BusinessDay 11 Jan 2019 by BusinessDay

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he economic slowdown is hitting Nigerians so hard that they now cannot afford to buy the right drugs that will cure their ailments. This has led to many people resorting to cheaper and sometimes very dangerous substi-

L-R: Mahmoud Isa Dutse, permanent secretary, Ministry of Finance; Chukwuweike Uzor, director, highways planning and development, Ministry of Works; Babatunde Fashola, minister of Power, Works and Housing; Zainab Ahmed, minister of Finance, and Patience Oniha, DG, Debt Management Office, during the presentation of N100 billion 2018 Sovereign Sukuk Symbolic Cheque to the Federal Ministry of Power, Works and Housing in Abuja, yesterday. Pic by Tunde Adeniyi

3M 0.00 13.21

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Drug sales slump 50% as Nigerians cut spending, seek cheap substitutes T

ODINAKA ANUDU, ANTHONIA OBOKOH & MICHAEL ANI

FGN BONDS

TREASURY BILLS

Download e-copy of Women’s Hub from www.businessday.ng

Pharmacies closing operations

tutes, causing many pharmaceutical companies who have seen up to a 50-percent fall in sales to close shop or sell their operations. “The drop in sales is about 30 to 50 percent in the last two years. Many pharmaceutical stores are doing 50 percent to

70 percent of what they were doing before now,” said Chidi Okoro, founder, Drugs and Medicaments Nigeria Limited, with about 14 retail outlets across Nigeria. Okoro explained that the pharmaceutical industry responds fast to economic head-

winds, as patients and families tend to spend less during times of economic stress. “People are buying cheap brands because they do not have money. Rather than buy malarial drug for N1,200, they prefer to buy that of N600, which Continues on page 34

Adrian Wood pushed to expose inside dealings behind 9mobile sale

…as local shareholders fight back JUMOKE AKIYODE-LAWANSON & LOLADE AKINMURELE

ources close to Teleology Holdings say accusations from local shareholders claiming the Adrian Wood-led parent company failed to meet financial and physical obligations are false and may leave them with no choice but to Continues on page 34

Inside Abubakar, Mustapha, Amaechi lead stakeholders to NIMASA Maritime awards, corporate dinner P. 33

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DMO hands over N100bn Sukuk proceeds to govt for road projects ONYINYE NWACHUKWU, Abuja

he Debt Management Office (DMO) on Thursday handed over the proceeds of the second tranche of the N100-billion sukuk issuance for the construction and rehabilitation of 28 key economic road projects contained in the 2018 Budget. The road projects totalling 642.69 kilometres are located in the six geopolitical zones of the country, with each zone having a total allocation of N16.67 billion. Babatunde Fashola, minister of Power, Works and Housing, received the symbolic cheque at a brief event in Abuja. Finance Minister Zainab Ahmed, who handed over the cheque, assured on adequate utilisation of the fund to build some of those critical roads which would ease commuting, spur economic activities across the country and further close the country’s infrastructure gap. The Federal Government of Nigeria on December 28, 2018 issued a seven-year N100-billion Sovereign Sukuk (15.743% N100BN Al Ijarah Sukuk due 2025) as part of the new domestic borrowing in the 2018 Budget to finance road projects. Details from the DMO indicate that the offer attracted significant interest from a wide range of retail and institutional investors with a total subscription of N132.20 billion, which represents a subscription rate of 132.2 percent. FBNQuest Merchant Bank Limited, Lotus Financial Services Limited, Banwo & Ighodalo and Sefton Fross, FBNQuest Trustees Limited and STL Trustees Limited serve as the transaction parties of the deal which the DMO calls a huge success. Retail investors accounted for 17.33 percent of the total allotment compared to 4 percent recorded in the debut issuance, and authorities say this indicates that the objectives of financial inclusion and deepening of the investor base for FGN securities, in addition to infrastructure funding, were being achieved. “The significant increase in the level of participation by retail investors from about 4 percent in the debut

Issuance in 2017 to 17.33 percent in 2018 means that the objectives of financial inclusion and deepening of the investor base of FGN Securities are gradually being achieved,” Ahmed said. “A total of 1876 retail investors participated in the Sukuk Issuance.” However, Pension Fund Administrators invested the largest amount, N40.69 billion representing almost 41 percent of the total, followed by the Deposit Money Banks which invested N17.5 billion. Retails investors invested about N17.3 billion; fund managers & non-bank financial institutions, N11.65 billion; noninterest banks/ethical funds, N10,94 billion, while other institution investors committed about N1.885 billion. The finance minister further explained that the Sukuk funding option was part of the initiatives of the government to diversify government funding sources, while also deepening the Nigerian capital market, mobilising more savings and getting more people into the financial net. She said that the use of proceeds of the issuance has an in-built investor protection mechanism in two forms: the trustees (FBNQuest Trustees Limited and STL Trustees Limited) both registered by Securities and Exchange Commission will monitor the disbursement of the sukuk proceeds. The minister also noted that the funds were released to the Ministry of Power, Works and Housing based on the framework agreed with the trustees in order to ensure transparency and accountability in the use of proceeds. “The Sukuk proceeds have been ring-fenced in a dedicated account at the Central Bank of Nigeria to ensure that they are utilised only for the road projects,” she said. Patience Oniha, director general, DMO, noted that the high level of subscription and participation by a diverse range of investors demonstrate the high level of investor confidence in the financing product, particularly “because the road projects funded with the proceeds of the first Sukuk that was issued in 2017 were evident for all to see”.

•Continues online at www.businessday.ng

GIP: World Bank President Kim’s next call ... chaired by Nigerian ENDURANCE OKAFOR

day after World Bank Group President Jim Yong Kim’s shock resignation from the bank, Global Infrastructure Partners (GIP), a private equity fund that invests in projects in wealthy and developing countries, announced that he will be joining the company as a partner effective from February 1. “The opportunity to join the private sector was unexpected, but I’ve concluded that this is the path through which I will be able to make the largest impact on major global issues like climate change and the infrastructure deficit in emerging markets,” Kim said in a statement. BusinessDay survey of the New York-based firm reveals that it was the leader of a consortium of investors that bought London’s Gatwick airport for £1.5 billion in 2009, and last month the group sold a majority stake in the airport to the French infrastructure company, Vinci, at an equity value of just under £6 billion, just days after

the hub was shuttered for several days over sightings of drones. In 2012, GIP acquired the Edinburgh Airport for £807 million, and since then the firm has made a cross section of investments in other areas of the transport sector as well as the natural resource and power generation areas of the energy sector. These include seaports, freight rail facilities, midstream natural resources and power generation businesses. Global Infrastructure Partners has investments around the globe. BusinessDay survey of the list of investments on GIP’s website revealed the PE firm has 29 stated assets it has put in funds. These include London City Airport, located close to London; Great Yarmonth Port company, situated in east coast of England; East India Petroleum Limited, located in India; Channel View, located in Texas area in the US; Port of Brisbane, in Australia, among others. GIP has also raised funds, and in

INSIGHT

Continues on page 34

L-R: Abiodun Dabiri, general manager, Lagos State Metropolitan Area Transport Authority (LAMATA); Ladi Lawanson, commissioner for transportation, and Akinwunmi Ambode, governor, Lagos State, during the governor’s inspection of the Oyingbo Bus Terminal, in Lagos, yesterday.

Nigeria makes World Bank’s top-three IDA debtors’ list

... credit support of $2.586bn confirms poverty level … trails Ethiopia, Bangladesh IHEANYI NWACHUKWU

he World Bank says it is helping Nigeria to fight extreme poverty and improve the living standards of her citizens with International Development Association (IDA) credits of about $2.586 billion (N790bn) as at end of 2018. Nigeria is third in the list of IDA top country borrowers, the World Bank said in its annual report for 2018 available to BusinessDay. Nigeria trails behind Ethiopia, which is the first with IDA credit of $3.122 billion, and Bangladesh (second) with IDA credit of $2.991 billion. IDA is one of the largest sources of assistance for the world’s 75 poorest countries, 39 of which are in Africa, and is the single-largest source of donor funds for basic social services in these countries. Nigeria overtook India last year as the country with the largest number of people living in extreme poverty, according to report by the World Poverty Clock, which noted that extreme poverty in Nigeria was growing by six people every minute, the highest number in the world. At the end of May 2018, the survey showed that Nigeria had an estimated 87 million people in extreme poverty, compared to India’s 73 million. The International Development

Association (IDA) is the part of the World Bank that helps the world’s poorest countries. Overseen by 173 shareholder nations, IDA aims to reduce poverty by providing loans (called “credits”) and grants for programmes that boost economic growth, reduce inequalities, and improve people’s living conditions. Traditionally, IDA has been funded largely by contributions from high- and middle-income partner countries. Additional financing comes from transfers from International Bank for Reconstruction and Development (IBRD) net income, grants from International Finance Corporation (IFC), and borrowers’ repayments of earlier IDA credits. Other top country borrowers and their IDA credits as at fiscal year 2018 are Pakistan ($1.948bn); Kenya ($1.280bn); Côte d’Ivoire ($987m); Tanzania ($955m); Uzbekistan ($740m); Nepal ($706m), and Uganda ($640m). “In fiscal 2018, our combined commitments for the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) totalled more than $47 billion,” said Kristalina Georgieva, chief executive officer of IBRD and IDA. “But these impressive numbers stand for something much bigger. They represent our ability to confront the world’s toughest challenges and to step in

when our clients need us the most.” The World Bank Group’s risk officers monitor the global political and economic impacts that could affect the institution’s finances. In fiscal 2018, economic growth in advanced economies reaccelerated, while activity in developing countries also rebounded. Policy uncertainty in some advanced and larger developing economies continues to present an overarching risk, and there is a significant chance that economic activity could diverge from the forecast of continued strengthening of global activity, the World Bank said in the annual report, adding that “geopolitical tensions remain elevated, with potential impacts on financial market confidence and volatility”. Every three years, the World Bank Group development partners meet to review IDA’s policies, assess its financial capacity, agree on the amount of financing for the next replenishment period, and commit to additional contributions of equity that are required to meet IDA’s objectives and development goals. Going forward, IDA said it will continue to grow its borrowing programme to raise funds that complement donor contributions, enabling it to expand its life changing investments in the poorest countries.

•Continues online at www.businessday.ng

Amid election fears, seasonal business lull may linger in Q1, Q2 2019 ... as hospitality sector prepares for another rough ride OBINNA EMELIKE

he Nigerian hospitality industry faces a spectre of rough ride in the first and second quarters of 2019, amidst growing fears over the upcoming general elections. This will be a reversal of the impressive result it achieved in the last quarter of last year, which was adjudged best for a long time in terms of occupancy rate and revenue generation with average 70 percent occupancy. The expected decline in the industry may also result in operators setting minimum revenue targets, delay in completion of ongoing hotel

projects and even downsizing until the situation improves. The situation, which is predicted to be similar to the peak of the economic recession of 2016 when occupancy fell below 30 percent, is due to the seasonal lull in business associated with every new year when businesses are slowly picking up, and worst still, the fears over the 2019 general elections. Comparing this time last year and other non-election years with 2019, bookings and hotel activities are usually down resulting in occupancy rates of below 40 percent. But the situation improves the moment corporate organisations resume fully

from the last week in January or first week in February. The seasonal lull in business in the better part of January of every year is normal. But the fear this year is that the lull may linger beyond the first quarter because the economy usually picks up months after the elections if there is no disruption. Besides, the budget for 2019 has not been passed and government policy directions will not be clear to investors until after May 29 when swearing-in of elected office holders will hold. “So, until then, businesses may

Continues on page 34

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Parents, proprietors seek option to tackle school fees’ challenges KELECHI EWUZIE

he beginning of any given year for parents in Nigeria is usually a hectic period. Not only do parents battle with loads of pressing financial needs, they must contend with payment of school fees for their children to continue their academic activity across the primary, secondary and tertiary levels of education. Stakeholders observe that payment of school fees is one peculiar challenge that confronts not a few parents in Nigeria. As schools resume, no doubt, many parents are wondering how to go about paying their children/wards’ school fees, aside taking care of other necessities. A cross section of parents, school owners and stakeholders in separate interviews with BusinessDay observe that going into an election year and considering the state of the economy, indeed these are trying times for them. While some parents are resorting to the various financial loan facilities offered by banks, others appeal to school owners for staggered payment options. Ajoke Popoola, proprietor, Martos International School, Lagos, says in her years of experience as a school owner, accessing loans from Nigerian banks is an option she always sells to parents.

Popoola says GTbank, First Bank, Zenith Bank, Access Bank and Diamond Bank yearly have products targeted at helping parents and guardians pay school fees of their wards in private schools. She says the economy situation is not making things easy for both school owners and parents alike. “For parents who adopt this bank loan option, the result has been fantastic, as it works for me. It enables parents, especially those with more than two children, to pay according to their financial abilities.” She however observes that it not one size fit all in the situation for parents, adding that her school management addresses parents according to their financial status. So, those that cannot pay school fees at once are made to enter into agreement with the school, but failure to keep to the agreement before the term ends may attract stiff penalty such as withholding the child’s result or resorting to the law. Chijioke Amadi, a concerned parent, says with increased pressure on family budgets owing to the economic situation, he has already entered an arrangement with the school management where his children attend for instalments payment plan as this will help ease school fees burden. The option of staggered payment will go a long way to help him survive the

current challenge, he says, stressing that failure by private school managers to help may force parents unable to pay the fees to seek schools with lesser fees or even try public schools. Amadi says the worsening economic situation has made it difficult for him and a lot of parents to keep pace with school fees payment, given that there are other needs contending with a meagre funds at every given time. According to Amadi, “The option open to me is to negotiate with the school management to allow me stagger payment as at the moment, full payment is not possible as things stand now. Tonile Wahab, a father of three, is quick to point out that purchasing power has dwindled consistently and spending every naira has come with serious deliberations and considerations within families. Wahab opines that the month of January each year is always challenging, adding that the forthcoming election has even made things tougher. To him, “the year is just unfolding. Nobody knows what will happen between now and February when the election will hold.” Since it is the begining of the year, he has informed the school management of his children ‘ school to bear with him as he runs around to see how to raise the school fees for the academic session.

Nigerian government transfers $227m annually through digital payment HOPE MOSES-ASHIKE

igerian government transferred up to $227 million per annum through digital payment as adoption of digital payment platforms cost up to 85-95 percent less than serving the unserved and underserved in a banking hall. The Central Bank of Nigeria (CBN) disclosed this in a revised National Financial Inclusion Strategy (NFIS) released on Wednesday on its website. The transfer, which is in the order of Government to People (G2P) and People to Government (P2G) payments, presents an opportunity to drive financial inclusion if the transactions are done on digital platforms that are linked to bank accounts or mobile wallets. To drive adoption of digitised G2P/P2G payments, there is need to ensure that government achieves 70

percent digitisation of G2P/ P2G payments at all levels. Currently, only 60 percent of Federal Government flows have been digitised. This rate is lower at the state government level and lowest at the level of local government. Local governments have the strongest interface with the financially unserved and underserved. If they lead in the adoption of digital payment, the potential for a trickle-down effect is high. One way to achieve this is to push for compulsory digitisation of all state and local government payments, including all social benefit transfers. According to the CBN, the major goal of this revised strategy is to reduce the proportion of adult Nigerians that are financially excluded to 20 percent in year 2020 from it baseline figure of 46.3 percent in 2010. The revised strategy revealed that 46.5 percent of

the females, 52.5 percent of those in rural areas and 53.5 percent of youth aged 18 to 25, 70 percent of those from the North West and 62 percent of those from the North East were excluded in 2016. The NFIS was launched in 2012 with 70 strategic recommendations, targets for overall financial inclusion as well as targets for products, channels and enablers. Six years after the release of the NFIS, progress in financial inclusion had been adversely affected by unforeseen socioeconomic factors such as the economic recession and security situation in parts of Northern Nigeria. Slow uptake of DFS and the limited rollout of national identity numbers, which restricted the ability of financial service providers to meet KYC requirements equally contributed to the sub-optimal progress recorded.

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21 laws for a better 2019 EIZU UWAOMA Uwaoma is a start-up, corporate restructuring and strategy consultant. He writes via contacteizu@gmail.com

nce again, welcome to 2019! We are in this together. As part of my contribution to your growth, here are 21 Laws to help you have a greater year. © Eizu Law of purpose: As 2019 starts, take some time out to play back what you’ve achieved last year, then as a progression write down and memorize what you want for 2019. If you don’t know and define where you are going, then everywhere you get to would look like it. In 2019 – start right, chart your course. Application: create a central theme for this year. And then make a mind map using the Be>Do>Have Triads Of Manifestation concept (I mean define the things to Be, what to Do and have) to make each Wheel Of Life better, Say 1.Family :Things you want to be, broken down into sets of things to do and have. You can loop the same process for 2.Spirituality 3.Health 4.Business 5.Finance 6.Socials etc. The law of vision: In 2019, if you’d be limited, it will not be by your abilities, but by – Your vision. Have a big picture of what you want at the end of 2019 before it even starts and ensure that there is a progressive realization of each of those set goals. It’s vital that you do this. Practical applications and tips:

Create a vision board. Collect items and assets you wish to have, people you wish to be like, cut out the images and attach them to the vision board. Keep them in a place you access often maybe by your mirror, wardrobe, work desk etc. It constantly reminds you of all you need be while creating a supernatural and metaphysical magnet that draws them closer to your reality. This is in line with the faith movement and the laws of attraction. The law of knowledge: As 2018 ends the legendary Mayan age with the beginning of a new age powered by the powers of knowledge, 2019 holds massive growth for those who know. To grow more, to do more – learn more. Practical applications and tips: Have a PDP (an accronym for Personal Development Plan). It may be getting a set of mentors and mentees, (to learn and in turn teach). It may be joining a book club, having one more degree, attending any of the Hexavian masterclasses, Breakfast with Eizu series or engaging Hexavia in a retreat or strategy session for your team, it may even be reading more books, traveling more etc The law of branding Define who you want to be, and how you want to be seen next year. Please understand that the only thing more important than what you’d be doing or selling in 2019 is what the buyer believes he is buying – be branded. Law of branding: Define who you want to be, and how you want to bed seen next year. Please understand that the only thing more important than what you’d be doing or selling in 2019 is what the buyer believes he is buying – be branded. Practical applications and tips: Take your online representation serious. Be intentional. Have a theme for your social media, create a logo, website, theme colour for yourself.

‘

I’m afraid that in 2019, there’s only one way to succeed, sacrifice! People who have an edge are those who have made sacrifices or have started making them. To go up, choose something hard to give up – you may need to deny today’s desires, to achieve tomorrow’s dream

’

Define what you believe in and what you want to contribute to the world and begin to blog about it. Let people know you for something. The law of character Be firm. Do not overvalue what you are not and undervalue what you are as well as what you do. In 2019, we will become what we have repeatedly done – character Practical applications and tips: Make a list of things you’d never do. Hang around people who are more credible. Choose to be truthful and honest in all situations with your mind made up to accept and enjoy the sacrifices and results that come from it. Make a list of people you know with integrity and then draw closer to them. They’d rub off on you. Cut off two faced people. Take your religion more seriously. The law of value and results In 2019, please don’t be a busy bee like you’ve always been. In the past, you may have worked hard, now it’s time to work smart. Look at the value chains of your life; recognize the things that have

added the most value and things that have wasted your time. And then from this, know what to start, what to stop and what to keep doing. In our pursuit for wealth, value is the currency. Its glaring that people don’t pay for efforts, they pay for results – in 2019, be result oriented, add value. Practical applications and tips: Wake up every morning with the prayer and mindset to lookout for what to help with and who to help. Complain and judge less. Attempt to be a solution to a problem around you and never a problem to a solution. The law of people 2019 is the year of influence, the year of people. It is that year that the relationships you have built in the past years would come to play. My advice is that you know and stick with the right people. In 2019, how you NETwork will determine your NETworth. Begin to use your built connections and goodwill. And if you don’t have enough of that, then begin to build one. Remember, people – are the greatest assets for 2019, invest in them. Practical applications and tips: Create an inner circle. Have a mastermind group. Join a religious cell. Be more involved with your community, volunteer for social work. Learn to be more assertive. Control and be more in charge of your physical and mental space while also listening more. The law of creativity Go across boundaries. When we all think alike, then no one is thinking – be creatively different in 2019. Think out of the box, as a matter of fact, think like there’s no box. Practical applications and tips: Find out the places and time of the day that stimulates your creative juices. Then stay there more. Leverage on the power of 4AM. Have a jotter or a notepad app close by. Be open to everything and attached to nothing. Share ideas, after all, that’s what they are for. The law of sacrifice I’m afraid that in 2019, there’s only

one way to succeed, sacrifice! People who have an edge are those who have made sacrifices or have started making them. To go up, choose something hard to give up – you may need to deny today’s desires, to achieve tomorrow’s dream. Practical applications and tips: Take up more responsibilities! The law of risks Take out your fears and then take off to your dreams. Ships are safe at bay, but that’s not why there were made. Eagles learn to fly by jumping off the sky. In 2019, only those who will risk going too far, can possibly find out how far it is possible to go! Practical applications and tips: Be open to everything and attached to nothing. Face your fears. The law of innovations and technology If what you’ve done in the last years still looks big to you, then you haven’t done much this year. If your process, lifestyle and pattern don’t make things better, safer, simpler, work faster and life easier, then it’s not it – replace it. Practical applications and tips: hang around younger people more. The law of process and continuous improvement You are expected to grow daily, not in a day – Kaizen. Always look for 3 things at every point in your life, what to start, what to stop and what to keep doing. Practical applications and tips Have personal rituals and routines. Define them, with predefined cycles.. Do them. Try not to break them. Also, never pass on a defect, irrespective of who initiated it or who is responsible for it.

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Nigeria and the debacle of budgeting Okey Nwachukwu Nwachukwu is a Lagos-based communications consultant

nother national budgeting season is in play. President Muhammadu Buhari, on Wednesday, December 19, 2018, presented to the parliament a budget of N8.83 trillion for the 2019 fiscal year. The session was characterized by such rowdiness that so rattled even the reticent President that he reminded everyone that the world was watching. The day after, the National Assembly adjourned plenary to January 16, 2019. Expectedly, the skeptics are having a good laugh. It seems like another trip through a familiar terrain. When a hint of an early passage of the 2018 budget became public, skeptics, that is those who chose not to be indifferent, dismissed it as another posturing by the government to project an image of discipline. Ita Enang, Special Adviser to the President on National Assembly Matters had proudly announced in September 2016 that the 2018 budget will be submitted to the

National Assembly in October 2017. The October deadline, which Enang declared sacrosanct, was set by the Parliament, he said. “The National Assembly will consider it between October and November (2017) and by December it would have been passed. The current budget will end in 12 months and having been signed on June 12, 2016, the budget is legally to run between June 12, 2017 and June 12, 2018. But the intention of the government is to make sure that the implementation date and assent will be for January 1, 2018 so that we will return the budget to the conventional January. This was a negotiated position between the executive and the legislature and in fact, the legislature is more anxious to get the budget passed by December and assented to in January,” Enang had declared then. Well, President Buhari presented the 2018 budget to the Parliament on Tuesday, November 7, 2017. It was signed into law on Wednesday, June 20, 2018, six months beyond Enang’s projection. This was after so much squabbling between both arms of government. Bothering to assess whether the 2018 budget attained its goals, if any, would be an exercise in futility. Proshare, a foremost online media, captured the Nigerian budget

debacle thus: “As a matter of fact, Nigeria operates a complex budgetary system, characterized by delays and inefficiencies, which often limits budget performance. For instance, since the year 2000, it takes an average of 130 days to pass the appropriation bill into law, from when it was presented to the National Assembly (NASS) by the President.” Would the 2019 budget take a different course? Time will tell. If the unruliness that characterized presentation of the 2019 budget is any indicator, then another rancorous fiscal year beckons. Already, President of the Senate, Bukola Saraki, has dismissed the budget as hopeless and/or deceptive. Other factors are also in play. Campaigning for the 2019 general elections, billed to hold on February 16 and March 2, 2019, is in full swing. Nothing would be more important to a typical politician at this point than re-election. So, an early passage of the budget, based on precedents, is almost impossible, unless there is exceptional horse-trading across the aisle. Again, a substantial number of the legislators in the 8th assembly are not returning. So, they have no incentive to pass the budget, unless, again, there is very tempting stimulus, preferably in cash. Essentially, there are a number of interest groups involved in the Nigerian budgetary process, all pulling from different ends for diverse reasons.

To the National Assembly, it is a constitutional right and bestows a measure of substance in the governance equation. To have the President stoop before it elicits triumphalism, especially if you are the Buhari model. The current National Assembly is not controlled by the ruling party, which makes it difficult, if not impossible, to enforce party discipline. The parliament is also handed an opportunity to flaunt a subtle control of the executive while trumpeting the principle of separation of powers. They will move at their chosen speed. The executive arm naturally enjoys the prerogative of implementing the budget, notwithstanding the oversight function of the parliament. Controlling the critical levers of power and authority, particularly the security services, revenue generating agencies and political patronage, confers further an edge on the executive as the most powerful arm of government. In an environment where absolute power resonates, such authority is often misapplied or abused. President Buhari, from antecedents, would certainly not be enthusiastic about presenting a budget before a body of ‘corrupticians’ or people he considers deficient in patriotism and integrity. With or without budget, he will govern Nigeria. He merely undertakes the exercise just to fulfill

democratic tenets and to present an appearance of adherence to economic management principles. The corporate world and international community represent another interest group. Believing that the document would provide a guide on economic policy and direction, they take a cue from it to make decisions. But because the Nigerian budget mostly operates in default, its only value lies in knowing that the expected has been done. Contractors are another major interest group. To them, the budget is just a contract or cash dispensing machine. Most public officials have similar mindset. The contractors therefore study every line item with considerable diligence. As they have collaborators in the system, all they do is lobby for inclusion of preferred contracts or projects and subsequently trigger their execution. Once money is released, the job is done, executed or not. The collaborators will just get their cut. Consequently, the same line items are recycled every year.

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Nigerian fintechs: Breathing life to basic economics Feranmi Ajetomobi Ajetomobi is an engagement strategist at CowryWise, a fintech company solving the problem of access to financial planning, automated savings and high-quality investment.

The seed of value ividly, I can recall an interesting advert by ValuCard in the early 2000s; the same period automated teller machines (ATMs) and payment cards got introduced to the Nigerian financial space. It was a memorable moment for the nation, and that advert did a good job selling the benefits of the new innovation. The advert educated Nigerians on the opportunity to travel around the country without carrying heavy cash, as all you needed was cash in your card. One of the value propositions was that roadside robbers would have nothing to steal from you. Today, there are over 18,000 ATM locations across the country and they processed about N5Trillion ($14Billion) in transaction value between Jan and Sept 2018. With the new kids (fintechs) on the block, this era is often forgotten when discussing the development of the Nigerian digital financial services even though it is the first seed of the Nigerian fintech value chain. Years that have come after this have seen the introduction of various digital financial services, from USSD transactions to automated savings and micro-loans. These innovations have helped improve the propensities for various economic actions tied to financial inclusion. Is the innovation actually valuable? Although some would love to argue that not much has been done

IJEOMA NJOKU Ijeoma Njoku writes from Lagos, Nigeria.

urrently estimated at roughly twenty-one million, the population of Lagos State is growing rapidly. The rural-urban migration to Lagos is consistent and steadily increasing which puts even more strain on the state’s infrastructure. As described by the United Nations, Lagos is the only mega city in the world without an organized public transportation system. Mega cities, are expected to have a balanced transportation mix comprising of rail transportation, water transportation and safe road transportation, with good road networks. Although Lagos prides itself as a mega city, it has failed in this regard. Lagos public transport systems have been widely described as chaotic, inefficient, expensive, low-quality and dangerous, both in terms of road traffic accidents and personal safety. Lagos roads are largely ridden with rickety buses that regularly break down and are not considered safe. Lagos is estimated to need at least seven

with financial inclusion, given that only 40% of Nigerian adults have bank accounts, we cannot take away the deepening impact of fintechs. It is one thing for a person to have a bank account, and another to enjoy the ease of actually making savings, receiving payments and accessing loans. For instance, of what use is a bank account to a local farmer who cannot access affordable loans based on his savings credibility? Financial inclusion goes beyond just providing people with bank accounts but granting them actual access to financial services that can help improve their living standards. Deepening financial inclusion can help boost the needed productivity required to create economic prosperity for millions of people. Providing financial access to the excluded, enabling convenience, engineering affordability, business model innovation and deepening the experience of those already under financial net are fundamental value propositions of fintechs, and they do so at a competitive cost to their users. The economic saviour In layman terms, fintech is simply any financial service you can access using technology whether it is provided by a bank or not; so non-bank fintechs are not banks’ enemies as many would like to think. Both parties need each other to survive. It is a symbiotic relationship necessary for the Nigerian economy to experience the growth and development it desires. So what impact has fintech had on the Nigerian economy and what potential impact can it have in the coming years? To answer this seemingly simple question, we would have to visit a few basic economic theories, starting with savings. According to basic economic growth models, a great part of economic development can be attributed to savings. The higher the savings of citizens, the higher their ability to build wealth and drive capital accumulation. The more people save, the more money

there is that can be directly invested in productive activities. In essence, savers can be seen as lenders to the drivers of production in the economy. As you might have guessed, the lower the savings over time the lower the rate of capital accumulation which can significantly affect the cost of accessing capital by those who need them. Think of scarcity of Lagos buses during the morning rush and how prices shoot up. The same thing happens when there is not enough capital. The cost of capital shoots up. Hence, there is a large benefit in getting more people to save. But that can lead to big questions. Why should I save my money with you? What do I get in return? Everyone, including the man who just wants to save around N100 or 25 cents, asks these questions. Given the higher costs than benefits that come with helping these small savers, traditional banks would naturally focus on the big cash holders. Resultantly, on the aggregate level, these little monies unsaved and not invested for millions of users deny the formal economy the required fund to drive productive activities. To cover this gap, some fintechs like Cowrywise have chosen to ride this path of providing fintech value propositions (access, convenience and affordability) by helping people keep their money longer in the formal system, thereby driving needed capital accumulation and generating competitive interests reserved for the top 1% of the society. Another aspect of the financial experience that has been strongly made better by fintechs is access to loans. This has had a significant impact on access to credit for small businesses and individuals. Given the cost of operations, acquiring loans through traditional channels can be a nightmare for any small business owner. In recent times, that nightmare has started to give way for sweet realities as such small scale entrepreneurs can now access loans in five minutes with fintech platforms like Paylater and Branch. Such small scale businesses do not need to close down

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Providing financial access to the excluded, enabling convenience, engineering affordability, business model innovation and deepening the experience of those already under financial net are fundamental value propositions of fintechs, and they do so at a competitive cost to their users

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anymore because of poor access to much-needed loans for necessary investments. They have been able to help people who never dreamt they would be able to access loans at their present income levels do so. Even though the cost of credit is still high due to the cost of risk, the trend is most likely downward as risk data get richer. What if I told you that beyond savings and loans, there is an actual understudied economic problem with providing change for purchases. MrEzekwesili did a brilliant job analyzing how this can affect purchase decisions in an article he wrote for Stears Nigeria. This little hiccup can affect your purchase decisions. Now think of the number of times you wanted to make a purchase but could not. Not because you did not have the means to but because there was no change. All these are gradually becoming issues of the past with the rise of payment innovations from amazing companies like Paystack and Flutterwave. One commendable act of fintechs

is their commitment to consumer education. Through the provision of free financial advice and product education, their users are equipped with strategies to lead better financial lives and tweak product offerings to serve their unique needs. Spreading the new life Let me illustrate this a bit. Bola is a young Nigerian lady who now saves better because of the ease and flexibility that comes with a digital savings platform she uses.She also earns a fair and stable interest payment from this platform. Bola would not only get the opportunity to improve her living standard at a faster rate, due to higher interests, she would also make money available for Obasan, the small business owner. With more Bolas getting into the system, digital loan service companies can access funds at a cheaper level to lend to the likes of Obasan, making it easier for them to fund and grow there small-scale businesses. These businesses also get to enjoy increased purchases from the Bolas again, who now find it easier to buy from them thanks to the improvement in their living standards and the payment channels. Not to forget, developments in payment services have also granted access to new innovations like booking platforms and other services that have enjoyed improved engagements. Evidently, we can see how digital financial services can help build a profitable value chains between economic agents; a flow that is gradually waxing stronger in the major cities of Nigeria and even beyond them. In summary, the wave of financial inclusion driven by Nigerian fintechs is helping to strengthen the link between economic variables like savings and investment; savings and purchasing power; investment and economic productivity; and in all driving economic welfare to new levels.

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Primero: The change agent in modern transportation in Lagos state thousand buses, however, the state currently has less than three thousand. The shortfall is apparent and having detrimental effects on the lives of everyday Lagosians. In 2007, the Bus Rapid Transit (BRT) idea was conceived by the administration of Bola Tinubu, the then Governor of Lagos State. The BRT scheme is a transport option, which relies on the use of dedicated interference-free, bus-only lanes to guarantee fast and reliable bus travel. This system came to fore, under the Fashola-led administration, whichkick-started the BRTscheme in 2008. The BRT program is a highperformance public transport bus service which works to combine bus lanes with high-quality bus stations, vehicles, amenities, and branding to achieve the performance and quality of a light rail or metro system, with the flexibility, cost, and simplicity of a bus system. However, a gap that existed within the scheme, called for Public Private Partnership. A group of investors led by Mr. FolaTinubu (Managing Director of Primero Transport Services Limited) thought it wise to invest in Lagos State, in a bid to solve the transpor-

tation issues. Hence, November 2015, saw the birth of Primero Transport Services Ltd. The entrance of Primero Transport Services Limited into the BRT scheme, as initiated by the Lagos State government has seen Primero grow to become the leading transportation service provider in Lagos. Primero Transport Services Limited prides itself as a privately owned company with an ultra-modern facility in Ikorodu. The Primero facility boasts of a fuel storage facility, an automated washing bay, a maintenance workshop, a warehouse, and a technology driven control room which helps determine the status of busses and traffic. This helps in either deploying more buses to where there is the most need or re-routing buses due to road blocks. Primero began operations with roughly 434 buses which operate from Ikorodu through to TBS in Lagos Island. Recently, Primero Transport Services Limited marked its third year anniversary. Thiswas a special milestone, particularly given the current harsh business terrain in Nigeria. As part of its renewed commitment to customers the Managing Director, Mr. FolaTinubu, recently remarked that the company is poised to in-

crease the number of its buses so as to drastically reduce the waiting time at bus terminals. Primero Transport Services Limited prides itself as having offerings that are unmatched in Nigeria’s mass transportation. Such offerings include, the card system, a cashless system which enables passengers to travel seamlessly and eliminates leakages which are often associated with cash transactions. Primero buses are fully fitted with air conditioners, TV screens and free Wi-Fi access. Since Primero Transport Services’ debut, the company has grown quickly, with further calls for the company to expand and increase its routes, in order to reach the demand of Lagosians who would like to enjoy safe, premium transportation services. The company is said to be aware of these demands, and in response, they have applied for the BRT corridor between Oshodi and Abule-Egba, which, if approved, will come into effect in 2019. The social impact of Primero’s initiative cannot be ignored as it has helped improve the transportation system in Lagos; and any improvement to infrastructure helps both

people and commerce thrive. On average,Primero Transport Services Limited conveys just over one hundred and fifty thousand commuters to and from their places of business on a daily basis. This is a massive contribution, but given the state’s populace, this is only scratching the surface. Beyond this, Primero Transport Services Limited, has employed roughly one thousand employees, thereby contributing gainful employment opportunities to the state. Lagos is currently the 5th largest economy in Africa. And with its quest to move up the ladder; likewise any forward thinking company operating in Lagos State. The Public Private Partnership will form a major growth driver to achieving this. Often time it has been posited that been that government has no business doing business other than creating a conducive environment. . As Primero Transport Services Limited strives to change the narrative in the transportation space; one can’t help but wish them the very best as this would be a win-win affair for the investor(s), state and the citizens alike.

