? They need to research and that is why some of us are on ground. I have a platform online. You can reach me on twitter and Instagram. I have four WhatsApp platforms where I teach young people and older ones what cryptocurrencies are and which ones have prospects in the future. I advise them on the exchange platforms to register on because there are exchange platforms where you buy and sell cryptocurrency. Some are global, some are indigenous and some are from Africa. Because of my curiosity for knowledge, I have been able to go out of the country to get the knowledge. I have done personal research and done online courses. So, we are around to make sure that Nigerians can benefit from this. Every crypto asset has white paper, which is like a template. Satoshi is the creator of bitcoin, no one knows Satoshi. From the white paper I read, Satoshi is a 37-year-old man residing in Japan and from research, he is either from the Caribbean, North America, South America, Asia or Europe because of his writings and his attitude. But sadly Africa was not mentioned and the fact that Africa was not mentioned, I was motivated to go into this space. We should be able to carve a niche for ourselves because it is money for the masses. It is money not censored, or controlled. Your treasury bills could be shut down by government but I can do transactions using a bitcoin. Because of the way bitcoin is designed, I don’t need a third party. That is why governments are scared that it could be used for illegal dealings but even the dollar and naira bill has been used for illegal deals. Just having a copy of the protocol, you can send money and be your own bank. So, we are on ground to make people understand all of these things, using the social media. What do you think the government can do to help deepen knowledge in this space? I have been speaking more on cryptocurrency and bitcoin which are monies. No government will

want to support these wholeheartedly but the governments of this world have come out to say they support block chain technology. China is building their cryptocurrency, which will go through block chain technology. The US is being threatened because China has large population and they are also thinking of getting their own digital platform. All of these countries are going towards block chain technology which is the power house for cryptocurrency. The way the world is going now, all advanced countries are looking at block chain technologies because it is a global ledger where you cannot fake anything. For instance, you can have a project where all our date of births is programmed in block chain for Nigeria. If you call the data base of this block chain after 2000 years, you will still get your date of birth. Each block chain is coded in a way that it cannot be edited. You need to go through a lot of processes to validate it and for transactions to move through. Government needs to encourage people to come into the space using the right avenues. This technology doesn’t need a third party. It will help reduce unemployment. If I buy a wrist watch from you, I can pay in a bitcoin, I don’t need to go to the bank. This again, is a problem for the government. This is more for the people than the government. Looking at the direction block chain technology is going globally, where do you see yourself in five years time? I see myself as a voice for Africa because he monetary policy of Africa and the way our economy is being fashioned, it cannot match the West. Bitcoin is our money. I always say bitcoin is the money for the people and by the people. There are about two billion unbanked people globally and I heard 100 percent of them are from Africa. Even those of us with bank accounts go through some rigorous process to get our monies but with having my software on my phone, I can pay for so many things. If you look at the evolution of money, you will see that there were cowries, then precious metal, which is the gold, then paper money, after which plastic money came out which are the ATM cards. Now we are in digital money. I see myself as a go-to person to talk to about cryptocurrency. I like people to know that knowledge has been decentralised with the internet. People should find out. I have all my social media handles. You can always do things online and even validate all we have been saying. We have been pushing and we will continue to push until people get the right information to invest wisely.

Tuesday 11 February 2020

BUSINESS DAY

BDTECH

In association with

E-mail: jumoke.akiyode@businessdayonline.com

Nigeria needs all hands on deck to achieve digital identity for all by 2030 Jumoke Akiyode-Lawanson

ith only about 38 million Nigerian citizens and legal residents registered into the database collection for National Identity Numbers (NIN), out of a population of almost 200 million, it is glaring that the National Identity Management Commission (NIMC), even after its intensified efforts to enroll as many people as possible, needs the help of professional API providers and independent verification platforms to achieve maximum effect and securely enable digital identity for all its citizens in compliance to the Sustainable Development Goal (SDG). The scheme which started at snail pace in 2014, recorded 38 million registered people in five years (November 2019), a remarkable increase in number from 30 million a year ago (November 2018) and an even more significant jump from the 21.36 million Nigerians successfully registered on the scheme in September of 2017. However, with an average of 7.6 million additional people registered per year, it means the NIMC would only be able to register another 83.6 million Nigerians by 2030, which would bring the total to 121.6 million. So, if no extra measure were taken, about 79 million Nigerians, excluding those that would be born between now and 2030, would still be off the NIMC database. Considering the fact that countries are consciously moving to achieve the United Nation’s Sustainable Development Goal (SDG) 16.9 to provide legal identity for all, including free birth registrations by 2030, analysts say that collaborative commitment amongst all stakeholders is essential for Nigeria to achieve this goal.

Luckily for Nigeria, the country has a number established identity verification and management solution companies that are competent to take on the responsibility of providing data verification services to assist the NIMC in achieving the global goal. Stakeholders are of the view that if the National Identity System is conducted properly with the help of trusted private data companies and is well syncronised with other data collected by other government organisations, the lack of adequate funds to issue identity cards could easily be ignored, and the National Identity Database could help government planning, policy and budget allocation for the various economic sectors, age groups, gender, religion, geographic location, weather and other strategic considerations.

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Chimezie Emewulu, managing director of Seamfix, an indigenous provider of an identity management solution called Bioregstra, a state of the art KYC (Know Your Customer) service online platform developed primarily for individuals and corporate (business owners) with the aim of ensuring that they are able to capture data, store the data, and have access to the data whenever it is needed, told BusinessDay that solutions like this will in no small way, help the Federal Government in the capture and management of citizen data to create legal digital identity for all. “With BioRegistra, the difficulty associated with knowing and identifying your customers will be a thing of the past. The platform enables you to capture and store your customer KYC details or information and further allows you access and

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to view the captured information or data whenever required. Your customer in this context is not limited to any sector.” Emewulu further highlighted some of the benefits of the solution and the competitive advantage saying that; “BioRegistra system has an intelligent quarantine engine designed to detect fraudulent and fictitious records and prevents them from being processed by running the records through security and inbuilt validation checks.” Aliyu Aziz, director general of the National Identity Management Commission (NIMC) recently declared that the country will indeed need the collaborative commitment of all stakeholders to create legal identity for all in the next ten years. “We are aware that identification plays an important role in enabling the achievement of Sustainable Development Goals (SDG) set by the United Nations, which demands that nations provide legal identity for all including birth registration by the year 2030, so as to enable social protection, right to economic resources, land and property and universal health coverage,” he said. In September 2018, the Federal Executive Council (FEC) approved the immediate commencement of the implementation of a strategic roadmap for digital identity ecosystem in Nigeria, a step that aimed to further boost enrolment across the country. The Federal Government empowered organisations like the Federal Road Safety Corps (FRSC), National Hajj Commission of Nigeria (NAHCON), Nigerian Immigration Service (NIS), Federal Capital Territory Administration (FCTA), and Nigeria Immigration Services to make NIN a mandatory requirement for service delivery. Also, telecoms operators will soon require NIN for SIM card registration, and others

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are expected to follows suit. Aziz says the provision of digital identity to everyone in the country is critical to accessing services both physically and electronically. As in the case of the United Kingdom, with the National Insurance Number and the Social security number in the United States America, registered Nigerians with NIN will be able to access government social interventions, credit facilities, and health care systems and will also promote socio-economic and political development. This is because every single individual would be accounted for through the database, entitlements will be rightly issued out and issues of identity theft will be curbed with the use of a unique identification number. Economic analysts say the recent dedication to citizen registration by the NIMC poses a ray of hope for a boost in Nigeria’s economy in the future, as the absence of unique identity numbers for every citizen in Nigeria may have been a contributory factor to the underdevelopment of certain services and industries in the country. “The growth of consumer credit may have been stymied by the absence of a unique means of identification of all citizens, which in turn created room for high rate of delinquency of consumers and lenders unwillingness to advance credit to individuals without tangible collateral,” Johnson Chukwu, MD/CEO of Cowry Asset Management Limited told BusinessDay. However, stakeholders call on the Federal Government to be cautious in collaborating with innovative companies that claim to be able to securely verify identification and collect data. “Technology can be overwhelming, and in an environment where effective surveillance is easily given up in order to stretch lean budgets, avoidable slips are not uncommon.”

Tuesday 11 February 2020

BUSINESS DAY

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

We have a technology and data driven approach to Nigeria’s logistics challenges - Jumia Jumoke Akiyode-Lawanson

ollowing the recent re-positioning of the company for optimum growth in the years ahead, Jumia Nigeria has said it is opening up its logistics and marketing services to third parties and partners because it has a technology and data-driven approach to solving the logistics challenges on the continent. Massimiliano Spalazzi, Jumia Nigeria’s chief executive officer and executive vice president, marketplace at Jumia Group, said the company will be relying on four major pillars to scale its third party logistics service: unparalleled physical and network infrastructure; its people (over 6,500 delivery agents and over 3,000 warehouse operators; its proprietary technology tools powering the entire network; its scale, with over 20 million packages delivered across Africa in 2019; and its omnipresence - 25 percent of deliveries in 2019 was in rural areas, 50 percent in urban cities, and 25 percent in small cities.

“Our last mile services have a wide geographical coverage area that enhances faster turnaround time, reliable handling of products and transparent reporting, all of which have contributed to the success of Jumia Cash-On-Delivery programme in both urban and rural areas”, he stated.

In addition, Spalazzi said that the Jumia point-to-point line hauls services have an established network that can handle bulk movements in key markets across different product categories, while restating confidence in the company’s capacities to help third parties tackle logistics challenges

Standard Bank partners Founders Factory Africa, Netcare, for investment in African tech start-ups Jumoke Akiyode-Lawanson

ive technology startups have been accepted into the Venture Scale programme, which is an initiative of Founders Factory Africa (FFA); backed by StandardBank and Netcare as corporate investors. The startups were formally inducted into the Venture Scale programme on Monday, February 3, 2020. All five startups have developed product offerings targeted at the FinTech or HealthTech sectors; and are set for an aggressive growth strategy - aided by the technical and operational expertise offered at FFA. The Venture Scale programme at FFA affords African startups the opportunity of rapid scale, made possible through a financial cash investment in tailored support services - across product development, UX/UI, data science, engineering, business development and growth marketing. Roo Rogers, co-founder & CEO, Founders Factory Africa, says: “The five businesses joining the Venture Scale programme represent some of the best of African entrepreneurship and innovation. From point-of-care DNA testing to agricultural logistics, the Founders Factory Africa portfolio has the potential to truly drive economic growth and transform the continent. We’re incredibly excited to be part of the growth of these businesses and to deliver their true scale potential.” In addition to the hands-on support provided, the program direc-

tors say that participating startups will also have access to exclusive partnerships with FFA’s pan-African corporate investors, Standard Bank and Netcare, which unlocks many of the scaling challenges that businesses face. This includes distribution channels, customer acquisition, pilots, data, IP and expertise, essentially offering the startups a very huge advantage in the competitive marketplace. Larry McCarthy, head of strategic investments and alliances at Standard Bank, says that he is excited to grow entrepreneurship across the continent. “Seed capital and business development programmes like FFA are needed to meet the fast-paced demand for technology across all sectors of business, and the effect it can have on improving growth. Standard Bank, being an African business, is committed to participating in this vital element of the economy,” he said. Amongst the five new startups joining the Venture Scale programme at FFA is Foodlocker, a Nigerianbased company. Foodlocker forecasts foodstuff demand through deep machine learning, thus enabling large-scale buyers to efficiently procure fast-moving consumer goods and fresh produce from smallholder farmers. Other startups included in the programme are LocumBase, Akili Labs and EnvisionIt Deep AI, all from South Africa. LocumBase is an independent, online booking and management www.businessday.ng

platform that provides real-time availability of verified locum medical professionals, by assisting practices in need of short-term, qualified stand-ins, who are able to provide quality care when needed most. Akili Labs leads the way in lowcost point of care, rapid diagnostics capable of testing for viruses, bacterial and fungal infections. EnvisionIt Deep AI is a platform that improves the speed and accuracy, with which a radiologist can diagnose and prioritise chest x-rays for further analysis using AI algorithms. Completing the list of startups on the Venture Scale programme is Bwala Africa. Bwala Africa isalastmile order fulfilment network designed to connect fleet operators and large FMCG manufacturers with retailers, for a fast convenient, orderto-delivery end to end experience. Speaking on the programme, Richard Friedland, CEO of the Netcare Group, says: “We’re excited about the selection of the first three healthtech startups, which will help stimulate healthcare innovation and development across the continent. By joining forces with FFA, we’re helping to create a support system for entrepreneurs, as well as providing value to people across Africa.” The FFA model includes its Venture Scale programme focused on developing existing startups, whilst the Venture Build programme harnesses the power of technology to build completely new businesses solving mass needs on the African continent.

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as regards manpower. “We have a pool of highly skilled and trained manpower, ready for on-demand deployment at request”. Meanwhile, Jumia has also shown interest in helping partners administer targeted surveys by leveraging its robust access to customers through various touch-

points. In the same vein, the marketing services are created to help third parties and partners reach their customers through targeted insertion of promotional content in Jumia packages, print and digital adverts at vendor drop-off points and customer pick-up points, as well as advert placement on Jumia vans, trucks and delivery bikes. Speaking further on the services, spalazzi explained that Jumia has an unparalleled physical presence and network infrastructure with omnipresence. “In 2019, we processed 20 million packages and we were able to achieve 25 percent deliveries in rural areas through a network of over 6,500 direct agents and 3,000 warehouse operators. What this means is that we can accomplish even greater success by opening up our logistics services to the public. We have the right infrastructure, people, partnerships and technology required to help third parties and partners solve logistics and marketing challenges. Jumia will continue to leverage its strength to explore innovative opportunities in the market”, he said.

CWG Plc wins Infosys ’Regional Alliance’ award

igeria’s largest system integration company, CWG Plc has won this year’s Infosys Finacle’s Regional Alliance FY20 award for the Middle East and Africa for deploying and implementing the Finacle Banking Solution in about nine banks in Nigeria. In a statement, the company said the award, which was received by CWG recently at a Partners’ Ceremony in Goa, India came as a result of CWG’s expertise in adopting innovations and successfully implementing the industry-leading universal banking solution. The statement quoted Ireti Yusuf - vice president, services delivery, CWG Plc, who received the award on behalf of CWG, saying the award is a testimony to the fact CWG has not relented in creating cutting edge solutions that enable business growth in all countries, where it has operations. “Declaring CWG as Infosys Finacle’s Regional Alliance FY20 award for Middle East and Africa’ is a testament to the fact CWG is consistent with what we are doing; adequately deploying technology solutions that enable the growth of our clients,” he said. He added that with its known expertise and the ability to adapt @Businessdayng

innovatively, CWG is happy to be recognised and rewarded, stressing that CWG has been consistent in using the Finnacle solution to solve banking challenges in Nigeria. The Finacle banking solution is the solution of choice for financial institutions across the world. As of today, the solution has been deployed in banks across 94 countries and serves over 848 million customers-estimated to be nearly 16.5 percent of the world’s adult banked population. CWG has been Infosys partner in Nigeria and has deployed the Finacle solution to several banks in the country. According to CWG, the solution enables Nigerian banks to leverage Finacle’s industry-leading solution suite, along with other enterprise-class applications hosted on a private cloud.

