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news you can trust I **TUESDAY 11 SEPTEMBER 2018 I vol. 15, no 137 I N300

Sell

Foreign Exchange

$-N 357.00 360.50 Market Spot ($/N) £-N 459.50 467.50 I&E FX Window 363.11 €-N 410.00 418.00 CBN Official Rate 306.25

3M 6M 0.26 -0.85 12.80 12.46

Currency Futures ($/N)

fgn bonds

Treasury Bills 0.00

10 Y -0.09

20 Y 0.00

15.08

15.24

15.26

NGUS OCT. NGUS JAN. NGUS JUL. 30, 2019 24, 2019 31, 2018 0.00 363.05

0.00 363.50

0.00 364.40

MTN goes to court to protect shareholders, assets ... South Africa ready to intervene in dispute – minister JUMOKE AKIYODE-LAWANSON & LOLADE AKINMURELE

TN Group will seek relief from a Nigerian high court to defuse a costly dispute with local authorities which has wiped off a third of

the market capitalisation of the Johannesburg-listed telco. The Nigerian Central bank ordered MTN to return some $8.1 billion alleged to have been illegally repatriated from the country between 2007 and 2015, even as Africa’s largest mobile

phone company by subscribers is also allegedly on the hook for $2 billion in back taxes- a claim brought against it by Nigeria’s Attorney General. MTN has denied any wrongdoings and now seeks a court injunction to stop the Nigerian

authorities from enforcing the claims made against it, after repeatedly claiming innocence. “In order to protect MTN Nigeria’s assets and shareholder rights within the confines of the Continues on page 33

Atiku begs Sule Lamido to step down ahead PDP presidential primary ... PDP BoT sets up committee to pick consensus candidate MICHEAL ANI

Akinwunmi Ambode, governor, Lagos State (2nd r), receiving the expression of interest and nomination form from Emma Ibediro (r), National Organizing Secretary, All Progressives Congress (APC), at the APC Secretariat in Abuja, yesterday. With them are the party’s Babatunde Ogala, national legal adviser (l), and Abdulahi Gashua, APC director of administration.

Nigeria offers solution to Africa’s armyworm invasion JOSEPHINE OKOJIE

rmyworm, the destroying caterpillar that has devastated agriculture in Africa would soon be a thing of the past as Nigeria has found a chemical that can destroy the pest, the Nigeria government says. Fall armyworm has cost African economies billions of dollars in crop losses since the pest was first spotted on the continent in 2016, prompting fears of a food Continues on page 33

Inside 2019: Ambode picks form, declares for 2nd term P. A4

former Nigerian Vice president and a PDP presidential aspirant Atiku Abubakar yesterday appealed to former Jigawa Governor Sule Lamido to step down for him in the race to clinch the Parties ticket ahead of the 2019 general elections. The 71-year-old former vice president made the appeal at the PDP headquarters in Dutse, Jigawa State and urged Lamido to replicate what happened in the 1993 election when the Yar’Adua Continues on page 33

Naira to weaken to N395/$ by end 2019, says Rencap David Ibidapo & Sobechukwu Eze

espite current relative Naira stability on the FX window against the dollar, investment firm Renaissance Capital (RenCap) has changed its stance on the fair value estimate of the Nigerian naira to N346 per dollar from N322. It also expects the Nigerian currency to weaken into the end of next year. “We think the naira will have to weaken in 2019 to keep it from becoming (too) overvalued; we now see the FX rate at N395 at YE19 vs N360 previously,” economist Yvonne Mhango said in a

Other analysts disagree

note to clients, yesterday. RenCap also sees inflation staying above 10 percent over the medium term. The weaker outlook for the Naira comes as rout in emerging markets has showed no sign of letting up, with most currencies weakening and stock markets performing worse than they were last year. The country’s economy has not been spared as it has experienced more outflows that inflows in the I&E window in recent months, with analysts saying political instability, and

interest rates hike in developed markets is likely to put pressure on its currency. But the Naira, which has been hammered in recent years, has enjoyed rare stability since the beginning of the year appreciating by 0.23 percent in the first half of 2018 and has stayed relatively stable when compared to the beatings experienced by other emerging market currencies, from the Russian Rubble to the South African rand. The stability in the exchange rate market is largely attributed to the rallying oil prices which

has helped Nigeria’s foreign reserves to increase, supported by the constant injections of foreign currency by the Central Bank of Nigeria (CBN) into the FX markets. However, that looks set to change as there are indications that capital inflows into the country is slowing down and pressure is mounting on the country’s external reserves. Data from the National Bureau of Statistics (NBS) show that since the first quarter of Continues on page 33

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Tuesday 11 September 2018

DisCos collected 62% of electricity invoice in Q1 2018, remitted 31% ISAAC ANYAOGU

iger ia’s eleven electricity distribution companies (DisCos) collected N106.6 billion out of the N171 billion of electricity invoice to customers between January and March this year and remitted 31 percent of the amount to the Nigerian Bulk Electricity Trader, to settle obligations to generation companies and the Transmission Company of Nigeria, the regulator has said. In its 2018 first quarter report, the Nigerian Electricity Regulatory Commission (NERC), blamed poor collections on non-cost-reflective

tariff and customers’ apathy. “Financial illiquidity remains the most significant challenge affecting the industry’s sustainability. This serious liquidity challenge is partly attributed to non-costreflective tariffs, and high technical and commercial losses aggravated by consumers’ apathy to payment arising from estimated billing and poor quality of supply in most load centres,” the report. NERC said this has resulted in a situation where “Out of the N171.1billion billed to customers in the first quarter of 2018, only N106.6billion was recovered, representing 62.3% collection efficiency. Therefore, out of every N10

worth of electricity sold during the quarter under review, N3.8 is uncollected.” Commenting on the influence of technical challenges, NERC said the level of billing efficiency during this quarter and the one prior to it, shows that for every 10kWh of energy received by a DisCo from the Transmission Service Provider (TSP), approximately 2.2kWh is lost due to technical constraint and energy theft. In other words, for everyN10 worth of electricity received by DisCos, N2.20 is lost due to poor distribution infrastructure and energy theft.

•Continues online at www.businessdayonline.com

FIRS can ask banks to take their money if they default on tax Odunayo Oyasiji

he Federal Inland Revenue recently announced that it would begoingafterbillionaire tax defaulters. The FIRS Chairman, Tunde Fowler disclosed that the agency will beam its searchlight on the bank accounts of tax defaulters who are making billions in the country but have refused to pay tax. The Chairman was quoted to have said “We looked at all businesses, partnerships and corporate accounts that have a minimum turnover of N1bn per annum for the past three years. First of all, the law states clearly that before you open a corporate account, part of the opening documentation is the tax ID. From the 23 banks, we have analysed so far, we have 31,395 records, out of which effectively, minus duplications, we had 18,602.” “We broke those into three categories. Those that have TIN tax ID; those that do not have TIN, and of course, no TIN no pay; and those that have TIN and have not even

Analysis been paying anything. So, on a minimum, every company or business included here over the last three years has had a banking turnover of N3bn and above. Some of them have had banking turnover of over N5bn and have not paid one kobo in taxes. Now, the total number of TIN and no pay is 6,772.” In the light of the foregoing, the chairman disclosed that the agency will appoint banks as its tax collection agents and all the defaulting accounts will be frozen or put under substitution pending when they come forward and comply with the law. A critical question that we need to ask is whether the FIRS has the power to appoint banks as collection agents, freeze accounts or put same under substitution? The answer is YES. Section 31(1) -(5) of the Federal Inland Revenue Act gives the power of substitution to the agency. Under this provision, the agency can appoint any person (please note that

banks have legal personality) to be the agent of a taxable person- section 31(1). Such appointment is merely to be by notice in writing to the person concerned i.e. the agent. Section 31(2) provides that such agent appointed by the agency may be required to pay the tax payable by the taxable person from the money the agent is holding for the tax defaulter. Section 31(3) expressly stipulates that where such agent refuses to pay (e.g. banks) the tax shall be recoverable from him (bank). Under Section 31(4), the FIRS is empowered to request from any person the details of the funds such a person is holding for another person or that is due from him to that person. The above provisions have vested the FIRS with an enormous power which can by implication make banks to freeze accounts of its customers as such money will be recoverable from them if they fail to pay. The provision successfully takes away the bank’s duty of confidentiality in protecting the details of the accounts of their customers.

L-R: Akanimo Udofia, chairman, Saidel Limited; Toyin Olagunju, general manager, project and engineering, Shell Petroleum Development Company (SPDC); Vivek Arora, senior vice president, Sapura Energy; Osagie Okunbor, country chair, Shell Companies in Nigeria/managing director of SPDC, and Bashir Bello, general manager, business and government relations of SPDC, during a business visit to the SPDC Management Team in Lagos, yesterday.

Union Bank sells N20bn bond to support loan book, working capital BUNMI BAILEY & JONATHAN ADEROJU

nion Bank of Nigeria Plc, has sold a N20 billion local currenc y bond, according to the information available on the bank’s official website “The new funding will support Union Bank’s loan book diversification efforts and provide further working capital as it forges ahead towards its vision to be Nigeria’s most trusted and reliable banking partner,” Emeka Emuwa, chief executive officer of Union Bank, said. The tier 2 lender said the N20 billion debut issuance was 165 percent subscribed signalling a testament to the growing strength of the Bank’s brand and performance and underscores the high level of investor confidence. The bank announced the registration of a N100 billion Debt Issuance Program and the subsequent inaugural

Nestle down 10% as NSE extends losing streak Endurance Okafor

he Nigerian Stock E xchange (NSE) opened the week negatively as the All Share Index fell 1.3 percent Monday, hitting the lowest level since July 2017. The index tumbled by more than 400 points as Nestle Nigeria stock price fell 9.7 percent by the close of market yesterday, in what was the biggest day-decline the consumer goods firm has reported in more than three years. The stock of the Nigerian consumer goods firm was the worst performer for the day among 164 members of Nigerian Stock Exchange All Share Index. It therefore weighed down the NSE performance in the

period under review due to bearish market sentiment arising from political risk from the forthcoming year’s election, and market analysts also linked it to the issues around MTN which is making foreign investors a bit ‘nervous’. Johnson Chukwu, MD of Cowry Asset Ltd said Nestle Nigeria’s yesterday’s performance could be due to market forces. “Nestle Nigeria investors are core investors, so one cannot say they are selling down because they are core investors. Such core investors are not largely driven by movement in stock prices. It could be due to market forces, that is the demand and supply in the market. And considering Nestle Nigeria is a large market cap stock and because of its market

value price, its stock movement would naturally have significant impact on the NSE All share index,” Chukwu said by phone. “Some investors are selling the stock after its valuation became expensive based on the earnings outlook,” another analyst said in a statement. The unit price of Nestle Nigeria lost about N145 from the N1500 it opened at and closed trading for the day at N1,355 on 10th September 2018. Ayo Akinwunmi, Head of Research at FSDH Merchant Bank said the Nestle Nigeria stock was over valued and as such it is coming closer to where it should be, as it is expected to be around N1300 to N1200. “Nestle Nigeria is one of the companies that have not had its share of the de-

cline that the market has recorded YTD and the reason it stood at a premium was because of its strong products and background, because it produces food that cut across every age in Nigeria. Also it has very strong corporate governance however I think it stood at a very high multiple considering its earnings and dividend yield declined. But despite its good qualities, if the market is contracting, a time will come where stocks like Nestle Nigeria’s will feel it, and I think that is what happened today,” Akinwunmi explained. Meanwhile, data compiled from the Bloomberg terminals show the Nigerian Stock Exchange Main-Board Index has returned -12.11 percent year to date.

issuance of Series I and II Bonds under the newly registered Bond Program. “The inaugural issuance under the N100 billion bond programme marks a milestone achievement in our bid to accelerate business growth and continue our commitment to reestablish the bank as one of Nigeria’s leading financial institutions,” Emuwa further said. “I acknowledge the efforts of the investor community in ensuring the success of this bond issuance under our registered programme and assure them that their confidence in us will be met with the effective delivery of our long-term growth strategy.” Stanbic IBTC Capital (Lead), Union Capital Markets, Barclays Securities and Standard Chartered Capital & Advisory were the Issuing Houses for the bond. The bank in its recently released (half-year) H1 2018 reported a 16 percent increase in gross earnings to N83.3 billion for the period

ended June 2018 compared to N72.06 billion in the same period of 2017 .Its Profit after tax also increased by 25 percent to N11.6 billion in H1 2018 from N9.46 billion in H1 (half – year) 2017 . As at the close of trading session yesterday, the share price traded at N5.30 having a market capitalization of N218.4 billion on the Nigerian Stock Exchange (NSE) Union bank which was established in 1917 was listed on the NSE in 1971, the bank is a household name and one of Nigeria’s long-standing and most respected financial institutions. The Bank is also a trusted and recognizable brand, with an extensive network of over 300 branches across Nigeria. In late 2012, a new Board of Directors and Executive Management team were appointed to Union Bank and in 2014 the Bank began executing a transformation programme to re-establish it as a highly respected provider of quality financial services.

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FG, others share N3.95trn in first half of 2018 …revenues in Q2 2018 the highest since Q3, 2014 …Delta gets highest allocation, Osun least HARRISON EDEH, Abuja

he federal, states and local government areas shared N3.95 trillion from the Federation Account within the first half of this year. The disbursements made by the Federation Accounts Allocation Committee (FAAC) represented an increase of 41 percent when compared to the N2.79 trillion disbursed in the first half of 2017 and a 95 percent increase in the N2trillion disbursed in the first half of 2016. The analysis is contained in the latest edition of the NEITI Quarterly Review published by the Nigeria Extractive Industries Transparency Initiative (NEITI). The review provided highlights and in-depth analysis of disbursements by FAAC for the second quarter and the first half of this year. A breakdown of the disbursements showed that the Federal Government received N1.65 trillion, states received N1.38 trillion while local governments got the least share of N795billion. The disparity in the revenues received by each of the three tiers of government was

based on the revenue sharing formula of the Federation as stipulated in the constitution. The NEITI Quarterly Review shows that the lowest monthly figure of N635.6 billion disbursed in the first half of 2018 was N121.4 billion higher than the highest monthly figure (N514.2billion) disbursed in the first half of 2017 and N218 billion higher than the highest monthly figure (N417billion) for 2016. “These figures clearly indicate that revenue accruing to the Federation in the first half of 2018 completely outstripped revenues in the previous two years”, stated the report. The Quarterly Review further disclosed that total FAAC disbursements in the second quarter of this year was 46 percent higher than the figure for the same period last year and 127 percent higher than the figure for the same period in 2016. The report noted that while N2trillion was shared in the second quarter of this year, N1.38 trillion was disbursed during the same period last year and only N886.38 billion was shared in the second quarter of 2016. “In fact, Q2, 2018 was the

first time an amount in excess of N2trillion was disbursed since Q3 2014. This is a run of 14 consecutive quarters of disbursements below N2trillion.” The phenomenal increase of disbursements recorded in the second quarter of 2018, the report observed, was the highest to the Federation since the third quarter of 2014. The report attributed the positive development to the rise in crude oil prices and similar increase in oil production. “Average oil price in 2016 was $43.5 per barrel, while in 2017 oil price averaged $54.2 per barrel. However, in the first six months of 2018, average oil price was $70.6 per barrel. Thus, on the average, oil price increased by 62.2 percent between 2016 and the first half of 2018”, the NEITI Quarterly Review asserted. “Total oil production in 2016 was 661.1 million barrels while the figure was 690 million barrels in 2017. In 2016, average monthly oil production was 55.1 million barrels while it was 57.5 million barrels in 2017. For the first two months of 2018 for which data is available, average production was 59 million barrels.”

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BUSINESS DAY

What the law says about attorney general and tax collection 20 SMEs get N6m lifeline to ODUNAYO OYASIJI

he Attorney-General is no doubt the Chief Law Officer of the Federation. The position is a creation of section 150 (1) of the constitution of the Federal Republic of Nigeria, 1999 (as amended). The section states that “there shall be an Attorney-General of the Federation who shall be the Chief Law Officer of the Federation and a Minister of the Government of the Federation”. Hence, he occupies two positions i.e. as the Chief Law Officer and a Minister. The Attorney-General has extensive powers attached to the office. Under section 174 (1) of the constitution (section 211 for the Attorney- General of states), the Attorney-General has the power to institute and undertake criminal proceedings against any person before any court of law in Nigeria, other than a court-martial, in respect of an offence created by or under any Act of the National Assembly, to take over and continue any such crimi-

nal proceedings that may have been instituted by any other authority or person and to discontinue at any stage before judgment is delivered any such criminal proceedings instituted or undertaken by him or any other authority or person. Further to the above, the Attorney-General also plays a vital role in civil suits involving the Government. The case of A.G of the Federation –VA.N.P.P (2003) 18 NWLR (PT. 851) 182 establishes the fact that the Attorney General is the Chief Law Officer and that he has interest in the interpretation of the constitution, statutes and other laws. In Federal Airport Authority of Nigeria –V- Bi-Courtney Ltd & Anor. (2011) LPELR - 19742 (CA), the court stated that the Attorney General as the Chief Law Officer is the proper party to be sued in any matter involving the Federal Government, Federation of Nigeria and any of its agencies. The Supreme Court of Nigeria held in A.G Kano State –V- A.G Federation (2007) 6 NWLR (PT. 1029) 164 AT 192 (B-C) that it is clear

Over 2000 jobs coming as Wells Hosa’s green house farm debuts in Edo

bout 2,500 jobs are underway as the first indigenous multimillion dollar Hydroponic farm opens for business in Edo State holding out promise of creating 500 direct jobs and over 2000 indirect jobs. Hosa Okunbo who initiated the project explained that the farm was his economic and social contribution to Edo State and Nigeria as a whole, adding that the project is a fulfillment of his life time dream to make history in agriculture by using Hydroponic technology to grow crops. Hydroponic technology which is also known as Hydroculture globally is the method of growing plants without depending on soil mainly but by using mineral nutrients solutions in a water solvent. The 27-hectare high tech hydroponic farm which is located at Odighi and Odiguetue in Ovia Northeast Local Government Area of Edo state will produce a cross basket of crops using this technology for local consumption and for export. Wells Hosa, as the farm is called, has a foreign technical and financial partnership in place to complement the federal government object for agriculture as an alternative to export proceeds and economic sustainability and for job creation. The farm will produce both cash and arable crops as well as livestock including cattle, poultry and piggery, all targeted at export and meeting local protein and milk requirement.

The greenhouse farm is the first of its kind in West Africa and the biggest, designed with Hydroponic Technology and covering over 27 hectares of land with a potential development of 28 Hydroponic Greenhouses of 5,440 square metres each with an estimated tomato production capacity of 4,200 Tons per year. Nigeria is a country with over 200 million people to feed, meaning that there is great potential for the development of modern agriculture. As a nation, we are blessed with good quality of water resources, manageable soils and diverse climates. On the other hand, we also have the infrastructure of air and sea transportation to facilitate exports. The challenge lies in our ability as a nation to take advantage of our enormous natural resources in a sustainable way. Today, modern agriculture is immersed in an economic process of globalization that cannot be ignored. Therefore, it is necessary for us as a country to adopt new technologies that allow us to increase productivity, obtain better quality products and therefore seek self-sufficiency and access international markets with better prices. We are convinced that this cycle of sustainability by protecting the potential of agriculture, as a sustainable player, represents an alternative to implement high-tech projects and boost not only agricultural exports, but also to start a new way of developing agricultural activities.

that the Attorney General of the Federation can be sued as a defendant in all civil matters where claim can be brought against the Federal Government or any of its authorized agencies. For the purpose of the subject under consideration, Federal Inland Revenue Service is the authorized agency. Therefore, the Attorney-General is a proper party in matters relating to FIRS. It must also be noted that FIRS administers the following legislations for the purpose of tax collection - Stamp Duty Act, Companies Income Tax Act, Petroleum Profit Tax Act, Personal Income Tax Act, Capital Gains Tax Act, Value Added Tax Act, Taxes and Levies (Approved List for Collection) Act and other laws empowering the Federal Government to collect tax and levies. Under section 2(b) of FIRS Act, the Agency can sue and be sued in its corporate name. However, a cursory review of Stamp Duties Act specifically stated that all “duties, fines, penalties and debts due to the

Federal Government shall be recoverable in summary manner in the name of the AttorneyGeneral”. This provision shows the role the Attorney-General plays in the area of recovery and not collection. With regards to tax collection issue, a thorough review of the act that established Federal Inland Revenue Service (FIRS)FIRS Act of 2007 reveals that the agency is the Federal Government’s tax collector- sections 7(1)(b) and 8(1)(a)-(c). The Act in Section 3(2)(c) dealing with the composition of the Federal Inland Revenue Service Board only gives the Attorney General of the Federation the room to have a representative on the Board. Sections 7 and 8 of the Act stipulates the powers and functions of FIRS. Furthermore, the Act in Section 8(1)(p) provides that FIRS shall “liaise with the office of the Attorney General of the Federation, all government security and law enforcement agencies and such other financial supervisory institutions in the enforcement and eradication of tax related offences”.

grow businesses in Anambra SEYI JOHN SALAU

total of 20 Small and Medium Enterprises (SMEs) and artisans got a sum of N300, 000 each amounting to N6 million from Life Continental lager beer to boost their businesses after successfully defending their business ideas in Ekwulobia, in Anambra State. The grant was given under the ‘Life Progress Booster’ initiative, a scheme designed to help SMEs grow their businesses by providing non-refundable grants to entrepreneurs. The Life Progress Booster initiative is designed to promote the innovative and industrial spirit of SMEs, especially in the South-eastern states of the country where the Life Continental beer brand holds a strong market share. Emmanuel Agu, portfolio manager, mainstream lager and stout brands, Nigerian Breweries said Life Continental beer has focused on

empowering its consumers through the years. “We believe in the strength and capacity of the people of the South-East to thrive in industry, but we also believe progress can only be achieved with support. Hence, the Progress Booster initiative was specifically created for the South-Easterners,” said Agu. Alvis Umeh, the South East zonal chairman of New Auto Spare Parts Association (NASPA) Nnewi, said Life Continental lager beer has taken social and entrepreneurial development to a new height with the scheme, which has helped many businesses grow since its inception four years ago. “Life Progress Booster has helped many upcoming and small businesses in this state and I am very happy with the results recorded so far. If other companies can take up similar initiatives targeted at small businesses, it will elevate the status of our members and bring more into the fold,” said Umeh.

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Tuesday 11 September 2018

At the official Launch of Bridge Season 2, a Project of BusinessDay in Lagos Pictures by Pius Okeosisi

Olu Akanmu, executive director, retail banking, FCMB delivering L-R- Arese Ugwu, Frank Aigbogun, publisher/CEO , BusinessDay; Â Olu his welcome address. Akanmu, executive director, retail banking, FCMB, and Anthony Osae-Brown, editor, BusinessDay.

L-R Nnenna Okoro founder of Youtopia beauty , Arese Ugwu host of the bridge, Ope Makinwa FCMB

L-R Lola Egboh, Head Digital marketing and communications Across section of guests. FCMB, Myles Igwe founder of Fr. PR, Lehle BaldĂŠ , producer of the Bridge season 2.

Oghenewvoke Ighure, ( right) executive director, digital services, BusinessDay with some guest.

2018 Nigerian Risk Awards and summit in Lagos

L-R: Christopher Kolade, chairman of the occasion; Funmi Olonisakin, Soji Apampa, CEO, Integrity Organisation Limited (l), and vice president and professor of leadership, security and development, Femi Oyetunji, MD, Continental Reinsurance. Kings College, London/guest speaker, and Joachim Adenusi, MD/CEO, Conrad Clark Limited.

Peter Ehimhem (l), with Sunny Ogbemudia both of Wapic Insurance Plc

Raheem Owode of Sterling Bank Plc (l), with Nkem Odibeli of Continental Reinsurance

Pictures by Olawale Amoo

L-R: Femi Oyetunji, MD, Continental Reinsurance; Oluwatoyin Sanni, CEO, Emerging Africa Capital Group; Gregory Ovia Jobome, executive director/chief risk officer, Access Bank Plc/past Nigerian Risk Awards winner; Frank Aigbogun, publisher/CEO, BusinessDay Media Limited, and Rufai Oseni.

Christopher Kolade, (l), with Abubakar Suleiman, managing director/chief executive officer, Sterling Bank Plc.

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MTN travails: Witch hunt or corporate governance failure MAZI SAM OHUABUNWA OFR sam@starteamconsult.com

he telecommunication giant, MTN, has been in the news lately. Of course it is good for a corporate organization to be in the news, but it must be for good reasons. A few days ago, MTN was on national news for illegal money transfer. The CBN accused MTN of transferring foreign exchange illegally out of the country and asked it to refund the sum of $8.1 billion it allegedly transferred. When I first heard this news of illegal transfer, I shuddered. How did this happen? Was it possible that they bought this huge sum of forex from the mallam or the unlicensed Bureau de change? Later I heard the CBN sanctioning some banks for aiding MTN to transfer the money illegally. Then my worry got worse. How come that banks which are licensed to deal in foreign exchange are being accused of aiding illegal transfer? Is this a case of illegal transfer of money or a case of the transfer of illegal money? I think that one of these or both of them sound like criminal offence. And if so, does the CBN have the power to accuse, prosecute and exact punishment? One has always had this impression that foreign exchange transfers go through a process of authorization. It looks like the banks penalized by CBN to pay

fines of N5.87 billion-Standard Chartered, Stanbic-IBTC, Citibank, and Diamond did not obtain appropriate authorizations from CBN before the transfers were made. Is it possible that these four otherwise respectable banks would deliberately act against the norm or against the law? And these alleged infractions occurred between 2007-2015. How come it took this long to find out, whereas banks make monthly returns to CBN? Troubling questions! While we were still trying to figure out answers to these bewildering posers, another bad news concerning MTN broke out last week. The office of the Attorney-General of the Federation charged MTN with failing to pay appropriate taxes, duties and levies. They were asked to pay tax arrears worth $2 billion. Again I shuddered. MTN again? What is going on here? Tax evasion over 10 years? Where is the FIRS in all this? When did this tax dispute start and how come it is blowing out in the public a few days after the illegal money transfer charge? Is this a mere coincidence or is it a fatal corporate governance failure in MTN or is there a plot to demonize and destroy MTN in Nigeria? Or indeed is it a combination of all of the above? I recollect that in 2015/2016, MTN almost went into liquidation when the Nigerian Communication Commission (NCC) imposed fines of $5.2 billion (N1.04T) for failing to comply with the directive to deactivate telephone numbers sold to customers without registering the customers (unregistered or pre-registered SIM cards). The

‘

Investors generally have herd mentality and when they feel persecuted as the MTN matter looks, they first become hesitant, and when the negative pressure is sustained, they flee

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company’s income, stock prices, shareholders’ funds and corporate image took terrible hits then. And now similar or worse damages may happen. Why is MTN subjecting or allowing itself to be subjected to this kind of ordeal? I can never tell and I have a sneaky feeling that there is more to all these than what the headlines suggest. Is there a political or diplomatic angle to these? Your guess is as good as mine. But whatever may be the undertones or ulterior motives in these brawls, one thing is certain, MTN has some culpability. I have often worried about MTN and the way it carried on with its business since it came into this country with a bang. True MTN takes a big portion of the bragging rights for liberating Nigeria from the tyranny of NITEL and ushering Nigerians to the telecommunications age. Along

with its competitors it has created jobs for several young Nigerians including service suppliers and recharge card sellers. But MTN’s dealing with its trade partners or distributors has continued to baffle me. For long, it looked like they never wanted any trade partner or distributor to succeed. They were often erratic in the way they changed trade policies and terms. It was as if they got irritated if they saw their distributors make profit! There was hardly any negotiations and their policies were often “take or leave it”. In the process they have driven many distributors out of business, many with bitterness in their hearts. Less than 5% of the distributors who started with them in 2001 are still trading with them today. Those who currently run the MTN business connect franchises are barely able to scratch out any margins as MTN gives them impossible targets and terms with little headroom. I presume that part of the problems of MTN is poor corporate governance. Any business that behaves as if it wants to maximize profit, without giving a damn about what is happening to other stakeholders- suppliers, distributors, employees, customers, regulators, etc, is essentially courting trouble. Recently MTN and some of their competitors were picketed by labour leaders for their unfriendly labour policies. I feel extremely sad when MTN and companies like them, such as banks make humongous profits and yet are so wicked that they hire university graduates as ad-hoc staff or temporary staff (often through third parties), drive them so hard with neck-breaking schedules or targets and then pay them twenty

five thousand Naira (N 25,000) as monthly stipend. Therefore when such companies run into the kind of problems that MTN and some of the banks seem to repeatedly run into, you wonder if it is nemesis that is catching up. May be not, but the failure of corporate governance is evident. Nevertheless I will end up by appealing to our regulatory agencies to take it easy with investors and such foreign owned companies like MTN, especially when the punishment for infractions look out of proportion to the infraction. Investors generally have herd mentality and when they feel persecuted as the MTN matter looks, they first become hesitant, and when the negative pressure is sustained, they flee. With our precarious economic growth status and the unrelenting unemployment, we must err on the side of caution. Such issues as tax dispute need not be held in the public glare. I will also advice MTN to improve its corporate governance practices. Corporate social responsibility is good but it cannot replace good corporate governance nor can it sufficiently compensate for poor corporate governance. Luckily there is a corporate governance conference organized by the Association of Corporate Governance Professionals of Nigeria (ACGPN) going on this week in Abuja. I fully recommend that MTN and other corporate organizations attend this conference and begin to internalize and practice good corporate governance principles as a hedge to these recurring corporate embarrassments. Send reactions to: comment@businessdayonline.com

[#StopTheKillings] UK-Africa post-Brexit trade scenarios (2)

RAFIQ RAJI “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

till, global firms with op erations in the UK are making contingency plans. Ahead of the formal exit of Britain from the EU in March 2019, JP Morgan, an American bank, has begun to relocate some of its Londonbased employees across the EU, for instance. Add to the mix for

them the possibility that Brexit might not even happen at all; and thus all that expensive scenario planning becoming all for naught. In fact, there is a cohort of influential and powerful politicians and businessmen believed to be making a concerted effort towards stopping Brexit or making it as soft as possible. In late June, for instance, former British prime minister Tony Blair called for Brexit to be delayed in a chat with British think tank Chatham House: “We should plan now for the possibility we need to extend the March 2019 deadline”. A delayed or soft Brexit are probably the only options left now: Queen Elizabeth assented to t h e E u ro p e a n U n i o n W i t h drawal Act 2018 in June. So, yes, unless there is a change to the law, the United Kingdom will

exit the European Union either in March 2019 or later. Same old Amidst all these is Britain’s relationship with her former colonies. By being a member country of the EU, the privileges enjoyed by the UK were extended to members of The Commonwealth as well. For example, a British visa or passport, which is relatively easier to attain for citizens of Commonwealth countries, allowed holders access to the wider European continent. With Brexit, that would no longer be the case. It begs the question then of how the UK’s trade and investment relationship with Africa would fare after Brexit? “We’ve got a UK-Africa trading relationship that’s worth more than £27 billion and the UK is the secondlargest investor in Africa, with

over £21 billion of investment,” s ay s Em ma Wa d e -S m i t h, U K trade commissioner for Africa to African Business in March. And “the government is very clear that no trading relationships should be worse off because of Brexit.”And “British companies that are active in Africa genuinely care [and] want to do good business,” she adds, mentioning the many community support schemes by British companies “as a result either of their investment into Africa or their exporting relationship.”Malte Liewerscheidt, Vice President at London-based Teneo Intelligence, a research firm, is not so optimistic about the African trading relationship post-Brexit, however: “I’m not enthusiastic about this at all. Yes, Britain would need to make an effort striking new trade deals,

but priority would be given to large trading partners such as the United States or Australia. Besides, the emphasis would be more on opening markets in Africa for Britain, rather than the other way around. [Besides,] most African exports to Britain are primary commodities that are already duty- and quotafree.” The evolving soft Brexit scenario, whereby the UK would retain existing EU trade rules, suggests there would probably not be much change to the current arrangement. • This is the second and final part of my column on 28 August 2018 titled “UK-Africa post-Brexit trade scenarios (1).”An edited full version was published by African Business magazine in August 2018. Send reactions to: comment@businessdayonline.