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Destruction of institutions in Nigeria

ne of the enduring tragedies of p o s t- c o l o n i e s , especially in Africa, is the tendency to destroy or sideline established institutions in the quest for accelerated development. Early independent leaders, who claimed to be so much in a hurry to develop their countries, were impatient with the workings of the institutions bequeathed by the colonialists and in most cases sidelined or altogether destroyed these institutions and personalised power. Over fifty years down the line, none of these countries has developed. Rather, they have been turned to virtual wastelands, ravaged, as it were, by tyranny, bad governance, impunity, mindless orgies of crime and death, poverty, hunger and diseases. Yes, these countries now have the worst socio-economic indices in the entire world! One lesson these African countries and leaders ought to have learnt by now is that strong institutions are the best guarantees for sustainable growth and development and not strongmen. Strong institutions are enduring and guarantee societal progress no matter the people inhabiting them. Personal

rule, however, is subject to the whims and caprices of rulers and tends to fizzle out when the ruler departs. But Nigeria, particularly the government of president Buhari doesn’t seem to have learnt any lesson. The government’s penchant for subtly or even openly interfering with independent state institutions to produce favourable political outcomes is worrying and is setting the country back by decades. Now, everyone, except those who chose to deceive themselves, know that the CBN – an important state institution that should be independent and insulated from political interferences - is everything but independent. The president openly takes monetary policy decisions reserved for the CBN while the apex bank is left to read the body language of the president and fall in line. Ditto the anti-corruption agencies like the Economic and Financial Crimes Commission (EFCC) that have been virtually turned into an agency of the ruling All Progressives Congress (APC) harassing and persecuting opposition politicians while acting dump to clear cut and credible corruption allegations against the ruling party apparatchiks. Same goes for important state institutions like the police (whose leadership tries to out-

do themselves in demonstrating loyalty to the president and harassing the opposition, the armed forces (whose leaders were commandeered to attend political campaigns in support of the president). Worse is the government and by extension the President’s open contempt and disrespect for the courts. He has consistently ignored valid court orders and judgements and has carried on as if only he is the most patriotic Nigerian and only he can salvage the country. The president is effectively setting himself as Nigeria’s messiah, under whom all should bow including other coordinate branches or arms of government whose constitutional duty is to perform oversight functions on the executive and prevent it from abusing its awesome powers. President Buhari does not appear to have learnt any lessons from sub-Saharan Africa’s misadventure with strongmen. He was once a strongman himself. In 1984/85, as military dictator, he attempted to eliminate corruption from Nigeria with military zeal and ruthlessness. But after he was shoved aside by his army chief, he watched helplessly from behind bars as all his efforts or plans were rolled back and the new government continued with ‘business as usual’, as the Nigerian cliché goes.

Institutions, simply defined, are established laws or practices and are a sine qua non for societal progress and sustainable development. In fact, for Francis Fukuyama, the development of a capable state that is accountable and ruled by law is one of the crowning achievements of human civilisation. It is the absence or weakness of institutions or, more appropriately, a capable state that is at the root of corruption. In Nigeria and other developing countries, corruption serves largely to grease the wheels of inefficient bureaucratic government machines leading to efficient outcomes. Common sense therefore dictates that an effective war against corruption must involve the strengthening of state institutions. This, however, is not the case with Nigeria. Nigeria’s war against corruption necessarily involves the weakening or destruction of state institutions. From Obasanjo to Yar’Adua, to Jonathan and now Buhari, the stories have been the same. But at no time has any government shown absolute contempt for the rule of law and order and state institutions like Buhari is doing now. Like it happened in 1985, he may wake up to realise that all he succeeded in doing was to create the environment for corruption and impunity to thrive in the country.

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Ondo agency to generate N600m from new investments YOMI AYELESO, Akure

ndo State Development and Investment Promotion Agency (ONDIPA) is targeting to generate N600 million in 2019. Emmanuel Omomowo, the secretary to the agency said they surpassed their targeted in 2018 with about 300 percent when it made N118 million against the N53 million target given. The agency is given a target of N260 million this year. Adeola Alonge, head of investment promotion, said they were optimistic of surpassing this year’s target. According to him, the agency since its inception in 2017 has contributed to the development of the state, creating and promoting air transport system within the state. He said agency has increased the flight schedules to Abuja and Lagos from three times to six times a week for Abuja route and created that of Lagos on a daily basis. He added that the agency has put up some data in place to present to the Federal government for approval of the deepsea port any moment from now. He also confirmed signing several memoranda of understanding with credible investors for sugarcane value chain project, ethanol, egg powdering, rice production, among others. While speaking on investment promotion, Alonge said that government was oil palm, bitumen, lime stone, cocoa, and rubber to add value to the state economy. “We have various products and our investment does not end at a particular table. We are promoting lime stone so as to get cement factory, oil palm to get more investment in the oil palm sector, cocoa value addition for chocolate, we have rubber and we are encouraging the rubber company,” said Alonge.

Car dealer bolts with man’s N995,000

48-year-old, Ishola Dickson has appeared before an Ile-Ife Magistrate Court in Osun charged with N995,000 fraud. Dickson is facing a two-count charge of stealing and fraud to which he pleaded not guilty. The accused, according to police prosecutor Emmanuel Abdullahi, committed the offences sometime in October 2014 at Omisore junction, Ile-Ife. Abdullahi said the accused obtained N995,000 from the complainant, Johnson Friday, on the pretext of helping him to buy a Toyota Picnic car. The accused did not buy the car and appropriated the money, he said. The offences contravened Sections 390 (9) and 419 of the Criminal Code, Laws of Osun, 2002. The defence counsel, Samuel Obi, applied for the bail of the accused, promising that his client would not jump bail. Magistrate Olukunle Owolawi granted the accused bail in the sum of N200,000 with two sureties in like sum. Owolawi said sureties must swear to affidavit of means and also reside within the court’s jurisdiction. Hearing in the case has been fixed for February 2, 2019.

Sympathisers catch glimpse of a woman crushed by an articulated vehicle at Molete in Ibadan on Wednesday.

NAN

Four farmers held over killing of 95-year man

our farmers – Akuha Igber, Awuhe Ashwe, Gowon Genki and Takela Denke – have been charged before a Makurdi Chief Magistrate Court in connection with the killing of a 95-year man, identified as Boun Adi. The suspects, all residents of TseIgbazer in Gwer-West local government area of Benue, are charged with criminal conspiracy and culpable homicide punishable under sections 97 and 22 of the Penal Code Laws of Benue, 2004. At their arraignment before Regina Ochokwunu, a chief magistrate, the prosecutor, Regina Ishaya, told the court that the case was transferred from the

divisional police headquarter, Naka to the state CIID, Makurdi via a letter. According to Ishaya, in the letter dated November7, 2018, one Patrick Yanmile of Naka, Gwer-West reported at the Naka police station that his 95-year uncle was murdered. The letter quoted Yanmile as stating that the accused persons and others, now at large, had conspired, attacked and killed his uncle in his house. He further stated that the accused persons, and the fleeing suspects, alleged that the deceased was a wizard and responsible for many deaths. The prosecutor said that two persons were earlier arrested and arraigned before Chief Magistrate Court 4, for the crime,

while the accused persons, who were previously at large, were arrested during further investigation by the police. However, when the case came up for mention on Wednesday, January 9, 2019, the pleas of the accused were not taken because the court had no jurisdiction to entertain the matter. The prosecutor informed the court that investigation into the matter was still in progress to enable the police apprehend other suspects still at large. He urged the court to adjourn to a later date. The magistrate, Ochokwunu, adjourned the matter to January 21, for mention, and directed that the suspects be remanded in prison custody.

N3m cultivated corn: 2 charged with arson REMI FEYISIPO

n Iyaganku Chief Magistrate Court sitting in Ibadan, Oyo State has remanded two men; Isiaku Ayuba, 2 0, and Shaibu Bello, 23, in prison for allegedly setting fire on loads of corn worth N3milion. The goods were said to be inside 17 pick-up vehicles. The chief magistrate, Oladele Adisa remanded the two defendants in Agodi prison pending when the court would receive legal advice from the Oyo State ministry of justice. Adisa, then, adjourned the case until February 22, for mention. Ayuba and Bello of Okaka are facing a two-count charge of conspiracy and

arson. The police prosecutor, Opeyemi Olagunju, told the court that the two suspects with others at large conspired to commit the offences on November 17, 2018. According to Olagunju, the two defendants had on November 17, 2018 at about 12:00 pm, set fire on 17 pick-up vehicles containing bags of corn, valued at N3million He disclosed that the corn belonged to one Lateef Atirinu of Ariyewon, Okaka. “The two defendants and others at large were alleged to have gone to the farm to collect maize stalks to build their houses. The farmer was said to have stopped them with a plea that they should allow him finish harvesting his

farm produce. “The defendants were, however, alleged to have set fire on the pick-up vans containing loads of cultivated corn,’’ Olagunju said. The prosecutor said that the accused committed the offences at Opo village in Okaka. The offences, he addedc contravened sections 443 and 516 of the Criminal Code Cap 38, Vol.II, Laws of Oyo State, 2000. He noted that the case was reported on November 23, 2018, at the state Criminal Investigation Department (C.I.D) in Iyaganku, Ibadan. The offences attract life imprisonment if the defendants are found guilty by the court.

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Friday 11 January 2019

MoneyInsight Here’s why Access Bank’s acquisition of Diamond Bank is a smart one Stories by FRANK ELEANYA

he merger announcement between Access Bank and Diamond Bank set off alarm bells in the financial services sector. Prior to then, there had been rumours that Diamond was going through some difficult times and is looking for suitors. As often happens in this part of the world, foreign entities were being lined up by the rumour mills as the likely buyers. For millions of customers of Diamond Bank, there was the usual jittery of the state of their deposits in the likely event of liquidation. But along came Access Bank and its merger plans ratified by the Central Bank of Nigeria (CBN). Although the dust is yet to settle on the merger between Access Bank and Diamond Bank, as it is subject to shareholder and regulatory approvals, the 29 million customers that would emerge from the new entity can now look forward to a future of expanded services and new products. The merger also means that the new entity has more than 13 million mobile customers, as well as 3,100 ATMs, 15.9 million cards and around 32,000 Point of Sale (PoS) terminals. The new entity hence becomes the indisputable retail bank leader in Nigeria and West Africa. Its potential for economies of scale is also an advantage for shareholders and depositors as they are left with no doubt as to the commitment of the bank to be the gateway for business, enterprise, and creativ-

ity coming into Africa. According to Herbert Wigwe, the Access Bank Group Managing Director/Chief Executive Officer, “Access Bank and Diamond have complementary operations and similar values and a merger with Diamond with its leadership in Digital and Mobile-led Retail Banking could accelerate our strategy as

a significant Corporate and Retail Bank in Nigeria and a Pan-African financial services champion. Access Bank has a strong financial profile with attractive returns and a robust capital position with 20.1 CAR as at 30 September, 2018.” From his submission above, it is obvious that Access Bank plans to surpass competition on all indices

and factors by leveraging on the technological (digital and mobile) strength of Diamond Bank to accelerate its set mission to take over financial territories across Africa. This drive is in line with its five-year strategic plan whose cornerstone is to tell the African story of strength, grit, tradition, and integrity in a way that it hasn’t been done before. From a small player in the 90s, Access Bank has grown rapidly to be a behemoth in the industry. It became a tier-one Banking institution following the 2004 Consolidation exercise mandated by the Chukwuma Soludo-led Central Bank of Nigeria (CBN) and later took control of Intercontinental Bank Plc. in 2012 - a move which cemented its position as an undisputed top three player in the Nigerian banking industry. Access Bank’s recent move to take over Diamond Bank is a testament to its ambition to be a leading player in Africa’s financial sector and one to beat in the global space. The Bank recognizes the role technology plays in accelerating these ambitious objectives, it is therefore little wonder that it chose to merge with Diamond Bank - a banking institution known to have grown its asset and customer base with the help of technology. Uzoma Dozie, Chief Executive of Diamond Bank touched on the similarities of their vision and the role of people and technology in the next growth phase of both companies saying: “There is a clear strategic rationale for the proposed merger and strong complementarities be-

tween the two institutions. While Diamond Bank has pioneered Nigeria’s largest technology-led retail banking platform, Access Bank is one of Nigeria’s leading full-service commercial banks. Consolidation in the Nigerian banking industry is an inevitable, natural progression in a sector where the gap between Tier 1 and Tier 2 banks has been widening and scale has become critical; where technology will disrupt the traditional business model while enabling broader financial inclusion.” The proposed merger will involve Access Bank acquiring the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a Scheme of Merger. Based on the agreement reached by the Boards of the two banks, Diamond Bank shareholders will receive a consideration of N3.13 per share, comprising of N1.00 per share in cash and N2.13 per share equivalent in newly issued shares of Access Bank to be exchanged for the outstanding shares of Diamond Bank. The offer represents a premium of 260% to the closing market price of N0.87 per share of Diamond Bank on the Nigerian Stock Exchange as of December 13, 2018, the date of the final binding offer. If regulatory approvals are received by the bank stakeholders and the Securities and Exchange Commission which recently signifies that it is aware of the proposed merger, it will definitely be one of the most significant corporate deals in sub-Saharan Africa this year.

“Open Banking will have the same impact that mobile telephony had when it was launched 18 years ago. Today, mobile telephony contributes 9.7 per cent of the GDP of the country,” Open Banking team told BusinessDay. Although Nigerian banks may seem hesitant about integrating the technology but reports already show that some of them have invested in API strategies and made efforts to integrate with fintechs. Some of the banks with API gateways include Diamond, Access, UBA, and GTBank. In the UK where it has gone mainstream, data from the Open Banking Implementation Entity (OBIE) showed the technology was used 3 million times in just one month indicating that the number of financial services beginning to engage with API integration is growing. The team believe Open Banking does pose a threat to banks rather it presents an opportunity for growth. “However, it is easy not to see this if you are not a big picture thinker,” they added, “When Open Banking started in the UK, the banks fought the regulators robustly. However, by the time they saw the benefits, they turned around to champion Open

Banking. At a recent event in London, where Open Banking Nigeria spoke, the attendees from banks were in the majority. Open Banking creates what we call the network effect.” It is not clear when the CBN intends to release its exposure draft on the use of the technology in Nigeria but many experts have predicted it is likely to happen in 2019. Carlos Figueredo, CEO of Open Vector – one of the partners of Open Banking Nigeria - in an interview with BusinessDay in June 2018, said Nigeria is on course to becoming the first country in Africa to integrate Open Banking on a large scale. “It is just a matter of time before our regulators come to the table to set out guidelines,” the Open Banking Nigeria team said, “The same happened when cards moved from magstripe to EMV; the CBN took on the initiative very quickly, and before you know it, Nigeria was one of the first countries to become 100 per cent EMV compliant.” The team disclosed that it is currently testing a sandbox which developers can start using from January 2019 to develop their Open Banking compliant applications.

Open Banking: Why it should matter in 2019

igital technology has in many ways transformed the financial services sector, creating new opportunities, reducing cost of operation, expanding the competitive landscape, and making operators more consumers friendly and responsible. The new technologies have also redefined the way the way the future of financial services is perceived. As greater emphasis shift to data analysis in financial; services, a growing number of experts have identified Open Banking as the future of the sector and one that has a clear pathway to an innovative data future. Open Banking seeks to create a system in which customer data can be easily, yet securely, accessed by different providers. BusinessDay recently sat down with professionals, Iphie Jide-Ebeogu, Mujib Ishola, Ope Adeoye, and Adedeji Olowe, driving the Open Banking Nigeria initiative. Open Banking Nigeria also known as Open Technology Foundation, is a non-profit created by a group of banking and fintech professionals working together to build the next generation of Application Programming Interface (API) standards. APIs allow software at one company to have access to infor-

mation from another. Their membership include individuals and companies such as 2iLab, Africa’s Talking, Flutterwave, Forloop, Global Accelerex, Heritage Bank, Kinexus, Netplus, Open Vector, Paystack, PwC, Teamapt, and Wallet.ng. Open Banking traces its root to October 2015 when the European Parliament adopted a revised Payment Services Directive (PSD2) which among other things set out to promote the development and use of innovative online and mobile payments through open banking. The UK took it a step further with the ruling by the United Kingdom Competition and Markets Authority (CMA) mandating the 9 biggest banks to allow licensed startups direct access to their data down to the level of transaction account. The European Union finally implemented the PSD2 rules in January 13, 2018. In Nigeria the movement is gaining momentum. The Central Bank of Nigeria revealed in September, 2018 that it is working on an exposure draft of the framework on open banking which it will soon unveil. Open Banking Nigeria team told BusinessDay that adopting open banking in Nigeria is likely to yield

instant benefits giving that the country has a more superior approach to digital payments compared to the UK which interestingly leads the world in documentation and packaging of its financial systems. “We are developing Open Banking Nigeria to solve our specific problems rather than adopting a different standard ill-suited to our environments,” the team said. “In fact, we believe that when done others would embrace the Nigerian standard than the complex British implementation.” That sentiment is coming across slowly with the banks which have the biggest stake in the open banking era. It is an era that could potentially lower the technological and operational barrier that prevents fintechs and banks from cracking the financial inclusion challenge Nigeria currently faces. Nearly 40 million Nigerians fall among the financial excluded bracket. An innovation that makes it easier, more convenient and lowers cost of financial services will increasingly attract this category of individuals. Open banking will also throw the door of innovation wide open making it easier for startups to compete on a global scale.

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MTN yet to recover after settlement with CBN

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MARKETS

Abraaj invests $10m in C&I Leasing after debt for equity swap FIKAYO OWOEYE

n what could be termed as a boost for the Nigerian investment space, Africa focused equity firm, Abraaj has announced the conversion of its Aureos Africa Fund of $10 million loan stock in C&I Leasing Plc to equity. At C & I Leasing’s current market price of N1.78, $10 million (N3 billion) would equate to 89 percent of the company, valued at N3.35 billion. It is understood that C & I will issue additional shares to consummate the deal. The company had in December announced plans to restructure its issued and paid-up share capital, consolidating every four (4) ordinary shares currently held to one (1) new share in the company. The purpose of the reconstruction was to allow the company to have enough unissued shares to accommodate the conversion of the Abraaj loan stock to ordinary shares and to raise additional capital through the capital market for business expansion. The move is expected

to be dilutive for existing shareholders. C & I was unchanged at N1.78 at close of trading Wednesday, according to NSE data. About Abraaj’s debt conversion to equity, Andrew Otike-Odibi the MD/CEO of the leasing company said the development was positive. “It improves the capital structure of the company and helps position it favourably for additional capital raise from the market in Q1 2019,” Otike-Odibi said. Abraaj had a rough 2018 which saw a filling for liquidation in the Cayman Islands, following complaints by four investors which includes the Bill & Melinda Gates Foundation and International Finance Corp (IFC), over how it used their money in a $1 billion healthcare fund. Abraaj’s founder, Arif Naqvi stepped down stepped down from the fund-management unit. Naqvi and the company, however, denied wrongdoing and blamed unforeseen political and regulatory hurdles for a delay in deploying the money. C&I Leasing first attracted Abraaj funding in June 2006, after securing a $4

Shares are down from 2018’s peak

Source: Bloomberg

million investment from the P.E firm and the group has continued to maintain a huge presence in Nigeria’s market space. The PE firm has a 20% equity stake in CWG Plc, 5.92% stake in Custodian & Allied Insurance Plc. Other investments include AOS Orwell Ltd, Mouka Foam, Eleme Fertilizer and Petrochemicals, Fan Milk. The Dubai-based Abraaj Group, however, sold its entire stake in Egypt’s Orascom Construction in its bid to restructure following allegations of misused funds. For the Andrew Odibi-led board of the company, it has an ambitious plan to grow and make the company the go-to company for marine IOCs in the country and give investors a good return on their investment. It recently announced the acquisition of two brand new 2018 ‘ASD 2913 Tugboat which will be deployed for a long-term contract with Nigerian Liquefied Natural Gas Company (NLNG). It had earlier in July 2018 concluded the buyout of a 27.5% minority stake in C&I Petrotech Marine Ltd, the company’s marine business subsidiary, and in the process took over complete

ownership of s I x vessels which are presently deployed in a long-term contract with Shell Petroleum Development Company of Nigeria (SPDC) The new conversion of the loan to equity could not have come at a better time when the company is working hard to clean up its huge debts to banks and other ‘Institutional Clients’. According to its Half year ended June 31st, 2018, C&I has a long list of companies is owing, from Banks, bondholders, to tax authorities. Although, the company has been able to remain relatively profitable over the years, with a meagre dividend to its Shareholders. Figures from the company’s result show that its revenue surged from N12.2 billion in 2013 to 21.3 billion in 2017. Similarly, it remained profitable over the same period with PAT increasing from N161 million in 2013 to 1.1 billion in 2017. C&I Leasing Plc was incorporated in 1990 and it specializes in the provision of services such as Fleet management, automobile distribution, marine vessel rental, equipment leasing, security and escort services.

INDUSTRIALS

Dangote Cement shares record biggest daily loss in three years SEGUN ADAMS

angote cement Plc. the largest company on the Nigerian stock exchange by market capitalisation, was down some 8.6 percent Wednesday, the biggest daily drop since January 2016, as elevated political risks take a toll on foreign investors’ appetite. Dangote cement’s slip dragged the equities market lower as the All Share Index, which tracks the average price movement of listed companies, shed 2.33 percent. “Dangote cement’s share price dip is a blip; as it happened because someone with bulk holdings decided to sell a significant amount of his or her holdings,” said Gbolahan Ologunro, an analyst at CSL Stockbrokers. “The downward trend is not expected to persist,’’ Gbolahan added.

Analysts say that highly capitalised stocks may be vulnerable as fears among local investors remain elevated. “The bearish market sentiment could extend to other large caps like Guaranty Trust and Nestle.’’ Another analyst at MBC Securities, Aluko Paul, explained that the decline might be as a result of the negative sentiments of foreign investors. “Most of the shares of Dangote cement are actually held by foreign investors and the decline in their share price is as a result of these investors withdrawing capital from the Nigerian economy.’’ He further explained that the market may experience busts of rally as bargain hunters take position in the big stocks. ‘’ It is not impossible that in the coming that days Nestle is also affected as a

bearish outlook should be maintained for Q1:2019. However, we might see a kind of short rally as bargain hunters would take positions in these stocks.’’ A total of 289,507 units of Dangote Cement Plc shares were trading in Wednesday’s market as opposed to 41,881 units in the previous

day. The increase in volume represents a 591 percent surge as the Value of shares traded equally rose by 566 percent from N7.47 billion on Tuesday to 49.72bn on Wednesday. Other high caps joined in the rout as Guaranty Trust Bank shed 2.19 percent and

First bank holdings went down 1.40 percent to put a downward pressure on the benchmark index. So far, the market has depreciated 6.66 percent Year to Date with investors losing N780 billion in 2019. Julius Berger led the advancers with a gain of 10 percent to close at N25.85

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

while Unilever closed 9.63 percent higher at N37. United Capital, First City Monument Bank and Fidelity each gained 6.87 percent, 6.25 percent and 5.56 percent to join the leaders. Conversely, University Press lost 10 percent to lead the laggards. Other stocks in the top 5 decliners category include N.e.m Insurance, champion Breweries Plc and Eterna oil and Neimeth Pharmaceuticals. Across sector performance was bearish as 3 of 5 sectors covered closed in the red. Industrial sector lost 4.35 percent to close as worst performing sector while Insurance and Banking closed on a bearish note with 3.06 and 0.28 percent respectively. Both Oil and gas and Consumer Goods gained marginally at 0.15 and 0.74 percent at the end of the day’s trade.

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TELECOM

MTN yet to recover after settlement with CBN ENDURANCE OKAFOR

lthough these are early days, MTN Group is yet to fully recover from the devastating impact of its regulatory collusion with Nigerian authorities after settling the matter by paying a $53 million fine. The stock price of the Johannesburg-based wireless carrier has increased marginally by only 2.05 percent since the news of settlement December 24 2018. However, the share price is 20.44 percent less than its price of ZAR 10966 in August 28, 2018. “Market participants largely expected MTN would resolve its issues with the Nigerian authorities. The limited reaction in the aftermath suggests this was likely already priced in,” Rafiq Raji, chief economist at Macroafricaintel said. BusinessDay analysis revealed that as at the close of the Johannesburg market yesterday, MTN share price was up 0.87 percent to trade at

ZAR8725, this is 24.82percent higher than the worst performance of ZAR 6990 in September, the month when there was more pressure in the dispute with Nigeria authorities. The Apex bank had in August 29, 2018 ordered MTN and its four banks to refund $8.134 billion back into the country, for what it described as ‘flagrant violation of extant laws and regulations of the Federal Republic of Nigeria, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 of the Federal Republic of Nigeria and the Foreign Exchange Manual, 2006’. Johnson Chuckwu, MD of Cowry Asset, while responding to MTN stock performance for the review period said market responded to the news but is not an automatic process, as he said the company’s performance will now be a strong driver of the share price. “When the market got the news, it responded and we saw a recovery but over time, performance justifies higher market price and so it all now depends on the company’s performance

in terms of profitability,” Chuckwu told BusinessDay. MTN Group through its twitter handle revealed that the apex bank reached an agreement of the telecommunication giant to pay a fine of $53 million as against the initial $8.1 billion. According to CBN, the decision to reduce the amount was reached as a result of the new information obtained from the telecom company. It said “there is nothing wrong with repatriation by MTN except with the pricing of the private placement.” Meanwhile, at the last MPC meeting, Godwin Emefiele, the CBN governor said “I will continue to say that CCI that are been issued to our foreign investors remains sacrosanct and no other company is being investigated on the issue of CCI,” he stressed that the MTN issue was an isolated one. There are indications that the MTN Group will now focus on listing its Nigerian subsidiary on the Nigerian Stock Exchange (NSE), now that it has settled its $8.1 billion dispute with Nigeria’s Central Bank.

L-R: Chairman of First City Monument Bank, Otunba Olutola Senbore; Founder of FCMB Group, Otunba Olasubomi Balogun and Chairman, Christian Association of Nigeria, (Ijebu Ode Area), Reverend Richard Oladele, during the New Year Prayer programme organised by Otunba Balogun at Ijebu Ode, Ogun State.

GLOBAL

World’s biggest tobacco company moves to phase out cigarettes MIKE OCHONMA

hilip Morris International- manufacturers of Marlboro cigarette and other leading brands is moving into smokefree products. In a swish research centre on the edge of a Swiss lake, the world’s biggest cigarette company is re-inventing itself. Philip Morris International which makes Marlboro and several other leading brands - has vowed to phase out cigarettes and move into smoke-free products instead, and this is evident in the complex of laboratories described as a signal of intent. So far, Philip Morris has spent £3.5bn on science and technology, clocking up more

than 3,000 patents, with another 5,000 pending. The current focus is on IQOS, an electric device that heats, rather than burns tobacco. The cooler temperature lowers levels of 15 noxious chemicals found in cigarette smoke by 95 percent, according to the company’s research. That doesn’t mean it reduces the risk of smoking-related diseases. Those studies haven’t been done, though blood tests suggest there is a less damaging impact on the body. The aerosol from heating nicotine liquid has even lower levels of toxic compounds. And while medical authorities endorse vaping as an alternative to smoking, they are so far sniffy about heated tobacco.

Public Health England says there just isn’t enough independent research to recommend it to smokers as a way of reducing risk. There may well be a big dose of scepticism involved too. Tobacco killed 100 million people in the 20th Century and for decades the industry denied there was a risk from smoking. According to anti-tobacco campaigners, it even covered up evidence that nicotine was addictive. In the UK, fewer than 15% of adults now smoke, compared to 21% a decade ago. Meanwhile, the biggest test is what Philip Morris does in low and middle income countries, where most smokers live and where it continues to make huge profits from its cigarettes.

L-R: Humphrey Ozegbe, head, Human Resources; Tony Saiki, head, Oil and Gas; Daniel Braie, managing director/CEO; Joyce Ojemudia, general manager, Marketing; and Moses Omoregbe, company secretary, all of Linkage Assurance Plc at the Company’s 2018 End of the Year Dinner and Awards Ceremony recently in Lagos.

MOTORING

Germaine Auto partners Total corporative to deliver vehicle maintenance services ENDURANCE OKAFOR

ermaine Auto Centre, a car sale and maintenance company, has partnered with the corporative of Total Nigeria to enable the latter access to vehicle maintenance services. The partnership between Total Staff Multipurpose Cooperative Society and Germaine therefore led to the launching of a new lube bay which will cater to Total Upspring Company Nigeria Limited staff, as well as other corporate organizations in that vicinity. Vincent Ezeh, the Managing Director of Germaine Auto Centre, while responding to the contract with the Total corporative, said “I am super excited about the partnership because it gives us the opportunity to go into Total and be able to reach out more to customers.” The MD further added that the contract also gives Germaine Auto the opportunity to take over all the entire fleet of Total, and “I’m talking

about vehicles way over a thousand units, if you put everything together with their corporative and staff and that will depend on the service we are able to give.” On the other hand, Olawale Olasoji; President of Total Coop said the cooperative is delighted to have opened a lube in partnership with Germaine Autos. “The idea for us was that we wanted to have the confidence that we are in good hands in regards to servicing and maintaining our cars coupled with the comfort of being able to do that in an environment that is easy for us to access without going through long and stressful queue that a normal car servicing centre experience,” Olasoji told BusinessDay. Speaking on the services that can be carried out in the lube bay, Michael Nwah, Brand and Communications Manager at Germaine Auto Centre said “we will provide services like routine maintenance, wheel balancing & alignment, and other services highlighted in our

Standard Service Plan.” For about 20 years, Germaine has existed as an integrated automobile dealership, known for automobile purchase (new and certified pre-owned), servicing, spare part sales and vehicle body work by providing quality service to individuals and corporate organizations. “The partnership has come to stay, we are delighted because Germaine is dedicated to giving us the exact same quality that they are known for everywhere and with them on our side, we will be able to deliver that at a cheaper price than what our members can get outside there,” Olasoji explained. GermaineMD,Ezehconcluded by saying that the value of service that they provide is not the question owing to the fact that they have qualified and well trained technicians. “Their biggest concern is in terms of price and we have a solution to that already which is through the maintenance contract that we are selling to them.

Abdullahi Umar Ganduje, governor, Kano State (seated) signing the State’s 2019 budget into law at watching him as he appends his signature, are Nasiru Yusuf Gawuna, deputy governor, Kano state (r); Babba Dan Agundi, majority leader, Kano State House of Assembly (2nd r); Ibrahim Muktar, attorney general, Kano state (2nd l); Aisha Jaafaran commissioner of Budget, Kano state (1st l) with other government officials in Kano state yesterday.

L-R: Lukmon Oloyede, marketing & brand communications associate, Zedvance Limited; Adebowale Banzi, head, marketing & brand communications, Zedcrest Capital; Samson Ajibade, permanent secretary, Public Service Office, Lagos State; Hakeem Muri-Okunola, head of service, Lagos State; Adedayo Amzat, CFA Group managing director, Zedcrest Capital and Founder, Zedvance Limited and Adegoke Orimolade, head, Public Sector, Zedvance Limited during a courtesy visit to the new Head of Service in Lagos.

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$556m hydro projects at various development stages in Nigeria ISAAC ANYAOGU

ith ten hydro projects at various stages of development from procurement to implementation and a cumulative cost of $556million, Nigeria’s power sector situation looks to get make over when these projects come online. Most of the projects are located in Northern parts of Nigeria where traditionally dams have been constructed because of challenges of getting water for irrigation. Only the Ikere Gorge Dam located in Ogun state is included in the project plan. The projects are also offshoot of agricultural projects. For example the Gurara Hydro Power located in Kaduna is designed and constructed with the main purpose of supplying water to the Lower Usuma Dam in the FCT to meet the demand for water and contribute to addressing the gap in electricity supply in the northwest states in the country. The Ministry of Power, Works and Housing plans to integrate a 30MW power plant into the Gurara Dam works, which is expected to produce 115 GWh of energy annually. The water from the Gurara reservoir will be used to produce hydroelectricity using the water that is available once the water supply demands have been satisfied.

All the projects have secured approval of the Federal Executive council in the past three years. The Ikere Gorge dam was approved on November 30, 2016 at the cost of $10milion. It is one of the two large dams constructed by the government, as part of the master plan for the comprehensive development of water resources potential of the basins of Ogun River. It is located 33 km northeast of Iseyin, in the Iseyin local government area of Oyo state. It is meant to generate 6MW of electricity for dam operation and rural electrification. The Gurara Hydro Power was approved by the FEC on

January 11, 2017, at the cost of $33.6million, the proposed model for the concessioning of the hydropower component of the dam will require one concessionaire to take custody of the project for a period of time as determined by the financial analysis The projects also complete a critical balancing act in the communities they are located to help provide water as well as electricity. The Doma Dam regulates the flows of the Ohina River in Nasarawa state. It is a multi-purpose dam with the primary purpose of irrigation and domestic water supply. There is domestic

latent annual demand for power of around 163GWh, or close to 19MW of installed capacity in addition to commercial and industrial demand. A hydropower project in the vicinity will help in reducing dependence on costly and polluting options such as diesel generating sets. The project will boost power supply within the environs of the dam. It was approved by FEC on November 30, 2016. The Dam and reservoir have been completed. The capacity of the project is 1.0MW, and it is proposed that the waters shall be diverted from the outlet

portal of the dam after modifying the morning glorytype spillway into a pressurized power intake with proper submergence. It is estimated to cost approximately US$3.82 million, with a development period scheduled over a span of 12 months and a construction period of 24 months. The services of the dam include provision of irrigation, hydropower generation, water supply, flood control, and fishing. The dam is 48 m high, 5,500 m long, and has a total reservoir capacity of 450 million cubic meters. The 150 km long network of irrigation canals is meant to support

8,000 ha of gravity-based irrigation and 23,000 ha of sprinkler irrigation. The sprinkler irrigation is supported by 26 pump stations at 33/0.415 KV voltage level. The 3.2 MW small hydropower project on the Bakolori Dam has been proposed to be rehabilitated. Several studies have been conducted to evaluate the restoration and rehabilitation works of the small hydropower project on the dam. Nigeria, with a population of 180 million people, has a total installed electricity generation capacity of 8,644MW. However, the peak generation is much lower at around 4,000MW. The reasons for the shortfall in generation can be attributed to the inadequate fuel supply to thermal plants, which constitute over 80% of the installed capacity; hydrological factors for hydropower stations; maintenance outages at power plants; and transmission and distribution outages. The peak demand is forecasted at 12,800MW. When seen against the available power of less than 4,000MW, it is clear that there is a peak load shortage of more than 8,000MW. As a result, the available generation capacity is less than one-third of the total peak demand for electricity. This calls for new power projects to be implemented that are dependable, renewable, and cost-effective says the project document.

Nigeria now generates 2MW of wind power - Fashola

abatunde Fashola, minister of Power, Works and Housing has said that Nigeria now generates and transmits two megawatts (MW) of electricity into her national grid from the 10MW Katsina wind power farm in Lambar Rimi Katsina. Speaking on Arise Network, television programme on Monday in Abuja, Fashola said the Katsina wind farm which had been abandoned was now actively generating power. He also said that 22 of the farm’s 37 turbines were yet to be fixed and turned on.