Tuesday 11 February 2020

BUSINESS DAY

property&lifestyle Benefits new Finance Act holds for real estate investors, potential homeowners ENDURANCE OKAFOR

ontrary to the t re a t m e n t o f real estate investment trusts (REITs) globally as tax neutral vehicles, Nigerian REITs has been faced with the risk of multiple taxation which has dampened investors’ appetite. But with the new Finance Act, there are expectations of attaining global best practice. Described by industry experts as a major leap, the Finance Act which became effective February 1, 2020, holds benefits for both real estate investors and potential homeowners, BusinessDay analysis shows. According to section 23 (1) of the Company Income Tax Act (CITA) as amended in the Finance Act of 2019, “the dividend and rental income received by a real estate investment company (REICs) on behalf of its shareholders” shall be exempted from Company Income Tax (CIT) “provides that a minimum of 75 percent of dividend and rental income is distributed “within 12 months of the end of the financial year in which the income was earned.” “By amending the CITA provision on ‘Payment of Dividends by a Nigerian Company’ and including an exemption for distributions made by a REIC, this risk, and the obvious disincentive to invest in REICs, is managed,” KPMG said. President Muhammadu Buhari signed the Finance Bill, 2019 (now Finance Act) into law in January and it was specially designed to support the implementation of the 2020 National Budget and to create an

enabling environment for businesses. Commenting on how the new Act will impact the real estate industry, Albert Folorunsho, the Managing Consultant of Pedabo, a Lagos-based auditing firm said it will be encouraging for real estate investment as the company income tax will not be charged on the minimum 75 percent dividend. “It is a major leap, and the provision can support the housing need of the public,” Folorunsho told BusinessDay. According to industry experts, REIT provides a practical, effective and efficient avenue for investing in real estate through the transfer of legal interests and has an enormous impact on economic performance as a result of increased activities in both the capital markets and the real estate sector. A REIT is a company owning and typically operating real estate which generates income. Most REITs specialize in a specific real estate sector, and properties included in a REIT’s portfolio may include apartment complexes, data centres, health care facilities, hotels, infrastructure—in the form of fibre cables, cell towers, and energy pipelines—office buildings, retail centres, self-storage, timberland, and warehouses. Taiwo Oyedele, Fiscal Policy Partner & West Africa Tax Leader, PwC was of the opinion that the new Finance Act will make REITs more attractive. “With the Finance Act, they will become more attractive as the tax effect produces the same result as REITs. As such, this initiative has the potential to encourage public investments and mobilise more liquidity

for real estate projects with a corresponding positive impact on the capital market,” Oyedele said. A survey by KPMG on the impact of REITs in the US shows that the total economic contribution of the US REITs in 2017 was an estimated 2.3 million fulltime jobs and $140.4 billion of labour income. REITs also contributed approximately $19 billion in property taxes in 2017. “Clearly, REITs are a significant contributor to the US economy in terms of jobs, economic activities

and tax generation. The impact of REITs in other African economies, such as South Africa and India, is also worthy of note,” the survey read. The prospects for REIS in Nigeria is perceived to be strong due to the high demand for, and undersupply of, real estate assets, and limited institutional investment. However, the absence of an enabling tax framework had hindered investment in REITs and failed to unlock the potential benefits attributable to REIT activities, as compiled

from industry sources. Adeniyi Akinlusi, president of Mortgage Bankers Association of Nigeria (MBAN) and CEO, Trustbond Mortgage said the new Finance Act will encourage people to invest in real estate and when that happens the investment companies will have more funds at their disposal to execute projects. “With more REITs fueled by an increase in investments the real estate investment companies will be able to increase the supply of products; residential, commercial. They can be

able to also promote mortgagee and may even begin to consider setting up a mortgage trust fund,” Akinlusi projected. According to industry experts, the impact of the new Finance Act could mean that potential homeowners and even tenants can be able to get real estate properties at a more affordable rate. Before the Finance Act of 2019 which has now presented the real estate investment industry with new tax benefits, rental, dividend or any other income received by a REIC on behalf of its investors (beneficiaries) were first meant to suffer tax of 32 percent (CIT and Tertiary Education Tax) in the books of the REIC, before redistribution to its investors – as dividends. Upon distribution of dividends, a REIC would be statutorily required to deduct 10 percent withholding tax. “It is expected that with supporting tax legislation, a REIT can serve as a taxefficient ‘pass through’ vehicle for investment in real estate and stimulate the growth of the capital markets, the real estate sector and the economy at large,” KPMG said. The Securities and Exchange Commission (SEC) had in 2017 introduced Regulations for the operation of a Real Estate Investment Scheme (REIS) in Nigeria. According to the Regulations, a REIS may be set up as a Trust (Real Estate Investment Trust “REIT”) or a Company (Real Estate Investment Company – “REICO”). Having the least investment options among the listed asset classes on SEC, the real estate funds grew Continues on page 32

Eko Atlantic bags IFC’s certification for green office tower ENDURANCE OKAFOR

ko Atlantic’s commitment to becoming the first green city in Lagos has earned it the Excellence in Design for Greater Efficiencies certification (EDGE) from the International Finance Corporation (IFC), the real estate company has said. Standing on 10 million square metres of land, Eko Atlantic City was able to secure the certification from IFC, a member of the World Bank Group through Alpha1, the City’s flagship office tower. The commercial property now holds the record as the first building in the city to se-

cure the EDGE certification. Completed in 2016, the City’s pioneer office building was awarded the green status certification for its fulfilment of IFC’s criteria to reach the minimum standard of using 20 percent less resource intensity in energy, water, and embodied energy in materials. According to Ronald Chagoury, Jr, Vice Chairman, South Energyx Nigeria Ltd, the planners and developers of Eko Atlantic, they are determined to build a green city, one that is future-ready. “By encouraging developers to construct resourceefficient buildings such as Alpha1 has done, we have a unique opportunity to cre-

ate an eco-friendly city that will have a high percentage of green buildings that have been certified to standards such as EDGE. This means that Lagos State will raise the bar and usher in a new era in the development of green cities,” Chagoury said. EDGE certification has become a worldwide trend with nearly 9 million square meters of floor space certified to date. The estimated energy savings are over 360,000 MWh per year, with over 9.5 million m3 of water per year and over 206,000 tCO2 of carbon dioxide per year, among other benefits. “ The market potential for green buildings in emerging markets is esti-

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mated at $24.7 trillion by 2030, according to IFC’s recent report, Green Buildings: A Finance and Policy Blueprint for Emerging Markets,”Marcene Mitchell, IFC’s Global Head for Climate Strategy and Business Development, who leads the EDGE program said. According to Mitchell Eko Atlantic’s encouragement of EDGE certification for its properties validates the opportunity for green buildings in Nigeria and “demonstrates their understanding of the importance of pursuing a more lowcarbon path.” By receiving the EDGE certification, Alpha1 joins a line-up that includes Cor-

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nerstone Towers (Lagos, Nigeria), Atlantic Tower (Accra, Ghana), and Citra Towers (Jakarta, Indonesia), among many others. So far, in Nigeria, 370 homes have been EDGE certified with over 2,010 tCO2 of carbon dioxide to be eliminated per year. According to Olawale Opayinka, MD/CEO, Eko Development Company, a real estate company dedicated to creating luxury residences of the highest specification, the City is destined to be West Africa’s new financial centre. “Eko Atlantic, Lagos’ ambitious multi-billion dollar new city is both reliable and secure. Eko Atlantic’s state of the art infrastructure, in@Businessdayng

cluding its water-processing plant (providing potable tap water) and modern utility systems (all under one management company), guarantees an exceptionally comfortable lifestyle,” Opayinka said. Eko Development has formed a partnership with ITB Nigeria Ltd, one of Nigeria’s leading building and civil engineering companies. The company has created numerous landmark projects in Nigeria including the National Assembly complex-Abuja, Karamo Beach Residences-Victoria Island, Kings Tower-Ikoyi, Heritage Place-Ikoyi and the Eko Hotel Expo Centre Victoria Island, all in Lagos.

Tuesday 11 February 2020

BUSINESS DAY

property&lifestyle Private sector is government’s best partner for affordable housing - Rendeavour CEO ENDURANCE OKAFOR

f Nigeria wants to bridge its housing deficit and deliver affordable housing to its citizens, the government would have to partner the private sector to deliver easy access to homeownership, Stephen Jennings, Founder & CEO, Rendeavour has said. Nigeria has a housing deficit that is more than 20 million units and estimates by BusinessDay shows that the country with the highest population in Africa would require in monetary terms, between N170trillon to N200trillion to bridge the housing gap if each unit is estimated to cost N10million. “The private sector is the best partner the government can have to build affordable housing. Private developers can deliver a quality product,” Jennings, told BusinesDay by mail. Nigeria’s housing challenge borders on the insufficient stock that meets the demand of low-income earners, low ownership level and lack of demand enabler in terms of mortgage or lowrate housing finance. According to Jennings even though real estate developers would like to deliver affordable housing, they cannot sell units below a price that gives them profit. He, therefore, stated that “Governments can help drive down the cost of housing further by giving tax breaks to private developers, streamlining approvals, guaranteeing partial off-take and allowing a percentage of the units to be sold on the open market.” Latest doing business report by the World Bank ranked the ease of register-

ing property in Nigeria at 183, one of the worst positions among its Africa peers. With the current ranking by the Washington-based lender, Africa’s largest economy was only better than 7 countries from the 190 that were surveyed. Analysis of the 16th edition of the ease of doing business report revealed that Ghana which has almost the same population as Lagos, Nigeria’s business hub and South Africa, the continent’s most industrialised country were ranked ahead of Africa’s highest producer of crude oil. Ghana was ranked 111th country with the most ease of registering property while South Africa stood at the 108th easiest country to register properties. It takes 33 days to get a property registered in Ghana. If that is to be done in South Africa, it will take 10 days less. One can obtain a property document at the end of 23 days in South Africa but in Nigeria, it takes three months and two days to get the same property documentation. “Total time required to register property has reduced from 105 days to 75, and the total number of procedures required to register property has reduced from 12 to 8,” the document read. On why Nigeria was lagging it Africa’s peers in the number of days needed to secure property documentation the World Bank report revealed that Nigeria requires 12 different procedures to obtain the document while in Ghana, it involves only 5 procedures. Checks by BusinessDay shows that the difficulties in getting property documentation in Nigeria has left lands and some real

Stephen Jennings

estate projects without a title; one of the reasons why it is difficult for banks to validate claims to land or for land occupants to use their properties to create wealth, hence, the sector’s liquidity challenges. A recent report by PWC said an estimated 95 percent of household dwellings in Nigeria do not have a title or a contestable title’s citizens “This process is made difficult due to the low quality of land administration in a city like Lagos for example. This does not encourage formal declaration of assets and discourages people away from registering their properties,” the Londonbased professional services firm said. According to said Nasir El Rufai, Kaduna State governor, the major issues that continue to affect housing delivery in Nigeria, which also account for the wide demand-supply gap, “include constraints related to

the high cost of securing and registering secure land title.” Another factor cited by industry experts on the reasons why Nigeria’s housing deficit has continued to expand in the last decade is the low earning capacity of the country which is a reflection of the state of the economy. Recent data shows that only 5 million of the 69.54million Nigerians reported by the National Bureau of Statistics (NBS) to have been gainfully employed as at third quarter of 2018, earn a salary of N3 million and above per year, According to the data by Graeme Blaque Group, a Lagos-based advisory firm the data put employed Nigerians who can buy affordable housing at only 7.19 percent, meaning as much as 64.54 million people who earn less than N3 million cannot afford to own their own home except of course there is an increase in their

income level. “We found that less than 5 million Nigerians earn up to 3million a year and when we first brought out the data a lot of people shouted, so when you put that into consideration and look at affordable housing; if I give you a house at zero interest rate for even 50 years, what type of house can you afford?” Zeal Akaraiwe, CEO of Graeme Blaque Group and Member, Technical Advisory Committee to the Nigerian Senate questioned. According to the CEO, before addressing the issue of affordable housing and whether or not one can afford or have access, earning capacity of the average Nigerian needs to be able to allow for it to happen. With the current income level in Africa’s most populous nation, Akaraiwe believes that Nigerians cannot afford to own real estate property in the urban areas. Nigerian economy continued to expand at a sluggish rate in the third quarter of 2019 after state data agency, NBS, reported a 2.28 percent growth for the period. Although that’s the fastest growth in four quarters, it’s unlikely to resonate with many Nigerians because even though the headline GDP seems to be expanding, it is shrinking in per capita terms. Since 2015, Nigeria’s GDP per capita has been on contraction mode every year and that helps explain why despite the growth in headline GDP, Nigerians are getting poorer. Individual efforts at increasing Nigeria’s real estate properties by way of developing more houses shows offering insights into possible solutions, have not helped to reduce the

demand-supply gap or increase the ownership level estimated at more than 20 million units. Despite its large-size population and self-acclaimed biggest economy in Africa, Nigeria is crawling behind its peers in terms of homeownership level. Whereas homeownership level is 84 percent in Indonesia, 75 percent in Kenya and 56 percent in South Africa, it is only 25 percent in Nigeria whose population is estimated at 200 million. Going by United Nations projection, the country’s population will be as high as 400 million in 2050. According to the Association of Housing Corporation of Nigeria (AHCN), the underdevelopment of Nigeria mortgage sector in driving homeownership is worrisome as more than 90 percent of new homes utilise funds from personal savings for incremental construction. “The biggest problem of the mortgage in Nigeria is the high cost of the very limited mortgage that is available. If they can develop a policy to ease housing finance, it will be impactful,” Wole Olabanji, the CEO of CoBuildIT, a real estate firm said. The high mortgage rate in Nigeria is considered one of the key culprits of the country’s housing challenge. A typical mortgage in Nigeria ranges between 7-10 percent for Federal Mortgage Bank of Nigeria (FMBN) and between 1525 percent for commercial mortgage institutions, one of the highest in the world and the main reason the industry has become less attractive to many whose purchasing power was eroded by the 2016 recession.

Benefits new Finance Act holds for real estate investors, potential... Continued from page 31 its asset under management (AUM) to a new record of N46.16 billion in 2019 but was behind fixed income and money market funds. The asset managed by the real estate funds appreciated by 6.04 percent in 2019 to post a high net asset value (NAV) compared to the 2018 record, SEC data analyzed by BusinessDay show. The funds grew by N2.63billion from N43.53 billion in December 2018 to N46.16billion as at the week ended December 27th 2019. The total asset managed by the real estate funds accounted for 4.59 percent of the mutual funds entire market which has a

NAV above the N1trillion threshold. Further analysis of the data from SEC, the industry regulator, revealed that UPDC real estate investment fund raked the highest share of the real estate funds with a NAV of N 33.99 billion, 72 percent of the entire N46.16 billion. This was also higher than the N31.44 billion reported by the fund in the corresponding period of 2018. Managed by both SFS Capital Nigeria Ltd, Union Homes REITS and Skyle Shelter Fund shared the remaining asset in the real estate funds. They both posted a NAV of N9.79 billion and N2.38 billion respectively. “Real Estate Fund is an www.businessday.ng

investment vehicle that can be used to address Nigeria’s housing shortage and encourage economic activity in the real estate sector,” said Ayo Akinwunmi, head of research at FSDH Merchant Bank. The new Finance Act also holds an opportunity for small and medium enterprises (SMEs) with a turnover of N25 million and below as they will no longer pay company income tax (CIT). This means real estate start-ups with a profit of N25 million will be exempted from paying CIT, initiative experts have said will spur growth in the sector. “The amendments contained in the Finance Act should positively impact

companies operating in the real estate sector and thus spur the growth of the industry. The tax-exemption of small companies and the reduced CIT rate for medium-sized businesses, for instance, will increase their capacity to absorb the shocks in the Nigerian macroeconomic environment and improve their cash flow position,” Akinlusi said. According to estimates by BusinessDay, Nigeria may require monetar y terms, between N170trillon to N200trillion to bridge the housing gap if each unit is estimated to cost N10million.In the last decade, Nigeria’s housing deficit has widened to more 20 million units fueled by;

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lack of patient capital for developers to constructs affordable housing for the growing low-income earners who account for the larger populace of Africa’s most populous nation. Real estate developers have continually been in search of viable alternatives sources to funding real estate projects in a country where the cost of funds has made bank credit inaccessible, unaffordable and unattractive to the sector. Figures by the National Bureau of Statistics (NBS) for the third quarter of 2019 as analyzed by BusinessDay revealed that the property industry was among the least attractive industries to the country’s commercial @Businessdayng

banks as it got one of the smallest portions of the loan in the review quarter. Banks’ confidence in the sector waned as credit allocation to real estate tumbled to its lowest level at 3.62percent since 2015. Sectoral credit allocation to real estate shed N121.52 billion year-on-year from N710.20 billion in Q3 2018 to N588.68 billion in the corresponding quarter of 2019. “Finance is a key strategy for everything. The reason why the prices of properties are high is that the funding comes at a cost, and all those costs are buried into the cost of construction,” Adekunle Abdul, Managing Director, Metro & Castles Homes said.