Tuesday 11 September 2018

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comment is free COMMENT Africa: Put your house in order

Send 800word comments to comment@businessdayonline.com

STRATEGY & POLICY

MA JOHNSON Johnson is an eclectic researcher, writer and columnist whose articles cover maritime, defence, technology and public policy issues and other areas of human interests. He is a member of the BusinessDay Editorial Advisory Board)

frica is rich in mineral resources. Today, the African continent consists of countries whose political leaders mostly want to cling to power perpetually. Most African countries have weak opposition parties, disregard for the rule of law, while corruption and greed on the part of political leaders have wrecked most economies. As a result of greed and baseless ambitions of most African leaders, almost the entire continent is ceaselessly preoccupied with religious and tribal wars that are of no strategic importance to the survival of the black race within the international community in the 21st century. In spite of these negative narratives, one should not forget that Africa has been blessed with some leaders too numerous to acknowledge in this article, whose contributions to African unity and regional development are noteworthy and commendable. For instance, the history of Africa is incomplete without mentioning Osagyefo Kwame Nkrumah’s unrequited love for black emanRICHARD OLANIYI AROWOLO Arowolo, is an associate at Perchstone and Graeys, a full service law firm. He can be reached atrichardarowolo@perchstoneandgraeys.com.

ith the rapid development of Information and Communication Technology (ICT), individuals, corporations and even governments continuously strive to deploy advanced technology to their daily operations. For some governments, electronic governance (E-Governance) has become vital for the transparent dissemination of information and efficient provision of public services using ICT. Successful implementation of the e-governance objectives of any government relies largely on effective data management- data analysis, storage, and transfer. In recent years, Nigeria has taken giant strides in the digitization of its operations in the public sector. The automation of service delivery at the Corporate Affairs Commission, Federal Inland Revenue Service, and other agencies are archetypes of Nigeria’s current drive to adapt to the modern trends of E-governance. Undoubtedly,

cipation and unity with a dream for a United States of Africa. The emergence of the African Union (AU) remains outstanding as one of his remarkable political ideals. On the eastern shores of the African continent, Julius “Mwalimu” Nyerere remains another of Africa’s visionary leader and founder of modern Tanzania. As a brilliant leader and philosopher, he was a people’s hero and a champion for the African continent. He laid the foundation of African socialism popularly known in Kiswahili as the only political doctrine that could sufficiently lift the country out of the shackles of imperial doldrums and stagnation. While in South Africa, Nelson Mandela remains one of the great moral and political leaders of our time. His life, character and leadership stand him out as one of the great figures of contemporary Africa. The journeys of these great African leaders’ are without shortcomings, but today Africa faces numerous challenges. These challenges create a burden on the continent such that Africa’s existing stage of civilization is far below its real potentialities for progress. Most African leaders by their greed have marginalized their people and indeed the continent, in global economic, sociopolitical and cultural affairs. So, we have a situation where havoc has been wrecked on Africans by African leaders over time. Thus, there is an exodus of Africans out of the continent of Africa through the Mediterranean in search of greener pastures in Europe, Asia and the Americas. Our sisters and brothers in the Northern hemi-

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Markel and May are motivated in part by a desire to stop the exodus of Africans to Europe. Markel was very blunt about African migrants: ‘We want to create jobs in Africa so you all don’t come to Europe.”

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sphere are concerned about Africa’s underdevelopment. Leaders from these regions of the world are back in Africa to use economic, political, cultural and other processes to influence African countries. Is this a spectre of re-colonialism? This question begs for an answer because representatives of Africa’s former colonial masters are now visiting Africa in different styles with almost similar objectives. First, it was President of France, Emmanuel Macron’s visit to strengthen economic and cultural ties with Nigeria. This was

followed by Theresa May, British Prime Minister who visited three countries in Africa- South Africa, Kenya and Nigeria. The visit of May to Africa was to forge business ties for a post-Brexit Britain, according to reports. After May’s official visit, German Chancellor Angela Merkel was also in Africa for three days and visited Senegal, Ghana and Nigeria. Her visit to Africa was amongst others to seek economic benefit. While China recently hosted African leaders for a Third Summit tagged Focus on China-Africa Cooperation (FOCAC 2018). The Summit is aimed at promoting vision for development in the African continent. This is so because Africa currently lacks many visionary leaders. So, the development of Africa has to be under the tutelage of China and other global powers. While China has played the role of Africa’s largest trading partner for the past ten years, Britain and Germany has a lot of “catching up” to do. The Chinese leader Xi Jinping and leaders from Africa met at the two-day forum with a focus on Xi’s cherished “Belt and Road” infrastructure programme. The massive scheme is aimed at improving Chinese access to foreign markets and resources, and ultimately boosting its influence in Africa. This has made China to give loans worth US$ 60 billion to African countries for roads, ports, railways, and other major infrastructure projects, not “vanity projects”. The total loans to African countries from China now stand at US$ 136 billion, according to a source. Africans should be prepared in all respects to pay their debt. There is no free lunch in Beijing. If loans cannot be paid by

African countries, strategic assets of debtor nations in Africa may be taken over by China. That is why Xi Jinping warned that loans given are not for “vanity projects”- projects that will fail to achieve economic goals. Markel and May are motivated in part by a desire to stop the exodus of Africans to Europe. Markel was very blunt about African migrants: ‘We want to create jobs in Africa so you all don’t come to Europe.” With respect to Nigeria, Markel wants to work with the country in order to find ways of tackling the problem of Boko Haram and widespread unemployment. So, the German Chancellor has promised to reactivate Volkswagen in Nigeria and establish a plant in Ghana. The United States of America under the leadership of Donald Trump looms in the background, contributing only military support. Donald Trump has barely shown any significant interest of strategic importance in the African continent. He has angered many Africans with offensive remarks about Africa and her leaders. The level of underdevelopment calls for urgent steps by Africa to put its house in order. Above all, African politicians, business gurus and civil society members need to prove that Africans are capable of progressive development without the tutelage of other people, especially the “colonizing powers”. African leaders owe their people the prime function of developing and establishing favorable conditions for its over one billion people to realize their potentialities for progress.

Send reactions to: comment@businessdayonline.com

E-governance: A case for blockchain as the foundation of Nigeria’s public-sector data management the adaptation of ICT in public service delivery and administration continues to save Nigeria a significant amount of operational expenditure, enhances efficiency, and eases the process of doing business. Technological innovations could be further harnessed in key sectors; for instance, electronic voting systems, and property registration/transfers. This would considerably ease current and future administrative and economic challenges for a Nigerian government primed to build on recent achievements in socio-economic reform. One such untapped technological innovation is the use of blockchain technology. Block chain technology creates a digitized and decentralized ledger of transactions (for instance, property registration instruments), made available to the members of an information network. It transparently distributes data (using advanced coding) tocreate a permanent record of a transaction. This record is known as a ‘block’. The block is then ‘chained’ or linked to the previous block in a chronological order.This

creates a continuous spreadsheet or record of transactions that can be accessed across the network in real time by all connected users. Blockchain technology was initially developed as an accounting method for the popular cryptocurrency, bitcoin. The record created using blockchain cannot be changed but only appended to and the record’s authenticity can be verified by the entire network community, as opposed to a centralized authority. Across the world, blockchain has been reported by governments to be the bedrock of an advanced and transparent E-governance system. It can be used to record a wide range of information or transactions, particularly information that is regularly updated. Ways in which some governments are already taking advantage of blockchain technology are highlighted below: Electronic voting systems: The government of the Japanese city of Tsukuba has reportedly introduced an online voting system, powered by blockchain. Earlier this year, West Virginiacompleted the first government-run blockchain-supported vote in United States history,

using a mobile blockchain-based platform. Also, residents in the city of Zug in Switzerland used the City’s new electronic ID system to votethrough their smartphones on a blockchain platform.Blockchainpowered votinghas the potential to substantially minimize the cost of conducting elections, boost transparency,create opportunities for citizens to vote from anywhere around the world,and streamline the process of counting votes. Using blockchain, each vote will form part of a chain of votes, which would be recorded on a publicly verifiable ledger, with results available instantly. Property registration and transfers: The use of blockchainbased land registries is fast growing amongst technologically advanced countries. The Republic of Georgia has reportedly initiated the process of usingblockchaintechnology to validate propertyrelated government transactions. Similarly, the Swedish government has commenced the implementation of this technology in its land-registry authority. Current projections show that the applica-

tion of the blockchain technology may reduce the time needed to complete title registration to just a few days or even hours! Incorporation of companies: The state of Delaware in the United Stateshas also begun exploring incorporation services based on blockchain records and smart contracts, rather than paper-based exchanges. A block chain digital approach to filing of complicated company rules will help automate processes such as those related to the different rights and obligations of the different classes of shareholders. The rules associated with investments in a business could also be formulated as smart contracts embedded in a blockchain. This blockchain might then be used to automate voting procedures or ensure compliance with rules regarding when and how investors can sell their shares.

Note: the rest of this article continues in the online edition of Business Day @https://businessdayonline.com/ Send reactions to: comment@businessdayonline.com

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Tuesday 11 September 2018

Lekki: Going the way of Apapa

he L ekki corridor, also known a s ‘ Ne w L a g o s ’ is, arguably, the fastest growing settlement in Africa. With its fast developing real estate market, huge construction projects and major developments, this corridor is emerging as new main-street of Africa, offering vast investment opportunities. The corridor is attracting huge individual and institutional investments such as the Lekki Free Trade Zone (LFTZ), the ambitious Dangote Refinery expected to come on stream by 2019, the Lekki deep seaport, chemical and fertilizer plants, among others. About 70 companies cutting across diverse sectors of the economy are said to have signalled interest to do business within the LFTZ with many of them promising billions of dollars of investment in the corridor, which also boasts of West Africa’s biggest shopping mall. Even at that, the Lagos State government says this is just a scratch of the surface as the zone presents limitless op-

portunities still to be tapped by local and foreign investors. However, with all these investments and potentials to grow into a city with its own soul, there is no known and concrete plan at public or private sector level to provide the critical infrastructure that will drive and give those investments any meaning. So far, the only access road to Lekki, for all it represents, is the six-lane Lekki-Epe Expressway that terminates at Abraham Adesanya estate. The entire stretch of the road is congested with cars during rush hour because there are no viable alternatives. And there are increasing fears that things will get worse in that corridor when all the big ticket projects like the Dangote Refinery and Petrochemical complex as well as the Lekki Deep Sea port comes on stream within the next four years. The implication is that the Lekki corridor is developing to be the heart of business activities in the country’s commercial capital when all these projects are completed. However, governments at the state and federal level are failing to

provide the critical infrastructure that is needed to support the huge developments taking place in that corridor. By now the government should have been busy expanding the road from Abraham Adesanya to Epe, constructing alternative roads, and building a rail network and providing other infrastructure and amenities to make life in that corridor match up with the development taking place. But no, practically nothing is being done and nothing will be done until the situation is out of control before government thinking of a solution or plan. Even the coastal road that was meant to link Victoria Island and Epe, and whose construction should have taken place simultaneously with the Lekki-Epe Expressway construction has remained on the drawing board without any movement. We see a recreation of another Apapa, Nigeria’s congested and gridlocked premier port city. But Lekki’s case will be worse than Apapa’s because there are multiple access roads to and from Apapa, but there is only one road to and from

Lekki. Besides critical infrastructure, there is also the fear that there is no planned development in the corridor even as more people move into the area. Analysts believe the government would be contending with the development of urban slums if it does not take an interest in how the area develops. The long term impact may be a significant drop in property value that will leave land speculators counting their losses. Property value in Apapa has dropped by almost 50 percent as residents are fleeing and businesses are relocating. No new investment is coming into the port city at the moment. We call on the Lagos state government to wake up to the demands of administering a cosmopolitan city as Lagos. It should, as a matter of urgency, create a plan for the development of the corridor and show commitment, beyond mere words, to building new road and train networks that would ease the congestion on that axis and bring the infrastructure in line with major cities in the world.

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Tuesday 11 September 2018

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Conference underscores role of market research in Nigeria’s growth initiatives …Speakers agree research engenders consumer understanding, product innovation, demand Stories by Daniel Obi Media Business Editor

oyin Salami, adjunct professor, Lagos Business School has underscored the role of marketing and marketing research in Nigeria’s search for new growth sectors to facilitate expansion and further diversification of the economy. He said marketing and marketing research will assist the nation in getting ahead of the curve and guide the production process that will generate faster economic growth. Speaking on the ‘Role of marketing research in Nigeria’s growth trajectory’ at Marketing Research Academy’s, MRA, programme in Lagos, the renowned economist said marketing research engenders understanding of existing and anticipated market needs. “It bridges the gap between product innovation and market place needs” Stating that nobody buys a product instead they buy the solution, Salami described innovation as gap identification. He listed three concepts in marketing –value creation, value communication and value exchange. He said it is important to innovate and create value, but it also more important to

communicate that value at a level that consumers are willing to continue to pay for it. Salami who teaches economics to business managers said affordability of product and consumer segmentation are significant in marketing to determine who affords the product. Relating marketing to economic growth, he said Nigeria has three key sectors – Agriculture at 22 % of GDP, Distribution at 17% while oil at 10% which forms about 60% of government revenue. He said marketing is already embedded in distribution activity as it involves selling and buying. He therefore said that understanding the consumer is a key component of marketing in playing its role in economic growth. “A marketer cannot sell to people he/she doesn’t understand and with understanding, innovation to fill market gaps becomes crucial”

According to him, new marketing methods demand new kind of marketing executives and a paradigm shift from the old ways. Without marketing, product is not created and demand will diminish”, he said. Also speaking at the forum, Feyi Olubodun, CEO, Insight Publicis Nigeria who was represented by Tayo Oyedeji, MD and Head, Starcom MediaVest SA said marketing is not just about promotions and advertising but it starts from product development, innovation to pricing, distribution and promotion. “So if we must grow as a nation we have to create new products and find a way to get it across to the consumers”, he said. Tayo said the role of government in value creation process is to create an enabling environment. According to him, some farmers big-

gest problem is not fertiliser or seedlings but getting their produce into the market. This is a government challenge instead of private sector problem. Speaking on understanding the consumer, he told the audience that mass market is dead. No marketer should plan to reach all Nigerians, instead Tayo said what marketers need to do therefore is to identify the segments that are profitable for their brands and find a way to reach this segment. He said in marketing, segmentation is key. In the past, he said segmentation has been executed through income, demographics, age among others, but Tayo said segmentation needs a hybrid model that takes into account the psychographic of the audience in order to have a much better way to determine target audience and reach them. Nigerian consumer today is a global audience and marketers need to understand this instead of talking to him or her as a local audience. Speaking on digital marketing, he said because Nigeria has the highest incidence of access to the internet by mobile phone in the world at 81 per cent, this means that digital is not something marketers do on the side as it is increasingly becoming the most

important part of marketing. So if any marketers must be effective, they need to understand digital and spend money on it. Today, Nigeria spends about 6 percent of total Ad spend on digital, It should be about 20 % currently, he said. In his contribution, Aggrey Maposa, CEO of Kantar Nigeria said any marketer that understands key mindsets of a consumer; he/she will perform ahead of competition. These changing mindsets are around identity, technology, digital, balance and health and nutrition. On identity, he said people are becoming sensitive to their ethnicity and region. This is where Hero Beer keyed its marketing strategy. He said technology has brought liberation to consumers and it has allowed them to connect beyond borders with different people, a development that was never envisaged. Maposa said this is influencing and inspiring what consumers plan and expect for their lives and what they expect brands to provide. On health, Maposa said consumers are becoming more conscious of what they eat to obviate certain ailments. Therefore, marketers need to understand these consumer changing habits in the way they develop products.

Katunga Media to discuss the effect of fake news on brands

he issue of fake news and its resultant effect on brands especially its direct impact on productivity and resultant effect on employment and the economy at large continues will be at the fore front of public discuss in October, this year. It is as a result of its very real debilitating effect on the continued growth of brands in specific that front line Media and marketing consultancy Firm Katunga media have put together the second in its bi –annual capacity engagement sessions for Journalists and other stakeholders to discuss very comprehensively the issue with a view to seeking lasting solutions to these malaise. The event which is scheduled to hold on October 12, at the Leola Hotel, Former Leadway Protea Hotel, Maryand Lagos will attract stakeholders in the Integrated Market-

ing Communications (IMC) sector.According to Edgar Joseph who is the Executive Vice Chairman of Katunga Media, the need for Brand Custodians to seek very credible and sustainable response to this malaise cannot be over emphasised, as a result of the critical damage it fosters on brand reputations which in most cases leads to the erosion of market share. It is in this regard, that Katunga Media in partnership with Brand Journalists Association of Nigeria (BJAN) and with support from the Nigerian Institute of Public Relations have pulled together some of the most influential industry experts to take a robust look at the issue with the aim of providing a discerning road map towards seeking a lasting solution. The session with a working theme- ‘Ensuring Effective Brand Protection and Projection in the era of Fake News will

have Folake Ani Mumuney the Group Head Corporate Communications at First bank

who will be ably represented by Yinka Ijabiyi who heads Brand Management of the

Bank will speak on: ‘identifying the specific impacts of Fake news on Brands’.

L-R: Bunmi Oke, Female Creative Advertising Personality of the year; Nkechi Alli-Balogun, Female Public Relations Personality of the year; Bola Thomas, Life-Time Achievement Awards; Joshua Ajayi, Publisher, Brand Communicator Magazine and Convener, WIMCA; Chizor Malize, Female Branding Personality of the year; Ada Adheke, Female Media Independent Professional of the year; Funmilayo Osineye, Representative of Nestle Nigeria Plc, Seasoning Brand of the year (Maggi), Sinmisola Obisesan-Hughes, Female Creative Director of the year at the Women in Marketing and Communications Conference and Awards (WIMCA) held on held on Friday, August 31st 2018 at Muson Centre, Lagos.

Chain Reactions unveils political campaign management services

ne of Nigeria’s leading Public Relations a n d I n t e g ra t e d Communications Consulting firms, Chain Reactions Nigeria has unveiled its bespoke public affairs and political campaign management services for governments, political parties, aspirants and candidates. It is aimed at preparing them to structure their political campaigns better with professional support in the run up to the next 2019 general elections in Nigeria. In a statement, Managing Director and Chief Strategist of Chain Reactions, Israel Jaiye Opayemi said the incumbent political office holders and their challengers can take advantage of different plans in the firm’s public affairs and political campaign management service bouquets to run better and well structured campaigns to win in this election cycle. Explaining the various services governments and politicians should take advantage of, Opayemi said, “we have a Campaign Play Book for governments and candidates seeking re-elections.

Outstanding female marketing, communication professionals, brands get recognition

utstanding female marketing professionals in the Nigerian Integrated Marketing Communications industry have been rewarded for their contributions to the growth of the industry. Speaking before the award session, convener of the conference, Joshua Ajayi said that selection of the awardees went through a select panel of assessors for the various sub sectors. “Unlike the norm where some platforms give out awards based on the ability of the awardee to sponsor or buy tables, we wanted to give a credible award to deserving female professionals who have in no small way contributed to the overall progress of this industry,” he said. In the individuals category awards,Nkiru Olumide-Ojo who heads Marketing and Communication for the Standard Bank Group in Southern and Central Africa bagged the Female Marketing Professional of the Year- Banking category while Rosemary Akpo, the Marketing Director, Africa and the Middle East for (Lucozade Ribena Suntory) clinched the Female Marketing Professional of the Year award for the FMCG category.

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BRANDING CSR: Unilever engages consumers on hand-washing to curb child mortality

DANIEL OBI

s part of its CSR, Unilever Nigeria last week engaged Nigerians on the role of proper hygiene in reducing child mortality. Its intention is to secure Nigeria’s future. Nigeria accounts for 13 % of Worlds Under- 5 deaths. This report examines the multinational company’s social investment. In 2003, Nigeria’s Federal Road Safety Corps enforced the compulsory use of seatbelts to curb road accidents which claim many lives. Today, FRSC has succeeded in inculcating that behavioural change as seat-belt practice has consciously caught up with motorists. Similarly, Unilever, multinational company operating in the FMCG sector has for over 10 years, through its Lifebuoy soap product, relentlessly campaigned for hand-washing with soap, especially among children. The Unilever hand-washing campaign entitled ‘Help a Child Reach 5’ was designed to save children and new-borns from preventable infections such as diarrhoea and pneumonia. This is also a journey to reduce child mortality. The key goal of the campaign is to create a behavioural change in the society and improve the proportion of population using safely managed sanitation services, including hand-washing facility with soap and water. Globally, 5.6 million children under the age of 5 died in 2016 and too many of these were from preventable diseases, according to Unilever. Out of this figure 2.7 million occurred in Africa with one million of them being newborns Nigeria accounts for 733,000 deaths of children under- 5. Out of this number, 215,000 deaths are due to preventable diseases. These figures, Unilever believes can be drastically reduced if the children and the family members are properly educated on the benefits of hygiene. It is awful when children and some adults engage in some unhygienic activities or when they return from school and work or after using the toilet and thereafter take foods without washing their hands properly with soap. This can result to diarrhoea and death. Concerned therefore, Unilever is determined at putting global spotlight on hand-washing with soap as a lifesaving habit. As part of its sustainable living plan,

L-R: Amy Oyekunle, CEO, Wellbeing Foundation Africa; Osato Evbuomwan, category manager Skin Cleansing, UNILEVER Nigeria plc; Omawumi Megbele, Brand Ambassador, Lifebuoy; Soromidayo George, director, corporate affairs, UNILEVER Nigeria plc; Sunday Isiyaku, country director, Sightsavers at the relaunch of lifebuoy anti-bacterial soap in Lagos.

the global company targets to reach one billion people with hand-washing behaviour change messages in the next two years. CEO of Unilever Nigeria, Yaw Nsarkoh said through the programme, the company seeks to decrease the incidence of pneumonia by 23 % and decrease incidence of diarrhoea by 45% by 2020.”Hand-washing with soap is the most cost-effective public health interventions to prevent child-death, hence our job at Unilever is to impact behaviours”, he said. He regretted that Nigeria accounts for 13% of the world’s under-5 deaths and every day, 2,000 under-5 year old die in Nigeria At the re-launch of Lifebuoy soap in Lagos recently, in continuation of driving the disease prevention message, various stakeholders underscored the importance of hand-washing message to the society. To ensure that the message penetrates to the target audience, Unilever partnered some organisations to take the message deep down. Amy Adekunle, CEO Wellbeing Foundation Africa who has been working with Unilever in training nurses and midwives in this course said these medics are the first key touch points for mothers during pregnancy or childbirth. She emphasised the importance of training the nurses to educate the mothers as children are most vulnerable to infections at early stages of life, and if not well handled it can impact negatively on growth and development. “Training them to discuss habit change with mothers is important so that the mothers start practicing hand-washing

with soap on key occasions like before breast-feeding their child. Working together, PPP such as these can pioneer innovative and practical initiatives to raise awareness of what good hygiene means”, Adekunle said. Another organisation, Sightsavers has since 2014 been working with Unilever Lifebuoy on a flagship programme called ‘Super School of 5’ that aims to prevent childhood blindness which is caused by an infection but preventable disease called trachoma. In his contribution, Sunday Isiyaku, Country director of Sightsavers said classrooms are key touch points to empower the youth in Nigeria. “We use tools like comics, puzzles, stories and games to make face and hand-washing with soap fun for children. We have observed the natural confidence of students improving when they have clean faces and hands. Empowering the youth of Nigeria will ensure that the next generation of Nigerians can enjoy an infection-free childhood”, Isiyaku said. Also speaking, Nwaoma Nwaogu, Pediatrician at Grorge Memorial Medical Center described hand hygiene a procedure for the purpose of reducing the number of micro-organisms on the skin. “When this procedure is performed with soap and water it is called hand-washing” She said hand-washing is as important to adults as it is to children as there are micro-organisms everywhere and on surfaces in homes, schools and other places that can be quite harmful and make children and adults alike susceptible to illnesses.

Osato Evbuomwvan, Category Manager, Skin cleansing, Unilever Nigeria said Lifebuoy has impacted the hand-washing behaviour of 425 million across 30 countries in Asia, Africa and Latin America. She said that giving people access to soap is not enough but changing people’s hygiene behaviours is key in improving hygiene outcomes for mothers and children in Nigeria. Speaking on the roles of businesses in advancing the Sustainable Development Goals, SDGs, Osato said businesses play fundamental roles in this direction, stating that realising SDGs will improve the environment for doing business and build markets. According to her, this is why Unilever is partnering some organisations so that the combined expertise can be leveraged to bring about large scale positive change in the hygiene sector. At the event, Unilever Nigeria also unveiled Nigerian singer-songwriter, Omawumi Megbele as Lifebuoy brand ambassador; to help children adopt better hygiene practices This is part of the nationwide campaign aimed at helping 2 million children adopt better hygiene practices and reducing child mortality. Brand Manager, Lifebuoy, Lanre Odupe, spoke on the brand’s rationale in selecting the artiste to represent the campaign, saying, “Omawumi is an excellent and passionate professional, a singer who is relatable to parents, guardians and their children. Being a mother herself she fully understands the need to address preventable diseases in Nigeria, and we are extremely delighted to have her on this initiative.”

Masters of Style top 10 finalists arrive Lagos as boot-camp begins

he top 10 participants of the Masters of Style fashion design competition, organized by PZ Cussons’ foremost brands, Imperial Leather and Canoe, have all arrived Lagos. The contestants who came from various parts of the country, will be camped in Lagos, as they begin preparations for the final phase of the competition. The Masters of Style competition recently concluded its campus tour of five universities: Jos, Port Harcourt, Benin, Lagos, and Calabar. Three winners emerged from each of the campuses as they exhibited their designs during the campus showcase. According to a statement, each received a token of N50,000, N20,000, and N15,000 respectively. However, only the top two finalists from each campus qualified for the next phase of the competition. The finalists are include: Makanjuola Adefunke and Okezie Abigail Ifeoma (University of Jos); Nwaribe Ekene and Otunwa Benedict (University of Port Harcourt); Omotayo Mary Ibukunoluwa and Onome Ruona Blessing (University of Benin); Salvation Uzoma and Yahaya Taofiq Abolarinwa (University of Lagos); Ita Majed Okon and Paramole Omotayo Saheed (University of Calabar). Welcoming the contestants, Brand Development and Activation Manager, Yetunde Badejo, congratulated the contestants for making it this far in the competition, and implored them to make ample use of the

opportunities and trainings during the Incubator and boot camp sessions. “We have engaged notable fashion designers and masters of the business of fashion, to train and mentor you as you prepare to take on the world. It is not just about the winner, which is why we want to equip every one of you for the future, so make good use of this opportunity, ask all the questions and learn as much as you can. We at PZ wish you all the very best,” she said. The Masters of Style Incubator and Boot camp programme, which will hold in Lagos for a two-week period, will feature coaches, mentors and judges such as foremost fashion designer, Mai Atafo; Creative Director, April by Kunbi, Kunbi Oyelese; Celebrity stylists, Style Infidel; fashion entrepreneur, Tolu Bally; and many others. The programmes have been designed to help these emerging talents groom and harness their skills, while also learning the business and trade secrets of the fashion industry. During this period, the contestants will be trimmed down to the final five, who will be assessed at the grand finale. The eventual winner of the competition will walk away with a whopping cash prize of N500,000, an internship program with a top Nigerian fashion designer, and a oncein-a-lifetime opportunity to showcase his/her collection at one of Nigeria’s top fashion shows.