“But for us to use wind, we need to build at a higher altitude the infrastructure, that cost will then be passed on to the consumers. We are experimenting with the wind project in Katsina. It is a 10MW project we inherited that had actually stopped working when we came in but we are now generating two megawatts out of it. There are about 22 turbines left to finish. But we are very prolific with solar, that is why we are giving so much support to solar,” said Fashola . The wind farm project was initiated by the late PresAnalyst: Isaac Anyaogu, Email: isaac.anyaogu@businessdayonline.com, 07037817378,

ident Umaru Musa Yar’Adua when he was governor of Katsina, but it was subsequently transferred to the federal government when Yar’Adua became president in 2007. “We are exploring every source of energy that Nigeria is able to efficiently deliver. The source of energy that a nation chooses is ultimately a factor of how much citizens chose to pay for energy. So, Nigeria is not a wind prolific country, we don’t have the wind speed at efficient rate, not that we don’t have wind, I will like to be very clear,” Fashola said.

Graphics: Fifen Famous

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5,916 agropreneurs count loses as World Bank, FG delay FADAMA grant CALEB OJEWALE Twiiter: @calebtinolu

o r 1 8 m o nt h s, the Federal Government o f Nig e r ia ha s kept the dreams of 5,916 young Nigerians hanging, on what is fast becoming another white elephant scheme. Each beneficiar y of the FADAMA Graduate Unemployed Youth and Women Support (FADAMA GUYS), an initiative of the FGN-World Bank FADAMA Additional Financing III, was supposed to get between N1.8 million and N1.9 million. Part of the conditions was for them to stay in agriculture and not take up any other employment for three years. The World Bank reportedly backed this project with about N9 billion, and many of these now-disappointed beneficiaries say the fund has been released to the ministry of agriculture, where disbursement was meant to be done. However, till date, the beneficiaries are clueless as to what has caused the delay. Some have even suggested that certain individuals may be reaping interests from the funds, which should have been disbursed. The program trained 5,916 candidates, selected in 23 states in collaboration with 60 training institutions across the country. According to the ministry of agriculture, these candidates have adopted simple and fundable agricultural enterprise modules in various agribusinesses ra ng i ng f ro m p ou l t r y , fishery, small/large ruminant fattening, crop production, processing, extension services etc. These young people, mostly degree holders, since enrolling for the scheme, as part of commitments expected of them, had

borrowed and raised capital for agribusinesses that have now failed to take off. On Twitter, one user uploaded a video, which was only 30 seconds long, but showed how what would have been a poultry farm now looks like an abandoned scrap yard. The abandoned cages rust away, and much of the structure is falling apart. Apparently, the would-be FADAMA beneficiary was to set up a poultry farm, and as part of his commitment, put up much of what would house the birds. The grant, which would have been used to get chicks and raise them, has still not surfaced six months after he made the video. Aliyu Gubio, a graduate o f Mi c ro b i o l o g y f ro m the Federal University of Technology Minna, first heard about what he thought was an opportunity through the FADAMA Twitter handle and was excited. He signed up in April 2017. Three months later in July, he was trained for two weeks at the Kaba college of agriculture after which he was given a certificate. After the training, they were expected to show commitments, before government provides the grant for their agribusinesses to take off. “Myself and other FADAMA GUYS were made

to lease lands of two hectares to grow crops. I personally spent N80,000 naira to lease a two hectare land for the farming purpose as we were made to understand that the program starts immediately after the training. “Up till date we have not been disbursed and we don’t know anything about when the disbursement will be made, or if it will ever be made. Most of us have lost all hope. We were made to understand that the program is World Bank funded and so we must take it seriously but it is almost two years now and nothing to show for it,” said Gubio in an interview. He furthered explained they were made to sign a three-year contract, which forbade them from seeking any other job during their contract tenure. “This has really kept most of us behind as we have turned down job offers hoping to get the FADAMA G U Y S a g ro g ra nt,” h e lamented. Jubril Geidam, another prospective beneficiary was already into poultry farming from his days as an undergraduate, and for him, this was meant to be an expansion into cultivation of maize and cassava. The twohectare land that he leased has remained unutilised In Taraba state, Bala

Ahmed leased 1.5 hectares of land for a period of three years to cultivate Tuber crops precisely yam and cassava. Even after submitting his business plan, which has since been verified by FADAMA staff, he has been unable to cultivate anything due to lack of funds. Bala in an interview said he was surfing the internet in search of job opportunities when he came across the FADAMA advert calling for applications to the programme. Since then, he has neither gotten a job or the grant promised even after his investments and commitments towards it. “I have invested a lot of time, money and remained unemployed, while expecting a grant to become an agropreneur. I can only hope that the federal government of Nigeria has not scammed us. From research I found out that a huge percentage, if not all of the fund was released by the World Bank, and the government has refused to disburse it,” he said. Asked the reason for not going ahead on his own, Bala explained that he didn’t have money for ploughing, ridging and seedlings. “Yam seedlings are very expensive,” he said. Also from Taraba state, Bashir Danjuma, a graduate

of the Federal University of Technology, Yola, said he has been into rice farming for five years. Since he was already into farming, he decided to expand by two hectares, hoping he could gradually move from being a small farmer. “ Un f o r tu nat e l y , t h e financial capacity is not there to give the boost to another level,” said Danjuma, who had to borrow from relatives to meet the requirements to be eligible for the FADAMA funds. Yomi Alade from Ondo state graduated from the Kaduna polytechnic, with a HND in business administration. In 2017, he heard of the FADAMA programme and according to him, applied online on April 15, 2017. He attended a two-week training session in July at the Federal University of Technology, Akure along with 297 hopeful young Nigerians. However, as at the time of the last revalidation e xe rc i s e i n Nove mb e r 2018, only 260 showed up. According to him, some of his friends quit their previous jobs to enrol in the FADAMA program, on the assumption it was going to secure their future as entrepreneurs who could also create jobs. After submitting his business plan, which he says was subsequently,

‘standardized’, he was approved for the N1.8 million grant. “We don’t have farmers in our family, but I ventured into it due to the opportunities in agriculture,” Yomi said when he was interviewed. He also revealed that after the last revalidation exercise of November 9, 2018, some of his colleagues were no longer active. “Some exited the program due to other opportunities they found, failure from FADAMA to disburse, and some are dead,” Yomi said. Asked for the identities of any of the deceased prospective beneficiaries, he said “No one in my state, but I do see their pictures updated on our WhatsApp group, Facebook group and other social media.” BusinessDay reached out to the World Bank office in Nigeria, to clarify the status of the funds it was meant to disburse for this programme. Adetunji Oredipe, the Task Team Leader of the Fadama Project, wrote in an emailed response inter alia that, “due to time lag between the training and readiness for disbursement, the National office had to undertake a revalidation exercise which was eventually concluded end of November, 2018. We have been informed that disbursement of funds to affected persons should commence at the first quarter of 2019.” On its part, the ministry of agriculture has been unable to offer explanations as to why the dreams of these expectant 5,916 young Nigerians have been toyed with for a year and half. To many hopefuls, they may have been used as pawns in the political chess game to get public goodwill by the government. The real names of FADAMA GUYS interviewed have been changed to avoid possible retribution

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Deepening diabetes care requires awareness, say experts ...as ignorance fuels prevalence ANTHONIA OBOKOH

s Nigeria battles to tackle the high number of people suffering from diabetics, health experts have linked the continuous rise of the disease to lack of awareness and ignorance of scourge in the country The medical experts say the situation of diabetes in the country has worsened largely because of persistent delays in referral to appropriate centres where they can be properly managed. According to International diabetes Federation (IDF), Nigeria is one of the 32 countries which has 425 million of its citizens with the ailment and research shows that about 5.5 percent of Nigerians are diabetic and about 4 million people are diagnosed with type 2 (Adult onset) diabetes “Management of diabetes and its complications could be expensive; the burden could be greatly prevented through awareness and enlightenment of the public,” said Ojo Sikiru a Lagos based medical practitioner. Sikiru also stated that the increase of the disease is also associated with lifestyle changes, overweight and obesity, physical inactivity, sedentary lifestyles, dietary changes, alcohol consump-

tion and cigarette smoking among others, while noting that millions of Nigerians are suffering from diabetes regardless the age. “Regular check-up is very important as a step to preventing diabetes and if the disease is not well controlled the long term consequences may cause blindness, kidney failure and even limb amputation,” he said. Diabetes is a chronic disease caused by the body’s inability to produce required amounts of insulin the hormone that regulates blood sugar. According to health experts, there is type 1 and type

2diabetes and it accounts for first cause of blindness, dialysis, and non-traumatic amputation. Diabetes is a Non-Communicable Diseases (NCD) that is responsible for millions of deaths globally. Sonny Kuku, president, Nigeria NCD Alliance said diabetes is one of the top leading non- communicable diseases affecting a lot of Nigerians. “ to kick start the process of bringing these epidemics under some control, the country needs concerted effort properly planned to prevent disease by creating

more awareness and making management of NCDs free,” Kuku proffering solution on further ways to check the alarming increases said: “One of the ways is to integrate diabetes disease and other NCDs into PHCs and fund them and also provide personnel that will tell the people about diabetes. “We also want to put pressure on the ministry to create special fund for the national health insurance scheme to fund NCDs and community based insurances which will be funded by budgeting especially local government funds,” he said.

BASF West Africa announces winners of Young Female Pharmacist award

fonobong Emmanuel Nelson, a 2015 graduate of the University of Uyo, has emerged the winner of the maiden edition of the BASF West Africa Young Female Pharmacist of the Year award. The company, in partnership with the Pharmaceutical Society of Nigeria, had announced earlier this year, its plans to recognise and reward young female pharmacists in an effort to raise awareness on gender gap in Science, Technology, Engineering and Mathematics (STEM) education and contribute to the bridging of the gap. Jean-Marc Ricca, managing director for BASF West Africa, while giving out the cash prizes to the winners at the 91st Pharmaceutical Society of Nigeria’s Annual National Conference, said with only 17 women having been awarded a Nobel Prize in physics, chemistry or medicine since 1903, it was the company’s hope that the award would be an impetus for increased interest

L-R: Rashidat Elesho, 2nd runner up; Sithembiso Dlalisa, sales account manager ENP BASF West Africa; Jean-Marc Ricca, country cluster head, BASF West Africa; Ukeme Daniel, 1st runner up; Ahmed Yakasai, president, Pharmaceutical Society of Nigeria; Mojisola Adeyeye, director- general NAFDAC; Mfonobong Nelson, winner; Kwadwo Owusu-Sarfo, regional head of sales and business development, BASF West Africa at Young Pharmacist in Nigeria award in Lagos recently.

and enrolment of females in STEM. “We also look forward to more science-focused organisations to step in to make contributions geared towards the generating the interests of females in STEM,” he said.

Ukeme Daniel of the University of Uyo and Rashidat Elesho, of the University of Lagos were announced as the first and second runnersup respectively. Ahmed Yakasai, immediate past president of the

Pharmaceutical Society of Nigeria, congratulated the winners of the award, and encouraged all other young female pharmacists below the age of 35 years to look forward to the award next year.

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Friday 11 January 2019

Mindfulness ‘has huge potential’ as a weight loss strategy A s the holiday season draws to a close, many of us may be struggling with the extra weight we put on during extensive, food-filled celebrations with family and friends. Can mindfulness techniques come to our aid in getting rid of those extra pounds? According to anecdotal evidence and some existing research, mindfulness techniques can help a person maintain or improve their physical and mental wellbeing. For example, mindfulness can reduce symptoms of anxiety and enhance cognitive functioning, and it may even improve a person’s immune response. The principle behind mindfulness is very simple: One has to be fully present in the moment, focusing attention on external stimuli and their effects on the body and mind, learning to concomitantly acknowledge and dismiss unnecessary thoughts. Thus, learning mindfulness techniques can help us tone down the effects of stress and regain more enjoyment in present experiences. Recently, researchers have suggested that mindfulness can also aid a person in their weight loss efforts. A new study from the University Hospitals Coventry and Warwickshire National Health Services Trust in the United Kingdom — in collaboration with other clinical and research institutions — confirms these and similar findings. “This research is significant, as we have shown that problematic eating behaviour can be improved with mindfulness application,” says the study’s first author, Petra Hanson, a research fellow and doctoral student at the Warwickshire Institute for the Study of Diabetes Endocrinology and Metabolism at University Hospitals Coventry and Warwickshire. Hanson and the team report their findings in The Journal of Clinical Endocrinology and Metabolism, which is an Endocrine Society publication. ‘Enabling appropriate lifestyle decisions’ The research team worked with 53 individuals participating in a dedicated weight management program at University Hospitals Coventry and Warwickshire National Health Services Trust.

Of the participants, 33 took part in at least three of four mindfulness training sessions, which taught them to practice mindfulness while eating. Over the next 6 months, the participants who had attended three or four mindfulness sessions lost, on average, 3 kilograms (about 6.6 pounds), while those who had only attended one or two mindfulness sessions lost an average of 0.9 kilograms (around 2 pounds). Moreover, when compared with a control group of 20 participants who attended the same weight management program but no mindfulness sessions, the individuals who had received complete mindfulness training shed an average of 2.85 kilograms (almost 6.3 pounds) more. “Surveys of the participants indicate [that] mindfulness training can help this population improve their relationship with food,” explains Hanson. Mindfulness, she explains, can help people change and manage their eating behaviours with more ease. “Individuals who completed the course said they were better able to plan meals in advance and felt more confident in self-management of weight loss moving forward,” says Hanson, adding, “Similar courses can be held in a primary care setting or even developed into digital tools.” She expresses hope that “[t]his approach can be scaled up to reach a wider population.” “Mindfulness has huge potential as a strategy for achieving and maintaining good health and well-being,” comments senior author Thomas Barber, from the Warwickshire Institute for the Study of Diabetes Endocrinology and Metabolism. The researcher notes that many pressing chronic diseases are linked, to some extent, with lifestyle behaviours and concludes: “[The] focus should be on enabling the populace to make appropriate lifestyle decisions and empowering subsequent salutary behaviour change. In the context of obesity and eating-related behaviours, we have demonstrated that mindfulness techniques can do just that.”

Culled from Medical News Today

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Ogun revamps clinical services delivery through medical personnel trainings RAZAQ AYINLA, Abeokuta

s part of agenda setting towards improving the entire medical and clinical services delivery for the new year, the Ogun State Hospitals Management Board has organised a two-day training for senior personnel cadre of medical staff with a view to boosting morale and skills of the staff in order to improve clinical services delivery across all the 20 local government councils and 37 local council development areas. Consequently, Ogun State health workers were directed to be good managers of resources at their disposal, especially clinical equipment and consumables, as well as be committed in providing efficient

health care services with a overall target and focus on ensuring optimum standards and performances all year round. Speaking at the training held at the Valley View Auditorium, Government House in Abeokuta, Adesanya Ayinde, a physician and permanent secretary, Hospitals Management Board explained that team spirit; commitment and cooperation among hospital staff would result to better performance, which would further improve health care services in the State. Ayinde enjoined the medical personnel to shun acts capable of jeopardising efforts aimed at improving the maintenance and functioning of the facilities, imploring them to take full advantage of the training to exhibit best practices in

Nigeria set to hosts first international Lassa fever conference …to mark 50 years after isolation of the virus ANTHONIA OBOKOH

he Nigeria Centre for Disease Control (NCDC) and its partners will host the first Lassa Fever International Conference between 16th and 17th of January 2019 in Abuja, Nigeria. The conference is to mark Nigeria’s 50 years since the Lassa fever virus was first isolated. The opportunity created by the anniversary of the discovery of the virus, is being used to bring researchers and practitioners from across the world together, to share and appraise global efforts towards the control of the Lassa fever virus disease. NCDC is charge with the response to the challenges of public health emergencies and to enhance Nigeria’s preparedness and response to epidemics through prevention, detection, and control of communicable diseases. Its core mandate is to detect, investigate, prevent and control diseases of national and international public health importance. The first Lassa Fever International Conference is also an opportunity to increase global health focus on the disease, which is found mostly in West Africa. Sierra Leone, Benin Republic, Liberia, Nigeria and Guinea continue to record cases and deaths from Lassa fever annually. As awareness and disease surveillance systems improve across these countries, mores cases are being detected. This has created an increased sense of urgency for the global health community to do

HBL Team

more through better prevention, disease detection, control and case management efforts. In 2018, the World Health Organization launched its Research and Development blueprint, highlighting the potential of Lassa fever and a selected list of diseases to lead to public health emergencies. This plan highlights the absence of efficacious drugs and/ or vaccines, and further highlights the urgent need for accelerated research and development. At the Lassa Fever International Conference, a global audience will learn about efforts towards new strategies to prevent transmission of the virus from rodents to human, new approaches to mitigating hospital transmission of the disease as well as new insights into the social context of Lassa transmission. Current efforts on new Lassa fever vaccines, therapeutics and clinical treatment approaches will also be key highlights at the conference. To prepare for the conference, NCDC called for scientific efforts into prevention, detection and control efforts to be showcased at the conference. This yielded over 500 abstracts from which 160 top quality papers were selected. In addition, travel scholarships were granted to 80 researchers from across Nigeria and West Africa. The Lassa Fever International Conference brings stakeholders together for a meeting full of learning and exchange of ideas. With this, NCDC will work with partners to develop a strong reform agenda for Lassa fever control in Nigeria and globally.

their various facilities. The Permanent Secretary appreciated the State government for its untiring commitment at ensuring that health workers acquire new skills on regular basis through training and seminars, saying the efforts would go a long way in sustaining high standard in government hospitals. Jola Oyeneye, director general, Public Service Transformation Office, while delivering his paper entitled, ‘’Team Work and Team Leadership’’, described team work as collaborative efforts to achieve a common goal, emphasising that cooperation, support, sacrifice, understanding among others, which he listed as good qualities of team work, would effectively project government facilities.

Oyeneye maintained that a good leader must have effective communication and decision making skills, be creative and understand the particular goal of the organisation, adding that motivating people to give their best in achieving the set goal, was also the hallmark of a good leader. Olatunde Adebiyi, a facilitator who also presented a paper titled; ‘’Tracking of Health Indices’’, noted that the importance of data could not be over-emphasised, saying that every activities in government’s health facilities on a daily basis should have record, which would aid their planning for a better performance. Responding, participants at the workshop, the Medical Director, General Hospital, Idiroko, Magret Kilanko and Chief Nursing Officer,

Ijebu Zone, Oluremi Mosuro, appreciated the Board for organizing the workshop, saying it would make them better managers and help in their work places, as well as assisting in synergising with other workers, to bring about positive growth of their facilities. Kayode Oladeinde, medical director, State Hospital, Ijaye, Abeokuta, was of the view that to achieve more results, all health workers should be made to acquire management skills to enable them work with people of diverse characters. BusinessDay however reports that the two day training was organised for Medical Directors, Directors and Heads of Hospital across the State for which they are expected to domesticate the training at various health facilities across the state.

Access Bank, Total, Shell call for more support to tackle HIV/AIDS in Nigeria Josephine Okojie

ccess Bank Plc, Total E&P Nigeria Ltd and Shell Petroleum Development Company have called on the private sector to join hands with the Nigerian Business Coalition Against AIDS, NIBUCAA in the fight against the spread of HIV/AIDS in the country. The organisations gave the call during a dinner party organised by NIBUCAA for business operators to seek collaborations to reduce the prevalence of HIV/AIDS in the country. “We have to realize that HIV/AIDS is not just a health problem, it is a developmental challenge. Therefore, the private sector cannot afford to be complacent with regards to the scourge,” Herbert Wigwe, group managing director, Access Bank Plc said. “It is eminently desirable that private sector supports all efforts geared towards the realization of the goal of the multi-sectoral response to HIV pandemic in particular under the Sustainable Development Goals,” Wigwe said. Wigwe, who is also the co-chair of the board of NIBUCAA said that the scourge of HIV/AIDS still persists in the country with Nigeria having the second largest AIDS numbers globally. Similarly, Nicolas Terras, managing director of Total E&P Nigeria and also a co-chair of NIBUCAA board, said the fight against HIV/AIDS is too big for the government alone to handle.

Musa Shuaibu, managing director, Nigerian National Petroleum Corporation (NNPC) Medicals; Omobolanle Victor-Laniyan, head sustainability, Access Bank Plc; Uche Ujomo, manager-health & CSR, Total Exploration & Production Nigeria Limited; Gbenga Alabi, executive secretary, Nigerian Business Coalition Against AIDS (NiBUCCA) during the NiBUCCA High Impact CEO Dinner held in Lagos recently.

Terras stated that captains of industries have collective leadership roles to play in the multi- sectoral response to HIV/AIDS, saying that the scourge is one that must be won at all costs. He said NIBUCAA, as a platform should be a veritable channel for the private sector to utilize their core competencies and resources towards addressing the issue in the country. Also, Engr Osagie Okunbor of Shell Petroleum Development Company, said the organisation since its establishment has achieved a lot in the fight against HIV/AIDS, but added that a lot is still needed to be done. Okunbor urged other companies must come onboard through the NIBUCAA platform to establish and implement workplace and community- based HIV/AIDS prevention and

education programmes. He said NIBUCAA, as a platform should be a veritable channel for the private sector to utilize their core competencies and resources towards addressing the issue of HIV/AIDS prevalence in the country. Another member of board, Engr Osagie Okunbor of Shell Petroleum Development Company, said the organization since its establishment has achieved a lot in the fight against HIV/ AIDS, but added that a lot still needed to be done. He said that is the more reason why other companies must come onboard NIBUCAA in other to achieve one of its goals of supporting the private sector to establish and implement workplace and community- based HIV/AIDS prevention and education programmes.

New technology on oral drug delivery systems in focus

renowned professor of pharmacy at the University of Nigeria, Nsukka, Kenneth Ofokansi, has said that several novel oral drug therapeutic systems have been invented along with the appreciable development of drug delivery technology for the past three decades. Ofokansi, explained that although, these advanced drug delivery systems are manufactured or fabricated in traditional pharmaceutical formulations, such as tablets, capsules, sachets, suspensions, emulsions and solutions, they are superior to the conventional oral dosage forms in terms of their therapeutic efficacies, toxicities and stabilities. Presenting the 140th inaugural lecture of the University of Nigeria titled “breaking the barriers to effective peroral drug delivery”, at the princess Alexandra auditorium, Nsukka, re-

cently , the University Don who is the chairman of the senate ceremonials committee of UNN, submitted that based on the desired therapeutic objectives, the modern oral drug distribution systems may be assorted into three categories – the immediate – release preparations, controlled – released preparations and targeted – release preparations pointing out that the immediate – release preparations are primarily intended to achieve faster onset of action for drugs such as analgesic, antipyretics and coronary vasodilators. He noted that other advantages of the system included enhanced oral bioavailability through transmucosal delivery and pregastric absortions, convenience in drug administration to dysphagic patients, especially the elderly and bedridden. According to Kenneth Ofokansi,

in the last four and half decades, the area of peroral drug delivery has undergone unprecedented changes, this transition has been mainly driven by the increased understanding of pharmaceutical and biological constraints at the molecular / atomic level, increased generation of drug candidates and emergence of several advanced technologies”. Ofokansi, who is fondly addressed as the doyen of pharmacy by the academia, said that overall, this area had made significant technological advances, not only in drug delivery aspects but also in various processing (fabrication) technologies, adding that it was therefore anticipated that current trends in peroral delivery would bring the much-awaited revolution in the delivery of therapeutic agents, particularly biotechnologybased molecules.

ANTHONIA OBOKOH and ANI MICHAEL / Reporters. Email: obokoh.anthonia@businessdayonline.com I David Ogar, Graphics

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Friday 11 January 2019

Company Review

10 things to know about CBN’s new Payment Service Bank Guidelines Maria Rotilu (Guest Writer)

n the 5th of October 2018, the Central Bank of Nigeria (CBN) released for comments an exposure draft of their newly proposed guidelines for the licensing of Payment Service Banks. Almost immediately, news that “fintech” companies were now required to have a minimum of 5 billion naira in capital hit the public. Major news outlets, carried the misconception that the Payment Service Bank guidelines were a regulation for fintech companies, and as expected, this sparked somewhat panicked conversations across the industry. In this era of soundbites and headlines decoupled from context and taken as the complete story, it is important to clarify the misconceptions surrounding these guidelines. The general definition of a “fintech” company is a technology company that carries out operations in any one, combination or all of financial services which include but are not limited to savings, lending, payments, foreign exchange and wealth management/investment, and any other financial service). With this in mind, it doesn’t appear that this regulation isn’t so much targeted at existing fintechs but is, in essence still a banking license that finally allows telcos lead. So the headline going around the press is a little misleading. After reading the guidelines, it is understandable that the general sentiment is tense. The regulations suspiciously seem to be designed with an agenda. But on closer investigation, that agenda is revealed to be multilayered. It exponentially increases the rate of financial inclusion by leveraging the desperation of the telecommunications (Telco) companies like MTN, Airtel and others to play in the banking space; and in the process, ensure access to cheap finance for the government.

Considering the history of the CBN and that its alliances tend to generally favor traditional banks, though this may be a seemingly small step away from that alliance, its significance and potential impact is tremendous. For the very first time, banking services can be led by non-traditional banking institutions, including telcos. Here are the 10 things you should know about the New Payment Service Bank Guidelines: 1. The required minimum shareholder capital is N5 Billion naira This is correct. The required minimum shareholder capital for a Payment Service Bank (PSB) is N5 billion ($14m, £10m). Clearly, this is a significant amount, one that most “startups” cannot afford. Some Nigerian fintech startups request half that amount for their funding rounds, and this is the amount required for just the shareholder capital. What this signals is that the CBN is not particularly interested in startups filling this space. They have their eyes on folks who have the financial clout and are desperate enough to venture into financial services - telcos. Other fees involved in participating include an application fee of N500, 000 and a licensing fee of

N2, 000,000. An important clarification is that the Shareholder Capital Requirement is payable up front during the application process, but will be refunded (with interest, minus administrative expenses and taxes) after the application process is completed. 2. The PSB License can be telco led, supermarket led, and even mobile money operator Led. This PBS guideline is evidence of the CBN opening up to Telcos and other “nonbanking” players. As I stated earlier, a critical point to note is that the entire premise of this license is prompted by the fact that bank-led financial inclusion is taking too long. A 2016 ‘Access to Financial Services Survey’ by Enhancing Financial Innovation and Access (EFINA) showed a decline in the already limited state of Nigeria’s unbanked and underbanked population’s access to financial services. The percentage of the financially excluded increased from ~40% in 2014 to 42% in 2016 which means things got worse for those totally unbanked. However within the same duration, we saw a slight decrease of 2% in informally and “formallyother” banked i.e., the underserved which means things also got better for this segment.

Looking at the downward trend in financial inclusion documented by the survey since 2008, an 11% decrease in financial inclusion between 2014 - 2018, one thing is clear. At this rate, it will take about 30 years to reach CBN’s goal of 80% financial inclusion instead of the current timeline of 2020. It is encouraging to see the CBN react to the fact that other measures are now necessary to move financial inclusion forward. On the list of potential promoters of this license are telcos, supermarket operators, and mobile money operators, and of course traditional retail banks. Of this list, the telcos’ seem to be the most promising. Their historical hunger for this space coupled with their strong distribution networks and a strong incentive to play in the banking space have them primed for action. Therefore, the PSB guidelines definitely come as good news to them irrespective of the hurdles the licensing requirements pose. 3. Lending is an impermissible activity with a PSB license Credit is one of the strongest levers for driving financial inclusion as it serves as a strong incentive for previously unbanked or underserved Nigerians to get plugged into the financial services system. Counter-intu-

itively, this regulation explicitly states that lending is not a permissible activity for companies operating under a PSB license. It also states that forex trading and insurance activities are off the table. The guidelines, unfortunately, do not provide details as to why these activities are not permitted. One begins to wonder if this stipulation is a protectionist reaction to benefit the traditional banks as they make a move toward retail banking, or if it was made in the same spirit of keeping user deposits as far away from other forms of banking as much as possible. Irrespective of the reasoning behind it, this regulation seems inconsequential for traditional banks and unnecessarily restrictive for the PSBs. 4. Naming convention must include “Payment Service Bank” There is the requirement that all PSBs have the “Payment Service Bank” added to their name to distinguish them from other banks. So, “MTN PSB”, or “MTN Payment Service Bank” may be a reality in the near future. 5. Compliance with the CBN Corporate Governance Code This was to be expected but it also again signals that CBN did not design this law with startups in mind as the CBN’s Corporate Governance Code is quite intense, for even established organizations. One could argue that with matters of finance and especially deposit-taking, compliance with the governance code is necessary to protect the customers’ interests. 6. Have a minimum capital adequacy ratio (CAR) of 10% The CAR as a metric essentially tries to protect depositors. It seeks to determine how much of the bank’s capital can cover its risk-weighted assets - a metric that assigns the potential risk of loss of value on an asset such that when compared to the capital, one can tell if the capital can adequately cover any potential loss of value of these assets.

In simple terms, the CBN requires that there be at least 10% of the value of risk-weighted assets available as capital, ready to be deployed to insulate risk and protect depositors from any exposure should assets lose their value. What this means for newly minted PSBs is that this ratio must not drop below 10% at any point in time. If it does, there may be consequences such as fines. 7. Invest 75% of its deposit liabilities in treasury bills or other government securities If the sole purpose of the PSB guidelines were to drive financial inclusion, the addition of this requirement seems a little off. It mandates PSBs to invest 75% of their deposits in treasury bills (which are considered “risk-free”) or other government securities. A possible reason for this rule - which is hard to ignore - is that the CBN is using the licensing regulation requirements to guarantee the government easy and cheap access to new sources of finance. Another angle could be that the CBN tries to proactively discourage “lazy banking” - taking deposits and investing to gain returns that are less risky. This is because if the PSBs provided less risky, and returns higher than retail banking, they may be disincentivized from focusing on the reason they were granted permission to operate - servicing the underbanked. This stipulation could also be a tactic for CBN to ensure that they can control the level of security of most of the investments these banks put deposit floats into. There is another requirement in this section that alludes to this, which requires that funds in excess of PSBs operational float are put in DBMs (Deposit Money Banks). Maria Rotilu Maria currently serves as the General Manager, Nigeria at Branch.co The rest of this article continues on www.businessday.ng

Friday 11 January 2019

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Filing of annual returns in Nigeria

–Surviving spouse(s) of the deceased. –Children of the deceased. –Parents of the deceased. – Brothers or sisters of the deceased of full blood or the children of such brother or sister who died in the life time of the deceased. – Brother or sister of the deceased of half-blood or the chil-

dren of such brother or sister who died in the life time of the deceased. –Grandparents of the deceased. – Uncles and aunts of full blood or their children. The procedure for the application for letter of administration will be discussed under another write up.

Locus Classicus

Savannah Bank of (Nig.) Ltd and Anor v. Ammel O. Ajilo and Anor (1989) LPELR-SC.188/1987 The 1st plaintiff is the owner of the property in question by virtue of deed of conveyance. The 1st plaintiff mortgaged the property to the 1st defendant bank in order to secure a loan. Based on the instruction of the 1st defendant, the 2nd defendant advertised the property for sale by way of public auction. The 1st plaintiff then instituted an action for an order restraining

the 1st defendant from selling the property and a declaration that the intended auction was null and void for not being in accordance with the Land Use Act. The plaintiff further contested that under section 22 of the Land Use Act, 1978, the purported mortgage-transfer of the mortgaged property to the 1st Defendant by the 1st plaintiff is ineffectual without the prior written consent of the Governor of Lagos State, and at all material

Odunayo Oyasiji

Letters of administration his procedure is mostly adopted where someone dies intestate i.e. without a Will. The law recognizes some set of people who are entitled to apply for letters of administration in order to be able to take over and administer the deceased person’s estate. In essence, it is a legal authority conferred by the probate court on a person called administrator or administratix to administer the estate or property of a person that died without a will. Where letter of administration is not granted then nobody will have the right to act or do anything with regards to the deceased person’s estate as they are vested in the Chief Judge of the state. As earlier stated, there are people recognized under the law as the right set of people that can apply for letter of administration. Section 49(1) of the Administration of Estate Laws of Lagos State highlighted the set of people that can apply. They are usually called next of kin. The section created a hierarchy in the set of people that can apply. The hierarchy in the section is reproduced below-

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times no such consent has been sought or obtained by the 1st Defendant. The matter was heard and judgement delivered at both the High Court and Court of Appeal before same was appealed to the Supreme Court. The Supreme Court held that all transactions under which an interest in land is being transferred require the Governments consent for their validity. The appeal was therefore dismissed with cost.

iling of annual return is a requirement under the law which every private company, enterprise or incorporated trustees in Nigeria must comply with. It is something that is meant to be done at least once in a year. The filing must be done at Corporate Affairs Commission in the form prescribed by law. The filing helps the commission to know that the company is still alive and active. As earlier stated, the filing is expected to be done every year. However, a newly established company may not file within the first 18 months of its existence. For companies that have been in existence, same should not be filed later than 42 days after the annual general meeting of the company. The CAC forms that are usually used in the filing of annual returns depend on the type of organisation or entity that is filing. The forms are listed below1. FORM CAC 10: Annual Return for a small company 2. FORM CAC 10 A: Annual Return for a company having shares other than a small company. 3. FORM CAC 10B: Annual Return for a company limited by guarantee. 4. FORM CAC 10C: Annual Return of exempted foreign companies. 5. FORM CAC/IT 4: Annual Return for Incorporated Trustee. 6. FORM CAC/BN/7: Annual Return for Business Name. By virtue of Section 375(1) (a)(b) of Companies and Allied

Matters Act of Nigeria some documents are supposed to accompany the CAC forms listed above. The section provides that – “(1) Subject to the provisions of section 377 of this Act, there shall be annexed to the annual return‐ (a) a written copy, certified both by a director and by the secretary of the company to be a true copy, of every balance sheet and profit and loss account laid before the company in general meeting held in the year to which the return relates (including every document required by law to be annexed to the balance sheet); and (b) a copy, certified as aforesaid, of the report of the auditors on, and of the report of the directors accompanying, each such balance sheet. (2) If any such balance sheet as is mentioned in subsection (1) of the section or document required by law to be annexed does not comply with the requirement of the law as in force at the date of the audit with respect to the form of balance sheets or documents aforesaid, as the case may be, there shall be made such additions to and corrections in the copy as would have been required to be made in the balance sheet or document in order to comply with the requirements, and the fact that the copy has been so amended shall be stated on it.“ Failure to file annual returns at the right time may lead to payment of default fees or CAC may delist the company on the basis that such company is not active or alive.

Appointment and removal of directors

irectors of a company are the people entrusted with the day to day running of a company. Therefore, how they get to the position and the process of their removal matters. Directors get to the position either as first directors (in the course of incorporation) or as a subsequent director (after incorporation). The first directors are usually appointed by the subscribers to the memorandum and article of association of a company. They are usually named in the memorandum and article of association of the companySection 247 of CAMA. Under Section 248 of CAMA, appointment and removal of subsequent directors is within the power of the shareholders of a company. The power is usually exercised at the annual general meeting. However, by virtue of section 249 of CAMA,

directors can appoint a director to fill casual vacancy (maybe as a result of death of a director). The appointment is still subject to the approval of the shareholders at the next annual general meeting. As for the removal of a director, the procedure is in section 262 of CAMA. It must be noted that ordinary or simple resolution is all that is needed to successfully remove a director. The procedure as stated under section 262 is broken down below1. A special notice shall be required of any resolution to remove a director under this section, or to appoint some other person instead of a director so removed. 2. The company shall forthwith send a copy of the notice to the director concerned, and the director (whether or not he is a member of the company)

shall be entitled to be heard on the resolution at the meeting. 3. A notice of a general meeting at least 21 days before the date of meeting to all members of the company. This notice will be accompanied by the representation if any made by the director concerned. 4. The company must give audience to the director concerned and read his representation (if any) at the meeting to members in the meeting in case same was not delivered to all the members at the meeting. 5. To remove the director, an ordinary resolution is passed by a simple majority of votes cast at the general meeting 6. The company is to notify CAC of this removal by filing Form CAC 7A.This must be done within 14 days of the removal. Late filing fee will be charged if it was not done within 14 days.