Tuesday 11 February 2020

BUSINESS DAY

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Tuesday 11 February 2020

BUSINESS DAY

POLITICS & POLICY

Deregistration of parties an affront on Nigerians - ANN …Kowa Party to sue INEC Iniobong Iwok

he Alliance for New Nigeria (ANN) has kicked against the registration by the Independent National Electoral Commission (INEC) the political party, saying that INEC’s action was an affront on Nigerians and the judiciary. Recall that INEC last Thursday deregistered 74 out of 92 political parties in the country. Speaking in a world press conference in Ikeja, National Chairman of ANN, Emmanuel Dania, described INEC decision as unconstitutional and a contempt of Court, stressing that there was Court order urging all parties to maintain status-quo pending when judgment is delivered on February 17th on the suit instituted by 33 political parties challenging INEC powers to deregister political parties in the country. The national chairman, said it was wrong for INEC to deregister the ANN when the commission had not given the party the chance to participate in local gov-

ernment elections in all the 774 councils in the country to determine its strength, while adding that commission could not act outside the constitution. “The announcement of Independent National Electoral Commission (INEC) to deregistered 74 duly registered political parties and the Alliance for New Nigeria captured on same list can be best described as hasty and unconstitutional. “The Nigerian constitution is bigger than any organ or arm or agency of government and the provisions are to be upheld and respected by all including INEC. “The constitutional position is clear on how and when political parties can be deregistered and that position is yet to be attained,” he said. “This position in contained in the press statement of Thursday, February 6, 2020 of The Inter Party Advisory Council of Nigeria, IPAC which clearly highlighted that the constitutional provisions are clear as stated in section 229 defines a political party to include association whose activities shall include can-

Emmanuel Dania, national chairman of ANN

vassing for votes in support of a candidate for election into a Local Government Council and this provision has not been fully and completed exhausted as a political party because we have candidates in Local Government Areas whose elections are coming up soon,” Dania said. Speaking further, the

Lagos PDP crisis: Court fixes March 12 to hear contempt suit Iniobong Iwok

he National Chairman of the People’s Democratic Party (PDP), Uche Secondus and some members of the party’s National Working Committee (NWC) yesterday appeared before the Lagos State High Court, Igbosere to stop committal proceedings against them. The Justice in charge of the case, Taofikat OyekanAbdullahi had on December 5, 2019 ordered Secondus and a member of NWC of the party and former Senator, Ben Obi to show reasons why an order for committal should not be made against them. The judge said that Secondus and Obi should come and explain why they should not be committed to prison for defying its order. The verdict was as a result of alleged disobedience to the court order of November 12, 2019 which restrained the contemnors (Secondus and the party’s NWC) from conducting a special election for the vacant offices at the Lagos State chapter of the party.

While ordering the contemnors to show cause for defying its order, Justice Oyekan-Abdullahi expressed dismay that PDP in Lagos State proceeded to conduct the afore said special election despite the knowledge of the case and pending application for interlocutory injunction. The special election committee was chaired by Obi at the instance of Secondus. But at Monday’s proceedings, Francis Akinlotan appeared for all the claimants as counsel, Emmanuel Enoidem and Wendy Kuku appeared for the respondents. The four claimants in the suit are Adegbola Dominic, for state Chairman of the party, John Babatunde Agbaje, Fatai Ajisefinni and Taiwo Kuye. The respondents are PDP, Ben Obi, Biodun Olujimi, Jarigbe Agom Jarigbe, Danladi Baidu Tijo, Ahmed Mukthar and INEC. Akinlotan, who appeared for the claimants, informed the court of his clients’ pending applications seeking for extension of time to their written addresses and also to reply the Preliminary Objection filed by the respondents, www.businessday.ng

adding that he was ready to move the applications if court granted him leave. The judge asked Enoidem, who appeared for 1-6 respondents, and Kuku who appeared for INEC which is the 7th respondents if they had objection, but the respondents said they didn’t, in which the court granted their prayers. The claimants’ lawyer also informed the court that the contemnors on Friday evening served him an affidavit on their response to contempt proceedings filed against but he was yet to reply to it and he still has time to reply. He, therefore, urged the Court to hear the substantive suit but the 1-6 respondents’ counsel objected, saying that until all the pending applications which included contempt proceedings, the Preliminary Objection and other, the substantive suit could not be hear. After several arguments on which application to hear first, the judge ruled in favour of the respondents and fixed March 12, to hear the Contempt proceedings against the contemnors.

national chairman said the news of deregistration came as a shock to the party, because the commission never gave ANN any notification of deregistration even when INEC recently carried out a verification of it branches and national headquarters, promising to come and conduct similar exercise for its Lagos State

chapter. “However, from the perspective of Alliance for New Nigeria, we consider the Chairman of INEC Mahmood Yakubu a noble and respected Nigerian, and for this reasons and the fact that the office of the National Chairman or any of its secretariat has not been served by INEC of any notice of deregistration or anything of that and that the only communication we have received from INEC after the last verification exercise at the National Headquarters was that the State Chapters of the party would equally be verified. “For the above reasons we consider the news making the rounds as fake news or rumour or some form of misrepresentation of INEC. “We have taken this position because a professional institution such as INEC that has related with all political parties and ANN through formal communication would not announce that the same political party has been deregistered on the pages of some newspapers with due process of notification,” he said. Meanwhile, the Kowa Par ty (KP) has equally

threatened to sue INEC over the party’s deregistration by the commission. In a press release on Monday, signed by Mark Adebayo, a copy of which was made available to BusinessDay, the party said INEC acted against the law which says that if a party wins at least one ward in a local government election, it cannot be deregistered. “A c c o r d i n g t o t h e amended clause that deals with deregistration of political Parties, if a Party wins a Ward in a Local Government election, it cannot be deregistered by INEC. Why it then went ahead to include KOWA Party among deregistered Parties is something that the Commission has to explain. “We will take all necessary legal actions to redress this dangerous threat to Nigeria’s democratic development. It is also an affront to the rule of law because KOWA Party is among 33 political Parties that took INEC to court on this matter and the case was adjourned to the 17th of February. But INEC took a precipitate action to deregister political Parties before then,” Adebayo said.

BMO commends Senate over power sector privatisation probe

he Buhari Media Organisation (BMO) has thrown its weight behind the Senate on its call for the probe of the privatisation of the nation’s power sector. Senate President Ahmad Lawan had said at a recent meeting with the executive of the Manufacturers Association of Nigeria (MAN), that there is the need to revisit the privatisation of the power sector as a way of unravelling the truth about the whole exercise, to bring about a solution to the sector. MAN had expressed its frustrations over the poor state of power supply in the country. The sector was privatised in 2013 under the People’s Democratic Party (PDP) administration with the distribution and generation sub-sectors sold to core investors.

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In endorsing the probe in a statement signed by its Chairman, Niyi Akinsiju and Secretary, Cassidy Madueke, BMO said the probe is most welcome in view of the growing concern expressed by Nigerians on the state of power supply in the country. “There is no doubt that the privatisation of power sector by the PDP administration seven years ago, has continued to put the current administration under heavy financial burden and eroded public confidence in the ability of the concerned investors to manage the nation’s power sector for effective and efficient power delivery to Nigerians. “We believe that the growing concern of Nigerians on the poor state of power supply in the country over the years, and the failure of the supposed investors in the areas of @Businessdayng

power generation and distribution to deliver effective and efficient power supply, have shown that the privatisation of the power sector under the PDP administration was done in bad faith and fraught with irregularities,” he said. “So far, it has become obvious that the investors did not have the capacity to turns things around for the better despite huge financial support from the Buhari administration over the past years. The privatisation of the power sector by the PDP and its leadership was nothing but a criminal move to commit Nigerians to their cronies. “It is a mere transfer of monopoly of the power sector from the state to a group of corrupt PDP leaders and sympathisers at the expense of Nigerians,” the group further said.

Tuesday 11 February 2020

BUSINESS DAY

NEWS

L-R: Haresh Aswani, MD, (Africa), Tolaram Group/promoter of the Lekki Port project; Adesuwa Ladoja, relationship director, Lekki Port LFTZ Enterprise Limited (LPLEL), and Biodun Dabiri, chairman, Lekki Port LFTZ Enterprise Limited (LPLEL), at the presentation of the ‘African Infrastructure Deal of the Year 2019’ to Lekki Deep Sea Port, at the 17th Project Finance International Awards Dinner, at the London Hilton, Park Lane

Udoma to receive high Japanese honour for promoting trade between Nigeria, Japan IFEOMA OKEKE

do Udoma & Belo-Osagie has announced that Udoma Udo Udoma, founder of the firm, will on February 12, 2020, be decorated by the Japanese Ambassador to Nigeria, on behalf of the Japanese Emperor, with the insignia of the Order of the Rising Sun, Gold and Silver Star.4 The Order of the Rising Sun, Gold and Silver Star is one of the highest orders awarded in the name of His Majesty the Emperor of Japan, and Udoma will be the first Nigerian to be so honoured. In the November 2019 announcement of the Autumn Imperial Decorations, Udo-

ma was named an international recipient of this honour in recognition of his role in improving bilateral relations and promoting friendship between Japan and Nigeria. This award recognises the work done by Udoma, over the years, to deepen the economic and social ties between Japan and Nigeria. From 2011 to 2015, when he served as the Honorary Consul of Japan in Lagos, he contributed to the promotion of bilateral trade and Japanese investment in Nigeria, thereby generating wealth for both economies. In addition, Udoma has been a strong proponent of Japanese development assistance to Nigeria and by 2015 Japan had become the 3rd

largest donor in Nigeria. This growing Japanese support for Nigeria was further enhanced when he served as the Minister of Budget and National Planning from 2015 to 2019. During this period, Udoma helped in securing the support of the Japanese Government for the development plans of the country as set out in the Economic Recovery and Growth Plan, a plan which Udoma effectively marketed to the Japanese, and other foreign governments and development partners. Some of the Japanese development projects during his time as Minister include Japanese financing of a project for the emergency improvement of electricity supply facilities

in Abuja in 2016. Another project was the emergency rehabilitation and reinforcement of the Lagos Transmission Substation in 2018. There were also a number of projects in the Health sector including the provision of 43 ambulances in 2017 and 2018; and funding support to strengthen the diagnostic capacity of the Nigeria Centre for Disease Control. The Japan International Cooperation Agency provided extensive support to a number of States as well as the Federal Government in water sanitation, agriculture, vocational training and technical transfer programmes. Japan also contributed to the rehabilitation and recovery programme in the North East.

Lagos commits to inventions’ Port Harcourt pupil, Oyindamola, bags development for next-generation leaders N7.5m InterswitchSPAK Science top prize KELECHI EWUZIE

ommissioner of education Lagos State, Folashade Adefisayo, says the government is committed to create more developmental and invention programmes to prepare students for greater future. Adefisayo observes that such developmental programmes will not only encourage students to be more productive, it will help empower them with tools to redirect their minds from premarital sex to an option of developing innate skills and talents through scientific inventions of economic value. Adefisayo, while speaking at the Lagos Schools Invention Platform ‘Lagos SIP,’ Season I1, stated that the SIP initiative, introduced in 2007 and formerly referred to as Jamfeast, was designed to redirect the minds of students

from immoral escapades towards invention and entrepreneurship for self-discovery and future economic independence. The commissioner, who was represented by the permanent secretary, Ministry of Education, Abosede Adelaja, stressed that the Lagos State government, in line with the THEMES Agenda, was placing more emphasis on invention and entertainment to discover hidden talents in our youths, adding th at Babajide Sanwo-Olu was determined to assist them achieve their full potentials. The state government will continue to raise the bar with measures put in place for the continuous success of the Lagos SIP, Adefisayo said, calling on stakeholders and corporate organisations to partner the state government in promoting inventions of these students globally. www.businessday.ng

KELECHI EWUZIE

pupil of Jesuit Memorial College, Port Harcourt, Rivers State, Oyindamola Aje, for his dexterity in going through the various levels of the science competition has emerged winner of the second edition of the InterswitchSPAK National Science Competition held in Lagos. The 16 years old Oyindamola for winning the award received a total cash prize of N7.5 million worth of tertiary education scholarship. This scholarship will spread over five years. He also went away with a laptop and a monthly stipend for the duration of the scholarship fund. In the same vein, 15-yearold Oluwatobi Ojo of Apt Scholars Universal College, Ogun State won N4 million worth of scholarship spread over three years as the first

runner-up, while 15-year-old Onyekachi Madumere from Scholars Universal Secondary School, Ogun State, received N1 million worth of scholarship for one year as the second runner-up. Expressing his gratitude for winning award, Oyindamola said he was not looking forward to the competition as he did not know what to expect, knowing he was competing against brilliant minds. According to Oyindamola, “I am very happy that I won the InterswitchSPAK 2.0 first prize. It has been a very long and exciting journey for me, and I am grateful to God that I am the overall winner. I did not see this coming at all but I’m very excited.” Mitchell Elegbe, managing director/founder, Interswitch Group, in his opening remarks, harped on the importance of science and technology to the Nigeria economy.