Victor Moses unveiled as Binomo Brand Ambassador

s part of its plan to infiltrate the African and Asian market, forex trading company, Binomo signed and unveiled Nigerian and Chelsea footballer, Victor Moses as its official Brand Ambassador a statement has said. Moses would be the face of the Binomo brand, an online platform. Moses, who was named by the Nigerian Football Federation as the 2018 Nigerian Footballer of the Year and recently represented Nigeria in Russia is to help boost Binomo’s integral marketing campaigns and help the brand encourage

Nigerians to bid for financial independence and success by being open to the possibilities that online trading can proffer. Delighted with the offer and happy to be on board, Victor Moses in the statement explained his relationship with Binomo. “Trading with Binomo is secure, accurate, and delivers superior customer service. I am happy to be involved with such a leading brand and a global leader in online trading.” While speaking on the partnership, representatives of the award winning company echoed similar sentiments, “Victor Moses is one of Africa’s most talented and successful footballers who perfectly personifies the ideals of Binomo brand: being a goal-oriented person, smart decision maker, a hard worker and someone who inspires millions of people in Nigeria and across the world. We are truly excited to work with him as we bring Binomo’s unbeatable service offerings closer to the Nigerian and African market.”

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Stanbic IBTC Insurance Brokers to offer annuity to retirees, others Modestus Anaesoronye

tanbic IBTC Insurance Brokers Limited, a member of the Stanbic IBTC Group, has announced the addition of annuity products to its rich bouquet of insurance offerings, in a move targeted at giving retirees a variety of retirement income solutions to choose from. Speaking during a media interactive session in Lagos Anselem Igbo, chief executive, Stanbic IBTC Insurance Brokers, said the organisation is delighted to add annuity to its product offerings and offer Nigerians, particularly retirees, a product that brings value, flexibility, and security, among other benefits. The offering, he added, is in line with Stanbic IBTC Group’s determination, as the leading end-to-end financial services provider, to avail its customers and Nigerians quality and bespoke financial services solutions that cater

for their every needs. Some of the benefits of annuity, according to the insurance broker, include the creation of a guaranteed lifetime income stream, protection of assets in annuity from market volatility, growth of income, and the opportunity to transfer the annuity to a spouse or named beneficiary, among others. Igbo called on retirees to take advantage of the annuity products even as he assured customers of an efficient and prompt service delivery. “We believe that the test of any insurance arrangement is in prosecuting claims to a satisfactory conclusion for our clients. Our role as brokers also ensures that insurers, as a matter of obligation, pay claims equitably and promptly. Prompt payment of claims is a key factor in any insurance contract. We continuously develop key relationships and requisite logistical processes to ensure that we get clients the best quotes and prompt claims settlement,” Igbo said. “Our services are also

L-R: Olukemi Oyelola, deputy rector, Academics, Yaba College of Technology; Naza Alakija;Stella Awoh, host; and Folashade Ogunsola, deputy vice chancellor, Development Services,University of Lagos during the presentation of Awoh’s Art work made with pulverized ginger starch titled ‘New Dawn’ at Didi Museum, Victoria Island Lagos.

offered to both existing customers and non-customers of the group. We proffer advice on the management of risks,

FCMB backs Financial Literacy TV Show, The Bridge Season 2

eading financial services provider, First City Monument Bank (FCMB), has again demonstrated its passion for the empowerment and realisation of the aspirations of youths by sponsoring the second edition of The Bridge, Nigeria’s number one financial literacy reality television show. The 13-episode programme will start showing weekly from September 13, 2018 on Silverbird television, BusinessDay television and the FCMB YouTube channel. The Bridge, organised by BusinessDay Media Limited and powered by FCMB, is a web series aimed at improving financial literacy amongst Nigerian millennials and bridging the gap between young Nigerians who wish to start, grow and build a successful business and those who are already accomplished in their respective fields of endeavor. Season 2 of The Bridge, anchored by Arese Ugwu, author of the best-selling book, ‘’The Smart Money Woman’’ will feature successful millennial business owners and celebrities every week, and ask them

about their financial models and important financial decisions in building a successful brand. Viewers will have the opportunity to relate to and apply the topics discussed on The Bridge to their real life, with topical issues addressed such as money mistakes to avoid, how to tackle common challenges business owners face, business management and other topics that millennials are interested in to live their dreams. Commenting on The Bridge financial literacy reality show and significance of FCMB’s sponsorship, Diran Olojo, group head, Corporate Affairs of the Bank said the development is in line with its values as a simple, reliable and helpful financial institution. According to him, “we are pleased to be part of this initiative, as it is an innovative approach to open a new vista of opportunities in capacity building, job and wealth creation for Nigerians, especially the youth. As a Bank that is continually aligning its service delivery and operations to meet the needs of its ever increasing and diverse customer

base, we are confident that in The Bridge series, we have found a platform that embodies the spirit of entrepreneurship and will help fast-track the development of a new generation of successful young business owners”. Olojo disclosed that during the programme, the array of bespoke financial solutions of FCMB and their benefits to help existing and potential businesses to grow in a sustainable manner, would be showcased. FCMB has over the years developed various engagement programmes focused on empowering young Nigerians such as #FlexxYourCreativity, #FCMBFlexxtern and the Flexx Youth Entrepreneurship Masterclass. Through these initiatives, FCMB has given young entrepreneurs and students access to training, funding, mentorship, networking opportunities and jobs. The Bank’s Flexxzone (http://flexxzone. fcmb.com/) also provides useful resources to help young Nigerians build their business and career, while keeping up with latest trends in fashion, lifestyle and entertainment.

secure protection against such risks and reduce exposure to the risks of business disruption, injury and death.

We also deliver creative risk management solutions that enable our clients create, protect and preserve wealth.

Stanbic IBTC Insurance Brokers’ professional services are at no additional cost,” Igbo added

NBL appoints Emmanuel Oriakhi as new marketing director

igerian Breweries Plc has appointed Emmanuel Oriakhi as its new marketing director. According to a statement, Oriakhi, who until his new appointment was the Business Development Manager, Heineken Global Commerce, Amsterdam replaced Franco Maria Maggi who has been seconded by the foremost brewer on expatriation to Heineken office in Amsterdam. The statement said Oriakhi who will now be part of the NBL management team “will integrate and oversee the marketing and trade marketing functions in Nigerian Breweries”. As part of his new brief, Emmanuel Oriakhi will be responsible for formulating marketing/trade marketing strategies, energizing the team to strengthen the company’s brands in Nigeria as

well as expand the portfolio with relevant innovations. Emmanuel joined Heineken in 2003 as a Commercial Management Trainee, where he has held increasingly senior roles within the Commercial Function of Nigerian Breweries. He started working in Retail Availability projects and Trade Census, then moved on to managing and relaunching the then biggest Non Alcohol Malt brand in Africa “Maltina”; managing the Gulder brand, “then second biggest beer brand in Nigeria”; and managing the Heineken brand. He became Head of Marketing Strategy & Planning and Head “CMI, Media Innovation & Digital” at various times. In September 2014, Emmanuel moved to Amsterdam to take up the role of Regional Marketing Manager Heineken within the AMEE region. He was responsible for driving equity and vol-

ume growth of the Heineken portfolio throughout the region. He also worked in close collaboration with the other regional marketers in driving capability development programmes within the region, in line with global commerce tools and frameworks. As at July 2015, Emmanuel was appointed to his former role of Business Development Manager Heineken Global Commerce (AMEE), directly supporting 24 countries and 54 export markets to develop the Heineken portfolio according to the Global Strategy and in line with the Brand Stage Model principles. Emmanuel has been quite instrumental in building the Heineken brand portfolio in AMEE, with the brand contributing over a quarter of the region’s profitability and now the biggest beer brand in the AMEE region’s brand portfolio. He has since resumed early this month.

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‘Our goal is to give that on-grid experience to off-grid world’ HEATHER ONOH is the founder/managing director of Smarter Grid Energy, a renewable energy finance company. In this interview with FRANK UZUEGBUNAM, editor, West Africa Energy, she talks about her vision for renewable energy, collaboration with Lighting Africa and her expectations from government in order to jump start the sector. Excerpts: How would you describe Smarter Grid? marter Grid is a renewable energy finance company. We manufacture solar systems and finance it for the consumers. We go out there looking at how people live their daily lives and what kind of products they use. As a Nigerian, I am aware of the problem of energy in our country, so I look out for those things that people can apply to productive uses and we solarize these things and send them to the consumers. What this has done is changing lives and that is very important for us. For now, our main focus is solar energy because we believe that it is the easiest and lowest hanging fruit ever because the sun will always shine every day. So long as the sun shines every day, people should have energy. That is how God made it. Are your solar products just for domestic use? Our products are for productive use first before domestic use. Initially, it was for domestic use alone but in the process of dealing with our customers, going out in the field and piloting some of the products we have, we had to listen to our customers to hear what they really need. What we heard was that they want to break the vicious chain of poverty. So we decided to look at their daily activities and how we can help improve their livelihoods; we have people who are milling grains, people who are selling items in their corner stores, barbers, fishermen who were doing things but not in the way they should have done it if there was energy. So we looked at the products they were using and decided to solarize them. We designed products they can use sustainably to address the issues they face in their businesses and bring them from the base of the pyramid Tell us about your range of products? We have numerous products. We have our little Miss

Sunshine which is three bulbs not just for the home but for productive use as well. You can use this product to light up the stores, kiosk at the corners so as opposed to closing at 6pmyou can close by 11 – 12 midnight. This particular product is very affordable. At N40 a day, you can get this product and after 3 years, it becomes yours. We are very proud of this product because of what it is doing in the life of business owners. We have products for fishermen in the riverine areas. It is called the Big Catch and Smarter Catcher for sea water and fresh water fishing. We put in 4 years in the making of this product. Ordinarily, the way we fish at night is that we anchor the kerosene lantern to the canoe and cast the net. We designed something to replace that kerosene lantern and use our solar-powered light. The fishing nets were redesigned. Fishes naturally gravitate towards the light. The small fishes come towards the light and the big fishes go after them. Right now, we are piloting this product in the riverine area in Delta State. The first trial we did saw an increase in revenue of over 200 percent. We also have designed solar barbing kiosk. We have solar clippers too. The barbers at the corner shops close as soon as the sun goes down but with this and under N40 per day, they can stay till midnight. We just finished doing demonstration for one of the Vice Chancellors of a university and they said they want at least 3 in each hostel. We have milling machine for grains milling without having to worry about fossil fuel or generator. We have multi-purpose kiosk which some people say could be good for banks in the villages. We also have the Busy Bees – a business package whereby everything you need to sustain your business is right there in the box. Of course, we do have the solar powered TVs which you can use at home or offices

Heather Onoh

– we have 19 inch; 32 and 52 inches are coming out soon. Right now, we are designing all our systems to be able to power the things that we use and ultimately the goal is to give that on-gird experience to the off-grid world. We are in partnership with Airtel to light up all their kiosks with solar. At Adeola Odeku Street in Victoria Island, you will see our solar powered Airtel kiosk. What this does is that it is helping them to introduce a charging station which has become a key driver for their business. Think about it – if you want to sell recharge card in the villages, some of these people travel very long distances just to charge their phone so when they charge their phones at the kiosk, they can buy airtime. The partnership with the telco is good for all the parties. What are your challenges? One of the challenges we had initially was awareness. Solar power has had a lot of negative outlook. People were not very happy with the performance. They go to the market and buy substan-

dard solar products, take it home and in 2 months, if it messes up, there is no one to call.When we came in, we offered 3 years payas-you-go plan in addition to after-sales services. If we do not come to provide the services, you do not pay. Our second challenge is distribution network. Most of the people who truly need theseproducts are in the rural areas. That is where the partnership with Airtel is very important because telcos have been very successful and rugged in reaching the rural areas. Another challenge is fi-

nance. The lending structure from Central Bank of Nigeria (CBN) does not allow the commercial banks to lend to the renewable sector. For us business owners, we will like it if the local banks will come and lend to us in naira. For now, you get mostly international funding which is in dollars; you sell in naira and pay back in dollars which is very difficult. We were self-funding initially until we started attracting international funding and partnership with Lighting Africa. However, there are 2 local banks that recently showed huge interests in us and what we do. What is the partnership with Lighting Africa all about? When we found out about Lighting Global and Lighting Africa, we became associates of Lighting Africa and it was love at first “light”. Lighting Africa is a World Bank Group program that catalyzes and accelerates the development of commercial off-grid lighting markets in Africa. The program provides support to off-grid energy companies in different markets. We believe that being an associate of IFC’s Lighting Africa program in Nigeria helps build our credibility in the market. The program has helped us break big glass ceilings that we could not do on our own. It has given us support by helping us get to areas we did not know how to reach, connect with the people in these areas, and even get government agencies talking about solar. Through the Lighting Africa program, our workers receive train-

I will like the government to create a specific vehicle for renewable energy finance especially for smaller products. We need to start small with little products to light up small businesses and homes

ing and support to help us market our products. Lighting Global/Africa has wellarticulated consumer education campaigns for customer education, advocacy and industrial connection. These targeted campaigns put the products in people’s hands letting them see that this works and showing them companies like Smarter Grid who are doing this.Sowe have been leveraging the program activities that they have designed. How can government incentivise the renewable energy sector? From policy angle, I will like the government to create a specific vehicle for renewable energy finance especially for smaller products. We need to start small with little products to light up small businesses and homes.I will like to see policies from CBN for the renewable energy sector just the way they have funding specifically designed for agriculture. Renewable energy and agriculture are vertically integrated; we manufacture solar pumps for irrigation and so many other things for agriculture. The way that government saw it necessary to structure loans for agricultural sector, I think the same thing should be replicated for the renewable energy sector. In terms of monetary policies, initially, there was zero tariff on renewable energy products we import but now, the tariff is 25 percent and of course, it is a pass through costs because the costs are passed to the final consumer. What we have been preaching is renewable-affordable and sustainable but government policies are strangling the business model. This sector should be our new crude oil – it is a sector that should pull people out of the poverty level by helping them increase their revenue earnings. Government should pay attention to the sector and create a financial vehicle that will soften the policies for us so that the banks can lend to us and also soften the policies on tariffs.

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COMPANIES & MARKETS FSDH calls for urgent measures to stimulate economic growth HOPE MOSES-ASHIKE

SDH Research, an arm of the FSDH M e rc h a n t B a n k Limited is calling for deliberate policy measures and engagements to stimulate economic growth in order to avert another recession. The call follows the unimpressive growth numbers released recently by the National Bureau of Statistics (NBS), which was below the expectations of most analysts.

Airtel reaffirms commitment to corporate philanthropy Seyi John Salau

elecommunications services provider, Airtel Nigeria, has said it will continue to promote corporate philanthropy in line with its vision of empowering and assisting underprivileged Nigerians. Speaking at a media viewing of Episode 12 of Airtel Touching Lives Season 4, the company’s Director of Corporate Communications & CSR, Emeka Oparah, said it is part of the telco’s strategy to continue to give back to the communities where it operates and also encourage other corporate organizations and individuals to adopt the spirit of giving. According to Oparah, the Airtel Touching initiative, which was initiated four years ago, has positively impacted the lives of hundreds of thousands of Nigerians in areas such as healthcare delivery, economic empowerment, water, environment and primary education. “You and I know that the government cannot provide all the basic needs, so as a socially responsible organisation, we elected to try and do this and in the past four years; I’m proud to say we’ve done a bit of our own to help out. “This initiative is spread across the country and it’s our way of giving back to the society. These stories are documented and shown to people. What we do is not to look good on TV but to inspire other people to contribute their own quota. “There are so many people out there who are suffering and we try to mitigate this; but how many can we do? That is why we showcase this so that people can key into it and be spurred to lend helping hands to the needy,” Oparah said. He also hinted that the company will not rest on its laurels in terms of creating positive impact, noting that plans are in top gear to roll out a much more robust Touching Lives Season 5.

The real Gross Domestic Product (GDP) growth rate of 1.50 percent was recorded in the second quarter of 2018 compared to 1.9 percent in the previous quarter. Although the fragile growth was driven by the Non-Oil sector, the fact that dominant sectors of the economy either recorded low growth or contracted in Q2 2018 indicates that urgent actions are required. Agriculture, which is the largest sector of the Nigerian economy at 22.86%, recorded a marginal growth of only 1.19 percent.

“The slow growth in the Agriculture sector, if not checked, may lead to food shortage in the country and consequently escalating food prices and rising inflation rate”, Ayodele Akinwunmi, head, research and strategy FSDH Research, said. Trade, which is the second largest sector of the Nigerian economy, contracted by 2.14% and also entered a recession in Q2 2018. The weak purchasing power in the country is responsible for the contraction in the Trade sector. Speaking on the topic,

‘Urgent Measures Needed to Stimulate Growth’, at monthly economic and financial markets outlook, in Lagos, Akinwunmi said improvement in the business environment that can lead to job creation and payment of salary of workers, particularly among the state civil servants, will stimulate purchasing power. FSDH Research observes strong growth in the Information and Communication and the Construction sectors of the economy. The contraction in the Real Estate sector can be reversed if government at all levels

partners with private sector operators to provide affordable housing units for Nigerians. The current low GDP growth rate is not strong enough to stimulate credit creation. It has also increased the risk of doing business in Nigeria. “Therefore, urgent measures are required so that low GDP growth rate does not become a new norm in Nigeria”. On inflation rate, FSDH Research forecasts that inflation rate to remain flat at 11.14 percent in August 2018, while noting the rising pressure from

food prices and its impact on inflation rate. Looking at the capital importation, he said the total value of foreign capital inflow into Nigeria stood at US$5.51bn in Q2 2018, a drop of 12.53 percent, compared with Q1 2018. This drop is an indication of the risk aversion of foreign investors. Both Foreign Portfolio Investments (FPI) and Other Investments declined in Q2 2018 over Q1 2018. However, Foreign Direct Investments (FDI) increased marginally in Q2 over Q1 2018.

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Economic recovery sees passenger traffic up 23.9% in H1 2018 Stories by IFEOMA OKEKE

usinessDay’s findings have shown that improvement in the country’s economy have resulted in the increase of total air passenger traffic in the first half of 2018. In a data released by the National Bureau of Statistics, (NBS) last week, 7,503,408 passengers passed through Nigerian airports in the first half of 2018, this is a 23.9percent growth from the 6,054,319 passengers recorded in the first half of 2017. Tayo Ojuri, an industry expert and Chief Executive Officer, Aglo Limited, an aviation support service told BusinessDay that the airline business is often the first hit during recession and will improve once the economy recovers. Ojuri explained that the direct implication of improvement in the economy is that there will be increase in the purchasing power of people,

which will enable them buy tickets to travel. Experts in the aviation sector have said that in 2018, air travel will gain momentum as a result of improvement in the Nigerian economy. A clear indication of this is that airlines are bringing in bigger aircraft, opening new routes and expanding fleet. Oil production recovered to 1.8 million barrels as at January 2018, according to OPEC data, from as low as 1.2 million barrels daily in the thick of militant disruptions. These factors contributed to lifting the economy from recession in the second quarter of 2017, according to the National Bureau of Statistics (NBS). The economy has consolidated its exit from recession after growing 0.8 percent in 2017 compared to a 1.6 percent contraction the previous year. In addition to this, this significant growth in both the first and second quarters of 2018 was mainly driven by the increased passenger traffic through Abuja airports, compared

Air Peace rewards Anambra students with free tickets over feat in technology challenge

ir Peace has congratulated five Anambra State students and their teachers on emerging victorious in the recent Technology challenge held in the United States, honouring them with free return Owerri-Abuja tickets to facilitate their visit to the Presidential Villa, Abuja on Thursday. The five Anambra students from Regina Pacies Secondary School, Onitsha represented Nigeria and Africa at the World Technovation Challenge in the Silicon Valley in San Francisco, United States and defeated Spain, USA, Turkey, Uzbekistan and China to lift the gold medal in the contest. They were billed for a reception by the Federal Government at the Presidential Villa, Abuja on Thursday in company with Miracle Igboke, their mentor, Uchenna Onwuamaegbu Ugwu, chief executive officer of Edufun Technik STEM, and Vincent Ezeaka their principal. The girls won the technology contest with the mobile applica-

tion innovation, FD-Detector they developed to assist in checking fake pharmaceutical products in Nigeria. In a statement signed by Chris Iwarah, Air Peace corporate communications manager, said the carrier was proud of the schoolgirls’ rare feat. The development, Air Peace insisted, was proof that its effort to develop engineering capacity in Nigeria’s aviation industry was not a misplaced venture. “We are very proud of the feat of these young girls from Nigeria. At Air Peace, we believe that given the right environment and encouragement Nigerians will excel in all their undertakings. These girls have proved beyond a doubt that Nigerians possess everything it takes to rank among the best in the world. “This is the motivation for the huge investment Air Peace has continued to make in the training of young Nigerians in aviation engineering. We will continue to recognise, encourage and reward excellence,” the airline said.

with the same period in 2017 when the Abuja airport was closed during the period for runway improvements. There was also a boost in passenger traffic in March 2018 when total air passenger was recorded at 1,721,224 (797,608 arrivals and 923,616 departures), a 62percent

jump from the average passenger traffic from the previous two months (January & February 2018). Lagos and Abuja’s international and domestic airports accounted for 73.4% of total air traffic passengers in Q2 2018, a decline in their combined market share in Q1 2018 (77.9%) but

an increase in combined market share over the same period last year (Q2 2017). Kola Olayinka, country manager, British Airways told BusinessDay that “everything has been looking positive for Nigeria. We are a big, economy, people are investing and coming in. people want to invest in Nigeria Air because they know we have the numbers. Anyone who puts money will surely make money.” Philip Akesson the country manager for Travelstart Nigeria, said the increase in ticket sales experienced in Nigeria is an indication that the stable economy is helping to give more trust such that the airlines will keep investing. “Delta now operates Lagos to NewYork flights, RwandAir has added more flights and a lot of the airlines are adding more flights and new routes. Some airlines that flew three times into Nigeria before are now doing daily now. The market is not like it was two years ago, it is improving and a lot of these is because of stability and it is good for business,” Akesson said.

South African Airways increases Luanda frequency for a seamless travel experience

outh African Airways (SAA) has increased frequency to Luanda, Angola, creating a seamless travel experience for customers travelling to various destinations on the SAA network on all continents. SAA’s African and Asian destinations in particular will have an increased connectivity allowing for seamless travel. The two extra weekly flights will commence with effect from 9 September 2018, bringing SAA’s total weekly operations between Johannesburg and Luanda to four flights per week. SAA has been operating to Luanda for more than 30 years, making it one of the leading airlines in Angola. The route is very popular with not only Angolans, but with most of the guests travelling from and to Luanda and then connecting on SAA’s route network to various destinations such as Sao Paulo, Hong Kong, New York, Washington and the entire Southern African Development Community. SAA operates to all the major cities

such as Lusaka, Maputo, Windhoek, Harare, Mauritius, Lilongwe and Blantyre. Nairobi, Entebbe and Dar Es Salaam also feature prominently on the travel itineraries of our guests on this route. Both narrow and wide body aircraft (A330-200, A330-300 and A320) operate on this route. The additional frequencies that take effect from 9 September will be operated with the A320 two class configured aircraft. “As part of our Africa growth strategy, we are enhancing our footprint on the continent by expanding our route network to enable seamless connections for our customers. We are especially pleased to offer our customers from Angola more travel options to connect them to the world through Johannesburg’s OR Tambo International Airport. East and Southern Africa, and the rest of the continent and the world are easily within reach,” says Tlali Tlali, SAA Spokesperson.

SAA remains committed to living up to the promise of “Bringing the World to Africa and taking Africa to the World.” SAA’s Network Development Plan is aligned to the Alliance Strategy by strengthening its position in sub-Saharan Africa through forming new partnerships. SAA customers can also fly with TAAG Angola Airlines, as the two carriers code share between Johannesburg and Luanda as well as Cape Town and Luanda. TAAG Angola Airlines code-shares with SAA on its direct services between Johannesburg and Luanda, including destinations such Harare and Lusaka on the South African Airways network. South African Airways (SAA) is one of the leading carrier in Africa, serving 57 destinations, in partnership with SA Express, Airlink, and its low-cost carrier, Mango, within South Africa and across the continent, and nine intercontinental routes from its Johannesburg hub.

BDTECH

BUSINESS DAY

Tuesday 11 September 2018

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Nigeria to see uptake in cloud technology adoption …As Signal Alliance, Microsoft partner in move to deepen penetration Stories by JUMOKE AKIYODE-LAWANSON

he interest in digital transformation by organisations that have seen the benefits of tapping into opportunities created by the accelerated growth of technology adoption will lead to increased usage of cloud technology in Nigeria, experts say. Cloud computing is the practice of using a network of remote servers hosted on the internet to store, manage and process data, rather than a local server or a personal computer. Types of cloud services include; Infrastructure-as-a-service (IaaS), Platform as a service (PaaS) and Software as a service (SaaS). Today, nearly every organisation has some level of cloud presence, typically for customer relationship management (CRM), human capital management (HCM), or procurement. Cloud is one of the key drivers of digital transformation. Cloud has disrupted the traditional Information Technology (IT) model by drastically reducing time to market and total cost of ownership (TCO) for innovative solutions. With its

ease of use and ubiquitous access, cloud has democratised the decisions about software purchasing, access, and usage. In a move to deepen cloud ser-

vice adoption in Nigeria, Signal Alliance (SA), an IT and application service provider company and Microsoft recently launched the FastTrack Partner Program in Nigeria.

The companies have established that the program is an exclusive group of partners across the globe approved by Microsoft to accelerate the migration of its platforms to the cloud. This is a customer success service designed to help them realise business value faster with the Microsoft Cloud. Signal Alliance is one of two partners from the West, East and Central Africa to join the other 200 partners from across all parts of the world. With the explosion of Microsoft Cloud business, these partners will help customers successfully move their workloads to the cloud. The Microsoft FastTrack services is a free direct onsite support to help a licensed user organisation onboard, migrate, and drive adoption of Office 365 and other Enterprise Mobility Suite. Such as; exchange online, SharePoint online, Skype for business, Yammer enterprise, Office 365 ProPlus, Intune, Azure AD, etc. Kenneth Ufomba, SA FastTrack manager said, “Signal Alliance is a Microsoft Fast Track Partner. We assist with various onboarding activities using a combination of tools, documentation, guidance, and carry out configuration tasks where

applicable. The objective is to drive adoption of workloads to ensure the following; increased productivity of employees, maximised return on Microsoft cloud investments, drive technology change management within the organisation and ensure better business outcomes.” In other words, FastTrack helps customers to provide a great customer onboarding experience, shorten customer time-to-value and accelerate customer engagements through high-margin, highvalue services. Speaking further, Ufomba said, “Many organisations who are early adopters that engaged us, have come to realise that there are many areas where additional help is needed.” In the last few months Signal Alliance has worked with several organisations and provided assistance to customers as they engaged with the SA Microsoft FastTrack team. Signal Alliance has been an enterprise technology provider for over two decades and it is a leading Microsoft enterprise partner in Nigeria for the past 10 years. Also, it is Microsoft biggest Licensed Solutions Provider (LSP) in West Africa.