Concilliation

his is a form of alternative dispute resolution process- an alternative to litigation. The world keep embracing new forms of resolving disputes without going to court. Conciliation is one of those means. It involves parties to a dispute make use of a person called conciliator. The conciliator meets with the parties both separately and together. The focus of the conciliator is to get the parties talking in a way and atmosphere that is not tensed. Issues are interpreted and the conciliator also helps the parties to find a solution that will be mutually acceptable to both parties. In short, a win-win situation is the goal of a conciliator. Conciliation is different from arbitration

in a number of ways-conciliation process has no legal standing, a conciliator writes no decision and no awards. An arbitrator does all that has been identified that a conciliator does not do. Conciliation is an aspect that Japanese law recognises for the resolution of civil disputes. It is also used for small lawsuits. It is a cheaper alternative to litigation. Nigeria can also imbibe the conciliation style as a way of resolving disputes amicably without getting to court. It will go a long way to lift the huge burden of cases that are on the judges and magistrates. It is also an avenue to create more job opportunities and increase the pace at which people gain access to justice.

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Friday 11 January 2019

Hotels Book ahead, save more in 2019

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otels always seem to account for the largest portion of travel funds. Even when you are not booking a four or five-star property, a few days stay in a hotel can easily empty your pocket if you are not financially disciplined or planned well ahead of your trip. Of course, most travellers like good hotels, but when you are on a budget, especially now that the exchange rate is very high, it is best to make sure you have enough after airfare and lodging to actually enjoy your trip; have good meals, go sightseeing, and buy some souvenirs for your loved ones. However, there a few tricks and tips on how to book cheaper hotel rates. Use search engines The popularity of hotel metasearch engines is on the rise and for good reason: It is one of the most efficient ways to find affordable accommodations. If you are unfamiliar with this concept, a hotel metasearch engine is a website that searches multiple hotel booking sites at once. For example, instead of running a search on Expedia, Orbitz, Priceline, and the hotel’s website, you can use a metasearch engine to search multiple sites at once to see which provider offers the lowest rates and best value. Kayak, Hipmunk, Room 77, TripAdvisor, and Trivago

Novotel Port Harcourt Address: 3 Stadium Road Rumuomasi, Port Harcourt Rivers State, Tel: 0809 713 5734

Transcorp Hilton Abuja 1 Aguiyi Ironsi Street Maitama, Abuja Tel: +234-708-060-3000

are just a few of the options available. Call the hotel directly If you have a particular hotel in mind, calling the hotel directly can often result in better rates. Since you are able to speak with someone in real time, the staff will often be privy to rates that are not advertised online or, at the very least, they will be able to give you insight as to what is affecting hotel room pricing. Events like conferences, concerts, and conventions can cause hotel room prices to skyrocket, and of course, certain times of year, such as the holidays, will see more expensive rates. If you are traveling and found out there is an event causing hotel rooms in the city center to be more expensive, then you need to research hotels away from the city center to find lower rates.

Book cancelable rates Room rates can fluctuate as quickly as minute to minute because a hotel’s inventory is always changing. It is simple supply and demand: the more people booking rooms at a hotel, the more the hotel can charge. One thing you can do if you are not flexible with your hotel choice is to book a cancelable rate. It should be fairly obvious which rates are actually cancelable; there is usually a call-out that states something like “FREE cancellation – PAY LATER,” as seen on Booking. com. You better book this rate (but cross check it is actually cancelable) and then monitor the price, as well as, prices of nearby, comparable hotels. It may take a little bit of extra legwork, but this tactic can save you as much as $US100 per night. Book last minute

This is a trick best reserved for shorter trips, like romantic weekend getaways or impromptu get-togethers with friends in the city. But it is not good to wait till the last minute to book a hotel room for that expensive international trip you have been saving up for or leaving your lodging needs up to fate when there could be a major conference happening that results in a hotel room shortage. However, if you do a bit of research and are flexible, booking last minute can result in much cheaper rates. Last-minute booking apps like HotelTonight, which works with hotels to negotiate deep discounts on unsold rooms, are a great starting point, and many of the online booking sites, like Expedia and Priceline, have their own “Tonight” or “Deals Tonight” section.

Victoria Falls gets new US$800 a night hotel

he list of luxury boutique hotels in Victoria Falls continues to grow with another addition scheduled to open its doors in the prime resort in May this year. Mbano Manor Hotel will bring a unique experience to global, high-end tourists visiting the resort’s pristine surrounds, which include the major draw card, the worldfamous Victoria Falls waterfall, and Zambezi National Park. The 19 all-suite luxury boutique hotel will be situated

between the Zambezi National Park and the majestic Victoria Falls, in the middle of an ancient, natural teak forest. The foreseen rate will be from US$800 per person per night sharing, for full board, including accommodation, meals, beverage and transfers. Mati Nyazema, Zimbabwe-born businesswoman, the driving force behind the hotel, is ecstatic and says her project is “the ideal product for a renewed travel experience” in the country, especially for discerning clients visiting Southern and East

Africa. However, the new arrival would have to fight it out for the evidently resurgent market share in an environment where others have already marked their territory in black and white. There are other luxury hotels in the Victoria Falls who have made their names on the global stage of travel such as on ratings agencies like TripAdvisor and fivestaralliance, among others. The market is defined by names such as the Victoria

Falls Safari Lodge, Stanley & Livingstone Hotel, Matetsi Victoria Falls, the Elephant Camp or even the intimate “grand old lady of the falls”, the Victoria Falls Hotel, itself. Riding on the crest of renewed interest in the Zimbabwean market and the subsequent economic developments, the country was seen as the new investment frontier. Toppling of long-time ruler Robert Mugabe ushered a new glimmer of hope, while the new government of President Emmerson Mnangagwa embraced a reform agenda under the mantra “Zimbabwe is open for business”. The first half of 2018 reported 21 percent growth in the local tourism sector in Zimbabwe. A number of hotels in Victoria Falls reported record occupancies up to August 2018, attributed largely to the newly-built Victoria Falls International Airport and more frequent flights being added by local and international airlines.

Protea Hotel Apo Apartments Address: Ahmadu Bello Way, Apo, Abuja Tel: 09 480 1818

Hawthorn Suites by Wyndham Abuja 1 Uke St, Garki, Abuja. Tel: +234 9 4603900, +234 805 7522500

Chida Hotel International Address: Plot 224, Solomon Lar Way, Utako, Abuja Tel: 0810 871 8882

Radisson Blu Hotel Ikeja #38/40 Isaac John St, Ikeja GRA100271, Ikeja Tel: +234-908-780 5555

206 Hotel Plot 206 Cadastral Zone B02 Opposite Kenuj 02 Mall, Oladipo Diya Road, Durumi District, Abuja Tel: 08119707993 Email: 206abuja@gmail.com

Radisson Lagos Ikeja #42-44 Isaac John Street, GRA Ikeja, Lagos

Protea Hotel (V/Island) Off Ajose Adeogun Street, V/ Island

Gombe Jewel Hotel, 22, Njamena Street, off Aminu Kano crescent Wuse 2, Abuja.

Radisson Blu Anchorage Hotel 1A,Ozumba Mbadiwe,Victoria Island.

Friday 11 January 2019

Harvard Business Review

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ManagementDigest

How companies can balance social impact and financial goals Marya Besharov , Wendy K. Smith and Michael L. Tushman

t’s notoriously difficult for organizations to keep faith with two equally important goals. A lot try. For-profit companies make grand pronouncements about social responsibility, but their resolve nearly always weakens when shareholder earnings are threatened. “Social” businesses and nonprofits often go in the opposite direction, privileging mission over financial viability. Something similar often happens when companies try to invent new businesses while keeping the old ones going. They try to support both businesses, but when money’s tight, one of the two nearly always wins out. We call these sorts of tradeoffs “strategic paradoxes.” To manage them effectively, leaders need more than just resolve. They also need a carefully designed framework of support. Our research suggests that this framework should include three important elements: organizational guardrails, dynamic decision making and what we call “both/and” leadership. Organizational guardrails are designed to ensure that, if one party has more power, the weaker party gets some extra protection. They can help in many different situations. Consider what happened at Digital Divide Data, or DDD, a social business that trains and hires underprivileged workers to do outsourced IT work. DDD’s founder and initial management team knew that they focused more energy on their mission than on making money, so they made sure that their board included some tough-minded, business-savvy members. That decision helped save the company. When one of those board members noticed some troubling patterns, he dug into the books and discovered that unless DDD got serious about making money, it would have to shut down in a matter of months. Senior leaders

then made some tough but essential changes and turned DDD around. Similarly, but at the opposite end of the spectrum, when Unilever approached Ben Cohen and Jerry Greenfield about acquiring Ben and Jerry’s, the two worried that the acquisition would compromise their company’s socialresponsibility mission. So they negotiated for an independent board of directors that would keep an eye on their mission and think beyond just profits and growth. The senior team at Corning, for its part, creates guardrails of a different kind. Aware that product groups have a tendency to kill innovations that they feel will cannibalize existing revenue streams, the senior team puts the most promising innovation projects under the protection of a general manager in a separate part of the company. Organizational guardrails alone won’t do the trick. A springtime decision that pushes resources in one direction may need to be revised in the fall, when the context has changed. This requires dynamic decision making. The best leaders in dual-purpose organizations consider their high-level principles sacrosanct but their ground-level decisions provisional. This is especially important

in organizations with social-versus-financial trade-offs to make. DDD’s leaders initially hired profoundly disadvantaged people in Cambodia without much concern for their professional qualifications — women rescued from sex trafficking, for example, and people with serious physical disabilities. Great for the mission, but not the most efficient way to optimize profits. Since then, the company has modified its practices to better meet its financial objectives: It has stuck to its mission of hiring underprivileged workers, but now it also screens them for analytical skills and learning capacity. DDD also engages in dynamic decision making when selecting new work locations, with an eye to keeping the company both mission-driven and financially sustainable. For-profit companies also find it essential to revise decisions as new opportunities arise and new problems emerge. Lululemon, the yoga-apparel manufacturer, initially grew based on a decentralized, employee-centric culture. When a new CEO wanted to grow faster and take the company public, he brought in leaders with marketing and operations expertise, but their focus on growth and efficiency trampled on some of the firm’s core strengths. Eventually the firm changed direction

again, recommitting to employee development and pulling back on the aggressive growth goals. In short, the company shifted dynamically over time — emphasizing first culture and then the business before ultimately finding a way to manage both. Dual-purpose organizations need leaders who are committed to managing the built-in tradeoffs. This requires “both/and” leadership, and not just on the part of the founder or the CEO. The whole senior team needs to embrace “both/and” thinking and convey its value to managers and employees throughout the organization. Otherwise, the inherent tensions between the organization’s two goals will be pushed underground, where they will fester. Leaders need to surface those tensions and adjudicate between them, adapting and adjusting constantly as the context changes. Initially, Jeremy Hockenstein, the founder of DDD, recruited senior leaders who embraced the paradoxes of the company’s twopronged mission, and that worked well. But eventually some of his more business-focused executives grew dismissive of the social mission, and Hockenstein had to let them go. It was the right thing to do. Whole Foods initially tried promoting a mix of idealists and

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pragmatists into managerial positions, but over time its leaders realized that “hybrid” managers, who are equally aspirational and business-minded, perform best for the company, and the company changed its promotion practices accordingly. We’ve described a number of dual-purpose organizations — big and small, for-profit and nonprofit — whose leaders have successfully navigated the strategic paradoxes of their missions. They’ve done so by creating organizational guardrails, making dynamic decisions and embracing “both/and” leadership. Yet the truth is that such successes are rare. That’s because these practices are emotionally and cognitively challenging. In the face of these challenges, leaders sometimes adopt just one or two practices. That’s often helpful, but adopting only one practice, in particular, can backfire. In DDD’s early years, for example, Hockenstein brought on senior managers and board members with “both/and” mindsets but didn’t build strong guardrails, and only recognized how far the organization had drifted off course when it was nearly bankrupt. Building guardrails without a “both/and” mindset can be equally risky, as leaders representing different priorities end up acting more like menacing guards than enabling guardrails. Ultimately, what we’ve learned in our research is that the three practices we’ve discussed above work best in concert, because each naturally supports and strengthens the others. Making this work isn’t easy, but the payoff can be substantial for everybody involved.

Marya Besharov is an associate professor of organizational behavior at the ILR School at Cornell University. Wendy K. Smith is a professor at the University of Delaware’s Alfred Lerner College of Business and Economics. Michael L. Tushman is a professor of business administration at Harvard Business School and director of Change Logic.

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Friday 11 January 2019

Trends that will rule movie business in 2019 Stories by OBINNA EMELIKE

o doubt, the Nigerian movie industry, aptly tagged Nollywood, has made an impressionable mark in the global movie industry. The industry, which surpassed Hollywood as the world’s second largest movie industry by volume, right behind India’s Bollywood in 2009, as well as achieved an industry record of N853.9 billion ($5.1 billion), and about 1.4 percent contribution to the Nigerian economy in 2014, hopes to achieve more this year. The industry is expected to play a key role in achievement of $8 billion revenue target of the entertainment industry to the Nigerian economy in 2019; a target set in 2014 when the industry reached the $5 billon revenue mark. However, the movie industry stakeholders, especially filmmakers and producers, are now leveraging on improved strategies, efficient marketing and distribution to ensure sustainability of their business and also to woo investments into the industry. So far, the investments in the industry have impacted positively on the quality of the production, storyline, quality of cast, e q u i p m e nt a n d t e c h niques.

To sustain the development, the industry is leveraging on some of the proven trends and strategies more in 2019. One of such trends is movie premieres. This year, filmmakers hope to collaborate more with cinema houses and film distribution companies for movie premieres and effective film distribution channels that will fight-off piracy, optimise revenue and safeguard investments in the industry. Since 2014, an average of five new films premiere on at least 20 cinemas across the country in a month and this has given rise to growing investments in cinema business. Speaking on the growing movie première trend, Kennis Ikwuagwu, a Nollywood content creator/ CEO, July Films, noted that the three most grossing films in Nigeria The Wedding Party, A Trip to Jamaica, and 10 Days in Sun City, which grossed N 453,050,000, N178,500,000, and N177,000,000 respectively, achieved the box office grossing breakthrough through premieres at cinemas across the country and the world over. But while movie premiere is trendy, investment in more cinemas seems trendier for investors now because of the high return on investments. Currently, the cinema business attracts over N15 billion investments in big screens

across the country with the likes of Filmhouse, Silverbird, Genesis among other cinemas opening at every corner, especially shopping malls. As well, movie producers are now working more with movie distribution companies to ensure optimal revenue collection. Leading the pack is FilmOne Distributions, which controls a lion share of the movie distribution business followed by Silverbird Film Distribution, Blue Pictures and a few others. These companies will be busier this year than in 2018 because of the many movie projects that are ongoing and in the pipeline. Moses Babatope, CEO, FilmOne Distributions, believes Nigeria needs more cinema screens around

Wildflower returns on StarTimes with season 2

ildflower is back on StarTimes. The second season of the acclaimed Filipino telenovelas will be aired from January 20th exclusive on ST Novela E Plus. Wildflower is one of the most watched series on primetime in Philippines and was a real success in Africa when premiered by StarTimes last spring. “We knew Wildflower had a lot of potential but we did not expect it to become our most popular drama. Fans have been craving for season 2 since the end of the first season” explains Echo Zhao, manager, ST Novela E Plus Channel. “We are very happy to start 2019 by broadcasting this amazing show. And believe me, if you liked the first season, you will love the second one.” Lead actress Maja Salvador is grateful for the sup-

port viewers have given the program. “We would like thank our viewers for the love and support they have given us in our first season. This second season, we promise to give your wilder revelations and wilder plot twists. We hope you continue loving and supporting us,” Maja said in an interview. Wildflower, produced by ABS-CBN, is a story of a woman’s courage, determination, and resilience to find

justice for her family and for the people of one town. Driven by hope and love, main protagonist Lily/Ivy fights for what is right without putting the law in her hands. Things will definitely get wilder as tension rises even higher. With Nay Carlota’s death, Ivy is further motivated to put the Ardientes down. What will Ivy do to give justice to Carlota? There is also no stopping Diego from running for governor of PoblacionArdiente against his brother Arnaldo. Will he win this battle or will he get played by his own family? When it comes to love, will Arnaldo finally fall into Ivy’s bait? Will Diego set aside his feeling for Ivy to heed the call of service? All these questions will get answers on ST Novela E Plus from Friday to Sunday19:50 CAT, two episodes per day starting from January 20th.

the country to encourage cinema culture and appreciation of Nigerian movie content. For him, effective film distribution network and movie premieres are the key to fighting piracy. Another trend that will change the industry this year is the many start-ups in digital media marketing, which movie makers are now leveraging on. They will do more this year because of their proven track record of paying what is due to the movie makers. Foremost of the digital platforms are online streaming outfits such as iROKO Partners, which licenses and streams Nollywood content to global subscribers, who pay $1.50 a month. According to Jas on Njoku, founder, Iroko Part-

ners, “The focus is to take this popular movie industry, digitise it, and put the right framework around it to capture the proper value. The revenue is already there, it’s just scattered. If stakeholders can invest in Nollywood and make back profits, it will lead to larger budgets and better quality content.” Beyond Iroko partners, Netflix, an American digital content distributor, is becoming trendier for movie makers. In 2015, Kunle Afolayan, one of the leading Nollywood directors, signed a deal with Netflix to distribute his award-winning psychological thriller, October 1, set around Nigeria’s journey to independence in 1960. Just three years later,

Netflix is now riding on the successful distribution of Nollywood content to owning a whole production right. Its recent $12 million movie rights purchase of Nigerian novel Beast of No Nation, to star Idris Elba has encouraged a lot of movie makers to think digital now. As well, most are ready to sell to Netflix following the successful acquisition of Genevieve Nnaji’s “Lion Heart,” the first original Nollywood film to be bought by the American movie streaming platform. Beyond Iroko, Netflix, YouTube is becoming a competitor, while nVIVO TV, a new OTT streaming video service, powered by the Cisco® Infinite Video Platform, is holding forth at home. However, the success so far with digital platform is due to increasing internet penetration across the country, with more gaining access every day as the penetration increases. As well, investors are looking at building more cinemas, with Filmhouse leading the pack with 25 new cinemas target even in secondary cities. With the trends, the biggest losers are pirates. But they are also devising means of continuing in their illegal business, meaning that movie makers should also not rest on moving on to more formidable platforms to remain in business in 2019 and beyond.

Faithia Williams premieres new movie, Connection

aithia Williams, Nollywood actor and producer, has recently released new pictures to the public just after premiering her new short movie, which also coincides with the launch of her new website. The private screening of the short movie, ‘Connection’ held at Radisson Hotel on December 29, 2018 was graced by top entertainers. Celebrities like Toyin Abraham, Etinosa Idemudia, Muyiwa Ademola, Kemi Afolabi, Dayo Amusa, Yomi Fash, Bimbo Thomas, ChinneyLove, Ayo Adesanya, Tayo Odueke, Bimbo Ogunnowo- Afolayan and more were present just to name a few. The short movie was written by Faithia Williams and directed by Desmond Elliot. It stars award-winning actors such as Odunlade Adekola, Toyin Abraham, Kate Henshaw, Muyiwa Ademola, Iyabo Ojo, Priscillia Ojo and more. The event also coincided with the launch of the actress’

personal website, www.faithiawilliams.com where her fans can catch a full glimpse of her life, what she stands for, her works and how to reach her for more work. The actress plans to use the platform as a tool to reach thousands of her fans globally. She also used the opportunity to reactivate her foundation for the girl-child. The foundation will seek to address issues surrounding the girl-child in Nigeria and in Africa. Some of the issues will be brought to bear through advocacy, strategic movies, giveaways and counseling to the girl-child and their guardians. Faithia Williams has been in the movie industry for over one decade and has made multiple movies. Despite her longevity in the industry, her influence still stands strong as shown in some of the cinema blockbusters of 2018 she starred in – Yoruba Demon, Seven and a Half Dates to name a few.

The actress revealed that she does not just want to be all about acting but all about making a lasting impact. “Many people have been asking why I am making the kind of moves I have been making lately. I want to make a lasting impact in the world. I do not just want to be a fine face in front of the camera every day, I am interested in being a fine face that impacts people and acting is just one of the ways I can do that. The movie ‘Connection’ is about the girl child and so is my foundation as well. I will be telling more of these stories and doing more in this regard. It is also why I have my personal website set up. I want to be able to interact and share with my direct constituency regularly. More announcements are coming and as you hear them, please bear in mind that the new Faithia Williams is doing all these to make a lasting impact in the world”, she said.

Friday 11 January 2019

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Business Etiquette

Movie Review of LION HEART

with Janet Adetu

Linda Ochugbua

Etiquest: Your business year in review

t was a very busy and exciting festive season with loads of interesting movies to choose from. “Lion Heart” happens to fall under the interesting category of movies. We all know that Geneviève Nnaji has got a huge fan base, fans that would go to the cinema even if it’s just to watch a one0minute film of hers. I strongly believe she is really good at what she does and deserves all the accolades; although we haven’t seen her in any movies for the past few years, her come back with this one was quite wonderful! I must also commend the publicity for this her movie which kicked off in October 2018; from BBC to CNN and then the Netflix deal. It made Lion Heart the first Nigerian movie to be signed on to the movie platform. I really enjoyed the movie not because I am a great fan, but because it was a well told story. This movie had a very simple yet amazing storyline, maybe because of the numerous A list actors who transformed the simple movie to something fantastic and interesting. The movie featured actors like Onyeka Onwenu, Pete Edochie, Kalu Ikeagwu, Nkem Owoh, Kanayo O. Kanayo among others. I loved how most of the actors didn’t get to play ‘typical’ roles like being a wicked uncle or a ritualist or what not. It was also good to see “Phyno” the popular Igbo rapper act in this movie. We seem to be seeing a lot of musicians take up key movie roles and they are not doing badly at all. This movie showcased Enugu city and a bit of Kano city beautifully. The cinematography, crew, soundtracks and transition between scenes were onpoint. The movie started by showing us the strong determined nature of “Adaeze” (Genevieve Nnaji), she was the first and only daughter and apparent heiress to her dad’s empire. She showed loads of concern for her dads business and hoped that one day when he decides to retire she could run the entire business as the Managing Director/Chairman. Her brother “Phyno” wasn’t in any way interested with taking over the

business, as he had better worries to think of with his ambitious music career. So Adaeze was left alone with her dad to take “Lion Heart” business to the next level. They needed to bid for a BRT contract with their foremost competition called ‘Igwe Pascal” who owned another big transport company in Enugu. The movie went on another twist when Adaeze found out their company owed the bank N950m naira which her Dad borrowed to expand the business to enable them win the state contract which didn’t follow through eventually. The company had 30 days to pay back this loan or lose the entire company to the bank. It was time for Adaeze to fight and show what she was made of and she had to do that with her Uncle; together they fought strongly to save the family legacy. Well you will need to watch the movie to see if they did and what they had to do to save the company from going down. I enjoyed the storyline and the end was even better. Verdict: This movie deserves an 8/10, in my opinion. I loved the seemingly perfect cast, production, plus the crew’s attention to detail was top-notch; the location, script, picture quality and storyline con-

ongratulat i o n s ! Yo u s c a l e d through 2018. Today it is something quite different. Please take the time to review your business in the past year 2018, so that you can better plan and project for the New Year 2019. Feel free to answer the following pertinent questions in

i. Embark on an office retreat to discuss the issues ii. Be open to feedback from all levels of staff iii. Be open to constructive criticism iv. Be in control of how the meeting is flowing v. Request for suggestions and review from all vi. Take every comment, opinion, idea and observation seriously

viii. Tabulate all new suggestions and circulate to all ix. Devise a measuring technique and tabulate variances where applicable x. Have new management ideas ready for sharing xi. Celebrate your highs during the year and question the lows

our Etiquest.

vii. Give all staff an opportunity to speak and what they have always wanted to all year round

xii. Present the way forward for the coming with huge enthusiasm As you embark and take your business on a new road to success this year wishing you all the best for the 2019. It is all about Reflecting on the Past Re-evaluating the Present Re-strategizing for a great Future.

nectivity were also good. With all these good vibes the movie exudes, I still couldn’t find that typical Genevieve “Wow” factor, I have seen a bunch of other movies in which she starred in and her acting was perfect, if I must say. She was just there in Lion Heart, maybe it was due to the role she played. Either way, it is still a great movie. So to the Drama and comedy movie lovers, I would recommend this before the holiday is over and it returns to only Netflix viewing. Movie credit: Cast: Genevieve Nnaji, Pete Edochie, Onyeka Onwenu, Nkem Owoh, Jemima Osunde, Kanayo O. Kanayo Producer: Chinny Onwugbenu Director: Genevieve Nnaji Written by: Ishaya Bako, Emil B. Garuba, C.J Fiery Obasi Duration: 95mins Genre: Comedy, Drama Feel free to review any movie of your choice in not more than 200 words and send via mail to linda@ businessdayonline.com You also stand a chance to win a free movie ticket when you answer correctly the questions shared on social media. Linda Ochugbua @lindaochugbua

Tips on evaluating your past Year:

Kindly share your experiences. Follow me on all social media platforms @ janetadetu and @ JSKetiquette also janet.adetu@ gmail.com

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Friday 11 January 2019

INTERVIEW HBSAN Life Impact Series with Fola Laoye, Director Health Markets Africa HBSAN Life Impact Series is an initiative of Harvard Business School Association of Nigeria (HBSAN), and is a series of interview sessions with prominent alumni of the prestigious Harvard Business School (HBS) who have had a major part of their career or business initiatives in Nigeria. The series is designed to showcase how the learning experience at HBS has influenced these business leaders in their endeavours, particularly the impact they have made in Nigeria, and by extension Africa. It is also aimed at inspiring the younger members of the HBS community who aspire to pursue their careers or grow their business initiatives in Nigeria.

his edition of the HBSAN Life Impact Series features an insightful interview session with Fola Laoye, Director, Health Markets Africa, Trustee Board Member and former President of HBSAN, who earned her MBA at Harvard Business School (HBS) in 1999. The session which held in her office at Health Markets Africa in Ikoyi, Lagos, was conducted by Collins Onuegbu, HBSAN Communications Secretary/Executive Vice Chairman, Signal Alliance, Chika Nnadozie, HBSAN Program Manager, and a media team from BusinessDay led by Uzo Akumah. Fola Laoye is the immediate past Chairman of Hygeia Nigeria Limited. She has been instrumental in charting the growth strategy of Hygeia for several years. She is currently the Director of the West Africa Investments at the Investment Fund for Health in Africa (IFHA). Fola has 25 years of local and international business experience, having trained with Ernst & Young, Lagos and Price Waterhouse Coopers in London. She serves as a Board member at Harvard Business School Healthcare Initiative; Results for Development Institute (R4D), a Washington DC-based think-tank that focuses on policies for Global Health & Education; Hygeia Group, Nigeria; Old Mutual Life Insurance Company, Nigeria; and Pension Alliance Limited (PAL), one of the foremost Pension Fund Administrators in Nigeria. Fola was nominated as a Young Global Leader by the World Economic Forum in 2011, and in 2013 she was awarded the Harvard Business School Africa Business Club Leadership Excellence Award. Transcript of the interview session with Fola Laoye; What is your career background? My name is Fola Laoye. I am a Chartered accountant and I have spent the last 20 years of my career in the Nigerian health sector. I started by joining and eventually running the Hygeia group which has the Lagoon hospitals and the Hygeia HMO.

We were pioneers in the health care insurance in Nigeria as well as the limited health care model that was more fashioned after the USstyled Kaizen model. I retired from Hygeia a few years ago and I have been more active in the investment space (the parts that are very much tied to health care), private equities, and some venture capitals. Most recently, I set up my own advisory firm called Health Markets Africa which focuses on advisory and investments in the health care space. I attended HBS for my MBA in 1997 and graduated as a member of the Class of 1999. This leads up to my 20th year anniversary and 20th HBS reunion which I’m really looking forward to. Why Did You Make The Decision To Attend HBS? First for me was the Harvard brand. I was always intrigued by the brand from my university days in Nigeria. I had heard about the school and I made it part of my personal goal to attend. But more importantly, the timing I chose to attend was a time I was transitioning in my career. I was making a very concerted decision to switch from finance to health and so I felt I needed an MBA that could give me a tool kit, to help me fast track my new career decision. I must say that I did think about other schools. I had gotten admission into London Business School and a couple of others, but in the end, the Harvard brand was going to afford me being truly part of a global network that was also going to be relevant in Africa. After doing my reality check, Harvard was the one school to give me that push, hence my decision to go there. Has HBS lived up to the hype? Absolutely! Certainly, I must say. Even while I was at HBS, I made extensive use of the alumni network in the US. The kind of calls I could take and even the people who took my calls was really unprecedented. The amount of support I received when I got back in setting up what was one of the first HMOs in Nigeria was a lot easier due to relationships and

L-R: Collins Onuegbu, communications secretary, HBSAN/executive vice chairman, Signal Alliance, and Fola Laoye, director, Health Markets Africa, trustee board member and former president of HBSAN.

Fola Laoye, Director, Health Markets Africa, Trustee Board Member and former President of HBSAN.

contacts from Harvard. What advice will you give a person who wants to make a career decision and sees HBS as the place to go, knowing that the Nigeria of today isn’t the same as 20 years ago? Over the last 20 years I have had course to relate with different schools and universities around the world and Harvard still holds a very unique proposition. Like I said, the mix of network and access that it gives. Harvard prides itself as being the General Managers Business School, and so it gives you a round sense of what it takes to be a manager which I believe is very important in becoming a leader. Secondly, it pays a lot of attention to entrepreneurship. HBS teaches you to create a successful business model. One that is true and will stand. It makes you think outside the box, innovate and explore. I remember myself and a few other colleagues of mine decided that we wanted to take Africa to the world (and not just leave it as the ‘dark continent’ on the map). We talked with Harvard Business School management about our plans and we got a lot of support. We eventually co-founded the Africa Business Club at the school which was most especially to bring the mind-set of African businesses into the school. We shed light on the opportunities that African businesses offered to business owners around the world. Another thing we got done was to create the African Business Conference which has happened once a year on the school ground for the last 20 years. So after going to HBS, how did you impact the health business which you refer to as family business? My parents started Hygeia as a second career. So holding it up as a family business, we needed to make it a corporate hospital. Not

one that we owned, but one where we could bring in investors and bring in other doctors. However, it got to a point where private health care didn’t really have the market and they needed to innovate. Then health insurance came in. This was the time when I had seen what they were going through and I was making the switch to help out. I was 26 at this time, so going to Harvard was a way to gain credibility because I was going to come back to deal with medical professionals. It was a male dominated area at the time and I had a lot of senior doctors who had way more experience than myself. Harvard did catapult me to having a seat at the table with these people. The business needed a management role in clinical performance to help grow the brand and this was vacant. When I came in, I had to work at the short floor before I eventually became a manager. However, people sat up and listened to me a little more because I had a Harvard MBA. I came back with key partners and technical know-how. We had to market because insurance is a game of numbers and we needed to grow the business very quickly. Around that time the National Health Insurance Scheme (NHIS) was getting started, so I and my father got involved in policy and advocacy with lots of negotiations with the government. Former President Olusegun Obasanjo had decided to place all the Federal civil servants on an insurance policy. That was 3 million people needing this service and we all needed to be ready to serve. It was a very exciting time and of course, I was able to pull on the tools, knowledge and relationships I had gained from Harvard to grow the business and industry at the time.How can a HBS Alum make an impact? As at when I joined the association, it’s safe to say that we had a lot

of captains on board and a lot of whom had gone through the Executive Programs. Then there were a few of us who had come in through our MBA programs and were particularly younger career wise. So to our advantage (the younger members), we had straight away a pool of mentors who had earned their stripes in working in Nigeria. They taught us so much on how to handle many aspects of what we call the “Nigerian factor”. They also had very strong views on ethics, leadership and to some extent governance. They had put their feet forward in running large corporations - UAC, Shell, UBA, First Bank, etc. They set up institutions outside of the organization - Nigerian Economic Summit Group (NESG). The Harvard alumni had also been very instrumental in writing the vision 2020 strategy for Nigeria. These have all formed a mode of discourse between government and private sectors. Even schools (Pan Atlantic University and Lagos Business School), have been formed out of the association. So these and many more things made me want to be part of the association at that time and even now. I went on to become the president at a time when there was a growing number of MBAs returning to Nigeria. This was excellent. We knew we had to bring the association, its role, and impact up to date with its next generation. What about making an impact in Government? We identified that a certain cohort of our members were in politics hence, the Abuja chapter. I think in doing so, there is a better network of members who go into this business, as there is a platform for them to meet other fellow members in politics. Networking is always very important because that’s where you can advocate and share ideas. More formally, with an Abuja chapter, we have been able to put out more content. I recently attended a discussion in Abuja, where other members and guests attended. It was on different topics on nation building. In fact, at the gathering, we took the HBS case study of Malaysia and we tried to view the pros and cons of Malaysia and Nigeria. Where the two countries are now and where they have come from. Members who were in government were there and we had an honest and open forum for everyone to discuss around these issues. We need to do more of this, as these issues around the country, leadership and ethics need to be spoken in in places like Abuja. For instance, we can have “The Akintola Williams Lecture” and make sure both stakeholders and members are present.