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Analysis

How Access Bank Lagos City Marathon impacts economy SEGUN ADAMS

n 2016, Access Bank partnered with the Lagos State Government to host the inaugural edition of the Access Bank Lagos City Marathon. At inception, the goal of this partnership was to provide strategic support to the country’s sport industry and promote a healthy and active lifestyle among citizens through fitness and exercise. Thanks to brilliant campaign activities around the theme ‘Running from the Old to the New’; the marathon garnered the interest of athletes and observers from around the world, causing an influx of thousands. The 2016 Access Bank Lagos City Marathon had 50,000 registered participants, and was ranked 2nd in Africa, after the Cape Town Marathon by the All-Athletics.com, and was ranked 71 among over 1,000 international marathons globally. The Access Bank Lagos City Marathon, in particular, has empowered a number of people in the hospitality industry, including food and drink vendors, fashion designers, advertisers, communication agencies and experts, technical officers, and volunteers that were all engaged from the planning stage to the completion of the marathon. In Nigeria, tourists especially love “African souvenirs”, many of which are made available along the routes of the marathon and off-site. By reviewing the activities of foreign marathon participants, we are bound to see significant economic benefits and international recognition at the conclusion of the 2020 Access Bank Lagos City Marathon. Running by numbers In 2019, 120,000 people registered to run the 42km path from the National Stadium, Surulere to Eko Atlantic. Over the years, we have watched the marathon grow, pulling in more sponsors and participants, and with them, more observers and enthusiasts. It’s not just about the sport Beyond the fit and active lifestyle running promotes, marathons have become sport tourism events. People now participate in marathons for other reasons which include; self-esteem booster, self-actualisation, self-therapy, and even socialisation. Marathons are not only beneficial to the participants but also the host cities. It is for this reason that more cities are launching races to promote tourism and boost their image. The 2018 edition of the Access Bank Lagos City Marathon hosted 35 gold label athletes, 12 silver and 13 bronze label athletes, including 120 international and 150 Nigerian elite athletes. These numbers do not take into account the @Businessdayng

tourists who were also present as observers and supporters of the racers. Needless to say, the route was excellently planned to show off some of the city’s finest landmarks, including Eko Atlantic which only grows in splendour as the construction of the megacity continues. Taking into consideration the transportation, hotels, dining, social activities, post-run sightseeing, family and friends that are likely to accompany the runners, and the size of some marathons (tens of thousands or more), it’s an easy guess that marathons cause a notable boost to the host city’s tourism industry. It follows reason that a large influx of tourists will result in considerable benefits for the host city and economy as a whole. Race is good for the economy Economic impact studies have shown that there are positive economic effects for the host city of a marathon. According to a study performed by the University of Illinois at Urbana-Champaign’s Regional Economics Applications Laboratory, the 2013 Bank of America Chicago Marathon generated “$253.49 million in total business activity to the Chicago economy,” which is “an equivalent of 1,742 full-time jobs and $85.94 million worth of wages and salary income.” How does this happen? It’s simple. Tourists want to explore and get as much out of a city as they can, leaving room for brands to create packages that these tourists will find attractive. A good example would be travel agencies creating packages specifically for the marathon period, or caterers putting together experience nights where tourists can experience the food culture of the host city. Sport-related brands have also seen a spike in business, increased sales, and top of mind awareness by pushing out content in line with the marathon’s theme of the year. By hosting a marathon widely watched across the continent and the world, Lagos has consistently informed investors, tourists, and foreign governments that the state is ready for business. While recognising the effort and investment required in hosting such an event, it also further stimulates future tourist visits, not just during the event. For example, the inevitable economic benefit for many countries that have hosted the Olympic Games include the postOlympic effect of an influx in international tourist arrivals. Additionally, event publicity also increases interest and the demand for local products and services from vendors, fashion designers, advertisers, travel agencies and experts, even when consumers are yet to visit the area.

Tuesday 11 February 2020

BUSINESS DAY

NEWS

ITA opens Nigeria office to strengthen Italian, Nigerian trade relation SEYI JOHN SALAU

L L-R: Bayo Olugbemi, MD/CEO, First Registrars and Investor Services Limited; Funmbi Akinluyi, director, Emerging Africa Capital (EAC) Limited; Joe Mekiliuwa, director; Nike Akande, group chairman, EAC Limited; Toyin Sanni, group CEO, EAC Limited; Segun Sanni, MD, Emerging Africa Asset Management Limited, and Olubusayo Adeniyi, MD, EAC Trustees Limited, at an event organised by the EAC Limited to unveil investment opportunities in Lagos.

Currency-in-circulation declines 7.9% in Jan. HOPE MOSES-ASHIKE

urrency-in-circulation (CIC) declined by 7.9 percent to N2.2 billion in January 2020 from N2.4 billion in December 2019, according to data obtained from the Central Bank of Nigeria (CBN). The decline is as a result of the recent increase in Cash Reserve Ratio (CRR) by 500 basis points to 27.5 percent in January from 22.5 percent since 2016, said Abiodun Keripe of investment research, Afrinvest Securities Limited. The CBN’s Monetary Policy Committee (MPC) at the end of its first meeting of the year announced the increase in the CRR. Godwin Emefiele, governor of the CBN, who announced the increase, said the MPC was confident that it was fortuitous as it would help

address monetary-induced inflation whilst retaining the benefits from the bank’s Loan to Deposit Ratio (LDR) policy, which has been successful in significantly increasing credit to the private sector as well as pushing market interest rates downwards. Currency is issued to Deposit Money Banks (DMBs) through the branches of the CBN and unfit notes retrieved through the same channel. Currency deposited in the CBN by the DMBs are processed and sorted into fit and unfit notes in line with the Clean Notes Policy. Banks’ credit to the private sector grew by N2 trillion between May 2019 and December 2019, according to the CBN. At the end of November 2019, CIC rose by 9.9 percent to N2,203.27 billion, in contrast to the decline of 0.4 percent at end of third quarter

2019, according to the CBN’s economic report for the fourth quarter of 2019. The development, relative to the level in the preceding quarter, reflected, mainly, the increase in its currency outside banks’ component, and seasonal factors. Total deposits at the CBN amounted to N14,350.54 billion at end-November 2019, indicating an increase of 3.6 percent above the level at end of third quarter 2019. The rise was attributed to 14.3 percent and 3.1 percent increase in the deposits of the Federal Government and the commercial banks, respectively. Of the total deposits at the CBN, the shares of the Federal Government, banks and private sector deposits were 47.4 percent, 35.9 percent and 16.7 percent, respectively. Reserve money grew by 5.0 percent to N7,353.36 billion at end November 2019,

in contrast to the decrease of 13.5 percent at the end of third quarter of 2019. The development reflected the increase in Federal Government and banks’ deposits with the CBN. The total stock of currency (issuable and non-issuable) in the vaults of the bank as at the end of December 2018 stood at 1,718.57 million pieces, compared with 1,284.10 million pieces in 2017, indicating an increase of 33.83 percent. As at end-December 2018, the total issuable notes (newly printed notes and Counted Audited Clean notes) stood at 496.61 million pieces, compared with 256.61 million pieces in 2017, indicating an increase of 240 million pieces or 94.0 percent. The increase was attributed to the volume of new notes supplied by NSPM plc, the CBN’s report said.

Tony Elumelu Foundation disburses first tranche of $5m partnership commitment from AfDB

Why we’re funding free legal support for indigent citizens - Sanwo-Olu

he Tony Elumelu Foundation (TEF) has disbursed $2.5 million seed capital to the African Development Bank-sponsored beneficiaries of the 2019 TEF Entrepreneurship Programme, being the first tranche of the $5 million partnership commitment from AfDB. The remaining $2.5 million is expected to be disbursed to the entrepreneurs before the end of this first quarter of 2020. The AfDB commitment follows the recent $8.5 million disbursement from the United Nations Development Programme (UNDP) to 2,648 entrepreneurs in the Sahel region and Africa more broadly, and further accelerates the economic empowerment generated by the Tony Elumelu Foundation. In 2019, the Foundation significantly increased the scale and reach of it impact, with the number of beneficiaries of its flagship Entrepreneurship Programme rising from its annual commitment

JOSHUA BASSEY

of 1,000 to 5,150, in collaboration with global and African partners. With its commitment to strengthen small and mediumsized enterprises and develop young entrepreneurs, AfDB joined the growing list of global development institutions benefitting from the Tony Elumelu Foundation’s unique model of identifying, training, mentoring and funding entrepreneurs and start-ups across Africa. The partnership demonstrates the implementation of the AfDB’s 10-year “Jobs for Youth in Africa” strategy, launched in 2016, to support the creation of 25 million meaningful jobs across the continent. The partnership illustrates TEF’s willingness to share its infrastructure and know-how with others who share the mission to empower young African entrepreneurs and TEF’s goal of creating millions of jobs, as well as generating billions in revenue to catalyse economic growth across the continent.

agos State government says financial and other forms of support being extended to the Lagos Public Interest Law Partnership (LPIP) is to guarantee continuous Probono (free) judicial services to indigent residents who desire fair legal representation. The state governor, Babajide Sanwo-Olu, stated this when a four-man team from the board of trustees of the organisation led by Daisy Danjuma, visited the Government House, Alausa, Ikeja, on Monday. The LPIP was set up by the Lagos State government in 2012 to expand access to justice and reduce the burden on government funded agencies. According to SanwoOlu, the role of the LPIP has so far aided Lagosians who, would otherwise, may not have had fair hearing, and accessed justice. He commended the team

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for rendering its services to humanity through partnership with non-governmental organisations and lawyers, promising that the state government would further raise the bar in the delivery of access to justice and judicial services. “We’ll continue to support the partnership and collaborate in whatever form for a better society. The support may be financial or any other resources to enable the LPIP achieve its mandate.” The governor urged other lawyers to join hands with the organisation noting that Lagosians deserve the best. The team leader, Danjuma, appreciated the continuous support of the state government, especially with regards to the digitisation of its services and the probono week, saying it was developed with the partnership of stakeholders to complement government’s efforts in the provision of free justice delivery service to the people.

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everaging the strategic growth initiative of the Italian government to grow its economy, especially across West Africa region, the Italian Trade Agency (ITA) recently opens its Nigerian office to strengthen the Italian/Nigerian trade relation. ITA says the office, located at the consulate in Lagos, is to key into the dynamics of Nigeria, which will help Italian companies catch the growing demand for quality in Nigeria. As Nigeria continues to seek for measures to rebalance its economy away from reliance on oil and gas, diversifying into other sector of the economy to add value to its raw materials to make it fit for export into other markets. The ITA will leverage adding value to Nigeria’s raw material through the technical know-how of Italian companies, since Italy already has a developed technology to do such. “The trade between Italy and Nigeria is at the

stage where it offers ample margins for growth; we on the one hand rely on raw material supply from Nigeria to Italy and import from Italy to Nigeria of mostly technology, and other goods in the furniture sector; finish goods sector, but still the market share we have in Nigeria is below the average market share we can enjoy in other markets,” says Alessandro Gerbino, trade commissioner for Ghana, Nigeria and Cote d’Ivoire. According to Gerbino, the Accra office is the headquarters for West Africa, while the agency is developing its network across the region. Hence it is a priority for ITA to be in Nigeria, being the biggest economy in Africa. “The size of the economy requires our direct presence here,” Gerbino says. Speaking on the initiative of the ITA to deepen trade relation with Nigeria, Gerbino notes that for the first time, the agency is bringing Italian companies to Nigeria by having the first Italian national pavilion at the Nigerian exhibition scheduled for March.

EY West Africa appoints new leader

Y has appointed Anthony Oputa as the new regional managing partner for the West Africa and Nigeria country leader, effective July 1, 2020. With this appointment, Anthony will become a member of the EY Africa Executive Leadership. Anthony will succeed Henry Egbiki, who is the current regional managing partner for West Africa and Nigeria country leader, a role he assumed in 2005. Henry will retire as the regional managing partner for West Africa and country leader Nigeria on June 30, 2020. Anthony joined EY as the Financial Services Sector leader and chief operating officer for West Africa in August 2018. Since joining EY, he has demonstrated his passion and ability for growing and enhancing the EY brand in the market. Prior to joining EY, Anthony was the deputy assurance leader in one of the BIG four professional service firms. He is a highly respected professional with over 20 years’ experience focus on the Financial Services Sector. Expressing his congratulations over Anthony’s appointment, Henry says: ”I am delighted that Anthony has been chosen to succeed my role. He is well qualified and positioned to take on the role of a Country Leader and Regional Managing Partner for West Africa. I am confident that Anthony will take the EY brand to greater @Businessdayng

heights and continue building a better working World for our clients, our people and our community.” Though he has a primary focus on offering a broad range of assurance and business consulting to the Financial Services Industry, he possesses deep knowledge and understanding of other sectors as well as markets in West Africa. Anthony has worked with a portfolio of local and multinational clients including some of the largest banks in Nigeria and West Africa, providing assurance and other advisory services and dealing with technical issues. He has significant experience managing large audit and non-audit clients. He is a regular thought leader on the development of the Financial Services Industry and often quoted in the press as well as at conferences. Anthony is a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN) and a graduate of Accounting from the University of Jos.

Tuesday 11 February 2020

BUSINESS DAY

NEWS

Court grants Adoke N50m bail ECOWAS sets up committee on Nigeria’s border closure on fresh 7-count charge FELIX OMOHOMHION, Abuja

Federal High Court, Abuja, Monday, granted bail to former Attorney General of the Federation (AGF) and minister of Justice, Mohammed Adoke, to the tune of N50 million. Justice Binta Nyako, ruling on bail application on an amended fresh sevencount charge against the former AGF and Aliyu Abubakar, standing trial on one count charge, granted bail to the defendants on the same terms as an FCT High Court, in Gwagwalada, Abuja, presided over by Justice Abubakar Idris Kutigi had already granted them. Justice Kutigi had on January 30 granted Adoke and Abubakar bail in the tune of N50 million with one surety in like sum. They are standing trial in a 41-count charge in his court. Delivering a ruling, Monday, Justice Nyako, said it was needless giving another ruling when there was a concurrent one. The defendants are charged before Nyako for alleged bribery and money laundering offences. The charges read in part: “That you Mohammed Bello Adoke, sometime in September 2013, in Abuja, within the jurisdiction of this Honourable Court, accepted as payment the sum of United States Dol-

lars equivalent to N300m from Abubakar Aliyu and you thereby committed an offence as specified under section 1 (a) of the Money Laundering Prohibition Act 2011 (as amended) and punishable under section 16 (2)(b) of the same Act. “That you Mohammed Bello Adoke, sometime in September 2013, in Abuja, within the jurisdiction of this Honourable Court, made a payment of a sum of United States Dollars equivalent to N367.3m to one Usman Mohammed Bello and you thereby committed an offence as specified under section 1(a) of the Money Laundering Prohibition Act 2011 (as amended) and punishable under section 16 (2)(b) of the same Act. “That you Mohammed Bello Adoke, sometime in September 2013, in Abuja within the jurisdiction of the Honourable Court, used the total sum of N300m when you knew that the said funds formed part of your unlawful activities to wit: payment of an amount exceeding stated threshold amounts outside a financial Institution and you thereby committed an offence contrary to section 15 (2) (d) and punishable under section 15 (3) of the Money Laundering (Prohibition) Act 2011 (as amended). “That you Mohammed Bello Adoke on or about

the 13th of September 2013, in Abuja, within the jurisdiction of this Honourable Court, did cause to be made a structured cash payment in 13 tranches of a sum of money totaling N50m into your Unity Bank Plc Account No. 0020153263, which sums you knew is part of an unlawful act, to wit: the payment of an amount exceeding stated threshold amounts outside a financial Institution, intending to conceal the origins of the said funds, contrary to section 15 (2 )(a) of the Money Laundering Prohibition Act 2011 as amended and punishable under section 15 (3) of the same Act. “That you Mohammed Bello Adoke on or about the 16th of September 2013, in Abuja, within the jurisdiction of this Honourable Court, did cause to be made a structured cash payment in 22 tranches of a sum of money totaling N80m into your Unity Bank Plc Account No. 0020153263, which sums you knew is part of an unlawful act, to wit: the payment of an amount exceeding stated threshold amounts outside a financial Institution, intending to conceal the origins of the said funds, contrary to section 15 (2 )(a) of the Money Laundering Prohibition Act 2011 as amended and punishable under section 15 (3) of the same Act.

TONY AILEMEN, Abuja

uthority of ECOWAS Heads of State and Government has constituted a committee, headed by President Roch Marc Christian Kabore of Burkina Faso, to study and make a full report on Nigeria’s land border closure with her neighbours. Nigeria’s border closure has seen strong negative economic consequences for the region, leading to calls on Nigeria to ease the closure. This is also coming on the heels of plans by Nigeria to review the impact and determine when the country can reopen the borders. President Muhammadu Buhari recently disclosed that the country had established a committee to review the closure, adding, “The report from the committee will determine the reopening of the borders.”