Startimes, UNAIDS partner on mobile application to increase HIV/AIDS awareness

tartimes, digital television operator and UNAIDS, the Joint United Nations Program on HIV/AIDS are collaborating to increase awareness on the infectious disease among young people with the use mobile online video application. The purpose of this partnership was addressed at a meeting held in Beijing on Monday September 4, 2018, with the theme of “Value of new media in African HIV/AIDS prevention campaign”, where Gertrude Mutharika, the first lady of the Republic of Malawi, Michel Sidibé, UNAIDS executive director and Guo Ziqi, StarTimes group vice president discussed the need for this timely digital intervention by Startimes. It was submitted that new HIV infections and AIDS-related deaths are more likely to occur among young people in Africa because HIV/AIDS

prevention information and knowledge don’t reach out to young people efficiently. It has been an urgent issue for global HIV/AIDS Prevention Campaign to engage more young people in prevention. Michel Sidibe said at the meeting: “We have seen progress in most countries today, but the biggest challenge that we face is complacency. The young people, they don’t have information, they don’t have knowledge, so they don’t protect themselves…So, information, knowledge and education, and that’s why StarTimes is very important for us.” He continued: “I just want to say sharing information, bringing knowledge and making sure that we can change young people will be key for ending AIDS.” Sidibé noted that for most African countries, 70 percent of the population are below the age of 35 and they

are not getting information. “Our recent approach will completely change the situation and help us to go for a generation free of AIDS.” With smartphone use and internet penetration soaring, Africa is set for a communication way revolution. Similarly, in Europe, US and China, more and more African young people, get used to watching stream videos on phones. “Based on this trend, StarTimes launched its video streaming service in African market with StarTimes App in June. Within 3 months, StarTimes App has had eight million downloads and the figure is expected to be 15 million at the end of this year,” said Guo Ziqi, noting that StarTimes App right now is streaming the “Zero Discrimination” PSAs as a trial cooperation with UNAIDS through the online video platform. Gertrude Mutharika, Malawian

first lady and former president of the Organisation of African First Ladies Against AIDS, said: “Malawi has significant and rapid growth in the number of mobile phones and subscribers over the last two decades. The majority of people who buy phone are for using social media communication as well as a source of information. It is for this reason that we revise HIV prevention strategy and seeks to explore social media technology and platforms to reach out to young people.” “I found that the launch of StarTimes App for HIV prevention is very timely and appropriate. This will greatly enhance our national efforts to reduce HIV infection, particularly on young people. I looking forward to working closely with StarTimes and UNAIDS in Malawi,” she remarked. During the meeting, Guo introduced the China-Africa Cooperation

project, “Access to Satellite TV for 10,000 African Villages”, which would be undertaken by StarTimes, and proposed to explore possible ways to help popularize HIV/AIDS prevention information and knowledge in African rural areas with the platform. UNAIDS and StarTimes formally established partnership on 12th May, 2017 with signing a MOU in Beijing “to reduce the impact of HIV across Africa by disseminating messages to the general public to increase awareness of HIV and UNAIDS’ work and reduce stigma and discrimination of people living with HIV and populations affected by HIV”. After the establishment of partnership, StarTimes and UNAIDS are boosting their cooperation in different African countries, aiming to mobilizing all available resources to enhance the awareness of HIV/AIDS in the continent.

BUSINESS DAY

Tuesday 11 September 2018

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

Africa needs more investment in ICT skills to stimulate economic growth - DBI Stories by JUMOKE AKIYODE-LAWANSON

kechukwu Adinde, Administrator, Digital Bridge Institute (DBI) has called on African governments to launch an aggressive intervention in the ICT sector by investing in digital skills to stimulate economic growth and youth employment. Adinde made this known at the recently concluded International Telecommunication Union (ITU) and the Digital Bridge Institute Regional Human Capacity Building Workshop in Abuja. Speaking on the theme; “strengthening capacity on internet governance in Africa, he stated that digital literacy in the 21st century has become as important as the ability to read and write was in the 19th century. ``Indeed, policy makers and governments in Africa ought to launch aggressive intervention into the ICT industry by investing in skills development to stimulate economic growth and tame the rising tide of youth joblessness and associated insecurity in the region,”

Ikechukwu Adinde, administrator, Digital Bridge Institute.

Adinde said. He lauded the ITU for establishing training centers but regretted that “only a few of our youths have the wherewithal to enroll for some of the human capacity training opportunities provided by the ITU centers of excellence and other tertiary institutions. “This makes the case for intervention even more imperative,’’ he said.

According to the Administrator of DBI, there is a convincing argument that if Africa wants to transform and become a global player, it must transform its human capital. Adinde said Africa must open access to quality education and training for the young population by deliberately creating funds that will increase access to acquisition of digital skills.

Citing the example of the Smart Africa Scholarship Fund launched during the Transform Africa Summit 2015, which hosted over 2,500 delegates from 81 countries, he said “the fund aims to provide financial support to our youths who are seeking post-graduate and certification- level training at the continent’s best ICT centers of excellence. ``I am a keen advocate of the digital skills initiative by the ITU Centers of Excellence Network for Africa which recommends the reservation of a certain percentage of the Universal Service Fund for ‘universal access to digital education’, he said. According to him, the ITU Centers of Excellence in Africa strongly canvassed this position in 2016 at the Capacity Building Symposium in Nairobi, Kenya.` ``It is time that we make a bold decision in this direction to provide funding access for the much talked about digital skills literacy by earmarking a proportion of Universal Service Fund (USF) for digital skills literacy. ``This resonates strongly against the backdrop of indica-

tions that surplus balance exist in USFs across Sub-Saharan Africa (SSA). A GSMA report in 2014 on the utilisation of USFs revealed that over half of the inactive funds (with undisbursed/surplus balances) within the 69 countries studies are based in SSA. The report went further to state that, if it is not possible to disband the majority of the funds and return the monies collected, then these USFs will require significant reform and restructuring in order to be transformed into functional and effective investment support vehicles for un-served and undeserved areas in SSA. “One of such reforms should be to invest the funds in digital literacy,” Adinde said, as the ITU workshop in Abuja provided another opportunity to focus discussions on the future of skills and knowledge. ``As we seek to change the African landscape in this era of connected economy, we must take strategic decisions that are implementable within the shortest possible time because of the changing terrain”, he said.

customers to have the highest level of confidence when viewing data and reports within their consoles. ESET maintains that its new enterprise products and services are designed to be seamlessly deployed in parallel with the existing ESET enterprise offer. Speaking during the unveiling of the products at the company’s head office in Lagos, Olufemi Ake, country manager, ESET, ex-

plained that the West African market now have access to upgrade or subscribe to the newly launched enterprise products and services. Ake said, “These powerful new tools which fit into the Gartner CARTA framework helps organizations to prevent, detect, predict and resolve all forms of known and unknown threats. “This is based on our multi-layered technology with metadata from each of these layers processed to our ESET LiveGrid® cloud systems, providing further intelligence to our machine learning algorithms. These automated systems, in combination with the expertise of our researchers and engineers, enable us to prevent these threats at the network level before they hit the network. “This solution is fully customizable, enabling customers to tailor the solution to their needs, and it provides vastly more visibility for complete prevention, detection and response against all types of cyber threats with continuous management, visibility and monitoring of all products and threats from a single pane of glass,” Ake explained.

ESET launches new line of enterprise security solutions

SET, a top cybersecurity research company has launched a new line of enterprise security solutions designed to provide the global enterprise sector with tools for prevention and management of cyber risks on a global scale. The European Union based company with offices in West Africa says it is raising its game with the introduction of ESET Dynamic Threat Defense, an off-premise cloud sandboxing solution providing almost instant analysis of zero-day and ransomware threats before they reach the network. As recently reported by Forrester1, buyers want an “endpoint security suite that consolidates capabilities and minimizes complexity when possible.” ESET’s new line of cybersecurity solutions meets this demand and offers something extra. The new line of enterprise security solutions also welcomes the brand-new ESET Security Management Center, a revamp of the renowned online console ESET Remote Administrator. This online console provides not only complete network visibility and full security management via one

single pane of glass, but also fully customizable reporting and single-click threat remediation, adding important complexity-minimizing elements to the whole suite. Juraj Malcho, chief technology officer, ESET said; “We understand global enterprise increasingly requires cybersecurity solutions that are more tailored to their specific needs, because we cooperate with a large number of them at the

country level.” “Get your hands on our latest offering and you’ll see how easily manageable an enterprise security solution can be,” he added. The ESET Endpoint Protection solutions offer enterprises increased visibility of the alerts being sent to ESET LiveGrid® – a platform made up of 110 million sensors worldwide and verified by ESET research & development centres. This allows

L-R; Adeniran Omotade, technical support manager, ESET Nigeria/Ghana; Uche Okafor, partner business manager, ESET South-West Nigeria; Olabanji Soledayo, marketing & consumer sales manager, ESET Nigeria/Ghana and Aderemola Ilori, human resource manager, ESET Nigeria and Ghana, at the launch of ESET’s ICT Security products in Lagos recently.

Rack Centre achieves business continuity management certification

fter major evaluation of its operations, Rack Centre, Africa’s premium colocation Data Centre has been seen worthy to obtain the ISO 22301:2012, business continuity management certification, joining an elite number of Data Centres in the world to attain such a feat. Awarded by the globally recognised British Standard Institute (BSI), industry watchers say the certification is an attestation that Rack Centre has evolved a robust and holistic system for business continuity management. The ISO 22301:2012 is designed to protect a business from threats to business continuity and proactively put plans in place ahead of time to prevent such threats impacting on the smooth running of that business or to keep the business running during crises and improve recovery time. Theuns Kotzé, managing director BSI Middle East and Africa said: “In today’s volatile world, understanding what it takes to ensure the survival and prosperity of an organisation can be more challenging than ever. By achieving ISO 22301:2012 certification for business continuity management, Rack Centre demonstrates its commitment to improve information resilience and minimise the operational impact of disruptive incidents. “On behalf of BSI, I would like to congratulate Rack Centre for achieving ISO 22301:2012 certification and for your ongoing commitment to continual improvement,” he added. Delighted in securing such a coveted certification, Ayotunde Coker, managing director, Rack Centre, said this is a key milestone for Rack Centre and underpins our commitment to excellence and business continuity. To obtain the certification, Rack Centre partnered with Deloitte, the internationally recognised professional services firm which provided consulting, implementation and certification services. Deloitte in its congratulatory message to Rack Centre said, “we understand that this marks a turning point in Rack Centre’s journey in maintaining the competitive edge and customer’s delight. It had been a tremendous learning experience for us all and it is heart-warming to see all the hard work resulting in this success.’’

BUSINESS DAY

Tuesday 11 September 2018

SPECIAL REPORT

ON LEADING PRIVATE UNIVERSITIES IN NIGERIA 1 WATCH OUT FOR OTHERS

‘We want to be the model for new private higher education institutions in Nigeria’ Aderemi Aaron-Anthony Atayero, as the fourth substantive Vice-Chancellor, Covenant University, has among other responsibilities, the role of driving the vision of the proprietor of this citadel of higher learning. In this interview with KELECHII EWUZIE, he shares some of the mandates on how to revolutionise private university education. Excerpts: What are the key drivers of academic growth in Covenant University? ovenant is blessed with a dynamic Chancellor and Chairman of the Board of Regents in the person of David Oyedepo who provides focused strategic leadership to the University together with members of the Board. We also have a crop of committed faculty and staff who have imbibed the seven core values of the University. Besides, our campus is endowed with world-class infrastructural facilities conducive to innovative teaching, research and recreation for faculty, staff and students. Also, the drive for growth emanates from the compelling nature of its vision, mission, and departure philosophy. The vision of the university is to be a leading World-Class Christian Mission University, committed to raising a new generation of leaders in all fields of Human endeavour; and the mission is to create knowledge and restore the dignity of the black man via a Human Development and Total Man Concept driven curriculum employing innovative, leading edge, teaching and learning methods, research and professional services that promote integrated, life-applicable, life-transforming education relevant to the context of Science, Technology and Human Capacity Building. Arising from these are: •Custom-built programmes that develops the total man—spirit, soul, and body. •Serene, safe, secure, pleasant, and empowering ICT driven teaching and learning environment. •Robust international linkages with top-ranked global institutions. •Pedagogy focused on graduating Job Creators rather than employment seekers. There is a common perception that private universities are very expensive, yet they offer little academic benefits to Nigeria. What is your take on this? I do not agree with this perception of private universities. In fact, the leadership of the regulatory agency of university education in Nigeria are of the view that the future of higher education in Nigeria lies with private universities.

Apart from the endorsement of the quality education which private university offers, discerning employers of labour approach private universities for recruitment of their graduates. For instance, at Covenant, feedback from employers about our graduates validates the high quality of education we provide; we have continued to receive request for recruitment of our graduates because of the excellent performance of Covenant graduates in their employment. I believe that it is the same with other private universities. But you will agree with me that excellent quality comes at a cost and if private universities are operating without government subvention, the fees charged would be relatively higher than that of public schools being funded from the common or public treasury. It may interest you to know that private universities were excluded from accessing the TETFUND by law. One of the major targets of Covenant University is to positively impact the Nigerian education system. How successful have you been in this regard, considering the quality assurance and funding challenges that university education system still grapples with in the country? Covenant’s success at positively impacting the Nigerian education system is evident. Today, the University has become a reference point for university education in Nigeria and Africa. For instance, the university has been adjudged by Elsevier’s Scival as number one globally in 26 research fields and number two in seven others. Recently, Times Higher Education rated Covenant as number one university in multidisciplinary research output in Nigeria. In addition, Covenant has satisfied the ranking requirements for Times Higher Education ranking of World Universities and we expect to be among the universities that will be listed in the next ranking of world universities by September 2018. Further to these, there were several departure policies that the university established at inception, such as non-award of pass degree and entrepreneurial education studies, which has been adopted by the National Univer-

Aderemi Aaron-Anthony Atayero

sities Commission. The NUC continues to recommend Covenant’s model of entrepreneurial education to Nigerian universities. Similarly, Covenant introduced some custom-built programmes into its curriculum at inception in addition to the BMAS courses of the NUC. Presently, the NUC is considering a review of its BMAS to enable universities have more leverage to include their own unique custom-built courses in their curriculum. This development would among other things enhance the uniqueness of private universities and facilitate turnout of robust graduates who would be solution providers. What are the major achievements that Covenant University has recorded since inception? To the glory of God, Covenant have consistently received local and international recognitions and awards, which are indicative of the University’s achievements. In terms of research, the University, through the Covenant University Centre for Research, Innovation and Discovery (CUCRID), has established 21 active research clusters with several patents issued by NOTAP. Also, Seventy-five (75) members of our faculty were listed among the top 10 Nigerian authors in various subject areas, accord-

ing to a recent computation by Elsevier’s SciVal. As for teaching, all our programmes are accredited by the National Universities Commission and their respective professional bodies. Many world-class universities and centres of excellence are collaborating with us, which attest to the quality of our delivery. Covenant was recently selected as a Centre of Excellence for execution of the African Development Bank (AfDB) Jobs for Youth Africa initiative. This is a 10-year programme aimed at equipping youths across Africa with skills needed to secure ICT related employment and businesses. The programme is expected to create over 9 million jobs, train 234,000 youths and establish 130 ICT Centres of Excellence in Africa. Also, the University is in collaboration with MIT as one of the higher institution members of Abdul Lateef Jameel World Education Lab (J-WEL). Through this collaboration, we are able to achieve redesigned education systems, new curriculum, improved teaching and learning modalities, development of top faculty and high impact research, and graduate students who are confident and empowered problem solvers. What can prospective undergraduates and post graduate students expect from Covenant University going forward?

In line with our vision to raise a new generation of leaders, we have established a curriculum and quality assurance processes that ensure that we turn out a total graduate who is mentally resourceful, intellectually reinforced, enterprisingly self-dependent, futuristically visionary, and responsibility sensitive to the changes demanded for the leadership role or dominion nature he is made for. These are life-applicable and life-transforming education experiences prospective Covenant students should expect. As an experienced university administrator, what is your leadership style like? As an institution, Covenant is on a mission to birth a revolution in Nigeria’s education landscape. In line with this mission, it is our vision to be listed among the top ten universities in the world by 2022. To accomplish this, I have engaged transformational leadership style to disrupt the status quo and engender the required changes in our faculty and staff as well as our processes. Occasionally, difficult decisions have to be taken and I encourage the flow of innovative ideas from the bottom to the top. Where do you see Covenant University as a private institution in the next five years? In the short term, (i.e. by 2022) Covenant would have emerged as one of the top ten Universities in the world. This will signpost the fulfilment of Vision 10:2022. Our ReCITe agenda is aimed at having Covenant listed among the top ten universities in the world, be a predominantly research Institution and become the model for new private Higher Education Institutions. What are your views about the education sector in Nigeria today? The importance of the education sector in our national development aspirations cannot be over stressed. The Nigerian budget for education is less than 10% while in Ghana it is approximately 30%. Presently, Nigeria has both problems of access and quality. Ironically, Ghana makes about $1bn annually from educational tourists from Nigeria. You cannot get much from a venture that you have not invested in. At a time

in Nigeria, our education system began to experience several challenges. The demand for university education is increasing without commensurate increase in funding and infrastructure. Consequently, the quality of graduates from our universities has been called to question as some multinational companies give preference to graduates from foreign universities in their staff recruitment. Over 1.6 million candidates registered for the 2018 UTME and the carrying capacity of the existing universities is grossly inadequate to accommodate this army of prospective students. Government, in its wisdom allowed private universities to come in to expand access and improve quality. Since the emergence of private universities, the number of admitted students have increased, new programmes that are relevant to our development aspirations have been introduced, and quality have also improved due to the engagement of ICT in teaching and learning, robust curriculums, and established quality control mechanisms. However, Government has a lot to do in addressing the challenges facing the establishment of private universities, their efficient management, development, and growth. We should not forget that private universities came on board because of gaps and decay in the public institutions. Therefore, mitigating their challenges is synonymous to solving the problem of the entire sector. The solutions to the sociopolitical and economic problems in Nigeria lie in quality and sustainable education. I boldly state that any investment in the education sector is an investment in the future of Nigeria. Quality and sustainable education has the potential to create employment, improve wellness, and create a well-informed or politicallyinformed citizenry. Therefore, I want to appeal that Government should declare a state of emergency in this sector and devise a developmental plan that will address and remedy the problem of access and quality within a specified period. There is need for massive infrastructural development in this sector.

BUSINESS DAY

C002D5556

Tuesday 11 September 2018

BUSINESS DAY

Tuesday 11 September 2018

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Nigeria’s 7% education budget dims beside Ghana’s 14% Stories by KELECHI EWUZIE

hile neighbouring Ghana, with a population of 28 million is preparing her workforce for the challenges of the future with increased budgetary allocation to education, Nigeria with over 186 million people lags behind, as successive governments fail to lift the sector financially. Ghana’s budgetary allocation for education in 2018 is N740 billion, which is 13.76 percent of her N5,382,396,406,800 total budget, while Nigeria budgeted N605 billion, which is 7.03 percent of her N8,612,236,953,214 total budget. Nigeria’s education sector has not received as much attention as it should in over a decade. Budgetary allocation to the sector has consistently fallen short of the United Nations Educational, Scientific and Cultural Organisation’s (UNESCO) recommended 26 percent. Analysis of budgetary allocation for education over the last six years has not even hit 15 percent; a situation which educationists say is reflective of how much importance successive government’s accord education. In the 2017 fiscal year, budgetary allocation for education was N550 billion, representing 7.4 percent of the N7.444

L-R: Adesuwa Ifedi, Vice President, Policy and Partnership- Bridge International Academies; Martha Costa-Sherwood, Head of Senior School, Children’s International School,; Uwaye Soetan, Director, Fantasia Education Partners and Obafela Bank-Olemoh, special adviser to the Lagos State Governor on Education at the School Leaders Convention held in Victoria Island, Lagos.

trillion total budget, while in the 2018 appropriation bill of about N8.612 trillion, only N605.8 billion was proposed for capital projects in the education sector representing 7 percent. Those who know in the education sector maintain that Nigeria’s low allocation to her education system, no doubt is costing the nation huge losses by way of poor infrastructure, low motivation for teachers across all levels and by extension, foreign exchange, as

parents in search of quality education take their children to school in Ghana. They observe that Ghana makes about $1bn annually from educational tourists from Nigeria, adding that the Federal Government cannot get much from a venture that they have not invested in. According to them, Ghana has cashed in on the neglect of Nigeria’s education system by encouraging the influx of Nigerian students and earning foreign exchange from them.

The importance of the education sector in our national development aspirations cannot be over stressed. The Nigerian budget for education is less than 10% while in Ghana it is approximately 14% says Aderemi Aaron-Anthony Atayero, Vice-Chancellor, Covenant University, Otta Ogun State. Analysts observe that the constant below par budgetary allocation to education has several notable downsides at all levels. They say that basic

education is still characterised by low net enrolment, as about 8.5 million children are out of school. School infrastructure has not caught up with increasing enrolment. According to them, the secondary level is not spared the decay. There are infrastructural challenges, including inadequacies in power and water supply. Over 65% of schools have no public power supply. ICT infrastructure is also poor at the basic education level. Inadequacies of

classroom, laboratory and workshop facilities pervade the system. At all levels, teachers are inadequate in number and quality. Florence Obi, former Deputy Vice Chancellor, University of Calabar, warned that any country that neglects knowledge resulting from educational activities sets itself back by a decade, noting that “any nation that does not pay attention to the educational needs of its population is likely to face difficult times in the future.” She further pointed out that higher education in Nigeria has been experiencing loss of facilities, deterioration of equipment and plants, and uncompleted projects, as a result of financial crisis facing the system. For his part, Peter Okebukola, former executive secretary of the Nigerian Universities Commission (NUC), said he expects the Muhammadu Buhari administration to improve funding across all levels of education. He observes that such a move would increase capital development to aid teaching and learning, adding that the Nigerian education system is not up to the level it should be. Aderemi Aaron-Anthony Atayero, says that the solutions to the socio-political and economic problems in Nigeria lie in quality and sustainable education. I boldly state that any investment in the education sector is an investment in the future of Nigeria.

Bridge advocates scalable approach to education of the future

he advocacy for education development in Nigeria received a boost, as a leader in the provision of low fee education through cutting edge technology in underserved communities, the Bridge International Academies and other education stakeholders gathered to address the challenges of education and the role for government and the private sector in delivering education and enhancing the teaching and learning methods. The School Leaders Convention, is a forum for educators to understand the current realities in education;

evaluate practice, reflect and strategise on school development. Adesuwa Ifedi, Vice President, Policy and Partnerships at Bridge, addressing the challenges of education in Africa, said that the greatest perpetrator to modern day slavery is poverty and education stops the trajectory of poverty. “Achieving universal education would help lift 420 million people out of poverty and the future of Africa depends on access to scalable quality education” she stressed. According to Ifedi, education in Africa will significantly impact the world. “Education

and work in Sub-Saharan Africa will determine the livelihoods of nearly a billion people in the region and drive growth and development in generations to come”. She added that the solution to Africa’s education has to be scalable in order to address the problem awaiting the continent in 2050 as revealed by the UN Department of Economic and Social Affairs World population prospect 2012 report, that Africa will have the fastest growing workforce and school age children by 2050. And Nigeria, being the most populous nation, will

contribute significantly to the number. Hence, the need to build a nation with an educated and skilled workforce that is stable, prosperous, and competitive. Consequently, Ifedi said technology is the game changer in scalable quality education delivery. ”Technology can be used to address inefficiencies in education management and the learning outcomes required in today’s workforce and used to support teachers to accelerate teaching and learning at scale to reach many more children”. She said. Obafela Bank-Olemoh, special adviser to the Lagos

State Governor on Education, said the future of education requires private sector involvement in addressing education issues at scale. He said with strategic partnerships, the government is working towards positioning Lagos for a technology driven future and prepare a workforce with the skillset that will drive the future of Lagos and meet industry standards. Bank-Olemoh said the government has invested N15 billion in building school infrastructure to ensure that students learn in a conducive environment and is committed to creating more oppor-

tunities for students through the ongoing CodeLagos™, ReadySetWork™, LagosRead™ projects as well as reduce the teacher to student ratio in the classrooms. The convener, Uwaye Soetan, said that the 2018 edition of the convention seeks to address the challenges of education and the role for government and private sector in delivering education of the future and enhancing the teaching and learning methods. “Once we understand the dynamics of the challenges and link up with the right network, we are halfway through overcoming the problems”. She said.

BUSINESS DAY

C002D5556

EDUCATION

Tuesday 11 September 2018

INSIGHT

Covenant University: Grooming next generation leaders through all round education KELECHI EWUZIE

n upsurge in the demand for university education by millions of youths in Nigeria, coupled with the failure of the state-owned school system to cope with teeming demand, no doubt prompted forward looking private proprietors to contribute to the development of desired human capital. A cursory look at the tertiary education system in Nigeria today shows that it has assumed an entirely new frontier and approach, such that private institutions are now at the forefront to bring back the glory days that this pivotal sector offered to the economy. While all Federal, State and private tertiary institutions in Nigeria may claim to offer different relevant courses, it is however important to note that grooming the next generations of leaders, who are not just worthy in character but also in learning, represents the driving force in the 21st century. It is, therefore, not surprising that in realising the gains of building human capacity to cater for the huge potentials that Nigeria possesses, the Federal Government issued operating licenses to some private proprietors to operate universities with a view to

provide globally competitive training across board. One of such leading institutions is Covenant, Ota, Ogun State, Nigeria’s foremost private University. Since inception on 21st of October, 2002, the University has been committed to pioneering excellence at the cutting edge of learning. Through her various programmes, the private university is driven by the compelling vision of raising a new generation of leaders for the African continent on the platform of a holistic, human development and integrated learning curriculum, in order to raise total men who will go out to develop their world. Covenant has created new ways of thinking and achieving result, thereby making her stand out from competitors. Thus, the University is creating an inspiring place to study and undertake research. In pursuit of her mandate, which is to revolutionise the educational landscape of Africa through Christian ethos and life transforming values, the institution takes a holistic approach to the development of students by ensuring that they receive qualitative education that goes beyond the classroom curriculum. Students are exposed to the integration of the fundamental requirements stipulated by

academic and professional quality assurance bodies; a global-outlook and impactdriven learning emphasis; and a powerful synergy for empowerment, to enable the inculcation of intellectual and creative abilities via a platform of solid commitment to selfdiscovery. Aderemi Aaron-Anthony Atayero, the fourth substantive Vice-Chancellor of the University, observed that the role of university in capacity building in any country must be given enough attention. He stressed that it was common place that in building the knowledge base for a sustainable economic, political, social and human development, universities should play a central role. The Professor of Communication Engineering opined that the introduction

of Entrepreneurial Development Studies as a general course in the University had become entrenched in the national education policy of Nigeria. That, he disclosed, formed the bedrock of the kind of approach to learning that the citadel of higher learning offers. According to him, “The vision of the University is to raise a new generation of leaders. As a result, the University, under the guidance and support of her Proprietor-base, has been able to emerge the first on a number of fronts in her short span of existence”. He further identified the academic enterprise as the major drive of Covenant, adding that the best students and faculty were drawn to the University by the allure of being part of a compelling intellectual and creative enterprise; a

community of scholars characterised by collaboration, innovation, and qualitative training in their various fields of expertise. Covenant is an institution whose academic expertise spans through four colleges offering diverse competitive degree programmes within the 21st century global context. This is further strengthened by her core guiding principle of academic interconnectedness. In the area of research, Covenant was birthed out of the desire to bring solutions to certain issues that plagued Nigeria and the black man and as such, the vision, mission and mandate of the University are crucial in running the race of rewriting the story of higher education in Nigeria. Professor Atayero further said, “That is why the passion of the Chancellor, Dr. David Oyedepo, is geared towards ensuring that Covenant stops at nothing until we begin to unravel the mysteries surrounding the underdevelopment of Africa. It has come to the point that we should not be dependent on the developed world for solutions to the myriads of problems facing the continent. “Covenant encourages collaboration between departments and colleges, operating under the thinking that barriers between disciplines must

not be barriers to learning. This collaboration continues to develop and uphold rigorous norms and standards while taking new pathways to connect traditional fields in non-traditional ways.” To further stimulate the academic climate fostered by diversity, Covenant attracts students from diverse African cultures and societies and from every economic echelon, all in pursuit of distinct intellectual experiences. The seasoned faculty members of the University, who are global scholars, researchers, Fellows and members of various professional bodies, support the diversity the University stands for. With such united focus on the academic enterprise, the entire University community pursues securing Covenant’s place at the global front. Covenant is especially proud of the nationally, regionally and internationally acclaimed record of her wellseasoned academics, who have left landmarks on the sands of time in Nigeria, Africa and beyond. It is not difficult to recognise that students who pass through the four walls of the school - a school whose vision is to be among the Ivy league Universities on the global platform - are trained by outstanding academic leaders in their various fields.

Are we unknowingly putting our children and ourselves under undue pressure?

OYIN EGBEYEMI

n today’s world, education by theory, as it was done in the past, would simply not suffice. It is no longer enough to go to school, learn subjects in class and not apply practical learning to the real world. It is no longer enough to limit learning to the classrooms when there are so many skills and talents to explore beyond its borders; when people are making a living from some of the most alternative talents; when mainstream jobs such as banking and engineering are no longer the only career options available for the attainment of wealth. Education has now taken

a whole new dimension with so many options for activities and learning experiences formed on the back of the demands of our current environment. And why wouldn’t we continue to evolve? We need to keep up with the global environment where new careers and industries pop up on a regular basis. It is however, sometimes difficult to keep up with doing what we need to do to ensure that we eventually figure out what works for us or what might be best for us in our local and personal contexts. Given this, there seems to be a strong tendency for people to want to try anything and everything in a bid to find their one true talent or calling. However, in doing so, people just end up becoming so busy being busy doing all these things, such that being busy has become our new way of life. We are continuously moving faster and faster to keep up with the pace of this dynamic world.

Additionally, with technology and digital media upon us, one would think that our lives would be made easier through the ease of connectivity and instant availability of information. Rather, we only seem to get busier and busier everyday, again another element of our new way of life. The new mentality is that we must always be actively engaged in something; otherwise we start to suffer from that internal anxiety of feeling inadequate or lazy. Another school of thought is that our peers and society may even look down on us for not being “fully booked”. So there are elements of personal guilt and societal pressure when it comes to this issue of being busy. In fact, some people look at it as a thing of pride; whereas, we actually don’t even remember to give our bodies a break every now and then and we end up doing ourselves more harm than good.