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Leading Woman Yolanda N. George-David, it’s all about a life of selfless service to humanity KEMI AJUMOBI

More about Aunt Landa er academic sojourn through the likes of Ha r v a r d M e d i c a l School and University of Pittsburgh, to mention a few; gave birth to her career as a practicing Female Fertility Specialist cum Clinical and Relational Psychologist with a concentration in Child Development. Her last few years have however found her working with various schools and communities, mentoring and coaching professionals, non-professionals and families across the globe. With multiple Awards both local and International under her wings, Dr Yolanda N. George-David’s proficiency as a PRA- Personality Rebranding Agent leaves no room for questioning. Where it all started Growing up as compared to my circumstances was a blessing, it was a miracle. I was blessed with great support system, a very pleasant family, and I was protected. All I needed to do was just to listen to my parents’ instructions, and the truth is my father’s decision to get all those textbooks, creating this pathway, and laying the fundamentals of going through all of the journeys was a blessing to me. I never knew what it meant not to have your fees paid or not to have new uniforms or books. My needs were never my worries, and it’s my hope that they are never the worries of any child. Have you always wanted to be a medical doctor? Funny enough, again, my folks. I actually wanted to be a lawyer. The whole idea, the reason I wanted to be a lawyer was because, as a child, pre-teen, I was intentional and worried about the amount of injustice that I had seen and I wanted to defend the rights of people. Now, my parents, my mum being a Child Psychologist, had said out rightly, I could not even dig an argument with my siblings. I’m grateful for my primary residence, Female Fertility Medicine, which has allowed me understand and help as many as possible, whether as a doctor or with my status as Aunt Landa, my knowledge of Medicine has helped me save thousands of lives. So I’m grateful I listened to my parents and I became a Doctor. Aunt landa bethel foundation The thing about the Aunt Landa Foundation is, before it became an official foundation here in Africa, I was just visiting for a bit, and my late friend said “all the work that you do with all these girls that were raped in Bagdad, I really think you need to speak to some of these teenagers in Africa, they really need it”, that’s when I decided, apart from

my outreaches for the widows and everything I’ve been doing, to dig my feet in the sea of sexual abuse in Africa or ending up having to work with great people like Abimbola Fashola, Alibaba and all of these people, Lepacious Bose, Tim Godfrey, Lolo. However, at the very beginning, I was just going to do a conference, so I went on air and said ‘if you’ve been sexually abused meet me, I will be there (at) my usual catering for my orphan kids, meet me there. I was expecting two or three girls to show up, but we had 746 girls show up. That then became our first official Aunt Landa Bethel Foundation meeting. It was girls who had just been sexually abused, girls who were still stuck in their abuse and could not leave. Now, the truth is, I can’t say I sat down and planned to have this massive foundation, I just wanted to create a relief mechanism to help just one person. I just had to run after it and grow with it as the needs kept coming. Aunt Landa market square Christmas of 2016, I reached out to Alibaba, and said to him “I get that we’re doing all of this awesome work within our walls, and I get that it’s good enough, but I feel that we need to reach out to more people, and I don’t want it to be dehumanizing to the receiver because, at that time, the way charity looked was dehumanizing to the receiver”. Alibaba asked me how I planned to do that, and I said to him “I wish we could have something like a traditional African market place where we had everybody come in, they buy stuff, and they select what they want, we can then say to them, “you don’t have to pay, you can go. It’s been paid by Love” and it took Alibaba less than thirty seconds to agree with it, even though he was worried that that was me coming up with another idea to create more debt. Later, Alibaba did a sketch of a currency, and in his words, “that’s the Aunt Landa currency”. Everybody coming into the market square would receive the said currency, so the children get to choose, they don’t have to know who Aunt Landa is, they come in, shop for free and pay with this currency. It’s actually free, and Kaboom, at that point, I was so excited that I could not even contain myself. Do you see yourself as a human rights activist? No, I do not. Although I have all these awards that call me that, my position at the foundation was actually the Servant-In-Charge, I know I was created to create relief. I see myself as relief merchant; I sell happiness for a living. People come to me with their pain and by God’s grace, they leave happy. So, I don’t see myself as a human rights activist, I’m just a relief merchant. What is the greatest lesson life

has taught you? For me, my greatest lesson is the fact that working as a relief merchant, I have been to too many burials, I have walked with people through their darkest moments, and one of those times, I was really ill and I could barely stand, I noticed that every tomb stone had a dash, so you see whoever was born in 1919-1954, that dash was there. As I stared at that dash, it hit me that all I have done with my life, that’s

all that is going to be in the dash. Eventually we’ll all end there, but what choices are we going to make? How do you balance work and family? I have been blessed with a king who understands that this is who I am and what I live for and family has been very supportive but again, everything is about priority. For me, no matter how busy someone is, what matters, matters. The way I balance

it is that my family is everything. And because of the work I do, whether as a Doctor or as a relief merchant at Aunt Landa, I make sure that I sometimes delegate, but I never put my family second. What would you want every girl, lady, mother to know? I want every girl, woman, mother and wife, to know that you are capable, and you are enough. Your dreams are valid, you can be anything.

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COMPLETE COVERAGE OF SOUTH-SOUTH / SOUTH-EAST

Dufil Prima Foods builds vegetable oil processing refineries in Abia UDOKA AGWU, Umuahia

ufil Prima Foods Plc, makers of Indomie Noodles have performed the foundation laying of two palm oil refineries in Amokwe and Okai communities in Item, Bende Local Government Area of Abia State. This backward integration effort is aimed at reduction cost of production, boost the economy and source for raw materials locally. The palm oil processing refineries in Amokwe and Okai, two c o m mu n i t i e s o f It e m in Bende LGA of Abia St at e, o c c u py a l a rg e expanse of palm plantations, including virgin land where new breed palm seedling (Tenerra) would be planted by Dufil Prima Foods. The ground-breaking ceremony for the two oil refining plants took place at two separate locations of Okai and Amokwe communities of Item town. When completed, they would be producing vegetable oil that would be particularly used by Dfil Foods. Nnenna Ejekam, the legal advis er of Dufil

Prima Foods, noted that the palm oil processing refiner ies were being established not only to create employment in the rural areas, but to comply with the directive of the Central Bank of Nigeria CBN that all foods related companies should set up plants locally to produce their raw material needs. This is aimed at boosting the local economy and stop the importation of raw mater ials from Malaysia. Recall that Malaysia took some oil palm seedlings from Nigeria in the early 1960s, to develop them

into cash crops. At that time, oil palm was the mainstay of the economy Eastern Region of Nigeria under late Michael Opkara, the then premier of the region. But today, the Asian countr y ranks among the world’s biggest producers of oil palm. According to Ejekam, the coming of the oil palm refineries would change the economic narrative of Item people, as their palms would now become a big revenue earner for the town. “With the establishment of palm oil refineries in Item by Dufil

Prima Foods Plc, poverty and criminality will be eliminated, as most youths will be gainfully employe d; thereby creating wealth for the people,” the legal adviser said. She explained that the project has gone through three stages of: acquiring virgin land, the mill and the communities leasing out their oil palm trees to Dufil Prima Foods. The company would start-off with harvesting leased old oil palm trees to service the oil refine r i e s, w h i l e aw a i t i n g fruiting from new trees that would be planted on

the virgin land. The local p e o p l e w ou l d e n su re adequate security for the mills and workers. Kingsley Ogba Nwokoro, the president general of Item Development Association spoke at Amokwe Item during the sword turning ceremony for the two factory sites, saying that Item p e o p l e w e re p l e a s e d with the company for siting the projects in their place. He assured the foods company officials of his people’s suppor t and e n su re t hat t h e y a n d their materials would be secured to succeed. “ Yo u r c o m i n g i n t o Item will register us as one of the big communities that have gone into modern day production of refined vegetable oil,” he said. “With the coming of Dufil Prima Foods Plc, makers of renowned Indomie Noodles and Power Oil, we (Item) will be known as one of the leading communities in the country where vegetable oil is produced in commercial quantity.” Historically, he said the palm industry has been the source of wealth and progress of Item. The people have

developed skills in managing and promoting the resource and invested a great deal in it before the advent of petroleum. He said oil palm business dates back to 1950s, when Item people who dealt in palm oil organized themselves into a cooperative society called ‘Item Merchants.’ They were noted for the wealth and success the produce can give. He said Item people were also known to have produced renowned merchants in produce business such as late Ugoji Eke, Egesi Akwari, among others ; while the foremost produce inspector of the Eastern Region, Herbert Ukaegbu Osoka was from here. Nwokoro lauded Nn e n n a E j e k a m , t h e initiator of the project, from Item, who is legal adviser to Dufil Prima Fo o d s, f o r u s i n g h e r years relationship with t h e c o mp a ny t o c o nvince it to invest in her homeland. Three directors of Dufil Prima Food Plc, Madhukar Khetan, chief operating officer, Adhi Narto, executive director production and Lim Saradosa, were present at the occasion.

Firm loses work tools to thieves EFEGADIRIM, Port Harcourt

set of tools including a cylinder carrier case, measuring approximately 14ft long and weighs about 35 kg has been declared missing from a transport barge parked at a j e t t y i n Wa r r i , Delta State. The tools were being returned from a client lo-

cation in Jones Creek, but were removed from a transport barge parked at a jetty i n Wa r r i , D e l t a State, while awaiting offloading and subsequent transportation back to Port Harcourt. The owner requests anyone with information on the missing tools to contact Blessing O. on 08055097929 or the nearest police station immediately.

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Private-sector led agric production may weather electioneering impact – analysts TEMITAYO AYETOTO

mid the uncertainties gathering alongside electioneering activities in the country, analysts appear confident that agricultural production driven by privatesector support will not be adversely affected. For crop such as cocoa, there are strong prospects that output for 2018/19 season will experience reasonable growth of about 15 percent if farmers in producing regions are able to scale through poor weather conditions. Prices may also marginally increase during the first quarter, although a dip is projected to occur towards October, which marks the beginning of 2019/2020 farming season. These forecasts are predicated on a trend of growth in production, which usually follows seasons of

low harvest. Agricultural activities last year were largely distressed by flooding which ravaged 80 percent of the country, including several farmlands across Abia, Jigawa, CrossRiver and Kebbi states, among others. The disaster coupled with clashes between farmers and herders in the northeast affected the volume and quality of food production in 2018, causing the sector to decline to 1.19 percent in the second quarter and 1.91 percent in the third quarter, despite beginning the year with 3 percent growth in the first quarter. In spite of analysts’ optimism, there are general concerns that electioneering will not allow much of policy focus on agriculture before and after the polls, thereby weakening growth potential further. The implication is that implementation of budget-

ary allocations to the various crops will suffer decline into the first half of the year and may perhaps pick up slowly midway into the second half if the ruling party returns to power. Should it be viceversa, continuity in current schemes to boost agricultural production, such as the Anchor Borrowers Programme (ABP) or the Presidential Fertiliser Initiative (PFI), may be discontinued for fresh programmes, which might also delay in taking shape. “There might be tectonic shift in the policy direction in a case where the same party gets back into power because over the period of this past, agriculture has been driven essentially by the Central Bank of Nigeria,” said an official familiar with the matter. “Whether or not the same party in power comes back, agricultural intervention will not start immediately. So, the whole of the first half of the

year will be gone. Even before appropriation comes into effect, and before fund release, we are already falling into the second half of the year, in which case the bulk of the southern part of the country would have been fully into production on their cost,” said the official. Emmanuel Ijiwere, vicepresident, Nigeria Agribusiness Group, shares the same sentiment and believes the lack of focus or a likely change of government will affect the sector’s performance, except continuity is ensured in the implementation of policies like the low-interest rate window provided to farmers last year. The CBN, in the bid to boost the productive sector of the economy, allowed agricultural and manufacturing sectors to obtain loans from commercial banks at a fixed interest rate of 9 percent last August but the impact has yet to trickle down to farmers into production.

L-R: Uzor Sunday Okolie, business development division, Sigma Pensions: Akinbode Adedayo, social worker, Hikanos Orphanage: Adaora Ude, head, Strategy, Sigma Pensions: Afolabi Oloyede, manager, Hikanos Orphanage, and Kehinde Aiyeola, business development department, Sigma Pensions, during the visit and donation of goods to Hikanos Orphanage for the ‘DearSigmaSanta’ CSR initaive in Lagos, yesterday. Pic by David Apara

Dangote retains Africa’s richest man title 8th consecutive year ENDURANCE OKAFOR resident of the Dangote Group, Aliko Dangote, who was ranked Africa’s richest man in the 2019 Forbes Africa’s Billionaires latest list, has remained consistently ahead of the pack for the eighth consecutive year, with a current net worth of $10.3 billion. The industrialist, who has now topped Africa’s rich list for a record eight times, emerged the continent’s richest man for the first time in March 2011, with a net worth of $13.8 billion, according to a similar annual report from Forbes. Analysts also believe that the business mogul’s fortune would increase dramatically in the next few years,

when his Group’s refinery, petrochemical and fertiliser plants, which have so far gulped more than $12bn, finally come on-stream to boost Nigeria and Africa’s crude oil refining and supply, with thousands of jobs expected to be created by the conglomerate. Dangote, in a citation by Forbes, founded and chairs Dangote Cement, the continent’s largest cement producer and the biggest stock on the Nigeria Stock Exchange. He owns nearly 88% of the publicly-traded Dangote Cement through a holding company. It noted that the cement giant produces 44 million metric tonnes annually and plans to increase its output 33% by 2020. Dangote also owns stakes in publiclytraded salt, sugar and flour

manufacturing companies. Dangote, chairman of the Aliko Dangote Foundation, was also ranked by Forbes as the 66th most powerful person on earth, ahead of Mike Pence, US Vice-President in May 2018. In the American business magazine’s 75-person list, Dangote clinched the second position in Africa, trailing President Abdel Fattah el-Sisi of Egypt, who was ranked 45th. Both men were the only Africans on the list. Dangote moved up five places from his 2017 ranking of 71. He was also ranked number 100 among the record 2,208 billionaires in 72 countries across the world in 2018 in a Forbes publication released in March 2018. In confirmation of his ever-bludgeoning status, Dan-

gote was also named as the sixth most charitable man in the world. The philanthropist, who endowed his foundation to the tune of $1.25 billion, was recently recognised and highlighted by Richtopia, a digital periodical that covers business, economics, and financial news, based in the United Kingdom. He was quoted to have once said that, beyond being known as Africa’s richest man, he would also like to be known as the continent’s biggest philanthropist. He started the Aliko Dangote Foundation in 1981, with a mission to enhance opportunities for social change through strategic investments that improve health and wellbeing, promote quality education, and broaden economic empowerment opportunities.

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West Africa projected to grow by 2.9% in 2019 - UN … growth to be driven by Nigeria’s growth forecast of 2.1% ISRAEL ODUBOLA

ccording to a report released by the United Nations titled “Socioeconomic Trends in West Africa in 2019,” the West African sub region is expected to grow by 2.9 percent by the end of 2019, which would be driven by Nigeria’s growth forecast of 2.1 percent. The report envisaged that West African economies would perform better this year, and further noted that economic improvement in the region would be triggered by Nigeria stronger economic performance, as the share of Africa’s most populous nation in regional output is about 75 percent. The debt profile of West African nations has been rising overtime, with majority having a high debtto-GDP ratio close to 69.8 percent, 19.8 percent higher than the 50 percent benchmark of the International Monetary Fund, the report noted, which upheld the disclosure of the Debt Management Office (DMO) a week ago that Nigeria’s public debt stock jumped slightly by 0.22 percent to N22.43 trillion in Q3 2018 from N22.38 trillion a quarter earlier. The United Nations projected a rebound in all sectors in the region, except building and construction and services sector, adding that with consistency in government policies in member of states and attractive business environment, regional growth might head towards 4 per-

cent in subsequent years. The realisation of Sustainable Development Goals in the region is threatened by paucity of local and foreign investment flows, which is much lower compared to the Northern and Southern regions of Africa, adding that full regional integration, which involves free movement of people and commodities, is marred by insecurity, however, the report noted that the international agency in collaboration with ECOWAS and other specialised agencies are working hard to create an action plan to tackle the menace. Asked about the viability of 2.1 and 2.9 percent growth forecast in Nigeria and West Africa, a Lagosbased economist who pleaded anonymity told BusinessDay that the target of 2.1 percent for Nigeria will basically be determined by oil prices. “We all know the importance of Nigeria in WestAfrica, if OPEC supply cut policy can possibly raise oil price between $60 - $70 per barrel, the country will definitely record stronger performance, and 2.9 percent growth in the region looks achievable,” he said. Earlier this week, Nigeria’s Economic Consultative Association (NECA) tagged the assumptions of the 2019 proposed budget, which include achieving a GDP growth rate of 3.01 percent as illusory , claiming that political dynamics in the Middle East might cut oil price, thereby thwarting the proposed budget.

Passengers escape death as train derails in Lagos JOSHUA BASSEY & MIKE OCHONMA

assengers on board an Iddo bound train travelling from Ijoko in Ogun State narrowly escaped death when the train derailed on Thursday morning. The Lagos State Emergency Management Agency (LASEMA) confirmed the incident to journalists. About 10 passengers were said to have been injured in the accident that occurred around 7:35am near Ashade Market in Lagos. The accident happened after the train departed from the Agege railway station. An eyewitness account has it that the train was on motion when the guard van and power car derailed, leaving many passengers at varying degrees of injuries.

It was gathered that the driver of the train stopped briefly to assess the extent of the accident, but later sped off with the two derailed coaches left behind. An eyewitness, Johnson Abbah, said as soon as the train got to Ashade Market, a sudden thunderous sound was heard that shook the surrounding. Abbah further explained that the passengers that sustained injuries were later rushed to Federal Medical Centre Ebute-Metta for treatment. However, the derailment affected train service as the Kajola to Apapa train terminated its journey at Agege, as passengers had no option than to disembark and look for commercial vehicles to take them to their various destinations.

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Abubakar, Mustapha, Amaechi lead stakeholders to NIMASA Maritime awards, corporate dinner ... Dangote, Otedola, Sanusi, Ooni, others expected

AMAKA ANAGOR-EWUZIE

here will be a mix of the old, the new, and the familiar at Saturday’s Nigerian Maritime Administration and Safety Agency (NIMASA) Merit Awards and Corporate Dinner, which honours industry stakeholders for their contributions to the growth of the sector and realisation of the Agency’s mandate of driving the industry in 2018. There will also be recognitions for outstanding NIMASA staff at the annual awards holding on Saturday, January 12, at the Eko Hotels and Suites, Victoria Island, Lagos. Former Head of State Abdulsalam Abubakar, Secretary to the Government of the Federation (SGF) Boss

Mustapha, and Minister of Transportation Chibuike Amaechi will be leading other stakeholders to the event. The governors of Lagos, Ogun, Enugu, Ondo, Kaduna, Kebbi and Borno States, as well as ministers of the Federal Republic of Nigeria are also expected at the occasion. Others expected to attend are Aliko Dangote, Femi Otedola, Nike Akande, as well as royal fathers, including the Emir of Kano, Sanusi Lamido, the Ooni of Ife, Oba Adeyeye Enitan Ogunwusi, top government officials, National Assembly members and members of the diplomatic corps. The awards, themed ‘Our Journey to Excellence’, which will be hosted by the Minister of Transportation

and chaired by the SGF, will showcase an array of stakeholders in the Nigerian maritime industry. The award categories include Shipping Company of the Year 2018 (Dry Cargo), Shipping Company of the Year 2018 (Wet Cargo), Maritime Education and Training Institute of the Year 2018, Manning Agent of the Year 2018, and Seafarers’ Employer of the Year 2018. Some staff of NIMASA will be honoured for outstanding performance in relation to the agency’s core values of commitment, accountability, professionalism, integrity, teamwork, excellence, leadership, and discipline. An Employee of the Year will be picked from the 11 winners of the Employee of the Month awards from January to November 2018.

“We want to celebrate our internal and external stakeholders for their outstanding contributions to the development of the maritime industry and realisation of our vision and core values as we launch into the New Year and a new phase in our mission of taking the industry to great heights,” Dakuku Peterside, director-general of NIMASA, said. Some of the corporate and industry awardees from last year’s event were Maersk Nigeria Limited, Gulf Agency Company (GAC) Nigeria, Charkins Maritime, and Offshore Safety Centre. The NIMASA Merit Awards and Corporate Dinner promises to be a night of glamour, glitz, and glitter to mark the end-of-year activities of the Agency.

A scene of an accident where passengers train derailed from tracks at Mangoro Bus-Stop, Agege Lagos, yesterday. Pic by Olawale Amoo

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MRS gets new helmsman amid rising costs, declining fortunes OLUWASEGUN OLAKOYENIKAN

oard of MRS Oil Nigeria plc, which experienced rising costs and declining revenue in the first nine months of last year, has approved the appointment of Priscilla ThorpeApezteguia as managing director (acting), the company says. The appointment followed the resignation of Andrew Gbodume, the former managing director/CEO of the oil marketing company. Thorpe-Apezteguia’s appointment took immediate effect, MRS Board said in its resolution dated January 7 and released by the Nigerian Stock Exchange (NSE) on Thursday. Thorpe-Apezteguia holds a Bachelors of Arts degree in International Studies and Business from University of Coventry, United Kingdom. She has over 17 years’ experience in the Oil and Gas sector and has held high-level positions in reputable organizations; such as Executive Director, Operations at Energy Solutions Integrated Services; Senior Manager, Business Development at OANDO Plc; Head of Marketing/ Customer Service Unit, Retail Manager, South West and Sales and Marketing Manager, all at MRS Oil Nigeria . Until her appointment as managing director (acting), she was the group sales and marketing manager of MRS Oil and Gas Limited. Revenue for the nine months to September 30, 2018 fell by 7.17 percent to N76.07 billion from N81.95 billion recorded in the corresponding period of 2017. Decline in revenue coupled with ballooned finance costs, which grew by 984 percent from N38 million to a whooping N417 million over the same period, triggered a loss of N425.76 million from a profit of N809.16 million recorded a year earlier.

Obaseki inaugurates Advisory, Steering Committee for Edo Health Improvement Programme

overnor Godwin Obaseki of Edo State has inaugurated the Edo Healthcare Improvement Programme (HIP) Advisory and Steering Committee, charging members to ensure sustainability of the programme. Speaking at the inauguration of the committee at Government House in Benin City, the state capital, the governor said, “Our emphasis is on the sustainability of the programme because we want to have a healthcare system that goes on forever within the limits of financial, social and environmental resources.” He charged members of the Advisory and Steering Committee to come up with modalities on how the challenges confronting the state’s health sector could be tackled, drawing from their professional expertise. “We have so many issues to deal with in our healthcare system, which include the payment for healthcare services, data gathering mechanism, getting Universal Health Coverage and health regulations,” he noted. He said the Edo HIP Programme should be structured in such a way that would allow for diversity and flexibility to accommodate all persons irrespective of status, level of income and location. He also charged the committee to come up with modalities to get people to key into the programme and improve access to qualitative healthcare. “Healthcare is not cheap because medical equipment is expensive. So, if we need quality healthcare service, we have to get people to pay for it.”

Lagos 2019 budget: Lawmakers want Ambode to appear in House Lassa fever: ISTH, Edo boost capacity to contain viral disease JOSHUA BASSEY

agos State House of Assembly says Governor Akinwunmi Ambode must appear before the House to properly present the 2019 budget as required by law. The lawmakers also say they are not responsible for the delay in the presentation of the budget as painted by the executive, adding that notice got to them while on recess. The state commissioner for economic planning and budget, Segun Banjo, had in a statement last week said the 2019 budget size of N852. 317 billion had been with the House of Assembly since December 18, 2018.

But the lawmakers, on Thursday, exonerated themselves, as the clerk, Azeez Sanni, intimated the lawmakers that his office received a message from Governor Akinwunmi Ambode dated Monday, December 17, 2018, but which he received. The speaker, Mudashiru Obasa, who commended the lawmakers for their reaction to the message, stated that this was not the time for resentment, acrimony and agitation, adding that the stake before the lawmakers was beyond 2019. “We must do everything to sustain our government, party and the state. You have all shed light on the issue in a matured matter.

“We went on break on December 18, 2018. The first call I received on the budget was on December 24, that the governor was willing to present the budget on that day. “We normally go on break for six weeks, but we went on break for two weeks as we were waiting for the budget. Also, we received the budget on December 28, when we were waiting for the New Year break. “There is no reason to shift the blame on the house that we were not willing to receive the budget,” he said. Obasa said the lawmakers were willing to receive the 2019 budget, saying that this was one of the reasons they were elected into office.

lthough no case of Lassa fever has been reported in the state in 2019, Edo State government and Irrua Specialist Teaching Hospital (ISTH) have reaffirmed their resolve to ensure that there is no resurgence of the viral disease in the state. The state government has stepped up awareness campaign to guard against a resurgence of the ailment in the state since reports that the viral disease has resurfaced in some states across the country. In a statement, Crusoe Osagie, special adviser to the governor on media and communication strategy,

said the state government had shown commitment in managing the ailment in the state by equipping the ISTH with two dialysis machines, one x-ray machine, a ventilator and Personal Protective Equipment (PPEs), which were procured at the height of the Lassa Fever outbreak last year. According to Osagie, “We are committed to ensuring that we do not record a resurgence of Lassa Fever in the state this year and are ready to provide even more support along the way. This is why we have intensified campaign on preventive measures and calling out to the rel-

evant stakeholders to contribute their quota. “As a state government, we have been a huge part of the campaign to keep Lassa fever at bay in the state by supporting the Institute of Lassa Control and Research domiciled at ISTH. Last year, we provided support in form of equipment and PPEs, and refurbished the water system at the hospital so they can be better prepared to respond to emergencies from Lassa fever. “The government is ready to even do more and provide the much-needed support to the hospital to ensure that there is no resurgence of the viral disease in the state.”

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Drug sales slump 50% as Nigerians cut spending... Continued from page 1

in turn affects sales. We have a

product called Wiper, which is an antimalarial drug. People were not buying it before, but it now sells like hot cake in Onitsha for about N500,” Okoro said. “Again, people also now go to alternative medicines – herbal and to pastors,” he said. He pointed out that importers bring in 7C drugs from, say, Czech Republic, to beat the stronger 3Cs from the UK in terms of price, adding that the industry is also trying to control its credit. “Because retailers are not paying up, wholesalers are also stifling supply. This is one of the reasons why there are empty shelves in pharmaceutical stores,” he added. A majority of Nigerians now have little or no disposable income, with the Brookings Institute estimating that the country is now the poverty capital of the world, with a record 87 million people living in extreme poverty and 8,000 people sliding into extreme poverty on a daily basis. But the cheap substitutes also come at a cost, to life and health, experts say. The patronage of cheap alternatives has negative implications on the health of Nigerians, Okoro

said, with the National Agency for Food and Drug Administration and Control (NAFDAC) becoming more of a revenue-generating agency than a regulator. Ifeh Azih, a biochemist and managing director, Destiny Laboratories, said even though cheap medicines provide short-term relief and partial remedy for patients, they prolong cures of ailments, leading to ultimately death. “Herbal medicines particularly have serious impact on the kidney, liver and pancreas. In fact, some of them reduce the level of sugar in the blood. I know three people who recently died of this situation. They didn’t know that the medicine was reducing their blood sugar until death,” he said. Azih added that the economic crunch is forcing Nigerians to change doctors’ prescriptions, disclosing that many citizens are now priced out of essential drugs, which has serious impact on health. The unemployment rate in Nigeria increased to 23.10 percent in the third quarter of 2018, from 18.8 percent in the second quarter, according to the latest figure from the National Bureau of Statistics (NBS). Minimum wage is N18,000 ($50) and has remained so since 2011. Inflation rate at 11.28 percent erodes income,

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just as misery index, a metrics used in ascertaining how well an average citizen lives, is 34.4 percent. “People no longer demand for drugs like they used to,” said Onocha Emeka, a pharmacist at Novelette Pharmacy. “Even those that purchase medicines prefer to go for cheaper brands.” Pharmaceutical companies listed on the Nigerian Stock Exchange (NSE) are also being impacted as some saw a decline in revenues in their most recent third quarter (Q3) results. May & Baker revenues fell 5.4 percent to N6.54 billion in September 2018, from N6.92 billion a year earlier. Morison Industries Plc, another drug maker, saw a 31-percent slump in revenues to N90.96 million in September 2018, from N131.2 million a year earlier, while Pharma-Deko revenues fell to N811 million in the same period from N1.1 billion in 2017, a 27-percent drop. “The challenges of pharmaceutical companies reflect the problems facing the industry. Patronage is key and remains a challenge,” Okey Akpa, chairman, Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (MAN), told BusinessDay. Major players in the pharmaceutical sector are struggling to sustain production to pre-2015 levels. Already, Swiss Pharma has been bought by an investor after experi-

Abdul Samad Rabiu (3rd r), chairman, Cement Company of Northern Nigeria (CCNN); Oscar Onyema (3rd l), CEO, Nigeria Stock Exchange (NSE), and other directors of the CCNN, Finn Arnoldsen (l); Chimaobi Madukwe (2nd l); Kabiru Rabiu (2nd r), and Ahmed Aliyu, company secretary, CCNN, during the ringing of the closing gong on the floor of the NSE to mark the end of trading and commemorate the successful completion of the CCNN/Kalambaina Cement Merger in Lagos. Pic by Olawale Amoo

Adrian Wood pushed to expose inside... Continued from page 1

divulge the inside details of the

acquisition of Nigeria’s fourth largest wireless carrier, 9mobile. Focus has since shifted to the identity of the local shareholders who remain largely unknown. “9-mobile’sstatementwillonlypush Adrian Wood to the wall to expose the unfair dealings of Teleology Nigeria,” a source familiar with the matter said. “All this is already sending the wrong signal to the foreign community,” the source added. The local shareholders of 9-mobile swiped back at Wood in a statement Wednesday where they said the former MTN CEO and his company, Teleology Holdings, failed to meet some financial and physical obligations earlier agreed upon. The statement came on the heels of Wood’sclaimtoBusinessDaythathewas displeased with certain actions taken by thelocalshareholdersthatwerecontrary to the initial arrangement. Wood’s displeasure led to his exit from the Board, and the local shareholders have responded by insisting

that the project would continue without any impute from Teleology Holdings, which they say is only a minority stakeholder in 9mobile. There were initial fears among industry players that the loss of a technical partner in Teleology Holdings, could scuttle the deal and force a sale reversal, given that the proposal made by Wood’s Teleology was a key consideration for regulatory approval by the Nigerian Communications Commission (NCC). Adrian Wood is said to have proved to the telecoms regulator that he had prior knowledge of the Telecommunications industry and was capable of using his expertise to successfully revive the ailing 9mobile. A source at the NCC, however, told BusinessDay Thursday that the sale remains intact and that the onus is on Teleology Nigeria to select another technical partner. “Although this is unprecedented waters for NCC, it is not for the regulator to reverse the sale as a deal has already beensealedandownership transferred to Teleology Nigeria,” the source said. What began with an outburst of

optimism for the 9-mobile project has soon turned sour after some infighting between the parent company led by former MTN CEO, Wood, and the Nigerian unit, over the business strategy of 9mobile, with the parent pulling out. The Nigerian unit responded to the parent company’s exit with some harsh words. “Wood was not personally present for all the critical presentations made by the consortium during the bid process and failed abjectly with his financing arrangements with Swissbased UBS Bank. In all these failings, other partners in the consortium filled the gap and pushed ahead until the sale was completed,” said Oluseyi Osunsedo, director, regulatory and corporate affairs for 9-mobile. According to Olusola Teniola, President, Association of Telecommunication Companies of Nigeria (ATCON), Teleology is one entity with different roles and responsibilities and Adrian Wood was not to handle the financial responsibility, although the Nigerian stakeholders may have thought otherwise.

•Continues online at www.businessday.ng

encing early struggles, while Evans Medicals has gone under. Incidentally, these two drug makers got the World Health Organisation (WHO) prequalification, which ordinarily should raise the level of their competitiveness. The pharmaceutical industry depends on imports for over 50 percent of its raw materials even as patronage remains a major hurdle. A pharmacist who spoke on condition of anonymity said the demand for drugs last year was low. According to him, some of the drugs patients bought were from doctors’ prescription while others were selfmedication.

Friday 11 January 2019

“There has been a decrease in the sales of drugs. The degree of drop is significant. I make average sales of N70,000 daily, but it was far more than this before now,” the pharmacist said. He said the low patronage witnessed is not because of rising drug prices as prices have remained stable; rather, it is a result of the general economic challenge in the country. Real household consumption and government consumption expenditures declined in 2017 (at -0.99 percent) while national disposable income fell by 1.52 percent, according to NBS data.

Amid election fears, seasonal business lull... Continued from page 2

not rebound,” Clems Oziri, an economist, said. Currently, occupancy rate is in the range of 30 percent-40 percent for international hotel chains and about 20 percent in indigenous hotels. This development is worrisome for Ronald Stilting, general manager, Ibom Hotel and Golf Resort, because the fear that the elections may be violent is already scaring guests who now shelve bookings, and corporate organisation who are also holding on until the elections are over on a peaceful note. The British-born general manager fears that this year may be difficult for the hospitality industry. “I can recall when President Buhari came to power in 2015. I was at Lilly Gate then. It took long for a decision to be taken to assure investors on the direction of government policy and that affected the economy. That situation may repeat and hospitality business will suffer for it because the hospitality industry needs activities in the economy to thrive,” Stilting said. Corroborating Stilting, Oziri believes this year’s elections will not be different from 2015. “If the government is not proactive with early policy direction after the elections and the swearing-in, the economy will suffer and I don’t see that happening with any of the two major candidates for the general elections in February,” he said. Ubong Nseobot, marketing and sales manager, Southern Sun Ikoyi Hotel, who noted that the hotels are struggling now to sustain occupancy,

thinks that the election is supposed to generate even more business for the hospitality industry through meetings, political gatherings, and campaigns, which would have impacted on their business especially this lull period. She assured that the traditional lull in business in January would soon elapse. “But if by the first week in February hotels are still struggling, then we know that it is because of the fears of the elections resulting in many people being afraid to return to Nigeria after the holidays, and probably waiting for elections to be over before they come back,” she explained. Ikechi Uko, CEO, Akwaaba African Travel Market, noted that hoteliers are expecting a rough ride this year because of their experience with election years in the past. “Usually, the economy acts differently during election time. People are cautious, investors do not take further risks and the whole economy is on alert. So, that is what we are about witnessing,” Uko said. Whichever way the elections go, Uko assured that hoteliers must have planned ahead, while the Nigerian economy will keep healing by itself. While Uko does not see an extremely bad year because of the elections, hoteliers hope for a quick rebound of the economy after the elections, but point out that the political actors have to make it happen if they have the country’s interest at heart. But they wish that occupancy will not go below 30 percent during the long lull in order to remain in business.

GIP: World Bank President Kim’s next... Continued from page 2

May 2008 it completed its GIP I, its first fund, with $5.64 billion in investor capital commitments. The fund became fully invested during 2012. In September 2012, GIP’s second fund (GIP II), completed fundraising with $8.25 billion in investor capital commitments, making it the largest independent infrastructure fund in the world at that time. Exceeding what it had initially projected, GIP’s third fund, GIP III, completed fundraising in January 2017 with approximately $15.8 billion in investor capital commitments. The more than 12-years-old firm employs approximately 150 investment and operational professionals and has offices in New York, London and Sydney with operational headquarters in Stamford, Connecticut, USA. In the aggregate, its portfolio companies employ approximately 21,000 people, as compiled from BusinessDay survey. Led by Adebayo Ogunlesi, a Nigerian-born lawyer and former Credit Suisse investment banking head, GIP last year began raising money for a potential $20 billion fund, just a year

after raising a record-breaking $15.8 billion vehicle, much of it earmarked for assets in the energy and transport sectors. Kim’s position as the vice chairman of GIP will make him the number two most important staff of the company after Ogunlesi, who is the chairman and managing partner of the firm. According to people familiar with the matter, Kim’s departure for GIP took shape around the time of the G20 summit in Buenos Aires, less than two months ago, when conversations about the new position heated up. A major concern for the World Bank now would be sourcing a replacement for Kim, coupled with the fact that the Bank also wants to separate him from possible conflicts of interest, considering his job role at GIP is almost the same as the core business of World Bank – lending to build infrastructure such as power, water and transportation projects. However, Kim accepted a oneyear cool-off period during which he will be barred from doing business with the organisation he has led since 2012.