But a statement by presidential spokesman, Garba Shehu, notes that the ECOWAS decision to set up the committee was agreed on Sunday night in Addis Ababa, Ethiopia, at an extraordinary session ECOWAS leaders convened on the margins of the 33rd AU Summit to discuss the issue and other pressing regional matters. Nigeria’s foreign minister, Geoffrey Onyeama, told journalists after the three-hour closed-door session that the meeting attended by President Buhari and chaired by the ECOWAS chairman, President Mahamadou Issoufou of Niger Republic, also discussed West Africas new single currency, the Eco, and the situation in Guinea Bissau after the presidential election. On border closure, Onyeama said: ‘‘The President of Burkina Faso is charged with undertaking a full study of

Benue strange disease suspected to be chemical poisoning, not coronavirus - NCDC GODSGIFT ONYEDINEFU, Abuja

ollowing an alert raised by the Senate over a strange disease outbreak in Benue State, the Nigeria Centre for Disease Control (NCDC) says its prior investigations indicate that the disease is not coronavirus or any major Viral Haemorrhage fever (VHF), but suspected to be chemical poisoning. Last week, the Senate alerted Nigerians that a strange disease suspected to be the novel coronavirus had hit Benue State, killing 15 persons already and about 104 seriously infected. The spokesperson of the NCDC, Emeka Oguanuo, who confirmed this in a telephone interview with BusinessDay on Monday, said the disease was likely to be chemical poisoning because those affected share the same water source. He added that

symptoms shown by persons affected indicate that it was not an infectious disease. He however said investigations were still ongoing to ascertain the disease. Chikwe Ihekweazu, director-general, NCDC, in recent tweet said water samples had been sent to the Federal Ministry of Water Resources for analysis. “We were notified of deaths from ‘strange illness’ in Benue by State Ministry of Health on February 1. Samples tested at NCDC National Reference Laboratory, and negative for major Viral Haemorrhagic Fevers Water samples were sent to Federal Ministry of Water Resources for analysis. Investigations are ongoing,” he said. Abba Moro, senator representing Benue South, who raised the alarm last week, revealed that the outbreak of the strange disease occurred on January 29, 2020, in Oye, Obi

Local Government Area of the state and consequently, directed the Federal Ministry of Health to immediately and the NCDC to investigate the disease and quickly employ surveillance measures to contain it. He listed the first victims of the epidemic outbreak as Happiness Ogbo, Onajobi Ogbedu, Wisdom Agwo, Andy Edu, all of whom died 48 hours after contacting the undiagnosed disease. He said the disease, which is yet to be diagnosed by health authorities and medical experts in Benue State, had symptoms such as headache, internal heat, diarrhoea, vomiting, stomach ache, weakness of the body and swollen stomach. Moro also noted that as at Monday, February 3, 2020, the number of persons affected with the strange epidemic had risen to 104.

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the situation, make a report and then we take it from there.’’ Asked when the report will be presented to ECOWAS Heads of State and Government, the Nigerian minister replied: ‘‘As soon as possible, there are no timelines. But he is supposed to start very quickly, study the situation from all the affected countries and present his report.’’ On the Eco currency, he said: ‘‘Nothing has changed in respect of Nigeria’s position.” He said Nigeria’s position was that the convergence criteria had not been met by majority of the countries, therefore there had to be an extension of time on the takeoff of the single currency. On Guinea Bissau, he said ECOWAS leaders recognised that there was an appeal of the presidential election result and they were waiting for the Supreme Court decision on the matter.

Tuesday 11 February 2020

BUSINESS DAY

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Tuesday 11 February 2020

BUSINESS DAY

news Indomie maker eyes Nigeria digital lending ... Continued from page 1

tries like Ghana, South

Four charts that show how Ghana is pulling... Continued from page 1

8.8 percent forecast by the International Monetary Fund, that is still very solid growth compared to Nigeria whose economy grew at a tepid 2 percent. GDP per capita Nigeria is also losing to Ghana from a GDP per capita standpoint. FDI For the first time since the United Nations Conference on Trade and Development (UNCTAD) started tracking data, Ghana attracted more Foreign Direct Investment than Nigeria first in 2015 after getting some $3.1 billion while Nigeria managed $3.05 billion. In 2018, it happened again, as Ghana beat Nigeria by $1 billion. Ghana’s

FDI came to $2.9 billion as against Nigeria’s $1.9 billion. Attracting robust FDI is one of the reasons behind the economy’s rapid growth rate. Nigeria could do with larger FDI flows to create jobs for a largely youthful but unemployed population. Economic growth is also in need of a boost from private investment. FX policy Gha na’s s i ng l e e xchange rate policy is also the more preferred by foreign investors compared to Nigeria’s multiple exchange rates which investment bankers say deters investment. Nigeria has at least three exchange rates. There is the N306/$ rate which the Federal Govern-

Nigeria set to name transaction advisors... Continued from page 1

ance are foreign investors hence the FG would likely use foreign advisors,” a source told BusinessDay. “FG might turn to Standard Chartered Bank. They were on Ghana’s recent Eurobond issuance.” H o w e v e r, a n o t h e r source said Stanbic IBTC Capital would likely be the advisor. Citibank Global Markets Limited and Standard Char tere d Bank were joint lead managers for the 6th Eurobond issuance in 2018, which was Nigeria’s last venture into the global debt market, while FSDH Merchant Bank Limited was the financial advisor. When contacted by BusinessDay, a senior FSDH official said he could neither confirm nor deny the bank’s role in the upcoming debt issuance due to client con-

fidentiality agreement. Nigeria steered clear of the international debt market last year after its record issuance of $5.4bn in 2018, according to data from Chapel Hill Denham. However, the government’s 2020 budget deficit of N2.175trn, about 1.52 percent of GDP, will be financed by borrowing N850bn from foreign sources as well as multilateral /bi-lateral loan drawdowns of N328.13bn. Finance Minister Zainab Ahmed said in December that Nigeria would be quick to tap into the international debt market to ensure the country has enough funds for the implementation of the 2020 budget. “What we’re not able to get in concessionary loans, we’ll go for the commercial window. Eurobond is one option,” www.businessday.ng

ment uses in its transactions like when sharing dollar income with states and local governments. Then there’s the second rate, N364/$, used by investors and exporters. The rate has somewhat weakened since it was first introduced in 2017 to manage an acute dollar crisis. The rate is the most popular within the country and the clos-

est to the market value of the naira. Then there’s a N365/$ rate for Bureau De Change operators whose staff litter the streets selling small amounts of dollars in cash to people. Ghana’s, on the other hand, is signed to an IMF programme that means it has little scope to flirt with an fx subsidy like in Nigeria.

Ahmed said. Already, President Buhari’s team is awaiting lawmakers’ approval for a proposed concessionary borrowing of $29.96bn for which, even though delayed, Senate President Ahmad Lawan has given assurance of approval. Nigeria’s proposed issuance comes after Ghana and Gabon’s successful Eurobond issuance which saw interests of 5x and 3x, respectively. Ghana is fresh off its $3bn dollar-denominated debt sale which saw investors oversubscribe with an order book of $15bn. The issuance which was split across three tenors – US$1.25bn 7 Y, U S $ 1 b n 1 5 Y a n d US$750m 41Y – cleared at 6.375 percent, 8.0 percent and 8.875 percent, respectively. S i m i l a r l y , G a b o n ’s $1bn 10-year bond sold at 6.625 percent with an

oversubscription of 3x. “It’s still a broadly favourable primary market because there is still a lot of demand for high-yield bonds globally due to the low-interest-rate environment,” said Omotola Abimbola, fixed income analyst at Lagos-based Chapel Hill Denham. “Even countr ies w ith worst rating than Nigeria have gone to the market and raised a substantial amount of money at cheap rates.” A successful outing for Nigeria would raise its foreign exchange reserves to at least $40.7bn and halt the steady decline in foreign currency holding since mid-January, which had brought fears of devaluation to the fore in recent months. It would also raise Nigeria’s Eurobond debt stock to a minimum of $13.868bn with total external stock estimated by the Debt Manage-

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Africa, and Egypt are also in the plan. With about 66 percent of the adult population in Africa unbanked, Africa fintech represents a huge opportunity to drive financial inclusion outside of traditional banking systems. Tolaram’s entrance into the lending space in Nigeria, in particular, brings more competition to the digital lending marketwhichalreadyhasdeeppocket players from China such as Opera, owners of the OPay super-app platform in Nigeria and Okash in Kenya, and Transsion, owners of PalmPay. Tolaram will also be locking horns with more entrenched local companies such as Carbon, Lydia, Page Financials, Renmoney, among others. While Tolaram can count on Tala which raised $110 million in Series D funding in 2019, it would have to do more in terms of driving local penetration. But it appears the company is thinking in that direction already as the deal is said to be led by one of the Tolaram sons, Nitin Vaswani, who is a medical doctor but also part of a private equity firm, Social Investment & Alternative Finance. “Nitin is an Indian but was born and bred in Nigeria even though he was schooled abroad,” a source who will not be named told BusinessDay. “He knows Lagos and Lagosians like the back of his hands. I think they would either invest in Tala directly or invest in Nigerian operations.” A report by Bloomberg

ment Office (DMO) to be $26.941bn increasing to approximately $30bn. While foreign debt has been cheaper for the government due to low-interest-rate environment in the developed world, the International Institute of Finance (IIF) has warned several countries in sub-Saharan Africa, including Nigeria, will face substantial debt amortisation payments in coming years. African Sovereign Eurobond issuance has surged in the last four years despite a decline to $25bn in 2019. Meanwhile, for Nigeria, issuance stood at a record high of $4.8bn and $5.4bn in 2017 and 2018, respectively. “ The medium-term (debt amortisation) peak will be reached in 2024-25, with $6.6bn and $7.4bn in repayments, respectively. In terms of individual countries, Ni@Businessdayng

which also confirmed the Tolaram’s interest in digital lending noted that Kunal Adnani, who leads Tolaram’s mergers and acquisitions team, has been enlisted to help coordinate the push into lending. Adnani is also betting on the company’s wide network of distributors to drive its digital banking entry in Africa. “What we’re looking to do is take the same technology, the same systems, and the same learning into African markets where we have a presence, albeit in a very different area,” Adnani said in an interview with Bloomberg. “We have access to thousands of distributors in these markets and they can also have a knock-on effect on our business. The more credit we can give them, the more they can increase volumes.” Adnani further said Tolaram’s offering could take the shape of a traditional bank, complete with interest rates similar to regular credit cards and savings accounts. The Singapore-headquartered company with an estimated value of $1.8 billion has food production and distribution operations across Africa and sells to more than 75 countries. It is behind several household brands in Nigeria like Indomie, Minimie, Power Oil, Power Pasta and Hypo Bleach. It also runs a bank in Indonesia, PT Bank Amar. In 2019, Mohan Vaswani, chairman of Tolaram Group, said the company was not afraid to try new businesses. “We are not afraid,” Vaswani said. “When we see opportunities, we are ready to take the risk.”

geria, Kenya, Ghana, Angola, and Zambia will feel the highest-burden,” IIF said in a January report. In 2020, the 16 countries studied by IIF will need to pay around $4.3bn in interest, compared to $1.6bn five years ago and only $300m 10 years ago. “Ghana, Nigeria, and the Ivory Coast alone are responsible for more than half of the 2020 total,” it said. In the third quarter of 2019, Nigeria paid $263m as interest fee on its Eurobond, according to the DMO. For Nigeria, a downturn of oil price remains a risk to foreign borrowing as it could cause a surge in debt levels and make repayments difficult. But this has not discouraged expensive short-term inflows into central bank (CBN) bills to finance growing budget deficits.

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World Business Newspaper

Merkel’s heir apparent to quit as CDU leader Annegret Kramp-Karrenbauer’s exit throws race to be Germany’s next chancellor wide open Guy Chazan

he race to succeed Angela Merkel as German leader was thrown wide open on Monday as Annegret Kramp-Karrenbauer, the woman long seen as her anointed heir, said she would not run for chancellor in next year’s election. Ms Kramp-Karrenbauer is also to stand down as leader of the Christian Democratic Union, the party she has led since December 2018, in a move that will usher in a new era of uncertainty in German politics. AKK, as she is widely known, was seen as Ms Merkel’s favoured successor and had long been viewed as a shoo-in for chancellor. But a series of gaffes gradually eroded her authority and sent her poll ratings into a tailspin. “Her mistakes just kept piling up,” said Olav Gutting, a CDU MP who is in the party’s governing council. “People like her a lot as a person, but the grass roots had growing doubts about her fitness for the highest office.” The contest to replace Ms Merkel, who will step down after her fourth and final term expires next year, is now expected to be a three-way contest between Armin Laschet, prime minister of North Rhine-Westphalia, Germany’s most populous state; Jens Spahn, Germany’s health minister; and Friedrich Merz, a former leader of the CDU parliamentary group and longtime rival of Ms Merkel. A victory by Mr Merz or Mr Spahn, both conservatives, would mark a watershed for the CDU, which has moved to the centre ground of German politics under Ms Merkel. Many in the party would like to see it shift to the right again

Annegret Kramp-Karrenbauer, left, with Angela Merkel after being elected as the party leader during the CDU congress in 2018 © Reuters

once the long-serving chancellor exits the political stage. Mr Merz announced last week that he was giving up his job as chairman of BlackRock, the investment manager, in Germany so he could devote more of his time to the CDU — a move many saw as confirmation of his leadership ambitions. The contenders to lead the CDU: Friedrich Merz Friedrich Merz was long seen as one of the leading conservative politicians of his generation. But he lost out to Angela Merkel in a power struggle and, a few years later, quit politics for a career in business, rising to become chairman of BlackRock in Germany — a job that made him a millionaire. In 2018 he staged a comeback, entering the race to succeed Ms Merkel as leader of the CDU and losing narrowly to

Annegret Kramp-Karrenbauer. In recent weeks his frantic schedule of public appearances has underscored his continuing interest in Germany’s top job. Mr Merz, who has strong views on immigration and national identity, has promised to pull the CDU in a more conservative direction and win back voters who defected to the nationalist Alternative for Germany. Jens Spahn Jens Spahn, 39, is one of Germany’s most active politicians. As health minister he has presented 18 draft laws in 18 months, dealing with everything from cutting patient waiting times to boosting staffing levels at care homes. Even Angela Merkel, long mistrustful of Mr Spahn, has become a fan: she said recently that he was successfully “taking on a lot of hot potatoes”

and “getting a huge amount done”. Young, ambitious and openly gay, Mr Spahn made a name for himself in 2015 as the most outspoken critic of Ms Merkel’s liberal immigration policies. The standardbearer of the young conservatives in the Christian Democratic Union, he also ran for the leadership of the party in 2018. With Annegret Kramp-Karrenbauer now throwing in the towel, Mr Spahn might attempt a second play for the top job in German politics. Armin Laschet The prime minister of North Rhine-Westphalia, Germany’s most populous state, Armin Laschet has long been considered a possible successor to Angela Merkel — and is widely seen as her ideological heir. The 58-year-old has some advantages: he heads the CDU’s

largest regional association, and his coalition of CDU and liberal Free Democrats has won praise for its pro-business policies. He also played a key role in Germany’s sensitive negotiations to phase out coal-fired power, which will have far-reaching consequences for his heavily industrialised state. However, party critics doubt whether the Merkel loyalist has the stature to be chancellor. A former journalist, Mr Laschet joined the CDU as an 18-year-old, was elected to the Bundestag in 1994 and later won a seat in the European Parliament. Ms Kramp-Karrenbauer’s announcement capped a tumultuous week in German politics that began when CDU politicians in the east German state of Thuringia sided with the nationalist Alternative for Germany to elect a little-known local politician as the state’s leader. It was the first time in Germany’s postwar history that a prime minister had been helped into office with the votes of the far-right. Ms Kramp-Karrenbauer had urged the Thuringian CDU not to vote for the candidate, Thomas Kemmerich of the liberal Free Democrats, but it went against her wishes. Their insubordination underscored her waning authority in the party: Tilman Kuban, leader of the CDU’s youth wing, said the party suffered from “a lack of leadership”. Ms Merkel then intervened, describing the CDU’s behaviour as “unforgivable” and insisting the election of Mr Kemmerich be cancelled. The remarks — by a chancellor who has rarely spoken publicly about domestic politics since standing down as CDU leader in 2018 — only highlighted Ms Kramp-Karrenbauer’s weakness.