So for children, the days of going to school, learning the very basic subjects in class, returning from school to complete homework on these subjects, and then spending the remainder of the day relaxing, reading a storybook or playing outdoors seem to be moving closer and closer to extinction. These days our children are involved in one extracurricular activity or the other in line with the demands of our environment. While the inclusion of extracurricular activities in the school curriculum adds that robustness, which prepares our children for the dynamic world, it seems as though some parents might be subtly and unknowingly passing down this “busyness mentality” to their children. Some children participate in so many activities, that they are constantly engaged and have no quiet time. This sometimes takes away the opportunity for them to “simply be children”, interact

with their natural environment, set some time aside to think, meditate and literally JUST BE CHILDREN. This is really not to take a way the importance of building a variety of skills in our children through their activities. But what happens during the period when children find a gap in their busy schedules. What do they do? Because they have become accustomed to a lifestyle of continuous engagement, inactivity becomes a foreign concept to them. Boredom sets in, and then anxiety comes in soon after, where children find it challenging to stay put or engage in more relaxed activities such as reading, writing or playing. Over-engagement also puts children under undue pressure to perform well in all areas that they are involved in. As much as we want what is best for our children and expose them to as many opportunities as we can, we also need to learn their limits by listen-

ing to and observing them closely. If children feel like their under too much pressure to “do everything”, then when a day comes where they do not perform up to expectations, they become disappointed in themselves and this diminishes their self esteem. It is imperative that we recognise the reality of our environment and learn to adapt and build the skills to suit the current dynamics. But when we start to get our children and ourselves involved in more than we can handle, we may be doing more harm than good. It is best to pace ourselves, be more organised, not fall under societal pressure and set realistic goals and standards for our children and ourselves so that we do not end up getting disappointed. Oyin Egbeyemi is an executive administrator at The Foreshore School, Ikoyi, Lagos.

Tuesday 11 September 2018

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Energy Report Oil & Gas

Power

Renewables

Environment

Liquidity squeeze puts power sector in disarray … cost reflective tariff only solution OLUSOLA BELLO

he hope of achieving stable electricity supply in the country may be mirage except the federal government takes urgent measures to stem the tide of illiquidity currently confronting the nation’s electricity distribution companies, the nation’s hope of stable power supply in the near future may remain a mere dream. Only last week, the Nigerian Electricity Regulatory Commission, NERC, in its Quarter 1 2018 Report, disclosed that the 11 Discos’ debts to the Nigerian Bulk Electricity Trader, NBET and Market Operator, MO, was a staggering N112billion According to that report, out of a total indebtedness of N163.1billion to NBET and MO by Discos, they were only able to pay only N51.2billion, this is just merely 30 percent of the total owed. The report coming from NERC indicates a very gloomy picture about the industry because out N171.1billion billed to customers in the first quarter of 2018, only N106.6billion was recovered, representing 62.3 percent collection efficiency. Power sector insiders dis-

close that it could be difficult if not outrightly impossible for the Discos to perform optimally given their weak financial positions and inability to generate funds from their operations owing to several constraints. Specifically, the non-implementation of the cost reflective tariff has been cited as the key factor responsible for the Discos weak financial base in the last three years. NERC attributed Discos liquidity challenge to noncost reflective tariffs, high technical and commercial losses as a result of consumers’ apathy to payment owing to their disdain for estimated billing and poor quality of supply in most Load centres.

Therefore, of every N10 worth of electricity sold during the quarter under review, N3.8 is uncollected.” To break this cycle of indebtedness, consensus among industry operatives is that NERC, the regulatory authority must give a nod to a cost reflective tariff. However some Power sector insiders are insisting that the NERC figures did not capture the total picture of Discos pathetic predicament. According to them, the situation is more precarious than NERC has presented it. When you add the high interest charges on facilities these Discos were availed by their banks, huge CAPEX requirement for capital projects, recurrent

expenses, other deductions etc, you will appreciate the frustration of these investors and why they are asking the federal government to come take back their assets,” a retired director at Power Holding Company of Nigeria, PHCN, said last weekend. He said further: “No nation treats its investors as these investors have been treated. To expect them to perform optimally is not only unrealistic but totally impossible.” He said when you look at the indebtedness NERC is talking about in respect of NBET. “You deprive a distributor the opportunity to sell her product at cost reflective

prices, contrary to the contract you signed, you now started billing her actual cost of the product from the factory. You now go ahead to record the difference between the actual cost and the price you approve for him to sell as debt for him in the books. Unless something fundamental happens to break the cycle, the indebtedness can only continue to grow in the books,” he said. Another investors said there is no alternative to cost reflective tariffs, adding that the only problem would be who will pay the difference between the actual cost and the amount electricity is made available to end users. He said somebody definitely must pick that bill and that person cannot be the investor who invested his hard earned money and borrowed funds to buy the distribution assets . “To resolve this solve this problem, government may have to turn to the Power Sector Recovery Programme, PSRP as a matter of urgency.” PSRP envisions that market shortfall will be addressed through: an annual federal government budget that will include provisions for fully funding historical and future sector deficits from 2017 – 2015; establishment of cost reflective tariffs and lastly, a payment Assurance facility to

be established by the Central Bank of Nigeria, CBN, to support NBET, and such similar facilities by the World Bank Group, IFC and MIGA. Aside from allowing for cost reflective tariff, and the fact that the federal government has made some moves to provide funding for the sector, the government needs to intensify the efforts if it must tackle the power sector challenges. Only recently the federal government, owners of 40 percent shareholding in the DISCOs, approved some N72billion financial facility to upgrade and expand Discos’ networks, earlier, a N39billion bailout for Discos metering plan was approved this year. Most remarkable was the N701billion Payment Assurance Guarantee introduced last year to raise monthly payment for electricity generation companies (GENCOs), a measure that has raised GENCO’s monthly payment through NBET from 80% to 20 percent.” All these moves are commendable, but the fact of the matter is that funding the sector needs to be structured, carefully worked out and strictly adhere to in such a manner that such funding will achieve cost reflective tariffs. We cannot run away from cost reflective tariffs.

Nigeria’s 9% active oil rig count improvement faces falling investor optimism STEPHEN ONYEKWELU

igeria’s active oil rig count grew marginally by 9 percent but investors will not be in a hurry to make new final investment decisions because the industry flounders in uncertainty. Africa’s largest crude oil producer saw its rig count increase by 9.38 percent, from 32 oil rigs in June to 35 in July, according to the Organisation of Petroleum Exporting Countries (OPEC) August Monthly Oil Market Report (MOMR). Rig count is a function of the level of exploration, development and production activities occurring in the oil and gas sector. “This growth can be attributed to a number of reasons. There was an atmosphere of expectation that the Petro-

leum Industry Governance Bill (PIGB) was going to be signed into law. Oil prices have been stable in the last six months or so. Then there some independent oil producers such as First E&P Limited that received final investment decisions (FID)” Wumi Iledare, professor of petroleum economics and member of the PIGB drafting committee told BusinessDay, on phone. “The success which Egina represents had also sent out the right signal.” However, uncertainty reigns in the industry. Chief among the factors inducing uncertainty in the oil and gas sector and which will keep investors on caution mode is that President Muhammadu Buhari withheld assent to the Petroleum Industry Governance Bill (PIGB). This Bill was designed to institutionalise governance of the oil and gas sector and

introduce adequate checks and balances. These are factors investors care about because they bring about clarity, transparency and accountability, which have been non-existent in the governance of Nigeria’s oil and gas sector. Since, the oil and gas sector is not immune from happenings in the general economy, recent fines on mobile telecommunication giant, MTN Nigeria and four other banks are equally sending jitters into the market. It speaks to the quality of regulation and how Nigeria’s economy is inefficiently managed. In a scathing opinion piece published September 03, Ijeoma Nwogwugwu, managing director of Arise Africa News Network explained how the systemic inefficiencies in the petroleum industry are designed to benefit a few and frustrate

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

the Petroleum Industry Bill even in its revised PIGB form. That Diezani Alison-Madueke, never got the PIB passed by the sixth and seventh National Assemblies “arose from the fact that the legislators succumbed to alleged bribes and the pressure brought to bear by the same people in “high places” and operators in the oil and gas sector” Nwogwugwu, wrote, partly in response to Omotayo Alasoadura, the senator who chairs the Senate Committee for Upstream Petroleum Resources, when he alluded to alleged bribes he had to resist. “Often enough, the lobby to quash the PIB, and later the PIGB, did not just come from compromised legislators but from officials of government-run parastatals, the petroleum ministry inclusive, whose preference was to maintain the status quo”

Nwogwugwu said. Opacity bothers private capital. The United States Energy Information Administration (EIA) said, “International oil companies are concerned that proposed changes to fiscal terms may make some projects commercially unviable, particularly deepwater projects that involve greater capital spending.” Before the recent gain, Nigeria’s oil rigs had remained static at 32 since the first quarter of the year. In 2015, Nigeria had recorded 30 oil rig counts. In 2016, it decreased to 25, and later 28 early 2017. It again dropped to 27 during the third quarter of 2017, and then 28 at the fourth quarter same year. Other OPEC members such as Algeria currently have 45 oil rigs, Angola four, Ecuador 8 and Equatorial Guinea, two.

Gabon has four, Iran boasts of 61, Iraq 59, Kuwait 50, Libya 5, Qatar 9, Saudi Arabia has the highest with 148 rigs, the United Arab Emirates has 55, and Venezuela currently records 70. Contrary to the Federal Government’s target of increasing crude oil reserves, Nigeria recorded a decline of 961.47 million barrels in the four years to 2016 on the back of low investment in exploration by oil companies. The oil reserves fell from a high of 32.23 billion barrels in 2012 to 31.27 billion barrels in 2016 while the condensate reserves stood at 5.47 billion barrels from 4.91 billion barrels in 2012, according to data from the Department of Petroleum Resources. Nigeria has the second largest amount of proven crude oil reserves in Africa, but exploration activity has slowed in recent years.

Email: energyreport@businessdayonline.com, Tel: +234-8023020011; +234-7037817378;

BUSINESS DAY

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Tuesday 11 September 2018

Energy Report

Asian market now next growth frontier for Nigeria, others ing shorter, and the quality of counterparties is declining. Contract prices are increasingly de-linked from oil pricing with a growing focus on spot and hub-based gas pricing.

ISAAC ANYAOGU

market analysis by Fitch Ratings, a leading global ratings agency has found that growing gas demand from Asia, particularly from China, could swing the liquefied natural gas (LNG) market into a deficit by 2022-2025 providing opportunity producers including Nigeria. Fitch arrived at this conclusion based on anticipated gas demand growth in the coming years driven by Asian markets that account for two-thirds of overall LNG demand. “This is due a combination of healthy power demand growth in the region, natural gas being the fossil fuel of choice in pursuit of curbing air pollution, and the backlash against nuclear energy. Japan is currently the largest LNG importer, but China is catching up quickly and becoming the major market for LNG,” Fitch said in its report. Also market expectations of oversupply and weak gas prices have curtailed new investment activity in the sector in the past two years.

Limited capacity additions beyond 2020 should be positive for spot prices, especially in Asia and Europe, the report further said. It is expected that this will benefit LNG projects with significant uncontracted volumes and those linked to gas spot prices. The ratings agency is confident about its forecast because unprecedented wave of new projects becoming operational in

2016-2019 has not resulted in, and is unlikely to result in a material surplus in the LNG market in the medium term as additional LNG volumes continue to find a home across a diverse array of countries and new buyers, and under more flexible contracts. “The global LNG market is still in its formative stage. Pricing mechanisms, contract terms and financ-

ing structures continue to evolve. Long-term oil-linked contracts are giving way to increased trading activity, which represented around a quarter of all new contracts in 2017, according to IGU World Gas LNG Report, compared to just 1% in 2012. New large LNG projects still rely on long-term contracts in order to secure financing. However, elsewhere contracts are becom-

Eko Disco to boost power supply with additional 20mw

Nigerian firm wins maiden Shell Global innovation outstanding performance prize OLUSOLA BELLO

Nigerian plasticre c yc l i ng c o m pany has won the maiden Shell Outstanding Achievement Prize in the 2018 Shell LiveWIRE Top Ten Innovators Awards. Bay e l s a St at e - b a s e d De-Rabacon Plastics came tops in a competition that also saw another Nigerian firm, Alternate Energy Limited, emerge as the second runner-up in the Energy Solutions category to win a $10,000 prize money. The two Nigerian companies are among the Top Ten Innovators named last week from among 21 entries in a contest which attracted over 11,000 voters from 102 countries. “This is part of the streak of successes with the Shell Nigeria Live-WIRE programme, coming a year after two of our Nigerian entrepreneurs won in the merit category at the finals in Sierra Leone in 2017,” said Igo Weli, general manager external relations of Shell Nigeria. “Being named as one of Shell LiveWIRE’s Top Ten Innovators showcases the innovative entrepreneurial talent that Nigeria is nurturing on the world stage,”

Igo added. De-Rabacon Plastics is a social enterprise that recycles end-consumer plastics into viable commercial products while Alternate Energy provides solar and wind powered community solutions, including water treatment and off-grid solar farms. Reacting to news of DeRabacon’s emergence as a winner, Yolo Bakumor Smith, managing director of the company, described the LiveWIRE opportunity as life-changing and providing employment and livelihood to over 58 direct and indirect employees and their scores of dependents. “This is a booster to my dreams and I give credit to The Shell Petroleum

Osagie Okunbor

Development Company of Nigeria, SPDC, for the opportunity provided to Nigerians to be successful, globally recognised business owners,” Smith said. In his response, Henry Chikogu, managing director of Alternate Energy Limited, described the award as a motivator not only to him and his company but also to other Shell Nigeria LiveWIRE beneficiaries and to prospective participants in the annual programme. Both Smith and Chikogu will be joining other winners in Kuching, Malaysia in November for the final awards ceremonies. Emobella Engineering Nigeria Limited and Derahbs Energy Services, both Nigerian companies based in the Niger Delta were among the Top Ten winners in 2017. Emobella provides engineering services with a USP of 24-hour availability and high-quality customer service, and De-rahbs Energy installs, services and repairs solar energy equipment, and provides a lowcost solar energy payment plan and training to future engineers and energy entrepreneurs. Operating in 17 countries, Shell LiveWIRE strengthens local economies across the globe by

Implications for Nigeria The NLNG is trying to remarket its expiring long term contracts increasingly relying on the traditional approach which in the evolving global LNG market may be quite inadequate. The tested funding approach for new LNG capacity is often structured as nonrecourse project finance and is dependent on sponsors’ ability to secure long-term offtake agreements, which buyers have been less willing to sign in anticipation of larger volumes of uncontracted LNG coming to the market. Fitch recommends that “sponsors may need to commit a higher equity contribution to get funding for LNG projects, which will continue to delay final investment decisions (FIDs) for some time.” In the case of Nigeria, several factors hamper the completion of new projects including regulatory uncertainty and a market strategy that is unyieldingly skewed

towards long-term funding contracts. According to Fitch report, the LNG market could shift into deficit by 2022-2025. Gas pricing is expected to improve in the major importer markets, benefiting LNG projects relying on spot and hub pricing and entities with significant LNG trading portfolios. The NLNG has the option to intensify engagements with the market to win long-term contracts to remain profitable or to take advantage of rising enthusiasm for the spot market. “We also expect oil companies to gradually return to their earlier LNG ambitions. This includes oil majors, like Shell, BP and Total, most of which emphasise the growing role of gas in the global energy mix,” says the report. A rash of new gas discoveries by the oil majors indicates the growing interest in natural gas which represents the next investments growth area in the energy sector so smart governments are improving their fiscal environments to benefit. The diplomatic overtures from the East and China should include discussions about expanding the country’s gas market.

OLUSOLA BELLO promoting entrepreneurship and developing entrepreneurs. Every year the programme supports thousands of individuals to access the knowledge, skills, networks and resources to turn their innovative business ideas into successful enterprises. Launched in Nigeria in 2003, the programme helps young people explore the option of starting their own business as a real and viable career option, and provides them with training, finance, and business mentorship. Shell Nigeria LiveWIRE has produced over 6,500 Niger Delta entrepreneurs most of whom are now employers of labour. Some of the beneficiaries are also given the opportunity to play in SPDC’s supply chain as vendors and are provided with access to growth capital. In 2014, a special Shell Nig er ia L iveWIRE pro gramme for Ogoni youths was launched, the same year another special edition was launched for Niger Delta Youths with disabilities. The Ogoni Special LiveWIRE is geared towards providing alternative livelihood for the youths of the area and has since produced over 165 entrepreneurs.

he management of Eko Electricity Distribution Company (EKEDC) has said that the ongoing power project expansion would boost supply to residents of Oniru, Maroko and Lekki environs within its network with additional 20 megawatts when completed within a mouth. Godwin Idemudia , the general manager, communications of EKEDC stated this weekend in Lagos that the company had embarked on aggressive power projects within its operations network to improve supply to its customers. He said that with the introduction of new power cables at the Maroko injection substation and construction of a new power line within its network customers in that area would enjoy uninterrupted power supply. Maroko Injection Substation currently supplies Maroko, Ajose Adeogun and Oniru environs. According to him, the replacement of the existing cables and installation of new power lines will not only improve power supply in these areas but also enable the company to extend the substations connection towards the Lekki axis therefore improving power supply in the area. ``The company had invested over N655 million on these projects, over N200

million spent to replaced old power cables, while over N455 million was also spent to construct a new power line. ``The construction of the new power line commenced in April 2018 and this would also improve power supply with an additional 20 megawatts,’’ he said. The EKEDC spokesman said that the project which commenced in April was slightly delayed due to importation constraints of the main power cables needed for completion. The cables he said have been cleared at the Lagos Port and the project will be completed within a month. “Since the old cables had been replaced, the company had not recorded any faults, adding that it has also increased the power outages in these areas to 20 hours daily which the company is also aiming towards 24-hours depending on energy supply from the grid,” he said. He, however, pleaded with customers to bear with the company and cooperate with its officials during this rehabilitation period. ``I commended our esteemed customers for their continued support and urged them to fulfil their obligations by paying their bills on time, as it will help the company provide better services as more investments will be injected into the network for the improvement of power supply to our customers under EKEDC network, ‘’the statement said.

Tuesday 11 September 2018

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In association with

Why savvy investors sidestep money market instruments for real estate Stories by CHUKA UROKO

hen the federal government, in its unintended activities that crowded out the private sector, offered investment instruments such as treasury bills and bonds at attractive interest rates, many investors fell for them, but are now retracing their steps because the dance party is over or seemingly so. Savvy investors who knew that such offers were not sustainable, took a different path, rooting for real estate which they knew/ know remains the best investment asset class in spite of current challenges which, analysts insist, is just a phase in market investment cycles. This class of investors knows that real estate is not a trade, but a long term game such that, when you are in it, you have to look at cycles rather than any moment in time. They also know that the Nigerian real estate market has very strong fundamentals which a patient investor with long term view of the market cannot gloss over. Such an investor should not be discouraged by down cycles as the market is experiencing at the moment. Nigeria has a very young and growing population where the median age is 19 while the average age is 27. This means that about 75 million people fall within the ages of 16 and 27. This 75 million young population will have to live, work, eat and play; they will go to school and hospital somewhere and real estate envelopes all these. One of the places that will be providing some of these services is The Oceanna Hotel Apartments which is situated on Water Corporation Drive, off Ligali Ayorinde Street, Victoria Island, Lagos. It is beauty set to redefine the skyline of Lagos and consists of four towers;

two mixed use and two residential blocks. This is an iconic development; it is more than just a location; it is the portal to a plethora of opportunities and experiences; it is a shift away from the box to something more organic and more natural. This explains why the return on investment here is one of a kind. Investment analysts note that even when money market instruments, including treasury bills, government bonds and time deposits, were giving 18.5 percent, 13.5 percent and 12 percent yield respectively, these were still lower than the 29 percent returns obtainable from The Oceanna Hotel. It speaks to reason that an offer of 29 percent annual return on a N4.034 million investment in a hotel room, which The Oceanna offers, is not only historic but also compelling at a time when viable investment asset classes are hard to find. Investment journey to The Ocenna Hotel begins

with just subscribing to a studio unit or a Lot, to earn a lifetime stream of increasing income which is estimated at 29 percent. With this, the developers are pioneering a new trend whereby the apartment will be operated by a world-class hotel management brand that would deliver high yield on the investment. They assure on a seamless transition to upscale living and there will be no maintenance obligations, repairs, dealing with agents and no yard to maintain. Investors get shortened payback period as the Hotel Apartments offer 7-8 years post construction payback period based on an average yield of 14 percent while investments in typical real estate assets offer between 17-20 years payback period based on yield of 5-6 percent. By this arrangement, the investment opportunity is open not only to Nigerians at home, but also those in the Diaspora. Remittances by Nigerians in Diaspora is estimated

at $22 billion per annum which experts say could be if only all the remittances are captured by the Central Bank of Nigeria. It is estimated that 10 percent of these remittances are invested in real estate. “More of these funds would have gone into real estate if asset quality and trust issues which have been a major challenge in Diaspora investment in Nigeria had been resolved”, said Olukayode Olusanya, the Oak Homes CEO, in an interview in Lagos. The Oceanna developers describe it as “a novel property investment opportunity with rare facilities overlooking the ocean”, adding that it is the most iconic development done with lightness and elegance, offering investors and homeowners the opportunity to live, work and play, while harnessing the advantage of great returns on investment. The project prides itself with a tapestry of diverse top professionals in architecture, engineering, interior designing, brand & marketing, hospitality, costing, finance and construction. Designed by HOK Architects, the designer of Dubai Marina, Emirate Stadium and The Flames of Azerbaijan, The Oceanna was branded by Brash Brands, the creative branding agency that breathed life into the world’s tallest building, Burj Khalifa in Dubai. Its build quality, stunning features and strong value proposition easily lends it to savvy investors. This is a place where the air is wild and free; it is a little haven built just for living, working and playing. “The Oceanna is a rewarding investment with excellent re-sale value and high yield. The scarcity of oceanfront properties allows it to retain value over a longer period as compared to properties in the city hub”, the developers assure investors.

Ease of doing business in focus as AFRES seeks Africa’s markets integration

L-R: Kunle Awolaja, chairman, AFRES Nigeria; Johnson Olaniyi, Regional Sales Director, Dangote Cement; an AFRES director; Tayo Odunsi, CEO, Northcourt Real Estate, and Akin Olawore, AFRES past chairman at a media briefing by AFRES in Lagos recently.

hen real estate professionals and other stakeholders in Africa gather for the 18th edition of the annual real estate conference in Abeokuta, Ogun State, Nigeria tomorrow, the focus of discussion will be on ease of doing business as a launch pad for integrating the continent’s real estate markets. Ease of doing business which is a major challenge in Africa varies from one country to another. Nigeria does not have an enviable record in this regard, having been ranked 145 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. The rank of Nigeria improved to 145 in 2017 from 169 in 2016. Ease of doing business in Nigeria averaged 145 from 2008 until 2017, reaching an all time high of 170 in 2014 and a record low of 120 in 2008. The Ease of doing business index ranks countries against each other based on how the regulatory environment is conducive to business operation and stronger protections of property rights. Economies with a high rank (1 to 20) have simpler and more friendly regulations for businesses. The 18th African Real Estate Society (AFRES) Annual Conference will be held from 10th – 14th September, 2018. The annual conference attracts representatives from academia and practice from the continent and also from across the world to discuss and present innovative solutions to real estate challenges. The conference encourages professionals from the private real estate sector, government agencies, academia, and other stakeholders in the sector. AFRES Nigerian chapter which is organizing the conference, explained in Lagos that the African markets integration would be looking at how

to harmonise and harness the various countries’ real estate potentials, especially those with relatively ‘well developed’ real estate markets. “African markets need to be integrated, especially in the area of land laws and standards. We are not going to change the laws of any country, but would rather ensure that there are standards which must be benchmarked to global standards”, Akin Olawore, past president of the society, explained. Olawore explained further that the laws of each country have to be respected because such laws are made as responses to what happens within their respective environments, pointing out however, that investors needed to have a one-stopshop of what happens across markets, hence the need for integration. A continent-wide organization that seeks to promote networking, research and education among property professionals, AFRES has strong presence in such African countries as Nigeria, South Africa, Ghana, Tanzania and Uganda. Kunle Awolaja, chairman of the Nigeria chapter of the society, disclosed in Lagos that holding the conference in Nigeria after the 17th edition in Kumasi, Ghana, was of immense benefit to Nigeria and the local community of Abeokuta. “This conference is meant to showcase the potentials of the Nigerian economy; it is also aimed to open up the country to the outside world”, adding that the society was happy with their partnership with Dangote Cement which is one of the sponsors of the conference. “The theme of this conference is Integrating Africa’s Real Estate Markets”, Awolaja said, noting that Dangote was a symbol of that integration with his cement companies which are in many African countries.

BUSINESS DAY

Tuesday 11 September 2018

‘Part of our focus is to find out what real demand is and educate investors’ RUTH OBIH-OBUAH trained as a lawyer, but found her passion in real estate. She is the founder/CEO, 3invest Nigeria, the organizers of the annual Real Estate Unite Summit. Through this summit, she has been able to expand the frontiers of her advocacy for real estate sector growth. In this interview with CHUKA UROKO, she offers insights into this year’s edition of the summit. Technology, policies, legal framework and commercial real estate investment, she says, will top agenda at the simmit. Excerpts: job losses? No. We know that real estate is the largest employer of labour, but that is not going to stop because of technology. What will happen is that people are going to be trained in new skills so that they will start providing technology services. We are calling on those who know to share their knowledge.

eal Estate Unite summit is here again and the icing on the cake in this year’s edition is technology. Why technology in real estate? Technology, yes, because that is the future of real estate. Technology is both innovative and transformative. There is now what is called ProTech, meaning property technology just as we have FinTech which means financial technology in the financial system. This is an application that, globally, institutions such as CBRE and JLL are using to solve real estate problems. Part of the problems we have in real estate, especially in the areas of registration of land titles, documentation, etc, has to do with long processes and with ProTech, some of these processes could be shortened. Technology can also be used in sustainable development, especially infrastructure and assets management and building technology. This application has the potential of making real estate processes more efficient and also cost reducing. Do we have capacity and competence in this ProTech; are there companies or institutions in this country that can offer that service? Some real estate companies are already rebranding. Filmo Realty, for instance, now uses

Ruth Obih-Obuah

technology to do its real estate business. Luckman Edu, the company’s MD/CEO, will be making a presentation at this summit to share some of their experiences. The aim is to highlight how technology is changing a lot of things in the real estate sector. We are trying to see how stakeholders including public and private sector can make this switch to technology to solve identified real estate problems. We need to understand how all these things work; get our professionals together to talk about them and see how what is learnt could be applied as solution to identified problems.

Many people are just hearing about ProTech. What is it all about and how relevant is it in this sector? ProTech is about digital transformation which, when applied, saves time and cost. In property management, for instance, when one has about 20 staff managing a property, when ProTech is applied, it helps to reduce the processes and cost by reducing the number of workers from that 20 to about two. This way, it is cutting cost not only for the facility manager, but also for the entire building. That means there will be

Part of your concern in this summit will be policies and regulatory framework. What exactly will the summit be looking at? The aim of the discussion around these areas is to connect the dots for the growth of this sector. We should not sit down and blame the banks for not lending or the mortgage institutions for not providing mortgages because it is not their fault. We should be discussing why those services are not being provided. Sometimes we know some of these problems and even the solutions but we are not talking about them. This summit will provide the platform for a conversation around all that. We should be talking about a problem like the Land Use Act to see how it can be dealt with. Right now, all investors want to exit their investment and the reason for that is policy. We spent ample time in the past attracting these investors. They are here but there is no good policy to hold them back and so, they want to leave which means there is something wrong

with the environment. Another problem here is absence of exit strategy for investors and this has to do with poor or lack of good legal framework. The summit will be highlighting all these things and make recommendations to the government. Discussions at the summit will take the form of town hall meeting. How will that be? Yes, it is going to be a sort of town hall meeting of professionals. The summit is going to proffer solutions to the identified problems. We will ensure it won’t end up as a mere conversation. We are inviting anybody who has solutions to these problems to come up with them and share. But we don’t expect people who will come to complain. What we need now is practical solution. How do you intend to make the outcome of these deliberations reach policy makers? What is the level of government involvement in the summit? We will ensure that whatever decision reached gets to them. Many of them will be there to hear us. We will continue to advocate that people who understand and have passion for this sector should be appointed into positions of authority. We need people like that to drive the operations of government ministries and agencies.

The real estate market is having challenges, and the commercial segment of the market is worse off. What will you, at the summit, be telling potential investors about this segment? Part of our focus here is finding out what the real demand is in this segment of the market. Investors need to be educated and that is what we intend to do. We want to tell them that before they go into any segment of the market—residential, commercial or retail—they have to find out what demand in that market is. They should not be deceived by all the noise about demographics. Here in Nigeria, we are still local market oriented; we are not so much fascinated about the Western-styled market that investors offer. Investors in retail should not come and give us what we cannot afford. In commercial office, all we hear about is Grade A office space. We have not reached there yet. We are still at Grade B and Grade C space. Profitability is a major consideration for any investor and so if his bottomline in a year is N100 million and his rent alone is about N80 million, that does not make much sense to him. People are not in business for prestige. So, before an investor brings a product into the market, he has to consider how profitable that market is.