Friday 11 January 2019

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Super Falcons regain top spot at AITEO/CAF Awards … As Salah retains Men’s African Player of the Year Stories by Anthony Nlebem

ine –time African champions, Nigeria’s Super Falcons continued their dominance in African football when they emerged the Women’s National Team of the Year at the 2018 AITEOCAF African Football Awards held on Goree Island, near Dakar on Tuesday night. It was the fourth time the Super Falcons would pick up the prestigious award, following earlier wins in 2010, 2014 and 2016. In December 2018 in Ghana, Nigeria’s Women National Team, Super Falcons won the Women Africa Cup of Nations for the third successive time and ninth time overall. For the second year running, the bog occasion for rewarding performers in the game on the African continent was bankrolled by Nigeria’s leading energy solution company, AITEO – also the Official Optimum Partner of the Nigeria Football Federation. Also, on the award night, Liverpool striker Mohamed Salah defeated fellow teammate Sadio Mane and Arsenal forward Pierre-Emerick Aubameyang to retain the Men’s African

Player of the year award for 2018. The Egyptian striker was voted as the African Footballer of the Year for the second successive year at the Confederation of African Football’s awards ceremony in Dakar on Tuesday night. He edged the same two players last year in a vote decided by the technical directors and head coaches of 56 CAF member associations. “This award is very big for me, I love it because I saw it when I was young and I always had a dream to win it one day,” Salah said when collecting his trophy for his 2018

exploits. “I’m proud to win it twice, I must thank my family and my team mates, and I dedicate this award to my country, Egypt.” Salah helped Liverpool reach the 2018 Champions League final but suffered a shoulder injury during the 3-1 defeat by Real Madrid in Kiev. That injur y raised doubts about his World Cup participation but he regained fitness to represent Egypt in the finals in Russia, scoring twice as they exited in the first round. Salah has scored 13 Premier

League goals this season to guide Liverpool to the top of the standings. It is the third time an Egyptian player has claimed the crown, with Mahmoud El Khatib’s 1983 victory being the other occasion. Two Heads of Government, in President Macky Sall of Senegal and President George Weah of Liberia, turned up, joined by FIFA President Gianni Infantino, CAF President Ahmad, FIFA Secretary General Fatma Samoura (a Senegalese), CAF 1st Vice President/NFF President Amaju Pinnick, CAF 2nd Vice President Constant Omari and CAF 3rd Vice President Fouzi Lekjaa. There was also the full complement of the membership of CAF Executive Committee, legends of the game from across the African continent, members of the diplomatic corps and world-renowned artistes who put up magnificent performances. Pinnick picked up the Super Falcons’ award, presented by four –time winner of the Woman Player of the Year, Perpetua Nkwocha. Nigeria legends Emmanuel Amuneke (winner of the Player of the Year in 1994), Nwankwo Kanu (winner in 1996 and 1999), Victor Ikpeba (winner in 1997) and the daughter of late Rashidi

Yekini (winner in 1993) joined the Legends XI parade that also included President Weah (the 1995 World, European and African Player of the Year), Patrick Mboma (Cameroon), El Hadj Diouf (Senegal), Frederick Kanoute (Mali), Didier Drogba (Cote d’Ivoire), Samuel Eto’o Fils (Cameroon) and Mohamed Salah (Egypt). Full list of winners Player of the Year: Mohamed Salah (Egypt & Liverpool) Women’s Player of the Year: Chrestinah Thembi Kgatlana (South Africa & Houston Dash) Youth Player of the Year: Achraf Hakimi (Morocco & Borussia Dortmunmd) Men’s Coach of the Year: Herve Renard (Morocco) Women’s Coach of the Year: Desiree Ellis (South Africa) Men’s National Team of the Year: Mauritania Women’s National Team of the Year: Super Falcons, Nigeria Platinum Award: His Excellency Macky Sall (President of the Republic of Senegal) Federation President of the Year: Fouzi Lekjaa Goal of the Year: Chrestinah Thembi Kgatlana (South Africa & Houston Dash)

Manchester United expand fan base in China

n a move to expand its fan base across Asia, Premier League club Manchester United is to open a series of club-themed entertainment and experience centres in China. The Old Trafford club, which has millions of fans on Chinese social media, will partner Chinese property developer Harves to build the centres. The first are scheduled to open in Beijing, Shanghai and Shenyang by 2021. The Beijing centre will be built in the Qianmen Dashilan area next to the Forbidden City and Tiananmen Square. Fans who visit a centre “will be able to experience the thrill of a matchday at Old Trafford” as well as learning about the history and heri-

tage of Manchester United, the club said in a statement. The complexes will also include restaurants and club retail stores. “We first visited China in 1975 and we are proud to have seen our fan base in the region grow and develop their passion for United over the years. This new concept will allow them to get closer to the club they love,” said Manchester United’s group managing director Richard Arnold. Harves boss Zhang Bo said the centres would offer a “fully immersive experience that entertains, educates, and inspires the next generation of football fans.” The club last visited the country during the summer of 2016. The club’s official TV channel MUTV is broadcast to more than 100

million viewers in China thanks to a tie-up with digital media platform Sina Sports. It makes MUTV programming available across numerous digital platforms. And according to China-based sports agency Mailman Group whose clients include Manchester United - the club has the largest online fan base of any overseas club in China. It says United has 9.3m followers on Weibo, China’s equivalent of Twitter, ahead of city rival Manchester City, with 8.3m followers. The club recently parted company with manager Jose Mourinho, and sits sixth in the Premier League. It is still in the Champions League and FA Cup competitions.

L-R: President Macky Sall of Senegal, President George Weah of Liberia, FIFA President, Gianni Infantino, CAF President Ahmad Ahmad, FIFA SG Fatma Samoura, NFF and CAF 1st VP Amaju Pinnick and others before the AITEO-CAF African Football Awards in Dakar on Tuesday .

Global insurer, Allianz endorses football for greater inclusion

he Allianz Group have again hosted the Allianz Junior Football Camp, which since the year 2009, annually welcomes teenagers from 25 countries to come to Munich for a week of training with FC Bayern youth coaches. These young men and women are given a once-in-a-lifetime chance to develop their skills, take a behindthe-scenes look into life at FC Bayern, watch games and practices with their favourite football stars, and make friends with other aspiring footballers from around the world. As a partner of two of the top football clubs on the planet – FC Bayern Munich and FC Barcelona – Allianz is in a unique position to support the huge segments of society for whom football is an essential part of life. Kathrin Zechmann, communica-

tor Sponsorship & Branding explains: “’Community’ is a key concept for all our football activities. Allianz partners with the international football community in all its forms – from street football to social media to top professionals – because we understand that football has a positive impact on the lives of many different people in many different ways. We are dedicated to deepening that positive impact, for today’s players and fans and for future generations.Love of football brings people together regardless of differences in nationality or language. Allianz is proud to be able to build a global community of young fans united by passion for the sport.” In July 2018, Nigerian insurer, Ensure Insurance, was acquired by the Allianz Group and rebranded to Allianz Nigeria in December 2018

36 BUSINESS DAY NEWS

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Lagos rolls out new transport system with 820 buses JOSHUA BASSEY

new public transportation system aimed at inching Lagos closer to what obtains in advanced economies is rolling out in March this year, the state governor, Akinwunmi Ambode, says. Coming under the Bus Reform Initiative (BRI) of the state government, the system will be flagged off with 820 high and medium capacity air-conditioned buses. The state government intends to gradually scale up the buses to 5,000 as the system gains acceptability across the state. The buses are coming with cameras, WiFi, USP point, televisions and specially fitted facilities for the physically challenged people. Already, new bus terminals, bus stops and depots are being completed in different parts of the state metropolis where commuters will be expected to queue up

to boarding and disembark from the buses. To guarantee efficient and effective management and maintenance of the buses, system, an assembly plant is also being considered. Ambode, while inspecting some projects associated with the project on Thursday, said plans were being concluded to roll out the system in March. According to Ambode, the initiative would redefine public transportation and make the state to be globally competitive. He added that the initiative is designed to inject 5,000 buses, modern terminals, facilitate ease of mobility for residents and also rev up the economy of Lagos. Inspecting the assembling plant at Awoyaya in Ibeju Lekki area of the state which is also serving as the temporary holding bay for 500 out of the 820 buses already acquired by the government, Ambode said the buses would be rolled out

after the elections, while the next phase of the project would be to assemble the buses in Lagos. “This is an assembling plant. The dream is that beyond the procurement of 820 buses by government, the next set of buses in the vision should be assembled in Lagos in this assembling plant and another one in Epe. “That is the dream and the whole project is scalable and in this scale right now, we would run with the 820; you have seen the maintenance workshops and all that, and then the next scale which is the next phase is for Nigerians to be able to assemble the buses in Lagos and then we create employment opportunities and also allow the GDP of Lagos to grow. The buses are ready and we think with everything we have done, we should be able to roll out these buses maybe immediately after the elections,” he said. The governor noted that though the 5, 000 buses

would not be enough for the state, but the government was showing the way and creating the right atmosphere to allow the private sector come in and participate in the whole arrangement. “What has happened is that government has gone ahead to procure these buses using its funds and the buses are being owned by a government company called Lagos Bus Services Limited (LBSL). So, the LBSL will lease these buses to operators who would use the three depots at Oshodi, Anthony and Yaba to ensure that the buses are sustained and maintained properly so that they don’t get wasted before their lifespan expires. “The idea is if we are able to show good example of which we have procured these buses with our own money, the private sector can join hands with us and start to procure those additional buses that will take it to 5,000, while government can also procure more and by so doing.

L-R: Diran Olojo, group head, corporate affairs, First City Monument Bank (FCMB); Gbola Sobande, vice chairman, Federal Nigeria Society for the Blind (FNSB) Executive Council, and Izegbua Amusu, chairman, board of governors of Vocational Training Centre (VTC) of FNSB, during the commissioning and hand-over of a hostel renovated and automated water system constructed by FCMB to the FNSB at its Vocational Training Centre, Oshodi in Lagos.

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Benin Owena Basin pledges provision of potable water, all-round irrigation for agricultural purposes … commissions area office in Auchi IDRIS UMAR MOMOH, Benin

n line with Federal Government’s mandate to provide potable water for domestic uses and promotion of national food security through all-round irrigation, Benin-Owena River Basin Development Authority (BORBDA) has opened area office in Auchi. Saliu Osifuemhe Ahmed, managing director, BORBDA, along with the chairman, board of directors of the agency, Ali Olaganju Olanusi commissioned the area office located in Audhi, the administrative headquarters of Etsako West Local Government Area. Ahmed said the area office would also provide rural infrastructure such as roads and associated infrastructure within the limits of available budgetary provisions as well as provision of employment for the people, thereby encouraging growth and development in the community. According to Ahmed, “With the presence of this area office, BORBDA is strategically positioned in line with the vision of the President Muhammadu Buhari’s administration to promote national food security through the entrenchment of agriculture as an alternative revenue source beyond oil.” He said the commissioning, Edo State area office had increased the federal agency area offices to four with one each in its state of jurisdiction of Ekiti, Delta, Ondo and now Edo.

The BORBDA boss explained that the purposes of bringing the authority’s closer to the people was geared towards facilitating the realisation of its mandate in the development of water and land assets and associated rural infrastructure. He however solicited the cooperation and support of the people of the community and other benefitting communities to ensure that the mission and vision of the initiative was achieved. On his part, Ali Olaganju Olanusi, chairman, board of directors of BORBDA, commended the Otaru of Auchi, Aliru Momoh, for donating parcels of land for the area office as well as for farming. Olanusi said the office would among others help in coordinating the activities of the authority within the community and beyond, creating employment and boosting socio-economic activities of the area. Earlier, in his goodwill message, the Otaru of Auchi thanked the federal agency for the choice of Auchi town as location for the area office, assuring of his determination to welcome any agencies or companies bringing development to his kingdom. Also in his remark, the executive chairman of Etsako West Local Government Council, Yakubu Musa, who was represented by his vice, Inusa Imonofi, assured that the council would ensure that the facility was put to judicious use.

Insurers step up action to enhance vehicle LIRS directs employers to deduct 10% capital gain tax from terminal benefits insurance inspection in low internet areas ISRAEL ODUBOLA

agos State Inland Revenue Service (LIRS) has directed employers across the state to deduct capital gain tax of 10 percent from any sum paid to employees on termination of their service. This was disclosed in a notice released by the state tax agency, signed by the chairman, Ayodele Subair. According to the notice, such compensations are subject to taxation in section 6(a) of the Capital Gain Tax Act although it is exempted from taxation in paragraph 26 of schedule three of Personal

Income Tax. The notice further stated the compensation would be exempted from Pay as You Earn (PAYE) if no agreement was made before the disengagement process began. However, the same will be subject to capital gain tax, which is 10 percent of the amount. “Pre-agreed amounts are generated from employment and subject to PAYE. Gratuity payment are tax deductible for PAYE purposes if they are paid under an approved pension scheme in line with Section 5 of the Pension Reform Act (PRA) 2014,” the notice reads, adding that:

“If paid outside PRA, the gratuity payments would be taxable if the conditions under paragraph 18 of the 3rd Schedule is triggered, that is (a) if the service period is below 10 years; (b) the sum is higher than N100, 000, and (c) where the service period is less than 5 years (or an aggregate of 63 consecutive months in the case of a service that is not continuous), the exemption permitted is N1, 000 per annum for such period.” The chairman stated that employers should notify the state tax agency of payments for compensation for loss of employment.

MODESTUS ANAESORONYE o ensure that consumers and vehicle inspection officers across different parts of the country with or without internet access are able to verify their motor vehicle insurance, the Nigerian Insurers Association (NIA) has launched the Unstructured Supplementary Service Data (USSD) Code. The code: *565*11# will enable consumers and officials in charge of vehicle monitoring and inspection to validate genuiness and validity of the vehicle insurance cover they have anywhere in the country.

The NIA it would be recalled had in 2001 launched the Nigerian Insurance Industry Database (NIID, which helped capture insurance policies obtained by motorist’s real time online on the internet and through dedicated hand held devices. But today, the platform has only captured about 2 million vehicles, underscoring the high prevalence of fake and parallel market operators. Speaking at the official launch of the Code in Lagos, Tope Smart, chairman of the NIA said this represents yet another giant step towards bringing insurance

closer to the people and ultimately eliminating fake insurance certificates in the market. Smart said the USSD works independent of internet connectivity. In this instance, any mobile phone (not necessarily a smartphone) would communicate with the NIID system to retrieve policy status whenever required. He said, “It is hoped that with the USSD, we would have fully overcome the problems associated with the dedicated devices as it guarantees uninterrupted service throughout the country and on all networks.

Friday 11 January 2019

BUSINESS DAY

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Friday 11 January 2019

later became a subject of litigation after the 2015 polls, on account of the absence of legal backing. INEC still insists that it would use smart card readers for accreditation in the 2019 elections but that would be procedural and not lawful as President Muhammadu Buhari has declined assent to the 2018 electoral amendment bill which provides legal backing for the card reader, electronic transmission of data among other provisions that seek to make elections free, fair and transparent. The inclusion of the card readers in the electoral act was made possible via an amendment to Section 49 by inserting a new subsection (2) which states that, “the Presiding Officer shall use a Smart Card Reader or any other similar technological device that may be prescribed by the Commission, for the purpose of accreditation of voters, to verify, confirm or authenticate the particulars of the voter in the manner prescribed by the Commission. The declined assent rendered the prohibition of the use of incident form for election useless despite claims by INEC. The use of the card readers ensures that only registered voters actually vote on election day, making the process more credible but the reverse is now the case. Also, the compulsory transmission of election results from polling units to collation centres, enshrined in the amendment bill has been thrown behind, giving room for manual manipulation of results in the process of physically transmitting them from the polling

units to collation centres which in most terrains is kilometers away. There are strong indications that if the use of incident forms and manual transmission of results from polling units to collation centres are not prohibited by law, such loopholes may be exploited to manipulate the results in favour of certain candidates. In fact, many political observers have affirmed that the ruling APC has planned to rig the 2019 general elections in connivance with INEC. Buba Galadinma, National Chairman of the APC stressed that, Buhari, “has already decimated one of the indices of making elections correct by refusing to sign the electoral act for the fear that to strengthen the electoral act of 2018 will stop his people from rigging. Another issue is that while INEC kept silent on the matter of Buhari’s refusal to sign the electoral amendment bill, it has however cried out loud that the ongoing strike by the Academic Staff Union of Universities, ASUU without possibility of being called off before election dates would jeopardise the polls. Festus Okoye, INEC National Commissioner and Chairman of its Information and Voter Education Committee, had lamented that the ASUU strike is a threat to the Commission’s preparations for the conduct of the 2019 general elections as over 70% of the ad hoc staff requirement for the elections are drawn from students of federal tertiary institutions. This has further prompted the question of whether INEC can meet Nigerians expectations in 2019?

2019: Can INEC meet Nigerians’ expectations? JAMES KWEN

he Independent National Electoral Commission, INEC is the cynosure of all eyes in Nigeria and beyond, as the time for it to once again carry out a very pressing assignment for the nation inches closer, beginning with national elections - Presidency and National Assembly on February 16, 2019 and state elections - Governorship and State Houses of Assembly on March 2, 2019. INEC was established by the 1999 Constitution of the Federal Republic of Nigeria to among other things, organise elections into various political offices in the country. However, Nigerians and the international community have always had reservations about the outcome of each election conducted by INEC because of electoral malpractices. That notwithstanding, the 2015 general election was said to be a great improvement of previous outings as the Commission, true to the expectations of Nigerians, announced the results which according to political pundits were the expression of the wishes of

Nigerians to change the status quo, as the then opposition party, the All Progressives Congress, APC wrestled power from the then ruling Peoples Democratic Party, PDP after 16 years in the saddle. As the pendulum swings to 2019 with visible signs that Nigerians have not entered the ‘eldorado’ as they anticipated in 2015 since there is loud cry about heightened hardship and insecurity in the land. They are again desirous to “change the change”. That is indisputably the expectations of Nigerians now. But the big question that almost defies precise answer is: can INEC meet Nigerians’ expectations? INEC on its part, has tried to prove beyond reasonable doubt, that it is keen to meet Nigerian’s expectations in the upcoming polls, having introduced five innovations aimed at conducting a credible exercise, as recently highlighted by Mohammed Haruna, INEC National Commissioner and member of its Information, Voter Education and Publicity Committee. According to Haruna, “among the Commission’s key innovations in furtherance of its mandate in the last three years, are first and foremost, the fixing of the dates of future general elections going forward from 2019 and its subsequent issuance of the Timetable and Schedule of Activities for the 2019 General Election on January 9. “Second, is its reintroduction of simultaneous accreditation and voting.Third, is its implementation of the constitutional and electoral provisions for continuous voter registration (CVR). Fourth, is its

enhancement of existing 167,875 smart card readers (SCR) for authentication and verification of its biometric permanent voters’ cards (PVC). Last, but by no means the least, there is its introduction of Form EC 60E, the so-called peoples’ result sheet”. Other measures include the signing of memorandum of understanding with transport unions for efficient delivery of logistics for the 2019 general elections, which Mahmood Yakubu, INEC Chairman, said is to reassure Nigerians that INEC is determined that all polling units nationwide will open at 8.00hrs. Even with rising concerns on the growing phenomenon of vote buying witnessed in some offseason elections such as the Ekiti and Governorship elections, INEC said it has developed a special mobile application to checkmate vote buying and other electoral malpractices. Mustapha Lecky, National Commissioner with INEC, announced that the mobile application which would allow Nigerians monitor the 2019 general election can be freely downloaded through the INEC website or Google Playstore, with geo-referencing features to address the new phenomenon of “vote buying,” a recurring feature in recent elections in the country. With all these strategies, can INEC meet Ngerians’ expectations? The answer to my mind is no. This is because the main thing that made the 2015 general elections a bit better than the previous ones was the deployment of smart card reader for accreditation. The card reader

NEWS

Opposition victory in DRC’s presidential poll reaffirms citizens’ resolve to change unfavourable regimes – Analysts ... want owners to regularise facilities before Q1 end MICHAEL ANI & OWEDE AGBAJILEKE, Abuja

he victory of the opposition in the just-announced presidential election result in the Democratic Republic of Congo (DRC) has reaffirmed the determination of citizens to turn the tide against any government they dim unfavourable to economic progress. Analysts say the outcome of the poll may well be a pointer to what awaits Nigeria in next month’s election. DRC named opposition leader Felix Tshisekedi as the winner of the December 30 contentious presidential election, after he scored about 39 percent of the vote, defeating the candidate of the ruling party, Emmanuel Shadary, who came third, and another opposition candidate, Martin Fayulu, who finished second.

“The Congolese presidential election holds strong lessons for the Nigerian economy as it shows to a large extent that the power of an election still resides on the people, hence an incumbent can always be removed from power just like we saw in 2015,” Gbolahan Ologunro, an equity research analyst at Lagos-based CSL Stockbrokers, said on phone. “However, the undertones of issues that come with elections in developing countries which undermine their democratic process are still very much prevalent,” he added. In a swift reaction to the announcement, the People’s Democratic Party Presidential Campaign Organization (PPCO) said the victory of the opposition party in the DRC signposts the fate that would befall the governing All Progressives Congress (APC) in Nigeria.

“The PPCO says the defeat of ruling party’s candidate, Emmanuel Ramazani Shadary, is another pointer to the impending defeat of President Muhammadu Buhari in the February 16 presidential election, as African nation consolidates on entrenching of purposeful leadership in the continent,” PPCO said, Thursday, in a statement signed by Kola Ologbondiyan, its media and publicity director. “The victory of opposition candidate and particularly the relegation of the ruling party to third position in the election despite the daunting challenges is a confidence booster for Nigerians on Atiku Abubakar’s victory despite the shenanigans and rigging schemes of the Buhari Presidency and the All Progressives Congress (APC). “Nigerians should not also forget that in March 2018, opposition can-

didate in Sierra Leone, Julius Maada Bio, defeated the ruling party’s candidate. In December 2017, opposition George Weah defeated the sitting Vice President Joseph Boakai of Liberia, while in December 2016, opposition party candidate, Nana Akufo-Addo defeated the incumbent President of Ghana, John Mahama. “Those relying on rigging to shortchange Nigerians on February 16 should therefore be reminded that as demonstrated in the DRC, the power of the people remains greater than the power of this nepotistic few,” it said. Nigerians will on February16 march to the poll to decide a president that will pilot the activities of Africa’s biggest oil producer in the next four years. While about 91 political parties might have got their names stamped by the Independent National Electoral Commission (INEC) to contest in the 2019

general elections, Nigerians have, however, staked their bet that the presidential elections will a twohorse race between the ruling APC and the main opposition PDP. Muhammadu Buhari, Nigeria’s incumbent president and candidate of the ruling party, is seeking a second term bid after clinching an unopposed ticket from his party, as he struggles to mend a massive defection of members that hit his party. The 76-year-old president has vowed to maintain the fight against corruption and take the country to the “next level” after the country entered into a recession in his first term in office. On the other hand, a former Nigerian vice president and presidential candidate of the main opposition party, Atiku Abubakar, is campaigning on job creation by boasting a GDP of $900 billion by 2030 to help get the country working again.

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Fact Check

Are 60 political parties supporting Buhari as Akinlade claimed? ODINAKA ANUDU

n Sunday, January 6, 2019, Adekunle Akinlade, governorship candidate of Allied Peoples Movement (APM) in Ogun State, claimed on Sunday Politics on Channels TV that 60 political parties were rooting for Muhammadu Buhari, Nigeria’s current president and candidate of the All Progressives Congress (APC). “Sixty political parties are supporting President Buhari,” Akinlade said. “This is not a new thing in our politics. The People’s Democratic Party (PDP) has the Coalition of United Political Parties (CUPP). But we believe in him and his manifesto,” he added. BusinessDay has decided to fast-check this claim to ascertain its veracity or otherwise. Checks on the Independent National Electoral Commission (INEC) website shows that there are 91 political parties today. On 14th August 2018, INEC registered 23 more political parties, bringing the number of political parties to 91. “At its regular meeting today, Tuesday, August 14, 2018, INEC took a number of decisions: the commission approved the registration of 23 new political parties. It had received a total of 144 applications from political associations seeking registration as political parties,” Mohammed Haruna, national commissioner and member, Voter Education and Publicity Committee of INEC, said.

Adekunle Akinlade

“This brings the number of political parties to 91 and will be the last round of registration of parties until after the general elections on February 16, 2019. This suspension is in line with Section 78 (1) of the Electoral Act, which requires all applications for registration as political party to be concluded latest six months to a general election,” he added. On December 5, 2018, it was

reported by almost all the newspapers, including BusinessDay, that 45 political parties had come together under Coalition of United Political Parties (CUPP) to formally adopted Atiku Abubakar, PDP presidential aspirant, as its presidential candidate in 2019 elections. “We must prove to them that we are the masters in this enterprise and tell them that the Nigerian people would not follow them (APC)

to the ‘The Next Evil’ scheme they have designed for our country. Millions of our suffering compatriots are looking up to us for deliverance and we must not disappoint them,” Olagunsoye Oyinlola, chairman of CUPP and former governor of Osun State, said in Abuja at the opening of a meeting of all the national chairmen. If you add Abubakar’s party— PDP— to 45, it will mean that 46 parties adopted him that day. A simple calculation shows that subtracting 46 parties from 91 registered parties leaves us with 45. This means that there are 45 parties that are not part of Abubakar’s CUPP. But 45 is still fewer than 60, meaning that it is impossible for 60 parties to support Buhari. It is also not possible that all the 45 parties are supporting Buhari. Oby Ezekwesili, presidential candidate of Allied Congress Party of Nigeria (ACPN), is not part of CUPP and does not want to have anything to Buhari. She has lampooned Buhari on almost all angles. For instance, on October 10, 2018, Jim Yong Kim, immediate past president of the World Bank Group, said that Nigeria unfortunately ranked 152nd out of 157 countries in Human Development index. In her response, Ezekwesili said, “This is a failure of leadership on the part of this government led by President Muhammadu Buhari. And this failure is, as I keep saying, urgently unsustainable. “Nigeria has no business being in the lower rungs of the Human Capital Development index. The report is simply the result of a leadership that

does not value its citizens enough to empower them holistically,” she said. “With my experience advising some of the most reform-minded governments on our continent, and building economies across Africa, it becomes even more heart-breaking to see the basic steps we must take to revamp our economy, to revamp human capital investment and to move forward on these crucial indicators. This failure has to end,” she added. Another candidate that has dissociated himself from CUPP or Buhari is Omoyele Sowore, presidential candidate for African Action Congress. “It is time for Kogi people to say enough once and for all so that we can truly liberate Nigeria and become the leaders we were promised while we were in school. The AAC is set to send the shameless fathers like Buhari who have refused to let go of power back to Daura. The roads here are terrible; it’s a sign that the people you have voted for have failed you. They do not remember you, save for election cycles when they bring a miserly N4,000, and you never hear from them again. Vote for me come February 16 and watch Nigeria transform before your eyes,” Sowore said at a mega rally in Kogi State on January 6, 2019. Though the comments of the two presidential candidates about Buhari may be subject to different subjective analyses, the fact is that 45 is not 60. This means that Akinlade’s claims on 60 political parties supporting Buhari is largely false.

Why health budget should matter to political elite

igeria needs an increase in health budget to stem rising cases of deaths. Nigeria has allocated only 2.9 percent of its total budget on health in the last three years, as against South Africa’s 13 to 15 percent over the same period. Budget allocations to the health sector in the last three years represent just 0.2 percent, 0.02 percent and 0.2 percent respectively of the gross domestic product (GDP), assuming modestly that Nigeria’s GDP stands at $420 billion. “The World Health Organisation has a standard benchmark that should be followed by developing countries with high rates of diseases. Compare that ratio with what we have in Nigeria and you will see why we still struggle with health issues,” Okey Akpa, chairman of Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (MAN), told BusinessDay on the phone.

“This is a global benchmark that is a product of research,” Akpa added. Larne Yusuf, a Lagos-based gen-

eral practitioner based, told BusinessDay in an earlier interview that government must plan more for the sector as low health budget in

the face of outbreaks means crisis. The WHO puts standard health budget allocations at 26 percent, especially for developing countries.

Nigeria has demography of 198 million, which presents a market opportunity but also a health burden on the government. The 2017 was marred by outbreaks of diseases such Lassa fever, which occurred in 718 cases wherein 68 persons died. Between January and July 2018, there have been 115 deaths in confirmed cases and 10 in probable cases. Cerebrospinal meningitis was suspected in 14,518 cases, across 181 local government councils, with 1,166 people reported death. Other outbreaks of include monkey pox and cholera. Cancer is responsible for the deaths of 72,000 Nigerians yearly, according to Wellbeing Foundation Africa (WBFA)’s 2019 research. Doyin Odubanjo, chairman, Association of Public Health Physicians of Nigeria, Lagos Chapter, said disease outbreaks cannot be predicted but get worse when a country fails to address prevention issues squarely.

BUSINESS DAY

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‘Atiku stands for total defeat of Boko Haram’

he Presidential campaign office of Atiku Abubakar, the Presidential candidate of the People’s Democratic Party (PDP) has reacted to a video that tended to discredit Atiku. A statement signed by Paul Ibe, media adviser to HE Atiku Abubakar, said: “Our attention has been drawn to a video being surreptitiously circulated by the Buhari Media Centre, under a satanic pseudonym, ‘Make Nigeria Worse Again’, in which they falsely accuse the Presidential Candidate of the People’s Democratic Party, Atiku Abubakar, of planning to cede parts of Borno State to Boko Haram in a peace deal. “This is completely false and only shows the level of dirty politics and fake news the Muhammadu Buhari administration is prepared to engage in its desperation to cling to power despite its widespread unpopularity. “For the avoidance of doubt, the only plans that His Excel-

Presidential candidate of the Peoples Democratic Party (PDP) and former Vice President of Nigeria, Atiku Abubakar addressing the crowd of supporters at the venue of the PDP Presidential campaign rally in Lafia, Nasarawa State on Thursday.

lency Atiku Abubakar has for Boko Haram is the total defeat of the terrorist sect once and for all. Atiku

Abubakar is not one for ‘technical’ defeats. He has said publicly and privately that if he is elected, both

Group commends Buhari on fuel, labour issues

he Buhari Media Organisation (BMO) has commended the Federal Government for reaching an agreement with the Nigeria Labour Congress (NLC) on the protracted national minimum wage issue. It will be recalled that the NLC had threatened to embark on a nationwide strike if there was no agreement on the N30,000 national minimum wage. In a statement signed by its Chairman, Niyi Akinsiju and Secretary, Cassidy Madueke, the group said it was elated that “with the latest memorandum of understanding signed between the Nigeria Labour Congress and the Federal Government, a bill for the N30,000 minimum wage will be presented to the National Assembly on 23rd

January, 2019 for consideration and enactment into law. “We consider this milestone as a sign of a responsive and responsible government that understands the plight of its workforce. “We also praise the Buhari administration for resolving so many intractable social problems that in the past posed a huge challenge to Nigerians. For example, the effort of the present administration which ensured the availability of premium motor spirit during the Christmas and New Year celebrations is worthy of commendation.” The group recalled that the Major Oil Marketers of Nigeria and the Depot and Petroleum Products Marketers Association, DAPMA had threatened to embark on a na-

tionwide strike before the yuletide, and the negative impact of such action can only be imagined. “We therefore, commend the Buhari administration for taking the bull by the horns and stopping this potentially debilitating action. “We further note that in a bid to resolve the lingering Academic Staff Union of Universities (ASUU) strike; the Federal Government has successfully engaged them and resolved the outstanding issues, which has resulted in the payment of outstanding allowances and salary arrears with the imminent reopening of the universities for uninterrupted academic activities. This again is a demonstration of the federal government’s commitment to the education of Nigerian youths,” it said.

Insecurity: Dogara urges Northern Elders to speak up ...As Atiku promises 70% appointments to youths, women OWEDE AGBAJILEKE, Abuja

peaker of the House of Representatives, Yakubu Dogara, has challenged northern elders to speak out against the ravaging insecurity in the region. Speaking on Thursday at the Peoples Democratic Party (PDP) Presidential Campaign Rally in Lafia, Nasarawa State, the Speaker noted that Nigeria is witnessing destruction because enablers have resorted to worshiping an individual and comparing such a person with God. According to him, next month’s General Election is a referendum on education, insecurity and hunger.

He expressed concern that besides Borno State, insecurity has now escalated to Kaduna, Katsina, Zamfara, Benue, Plateau, Sokoto, Nasarawa States among others. Condemning the conspiracy of silence by Northern elders, Dogara who is currently seeking reelection, said: “When these things was prevalence in 2015 we had Borno Elders, where are Borno Elders now? Where are the leaders of northern Nigeria, where this problem has become endemic? What are they saying? The truth is that if we don’t rise to the challenge sooner than later if things continue this way we are not going to have a country. “So it is our responsibility to

rescue Nigeria from the clutches of insecurity, because without security we cannot even understand the meaning of democracy. Earlier, the PDP Presidential Candidate, Atiku Abukakar, declared that insecurity is escalating in the country because the All Progressives Congress (APC) administration does not know how to govern. He added that the APC is not campaigning because it plans to rig the forthcoming election. Atiku who promised to address unemployment crisis, pledged to give 40 percent of his government to the youth and 30 percent to the women, “making a total of 70 per cent, this is because I want you to succeed us.”

Boko Haram and ISWAP would be wiped off the face of the planet.” “Indeed, former Vice President

Atiku Abubakar has criticised the Buhari administration policy of releasing so called ‘repentant’ Boko Haram members and tied the resurgence of terrorism in the nation to that ill-advised programme,” the release further said. According to Ibe, “Under an Atiku Abubakar administration, every terrorist that is caught will be tried in accordance with the provisions of the law. Atiku Abubakar has zero tolerance for terrorists and has detailed his plan to equip the military to deal decisively with these threats to our national security once and for all. “It is worth noting however, that this fake news video began circulating soon after Vice President Yemi Osinbajo commissioned the Buhari Media Centre on Tuesday, January 8, 2019 in Gwarinpa, Abuja.” “It is very doubtful that this is a coincidence and we call on the public to be wary of such videos and other online propaganda from the Buhari Media Centre to discredit the PDP Presidential candidate,” it further said.

Some leaders in Ogun APC not satisfied with me developing Abeokuta - Amosun RAZAQ AYINLA, Abeokuta

overnor Ibikunle Amosun of Ogun State has cried out that the only challenge he has in All Progressives Congress (APC) in the state chapter which prompted the political crisis as regards his inability to have a successor in the party was his frantic effort to develop Abeokuta, state capital, against all misgivings coming some quarters. Governor Amosun revealed that some selfish leaders within the party, having seen him develop Abeokuta, the political headquarters of Ogun central senatorial district, started campaigning against him for all his action and accused him of developing Abeokuta, Amosun’s country home at the detriment of other regions in the state. Recall that some APC leaders, especially from Ogun east senatorial district being led by former governor, Olusegun Osoba went against Governor Amosun for his agenda to handover to Ogun westYewa/Awori governor in APC in the person of Adekunle Akinlade for which there was a “political gang up” against him which prompted emergence of Dapo Abiodun as governorship candidate of the party. But, Amosun’s caucus of APC was later frustrated out of the party and went to adopt new political party, Allied People’s Movement (APM) which gave a mandate to the embattled Adekunle Akinlade as its governorship candidate, having exhausted all political means

to retrieve their political mandate from APC. Speaking at Owowo Ward 9 of Ewekoro Local Government during flag-off of his senatorial campaign within Ogun central senatorial district, Governor Amosun said no sane governor would abandon the state capital undeveloped and it is uncharitable for anyone to accuse him of developing Abeokuta over other areas. The governor said, though priority was given to the state capital, he has never abandoned other areas of the state in his infrastructure drive in the state, accusing the unnamed leaders of being jealous of his unprecedented achievements as the governor of the state. “Why am I being castigated? Abeokuta was made the state capital over 40 years ago and the only offence I’ve committed is to have developed Abeokuta, but I tell you, no sane governor will neglect Abeokuta, else that governor will see the result. “I have never neglected other areas. We have one of the best flyovers and roads of our administration in Sagamu, there are two flyovers in Ijebu Ode with good roads and the same things are done in Ijebu Igbo and Yewa. “What we have done is that when we do three things in Abeokuta, we do two or one in other places and we are running round day and night to get this done. I am not the first governor in Ogun State but I appreciate what they have done but if anybody castigate me, no governor worth his salt will abandon Abeokuta”, he said.

42 BUSINESS DAY

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

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Does January determine the rest of the year? Nonetheless, markets are beginning to rebound following the statement of the Fed chair, Jerome Powell to be patient and data driven about future rate hikes. The outcome of the negotiations between China and the US on trade protection would as well as the resolution on by the US Senate on the wall budget would determine in most part the rest the year.