China struggles to return to work after coronavirus shutdown Xi Jinping says large-scale layoffs must be avoided as many workplaces remain shut

Ryan McMorrow, Christian Shepherd and Tom Mitchell

hinese president Xi Jinping said large-scale layoffs must be avoided as China officially returned to work on Monday. But any hopes its stricken economy would quickly come back to life were disappointed as businesses extended holidays or work-fromhome arrangements to contain the deadly coronavirus outbreak. According to China Central Television, Mr Xi made the comment during his first virus-related public appearances outside the confines of government and Chinese Communist party meeting halls since the disease erupted in mid-January. State media ran pictures of Mr Xi wearing a surgical mask and getting his temperature checked as he toured a residential area in eastern Beijing to “investigate and guide”

epidemic control work. Mr Xi’s relatively few public appearances over recent weeks have been almost entirely limited to official government meetings and formal receptions of visiting foreign dignitaries. Elsewhere in Beijing, whitecollar workers trickled back into office buildings while authorities in Shanghai encouraged people to continue working from home. In areas that had not extended the February 10 deadline to return to work, many factories and businesses remained closed for lack of manpower. “Most of our factory’s workers are from Henan province. They haven’t returned yet,” said one worker at an electronics components factory in Suzhou, near Shanghai, who asked not to be named. Authorities said they were still reviewing a request by Foxconn, www.businessday.ng

the maker of Apple’s iPhone and China’s largest employer, to restart production in Shenzhen, near Hong Kong, and Zhengzhou, a city in Henan province about 500km from Wuhan, the centre of the outbreak. Other Chinese tech titans such as ByteDance, Tencent, Alibaba and Meituan have extended their work-from-home policies for at least another week. While some global automakers, including Ford, Daimler and Tesla, restarted China plants on Monday, a number of manufacturers were taking a cautious approach to ramping up production in the world’s largest car market, where they face declining sales after decades of uninterrupted growth. BMW is planning to restart plants on February 17, depending on how the outbreak develops, a spokesperson said. Volkswagen is opening factories at its FAW joint

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venture one-by-one this week and keeping most plants run with its other Chinese partner, SAIC, closed until next week. 40,000+ Total number of coronavirus cases recorded in China China’s State Council is pushing to get the world’s second-largest economy back to work and avoid prolonging the shutdown, which started more than three weeks ago. The total number of confirmed cases in China rose to more than 40,000 on Monday, according to the National Health Commission, and the country’s death toll climbed to 908, the vast majority of whom were in Hubei province, the centre of the outbreak. There have now been nearly five times as many coronavirus infections in China as there were during the Sars outbreak in 2002-2003, which knocked quarterly economic @Businessdayng

growth down by two percentage points. Many economists have forecast the coronavirus could have a greater impact on growth than Sars. Markets were mixed on Monday with China’s CSI 300 up 0.3 per cent and Hong Kong’s Hang Seng index down 0.6 per cent. Tokyo’s Topix dropped 0.72 per cent while Sydney’s S&P/ASX 200 fell 0.14 per cent. The Australian dollar, which investors view as a proxy for China’s economy, rose 0.5 per cent to almost $0.67. But it was still down 4.6 per cent in the year to date and remained close to a decade-long low. China’s National Bureau of Statistics said on Monday that consumer price inflation for January increased 5.4 per cent year-on-year, higher than most economists had forecast, in part because of hoarding as the epidemic gathered pace in mid-January.

Tuesday 11 February 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED Daniel Thomas and Simeon Kerr

MC Health has forced its founder BR Shetty and another top shareholder, Khalifa al-Muhairi, to step back from the board, after the size of their stakes in the embattled FTSE 100 company were incorrectly reported. The healthcare group said that BR Shetty, an Indian entrepreneur who built businesses across the UAE and brought NMC to the London market in 2012, was carrying out a legal review to verify his stake in the group. The decision suggests that the holdings of Mr Shetty and his two Emirati partners, Saeed al-Qebaisi and his relative Mr Muhairi, “have been incorrectly reported historically to the company and the market,” NMC added. Mr Shetty, co-chairman, and Mr Muhairi will “absent themselves from further board discussions until clarification of these matters,” said NMC, “pending a board decision about their ongoing roles as directors of the company.” The disclosure comes after a torrid two months for NMC, which Mr Shetty founded in 1975. In December, US short seller Muddy Waters issued a report that raised questions over NMC’s finances and management. Before the report, Mr Shetty owned about 15 per cent as one of the three individuals who controlled NMC, alongside Mr Qebaisi with 17.4 per cent and Mr Muhairi with 15 per cent. Both have sold down their stakes in the past month, however, at a deep discount to cover debts linked to

NMC Health asks founder to step back from board FTSE 100 group reviews BR Shetty and another top investor’s positions after stakes incorrectly reported

their stock. The group’s shares are down about 70 per cent since the December report. NMC, which denied the Muddy Waters claims, has appointed former FBI director Louis Freeh to investigate the allegations. Mr Shetty has also seen the value of his other main business, Finablr, fall more than 60 per cent over the same period. The financial services group has a similar shareholder base to NMC and its

share price decline was aggravated by a ransomware attack on its Travelex currency business over the new year. Finablr, which floated in London last year, said on Monday that it is reviewing how the “purported arrangements” between Mr Shetty and the other top NMC shareholders affect their holdings in the payments group. Shares in Finablr were up 7 per cent. Although NMC shares have

collapsed over the past couple of months, they climbed 12 per cent on Monday after the healthcare group said it had received takeover interest from US buyout group KKR and Switzerland-based GK Investment. The company said that “no proposal has been made by either and there have been no discussions as to the terms of any possible offer”. KKR declined to comment. BRS, Mr Shetty’s holding com-

pany, declined to comment. A spokesperson for Mr Muhairi declined to comment. Mr Qebaisi could not immediately be reached for comment. On the question of Mr Shetty’s stake in NMC, the company said that it had not been aware of a memorandum of understanding that led to a vehicle owned by the Indian businessman holding shares on behalf of the other two controlling investors. The board said it was “urgently seeking clarity from each of these shareholders” and “repeated its request for clarity” from each of the shareholders in relation to the number of shares owned by them that are pledged or used as security. NMC said Mr Shetty’s BRS Ventures had been holding 20m shares for Messrs Qebaisi and Muhairi, pursuant to a memorandum of understanding from May 2017. Some of those shares were transferred to other banks and may have security attached to them. If the legal review shows the shares belong to his Emirati partners, and not Mr Shetty, then he and his family’s holdings would be reduced by 9.6 per cent. “Mr Shetty and his advisers are investigating the details of and the legal basis of these possible transfers and security arrangements,” the company said.

Global stocks edge lower as coronavirus concerns linger

Irish shares under pressure after leftwing Sinn Féin makes electoral gains Philip Georgiadis and Myles McCormick

lobal stocks nudged lower as concerns over the impact of the coronavirus resurfaced, while Irish stocks slipped following a surge in support for the leftwing nationalist Sinn Féin party in elections over the weekend. On Wall Street, futures pointed to opening losses of around 0.1 per cent at the open for the S&P 500, while the Stoxx Europe 600 index was off its worst levels as it fell 0.2 per cent. Stock markets enjoyed a strong rebound last week as investors banked that the economic damage from the novel coronavirus would be limited and that any ensuing shock would be contained by central bank stimulus. The narrative that has played out over the past few weeks “is now familiar”, said Neil Shearing, chief economist at Capital Economics, a consultancy. The global economy experi-

ences a growth shock, risky assets sell off, investors anticipate that central banks will respond by loosening policy, market interest rates and bond yields fall, and this helps to put a floor under risky assets. Neil Shearing, Capital Economics “Investors should consider shoring up their near term defences,” said Luca Paolini, chief strategist at Pictet Asset Management. The Swiss wealth manager, which is neutral on equities, has

increased its weightings in more defensive assets and turned neutral — from underweight — on bonds. “Tactically, our defensive hedges include gold, Swiss francs — which usually appreciate whenever economic conditions deteriorate — and US Treasuries, additional insurance against the fallout from coronavirus,” Mr Paolini said. Asian shares dropped, although mainland Chinese stock markets were a bright spot as

the country officially returned to work following a shutdown caused by the spread of the coronavirus. Still, many businesses extended holidays or work-fromhome arrangements in their efforts to contain the deadly outbreak. The CSI 300 index in Shanghai closed 0.4 per cent higher. Irish stocks came under pressure after Sinn Féin pushed past the country’s two establishment parties to win the highest share of the vote in the weekend’s general election. Shares in Ireland’s biggest banks, AIB and Bank of Ireland, dropped more than 5 per cent in Monday afternoon trade, leaving them among the worst performers of major listed European companies. The ISEQ index of Irish shares was down 1.2 per cent. The traditional largest parties — centrist Fianna Fáil and centreright Fine Gael — have previously ruled out a coalition with Sinn Féin, which was the political wing of the IRA during its violent

campaign to force Britain from Northern Ireland that ended after the 1998 Good Friday Agreement. But Sinn Féin’s leader Mary Lou McDonald said her party now had a “very substantial mandate” to play a role in the next Irish government. The party did not run enough candidates to win an outright majority of seats, but it had won 34 as counting continued on Monday afternoon, up from 23 after the previous election. Fianna Fáil are on track to win the largest number of seats under Ireland’s proportional representation voting system. Micheál Martin, party leader, on Sunday stopped short of ruling out the prospect of a coalition with Sinn Féin. The yield, which move inversely to prices, on Irish 10-year bonds fell 2 basis points to minus 0.124 per cent as investors moved into government debt. The US dollar edged lower having risen more than 1 per cent last week, while US government bond yields were stable.

Tuesday 11 February 2020

BUSINESS DAY

ANALYSIS

US election: Democrats try to blunt Donald Trump’s digital edge

After the debacle in Iowa, many in the party worry about its new campaigning technologies Kiran Stacey

eCe Ibson was one of the lucky ones. When the app she was using to log votes at last week’s botched Democratic Iowa caucus gave her an unexpected error message, she continued using it until it appeared to correct itself. Many of her fellow party volunteers were less lucky. A series of glitches in the app prompted the entire process to grind to a halt, causing one of the most chaotic nights in the party’s recent history and prompting questions about whether the technology the party uses is fit for the brutal presidential campaign. “When you do this, we are on the national and international stage,” Ms Ibson said afterwards. “The world is watching, and especially in this election cycle we were taking this very, very seriously. So yes, it was embarrassing that this did not work.” Many who work closely with the party say the failure is indicative of a much wider problem with the digital skills it is bringing to the 2020 campaign. Democrats are desperate to catch up with Donald Trump’s campaign, which won a reputation for its savvy use of social media in 2016 and is investing heavily in an array of campaigning technologies. While television, newspaper and radio advertising remain dominant, campaigns are increasingly looking to social media, text messaging and other technologies to give them the upper hand in what is expected to be an extremely close presidential race — and one which may depend on turning out voters who are not easily reached by other methods. But the Iowa debacle has underlined concerns within the party that the Democrats have wasted money and time developing technologies that do not work, replicate what is already available or build on flawed foundations. “Why were we spending resources [in Iowa] on a relatively simple function, especially this late, when we knew this was coming for three years?” says one Democratic technology strategist. “There is a problem here more widely with the party and its decisions on technology.” Theresa Payton, chief executive of security consulting group Fortalice Solutions, says of the party after the Iowa caucus: “They didn’t follow a guiding principle: if you’re going to fail, fail small, fail fast. Don’t fail colossal.” Democratic fears over their technological prowess stem from the 2016 campaign, when the party found itself blindsided by a more agile and aggressive Trump operation which used Facebook in a way no one had before. Brad Parscale, a 6’8” web designer with a Viking beard and a taste for inflammatory rhetoric, led the Republicans’ digital efforts from his office in San Antonio in Texas. Using detailed voter data — some of it obtained from Facebook

users without their permission via the British consultancy Cambridge Analytica — he was able to target people in rural areas who did not usually vote. Far from the confines of Washington, Mr Parscale felt free to experiment with different messages targeted at different groups. He spent tens of millions of dollars developing hundreds of different adverts for Facebook, provoking the fury of Mr Trump himself, who believed television to be key to winning elections. “It was the first time he had really yelled at me,” he later told the Washington Post. In response he told Mr Trump: “If you are going to be the next president, you’re going to win it on Facebook.” Senior executives at Facebook agree. Andrew Bosworth, who oversaw advertising on the platform at the time of the 2016 campaign, said in a recent post that he thought Mr Parscale’s work had been “unbelievable”, and constituted the “high water mark of digital ad campaigns”. Mr Parscale has now been promoted to lead the Trump reelection campaign and is once again experimenting heavily with online advertising. A glance at Facebook’s library of political adverts shows thousands of different Trump campaign posts, often almost identical but using subtly different language. Democrats for example are variously described as “radical”, “partisan” or “corrupt”. Sometimes they are not mentioned at all but in their place is “Nancy” — a reference to the Democratic Speaker of the House Nancy Pelosi. “They are very creative about digital ad buys; they have thousands of different Google and Facebook ads,” says Max Wood, founder of Deck, a new votertargeting platform being used by Democratic campaigns. “They throw a lot of shit at the wall and see what sticks.” If Mr Parscale is to be believed,

however, social media will play a far smaller role this year. Instead it is shaping up to be the election of the text message. “This is how Donald Trump stays president for four more years,” Mr Parscale told a Trump rally in 2018, holding up his iPhone. “Now this phone is how we connect with you. It’s how we turn you into the army of Trump.” One technique being heavily used by the Trump campaign is known as geofencing. This involves collecting the unique identification numbers of every mobile phone in a particular location — for example at a political rally — and then using the data to identify users and send them adverts afterwards. The Democratic party organisation has historically been more decentralised and less centrally controlled than that of the Republicans. As a result, its response in the digital field has been to encourage entrepreneurs aligned with the party to experiment. Inv e s t m e n t g ro u p s h av e popped up in WeWork offices across Washington DC and in Silicon Valley. They include Acronym, which was founded by Tara McGowan, a former aide of Barack Obama, and which owns Shadow, the company whose app faltered so dramatically in Iowa. Speaking to the Financial Times before the Iowa caucus, Kyle Tharp, Acronym’s spokesperson, was enthusiastic about another tool developed by Shadow which allows campaigns to send out text messages to thousands of supporters and activists at a time. “This kind of technology is going to play a big role in 2020,” he said. Others might disagree. Campaigners for Joe Biden, a leading candidate in the Democratic primary race, reportedly gave up using Shadow’s texting tool after becoming concerned about its security. Other pieces of technology are generating more enthusiasm, even

if they pose new dilemmas for personal data privacy. One major area of investment is so-called “relational organising”, which allows campaigns to access and leverage their supporters’ contact books. Campaigns can now tell their volunteers to download an app, and with the permission of those volunteers, scrape their contact lists and cross-reference them with their own lists of likely or possible voters. If matches are found between the volunteer’s contact book and the campaign’s voter list, the app can then automatically suggest sending that person a message, tailored to what the campaign knows about the voter. Democrats were keen on developing such tools after seeing the Trump campaign experiment with them in the final weeks of the 2016 campaign. Thomas Peters, chief executive of uCampaign, which made Mr Trump’s America First app, says: “The app might prompt you to text a daughter in Michigan about Obamacare, or email an aunt in Florida about the wall. “In Michigan, we sent 6,000 matched texts,” he adds. Mr Trump won the swing state by just over 10,000 votes. This time around, such apps are likely to be even more sophisticated. “At the moment campaigns can manually edit suggested messages to tailor them to their audience,” says Michael Luciani, chief executive of The Tuesday Company, whose Team app is being used by several Democratic candidates. “But in the future we are hoping to use machine learning so the app can make these edits automatically.” The Tuesday Company is being backed by another investment vehicle, known as Higher Ground Labs, which has also been set up by former Obama staffers. Betsy Hoover, a co-founder of HGL, says the party has “an incredible bench” of technology

experts developing tools to defeat Mr Trump. “If those experts are empowered with the resources and influence necessary, we can gain significant ground this cycle and run relevant, successful programs,” she says. One of HGL’s investments is in Mr Wood’s company Deck, which uses machine learning to tell candidates who their target audience should be in any given location, based on publicly available consumer and voting data. Some Democrats believe all this experimentation will bear fruit over the next few months as they look to take on the Trump campaign in new and unexpected ways. Others however are not so sure. Tim Lim, who had advised Democratic campaigns on digital marketing, says: “The real question is going to be, can everything we are testing and learning and doing be applied in what will be one of the more insane general election environments? The Trump campaign is starting now; is whatever we are doing effective? “You have one side doing whatever it takes to win. How do you fight in that type of environment?” Whatever tools the Democrats develop will only help them compete if the data behind it are up to scratch. And this is where Democrats worry that Republicans have a big advantage. For the past 10 years, Charles Koch, the billionaire and Republican donor, has been running a company called i360, which hoovers up as much voter data as possible to be used by conservative candidates. Using data from commercial sources, voting records and previous campaigns, the company claims on its website to have built “a comprehensive data resource of all voting Americans”. i360 can then sort that data so that candidates can target particular sec-