How ITB combines innovation and technology to ‘build it right’

n recent time, the construction industry in Nigeria has turned the corner with cutting edge technology driving creativity, innovation and growth in the industry to the advantage and benefit of consumers. Growing consumer sophistication and aspiration, rising demand for smart buildings and the need for global best practices have ‘conspired’ to compel construction companies and sundry builders to be not only innovative, but also creative in their product offerings. The high streets of Nigeria, especially in the three major cities of the country, namely, Abuja, Lagos and Port Harcourt , have seen some of the country’s best and iconic buildings adorning cities’ skyline. These are products of innovation and creativity

made possible by technology, experience and efficiency. At the forefront of this renaissance in building and construction in Nigeria is ITB Nigeria Limited—a civil engineering and construction company whose main focus is the construction of high quality buildings for both residential and industrial use. Established in 1995 as a member of the Chagoury Group, ITB deploys technology to ‘Build It Right’ and to address the growing demand for innovation and improved engineering expertise in Nigeria. The company’s teams of builders and civil engineering contractors have established ITB as the leading provider of top-quality construction services across the country with a record of delivered projects and strong clients’

relationship. Besides the quality and iconic nature of its projects, ITB uses technology to achieve considerable speed in project delivery which the managing director, Ramzi Chidiac, estimated at 20 percent lower than delivery timeline, yet exceeding client’s expectations in terms of build quality. “We have redefined and raised the standards of build-

ing and construction in Nigeria”, Chidiac enthused at an event in Lagos, disclosing that ITB has adopted a new slogan, ‘Build it Right’, to reflect the company’s adoption of international best practices using the right technology, the right processes, the right systems and the right people. “This slogan reaffirms our unrivaled quality, technology and standards in our

various services and operations”, Chidiac explained. At ITB, the core value is to grow through creativity, invention and innovation, thus ‘Build it Right’ is the company’s way of reaffirming its position. “We currently have unrivaled technology in the Nigerian construction industry and the projects that we have carried out are a testament to that. We have certainly raised the bar in the way buildings are designed and constructed in Nigeria”, the managing director stated. The National Assembly Complex Abuja, Intercontinental Hotel on Victoria Island, Lagos which has 19 floors and stands roughly 90 metres tall; Aitel Building in Banana Island, Lagos; staff housing complex comprising 800 units for ALSCON’s Aluminium Smelter Plant;

Eko Towers 1 &2, the Kuramo Towers, etc are some of the company’s footprints in the Nigerian construction industry. “In order to continue to improve on our services and increase clients’ satisfaction, we have gone ahead to invest in multiple resources and affiliates. We are adequately equipped to handle Turnkey projects”, Chidiac said, adding, “we built the first LEED-certified building in Nigeria and we are advocates of smart buildings”. The Heritage Place, a 14-floor Grade A office building in Ikoyi, Lagos, was built by ITB. This is a typical example of a smart building that is LEED-certified, saving energy cost up to 20 percent for its occupants and providing a working environment that enhances productivity.

Tuesday 11 September 2018

C002D5556

BUSINESS DAY

Tips & Talking Points

Harvard Business Review

When working across cultures, understand what silence means

TALKING POINTS Sky-High Growth 0.5%: Cloud computing adoption continues to grow year after year: In 2010, less than 0.5% of companies had adopted the technology. + Conflict of Technique 60%: An estimated 60% of agile teams cite tensions with leaders stemming from differences in management style. + Losing Concentration 40 seconds: Research from Microsoft reports that people who work at a computer become distracted or are interrupted every 40 seconds on average. + Out-Innovated 2009: In 2009, Nokia launched its (now discontinued) Ovi Store worldwide to compete with Apple. + Buying Power $1 trillion: Women of color consumers contribute about $1 to the U.S. economy, according to Prudential Financial.

Lead confidently when you aren’t feeling confident

ultural differences aren’t always obvious. Take silence, for example. At the end of a meeting, you might ask whether anyone has a question. But if your colleagues come from a culture where people tend not to ask questions in a public setting, they will keep quiet — but out of respect, not because they don’t have something to ask. That’s why it’s important to learn more about communication differences between your culture and your colleagues’: Do people shake their heads to mean yes (as they do in Bulgaria) rather than nodding their heads (as in the U.S.)? Do they defer to authority in

public? Knowing these kinds of differences will help you understand what your co-workers are really saying — or aren’t saying. So instead of assuming that silence in the meeting means your colleagues don’t need clarification, you might say, “Many people new to projects like this one have a number of questions. What are some of the issues you want to know about?”

hen faced with a tough challenge, it’s normal to feel uncertain, and maybe even afraid. But it’s hard to inspire your team to rise to the occasion if they sense that you’re intimidated. You can project confidence by doing four things. First, demonstrate empathy for your team members. They want to know that you aren’t out of touch with what they’re feeling. Second, communicate your vision for the team — and that tough challenge. People need to have a clear sense of where they are headed. Third, set a direction for the team. Show them how you’ll reach the vision together. Last, give people proof. They need a reason to buy in to what you’re telling them, so offer evidence for your direction and optimism. Be specific, be personal and reference the work that the team is already doing. This will build your team’s confidence — and your own.

(Adapted from “3 Ways to Identify Cultural Differences on a Global Team,” by Art Markman.)

(Adapted from “How to Lead When You’re Feeling Afraid,” by Peter Bregman.)

Make sure your webinar lets the audience participate Don’t let one person dominate

When you ask a colleague for help, be clear and specific

sking f o r help can be uncomfortable, so most of us avoid it, or do it awkwardly. But you can’t always tackle a full plate of work alone. To get support from your colleagues, figure out what you really need. What task can someone else do that will save you a ton of time and that doesn’t take a lot of explaining? Next, identify the right person to hand it off to. Choose someone who actually can help in the way you need. Then make a clear request, being specific about what you want them to do, and when. This is where most of us bungle it: Because asking for help is

ne of t h e biggest risks of presenting via webinar is boring your audience. No one wants to watch as a disembodied voice clicks through slides. So be sure you’re giving people a chance to interact with you. Depending on the number of attendees, you may ask them to “raise their hand” if they have a question, type their questions into the comment box, or use a separate Q&A feature. Whatever you decide, clearly explain the instructions at the beginning of the webinar, and periodically remind people how they can join

the conversation in a meeting

Y in. Remember that it may take participants some time to formulate their questions, especially if they’re typing them, so give several minutes’ warning before you dive into the Q&A. And if you expect there to be a lot of comments or questions, you may want to have an assistant pick the ones you’ll respond to, so you can focus on your talk. (Adapted from “How to Give a Webinar Presentation,” by Dorie Clark.)

ou’ve probably led one of those meetings where someone talks, and talks, and talks — and no one else can get a word in edgewise. It’s annoying, and potentially damaging to team morale. Of course, you can’t always expect that everyone will contribute, but there are ways you can encourage broader participation. When you open the meeting, let the group know that you want everyone to speak up. If someone is speaking too often during the meeting, ask them to hold back: “Andre, let me get some others into this conversation, and then I’ll come back to

you, OK?” Whenever someone is interrupted, double back and ask them to finish what they were saying. And if you’re the person interrupted, speak up: “Marie, I wasn’t quite finished. I’d like to complete my comment, and then I’d love to hear your thoughts.”

(Adapted from “5 Common Complaints About Meetings and What to Do About Them,” by Paul Axtell.)

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

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awkward, we say something vague (“Would you like to ... “ or “If you have time ... “), which undermines the request. Accept whatever help your colleague offers — even if it’s not exactly what you asked for. And don’t forget to say thank you.

(Adapted from “Drowning in Work? Here’s How to Ask a Colleague for Help,” by Heidi Grant.)

BUSINESS DAY

C002D5556

Tuesday 11 September 2018

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

GTBank Nigeria Plc: Efficient balance sheet, moderate opex, and strong asset quality underpins profit BALA AUGIE

uaranty Trust Bank (GTBank) Plc in its recently released half year results for the period ended June 30th 2018, showed improvement in profitability, assets quality and key performance ratios. GTBank has maintained its position as the most efficient lender in Africa’s largest economy amid a tough and volatile macroeconomic environment, as it continues to intensify on cost control mechanism. The Bank’s impressive performance earned it Buy Ratings from analysts at sundry investment house. Income from fees and commission income, combined with cost control mechanism, are expected to propel future earnings. Overall, the Bank delivered good financial performance across all key profitability metrics in the period under review. With the Profit before Tax (PBT) of N109.6 billion posted in first half of the year, the Bank is on course to meeting its PBT guidance of N205 billion for 2018 full year ending (FYE).

Growth in Non Interest Income drives Gross Earnings Gross earnings for the second quarter increased by 5.51 percent to N226.60 billion from N214.10 billion the previous year; largely as a result of growth in non-Interest Income which compensated for the moderate drop recorded on interest Income line. Interest income dipped by 2.41 percent to N161.88 billion in June 2018 from N165.88 billion as at June 2017; compelled primarily by declining yield environment in 2018 when compared with corresponding period last year. Treasury Bills for 91, 182 and 364 days were sold at 10 percent, 10.30 percent and 11.5 percent respectively at Primary market auctions in June 2018 representing a decline of 350 bps, 720 bps and 715 bps from 13.5 percent, 17.5 percent and 18.6 percent respectively in June 2017. Non Interest Income, which compensated for drop in interest income, surged by 34.24 percent to N64.74 billion in June 2018 from N48.21 billion. The growth in non interest income was largely driven by a 123.32 percent surge in in-

Segun Agbaje, managing director/CEO GTBank

come on financial assets held for trading to N12.64 billion in the period under review as against N5.66 billion the previous year as the lender continues to judiciously utilize its Naira and FCY liquidity to take appropriate positions in fixed income and FX market. Net fees and commission

income rise by 13.89 percent to N25.91 billion in June 2018 from N22.75 billion the previous year; driven by increases in advisory services and transactional volumes. Interest expense increased by 21 percent to N43.95 billion in June 2018 from N36.47 billion as at June 2017; driven by intense competition for deposits among banks and other financial institutions and continued customers’ appetite for Treasury Bills which remained above N360 billion levels in both full year (FY) 2017 and half year (HI)-2018 Efficient balance sheet, strong asset quality, and increased transaction volumes underpin profit GTBank’s profit before tax (PBT) increased by 8 percent to N109.63 billion in June 2018 from N100.51 billion the previous year. Growth in PBT largely driven by efficient balance sheet, growth in transactional volumes arising from effective delivery of financial services, strong asset quality and moderate OPEX growth. Moderate Growth in opex validates cost control strategy GTBank is the most efficient lender in Africa in Africa’s most populous nation as evidenced in moderate growth in operating expenses and an

BD MARKETS + FINANCE Analysts: BALA AUGIE

improvement in efficiency ratio amid high inflationary environment and regulatory induced fees. Operating expenses grew by 2.60 percent in the period under review, well below the inflation of 11.23 percent. Consequently, cost to income ratio (CIR) remained strong at 38.8 percent representing an improvement of 133 bps from 40.2 percent in as at June 2017. Personnel expenses were up 13.40 percent to N18.60 billion in June 2018 from 16.40 billion the previous year; The growth in staff cost was due devaluation impact of translating the subsidiaries staff costs from their original currency to naira as well as impact of salary reviews in January 2018 in response to the country’s double digit inflation rate. The Bank’s customer base increased by 11.5 percent to 13.1 million in June 2018 from 11.9 million as at December 2017, thanks to cost efficiency complemented by customer acquisition drive and effective retail strategy. Banks performance validates improved efficiency ratio For the second quarter ended June 2018, GTBank’s total assets increased by 6 percent to N3.54 trillion from N3.35 trillion as at June 2017. The growth in total assets can be attributed to a significant increase in financial assets held for trading and derivative financial assets by 37 percent and 6 percent respectively. Total loans and advances to customers reduced by contracted by 10.80 percent to N1.29 trillion in June 2018 from N1.49 trillion the previous year. The contraction in loan book was due to scheduled pay-downs by some FX loan customers on account of improved FX liquidity in the market as well as impact of IFRS 9 implementation. Total deposit increased by 14.76 percent to N2 billion in June 2018 from N2.37 billion as at June 2017; driven by bestin-class retail strategy. GTBank has an excellent strategy management strategy, as evidenced in improvement in assets quality despite

exposure to the oil and gas and telecoms industry. NPL ratio improved to 5.50 percent in June 2018 from 7.70 percent as at December 2017, thanks to assets de-recognition made possible by adequate provisioning and substantial credit risk buffers created in prior years, specifically in 2016 from the huge revaluation gains recorded during that period. Cost of risk improved to 14 percent in June 2018 from 45 percent as at June 2017. The significant improvement in impairment charges was due to a faster decline in impairment charges than compared to loans. Impairment charge fell by 71.83 percent to N2.03 billion in June 2018 from N7.21 billion as at June 2017. The decline in impairment charges stems from payoff of some of the bank’s loans (particularly in the upstream oil & gas sector), which led to contraction in the loan book, according to analysts at Cordros Capital Ltd in a recent to client. “The creative treatment of IFRS 9’s stringent initial adoption adjustments through equities, as opposed to the income statement also contributed to improvement in CoR,” summed analysts at Cordros. In spite of capital pressures, declining yield regime and non-dissipating customers’ taste for treasury bills investments, GTBank was able to utilize the resources of shareholders in generating higher profit. Return on equity (ROE) increased to 34.07 percent in the period under review from 32.09 percent the previous year. Return on assets increased by 5.54 percent in June 2018 from 5.27 percent as at June 2017. However, net interest margin fell to 9.60 percent in June 2018 from 10.40 percent the previous year. The decline in NIM was as a result of increased cost of funds and declining asset yields. GTBank remains adequately capitalized with CAR of 22.04 percent, which is well above the regulatory requirement of 15 percent (16 percent for DSIB) in spite of the implementation of IFRS 9.

BUSINESS DAY

Tuesday 11 September 2018

Live @ the Stock exchange Prices for Securities Traded as of Monday 10 September 2018 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 257,458.95 8.90 -1.66 148 6,563,498 UNITED BANK FOR AFRICA PLC 266,755.49 7.80 -1.27 274 16,659,883 643,628.12 20.50 -1.91 337 6,639,714 ZENITH INTERNATIONAL BANK PLC 759 29,863,095 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 324,852.40 9.05 0.56 195 6,640,999 195 6,640,999 954 36,504,094 BUILDING MATERIALS DANGOTE CEMENT PLC 3,800,033.15 223.00 - 18 124,329 LAFARGE AFRICA PLC. 199,488.85 23.00 - 48 120,717 66 245,046 66 245,046 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY LTD 354,832.07 603.00 - 14 9,890 14 9,890 14 9,890 1,034 36,759,030 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 1 10,000 76,217.41 79.90 - 10 6,173 OKOMU OIL PALM PLC. PRESCO PLC 60,050.00 60.05 - 6 45,004 17 61,177 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,890.00 0.63 - 9 42,979 9 42,979 26 104,156 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 1,164.81 0.44 - 1 20,000 225.71 0.58 - 3 100,000 JOHN HOLT PLC. S C O A NIG. PLC. 2,111.93 3.25 - 7 1,292 48,371.11 1.19 0.84 52 2,954,138 TRANSNATIONAL CORPORATION OF NIGERIA PLC U A C N PLC. 31,694.26 11.00 - 35 175,825 98 3,251,255 98 3,251,255 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 33,000.00 25.00 - 6 11,700 ROADS NIG PLC. 165.00 6.60 - 0 0 6 11,700 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT CO. LIMITED 4,079.48 1.57 - 16 323,099 16 323,099 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,900.00 95.00 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 11,300.89 45.20 - 0 0 24,014.43 9.00 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 0 0 22 334,799 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 14,093.09 1.80 - 6 7,514 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 192,753.69 88.00 - 30 24,464 INTERNATIONAL BREWERIES PLC. 275,067.58 32.00 - 9 37,045 NIGERIAN BREW. PLC. 739,713.44 92.50 -0.43 93 2,357,301 138 2,426,324 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 39,250.00 7.85 - 34 148,803 DANGOTE SUGAR REFINERY PLC 192,000.00 16.00 - 35 217,186 FLOUR MILLS NIG. PLC. 90,208.35 22.00 2.33 54 381,535 HONEYWELL FLOUR MILL PLC 12,053.90 1.52 5.56 10 168,787 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 1,158.30 6.50 - 0 0 NASCON ALLIED INDUSTRIES PLC 52,988.77 20.00 - 10 44,697 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 143 961,008 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,875.93 10.05 - 21 60,360 NESTLE NIGERIA PLC. 1,074,049.22 1,355.00 -9.67 73 87,930 94 148,290 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 3,377.28 3.24 - 13 207,250 13 207,250 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 53,601.44 13.50 - 27 93,700 UNILEVER NIGERIA PLC. 268,866.25 46.80 - 21 59,416 48 153,116 436 3,895,988 BANKING DIAMOND BANK PLC 30,803.32 1.33 0.75 88 30,071,205 ECOBANK TRANSNATIONAL INCORPORATED 357,816.25 19.50 - 21 54,893 FIDELITY BANK PLC 49,257.15 1.70 0.59 94 10,105,811 GUARANTY TRUST BANK PLC. 1,015,375.68 34.50 -1.43 194 11,247,441 JAIZ BANK PLC 15,321.41 0.52 3.85 14 1,281,164 SKYE BANK PLC 8,189.38 0.59 1.72 59 4,234,246 STERLING BANK PLC. 41,746.11 1.45 - 46 2,016,167 UNION BANK NIG.PLC. 154,339.99 5.30 - 36 266,895 UNITY BANK PLC 9,234.58 0.79 - 5 45,635 WEMA BANK PLC. 21,215.96 0.55 -3.51 43 2,032,291 600 61,355,748 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE COMPANY PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 6,029.28 0.87 -2.25 47 2,356,097 AXAMANSARD INSURANCE PLC 24,150.00 2.30 - 19 141,954 CONSOLIDATED HALLMARK INSURANCE PLC 2,660.00 0.38 - 1 3,000 CONTINENTAL REINSURANCE PLC 15,559.12 1.50 -6.25 5 282,469 CORNERSTONE INSURANCE COMPANY PLC. 3,976.97 0.27 - 6 105,500 GOLDLINK INSURANCE PLC 2,411.47 0.53 - 0 0 GREAT NIGERIAN INSURANCE PLC 1,913.74 0.50 - 0 0 GUINEA INSURANCE PLC. 1,964.80 0.32 - 0 0 INTERNATIONAL ENERGY INSURANCE COMPANY PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,343.50 0.32 3.23 5 232,115 LAW UNION AND ROCK INS. PLC. 2,148.17 0.50 -7.41 9 2,175,110 LINKAGE ASSURANCE PLC 5,600.00 0.70 - 3 18,000 MUTUAL BENEFITS ASSURANCE PLC. 2,240.00 0.28 3.70 18 2,400,150 N.E.M INSURANCE CO (NIG) PLC. 16,263.95 3.08 -6.95 66 2,537,764 NIGER INSURANCE CO. PLC. 3,018.40 0.39 - 16 1,037,738 PRESTIGE ASSURANCE CO. PLC. 1,832.36 0.48 - 1 30,000 REGENCY ALLIANCE INSURANCE COMPANY PLC 1,400.44 0.21 -8.70 5 2,000,000 SOVEREIGN TRUST INSURANCE PLC 2,001.80 0.24 -4.00 6 1,201,000 STANDARD ALLIANCE INSURANCE PLC. 3,744.20 0.29 - 2 505 STANDARD TRUST ASSURANCE PLC 4,483.72 0.48 - 0 0 SUNU ASSURANCES NIGERIA PLC. 3,080.00 0.22 10.00 13 840,830 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE COMPANY PLC 5,280.00 0.33 - 0 0 VERITAS KAPITAL ASSURANCE PLC 3,882.67 0.28 - 0 0 WAPIC INSURANCE PLC 5,219.27 0.39 5.13 37 1,567,010 259 16,929,242 MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,772.95 1.65 3.13 12 1,181,000

12 1,181,000 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,914.00 1.17 - 2 700 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 0 0 RESORT SAVINGS & LOANS PLC 5,664.87 0.50 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2 700 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,820.00 3.91 -2.25 38 281,761 CUSTODIAN INVESTMENT PLC 32,350.25 5.50 1.85 34 2,136,370 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 35,050.80 1.77 -1.67 40 1,599,841 411.91 552.20 - 0 0 NIGERIA ENERYGY SECTOR FUND 1,337.80 0.26 - 1 1,000 ROYAL EXCHANGE PLC. STANBIC IBTC HOLDINGS PLC 455,115.35 45.00 - 9 30,873 17,700.00 2.95 -1.67 51 1,402,630 UNITED CAPITAL PLC ValuAlliance Value Fund 3,312.39 103.20 - 0 0 173 5,452,475 1,046 84,919,165 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 1,030.41 0.29 7.41 12 1,085,330 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 12 1,085,330 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 9,000.00 6.00 - 0 0 17,101.03 14.30 - 21 168,467 GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. 2,401.00 2.45 -1.61 22 588,336 1,139.49 0.66 - 7 50,671 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 411.96 1.90 - 0 0 50 807,474 62 1,892,804 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. 680.40 6.30 - 0 0 381.11 0.77 - 1 2,000 TRIPPLE GEE AND COMPANY PLC. 1 2,000 PROCESSING SYSTEMS CHAMS PLC 1,314.90 0.28 - 0 0 E-TRANZACT INTERNATIONAL PLC 16,590.00 3.95 - 1 100 1 100 2 2,100 BUILDING MATERIALS BERGER PAINTS PLC 1,898.34 6.55 - 8 21,455 19,845.00 28.35 - 10 24,505 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 38,831.34 30.90 - 0 0 FIRST ALUMINIUM NIGERIA PLC 696.42 0.33 - 6 85,500 361.24 0.68 - 0 0 MEYER PLC. PORTLAND PAINTS & PRODUCTS NIGERIA PLC 2,364.38 2.98 - 5 106,794 PREMIER PAINTS PLC. 1,279.20 10.40 - 0 0 29 238,254 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 3,522.64 4.00 -0.25 18 509,005 18 509,005 PACKAGING/CONTAINERS BETA GLASS PLC. 38,997.82 78.00 - 2 44 GREIF NIGERIA PLC 388.02 9.10 - 0 0 2 44 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 5 157,950 5 157,950 54 905,253 CHEMICALS B.O.C. GASES PLC. 1,752.39 4.21 - 3 4,900 3 4,900 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 - 2 74,000 2 74,000 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 55.00 0.25 - 3 2,227 3 2,227 8 81,127 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,503.05 0.24 -7.69 29 2,591,918 29 2,591,918 INTEGRATED OIL AND GAS SERVICES OANDO PLC 65,264.92 5.25 - 57 472,737 57 472,737 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 64,907.15 180.00 - 26 138,906 CONOIL PLC 16,863.04 24.30 - 16 42,242 ETERNA PLC. 8,150.90 6.25 - 23 151,178 FORTE OIL PLC. 24,812.27 19.05 -9.29 76 709,248 MRS OIL NIGERIA PLC. 8,701.65 28.55 - 1 5,629 TOTAL NIGERIA PLC. 64,407.29 189.70 - 19 15,280 161 1,062,483 247 4,127,138 ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 18,818.75 1.93 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 541.12 0.46 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,212.76 5.45 - 1 500 TRANS-NATIONWIDE EXPRESS PLC. 365.70 0.78 - 4 950 5 1,450 HOSPITALITY TANTALIZERS PLC 674.44 0.21 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 0 0 IKEJA HOTEL PLC 4,718.87 2.27 - 2 1,260 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 51,302.73 6.75 - 0 0 2 1,260 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 5,280.00 0.44 - 1 2,000 1 2,000 PRINTING/PUBLISHING ACADEMY PRESS PLC. 302.40 0.50 - 0 0 LEARN AFRICA PLC 779.16 1.01 - 4 99,250

BUSINESS DAY

C002D5556

Tuesday 11 September 2018

STRATEGYBRIEFING IDEAS THAT POWER HIGH PERFORMANCE

The one language company Activity based approach to strategy demostrates that everyone in the organization is a part of strategy - Michael E Porter

study done by Maracon indicated that less than 20% of well-formulated strategies are executed successfully and, on average, firms deliver only 50% of the financial performance their strategies promise. If a well formulated strategy is not executed how can an organization expect superior performance? A similar study carried out by Effectory with over 300,000 responses worldwide gives us an idea to what the problem might be. Less than 50% of employees say they understand their firm’s strategy. In another study conducted by McKinsey only 34% of 772 directors believed their boards understood their strategy. Now no matter how good employees maybe one thing to understand is that they are not mind readers. A strategy not understood can in no way be executed effectively. Also if the board does not understand the strategy how can they provide the necessary support needed for a successful execution of the strategy? Except everyone in the organization understand and speaks the same language, that means understand and believes in the strategy, it cannot be effectively executed. A company where the strategy is understood and believed in by everyone is called ‘the one language organization’ and effective execution is

limited to the extent to which everyone in the organization speaks the same language. Solving execution problem therefore is about solving a language problem. When Michael Porter introduced the value chain, which is an activity-based approach to strategy he aimed to demonstrated that everyone in the organization should be a part of the strategy irrespective of their function. His work implied that superior performance is a product of linguistic unity. If linguistic unity is so important just why does not every organization ensure that they are unified in language? There are five reasons why this happens. The first reason is that most executives are clueless on the subject of strategy. Irrespective of the wide popularity enjoyed by strategy in business literature it remains a little understood concept for many executives. Values, vision and mission are all mistaken as strategy. Model and tactics are all lumped together as strategy. Strategy is the configuration of activities in a way it distinguishes a firm. It is the positioning of a company in its competitive environment in a way that gives it an edge over the competition. This simple misunderstanding has cost lots of organization in wrong investment decisions.

The second reason is the sacred respect accorded to the strategy by executives. Most senior executives are scared that communicating their strategy will expose them to strategy theft. But come to think about it, such executives should understand that they stand a more serious problem than strategy theft. Preserving your strategy so that your competitors don’t know about it and at the same time shutting your people out means it will not be executed and that means you will at best play along others as a corporate mediocre. How often have you read about the strategy of Google, Apple, Bulberry and Nike? For example it took US car manufacturers many years to get good at Toyota’s lean manufacturing methods,even though Toyota willingly gave factory tours to it’s rival executives.More recently,traditional companies continue to struggle to adopt the digitally powered methods of online leaders like Amazon.com and Google,although the outlines of these methods are well known. What does it show? Communicating your strategy doesn’t compromise your position if you really have a strategy (read my article on ‘Nigerian companies rarely have a strategy’) The third reason(and it’s a sad one)

is that executives are not committed to their strategy. Strategy is about choices and sometimes choices can be very expensive. When the consequences of the choices you make begin to close in on you the chances of shifting your position increases except if you are truly committed to the decision on where and how to play in the market. At such moments, executives get into a lot of trouble in their bid to meet short term targets. They become occupied with moves like outsourcing, diversification and and restructuring even when such moves lack alignment with their strategy that they quickly look sight of their choice. This usually happen because strategy is seen by many managers as how to increase shareholders return. So everything that helps us meet that goal today is a good strategy, they think. But that is also why

companies are simply struggling along rather than thriving. High performing companies do not change their strategy like diapers because it often comes with a steep price. By focusing on the choices you have made about where to play and asking yourself hard questions about how to best keep yourself in the game you deepen rather than shift your position. By realising that your decisions shape the destiny of company you realize that products or segments does not necessarily determine outcome but the configuration of activities within your value chain. Staying true to your strategy helps people in the organization learn and speak thesame language. To get the rest of this article or to request FREE strategy assessment and advise by Brian Reuben write brianreubenmentoring@gmail.com

Brian Reuben is an author, advisor to business leaders, keynote speaker and an entrepreneur. He has trained and advised senior executives at several organizations including Africa Reinsurance Corporation, UAC, United Securities Limited, Globacom, BusinessDay among others. He is the Director of Brian Reuben International, a strategy and leadership advisory firm based in Lagos Nigeria and sits on the board of a number of organizations in Africa.

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Tuesday 11 September 2018

C002D5556

BUSINESS DAY

NEWS Naira to weaken to N395/$ by end 2019, says... Continued from page 1

2018, foreign capital outflows have outstripped inflows, as falling local currency yields, increased

political tensions; insecurity in North Central and rising yields in developing markets has sent investors out of Nigeria. The country recorded net outflows of $900 million in August in the interbank foreign exchange trading market sources have told BusinessDay. There has also been a steady drop in FX trading on the Investors & Exporters (I&E) windows, according to FMDQ data compiled by BusinessDay. Total turnover at the I&E FX Window has been declining since May 2018 when $6.4 billion was traded. This fell to $3.93 billion in June, and

further declined to $3.39 billion in July, according to data from the FMDQ OTC security market. The country’s external reserves have also come under pressure dropping to US$45.46 billion on September 6, from a peak of US$47.86 billion on May 10. But Ayo Akinwunmi, Head of Research Department FSDH, told BusinessDay that ‘‘it is difficult to tell if the Naira is overvalued or undervalued as the factors that determine the valuation of the Naira are volatile. Currently the outflow of foreign investors from Nigeria and the move of the CBN to raise yields on T-bills do not signify that the Naira is undervalued.’’ ‘‘Looking forward, the current import substitution, which has shifted demand to locally made goods and

completion of Dangote refinery, which will reduce by 25 percent to 30 percent Nigeria’s import bill, could strengthen the naira against the dollar,” Akinwunmi said. Omotola Abimbola, fixed income and currency specialist at Ecobank Transnational agrees that Naira is grossly undervalued when considering the pool of external reserves and the current account surplus. However, he told BusinessDay that the possibility of a Naira rally this year is unlikely. Wale Okunrinboye, Head of Research Sigma Pension on the hand believes that “the Naira is fairly valued at its current price and as long as the oil prices continues to stay above $70” He also argues that “with the CBN foreign currency intervention program, the Naira would not rally far from its current position.”