AMAMCHUKWU OKAFOR

anuary, the first of the seven months with thirty one days easily passes as one of the strongest months of the year. This is because it follows the business calendar of most organisations and households. In the month, new strategies are initiated; tax planning, recruitment, cost cutting initiatives, re-investment decisions and budget implementation. Some believe that January determines the rest of the year. This phenomenon has been broadly captured as the January Effect. January Effect is a hypothesis that there is a pattern of seasonal anomaly in the financial market where the prices of securities increase in the month of January more than in any other month. It is has been described as the particular tendency of small-cap stock to rise especially before the middle of the month. Even though there are data evidence that suggests the January Effect has become less prominent as markets have corrected for the inefficiency, January still comes with a lot of dramas – political and economic. Global environment - US Equities markets globally got off to a good start in 2018 as gains recorded by key indices suggested momentum for a strong year. However, global equities markets ended the first half of the year relatively flat, advancing slightly on average from the previous year’s close. Despite the largely optimistic broad outlook on global growth (with the IMF revising its global growth forecast for 2018 upwards to 3.9% in April, from 3.8% earlier projected); global markets continue to face the drag effects from trade protectionism sentiments and policy normalization by systemic central banks. By the end of the year 2018 into the New Year, markets were reacting to the fourth and final (for the year) hike in the federal funds rate for the year from 2.25 percent to 2.5 percent. Effective to the expectations of rate hike, the S & P 500 fell by 2.5 percent to 2,530.54 basis points on Monday 19, 2018. The broad market index finished the session low, 2 percent at 2,545.94 basis points, its lowest close for the year. The Dow Jones Industrial Average lost 507.53 points to close at 23,592.98, bringing its

Equity Turnover

two-day losses to more than 1,000 points. With shares of Amazon and Goldman Sachs leading the declines, the Dow and S & P 500 closed Monday down 7.6 percent and 7.8 per-

cent this month, respectively. In as much as the trade war between the US and China continues, Trump goes to a political war against the Senate over $5.7 billion budget funding for

the wall around the Mexican borders. This stalemate degenerated into a partial government shutdown that has carried over into the New Year. The shutdown which is the third since the Trump administration implies that 25 percent of US federal government has no funding, nine departments including Homeland Security, Justice, Housing, Agriculture, Commerce, Interior and the Treasury have been affected, National Parks and Native American tribes not sparing. Currently, over 800,000 workers have been furloughed.

Domestic environment – Nigeria The Nigerian equities market was not left out of the New Year frenzy in 2018 as it extended its prior year’s rally buoyed by rising crude oil prices, and foreign exchange (FX) liquidity. Investors retained an optimistic view of the Nigerian markets; hinged on a positive economic outlook - with strengthened GDP growth expectations of 2.5% for 2018 (as forecasted the World Bank). In Q1 2018, the average daily value traded across all products on the NSE, increased by 96.31 percent to N6.98 billion ($22.84 million), from N3.56 billion in the previous year, 2017. Similarly, the average daily volume traded increased by 125.17 percent to 695.65 million units in Q1 2018, from 308.94 million units in Q1 2017; while the number of transactions recorded during the quarter rose by 113.56 percent. At the end of Q1 2018, the average PE ratio of The Exchange’s listed equities stood at 24.91 compared to 18.83 in the previous year. The equity turnover velocity also increased by 1.44 percentage points to 11.72 percent, from 10.28 percent in Q1 2017. The dividend yield for the 52-week period ending March 29, 2018 was 4.61 percent, compared to 5.97 percent for the previous year. Global risk off sentiments amid uncertainty in the global financial markets as well as uncertainty with regards to Nigeria’s 2019 elections brought in some level of moderation throughout the year. As at January, returns were about 15.98 percent and it dropped to 7.91 percent in April and by May the market returns entered the negative territory (-0.36 percent). The poor performance of the market (ASI) was mirrored across the sectors of the NSE, although in different magnitudes. The financial sector’s performance tracked by movements in the banking and insurance

indices shows that the financial sector relatively outperformed the market. The ASI averaged around -2.71 percent in 2018 compared to the average of -0.86 percent in the banking index and 1.18 percent recorded in the insurance index. The better performance of the financial sector reflects its resilience amidst the downturn due to the level of liquidity usually maintained in the sector. In H1 2018, the industrial sector averaged 9.12 percent to outperform the market (7.57 percent). However, in H2 2018, the trend reversed as sell-offs in the industrial sector dropped average returns to -24.96 percent compared to the market performance of -13.1 percent. The consumer goods sector was the worst performing sector on the NSE in 2018 averaging returns of -10.13 percent in 2018. The poor performance of the sector has mostly been attributed to the lack of foreign exchange in H1 2018 and the resulting increase in the cost of raw materials. The returns in the oil and gas sector averaged -2.68 percent in 2018 compared to the market returns of -2.71 percent. The recovery in crude oil prices in mid2018 boosted investors’ sentiment to the sector as SEPLAT enjoyed the most gain due to its operation in the upstream business. Conclusion: First trading week 2019 As the preceding analyses for 2018 show, the domestic economy does not seem to play to the forces of the January Effect as sweeping global and domestic sociopolitical factors act to alter the trajectory beyond January. The stock market in the first trading week of 2019 seemed to have been bearish as the NSE-ASI depreciated by 1.28 percent while market capitalization appreciated by 0.78 percent to close the week at 30,638.90 and N11.426 trillion respectively. The sentiments are due to the forth coming elections in February as well as the uncertainty surrounding global oil prices and the decision of OPEC on production cuts. The rest of the year largely rest on the outcome of the election more than what happens in January alone.

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Live @ The Exchanges Top Gainers/Losers as at Thursday 10 January 2019 GAINERS Company JBERGER

Market Statistics as at Thursday 10 January 2019

LOSERS Opening

Closing

Change

Company NESTLE

Opening

Closing

Change

N25.85

N28.4

2.55

N1450

N1401.1

-48.9

GUARANTY

N31.3

N33.2

1.9

GUINNESS

N70

N63

-7

DANGCEM

N170

N171.5

1.5

OKOMUOIL

N83.75

N82

-1.75

N26.55

N28

1.45

N5.5

N5.3

-0.2

CCNN

N18.55

N19.45

0.9

N1.91

N1.72

-0.19

ACCESS NEM

ASI (Points) DEALS (Numbers)

3.067

MARKET CAP (N Trn

L-R: Abolaji Oyebo, head, Technology Services, The Nigerian Stock Exchange (NSE); Adeyemi Cahdide-Johnson (SAN), chairman, Nigeria Mortgage Refinance Company (NMRC); Bola Adeeko, head, Shared Services Division, The Nigerian Stock Exchange (NSE); Kehinde Ogundimu, managing director/CEO, NMRC; Sonnie Ayere, founder/chairman, Dunn Loren Merrifield Group and Kanayo Mba, acting chief finance officer, NMRC during a Closing Gong Ceremony in commemoration of the N11billion 13.80% Series 2 Fixed Rate Bonds listed on The Exchange.

of trading session on Thursday January 10. The NSE 30 Index increased by 0.57percent, from 1,324.97points to 1,332.52points. The NSE Banking Index rose by 2.74percent, from 368.68 points to 378.78 points. NSE Consumer Goods Index declined by 1.75percent, from 716.14 points to 703.60points. NSE Industrial Index advanced by 2.24percent, from 1,137.54 points to 1,163.06 points. NSE Insurance Index decreased by 2.05percent, from 116.56 points to 114.17points; while NSE Oil and Gas Index went up by 0.13percent, from 293.79points to 294.17points.

11.007

FCMB shows commitment to Corporate Social Responsibility

Stories by Iheanyi Nwachukwu

from N5.5 to N5.3, down by 20kobo or 3.64percent. The share price of NEM Insurance Plc was also down by 19kobo or 9.95percent, from N1.91 to N1.72. In 3,677 deals stock dealers exchanged 385,291,613 units valued N3.067billion. Custodian Investment Plc, Access Bank Plc, FBN Holdings Plc, Diamond Bank Plc and United Bank for Africa Plc were actively traded stocks on the Nigerian Stock Exchange. The Nigerian Stock Exchange (NSE) All Share Index (ASI) moved up by 0.62percent, from 29,336.80points to 29,517.73points at the close

385,291,613.00

VALUE (N billion)

… Equities gain N67bn as investors buy into recent dip

increased from N26.55 to N28, adding N1.45 or 5.46percent; while Cement Company of Northern Nigeria Plc share price increased from N18.55 to N19.45, gaining 90kobo or 4.85percent. Nestle Nigeria Plc occupied topmost position after its share price declined by N48.9 or 3.37percent, from N1450 to N1401.1. Guinness Nigeria Plc followed after its share price dipped by N7 or 10percent, from N70 to N63. The share price of Okomu Oil Palm Plc also decreased from N83.75 to N82, down N1.75 or 2.09percent; while that of Access Bank Plc declined

3,677.00

VOLUME (Numbers)

Stock market rises by 0.62% igerian stock investors saw the need to take advantage of recent value decline at the Bourse as they rushed to Custom Street on Thursday January 10 buying value stocks seen to be trading below their real values. Some of analysts stock picks for 2019 turned investors delight with resultant impact on their prices. At the sound of closing gong by 2:30pm, no fewer than 21 stocks gained as against 15 losers. The value of stocks listed on the Nigerian Stock Exchange (NSE) increased from preceding day high of N10.940 trillion to N11.007 trillion, representing an increase of N67billion. Meanwhile, the stock market year-todate (YtD) returns currently stands at -6.09percent. For instance, the share price of Julius Berger Nigeria Plc recorded the highest gain of N2.55 or 9.86percent, from N25.85 to N28.4, followed by GTBank Plc which increased from N31.3 to N33.2, up N1.9 or 6.07percent. Also, the share price of Dangote Cement Plc increased from N170 to N171.5, up N1.5 or 0.88percent. Forte Oil Plc also

29,517.73

n line with its commitment to continually empower and impact lives in all segments of the society, First City Monument Bank (FCMB) has handed over a hostel it renovated and equipped with modern facilities to the Federal Nigeria Society for the Blind (FNSB) at its Vocational Training Centre (VTC) located at Oshodi, Lagos state. In addition, an automated water system constructed by the Bank has also been donated to the Society. The gesture forms part of the Bank’s Corporate Social Responsibility (CSR) initiatives, which focus on poverty alleviation, economic empowerment and environmental sustainability. It is aimed at effectively supporting the efforts of the FNSB towards enhancing the standard of teaching, as well as learning of the visually impaired students of the VTC. This is coming on the heels of FCMB’s donation of 15 Braille machines to the Society two and half years ago. The Braille machines (comparable to a typewriter) are designed to aid the visually impaired in reading and writing, with a view to ensuring they have unfettered access to sound education. The FNSB was established 63 years ago. So

far, over 2,000 visually impaired men and women have benefitted from the various training programmes at the centre. Speaking at the commissioning and handover ceremony of the hostel and water system to the Society on January 9, 2019 in Lagos, the Group Head, Corporate Affairs of FCMB, Diran Olojo, said that the Bank recognises the importance of every segment of the society. He added that: ‘’As a corporate organisation, we believe that it is necessary to constantly extend the hand of fellowship, support and love to the physically challenged and other less privileged groups through CSR programmes of this nature. We will continue to champion and execute initiatives that will help and empower a wide spectrum of people, communities and other stakeholders to ensure the emergence of a sustainably progressive society’’. Olojo further assured that: ‘’We will continue to do our best to help remove barriers, give new hope, provide resources and expand possibilities as well as opportunities, so that people with vision impairment and other challenges can achieve their full potential.

Linkage Assurance positive about 2019

L-R: Ike Chioke, managing director, Afrinvest (West Africa) , Mary Uduk, acting director general, Securities and Exchange Commission; Adesuwa Okunbo, managing director, Syntaxis Capital Africa, and Ugo Ikemba, former, commissioner SEC, during the official launch of the Syntaxis Nigeria Growth Fund in Abuja.

nderwriting firm, Linkage Assurance Plc is positive that its business in the New Year 2019 will witness efficiency in operation, quality service delivery to customers and increased value for its shareholders. The underwriter believes that with increased investment in technological infrastructure and as well as quality manpower, which the company has attracted in the outgoing year the future is bright for the company. Daniel Braie, Managing Director/CEO, Link-

age Assurance Plc made the remark at the Company’s 2018 End of the Year Dinner and Awards held at Lekki Coliseum, Victoria Island, Lagos. Braie who commended the staff for their contributions in 2018, said the Company was able to overcome the challenges in the business environment because of the commitment of the staff. “The business environment was very challenging in 2018 to the extent that companies were having difficulties but with God on our side we did not perform badly”.

“We have been able to attract quality staff, better infrastructures to enable us deliver quality service in the coming year, and I am hopeful that we will do better in 2019, he said. Braie however charged the staff to redouble their efforts to sustain the growth achieved so far and the targets it has set for itself as a company. The event was an opportunity for the company to reward its staff who showed outstanding performance in their different departments during the outgoing year.

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Live @ the Stock exchange Prices for Securities Traded as of Thursday 10 January 2019017 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

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Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 153,318.25 5.30 -3.64 396 60,479,777 247,945.80 7.25 -0.69 145 26,963,055 UNITED BANK FOR AFRICA PLC ZENITH BANK PLC 678,164.27 21.60 2.86 400 23,998,316 941 111,441,148 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 254,856.58 7.10 0.71 232 48,866,913 232 48,866,913 1,173 160,308,061 BUILDING MATERIALS DANGOTE CEMENT PLC 2,922,447.02 171.50 0.88 85 97,994 104,081.14 12.00 2.56 47 286,592 LAFARGE AFRICA PLC. 132 384,586 132 384,586 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 376,604.52 640.00 - 11 25,438 11 25,438 11 25,438 1,316 160,718,085 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,900.00 95.00 - 1 95 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 11,300.89 45.20 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 15,876.20 5.95 -9.85 2 101,480 3 101,575 3 101,575 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 3 101,575 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 1 400 OKOMU OIL PALM PLC. 78,220.62 82.00 -2.09 17 1,210,156 PRESCO PLC 62,000.00 62.00 - 34 124,560 52 1,335,116 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,590.00 0.53 - 9 168,063 9 168,063 61 1,503,179 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 767.71 0.29 - 1 298 JOHN HOLT PLC. 186.79 0.48 - 0 0 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 50,809.99 1.25 5.93 71 10,476,082 U A C N PLC. 25,931.67 9.00 - 30 364,205 102 10,840,585 102 10,840,585 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 37,488.00 28.40 9.86 52 315,922 ROADS NIG PLC. 165.00 6.60 - 0 0 52 315,922 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 3,923.58 1.51 -8.48 5 377,000 5 377,000 57 692,922 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 12,135.72 1.55 - 2 945 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 137,994.12 63.00 -10.00 64 1,305,974 INTERNATIONAL BREWERIES PLC. 266,471.72 31.00 - 2 1,010 NIGERIAN BREW. PLC. 631,755.26 79.00 0.13 89 562,743 157 1,870,672 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 28,500.00 5.70 1.79 40 332,097 DANGOTE SUGAR REFINERY PLC 165,600.00 13.80 1.10 41 623,327 FLOUR MILLS NIG. PLC. 78,727.29 19.20 1.86 41 656,782 HONEYWELL FLOUR MILL PLC 8,802.52 1.11 1.83 27 866,143 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 775.17 4.35 - 1 5,000 NASCON ALLIED INDUSTRIES PLC 47,689.89 18.00 - 13 42,340 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 163 2,525,689 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,782.02 10.00 - 13 27,622 NESTLE NIGERIA PLC. 1,110,590.67 1,401.10 -3.37 37 138,541 50 166,163 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,690.67 4.50 - 31 297,579 31 297,579 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 47,645.72 12.00 - 16 21,019 UNILEVER NIGERIA PLC. 212,565.20 37.00 - 13 62,100 29 83,119 430 4,943,222 BANKING DIAMOND BANK PLC 46,089.17 1.99 5.85 290 37,147,630 ECOBANK TRANSNATIONAL INCORPORATED 247,718.94 13.50 - 19 72,354 FIDELITY BANK PLC 56,211.11 1.94 2.11 63 6,284,796 GUARANTY TRUST BANK PLC. 977,115.15 33.20 6.07 190 9,549,176 15,616.05 0.53 - 25 4,327,310 JAIZ BANK PLC SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 57,005.03 1.98 - 396 4,900,476 UNION BANK NIG.PLC. 174,724.52 6.00 - 38 742,654 UNITY BANK PLC 10,520.40 0.90 -1.10 5 365,500 22,373.19 0.58 3.45 36 1,572,417 WEMA BANK PLC. 1,062 64,962,313 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,296.73 0.62 3.33 14 914,542 AXAMANSARD INSURANCE PLC 18,900.00 1.80 - 10 1,919,203 CONSOLIDATED HALLMARK INSURANCE PLC 2,660.00 0.38 - 0 0 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 2,945.90 0.20 - 0 0 GOLDLINK INSURANCE PLC 2,411.47 0.53 - 0 0 GREAT NIGERIAN INSURANCE PLC 1,913.74 0.50 - 0 0 GUINEA INSURANCE PLC. 1,412.20 0.23 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,197.03 0.30 6.67 11 1,993,339 LAW UNION AND ROCK INS. PLC. 2,362.98 0.55 10.00 6 204,600 LINKAGE ASSURANCE PLC 5,200.00 0.65 -9.72 3 150,000 MUTUAL BENEFITS ASSURANCE PLC. 1,600.00 0.20 -4.76 6 576,300 NEM INSURANCE PLC 9,082.47 1.72 -9.95 31 809,491 NIGER INSURANCE PLC 1,702.69 0.22 - 2 288,104 PRESTIGE ASSURANCE PLC 2,691.28 0.50 - 3 96,287 REGENCY ASSURANCE PLC 1,333.75 0.20 -4.76 3 180,100 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 2 25,000 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 5.00 14 2,256,816 WAPIC INSURANCE PLC 5,353.10 0.40 - 35 936,925

140 10,350,707 MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 3,315.62 1.45 -9.37 3 573,944 NPF MICROFINANCE BANK PLC 3 573,944 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,116.00 0.98 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,922.05 1.42 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 4,192.00 0.37 -9.76 1 100,000 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 1 100,000 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,880.00 3.94 - 27 217,999 CUSTODIAN INVESTMENT PLC 34,114.81 5.80 3.57 29 120,270,094 DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 33,664.61 1.70 0.59 49 2,168,567 FCMB GROUP PLC. ROYAL EXCHANGE PLC. 1,080.53 0.21 - 1 100,000 472,601.52 46.15 - 12 63,031 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 16,740.00 2.79 -0.36 73 2,698,655 191 125,518,346 1,397 201,505,310 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 2 631 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 852.75 0.24 -4.00 2 205,800 4 206,431 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 7,425.00 4.95 - 0 0 FIDSON HEALTHCARE PLC GLAXO SMITHKLINE CONSUMER NIG. PLC. 14,589.69 12.20 - 11 43,634 2,401.00 2.45 - 8 16,354 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,208.55 0.70 - 8 21,104 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 325.23 1.50 - 0 0 PHARMA-DEKO PLC. 27 81,092 31 287,523 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 0 0 0 0 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 648.00 6.00 - 1 5,000 381.11 0.77 - 0 0 TRIPPLE GEE AND COMPANY PLC. 1 5,000 PROCESSING SYSTEMS CHAMS PLC 939.21 0.20 - 0 0 E-TRANZACT INTERNATIONAL PLC 16,590.00 3.95 - 0 0 0 0 1 5,000 BUILDING MATERIALS BERGER PAINTS PLC 2,492.48 8.60 - 2 3,448 CAP PLC 22,050.00 31.50 - 2 100 255,641.09 19.45 4.85 13 232,520 CEMENT CO. OF NORTH.NIG. PLC FIRST ALUMINIUM NIGERIA PLC 696.42 0.33 - 0 0 MEYER PLC. 313.43 0.59 - 0 0 1,999.41 2.52 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 1,279.20 10.40 - 0 0 17 236,068 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 3,170.38 1.80 - 12 431,555 12 431,555 PACKAGING/CONTAINERS BETA GLASS PLC. 33,498.12 67.00 - 0 0 GREIF NIGERIA PLC 388.02 9.10 - 0 0 0 0 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 29 667,623 CHEMICALS B.O.C. GASES PLC. 1,577.57 3.79 - 1 27 1 27 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 50.60 0.23 - 0 0 0 0 1 27 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 14 629,376 14 629,376 INTEGRATED OIL AND GAS SERVICES OANDO PLC 51,590.36 4.15 -2.35 86 1,503,430 86 1,503,430 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 66,349.53 184.00 - 6 10,139 CONOIL PLC 16,134.39 23.25 - 10 17,403 ETERNA PLC. 5,607.82 4.30 8.86 39 761,120 FORTE OIL PLC. 36,469.47 28.00 5.46 42 542,252 MRS OIL NIGERIA PLC. 7,055.81 23.15 - 1 100 TOTAL NIGERIA PLC. 67,972.27 200.20 - 10 2,850 108 1,333,864 208 3,466,670 ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 19,988.83 2.05 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 411.72 0.35 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,475.89 4.20 - 2 5,865 TRANS-NATIONWIDE EXPRESS PLC. 328.19 0.70 - 0 0 2 5,865 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 0 0 IKEJA HOTEL PLC 2,889.53 1.39 - 3 41,000 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 1 111 46,362.46 6.10 - 1 50 TRANSCORP HOTELS PLC 5 41,161 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 302.40 0.50 - 0 0 LEARN AFRICA PLC 956.60 1.24 - 1 18,000 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0

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Activist shareholders score with record moves in 2018

Campaigns targeted 226 companies as drive for better returns spurs new tactics Lindsay Fortado

ctivist shareholders, emboldened by recent successes, have shattered previous records in 2018 by targeting the largest number of companies ever, deploying the most capital and winning a greater number of board seats than ever before. The record investor actions were driven by a greater number of investors adopting an activist playbook, the rapid rise of the strategy in Europe and Asia and a buoyant deals market, said Jim Rossman, the head of shareholder advisory at Lazard, which compiled the data. He added that an increasing number of asset managers were willing to throw their support behind hedge funds clamouring for change. “Activists have been able to act with a bit more confidence because of the support they’re getting from the investor community,” said Mr Rossman. Activists such as Elliott Management, Third Point, Starboard Value, Trian Partners and ValueAct buy up stakes in companies in order to lobby for change that they hope will improve the target’s share price. The strategy, once derided as seeking only short-term gains at the expense of long-term shareholder interests, has become mainstream as hedge funds pursue higher returns for their fees and their campaigns become more sophisticated and more prevalent while targeting larger companies and in more regions of the world. A record 226 companies faced activist campaigns last year, up from 188 in 2017, and the amount of capital invested in the targets was up to a high of $65bn.

Some of the biggest campaigns of 2018 included Third Point’s proxy fight with Campbell Soup, Pershing Square and Third Point’s efforts to drive United Technologies to split into three separate businesses, and Elliott’s nascent campaign to push Pernod Ricard to improve its profit margins. “Activism levels continue to increase, driven by attempts to force sales to financial sponsors as well as an uptick in European campaigns,” said Bill Anderson, global head of Evercore’s activism and raid defence business. “Over 20 per cent of the S&P 500 have a leading activist in their stock, so 2019 should be another year of heightened activist pressure.” The most common objectives for activist campaigns last year were a sale of the company, a boost in an acquisition offer and urging a break-up or divestiture, according to Lazard’s research. One-third of all campaigns last year were in Europe and Asia Pacific, the highest levels ever initiated in those regions. There was one-fifth increase in the number of investors who launched campaigns from the previous year, to 131, and one-third rise in the number of investors who were deploying an activist strategy for the first time, to make for a total of 40 “first-timers”. Asset managers, including T Rowe Price, Janus Henderson and GBL, are taking a more active role in major campaigns, sharing their views with company management and other shareholders. “In general the climate among traditional asset managers is they’re more willing to take sides and speak up, and that’s been very helpful for the activists,” said Mr Rossman. “A lot of that is happen-

Banks raise bets on prime broking for struggling hedge funds Clients have taken a pummelling, but lenders are still jostling to win their business

Lindsay Fortado and Laura Noonan

ig banks are throwing extra resources into prime broking, betting on their embattled hedge fund clients to provide a much-needed revenue boost as other areas falter. Despite hedge funds taking a pummelling over the past three months in choppy market conditions, executives in the banks’ prime broking divisions that handle their trading and lend them money still expect the smartest managers to outperform. At the same time, the banks’ other significant sources of revenue, such as advising companies on mergers and acquisitions or trading fixed income, currencies and commodities, are more market-dependent. The final three months of last year was the quietest period for mergers and acquisitions in more than a year, in a sign that market turbulence was giving dealmakers pause. Fixed income trading revenues are also falling, while companies are shying away from

doing initial public offerings. Jason Sippel, head of global equities and prime services at JPMorgan Chase, said that even if the market conditions for hedge funds worsened, the bank still wanted to grow in the space. “Our management team has given us marching orders to take market share in equities, that is mission one,” he said. “Scale is critically important.” One of an investment bank’s most capital-intensive activities, prime broking has been in and out of fashion with banks since the 2008 financial crisis, especially among European players who initially retreated before piling back in two years ago. Post-crisis regulations require banks to have more capital for their prime brokerage activities, which has depressed their return on equity and made the area less attractive overall. The high capital demands reflect the inherent risk of lending hedge funds money which is then put into equities, derivatives and Continues on page 48

Elliott Management, backed by billionaire Paul Singer, has spurred a wave of activism from other sophisticated investors © Bloomberg

ing behind the scenes, but we’re working on these campaigns and we’re seeing the increase.” Elliott Management, Paul Singer’s $35bn hedge fund, continued to dominate the activist landscape. The fund launched 22 new campaigns last year, more than twice that of the next-biggest mover, ValueAct with nine fresh targets, and targeted companies in more countries than any other activist investor. Elliott also topped the list with the largest market value of its current activist positions at $14.7bn. They were followed by ValueAct with $12.6bn deployed, Cevian with $11.2bn and Trian with $10.1bn. Despite the record year of action, it is not clear that the surge will continue at a time of increasing

market turmoil. “It might be hard to match this year, but already we started the year with [Edward] Bramson demanding a board seat at Barclays and Elliott making a bid for QEP,” said Mr Rossman. “I’m expecting a busy year.” “I think the volatility we’ve seen provides opportunities, but it also makes it more challenging,” he added. “The inherent challenge for stock pickers is to pick their spots, but the volatility can make it harder for everyone to see where the real opportunities lie, so it could have a dampening effect.” But it could also reduce valuations in some sectors that activists had avoided because they felt valuations were too high, providing new targets, said Mr Rossman. That could include the energy sector as

oil prices remain in a trough, bank stocks and the wider financial sector, and technology stocks. A reduction in deals could also dent activism since so many campaigns were linked to M&A, he said. Mr Rossman said that a trend he predicted at the start of 2018, that activists could branch into private equity strategies, would continue this year after Elliott went on a buyout spree in recent months. “It’s really just Elliott that’s been doing this, but what I’m sensing is that some of the large PE firms are spending time talking to the activists and trying to ferret out ideas,” he said. “We thought that there would be more crossing over of those two groups, and we think there will be more blurring of the lines this year.”

Macy’s sparks $30bn retail wipeout after guidance cut Shares in US department store chain drop almost a fifth Peter Wells

acy’s led a broad sell-off that wiped more than $30bn from the value of US retailers on Thursday after the department store chain cut sales and earnings guidance for its fiscal year, less than two months after upgrading it, in a move that sent shares tumbling by nearly one-fifth. Down 19.4 per cent in morning trade at an 11-month low of $25.58, the Cincinnati-based retailer was eyeing its biggest oneday drop on record as investors digested the underwhelming holiday trading update. While its holiday season began with a strong Black Friday, Macy’s said things weakened in the middle of December and did not recover until the week of Christmas. As a result, the retailer now projects comparable sales growth, a key industry metric, of just 2 per cent in fiscal 2018, down from the range of 2.3 per

cent to 2.5 per cent it had been bumped up to in mid-November. Earnings are expected to come in the range of $3.95 to $4.00 a share, compared with mid-November guidance of $4.10 to $4.30 a share. The disappointment weighed on rivals, prompting some companies like Target, which reported solid holiday sales, to swing to losses from gains in pre-market trading. Kohl’s tumbled more than 8 per cent while JC Penney shed 6 per cent. The S&P 500 retail index was down 2 per cent, on track for its biggest one-day drop since December 21, with an overall decline in market capitalisation of about $32bn. Macy’s shed about $1.9bn in market value. Jeff Gennette, chief executive, said in an update that there was a strong performance during the holiday period across categories including fine jewellery, women’s shoes, fragrance and dresses, among others, but this was “largely offset” by un-

derperformance in areas such as women’s sportswear, fashion watches and cosmetics. “We are revising the guidance we provided in November and will continue to take the necessary steps in January to ensure a clean inventory position as we enter fiscal 2019,” Mr Gennette said. Macy’s said comparable sales rose 0.7 per cent from a year ago during the NovemberDecember period, marking a second consecutive year of positive holiday comparable sales. It also pointed out that even its revised guidance for full-year comparable sales was still double that given in February 2018. Still, investors were unimpressed and thumped the stock as much as 19.6 per cent lower in morning trade. At these levels, the stock is on track for its biggest one-day drop since it listed in 1992, eclipsing its previous record tumble of 17.5 per cent on October 10, 2008.

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FT Banks raise bets on prime broking for struggling...

Liberty Media discusses deal to take holding in agent to the stars

Continued from page 47

other assets whose values can fluctuate wildly. Banks make hedge funds deposit “margins” to cover potential losses, but if asset prices fall too quickly, those margins can be inadequate. As European banks retreated, US rivals have consolidated their grip on the market, with Morgan Stanley, JPMorgan and Goldman Sachs dominating the top spots. Now Citigroup, which was traditionally strong with foreign exchange and fixed income strategies, is also rapidly expanding in the hopes of winning market share from a wider range of hedge funds. In Europe, Barclays’ prime business is also expanding, while BNP Paribas is quietly adding resources in the hopes of winning more business. Deutsche Bank promised to cut back prime under its latest restructuring, having already lost some top hedge fund clients when it faced worries about its own future. But Germany’s biggest lender is nonetheless still hoping to woo back clients. The potential dangers to banks from prime broking — where most risk stems from counterparties rather than market direction — were laid bare in mid-December when it emerged that Citi faced losses of up to $180m on an Asian hedge fund’s foreign exchange trade that went bad. The bullishness of the big banks on prime was rewarded in the first half of 2018, when prime broking revenues across the world’s 12 biggest investment banks rose more than 15 per cent, according to data from industry monitor Coalition. But the world has changed since then. Hedge funds suffered their worst year in seven years. Hedge Fund Research’s index of all strategies is down 4.07 per cent for 2018. Industry veterans including Jabre Capital and Highfields Capital Management, which once managed as much as $5bn and $12bn respectively, have shut down. Others are bracing for a potential wave of investors asking to redeem their money in the first quarter if performance continues to decline. Money has already started to leave hedge funds as investors grow jittery about returns, as well. Investors pulled $6.43bn from hedge funds in November — the industry’s third consecutive month of outflows — leading to a contraction in the overall assets managed as performance also fell, according to eVestment. “The concern for our business model would be if our clients were battening down the hatches and not doing anything,” said the head of prime brokerage at a top investment bank. “We don’t see that happening.” JPMorgan, which leapfrogged Goldman last year to claim second spot after Morgan Stanley on the influential ranking from industry monitor Coalition, expects further growth and has made no secret of aspiring to the top spot. Despite the recent turmoil, Dean Backer, head of prime brokerage at Goldman, said he did not expect to see significant consolidation in the hedge fund industry, primarily because if money is potentially redeemed from a fund, it is most likely to be reinvested in other hedge funds. Still, some closures will be inevitable, he said.

Friday 11 January 2019

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Formula One owner seeks stake in Creative Artists Agency, which represents Lady Gaga Matthew Garrahan

Felix Tshisekedi, leader of the Congolese main opposition party, the Union for Democracy and Social Progress, pictured after casting his vote in Kinshasa on December 30 © Reuters

Opposition leader declared winner in Congo election Shock victory by Tshisekedi is rejected by rivals and could prolong political crisis Tom Wilson

he Democratic Republic of Congo named opposition leader Felix Tshisekedi as the winner of last month’s contentious presidential election, in an announcement that was rejected by other opposition candidates and could prolong the country’s dangerous political crisis. The head of the country’s election commission said in the early hours of Thursday that Mr Tshisekedi had won the delayed election with about 39 per cent of the vote, defeating another opposition candidate Martin Fayulu, who finished second, and President Joseph Kabila’s chosen successor Emmanuel Shadary, who finished third. Mr Tshisekedi’s surprise victory followed statements this week from his party that it had met with Mr Kabila’s representatives to discuss a transition, stoking reports that the two sides had reached a deal to block Mr Fayulu from power. The country’s powerful organisation of Catholic bishops, which ran the biggest election monitoring mission, told diplomats last week that Mr Fayulu was in an unassailable lead. It publicly warned the election commission, widely believed to be aligned with the government, not to distort the results.

Jean-Yves Le Drian, French foreign minister, on Thursday cast doubts on Mr Tshisekedi’s victory. “We must have clarity on these results, which are the opposite to what we expected,” Mr Le Drian told CNews, according to Reuters. “The Catholic Church of Congo did its tally and announced completely different results.” While Mr Tshisekedi thanked Mr Kabila for his backing, Mr Fayulu refused to accept the result and called on election observers to reveal “who really was our people’s choice”. The mistrust generated by the delayed announcement of results and the rumoured backroom dealing has turned what might have looked like a momentous victory for Congo’s biggest opposition party into a potentially explosive scenario, said Jason Stearns, director of the Congo Research Group at the Center on International Cooperation, a New York think-tank. “This is a relatively volatile, unpredictable situation,” Mr Stearns said. “Tshisekedi’s victory goes against what the Catholic Church is reported to have said in private, and is likely to be contested by many in the opposition. The looming question for many remains: was there a deal struck between Tshisekedi and Kabila to enable this victory?” Congo has never had a transfer of power via the ballot box and many of

its 80m people appeared desperate for change as they queued to place their ballots on December 30. In office since 2001, Mr Kabila was due to step down in 2016 but delayed elections and held on to power, sparking violent protests in which dozens died. Under domestic and international pressure Mr Kabila agreed to step down in August, naming the former interior minister, Mr Shadary, to run in his place. Mr Shadary benefited from the full support of the state on the campaign trail but Mr Tshisekedi, Mr Fayulu and other opposition candidates promised a once-in-a-generation opportunity for change that resonated with voters across the country, who voted for opposition candidates in huge numbers. Given the widespread support for a transfer of power, the possibility of a deal between Mr Kabila and Mr Tshisekedi had increased the likelihood of violent protests in the weeks ahead, said Mvemba Dizolele, a Congolese lecturer at the Johns Hopkins University School of Advanced International Studies in Washington. “If [Mr Tshisekedi] really won fair and square in a situation like this where the people really want a break with the past, why is he so eager to get into a deal with the old guard,” Mr Dizolele said. “It kills the credibility of the entire process and from the outset dilutes [Mr Tshisekedi’s] legitimacy.”