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Top Gainers/Losers as at Monday 10 February 2020 LOSERS

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Change

NESTLE

N1380

N1242

-138

0.2

MTNN

N117

N115

-2

N1.23

0.11

WAPCO

N15.3

N15.05

-0.25

N4.5

N4.6

0.1

GUARANTY

N29.5

N29.3

-0.2

N1.11

N1.2

0.09

N2.17

N2.02

-0.15

Company

Opening

Closing

Change

BUACEMENT

N35.4

N36

0.6

N3.2

N3.4

N1.12

AFRIPRUD LAWUNION

UPDCREIT NPFMCRFBK

Company

MAYBAKER

ASI (Points) DEALS (Numbers) VOLUME (Numbers) VALUE (N billion) MARKET CAP (N Trn)

27,772.19 3,487.00 200,155,486.00 1.922

Global market indicators FTSE 100 Index 7,440.04GBP -26.66-0.36%

Nikkei 225 23,685.98JPY -142.00-0.60%

S&P 500 Index 3,339.28USD +11.57+0.35%

Deutsche Boerse AG German Stock Index DAX 13,474.64EUR -39.17-0.29%

Generic 1st ‘DM’ Future 29,141.00USD +97.00+0.33%

Shanghai Stock Exchange Composite Index 2,890.49CNY +14.52+0.50%

14.464

Eroding gains may end NSE brief reign as best performing stock market …driven by losses in high-cap stocks Stories by Iheanyi Nwachukwu

igeriastockmarket again kicked off this week on a negative note amid continued caution from investors. With this trend, the gains that were recorded by the Bourse gradually erodes, which may end its brief reign as the best performing stock market in the world in January. “January started so well: February is another matter. Nigeria’s stock market was world’s best-performing in January…”, Coronation Research said in their recently weekly titled “February tougher than January”. The record negative seen on Monday February 10 was on the back of losses in highly capitalised stocks like Nestle, MTNN, Lafarge Africa and

GTBank. The renewed sell pressure which resulted to a 1.05percent d e c l i n e i n t h e ma rke t ’s benchmark Index also led to a loss of about N152billion in value of listed stocks. The stock

market’s year-to-date (ytd) positive return has decreased to 3.47percent. Only 16 stocks gained as against 17 losers. The Nigerian Stock Exchange (NSE) All Share Index (ASI) decreased to 27,772.19

ASHON reconstitutes governing council, awaits demutualisation

he Securities Dealing Association of Nig e r i a ( A S H O N ) has reconstituted its Governing Council in line with the tradition of seamless change of baton for enhanced professionalism as the wind of demutualisation is on the horizon. As a prelude to the emergence of the reconstituted Council, ASHON had in October last year conducted its characteristic peaceful election of which the results were announced during the 10th Annual General Meeting (AGM). Under the reconstituted Council, ASHON’s chairman, Oyinyechukwu Ezeagu retained his position as he is still serving his tenure. Besides, Akin Akeredolu-Ale, the First Vice Chairman has exited the Council by virtue of his new role as the Chief Executive Officer of Lagos Commodities and Futures Exchange.

The for mer 2nd Vice Chairman, Sam Onukwue has emerged the First Vice Chairman while a council member, Sehinde Adenagbe has scaled up the corporate ladder to emerge the Second Vice President. Bunmi Ajayi, Ify Ifejeize, Dare Adejumo and Andy Tsaku are all council members while Emeka Madubuike is the ExOfficio member. Ezeagu had late last year explained that ASHON had embarked on series of initiatives to prepare for demutualization of The Nigerian Stock Exchange. “We represent firms that will transit from members to shareholders of the Exchange. We are gearing up to this new responsibility and the benefits to flow from the laudable venture. Our members are being repositioned to operate under the demutualized Exchange. ASHON’s members are currently the owners of The www.businessday.ng

Nigerian Stock Exchange. “ We h a v e e m b a r k e d on strategic restructuring to bolster the members’ image, consolidate a formidable team and review internal processes among others. The process of Demutualization of the NSE is approaching a climax. It is important that we prepare ourselves for the change in status which comes with some responsibilities and new realities. “A l l o u r m e m b e r s representing us both at the Advisory Committee and the NSE Council have been working tirelessly to defend our collective interests in the demutualisation process.”, he said As a further move towards demutualization, a court ordered meeting of members of The Exchange where the Scheme of Arrangement shall be approved, among others has been scheduled for the 3rd day of March this year at Civic Centre, Victoria Island, Lagos.

points from preceding day high of 28,067.09 points while the value of listed equities dropped to N14.464trillion from N14.618 trillion seen last Friday. In 3,487 deals, equity investors exchanged

200,155,486 units valued at N1.922billion. All sectoral indexes closed negative except NSE Industrial Goods, and NSE Insurance that gained. FBN Holdings, Transcorp, Zenith, UACN, and Fidelity Bank were actively traded stocks. Nestle Nigeria Plc recorded the highest decline after it share price dropped from N1380 to N1242, losing N138 or 10percent, followed by MTN N which dropped from N117 to N115, after shedding N2 or 1.71percent. Lafarge Africa Plc was also down from N15.3 to N15.05, losing 25kobo or 1.63percent, while GTBank Plc joined the laggards after its share price dropped from N29.5 to N29.3, losing 20kobo or 0.68percent. On the gainers table BUA Cement rallied most, from N35.4 to N36, adding 60kobo or 1.69percent, followed by UPDC REIT which advanced from N3.2 to N3.4, adding 2kobo or 6.25percent.

In their view, Cordros Research analysts noted that the trend witnessed last week will likely persist this week, “as the dual impacts of the weakening sentiment and mixed earnings performances during earnings season are expected to pressure market returns.” “Nonetheless, we advise investors to take positions in fundamentally justified stocks”, the analysts said in their February 7 note. “With significantly lower turnover in the session and negative market breadth, we believe the current global macroeconomic situation will continue to determine market movement, while discerning investors will cherry-pick on fundamentally sound names. “Barring any loss in highcap stocks as seen today (Monday) in Nestle, we expect the market to trade sideways in the next session”, according to equity research analysts at Vetiva Securities.

DFID, FCA to collaborate with SEC on Fintech

he Department f o r Int e r nat i o na l Development (DFID), Financial Conduct Authority (FCA) and the Securities and Exchange Commission (SEC) have agreed to collaborate to develop the Fintech space in Nigeria. Speaking when she received officials of both organisations in Abuja weekend, Acting Director General of SEC, Mary Uduk said the SEC was enthusiastic about the collaboration as it would encourage responsible use of new technologies and digital finance in the capital market, influence increased international participation & cooperation, and also provide investors with more choices in the Nigerian Capital Market. Sh e s a i d t h e S E C i s looking to adopt regulatory and supervisory practices for orderly development and stability of Fintech, as the Commission will pay close attention to sustaining confidence and safeguarding the integrity of the market. “In this way, our policies

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will facilitate the safe entry of new products, activities and intermediaries. In addition, we will ensure that regulation does not stand in the way of innovation”. She said While it is clear that FinTech has already made huge inroads into many aspects of the financial industry, what is perhaps even clearer is that the surface has barely been scratched in relation to what FinTech can do for us in the future. According to her “The awareness of customers that their data might be prone to cyber-attacks could make them lose trust in digital channels u n t i l s t ro n g c o n s u m e r protection frameworks are in place. These frameworks for digital financial services will be critical in building confidence for consumers. “We have come up with ways to monitor the risks that may come up. It’s like a sandbox, but not an enclave. We are building capacity to train young people that would be able to drive the process. “We hope that this year @Businessdayng

will be a turning point. We are trying to gather as much information as we can to be able to contextualise and synthesise regulation in Nigeria “ Yo u n g p e o p l e a r e beginning to get interested in investment and they are doing this via Fintech and that is why we are doing all that we can to develop rules around it so that the risk will be mitigated and it will further develop the market In his remarks, Senior Adviser, UK DFID, Richard Sandall, said DFID and FCA have a partnership to support FCA to step into new jurisdictions to deliver DFID objectives in certain areas. He s a i d , “ We a re i n Nigeria to look at the FinTech environment, regulatory environment and see if there are ways the Fintech environment can be built. “We are very interested in the impacts that Fintechs in Nigeria would have in the UK. We know that Nigeria has Fintechs and the FCA has already established international networks.

Tuesday 11 February 2020

BUSINESS DAY

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Tuesday 11 February 2020

BUSINESS DAY

NEWS

FG warns airport users to cease purchase of access gate stickers from ICube IFEOMA OKEKE

ederal Government through Federal Airports Authority of Nigeria (FAAN) has warned all airport users to cease purchase of access gate ticket from Messrs I Cube Nigeria Limited. In a statement sent by FAAN on Monday, the authority stated that its attention had been drawn to the fact that some members of the public were still buying Murtala Muhammed Airport access gate stickers from Messrs I Cube Nigeria Limited. “The general public is hereby notified that the Authority has severed all business relationships with Messrs I Cube Nigeria Limited. “Consequently, any individual or organisation consummating any form of business transaction with Messrs I Cube Nigeria Limited on this facility is doing so at his or her own peril. “The general public is by this notice advised to contact the accounts department of Murtala Muhammed International Airport for any business transaction or inquiry on this facility,” the authority said. Last week, FAAN ordered I-Cube to cease collection of

toll fares from motorists and vacate the Murtala International Airport access gate with immediate effect because the contract with the said company had expired. In a letter dated February 4, 2020, and signed by Rabiu Yadudu, managing director of FAAN, and copied to the Airforce commandant, MMIA, Commissioner of Police, Airport command, director of State Security Services, all directors of FAAN and all the aviation unions, FAAN said the concessionaire should immediately vacate the access gate as the agency had resolved to temporarily take over. Leke Abajingi, manager of I-Cube, had stated that the letter from FAAN was received and that the company would abide by the agency’s directive. “The issue has been resolved. FAAN has given us a letter, not one of termination but a letter to tell us that our contract has expired and that they want to take over temporarily to monitor the revenue by themselves for some time. They said that the normal due process will be followed. Bear in mind that the case is still in court as one of the interested companies took FAAN to court over the matter and joined us as defendants.

SON seals 13 Nigerian-based steel Obaseki seeks end to stereotypes that limit factories over standards infraction girl-child success in science, tech AMAKA ANAGOR-EWUZIE

tandards Organisation of Nigeria (SON) has sealed 13 steel factories across Nigeria for violating standards. Enebi Onucheyo, chairman, SON’s taskforce on steel, disclosed to newsmen on Monday in Lagos, saying the companies in question were located in Lagos, Ogun, Osun, Abia and Edo states. According to Onucheyo, the affected companies were shut until further notice following a nationwide market surveillance carried out by the SON taskforce between November 2019 and January 2020. He said samples of various steel products were obtained from the open market as well as the facilities of the companies during the surveillance period. SON classifies steel bars as life-endangering products, and Nigeria Industrial Standards (NIS) provides for unique identification marks for every locally manufactured or imported steel bars for ease of traceability, he said. “Laboratory tests and analysis carried out on the

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samples revealed that most of them failed to meet the minimum requirements for diameter and mass per meter as provided in the Nigeria Industrial Standard (NIS 117:2004). These are critical parameters in the standard for reinforcement bars for concrete,” he said. Enebi further said that the shutdown exercise followed earlier warnings to all the steel manufacturing companies after observed infractions with directives to ensure strict compliance with the requirements of the NIS 117:2004. He also disclosed that some of the companies were found to have tampered with products earlier placed on hold by SON in their facilities while an unregistered identification mark ‘GE’ was discovered in one of the products sampled. He stressed that the exercise would be a continuous one in furtherance of the SON commitment to protect Nigerian consumers from the dangers associated with substandard and life-endangering products in view of the incessant collapse of buildings and structures across the country.

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do State governor, Godwin Obaseki, has called for intensified efforts geared towards eliminating the long-standing biases and gender stereotypes, which have over the years limited the progress of girls and women in Science, Technology, Engineering and Mathematics (STEM) fields. Governor Obaseki said this in commemoration of the 2020 International Day for Women and Girls in Science marked every February 11 by the United Nations (UN) Women. Obaseki noted that bridging the gender gap in STEM disciplines was vital to achieving sustainable development in any country of the world. The governor, however, celebrated innovative women who despite the gender biases and inequality, have broken new grounds in science and technology, commending them for braving the many cultural hurdles to stamp their names in history. The governor said, “We must leverage this year’s International Day for Women and Girls in Science to honour our women who have contributed to the growth of science and technology across

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the globe, as well as educate young girls on its importance and encourage them to emulate such role models. “It is quite worrying that though women have made tremendous progresses towards increasing their participation in science related fields, they are still underrepresented as a result of gender biases or cultural stereotypes. This calls for all hands to be on deck to change the narrative. Globally, we need to do more and encourage our female children to strive to be the best in whatever they aspire to be, especially in science disciplines.” The governor noted that apart from legislations aimed at protecting women and girls in the state, the Edo State Government has embarked on series of programmes targeted at empowering women at the Edo Innovation Hub and other projects under the Edo State Skills Development Agency (EdoJobs). He said his administration was committed to the education and protection of the girl-child, noting that holistic reforms in basic education would propel children in the state to realise their full potential.

Tuesday 11 February 2020

BUSINESS DAY

NEWS

Edo’ll effectively fund state’s health insurance scheme – DG, Insurance Commission

D L-R: Olufemi Muraino, executive director, Inlaks; Vivian Okoloigwe, relationship manager, services and growth sector, Nigerian Stock Exchange; Femi Adeoti, MD/CEO, Africa Operations, Inlaks; Tony Ibeziako, head, primary market, Nigerian Stock Exchange, and Lanre Odufuwa, team lead, services and growth sector, Nigerian Stock Exchange, at a visit by Nigerian Stock Exchange to Inlaks in Lagos.