L-R: Adetokunbo Kayode, president, Abuja Chamber of Commerce and Industdry (ACCI); Shameem Ahsan, high commissioner of Bangladesh to Nigeria, and Mohammed Shah Ekramul, third secretary of the Embassy, during a visit to ACCI to explore more areas of economic ties with the business community in Nigeria in Abuja. Pic by Tunde Adeniyi

MTN goes to court to protect shareholders... Continued from page 1

law, we have applied today in the Federal High Court of Nigeria for

injunctive relief restraining the CBN and the AGF from taking further action in respect of their orders, while we continue to engage with the relevant authorities on these matters,” Tobe Okigbo, corporate relations executive, MTN Nigeria said in a statement sent to BusinessDay. “The allegations being made involve issues that appear to be complex and so are easily misunderstood and misinterpreted. They are made even more confusing when the relevant authorities send conflicting messages and instructions and act in a way that appears un-coordinated and at cross purpose,” Okigbo said. Since August 28 when the CBN first publicly accused MTN of illegally repatriating some $8.1 billion out of the country and asked it to refund the money, the shares of the Johannesburg-listed telco has tumbled 32 percent, leaving shareholders with a loss of 66 billion rand ($USD 4.3 billion). The apex bank also slapped fines on four banks who were accused of helping MTN repatriate the funds using irregular certificates of capital importation (CCI). The four banks, Standard Chartered, Stanbic IBTC, Citi bank and Diamond bank- said last week that they have been debited with the N5.87 billion fine, despite all four claiming innocence. “At no time did the Bank use irregular Certificates of Capital Importation (CCIs)tomakeremittancesonbehalfof MTNNigeriaCommunicationsNigeria Limited (MTNN) as alleged,” Demola Shogunle said in a letter last week. “On the contrary, all remittances were done with knowledge and approval of the Central Bank of Nigeria, an in accordance with the Foreign

Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 and other extant Regulations,” Shogunle said. MTN shares were down 1.4 percent to 73.74 rand Monday, according to Bloomberg data. “Let’s see if the court decides whether MTN is guilty or not, it is impossible for all the courts to deny justice to MTN,” said Bismarck Rewane, CEO of Lagos-based Financial Derivatives Company. Citing a letter written by Nigerian authorities, a source at MTN told Business Day that a 14-day ultimatum was given by Nigerian authorities to settle the $10 billion claims, which is about the size of MTN’s market capitalisation of $9.1 billion. To buy time to resolve the matter, MTN decided to seek redress in court, according to the source. “In all of these, the FIRS never said that MTN Nigeria owes any taxes. The CBN or AGF cannot go into our personal account to debit funds because it is illegal to do so. MTN decided to seek redress in court because we never did anything wrong,” the source said. “This is totally different from the NCC fine, where we admitted to not doing exactly what we were supposed to do and then negotiated the fine. “But here, there is nothing to negotiate because we never illegally repatriated funds and all the allegations levied against us by the CBN and AGF are false. In the letter sent to us, we were given 14 days to pay, so we had to go to court to settle this issue,” the source said. Critics say the Nigerian government has not properly managed the situation and the crisis deals a blow on Nigeria’s attractiveness to foreign direct investors. “MTN came into Nigeria at a time when international investors had very little or no interest and

confidence in Nigeria’s economy but they succeeded and the poor image of Nigeria in the international market was almost cancelled out,” Subomi Sodipo, a telecommunications industry analyst and CEO of CFmobile told BusinessDay in an interview. “Therefore it is only normal that the attitude of the Nigerian government on a company like MTN will also be a yard stick for measuring ease of doing business in Nigeria,” he said. Last week, Moody’s Investors Service placed the company’s rating of Ba1, four steps into junk territory, on review for downgrade on Thursday, citing the “uncertainty around the potential implications” of the Nigerian penalties. After South Africa, Nigeria is MTN’s largest market where it has 54 million customers, according to its 2017 financial statement, but the market is proving to be its biggest headache. MTN has declined more than 60 percent since October 2015, when its troubles with Nigerian regulators over the disconnection of lines were first announced. The company agreed to pay a $1 billion fine for missing a deadline to disconnect customers who weren’t properly registered in the country, after authorities said that practice was aiding Islamist militant group Boko Haram. Meanwhile the South African government is ready to intervene in the dispute between MTN Group and the Nigerian government, if MTN asks for help, South Africa’s Telecommunications Minister Siyabonga Cwele told Reuters. “If they need our assistance, then we will engage our counterpart in Nigeria,” Cwele said on the sidelines of a telecoms conference in Durban. Cwele also said that MTN has told the South African government that talks continue between the company and the Nigerian government.

Atiku begs Sule Lamido to step down... Continued from page 1

brothers initially sought the tickets of the defunct Social Democratic Party. He explained that he was not in Jigawa for campaign but to visit PDP members in the state and his Junior brother (Sule Lamido). “Junior brothers cannot contest against his senior brother, the junior brother instantly steps down for his brother due to his loyalty,” Atiku said. According to the former vice president, his mother was from Jigawar Sarki, a village in Dutse Local Government Area of Jigawa State before her family migrated to Adamawa State. He, therefore, said that “Sule Lamido is my junior brother and will learn from what transpired between Shehu Musa and Umaru Musa.” Meanwhile, the Board of Trustees (BoT) of the People’s Democratic Party (PDP) said it had set up a 12-member committee to discuss with the party’s 13 presidential aspirants, with a view to picking one of them as a consensus candidate Abubakar has been a presidential aspirant in three different parties since Nigeria returned to democratic rule at the turn of the century. He lost to President Muhammadu Buhari in the APC primaries in 2015 but supported him as the candidate. Buhari’s subsequent victory against then President Goodluck Jonathan marked the first time in Nigeria’s history that an opposition challenger took power through the ballot box. Atiku, a former customs officer has vowed to stick with the PDP if he fails to win the

nomination. Atiku alongside 12 others in the PDP are bidding to unseat President Buhari in February 2019 elections. Among these includes Nigeria’s senate president and third most powerful man in the leadership hierarchy Bukola Saraki, Former governor of Kano state Rabiu Kwankwaso, Aminu Tambuwal and a one-time senate president David mark who has also purchased the PDP nomination form. Political parties must select their candidates for the 2019 presidential election between August 18 and October 7 this year. The People’s Democratic Party’s nomination convention will hold in October, when one candidate emerges and the other challengers decide whether to back him or strike out on their own and split the opposition. However, most of the candidates have said they will support whoever emerges as winner in the parties primaries come October 6th this year. President Buhari who sought re-election in April this year appears to be the sole candidate who has gotten the party’s presidential ticket to contest elections in February 2019, even as the party adopted a direct primary for the president and indirect primaries for the governorship position. Atiku on the other hand in his preaching of restructuring as the major solution to Nigeria’s problem, and has vowed to scrap the system of multiple exchange rates so as to attract foreign investment and accused President Muhammadu Buhari of failing to deal with the nation’s security challenges.

Nigeria offers solution to Africa’s armyworm... Continued from page 1

shortage as hundreds of farmlands were attacked by the pest.

“We have found a solution to the armyworm invasion across Africa and the Food and Agriculture Organisation (FAO) has tested our chemicals which are purely organic and we would be launching next month on World Food Day,” Audu Ogbeh, Minister of Agriculture and Rural Development told BusinessDay on the side-lines of the just concluded Africa Green Revolution Forum (AGRF) in Kigali, Rwanda. “It was invented by our researcher, a professor at a University in Nigeria who got the solution from neem tree and after our launch we would be sharing with other countries,” Ogbeh said. The minister did not give the name of the researcher nor the chemical, saying that details would only be provided when the Federal Government launches it. The neem tree which is used to provide the solution has long been recognised for its unique properties both against insects and in improving human health. It is grown in most tropical and sub-tropical areas of the world for shade, reforestation and for the production of raw material for natural insecticides and medicines. Armyworm, a pest, is part of the order of lepidopters and wreaks havoc on crops if left to multiply. Its name is derived from its feeding hab-

its and it eats up the stems of crops, as well as the leaves. Since 2016 when it was first spotted in Nigeria, a total of 22 states have been affected out of the country’s 36 states, according to Nigeria’s maize association. The incurred losses that affected these states led to a 2016 and 2017 decline in Nigeria’s maize production, the association says. Similarly, prices of maize in 2017 hit a record high of N180, 000 per metric, making poultry farmers, producers of feeds, flour, noodles, biscuits, brewers, confectioners among others, who uses maize as a raw material at factories to suffer as their production cost shot-up. “We are very excited about this and waiting anxiously for the unveiling. We had suffered a lot from armyworm invasion in the past and we hope that this would totally address the problem,” Bello Abubakar Annur, national president, Maize Association of Nigeria (MAN) said in a response to questions. Recently, the Food and Agricultural Organisation (FAO) warned that if left on checked, fall armyworm pest could push over 300 million people into hunger, and lead to an annual economic loss of about $4.8 billion from maize production alone. The Federal Government had last year partnered with the International Institute of Tropical Agriculture (IITA) to find a lasting solution to the armyworm pest.

BUSINESS DAY

C002D5556

Tuesday 11 September 2018

Live @ The Exchanges Top Gainers/Losers as at Monday10 September 2018 GAINERS TOTAL

Market Statistics as at Monday 10 September 2018

LOSERS N177.6

N181

3.4

Company GUINNESS

DANGCEM

N228

N230

OKOMUOIL

N76.95

N77.5

0.55

GUARANTY

N36

N36.5

ZENITHBANK

N21

ETERNA

N6.7

Opening

Closing

Change

ASI (Points)

33,611.69

N95

N90

-5

N97.9

N95

-2.9

0.5

FLOURMILL

N24.3

N21.95

-2.35

VOLUME (Numbers)

N21.35

0.35

DANGSUGAR

N15.75

N15.1

-0.65

VALUE (N billion)

N6.9

0.2

N5.3

-0.3

OANDO

DEALS (Numbers)

3,104.00 137,625,452.00 1.356

MARKET CAP (N Trn

12.270

Stock market hits new low as investors lose N156bn …as Nestle, Forte, 19 others lose Stories by Iheanyi Nwachukwu

he Nigerian stock market reached a new low on Monday September 10, 2018 as the All Share Index (ASI) declined further by 1.25 percent. From a record high of 34,037.91 points as at last Friday, the Nigerian Stock Exchange (NSE) ASI dropped below 34,000 points level to close at 33,611.69 points. The value of listed stocks decreased to N12.270trillion from N12.426trillion recorded the preceding trading day, representing N156billion loss. “This week, we believe bargain hunting will

drive performance in the first two trading sessions. However, for the week, we maintain a bearish

outlook for the market due to the absence of positive drivers”, Afrinvest Research analysts

had said in their stock recommendation for this week. The Year-to-Date

(YtD) returns of the Lagos Bourse stands at minus 12.11percent as 11 companies share price advanced as against 21 losers. Nestle Nigeria Plc led the losers table after its share price declined from N1500 to N1355, representing N145 or 9.67percent decline. Forte Oil Plc also declined from N21 to N19.05, down by N1.95 or 9.29percent. Also, Global Spectrum Energy Services Plc share price declined from N6.35 to N5.75, down by 60kobo or 9.45percent; GTBank Plc stock price declined from a high of N35 to N34.5, down by 50kobo or 1.43percent; while Nigerian Breweries Plc lost 40kobo, from N92.9 to N92.5, down by 0.43percent. On the gainers ta-

PZ Cussons: FX losses to moderate in FY’19 – Vetiva Research

Goldman bear-market risk indicator at 50year high

…Weakest fourth-quarter (Q4) revenue in over a decade drives underperformance

Z Cussons Plc (PZ) recently released its FY’18 financial results (for the period ended 31 May 2018) showing a modest 3percent yearon-year (y/y) revenue growth to N80.6 billion, while profit after tax recorded a disappointing 48percent y/y decline to N1.9 billion (Vetiva: N2.2 billion), its lowest level in recent history. “Revenue for the year came in 5percent below our estimate following disappointing figures in the typically stronger Q4 period. Notably, Q4’18 revenue came in 23percent lower y/y and at the lowest level since 2007 at N17.3 billion.” According to management, the peak-season flop was due to sustained weakness in consumer sentiment across most of its categories. Looking at the major business

segments, Electricals recorded a third consecutive year of revenue decline, down 6percent y/y amidst reduced consumer spend. Meanwhile, PZ’s Branded Consumer Products segment recorded a 6percent y/y revenue growth, supported by new product launches and growth in Morning Fresh. Profit drops to lowest level in recent times, lags Vetiva’s estimate

In line with the trend recorded in the past two years, the company’s bottom line remained subdued by substantial foreign exchange losses, trimming 65percent off operating profit within the period (N5.4 billion, Vetiva: N4.0 billion). Given that these FX losses have been a result of exchange rate differentials, PZ’s parent company has stated that all US Dollar denominated

balances will now be translated at the NIFEX rate (previously CBN rate) given that this rate is where majority of its transactions are settled. With this development, we expect FX losses to moderate substantially going forward barring any unforeseen currency devaluation. Away from this, PZ’s earnings were also hampered by cost escalation in the period. Notably, gross margin contracted by 537bps y/y to 30percent - a result of higher raw material costs that have not been passed on to consumers. Furthermore, PZ also recorded a 10percent y/y rise in operating expenses –particularly driven by higher personnel costs. Driven by these, PZ recorded a 38percent y/y decline in FY’18 EBIT to N8.2 billion (Vet-

ble, Flour Mills Nigeria Plc led the pack after its share price increased from N21.5 to N22, up by 50kobo or 2.33percent; Custodian Investment Plc also advanced, from N5.4 to N5.5, up by 10kobo or 1.85percent; Honeywell Flourmills Plc stock price increased from N1.44 to N1.52, up by 8kobo or 5.56percent; likewise University Press Plc stock price increased from N1.92 to N2, up by 8kobo or 4.17percent. NPF Microfinance Bank Plc stock price rose from N1.6 to N1.65, up by 5kobo or 3.13percent. Diamond Bank Plc, UBA Plc, GTBank Plc, Fidelity Bank Plc, and FBN Holdings Plc were actively traded stocks on Custom Street. In 3,104 deals, stock traders exchanged 137,625,452 units valued at N1.356billion.

iva: N7.7 billion). FY’19 Earnings estimates little changed Though PZ’s Q4 revenue performance is quite discouraging, we forecast a modest 4percent y/y revenue growth in FY’19 with most of the improvement happening in the latter part of PZ’s financial year, amidst expected increase in spending during the election period. We however forecast a significant rise in FY’19 bottom line to N4.9 billion (Previous: N4.8 billion) driven by a sizable reduction in foreign exchange losses to FY’19E: N2.0 billion (FY’18: N5.4 billion). Overall, we forecast a modest improvement in FY’19 EBIT margin to 11.percent (FY’18: 10.4percent). All in all, our 12-Month Target Price for PZ is revised lower to N23.79 (Previous: N24.37), BUY.

Goldman Sachs Group Incorporated indicator designed to provide a “reasonable signal for future bear-market risk” has risen to the highest in almost 50 years. The firm’s Bull/Bear Index, which is based on measures of equity valuation, growth momentum, unemployment, inflation and the yield curve, is now at levels last seen in 1969. While the gauge is at levels that have historically preceded a bear market, Goldman strategists including Peter Oppenheimer wrote in a note last week that a long period of relatively low returns from stocks is a more likely alternative.

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NEWS WAMA to review progress of ECOWAS Single currency roadmap …to assess member countries readiness to meet 2020 deadline ENDURANCE OKAFOR

he 2018 mid-year statutory meetings of West African monetary agency (WAMA), West African monetary zone (WAMZ) and West African institute of financial and economic management (WAIFEM) is aimed at reviewing the progress made in the implementation of the ECOWAS Single currency roadmap. The meeting scheduled to hold in Abuja, Nigeria’s capital from September 6 -14, 2018 will also focus its discussion around the status of implementation of programmes under the ECOWAS Monetary Cooperation Programme, member countries compliance with the convergence criteria and harmonization of payments system. The statement on Central Bank of Nigeria’s (CBN) website, says the mid-year meeting will iron issues about harmonization of monetary

policy framework and exchange rate regimes, harmonization of statistics, capital account liberalization, and financial integration as well as other administrative and governance issues in those Institutions among others. Meanwhile, West Africa countries have had the goal to facilitate payment for goods and services that are traded intra-regionally and to facilitate that in the different local commerce though the introduction of single currency in ECOWAS and they have a set target of attaining the objective by the year 2020. “We have been engaged in a big project, the pan Africa payment and settlement platform which we are developing and I am pleased to say that we are nearing concluding that project. We are doing to it to bring convertibility within Africa of African currencies, that is the first important step to having a single currency and we are doing it by providing a clearing platform,” Ben-

edict Oramah, president of Afreximbank, said at a press conference at the banks 25th annual general meetings in Abuja. Explaining how the platform will work, Afreximbank president, Oramah, said “for instance, somebody in Ghana buying goods in Nigeria will pay for input in Cedi, while the seller in Nigeria will receive naira. Ultimately, when we clear everything, only those who are in deficit would then be called upon to pay in dollars, however, as we do this across 54-55 countries in Africa, well start to create a notional currency which would be built around the African Export-Import bank. Meanwhile, ECO is the proposed name for the common currency that WAMZ plans to introduce. The aim is to merge ECO with West African CFA France, which is used by French-speaking members of ECOWAS, and then ultimately create a common currency for West Africa.

2019 elections: Why Delta APC opted for indirect primaries MERCY ENOCH

he Jones Erue -led All Progressives Congress (APC) in Delta State has opted to use indirect primaries for the selection of the various candidates that would fly the party’s flag during the 2019 general elections. A major reason behind the adoption of the indirect primaries option is for the party to avoid a repeat of ugly experiences encountered during past congresses held by the party in the state. The fear that there may not be adequate security for members and voters during the exercise is another reason. Third and top reason is the inconsistency in data-base of registered members considered would hinder most of the voters from exercising their

franchise. All these and more were revealed in Asaba, weekend, during the State Working Committee (SWC) meeting that was attended by the State Executive Committee (SEC) of the APC, the ward chairmen and secretaries as well as other stakeholder of the party. They deliberated and made decision following a letter from the APC national office to the chairman, requesting that the SEC members decide on the mode of the primary elections for the party in the state. The letter which was read by the state’s assistant secretary, Ese Agiri, was a product of the 6th regular NEC meeting of the party, directing chairmen of the political party to choose the mode of primaries according to the peculiarities

and needs of their different states. They were expected to choose either direct, indirect or consensus primaries for the various political positions apart from that of the president which had already been chosen as ‘direct’ by President Muhammadu Buhari. “Let me state here for the benefit of most of you who were not there during our congresses at Orchid Hotel, Asaba. It was were like a war zone”, Jones Erue, the chairman of the party said. He mentioned some important and prominent APC stalwarts that lost their lives in the course of the congresses and added: “Even the state chairman today risked being killed. It was the help of the DSS that saved his life. It was really war. It was not like party congresses”, he noted.

FBRA encourages healthy lifestyle, proper waste disposal as WCD nears CHUKA UROKO

ood and Beverage Recycling Alliance (FBRA) has encouraged consumers of its products to cultivate healthy lifestyle and also imbibe culture of proper disposal of used post-consumer packaging waste to ensure a cleaner environment. The company advises that special focus should be on plastic waste and polyethylene terephthalate (PET) bottles in order to avoid environmental pollution, more so as the World Clean-up Day draws near. Founded five years ago as a self-regulatory initiative to aid the collection and recycling of post-consumer packaging of the food and

beverage sector, FBRA ensures the success of the Extended Producer Responsibility (EPR) policy of the federal government. This policy is aimed at ensuring that companies take responsibility for the entire life cycle of their products. Through its advocacy, the Alliance has been emphasising the need for sectoral action under a Producer Responsibility Organisation (PRO) to ensure that companies collectively engage in the recovery and recycling of their packaging wastes for a cleaner and healthier environment. As the PRO of companies in the food and beverage sector, FBRA insists that a healthy lifestyle that embraces waste management

is necessary for the ecosystem to get rid of diseases associated with unhealthy environment. The alliance will, on September 14 which is the eve of the World Clean-up Day, engage in cleaning exercise along with its collection partner Recycle Points, and will also educate members of the public on waste separation and management at the Arena Market in Oshodi, Lagos. The exercise will involve volunteer staff from its member companies which include Nigerian Bottling Company Limited, The Coca-Cola Company Nigeria, Nigerian Breweries Plc, Seven-Up Bottling Company Limited and Nestle Nigeria Plc.

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FINANCIAL TIMES

French environment minister raises prospect of EDF shake-up

Global Masters in Management ranking 2018: analysis and methodology Page A2

Page A3

World Business Newspaper

Alibaba’s Jack Ma to hand over to Daniel Zhang next year CEO to inherit chairman’s role from Chinese ecommerce group founder in September 2019 LOUISE LUCAS

aniel Zhang will replace founder Jack Ma as chairman of Alibaba in a year, adding the role to his job as chief executive of China’s most valuable company and ending days of speculation after it emerged at the weekend that Mr Ma would retire from the ecommerce group. Mr Ma, a former English teacher who founded the company 19 years ago and built it into a business with a stock market valuation of $420bn, said that he would instead focus his efforts on philanthropy and education. “I still have lots of dreams to pursue,” Mr Ma said in a letter to customers, staff and shareholders on Monday. “I also want to return to education, which excites me with so much blessing because this is what I love to do.” The 54-year-old will spend the next 12 months ensuring “a smooth transition of the chairmanship to Mr Zhang”, Alibaba said. Mr Ma, who owns 6.4 per cent of Alibaba and has a net worth of more than $40bn, according to the Bloomberg Billionaires Index, will remain on the board until the 2020 annual general meeting. The transition has been a decade in the making, with Mr Ma focusing on a long-term vision and playing a more ambassadorial role since stepping down as chief executive in 2013. He will remain a lifetime member of the 36-person Alibaba partnership, the torchbearer for corporate culture and mission, and a shareholder in the group. News of Mr Ma’s impending retirement comes at a time when sentiment towards Chinese tech has

been under pressure both overseas, as trade tensions escalate between China and the US, and at home as Beijing ramps up regulation on the sector. Duncan Clark, head of BDA consultancy and author of a book on Alibaba, noted that Mr Ma is “a great delegator — none of this [Tesla chief] Elon Musk 120 hour weeks”. However, as a figurehead Mr Ma will be hard to beat. A natural performer, his demeanour contrasts sharply with the more sober Mr Zhang. Mr Ma spends much of his time on the road, meeting heads of state as well as business partners and youthful entrepreneurs across the globe as the face of the company. “The question is, do you need a ringmaster to keep it all going?” added Mr Clark. Mr Zhang, 46, joined Alibaba in August 2007 as chief financial officer of Taobao Marketplace, the online ecommerce platform. An alumnus of Shanghai University of Finance and Economics, he has worked with PwC, the professional services firm, and an online game developer. Before becoming chief executive of Alibaba in 2015, he served as chief operating officer. In his letter on Monday, Mr Ma described his successor as showing “superb talent, business acumen and determined leadership”, adding that Mr Zhang’s “analytical mind is unparalleled . . . and he has the guts to innovate and test creative business models”. Mr Ma has long spoken of building a company to last more than a century. “No company can rely solely on its founders. Of all people, I should know that,” he added.

Jack Ma (left) and Daniel Zhang (right). The succession is the first generational change in China’s private tech sector © AP/Reuters

Trade war fears scupper Volvo Cars initial public offering China’s Geely delays flotation as tensions hit carmaker valuations PETER CAMPBELL

eely is to delay its initial public offering of Volvo Cars because of concerns over the Swedish company’s valuation in light of the global trade war. The Chinese owner had planned to list part of the carmaker before the end of the year. But although Geely believed it had the backing secured for a flotation valuing Volvo at $30bn, it was worried that investors — many of which were due to be Swedish pension funds — would see the stock slip after the float. “It’s important to know that we have headroom, so we can look the investors in the eye a year after the IPO,” Hakan Samuelsson, Volvo Cars chief executive, told the Financial Times. “It is still an option, a very realistic option, but will not happen immediately,” he said. “The timing has to be optimal.” Had it gone ahead this year, Volvo’s IPO would have been the largest on the Swedish stock market since Telia in 2000, a flotation that left a bitter taste with the country’s investment community after shares in the tele-

coms group fell following the listing. Mr Samuelsson added the “conditions right now are not optimal to give certain upside for the investors”. He said the business also needed “stable market conditions” to list its shares, and that any final decision rested with Geely’s owner, Li Shufu. Like all large car manufacturers, Volvo is facing potential disruption to its business from the global trade war that has seen the US threaten to ramp up tariffs on automotive imports from Europe and China. The Swedish carmaker, which has plants in China and Europe as well as a newly built facility in the US, has already begun shifting its footprint to avoid extra costs, with production of its XC60 sports utility vehicles for the US market moved from China to Torslanda in Sweden. Mr Samuelsson said the outcomes of the trade discussions between the three blocs were “really difficult to predict”. At present the US is seeking to end an imbalance in trade with both

China and the EU, with $50bn of tariffs already imposed and threats of in excess of $200bn more. Separately, the Swedish chief executive has extended his contract with the company for another two years until 2022. He said the extension was to see the fulfilment of Volvo’s new products, including its first self-driving car in 2021, rather than to pursue a stock market listing by the end date. “We have no fixed timescale and no hurry,” he said. “I have no ambition to be a listed company CEO. I see that as no more exciting than a CEO of a private company. I’m rather neutral.” Volvo is still pursuing an ambitious midterm plan to double sales and raise profit margins by 50 per cent by the middle of the next decade, while expanding its fledgling subscription service and selling more vehicles to ride-hailing fleets. Last week the company unveiled a concept for a vehicle that drives itself completely, while passengers sleep in a bed inside — a product it believes may replace short-haul flights and overnight trains.

Citigroup late in the game to merge key investment bank units

Federal Reserve faces key decisions as balance sheet shrinks

Wall Street’s other banks have long run their advisory and capital markets businesses as one unit

SAM FLEMING AND ROBIN WIGGLESWORTH

ROBERT ARMSTRONG AND LAURA NOONAN

he question about the new organisational structure unveiled last week by Citigroup’s investment bank is not so much why changes were made, but what took the bank so long to make them. Wall Street’s other big banks have long run their advisory and capital markets businesses as one unit, recognising the benefits of a one-stop shop for clients seeking advice on a big transaction who may well have the need to raise debt or equity too. Why, then, did it take until now for Citi’s Corporate and Investment Banking division (loans and advice) to be fused with the Capital Markets

Origination division (debt and equity raising)? Jamie Forese, who heads the Institutional Clients Group which sits over CIB, CMO, markets, treasury and private banking, told the Financial Times the move is about “thinking of the future” now the process of post-crisis “repairing and rebuilding” is over. That spirit of renewal is in evidence elsewhere in the group; on Tuesday chief executive Mike Corbat announced the retirement of Citi’s veteran chief financial officer John Gerspach, its Europe, Middle East and Africa CEO Jim Cowles and its North America boss Bill Mills. The banks’ experience with past restructurings may have a lot to do Continues on page A2

System for setting interest rates is focus of debate at central bank

he clock is ticking. As the Federal Reserve presides over the steady shrinking of its multi-trillion dollar balance sheet, investors are urging policymakers to push forward long-awaited decisions over just how large the central bank’s portfolio will ultimately need to be to keep monetary policy running smoothly and the banking sector well-stocked with safe assets. Jay Powell, the Fed chairman, has lined up a debate for this autumn. But as the reduction in the balance sheet accelerates into 2019 the market is looking for much clearer signs from the Fed on its future framework for steering the markets. Some analysts worry the Fed risks shrinking its balance sheet too much. The Fed confronts two big, intertwined decisions. Does it want

to stick with its current system for setting interest rates, or revert to something similar to the framework it used before the financial crisis? And how big a balance sheet is it willing to carry to execute monetary policy? The decisions will have far-reaching implications for how the banking sector operates. Politicians are watching closely: many Republican lawmakers are suspicious of the Fed’s swollen balance sheet, seeing it as an unnecessary incursion by the public sector into private markets. Fitch says that after basically stabilising in 2017, the Fed balance sheet will shrink by around $315bn this year and $437bn in 2019 as it allows assets it has been holding to mature. The flipside of those assets are liabilities, including currency in circulation and commercial banks’ reserves held on deposit at the Fed. The quantity of reserves in the

system is central to any decision on how the Fed will set interest rates in the future. Opting to keep the current system would by necessity mean keeping a lot more reserves in the system than under the pre-crisis toolkit, thus limiting the extent to which the Fed shrinks the assets on its balance sheet. This so-called floor system, which the Fed is currently using, involves the Fed setting an interest rate on excess bank reserves and another rate on an overnight reverse repurchase facility to steer market rates. Among those who have sounded enthusiastic is Mr Powell, who in mid-2017, before his appointment as Fed chair, told an audience he saw the system as simple and efficient to administer, straightforward to communicate, and effective in controlling rates.