Wall Street battles for supremacy in volatility market Asset managers vie to launch replacement for iconic VXX fund Richard Henderson and Joe Rennison

fight for assets has erupted among volatility funds that allow investors to bet on gyrations in the stock market, as the current market-leading exchange traded product enters its final days. Barclays’ $700m exchangetraded note, known by the ticker VXX, was the first of its kind when it launched in January 2009. The fund buys futures contracts on the Vix volatility index, also known as Wall Street’s “fear gauge”, which typically rises as equity prices fall. However, unlike more traditional exchange traded funds, ETNs are structured as bonds with a fixed maturity. Barclays is hoping to lure investors to a successor ETN called VXXB when its predecessor dies on January 29, but sharp-elbowed challengers have spotted an opportunity to knock the bank from its pole position. “There is a clash to see who will

replace that product,” said Nick Cherney, head of exchange-traded products for Janus Henderson, who was also on the team that first created Barclays’ VXX. “Everybody is competing for that flow.” VelocityShares, an arm of fund manager Janus Henderson, this week clipped fees on a replica product called VIIX to try to lure assets away from Barclays, dropping its “expense ratio” to 70 basis points from 75bp, after cutting the rate from 89bp in June. The move undercuts the 89bp charged on Barclays’ VXX and VXXB products. Barclays is hoping VXX’s size and volume — trading 20 times more frequently than the $161m VIXY, its leading challenger — will encourage investors to migrate to VXXB. Barclays owns the majority of the $184m in assets in its replacement VXXB ETN to boost liquidity and encourage investors to switch from VXX. Yet ProShares, another aggressive ETF provider, is also keen to gather assets for its Vix Short-term Futures ETF, known as VIXY.

“It’s a unique opportunity. You have to make hay while the sun shines and right now the sun is shining,” said Ben Fulton, who runs ProShares’ tactical products group. He declined to comment on the prospect of cutting fees for VIXY, which has a 85bp expense ratio. Vix-linked products have became popular with investors in recent years, leading investment groups to launch more than 40 different funds, with VXX and XIV, its mirror-image “short” Vix fund backed by Credit Suisse, by far the most popular. Vix funds that bet on turbulence have seen losses in the years since the crisis as markets have remained largely calm, but that came to an abrupt end in February last year. Exchange traded products that bet on volatility remaining subdued were hit hard, forcing Credit Suisse to shutter XIV. But VXX and similar “long” volatility products saw hefty short-term gains. Indeed, VXX went out with a bang before its scheduled demise, returning almost 68 per cent last year — its only positive year since its birth.

ormula One owner Liberty Media is in talks to invest in Creative Artists Agency, the entertainment and sports group that represents stars from Lady Gaga to Cristiano Ronaldo, according to people briefed on the discussions. CAA is one of Hollywood’s most powerful entertainment agencies and has the industry’s largest sports representation business with top stars from the NFL, NBA and Major League Baseball on its books. It also advises on sports media and commercial deals. Liberty Media’s interest in a representation powerhouse points to a convergence between rights holders, distribution channels and talent and is indicative of other shifts in the media sector. An investment in CAA would give Liberty greater negotiating leverage for its other businesses — namely Formula One. It knows CAA well, having hired the agency to sell its sponsorship rights after Liberty Media bought the motorsport in 2017. Liberty Media is run by Greg Maffei, the right-hand man of its billionaire chairman John Malone. Mr Maffei is the main architect of a strategy that has seen Liberty assemble a portfolio of media, sports and cable assets, including baseball’s Atlanta Braves, SiriusXM satellite radio and LiveNation Entertainment, the concert booking and ticketing group. CAA is controlled by TPG, the private equity firm, which has a stake of more than 60 per cent but has not been involved in the CAA-Liberty Media discussions, according to a person with knowledge of the talks. Two people briefed on the negotiations cautioned that there was no guarantee they would lead to a deal. A TPG spokesman said it received regular approaches about its investments but that it was not in “active discussions” regarding the CAA stake. CAA and Liberty Media declined to comment. It is unclear if Liberty wants to buy all of CAA but its record suggests the acquisition of a substantial stake would be more likely. It tends to invest in businesses rather than buy them outright, seeking control and influence by using leverage, board presence and complex, tax-driven dealmaking. CAA has added other external shareholders in recent years, selling minority stakes to Temasek, the Singapore-based investment fund, and China’s CMC Capital Partners. Prices were not disclosed but when TPG increased its stake in CAA four years ago the deal valued the agency at more than $1bn. Endeavor, a big CAA rival in Hollywood talent and sports representation, has diversified into other entertainment properties, acquiring Ultimate Fighting Championship and Professional Bull Riders, as well as the Frieze art fair and IMG, the sports marketing and fashion group. CAA is run by managing partners Bryan Lourd and Kevin Huvane and the agency’s president Richard Lovett. It was founded in 1975 by a group of talent agents that included Michael Ovitz and Ron Meyer, which built it into Hollywood’s dominant agency.

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Wall Street drops amid US shutdown tensions

Global equities fail to benefit after Fed signals caution on rates

Kate Allen and Hudson Lockett

all Street is following European equity markets downwards as the positive glow from this week’s US-China trade negotiations fades and tempers fray in Washington over the ongoing government shutdown. The S&P 500 index is 0.3 per cent lower at 2,577 in mid-morning New York trade. The FTSE 100 is up 0.4 per cent after earlier trading down by as much as 0.6 per cent, and the Europe-wide Stoxx 600 is 0.1 per cent firmer after falling 0.7 per cent in early trading. “The breakdown of talks on the US government shutdown has made investors worry a little,” said Paul Donovan, chief economist at UBS Global Wealth Management. “The emphatic way in which the talks fell apart may raise investor concerns about what the next two years in Washington is likely to look like.” Tokyo’s Nikkei closed 1.3 per cent lower and China’s CSI 300 index of Shanghai and Shenzhenlisted stocks closed 0.2 per cent down, although Hong Kong’s Hang Seng gained, up 0.2 per cent. The US dollar is slightly up after a tumble prompted by expectations of a more cautious policy approach from the US Federal Reserve. The publication of the minutes to the Fed’s December meeting eased investors’ fears that further rate hikes were imminent. Meanwhile China’s renminbi touched a five-month high as analysts tipped Beijing to ratchet up easing and stimulus measures in the wake of official data out on Thursday that pointed to weaker inflation in December. Capital Economics economist Julian Evans-Pritchard said slower inflation gave Beijing “plenty of room” to loosen monetary policy,

adding: “If anything, cooling factory gate inflation will strengthen the case for the central bank to do more to ease financial pressure on industrial firms including by cutting benchmark lending rates”. The stock market moves came despite China’s ministry of commerce releasing a statement characterising trade negotiations with the US that concluded on Wednesday as “extensive, deep and meticulous”, suggesting investor optimism for a resolution to the two countries’ trade war was waning. Forex and fixed income The dollar index, which tracks the US currency against a basket of international peers, reversed early losses to trade 0.2 per cent up on the day. That followed a rough Wednesday session that saw the index tumble to its lowest level in three months on expectations the Fed would take its time on further rate rises and partisan bickering in Washington over the ongoing government shutdown. The dollar’s weakness saw China’s currency strengthen to its firmest level against the dollar in more than 150 days. The onshore renminbi, which trades within two per cent in either direction of a midpoint set each day by the People’s Bank of China, gained as much as 0.5 per cent to Rmb6.7845 per dollar, its strongest level since August 2018. The offshore rate strengthened by as much as 0.4 per cent to Rmb6.7851. Sterling is 0.3 per cent lower at $1.2752 as the UK Parliament debates the government’s EU departure plans. Sovereign bond markets were little moved with yields, which move inversely to prices, on 10year US Treasuries down 1 basis point at 2.71 per cent. The 10-year German Bund yield is down 2bp at 0.20 per cent.

Norwegian watchdog censures Nasdaq for failure to supervise power traders Philip Stafford

he Norwegian markets regulator has censured Nasdaq’s commodities exchange in Oslo for supervisory failures after a trader blew a €114m hole in the stability fund that ensures the safety of derivatives trading last year. The business failed to adequately monitor its trading members or the traders’ positions limit the regulator had set, a report on Thursday from Finanstilsynet, the Norwegian financial supervisory authority, said. Authorities have been investigating the market dislocation last September when Einar Aas, one of Norway’s best known power markets traders, was unable to maintain his positions in the German and Nordic power markets after prices went sharply against him. His outsized positions blew through several of the layers of protection at Nasdaq’s clearing house in Sweden, which is designed to insulate the market from a default. But Finanstilsynet said the Nor-

wegian arm had relied too much on sharing resources within the wider Nasdaq group, while some controls were not in compliance with requirements set out in Mifid II. It “censures the company for depending too heavily on the monitoring carried out by Nasdaq Clearing, whose objective differs from that of the company,” Finanstilsynet said. Furthermore Nasdaq’s investigations into the incident had been “inadequate” and the watchdog criticised Nasdaq “for not telling its supervisory authority on its own initiative.” The Norwegian regulator also discovered that unidentified deputies for Mr Aas had entered into trades on the exchange via Mr Aas’s membership. Nasdaq said it had received the report. “We are currently reviewing it in detail to address any concerns. We continue to communicate and work with regulators, our members and other stakeholders in order to further enhance our exchange and commodities business,” it said in a statement.

BlackRock cuts jobs as industry comes under pressure Strategies revised in response to more challenging market conditions Robin Wigglesworth

lackRock will cut staff by 500 to free up resources to focus on new priorities such as fee-rich alternative strategies and faster-growing markets, underscoring how the biggest players are revising their strategies in challenging industry conditions. While the world’s biggest investment group, with about $6.4tn under management, remains comfortably profitable — with a margin of more than 40 per cent — the entire asset management industry is under increasing pressure on fees at a time of weakening investor sentiment. That has sent the average share price of listed US investment management groups down nearly 26 per cent last year, with BlackRock’s stock dropping 24 per cent. On Wednesday chief executive Larry Fink announced a management reshuffle, and on Thursday, Rob Kapito, the group’s president, followed up with a rare announcement about the round of job cuts. The redundancies amount to about 3 per cent of BlackRock’s 14,900 employees. Mr Kapito stressed that the headcount would still be about 4 per cent higher than a year ago.

“After several years of meaningful headcount growth, we are making some changes this week to the size and shape of our workforce,” Mr Kapito said in a company-wide memo seen by the FT. “BlackRock is a growth company, and growth requires investment. The changes we are making now will help us continue to invest in our most important strategic growth opportunities for the future.” The asset manager plans to plough the savings into some of its main priorities, such as enhancing its factor investing, exchange traded funds and illiquid alternative strategies in private debt and equity. It is also planning greater investments in technology and building up distribution in fastergrowing markets around the world. “While key competitors will be playing defence, BlackRock is continuing to invest in the critical strategic initiatives that will fuel our growth in the years ahead,” Mr Kapito said in the memo. “Even in volatile markets and with significant industry headwinds, we can find opportunities for growth.” BlackRock, and particularly its cheap passive index investing business — whose crown jewel is the $1.8tn iShares ETF empire — has been a moneymaking machine

since the financial crisis, sucking up more than $1bn a day on average in 2017. It started to splutter as markets became more turbulent last year, sending its long-term net inflows to a two-year low of $10.6bn in the third quarter. ETF flows picked up strongly in the fourth quarter, however, and BlackRock is expected to deliver creditable results again when it reports earnings next week. On Wednesday, Mr Fink announced that Mark Wiedman, the head of BlackRock’s index investing business, would be given a new enlarged role that would put him in charge of its international operations, corporate strategy and marketing. Although there is no suggestion that Mr Fink is presently considering stepping down from the company he founded three decades ago, the move positions Mr Wiedman as a frontrunner. “The changes transforming our industry put a premium on strategy to drive growth, on unifying our focus on international markets, and on using our brand to drive our business,” Mr Fink wrote in the memo sent out on Wednesday. “Mark will work with me and the rest of our senior leadership team to achieve these objectives.”

The ‘China shock’ has not been as bad as Donald Trump thinks Growth in service sector jobs belies the president’s vision of American ‘carnage’ Gillian Tett

f you were to ask most ordinary American voters what has happened to their country’s manufacturers in recent years, they might howl with horror or mutter about “carnage”. After all, Donald Trump swept to power alleging that Chinese competitors have “killed” American factories and jobs. Hence the simmering USChina trade war, and this week’s highstake talks in Beijing. But if you want a more accurate picture of what Chinese competition has done to US industry, it is worth looking at some material presented at last weekend’s American Economics Association’s convention in Atlanta. In recent years, an army of economists has analysed the issue that sparks Mr Trump’s ire: the impact of Chinese competition on America. And while this number-crunching supports the president’s rhetoric in some areas, the data also suggest it is time to reframe the debate — away from manufactur-

ing to services. Let us start with the place where the facts back Mr Trump. Yes, in recent decades, the US has seen traditional manufacturing jobs shrivel dramatically. Moreover, studies by economists such as David Autor show this decline was most stark in regions and industries exposed to Chinese competition. Sometimes this was because American factories closed their doors, or moved overseas. But, as the economists Teresa Fort, Justin Pierce and Peter Schott told the AEA, US companies have also replaced human workers with robots at home, often to cut costs because of overseas competition (and, as they stress, it is often hard to disentangle precisely whether it is robots or trade displacing most jobs). This process often inflicts enormous local pain, or the economic “carnage” that Mr Trump talks about. A second paper co-authored by Prof Autor and presented to the AEA shows that this shock is correlated with a collapse in marriage rates (because it is mostly the men, not women, who

lose work, making them less attractive partners). Other research also shows correlations with rising opioid addiction and child poverty rates. Worse still, the impact of a “China shock” is magnified across the economy by house prices, as the economists Robert Feenstra, Hong Ma and Yuan Xu told the AEA. This all makes for grim reading. But there is also a big caveat — more accurately, a silver lining to this cloud — that Mr Trump has hitherto ignored: while so-called manufacturing jobs have shrivelled, this does not capture what has happened to “manufacturing firms”. Calculations from Profs Fort, Pierce and Schott show that between 1977 and 2012, the number of “manufacturing firm workers” employed in “manufacturing plants” halved from just under 20m to nearer 10m. However, the employees in “non-manufacturing plants” that were owned by “manufacturing firms” rose from 13m to 23m, primarily due to an explosion in service sector jobs such as design and IT.

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Friday 11 January 2019

ANALYSIS Donald Trump has become entrapped by his phantom wall The re-election battle is creeping up while the president’s power to honour his pledge slips away Edward Luce

A Libya: the battle for peace in a failing state Hope grows that a renewed diplomatic effort can unite warring factions in the oil exporting country Andrew England and Heba Saleh

or the past four years, Mu s t a f a Sa na l l a ha s had a frontline view of the damage wrought on Libya as armed groups have carved up the oil-rich north African state into a patchwork of fiefdoms. As chairman of National Oil Corporation, he has faced a constant battle to keep the crude flowing while militias have repeatedly fought over oil facilities that are the country’s economic lifeline. His staff have been murdered and kidnapped. In September, he had to smash a window in his fifth-floor office in Tripoli as smoke poured in under the door, to escape a deadly attack by Isis. More recently, tribesmen and members of the Petroleum Facilities Guard — the armed force that is supposed to protect oil facilities — shut down the El Sharara field, the country’s largest. The unrest, ostensibly over pay and the dire state of government ser vices, began in early December and has been costing $32.5m a day in lost output. The result is that the $100bn in revenues and damage Mr Sanalla estimates has been lost due to attacks on Libya’s oil facilities in the past five years keeps totting up. “It’s a very difficult job unfortunately,” Mr Sanalla says. “The lack of unity and accountability is holding us back significantly, as demonstrated in Sharara — they are the people supposed to protect us, not cost us millions.” For eight years, Libya has been emblematic of the failure of the Arab spring: the crushed hopes of restive, youthful populations and an example of lost opportunities. The forces that rose up with Nato’s backing failed to fill the void created by the overthrow of Muammer Gaddafi’s regime. Instead, the country broke up under rival governments in the east and west, with competing factions fighting over the spoils of victory. Now, as international attention intensifies on the failing state amid longstanding concerns about the flow of migrants to Europe and the risk that Isis fighters being forced out of Syria will seek to exploit the chaos, the UN is leading a fresh drive to bring stability to the Opec member. It has set an ambitious target of holding elections in the spring, with the aim of bringing the fragmented society under one central authority for the first time in years. Success would mean that Libyans could have a chance to finally use the nation’s rich resources to

begin the process of rebuilding a shattered state. Failure would threaten more conflict. Mr Sanalla, a chemical engineer, took over as NCO chairman in 2014 as the country was sliding towards civil war, sees the looting and smuggling in the oil sector as a “plague that is eating away the fabric of our society”. But he also knows the potential should the situation stabilise. Emboldened by his success in ramping up crude production from about 200,000 barrels a day to just over 1m b/d, his target is to increase output to 2m b/d with a $60bn five-year investment plan. He also hopes to launch the first exploration licensing round in more than a decade, and lure more oil majors to join the likes of Total, ConocoPhillips and Eni to the country. “If we have the right election, I think we’ll have the right people to solve the issues,” Mr Sanalla says. “Without transparency, without fighting the smuggling, it’s very difficult to have any solutions.” The man with the job of leading diplomatic efforts, the UN envoy Ghassan Salamé, acknowledges that reconciliation in Libya can look like an “impossible” mission. He must grapple with competing politicians obstructing elections; militias that thrive and profit on the chaos; and interference from foreign powers with conflicting priorities. The impetus for the renewed diplomatic push came after Tripoli endured its worst violence in years as militias fought month-long street battles in the capital in August and September. The carnage exposed the impotence of the Government of National Accord in Tripoli. But after securing the ceasefire that ended the violence, the UN mission believes that it could prove a turning point that forces politicians to accept the need for change. Three years after the GNA was endorsed by the UN Security Council as the legitimate authority, the UN’s efforts now depend on it convincing rival Libyan leaders to support a national conference that would pave the way for the polls. Mr Salamé believes there have already been tentative signs of progress, such as the appointment of a new interior minister and efforts to overhaul security in Tripoli. After the fighting in Tripoli weakened the GNA he says it is “much more willing to listen to us” and has passed reforms. A key measure was imposing a 183 per cent tax on foreign currency transactions, which has in effect devalued the dinar and narrowed the yawning gap between

official and black market currency rates. This has eased a crisis that forced Libyans to queue for hours at banks just to get their hands on a few hundred dinars. It also curbed the ability of warlords to reap huge profits from the black market by extorting dollars at the official rate from banks. Yet it is not just the estimated 200,000 militiamen on the state payroll who present a possible hurdle to a settlement. Instead, Mr Salamé points to a political class that has grown wealthy amid the chaos. “You need a bulldozer to take him [a politician] from his chair. It’s very, very difficult,” he says. “The idea of elections, the idea of replacing somebody with somebody else, is viewed as aggressive.” Or, as one regional official puts it, the status quo allows them to have “power and access to money to appease their constituencies”. As for the gunmen — the UN estimates there are 15m-18m weapons in a country of 6.5m people — the realistic option is not to attempt to force them to give up their guns, but to “persuade those who hold them to keep them silent”, Mr Salamé says. The risk is that an election acts as a spark for renewed violence. Many of the country’s problems are traced to the previous vote in 2014. Turnout was below 20 per cent, the results were contested, the process deepened divisions and conflict ensued. The establishment of the GNA, led by Fayez al-Sarraj, prime minister, as part of the UN-backed political agreement in December 2015, was intended to bring stability. But in many respects that project was stillborn. The GNA remains beholden to militias and struggles to exert influence beyond the capital. Khalifa Haftar, a military strongman who controls much of the east and commands the self-styled Libyan National Army, refuses to recognise it. A parliament in Tobruk is similarly dismissive of the UN-backed government and aligns itself to Mr Haftar and a parallel “interim government” in the eastern city of Bayda. The malaise has left the country with competing factions claiming authority over key state institutions, including the central bank and the Libyan Investment Authority, the sovereign wealth fund with more than $60bn of assets. Libya must also contend with the resurgent threat of Isis. The group’s Libyan branch was driven out of its stronghold in Sirte in 2016 by local forces backed by US air power. Several people were killed last month when Isis attacked the foreign ministry in Tripoli.

mericans are embarking on the longest year of their lives, which will last until the presidential elections in November 2020. It is anybody’s guess at what point Donald Trump will agree to reopen the US federal government. But it is a sure bet Congress will not give him serious money to build a Mexico border wall. This presents Mr Trump with a dilemma, which will intensify as his re-election bid looms. It is doubtful his political career would have taken off had he not vowed to build a wall, yet he will be increasingly powerless to honour that promise. Over the next 20 months, Mr Trump must therefore continue finding ways to blame Democrats for thwarting the will of the American people. In so doing, he

also single-handedly revive the US steel industry. The more Mr Trump dwells on it, the larger the wall looms. The same applies to his electoral base. As a campaign mantra, Mr Trump’s “big beautiful wall” was pure gold. It symbolised fear of outsiders and the promise of blue collar work. Nobody could forget such a tangible promise. As a re-election strategy, it leaves something to be desired. If Mr Trump was unable to build a wall during his first two years when Republicans controlled all branches of government, why did he try to do something only after power had shifted to the Democrats? The answer is simple. Mr Trump never intended the wall as anything more than a slogan. The manufactured crisis on the US border stopped the moment

Donald Trump used the promise of building a wall on the Mexico border as a rallying cry in his election campaign © Reuters

will act out his version of Winston Churchill’s definition of a fanatic — “someone who can’t change his mind and won’t change the subject”. As a hostage to fortune of his own making, Mr Trump’s only hope of avoiding humiliation is to take US politics hostage. Steve Bannon, his former chief strategist, often says that Mr Trump has zero chance of being re-elected if he fails to build that wall. In practice, Mr Trump could still win without it. Two compulsions will ensure he stays on the subject between now and then. The first is a lack of anything better to talk about. In terms of Mr Trump’s domestic agenda, the Mexico wall is basically all that is left. The only big steps he has taken are signing the $1.5tn tax cut in late 2017, and appointing two conservatives to the Supreme Court. Any Republican president would have done the same. To be fair to Mr Trump, he also vowed to protect the forgotten American and enact a big infrastructure splurge. This marked him out from more establishment Republicans. However, both merge in Mr Trump’s mind to make a barrier with Mexico. The point of his wall is to protect forgotten Americans from the invasion of Hispanic caravans, heroin smugglers and criminal gangs. Moreover, it would be the grandest infrastructure project since the Great Wall of China. Now that Mr Trump has conceded it could be made out of steel, not concrete, it would

Mr Trump was elected in November 2016. It only resumed in the weeks leading up to the 2018 midterm elections. Border crises are a way of whipping up fear and outrage. They only manifest themselves when Democrats are in office. Second, Mr Trump knows only how to appeal to his base. When he tries to pivot to the centre, the conservative right slaps him back into line. Just four days before the government shutdown began in late December, Mr Trump agreed to a bill that would keep the US government open. It did not include any funding for the wall. He was pilloried as a “sellout” by the nativist wing of the Republican party. Mr Trump immediately changed tack. Four days later the government closed. With 89 per cent approval among Republican voters, Mr Trump can easily fend off an establishment challenger for his party’s nomination. He can also keep most Republican lawmakers in line. But that strength is also his greatest weakness. It stops him from doing the kinds of things that would improve his chances of winning a second term. So he is stuck with a phantom wall. It is possible that in the coming days Mr Trump will declare a national emergency and divert military funds to the border. At that point, his wall obsession would turn into a constitutional crisis. Given Mr Trump’s inner compulsions, that spectre is only likely to grow.

Friday 11 January 2019

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Opinion Prophecy and power

t has become a national past time that every year’s end and every beginning of January we are heavily inundated by catalogues of prophecies by men – and they are invariably men – who call themselves “prophets”. For many years I used to ignore them. And then out of curiosity, I started reading them in the manner one reads “your weekly stars” in the newspapers. I approach them from the angle that, ab initio, they are not meant to be believed, even though they serve an entertainment value. My strongest intellectual passions are in development economics, monetary policy, probability theory and the philosophy of science. My humble understanding of the world and of the extent and limits of human knowledge convince me that, even from a purely intellectualscientific viewpoint, prophecy cannot be dismissed out of hand. There is also the theological angle. I once lived and travelled widely in the Muslim world. There are Muslim clerics and mystics who have the gift of prophecy, although Muslims are forbidden to call anyone a “prophet”. For those of my gentle readers who happen to be Christians, the New Testament talks about the “fivefold ministry” open to believers. Some are called to be apostles; some prophets; some evangelists; some pastors or shepherds; and others teachers. Although there is no hierarchy in those ministries, convention normally accords the highest status to apostles. Apostles are those who break new ground – who reinterpret the gospel for their generation. It is also possible to combine one or more of those ministries. Paul was not just an

apostle; he was a great missionary evangelist, teacher and shepherd. He was also a prophet. The late Billy Graham’s ministry was not only apostolic; he was a great teacher, evangelist and pastor. Some would say he was also a prophet sent to call America and the world to repentance. From a purely intellectualscientific angle, prophecies do exist. Known reverentially as “the Rambam”, Moses Maimonides was a medieval Jewish doctor, scientist, philosopher and counsellor to kings. His famous work, “A Guide for the Perplexed”, is a manual for all those who seek to understand the mystery of our universe. I believe that St. Thomas Aquinas may have gotten inspiration for his magnum opus, Summa Theologiae, from the Rambam. Maimonides declared that anyone “who says prophecy does not exist and knowledge is not communicated from the Creator to the heart of man” cannot be taken seriously. But he insists that the gift of prophecy can only be given to wise sages of a strong character; who are driven, not by the baser angels of our human nature, but by a high order of holiness -- in that exalted realm in which it is possible to hear the mind of God. It may surprise many to know that there is a strong relationship between science, prophecy and dreams. Francis Crick, the Nobel laureate and co-discoverer of the structure of deoxyribonucleic acid, declared that the neural electrical networks that make up human brain cells normally scan the environment and unify our daily experiences which come out in the form of dreams. Dreams

are, according to him, a way of “unlearning”. Remarkably, the history of science provides several examples of great discoveries that were made through prophetic dreams. The great Russian chemist, Dmitri Mendeleev was obsessed with finding order within the world of chemicals. According to him, during one night, “In a dream I saw a table where all the elements fell into place as required. Awakening, I immediately wrote it down on a piece of paper.” Thus was born the periodic table that we all had to learn as school children. The German organic chemist Friedrich August Kekulé was working very hard on the chemical structure of benzene in a cold winter night in 1865 when he fell asleep on his chair. According to him, he began dreaming of atoms dancing; they had arranged themselves in the form of a snake that had turned around and bitten its own tail. He woke up and got

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The first round of the presidential elections will prove inconclusive. During the second round, a third force will emerge under the leadership of a relatively new party. The winner will be a dark and relatively unknown technocrat

, HumanAngle

FEMI OLUGBILE Physician, psycho-profiler and essayist

ecentlytherewasacelebrated meeting in the Oval Office between the black musician KanyeWestandthePresident oftheUnitedStatesofAmerica,Donald Trump. To set the scene, while it does not happen every day, it is not totally unheardofforthe‘leaderofthefreeworld’ tomeetwitheccentriccult-figuresfrom the entertainment industry in the Oval Office. There was a celebrated meeting between President Richard Nixon and ElvisPresleyduringtheNixonera.Elvis, the Rock’n’Roll legend who rode on the back of ‘black’ music to fame and fortune but did not much like black people, had some wacky right-wing politicalideaswhichhesharedwiththe President, including a ‘revelation’ that theBeatleswere‘communistinfiltrators’. He wanted to be given a US Marshall’s badge and appointed an ‘undercover agent’.ThePresidentindulgedhisantics the way one would indulge a favourite child,andevenaskedforhisautograph and took a photograph with him in the office. Since an American President could do almost anything, Nixon gave him the badge. Whether he appointed him an undercover agent into the bargain is a detail that is not available on record. Kanye West is a rap artist and producerwhohasachievedgreatfame in musical circles over the past two

When Kanye met Donald

decades. On a Thursday in October, 2018,hepaidamuchpublicizedlunchtime visit to Donald Trump. As usual, Donald Trump was being pilloried in the regular press for his gaffes, his lies, and his tweets. Kanye is a maverick artist who regularly says and does things to offend other people - artists, producers, the black community, some white musicians who he embarrasses at award ceremonies by going on stage to declare that someone else deserves the award more, and the general public. Controversy is never far from him. Despite all that, or in part because of it, heiswidelyacknowledgedasoneofthe

most talented musicians in the world, withastringofawardsandrecognitions rivalled by only few in history. Rapper, singer, songwriter, record producer, fashion designer and entrepreneur, he hassoldover120millionalbumsworldwideandwon21GrammyAwards.His net worth is estimated at $250 million dollars. And he is married to celebrity television personality Kim Kardashian. On top of all this, and much to the chagrin of his hordes of fans in the black community, he is a great fan of Donald Trump. For his appointment at the White House, he wore Trump’s ‘MAGA’ cap (‘Make America Great Again’). At the high point of the visit to

the interpretation of his dream to mean that benzene molecules are made of rings of carbon atoms. This discovery opened up a new field known as aromatic chemistry. The Indian mathematical prodigy Srinivasa Ramanujam who rose from nothing to become a scholar of Trinity College Cambridge and Fellow of the British Academy of Sciences, claimed to have made some of his discoveries through prophetic dreams: “While asleep, I had an unusual experience. There was a red screen formed by flowing blood, as it were. I was observing it. Suddenly a hand began to write on the screen. I became all attention. That hand wrote a number of elliptic integrals. They stuck to my mind. As soon as I woke up, I committed them to writing.” The German Nobel laureate and father of neuroscience, Otto Loewi, was struggling for years to understand how nerve signals are transmitted using chemical instructions, until the whole thing was revealed to him in a dream in 1933. The dream showed him the experiments needed to prove his hypothesis, thereby establishing the field that we know today as neurology. Two of the greatest intellectuals of the Enlightenment, Isaac Newton, and the German statesman and philosopher Gottfried Wilhelm Leibniz, discovered the differential calculus independently about the same time. Both were mystics and both dabbled in occultism and Kabbalah. But science is yet to fully explain the mystery of prophecy. In the words of the theoretical physicist Stephen Hawking, “If we find the answer to that, it would be the ul-

timate triumph of human reason -- for then we would know the mind of God”. There are many in our country today who pitch everything on prophets. That is foolish. God gave us the brains to think. We are to live by faith and righteousness, not prophecies. But we must never dismiss them either. They are meant to warn and to guide and instruct. Throughout history kings and emperors have consulted seers and prophets about what the future holds. The ancient Greeks used to consult the Oracle at Delphi. Napoleon Bonaparte, the conqueror of Europe, not only consulted oracles; he was himself a mystic and occultist who deployed those skills in winning major military battles. American President Ronald Reagan and his wife Nancy were often beholden to psychics. So was French president François Mitterrand. During a summer holidaying with his parents in colonial Yamoussoukro, Côte d’Ivoire, seventeen year old Jacques Chirac encountered an old Baoulé woman who prophesied that the young man would one day become president of France. He later served as president during the years 1995 to 2007. I know many of my Yoruba friends who consult the Ifá oracle before making major decisions in business, politics or matrimony. The world is indeed a mystery. Those who boast about being purely philosophical rationalists are missing the point. The best attitude is to keep an open mind while remaining sceptical. In a world replete with crooks and charlatans, prayer contractors and bribe-taking “prophets” scepticism is a moral virtue.

the visit, he moved over and hugged Trump. ‘I love this man’ he averred, to everyone who cared to listen. As expected, the mere thought of a black musician in a genre of music that dwells on the ‘victimology’ of the black community embracing Donald Trump was enough to make the average African American puke, and the social media were set alight. The irony of the embrace was not lost on many. Several years before then, during the Katrina hurricane and flood in New Orleans, Kanye West had been so incensed at the shoddy way black people were being treated by government and law enforcement agents, as well as the long time it took President GW Bush to rouse himself to pay a visit to the devastated victims that he made the famous statement ‘Bush does not like black people’. To the black community, George W Bush indeed was a choir boy by comparison with Donald Trump. How it must have made the blood of many activists of the ‘Black Lives Matter’ boil in anger! Kanye West literally took control of the meeting during his audience in the White House. The President, not known to be a great listener to anything, sat quietly for the most part, his hands on the desk, listening

as Kanye delivered a wide-ranging monologue on topics from the need to change the 13th Amendment of US Constitution to the virtues of his new line of sneakers. ‘Trump is on his hero’s journey right now,‘ he said. ‘He might not have thought he’d have a crazy person like me...’ He was referring here not just to the fact that people might find his familiarity with Donald Trump odd, but also to the nervous breakdown that he had for which he had been hospitalized. There was still argument about whether the admission had been voluntary or he had been compelled to go in willy-nilly because of his disturbed behavior. More recently, when critics have questioned some of his behavior, he has been quick to say that he did not really suffer a nervous breakdown but was merely sleep-deprived. The love affair between the Donald Trump White House and the black rapper has been showing signs of cooling somewhat since the visit. Trump’s image-laundry machine in the black community was going to feature Kanye in a prominent role. He backed out of the role, complaining that he felt he was being ‘used’. That was not, of course, to imply that the black boy had abandoned Trump. Some loud voices in the African American community have advocated a boycott of Kanye West’s music and his clothing and other business. Clearly Kanye West is a black man with what would be called ‘right wing’ views. Unfortunately, there is an ugly kernel of truth in some of what he and the few other black ‘right wingers’ who have dared to raise their heads above the parapet are saying. White men kill black men, which is

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The love affair between the Donald Trump White House and the black rapper has been showing signs of cooling somewhat since the visit.

THE NEW WEALTH OF NATIONS

OBADIAH MAILAFIA Dr. Mailafia is a former Deputy Governor of the Central Bank of Nigeria, a development economist and public finance expert with a DPhil from Oxford obmailafia@gmail.com; 08036590990 (text messages only)

Let me conclude with my prophecy for 2019: The first round of the presidential elections will prove inconclusive. During the second round, a third force will emerge under the leadership of a relatively new party. The winner will be a dark and relatively unknown technocrat. It will shock the world. Our country will breathe a new lease of life. The economy will improve, as investors arrive in droves. The reign of murderous infamy will come to an end. There will be a great and perpetual peace. Righteousness, justice and enlightenment will reign. And the government shall be upon His shoulders. Nigeria will become a light unto the nations – a city set on a hill. ugly, and must be stopped. But black men also kill black men, which is ugly too, and must be stopped. Far more black men are killed by other black men in the hotbeds of gang violence in Chicago and other places than those killed by white men on a daily basis. People – especially men need to take responsibility for parenting and should not just bear children and abandon them to a life of violence and drugs and early death in the innercity streets, in a manner reminiscent of the almajiri menace in northern Nigeria, and just as deadly. These are not popular truths to say in the black community, but someone has to have the courage to say them, otherwise there would be no real change. A whole race cannot, in any case, follow one political direction because politics and change are also driven from within. Blacks and Asians in the UK have discovered that they cannot and should not all vote ‘Labour’, as they have traditionally done. Some – especially among the younger generation, have become pillars of the Conservative party. A strong black presence in the Republican party in the USA will not only empower black people but help to drive the racist core to the fringe and beyond. A historical nugget many are not aware of is that Abraham Lincoln, who took America into a civil war to abolish slavery, was a ‘Republican’, and, long ago, the ‘Democrats’ were actually the slave-owners. Kanye West – the troubled young black man dreams some day of becoming the President of America. It can reasonably be assumed that he would want to do it as a Republican. He is not winning any popularity contests in the black ghettoes now, and many people frankly hate his guts, but who knows what the future holds.

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NEWS YOU CAN TRUST I FRIDAY 11 JANUARY 2019

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Opinion Prophecy and power

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, HumanAngle

FEMI OLUGBILE Physician, psycho-profiler and essayist

When Kanye met Donald

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The love affair between the Donald Trump White House and the black rapper has been showing signs of cooling somewhat since the visit.

THE NEW WEALTH OF NATIONS