Petroleum Industry Bill will be passed in mid-2020 - Sylvia DIPO OLADEHINDE

… new version will be sent to Senate next week

igeria’s minister of state for petroleum, Timipre Sylva, says the much awaited Petroleum Industry Bill (PIB) will be passed into law by Nigeria’s Parliament by mid-2020. According to Sylva, the ninth National Assembly will likely break the jinx this time around and pass the long-awaited PIB, which has not been assented to for more than a decade. Nigeria has been on a perpetual voyage with PIB, which is one of its most important bills ever to be contemplated in Nigeria’s history in a journey that began 16 years ago with a lot of anticipation and promises.

Speaking at the first day of 3rd edition of the Nigerian International Petroleum Summit in Abuja with the theme “Widening the Integration Circle: Technology, Knowledge, Sustainability Partnership,” Sylva said a new version of the new PIB will be sent to the Senate next week. The minister noted that there was existing consensus among industry players on the need to review the laws governing oil and gas production activities in Nigeria. “The existing laws are obsolete and requires modernization based on current realities,” he said. The PIB is still stuttering through legislation after passing through four presidents, five presidential terms and

five legislative tenures however the governance aspect of the bill which is Petroleum Industry Governance Bill (PIGB) is currently awaiting President Muhammad Buhari (who is also the Minister of Petroleum) signature before it becomes a law. But Sylva is optimistic that given the cordial relationship between the Executive arm of government and the Ninth Assembly, the PIB would be passed on or before mid-2020. “We are focused on positioning gas as a transitional form of fuel from carbon emitters to renewables. The seriousness of this is evidenced in the effort to focus on gas business with 2020 tagged as the year of gas,” he said.

On transitioning to renewables, the minister noted, “As Africans, we are advocating that the transition to renewables be done through gas as it is a cleaner form of fuel and we have abundance of it.” President Muhammadu Buhari, who was represented at the event by secretary to the government of the federation, Boss Mustapha, said Nigeria as an oil-producing nation remained ready and accessible for legitimate investment from all interested countries, individuals and partners. “Let me assure foreign delegates that their investments are well secured in Nigeria and a high return on investment is always guaranteed. It cannot get better anywhere,” Mustapha said.

Innovation Festival launches in Lagos Feb. 11 AXA Mansard partners Jumia One on Money Market Fund TELIAT SULE

nnovation Festival (IFest), Africa’s biggest platform that seeks to bring stakeholders together, will be launched in Lagos on February 11. The aim of this initiative is to proffer solutions to issues being faced by the African societies in the areas of unemployment, housing, transportation, agriculture, education, power, and security, among others. It should be noted that Africans have been struggling with major societal issues ranging from security, power, health, unemployment, food security, etc., and governments and private organisations have been taking steps in addressing some of the issues by organising conferences, seminars but without a major milestone actions. To this end, IFest aims to bring together with all the stakeholders in various industries to incubate and showcase their brands, corporate inventions, new innovative products, innovative

features and upcoming industry discoveries. This event has thus set in motion an ideology-driving platform to bring together all stakeholders to explore the possibilities of innovation, with a view to converging innovation with opportunities and recreate a new future for Africa. The event seeks to educate and showcase to all stakeholders what innovation really is, harnessing the potential of innovation to address as well as open doors of opportunity by giving innovators a platform to showcase their innovations to different stakeholders who will help bring them to life. The Global start-up ecosystem report estimated that the Lagos start-up ecosystem is worth about $2 billion; making it the most valuable in Nigeria. According to the talent-gap analysis conducted by Co-Creation Hub, it was discovered that although the youth employment rate in this sector is soaring, the tech industry is struggling to find persons with relevant skills.

n order to continue to provide top-notch savings and investment solutions, AXA Mansard Investments is partnering Jumia’s all-in-one lifestyle App, Jumia One, to bring AXA Mansard’s Money Market Fund closer to the public and to make it easier to invest. In addition to AXA Mansard’s MyAXA app, AXA Mansard’s Money Market Fund is now accessible through the Jumia One app. This means that new and existing clients can now either sign up and/or make payments to the money market fund on the Jumia One app. According to Renah Osiemi, head of solutions at AXA Mansard Investments, “AXA remains committed to empowering people live better lives. We are therefore very excited about this partnership with Jumia One which will make transactions easier and money market fund more accessible to a wider number of people.” Jumia One is a one-stop shop app to fulfil one’s daily needs in a single click. In ONE place, people can recharge

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phones, pay bills, order food or a cab, book a hotel or a flight, find next house or car, read the best blogs, bet online, listen to radio and even get money back from next purchases. Speaking on the partnership, Tunde Akinnuwa, head of Jumia One, said: “Our mission is to bring every online service in one place and make them easier, more secure and more affordable to everyone. Therefore, we have chosen to work with an organization whose mission aligns with ours. AXA Mansard has proven over the years that they remain resolute in providing excellent client experience and redefining the way investment solutions are delivered.” “AXA Mansard Investments Limited has tasked itself with seeking innovative ways to create value for its customers. One key thrust of our strategy is to create a delightful client experience that enables people better manage their finances. This is the reason we are partnering with Jumia One to ensure we keep making transacting easy and seamless,” Osiemi said.

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irector-general of the Edo State Health Insurance Commission, Rock Amegor, has reassured residents that the state government will effectively fund its health insurance scheme to ensure that everyone enrolled in the scheme is well catered for. Amegor, in an interview with journalists in Benin City, said the state government was holistically pursuing its health insurance scheme, noting that the revamp of the Primary Healthcare Centres (PHCs) across the 18 Local Government Areas (LGAs) of the state, was the first step in preparing for the kick-off of the scheme. He added that the framework had to be set to ensure sustainability and provide well-equipped PHCs to implement the scheme across the state. According to Amegor, “We have various health plans in the scheme. We have the formal sector and the informal sector health plans. We have the student package, and the premium

package. We also have the basic minimum package, which is the one the Federal Government and the state government are funding. We have the formal public plan and the formal private-sector plan, as well. The private sector plan is for organisations that have more than five workers.” On the funding of the scheme, he said, “For equitable payment for the scheme, we decided on payment of a percentage of whatever a person’s gross salary. We pegged it at 1.75 percent for the employer and the employee. In the first year, the employer, which is the government, is to pay 1.75, but it is supposed to be within a range of 1.75 and 3.25 percent.” He said the scheme was still in the test phase, adding, “That is why we are working with the minimum requirements. For those earning little, it might be insignificant to pay 1.75 of your salary, but if you are on Level 17 or thereabout, it would be significant. It would help bridge the gap for funding for the scheme.”

PWC, ProvidusBank, others support DOAMF Healthcare Intervention programmes

ricewaterhouseCoopers, ProvidusBank and ARM Pension Managers, lead the team of corporates that have thrown their weight behind the 10th edition of the Daniel Ogechi Akujobi Memorial Foundation Charity Golf tournament, and event organised to raise funds for intervention in two key sectors, one of which is healthcare. Others lending support to the Foundation’s intervention programmes are: Fidelity Bank, LandWey Investment Limited, Radial Circle Group, Zenith Bank plc, First Bank Channels Television, Silverbird Television, Grand OAK, Cappa & D’Alberto, SPAR (Park N’ Shop), Fidelity Bank plc, Amni International Petroleum Development, Kansai Plascon Nigeria, Victoria Crown Plaza, Ikoyi Club 1938, Protea Hotel, Wheatbaker Hotel, Four Points by Sheraton and many more. Coordinator of the organising committee, Pat Bassey, confirmed, “To mark the 10th Edition of the Charity Golf Tournament, the Foundation plans to put on display a compendium of its achievements in touching lives over these years. It is our hope that corporate and individual sponsors and donors, who have consistently supported the event and the Foundation, would during the event appreciate the mileage that their support has covered, in the focus areas of healthcare and education for @Businessdayng

the less privileged and underserved communities across Nigeria.” He further stated, “We will also use this opportunity to appreciate those corporate organisations, groups and individuals who continue to support this golf event, in order to enable the Foundation to continue to touch the lives of the indigent and underserved in the society - who are the ultimate beneficiaries of this event.” Bassey also confirmed that about 180 players were expected to tee off at the final of this year’s DOAMF Charity Golf Tournament scheduled for February 15, 2020 at the Golf Section of Ikoyi Club 1938 in Lagos. According to Bassey, “A number of the finalists had made the cut from the men’s and ladies’ Qualifiers for the event held on February 1, and 4, 2020, special friends and guests of the Foundation, as well as, veteran players.” Ebi Pinnick, a member of the organising committee, added, “We will also use the opportunity of the 10th Edition of the Charity Golf Tournament, particularly at the cocktail event in the evening, to appreciate those corporate organisations, groups and individuals who continue to support this golf event, in order to enable the Foundation to continue to touch the lives of the indigent and underserved in the society - who are the ultimate beneficiaries.”

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BUSINESS DAY Tuesday 11 February 2020 www.businessday.ng

CEO in focus

Albert Folorunsho: Championing growth of indigenous audit industry ENDURANCE OKAFOR

ith over 20 years of professional experience in Taxation, Insolvency Practice and Management Consulting, Albert Folorunsho, the Managing Consultant and Cofounder of Pedabo Professional Services is one of the leaders that have put Nigeria’s audit industry on the global map. Folorunsho, a Fellow of the Chartered Institute of Taxation, and an Associate Member of the Chartered Institute of Bankers of Nigeria has led Pedabo Professional Services, an indigenous tax, audit and advisory firm from a two-man company to a multimillion naira company. Born on the 10th of October 1967 in Iffe-Ijumu in Kogi State of Nigeria, Folorunsho obtained an OND from The Kaduna Polytechnic in 1987. He started his professional career as an Accountant with the National Commission for Museums & Monuments in 1988 as an Assistant Executive Officer, level 6. Folorunsho worked there for two years during which he was introduced to ICAN exams and became a Chartered Accountant at 22 years of age, before leaving as Accountant1. In 1992, the founder moved on to join the tax and audit firm of Babington Ashaye & Co., where he trained and became a Senior Manager. In the seven years, Folorunsho worked at the firm he gathered working experience as both the Head of Tax unit and the Insolvency Department. Having agreed with his friend and partner, Ajibade Fashina, the CEO founded Pedabo Associates Limited on 1st November 1998. His hunger for knowledge led him to further his studies; after setting up the company, Folorunsho went ahead to obtain his first degree from Ambrose Alli University where he studied Business Administration and later a Master of Banking and Finance from the University of Ibadan. Folorunsho is the current dean of the International tax faculty, where he is a Fellow; the CEO is also a Fellow of the Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN), where he is currently a Treasurer. After his qualification as a chartered accountant in 1990, Folorunsho started lecturing taxation at Mayo Associates Limited and later Safe Associates before he joined 12 wise men to form Wyse Associates Limited where he is still lecturing Advanced

Folorunsho

Taxation for ICAN and Business Taxation for ACCA exams. In 2008 Folorunsho decided to expand his tax knowledge in the area of International Tax, he registered with the Chartered Institute of Taxation (CIOT) of the United Kingdom and he obtained an Advanced Diploma in International Taxation (ADIT) and currently an international affiliate of CIOT UK. Under the leadership of Folorunsho, Pedabo has over the years continued to grow stronger in its capacity to deliver an array of more specialised tax, audit and financial consulting services to its multi-sectoral clientele, many of whom are clear leaders in their fields. The company assert with pride that it expects Pedabo to be mentioned in every list of top 10 professional accounting firms in Nigeria, and certainly expect to be ranked in the top 3 list of indigenous firms. A feat that has been achieved with conscientious dedication and continued development in the quality of services delivered over time. With a combined experience of over 100 years of professional practice, Pedabos’ partners have been active participants in recent developments of the practice of taxation in Nigeria, working closely with regulatory authorities. Folorunsho was a member of the Voluntary Assets and Income Declaration Scheme (VAIDS) steering committee which carried out studies on countries that have implemented similar programmes in the past, like

South Africa, Turkey, Indonesia and India before the structure was finalized in Nigeria. The committee was also involved in training the Community Tax Liaison Officers used in propagating the programme. Pedabo’s work for clients and the tax authorities have contributed to the shaping of the tax regulatory framework in Nigeria. Its automated audit approach and methodology is robust, scalable and enables the audit firm to deliver high quality, efficient and value-added audit services to its numerous clients. The indigenous firm takes a lot of pride in its automated audit methodology which is periodically reviewed by member firms within its global network, Morison KSi; a network that is represented in over 88 countries by 158 multidisciplinary members, with a cumulative revenue of over $1b. Pedabo has begun to live its vision of becoming one of the leading professional services firms in Nigeria with its over 200 clients in the past year alone. The company has provided dedicated services to its clients through retainers in; tax consulting – corporate and personal income taxes, Transfer Pricing, Country by Country Reporting, management of PAYE and FIRS Audits, statutory audits, internal audit set-ups and periodic reviews, accounting services (dedicated and outsourced) and payroll management; The Lagos-based auditing firm has also provided its clients with one-off services that

includes: Financial (Business & Project) Due Diligence, Forensic Audits, Actuarial Valuation, Business & Portfolio Valuations, IFRS Conversions and Impact Analysis, Business Restructuring, Asset Certification, Reporting Accounting, Advice & Representation for government schemes, such as; Pioneer Status Incentives, NOTAP Registrations, Road Infrastructure & Tax Credit Scheme, to mention a few, Specialised Financial Management Trainings – from accounting, tax appreciation and management to IFRS Implementation and Compliance, and; Several specialist services tailored to your business to meet your financial and regulatory objectives. According to Folorunsho, Pedabo’s commitment as a firm remains to continue to develop capacity and provide exceptional timely service, even now that it has over 120 man strong with over 60 percent of its personnel professionally qualified and poised to deliver cutting edge professionalism on all of its assignments. Speaking on the success of Pedabo, the company said it has been massive; haven started with just one staff and growing that number to over 115 employees with an office in Lagos, Abuja and a representative office in Ghana, the company said it has reported huge growth over the years. The surge in the number of Pedabo’s clients was evidence that the company has achieved many of its dream and aspira-

tions. According to the firm it is now seen as a viable competition by the top four international firms. For instance, transfer pricing was considered exclusive to the top four but Pedabo is also an expert in that space and that has given it a big break. “The company represents most of its clients in all the states of the Federation and FCT and has managed tax for banks with branches all over the Federation. Its clients include major companies in telecoms, construction, insurance, regulatory and every sector of the economy and this is a company that started off with some clients that were small,” an industry expert who has grown with the company said. According to industry sources, Pedabo is gradually becoming a household name in tax, audit and advisory services in Nigeria and it has grown with a number of clients that were paying them N50,000 some 20 years ago but are now paying us as much as N5million. Folorunsho is of the opinion that the strength of Pedabo’s lies in the fact that the company is always available for its clients at all times and to equip staff with knowledge. “I have time for all my clients both big and small, as we are just a phone call away and we try to meet our clients’ needs, coupled with the fact that we have a very good relationship with our clients, the tax authorities and other regulatory authorities.” The CEO who enjoys listening to good music has been a lecturer in Tax Management for the past seventeen years at Wyse Associates Limited, a leading accountancy tuition house. He also lectures Business and Advance Taxation in the same school for students preparing for the ACCA examinations. Having passed and awarded the prestigious Advance Diploma in International Taxation by the Chartered Institute of Taxation (CIOT) of UK, with specialization in UK taxation and European Taxation. He is an international affiliate of the CIOT, with wide experience in international taxation and advisory involving cross-border structuring and transfer pricing. He has been involved in all aspects of taxation practice varying from International Tax Advisory, Transfer Pricing Planning and Implementation, Oil and Gas Taxation Management to name a few. He has also handled several Insolvency assignments for banks ranging from Debt Recovery, Liquidation and Receivership Management.

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