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Citigroup late in the game to merge...

Bain sets aside fees from South Africa tax authority work

Continued from page A1 with the longevity of the old structure in the investment bank. Citi was an early mover when it merged its corporate and investment banks back in 2008, but the experience was a painful one and complications and rivalries endured for years after, bankers say. That merger was complicated by investment bankers believing they were more important than corporate banking colleagues, even though corporate banking was a more stable business line after the financial crisis, a senior banker who lived through the merger said. Last week’s merger will not be afflicted by the same challenge because investment bankers and capital markets bankers are on a more even footing, but still the hangover from the last merger was enough to make Citi want to bide its time before attempting another. “It’s better to do the right thing a bit slow than the wrong thing too soon,” said Tyler Dickson, former head of capital markets origination who was named to co-head the newly-created Banking, Capital Markets and Advisory unit with investment banker Manolo Falco. Two senior investment bankers told the FT that “personalities” had made it difficult for Citi to merge the divisions sooner, but would not give further details on what the issues were. “Universally people have said this makes a lot of sense,” said Mr Dickson, adding that he and Ray McGuire, the former head of Citi’s CIB global and now chairman of the new combined unit and vice-chairman of Citigroup, already had a close working relationship. A senior investment banker said Mr McGuire was “very happy” with his new role, where he will be spending more time focusing on clients. “Ray has had the longest tenure of any global business head I can remember,” he added, describing running global businesses as a “brutal” exercise. Mr McGuire spent 13 years as the head of Citi’s CIB globally. Mr McGuire’s move from a key operational role and the trio of departures announced on Tuesday come less than a month after Citi’s global head of cards Jud Linville stepped down as part of a restructuring of Citi’s consumer bank. “Each change individually makes sense” as an example of normal succession, said Brian Foran of Autonomous Research, especially given that four of the men are over 60. “But in aggregate it is a lot of change, and it makes some investors wonder whether this is passing the baton to a new generation or whether there is internal pressure about hitting financial targets.” Several executives stressed that the new structure was about growth opportunity, not cutting costs. One key challenge will be to translate Citibank’s traditional strength as a global commercial bank, and as a leader in foreign exchange and credit, into wider success in investment banking, in areas such as M&A and equities. Citi trails three other banks — Goldman Sachs, Morgan Stanley and JPMorgan — in global M&A revenue, according to Dealogic data. It has never ranked higher than fourth in the decade since the crisis. It is, by contrast, at the top of the table for raising debt capital.

Tuesday 11 September 2018

Consultant’s advice on a restructuring was used to pursue a political vendetta JOSEPH COTTERILL

Sara Kukka-Salam, a 2015 graduate in Masters in Management at the Stockholm School of Economics - ranked 12th in this year’s list © Charlotte Rueckl

Global Masters in Management ranking 2018: analysis and methodology The FT’s list is more diverse than ever — for course content, location, fees and more LAURENT ORTMANS

he 2018 Financial Times ranking of masters in management has reached the milestone of 100 schools for the first time, as the MiM degree continues to grow in popularity worldwide. Find the full ranking here. This year’s table includes programmes from 27 countries, mostly in Europe, with more than 30,000 enrolled students. In comparison, the FT 2018 Global MBA rankings, published in January, featured schools from 17 countries, half in the US, with about 19,000 new students. The first MiM ranking, published in 2005, listed 25 schools, all in Europe. The number of schools has increased sharply in the past four years, from 70 in 2014 to 95 in 2017. This year, 104 schools took part in the process, including six new entrants, with 100 making the final cut, the maximum in the FT rankings. Masters in management programmes have a core of general management education in common but otherwise they vary widely. The shortest programme is eight months and the longest 36 months long, and cohort sizes range from 28 to 1,274. Programmes are taught either by business schools or universities and come with very different price tags: tuition fees at ranked schools range from zero (where there is full state

funding) to about £40,000. Swiss school St Gallen’s MA in Strategy and International Management tops the ranking for the eighth consecutive year. HEC Paris remains in second place, a position it has held since 2014, and London Business moves up one place to a new high of third. St Gallen has the smallest cohort among schools in the top five, with about 55 students each year. “The group is carefully selected so that you work together with people who are truly inspiring and bring you further,” commented one graduate. Its programme is also cheaper than any of its top five rivals, with a maximum fee of SFr10,000 ($10,027) and is in the top 20 for value for money. St Gallen’s alumni have the highest salary on average among European schools at $109,000, adjusted for purchasing power parity, behind alumni from Indian schools. The programme is also number one for aims achieved and the efficiency of its career service. Finally, the school is in the top five for international course experience and international mobility in the three years following graduation. This year’s highest new entrant is Hult International Business School. The US institution, which has campuses in Dubai, London and Shanghai, came in at 53. Its programme is in the top 10 for international mobility of graduates. The University of Economics, Prague took part in

this year’s ranking with a different programme to previous years. The school’s Master in International Management — part of Cems, the international alliance of business schools — went straight in at 22. The Irish and Swedish members of Cems — Smurfit Graduate Business School at University College Dublin and Stockholm School of Economics — are also climbing the table. Smurfit has broken into the top 10 for the first time at seven and Stockholm is up 11 places to 12. Both schools have risen more than 30 places in the past three years since taking part with new courses. This year’s ranking includes for the first time a school from Slovenia — the University of Ljubljana Faculty of Economics. It enters the ranking at 83 and is number two for value for money. With that, Slovenia becomes the 42nd country to feature in 20 years of FT rankings. For the eighth year in a row St Gallen’s MA in Strategy and International Management tops this ranking. Alumni from 2015 have the highest salary among European schools, at $109,000, and the MA is top for aims achieved and its careers service. “The administration was extremely helpful in allowing me to develop [in] exactly the direction that I wanted”, said one graduate. St Gallen is also second for international experience during the MA and fourth for graduates’ international mobility.

Janet Yellen calls for US carbon tax to curb climate change Ex-Fed chief backs plan for levy with revenue given to the public as dividend payouts ED CROOKS

anet Yellen has spoken out in support of a carbon tax as the most effective and efficient way to reduce US greenhouse gas emissions. Ms Yellen, who chaired the US Federal Reserve until February, has joined the Climate Leadership Council, a bipartisan group pushing for the US to address the threat of global warming by introducing a carbon tax, with revenues returned to the public in dividend payments. The group is backed by large companies including ExxonMobil, BP, General Motors and Johnson & Johnson. “Climate change is a very critical problem that we need to address,” Ms Yellen told the Financial Times. “When the central problem is the damage caused by greenhouse gas emissions, the cleanest and most efficient way to address it is to tax those emissions.”She was speaking as the council published estimates that

indicated its plan to abolish climate regulations and replace them with a carbon tax could cut US greenhouse gas emissions by substantially more than all the policies put in place by President Barack Obama. It also issued poll results suggesting that 56 per cent of respondents backed its idea of “taxing fossil fuel companies on their carbon emissions and rebating all the money directly to all Americans through a monthly cheque”, with 26 per cent opposed. The proposal for the carbon tax and dividends is known as the “BakerShultz plan” after being drawn up by a group including James Baker and George Shultz, respectively secretaries of state under presidents George HW Bush and Ronald Reagan. Its supporters acknowledge that it stands little chance of becoming law under President Donald Trump, who has in the past described global warming as a hoax, but are working to win support for the 2020 elections and beyond.

Ms Yellen said she had joined the Climate Leadership Council because it was trying to build a political consensus for action on climate change. “Is this going to be politically acceptable? I really don’t know,” she said. “But I think it is worthwhile to show there can be broad agreement on a policy that is environmentally enlightened.” The former Fed chief’s involvement in climate policy dates back to her time as chair of President Bill Clinton’s Council of Economic Advisers, when she argued the case for the 1997 Kyoto protocol, saying the cost of the 7 per cent emissions reduction sought by the administration would be “modest”. “I learnt a lot about the seriousness of the issue,” she said last week. At the time, the administration backed a cap-and-trade programme to reduce emissions. Ms Yellen was willing to support it, she said, but most economists would argue that a carbon tax was a more effective policy.

ain will set aside millions of dollars in fees from South Africa’s tax authority after evidence that its advice on a restructuring was used to pursue a political vendetta by an ally of the former president, Jacob Zuma. The management consultant said that it was offering to repay R164m ($10.8m), plus interest and value-added taxes, after an internal probe found within a week of investigating that its work for the South African revenue service (Sars) “fell short of our operating principles”. Like McKinsey and KPMG, Bain has come under fire in South Africa for work allegedly facilitating the breakdown of independent institutions under Mr Zuma’s corruption-hit presidency, which ended earlier this year. McKinsey and KPMG have moved to repay fees for work tied to alleged looting of state contracts by the Guptas, a business family enjoying Mr Zuma’s friendship. In recent weeks a judicial inquiry in South Africa has heard evidence that Tom Moyane, Mr Zuma’s appointee as head of Sars, used Bain’s advice on a restructuring in 2015 to purge internal opponents and degrade what was formerly regarded as a world-class tax collection authority. Last week former Sars employees called for Bain to repay its fees after the company’s head in South Africa, Vittorio Massone, told the inquiry that “we might have been used” by Mr Moyane. Bain said on Sunday that an additional reason for setting aside fees was that “we do not want to benefit from work that was used to further a different agenda than was intended”. Bain added that it would follow the inquiry’s decision on what to do with the money it has set aside, or use the amount “for the benefit of South Africa” if the inquiry gives no guidance. “In the latter instance, we will seek guidance from business, government and civil society leaders on how these funds can best be used,” it said. Mr Massone, who also admitted Mr Moyane had asked for Bain’s advice on Sars a year before he was appointed its head, will step back from day-to-day operations to focus on the inquiry, the company said. Turmoil under Mr Moyane has led to Sars missing revenue collection targets by R50bn, increasing pressure on South Africa’s already badly strained state finances. After the ruling African National Congress forced Mr Zuma to leave office this year, his successor, Cyril Ramaphosa, sacked Mr Moyane and instituted the inquiry. The inquiry also heard evidence from a South African Treasury official that the Bain contract might have been irregularly awarded by Sars. Mr Moyane denies wrongdoing, as do the Guptas and Mr Zuma.

Tuesday 11 September 2018

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BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

French environment minister raises prospect of EDF shake-up Shanghai and Shenzhen-listed blue-chips have fallen a quarter from January’s peak DAVID KEOHANE

rance’s new environment minister has said that EDF must prove the viability of its next generation nuclear reactor before the question of new plants can be considered and re-raised the prospect of a change in the structure of the state-controlled energy giant. “EDF should demonstrate that the EPR [European Pressurised Reactor, a next generation nuclear reactor] works, which is not the case yet. Nobody is able to guarantee a date for its connection to the grid. It also has to demonstrate that the EPR is competitive in terms of costs,” François de Rugy told French daily Le Monde. However, Mr de Rugy, who is seen as more pragmatic than his predecessor, added that “we must get out of the religious war about nuclear energy” and “the important thing is to know the economic data in the nuclear field and in the field of renewable energies.” The comments come as Mr de Rugy takes the reins of France’s environmental policy. Last week French president Emmanuel Macron appointed Mr de Rugy as his new environment minister as part of a minor government reshuffle triggered by the surprise departure of Nicolas Hulot, the former television personality and longtime environmental campaigner replaced by Mr de Rugy. France is preparing to unveil a multi-year energy programme this autumn, which will include details on the speed at which the country should pursue a government target to cut nuclear’s share of domestic electricity production to 50 per cent. The question of whether new reactors will eventually be commissioned is of particular importance to nuclear-focused EDF. Earlier this summer Jean-Bernard Lévy, EDF’s chief executive, told French lawmakers that future French

EPRs built in a series, as opposed to the one-off prototype at Flamanville, could produce electricity at a cost of €60-€70 per megawatt per hour. That would be comparable with the £57.50/ MWh price in the latest UK offshore wind contracts. While an EPR in China has now been connected to the grid, the company’s flagship Flamanville plant in France, seen as a crucial marker for the technology, is seven years late and €7bn over budget. In July, EDF said the loading of nuclear fuel at Flammanville “is now scheduled for the fourth quarter in 2019 and the target construction costs have been revised from €10.5bn to €10.9bn.” Mr de Rugy also refused to rule out changes to the “architecture” of EDF: “I have some ideas on the subject…I am not in favour of change on principle, but I think that the status quo is not in the interest of the state and the company. You really have to look at everything, not just the subject of the energy transition, but also the debt of the company, and that can indeed inspire changes.” Ex-minister Nicolas Hulot had told the Financial Times last year that EDF needed to embrace a transition towards environmentally friendly energy rather than “resist” it. He added that this might require revisiting the structure of the company - analysts suggested EDF’s nuclear activities and riskier debt could be separated from its renewable, retail and network assets. “The question of EDF’s structure is back on the table, and rightly so in our view. EDF is one of the largest utilities in the world with an Enterprise Value heading towards €150 billion and a wide range of business lines in different countries and with different risk profiles,” said Sam Arie at UBS. “We certainly believe there could be value in a NewCo/OldCo separation – perhaps similar to the RWE/ Innogy split in 2016, but potentially much larger and more significant,” added Mr Arie.

UBS launches World Bank sustainable debt product

Swiss group in drive to focus on higher-margin innovative drugs KATIE MARTIN

BS has launched a new debt product backed by the World Bank and linked to sustainability goals in the latest effort to satisfy demand among rich clients for ethical investment. The World Bank is issuing notes through its International Bank for Reconstruction and Development, linked to an index that reflects the equity performance of 100 companies that have signed up to the UN’s environmental, social and governance goals. The product is designed to attract ultra-wealthy clients and family offices. Investors now have six weeks to sign up to the dollar-denominated notes, which will pay no coupon but will return the initial payout plus any positive return of the index after seven years. Top index components include Johnson & Johnson, Kimberly-Clark and HP. UBS said it has no target for the amount it is seeking to raise for the

World Bank, but “demand is promising”, according to Michael Nelskyla, head of investment solutions at the Swiss bank. “The effort reflects our commitment to be the leading provider of products that help align our clients’ financial objectives with their priorities to support sustainability,” he said. UBS is the exclusive underwriter of the note and also has exclusive rights to build financial products on the Global Sustainable Signatories Index. Last week, the European Investment Bank sold a new type of debt that backs sustainable investment. The EIB sold the first green bond in 2007 and has since raised €23bn in greenlabelled debt to finance renewable energy and energy efficiency schemes. A host of investment products proffering social benefits have emerged in the decade since the green bond industry was launched, with social bonds tapping into investors’ desire for ethical investments and the World Bank working on specialised capital structures such as catastrophe bonds and vaccine bonds.

UK economic growth picks up steam Retail and construction activity propel quarterly GDP expansion to fastest in a year DELPHINE STRAUSS

he UK’s scorching summer fuelled a recovery in retail and construction, propelling quarterly economic growth in the three months to July to its fastest pace in a year, official data showed on Monday. The Office for National Statistics said its new measure of rolling three month growth — comparing a threemonth period with the previous three months — hit 0.6 per cent, up from 0.4 per cent in the previous quarter. That was the strongest quarterly growth recorded since July 2017, although the figures were flattered by the unusually slow growth seen in February and March. “It wasn’t just the mercury rising at the start of the third quarter: today’s data deluge suggests the UK economy was too,” said Lee Hopley,

chief economist at the EEF manufacturers’ organisation. The figures will vindicate policymakers at the Bank of England, who raised interest rates in August, saying they were now confident that the slowdown seen at the start of the year was due to a change in the weather, not the economic climate. “Far from running out of steam UK activity has picked up after a very poor start to the year. Monthly data is choppy, but this pick-up shows that the UK is entering the crucial phase of the Brexit talks in better shape than seemed likely six months ago,” said Ian Stewart, chief economist at Deloitte. George Buckley, economist at Nomura, said the figures were consistent with recent survey data and suggested the economy was performing well, given the BoE’s estimate that average annualised growth around 1.5 per cent is now the most

the UK economy can sustain without fuelling inflation. However, some economists question how durable the pick-up will prove. It was in large part due to a sharp recovery in retail trade, which grew 2.1 per cent from the previous quarter. This could be a sign that consumers are starting to spend more freely, as the squeeze on real wages finally eases off, but separate data have shown that much of it was spending on food and drink — fuelled by the World Cup and other summer festivities — with large parts of the retail sector still afflicted by a secular shift in consumer habits. Activity in the construction sector also grew strongly, up by 3.3 per cent from the previous three month period, although the fastest expansion came at the start of the period, when builders were still catching up with backlogs caused by the harsh winter.

Europe holds steady after Chinese stocks come under pressure US president signals further tariffs imminent, while dollar maintains gains ALICE WOODHOUSE AND RICHARD BLACKDEN

urope is on the rise on Monday, with the Europe-wide Stoxx 600 index up 0.5 per cent. Indices across the continent are also up — Italy’s FTSE MIB by 2.2 per cent, France’s CAC by 0.5 per cent, Spain’s Ibex 35 by 1.26 per cent and Germany’s Xetra Dax by 0.5 per cent — defying the negative mood in Asia. Asia suffered after US president Donald Trump said he would be imposing levies on $200bn of Chinese imports soon and said tariffs on a further $267bn of products were “ready to go at short notice”. “Headwinds from the US/ China trade dispute are building,” analysts at JPMorgan Chase noted. “We are waiting for news on the next round of US tariffs on $200bn of imports from China, the Chinese response, and the potential for a further escalation.” Hot topic The CSI 300, a benchmark for the biggest companies listed in Shenzhen and Shanghai, closed down 1.45 per cent on Monday. That takes its decline since its late January high to at least 26 per cent. The US has already imposed $50bn in tariffs on Chinese products.

Apple suppliers in Asia were hit after Mr Trump suggested over the weekend that the California-based company build its products in the US to avoid planned tariffs on goods imported from China. By the close, Hong Kong-listed Sunny Optical and AAC Technologies had fallen 4.3 per cent and 3.6 per cent, respectively, putting them among the biggest losers on Hong Kong’s Hang Seng index. Assembler Hon Hai Precision Industry, also known as Foxconn, fell 3.3 per cent in Taiwan. The S&P 500 and the Nasdaq Composite each closed down 0.2 per cent after evidence of accelerating wage growth renewed expectations that the Federal Reserve was on track for two further rate rises this year. Forex Russia’s rouble weakened to more than Rbs70 a dollar for the first time in almost two-and-ahalf years on Monday, as investors extended a sell-off in the currency fuelled by concerns over the independence of its central bank. The Russian currency traded as low as Rbs70.115 against the dollar, about 0.2 per cent lower on the day and its weakest since March 2016. Sweden’s currency climbed in early European dealings on Mon-

day, recovering further from its lowest levels since 2009, as investors parsed through preliminary results from this weekend’s election. The krona climbed 0.31 per cent against the euro to SKr10.43 just as trading began in London. It has bounced back 2.8 per cent since reaching SKr10.7285 two weeks ago. The dollar index was holding on to gains made after jobs figures were released. The index is now up almost 7 per cent since the middle of April. Meanwhile, emerging market currencies were broadly weaker, with the Indian rupee down 0.93 per cent to Rs72.45 — breaching the key Rs72 level — the Turkish lira down 1.15 per cent and the South African rand 0.34 per cent lower. Fixed income The 10-year US Treasury yield was little changed at 2.94 per cent, while the yield on 10-year Japanese government bonds rose 1 basis point to 0.107 per cent. Commodities Oil prices were higher, with Brent crude climbing 0.56 per cent to $77.26 a barrel and West Texas Intermediate gaining 0.44 per cent to $68.05 a barrel. Gold was down 0.2 per cent at $1,192.

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2019: Ambode picks form, declares for 2nd term …Says ‘I remain committed to achieving more for Lagos’ JOSHUA BASSEY

overnor Akinwunmi Ambode of Lagos State on Monday picked the All Progressives Congress (APC) gubernatorial form to declare his ambition for a second term in office come 2019. Ambode said he remains undaunted and resolutely committed to achieving more for the state if re-elected The governor, who addressed scores of party faithful who turned up to witness the declaration in Alausa, recalled how the journey began four years ago when he called on Lagosians to join him in a journey of selfless service to build a secure and prosperous state driven by a vibrant economy and supported by quality service, equity and justice, saying it was gratifying that the people believed in him and gave their support. “In the last three-and-a half years, I have fulfilled my promises to you to make Lagos work for all. With your support, we have made Lagos a better place and changed the face of our state. I did not do it alone; we did it together, because you believed. “Our state has remained steadily

Ambode

prosperous because of your positive outlook. I urge you to always stay positive in your personal and communal lives and continue to aspire to great things,” he said. Thanking Lagosians for believing in his administration and for the support so far, Ambode, who had earlier picked up his expression of interest and nomination form at the National Secretariat of the party in Abuja, specifically appreci-

ated members of APC and political leaders in the state, including Bola Tinubu, APC national leader for giving him the platform to contribute to the further growth and development of the state. Ambode said though a lot had been achieved, he was nonetheless not daunted or tired to achieve a lot more for the state, adding that such was the reason for humbly seeking the support of the people to achieve

2019: Natasha picks nomination form, promises to reposition Kogi Central

atasha Hadiza Akpoti, a barrister and founder, Builders Hub Impact Investment Program (BHIIP), has obtained the Expression of Interest and Nomination Forms to run for the office of the Senator representing Kogi Central Senatorial District on the platform of Social Democratic Party (SDP). Addressing journalists after picking the forms at the party’s headquarters in Abuja, Akpoti said the people have realised that

government has been so far away from them and she decided to answer the people’s call to be the voice of the voiceless and change the narrative. She pointed out that the aim of delving into politics is to consolidate on the achievements made thus far on the resuscitation of Ajaokuta Steel Company and to reposition Kogi Central Senatorial District. My mission is to see the “Creation of steel laws, establishment of

Agboti speaking to journalists after picking her senatorial form

more for the State. “In these three and a half years as your Governor, I have seen visible proof that we can achieve unbelievable things when we all come together with no more than our belief in our dreams. “We achieved because you believed. But there is still a lot more to be done. But I am not daunted. I am not tired. And I am sure you feel the same way because we all envision a better Lagos, a Lagos of our dreams. “So, I humbly call you again, to give me your support as I seek to continue with your mandate to steer the affairs of our State. I ask you to believe again and together, let’s achieve more,” governor Ambode said. Also speaking, Gbenga Ashafa, the senator representing Lagos East, said Ambode had already been endorsed for a second term by Tinubu on account of his sterling performance in office. “We are so proud to have Governor Akinwunmi Ambode as our governor. As the senator representing Lagos East which produced him even though he is for the whole of Lagos State, we are saying we are very happy to endorse him for a second term on the instruction of our leader, Asiwaju Bola Ahmed Tinubu,” Ashafa said.

Tuesday 11 September 2018

Benue APC passes vote of confidence in Buhari, Oshiomhole ...Adopts indirect primaries BENJAMIN AGESAN, Makurdi

he All Progressives Congress (APC) Benue chapter, on Monday passed votes of confidence in President Muhammadu Buhari, APC National Chairman, Adams Oshiomole and the leader of the party in the state, George Akume for their good leadership in the party. The state chapter of the party also adopted indirect primaries in selecting candidates for the 2019 general election. These decisions were taken at the APC State Executive Committee (SEC) meeting in Makurdi, the state capital. The motion of passing votes of confidence in the President and Oshiomhole was moved by Akume which was supported by members of the party. The decision of adopting indirect primaries was however, rejected by the former senatorial aspirants for Zone C, Daniel Onjeh who lost out to David Martin in 2015. Onjeh explained that he would prefer the direct method. He said that indirect method would be tasking and involve a lot of money as the party was not buoyant enough to sponsor many people. His suggestion was rejected and immediately ruled out immediately by the party executives. The APC State Chairman, Abba Yaro said, after the SEC meeting in Benue direct primaries won’t be possible in the state because of the absence of a comprehensive membership register. The decision was reached after due consultation with the party’s stakeholders in the State and National Executive Committee (NEC) of the party.

Ashiru resigns to pursue governorship ambition in Ogun Steel Development Authority and so much more to ensure that social justice is entrenched.” She maintained that she was going to make sure the section of the 1999 constitution which bears right to life is amended to include right to portable water, right to quality education, good road, good health system and so much more. She pointed out that it was time to give opportunity to women to take charge in leadership, adding that she is going to make sure women’s right are adequately promoted, while promising to extend a hand of mentorship to other women. She emphasised that everybody has right to benefit from the moribund steel companies in Nigeria, and reiterated her commitment to push harder for the revival of Ajaokuta and Delta steel companies if given the mandate. Responding on why she chose Social Democratic Party as a platform to front her ambition, she said the philosophy of the party resonates with her ideas of politics, adding that her father was one of the founding members of the party who worked closely with the late Moshood Abiola to promote the party and by default she has always been a member of Social Democratic Party.

…Thanks Amosun, others RAZAQ AYINLA, Abeokuta

imbo Ashiru, Ogun State commissioner for commerce and industr y, has resigned from his appointment in the cabinet of Governor Ibikunle Amosun to pursue governorship ambition on the platform of All Progressives Congress (APC). BusinessDay gathered that, Ashiru, the longest serving commissioner in the ministry, resigned following his resolution to contest the number one political office in the state, having obtained APC nomination form which qualifies him as one of the aspirants vying for governorship seat in the APC primaries that will be conducted on September 25, 2018. Ashiru, who was reported to have helped facilitate the birthing of over 320 manufacturing firms in the state as the commissioner for commerce and industry, submitted his resignation letter to the office of the Secretary to the State Government on Monday morning. The former commissioner, who hails from Ijebu-Ode in Ogun East senatorial district, confirmed the

resignation on phone to our correspondent, just as he thanked the governor and entire people of Ogun State for allowing him serve his fatherland as one of the commissioners in equally one of the sensitive ministries in the state. “Yes, I have tendered my resignation letter this morning to pursue my governorship ambition. You will recall that my people from Ijebu and Remo picked me as a consensus governorship candidate since last year; they also bought me an APC nomination form recently to contest for the seat. “So, I must hear the clarion call from the good people of Ijebu-Remo to further serve my fatherland in higher capacity, and as a true son of my father and law-abiding citizen, I must quit my present office to be able to fully partake in the primaries as directed by our party - All Progressives Congress (APC). “I therefore, express my appreciation to the governor and all the good people of Ogun State for allowing me to serve my fatherland meritoriously. I am looking forward to your usual support as I step forward for next move which is governorship seat,” he said.

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Agip, BSC Energy, others get license for 1,464mw power plants OLUSOLA BELLO

s part of governments drive to improve the country’s capacity for electricity generation, the National Electricity Regulatory Commission (NERC) has issued licenses that would enable companies generate 1,464 megawatts of electricity in the first quarter of 2018. Amongst the companies that befitted from the licenses are Nigeria Agip Oil Company which got a license to build Okpai phase two power project which is 450 megawatts, BCS Energy Nigeria Limited in Geregu, Kogi State, 1000 MW. Other companies are Cummins Power Generation Nigeria Limited, which got three licenses to construct power plants of different capacities in Lagos and Owerri. The company is to build a 2.5 mw generating plants for the Nigerian Bottling Company in Owerri, and 5.25MW for Golden Tullip and 1.7mw at Ilupeju, Lagos. Crown Tower Solution another company based in Ibadan is to also build 5MW. According to the first

quarter report of NERC for 2018, the Commission issued two (2) new on-grid and four (4) off-grid licences and granted extension for one (1) licensee during the quarter under review. The nameplate capacities of those licences summed up to 1,464.5MW. On the other hand, three (3) permits were renewed for captive power generation with a total capacity of 375MW. In the same quarter, however, the Commission after due consideration, approved the transfer of Licences from Mobil Producing Nigeria Limited and North South Power Limited Licence to Qua Iboe Power Plant Limited and Shiroro Solar Generating Company Limited respectively. The Commission also approved the transfer of 4,999,999 shares from Nova Solar 5 Farms to Azura Katsina Limited. It also certified five (5) Meter Service Providers (i.e. Meter Importer and Installer) following the satisfactory evaluation of their applications. There were two (2) off-grid applications under evaluation by the Commission for issuance of licences and permits as may be applicable. Furthermore, during

the first quarter of 2018, the Commission claimed it continued the technical evaluation of Independent Electricity Distribution Network (IEDN) applications from the following prospective investors: Ariaria Market IEDN which is licenced to evacuate 9.5MW Power to be generated by Ariaria Market Limited IPP. The second company is Tadabo Electricity Distribution Company, a subsidiary of Kano Hydro and Energy Development Company (KHEDCO) established solely to serve as SPV for the evacuation of the generated Power from Tiga and Challawa hydro power plants. The Power will be distributed to Kano Water Board owned water treatment plants at Tamurwa and Challawa to power the heavy-duty water pumps. Otakikpo Independent Electricity Distribution Network applied for IEDN licence to enable it distributes electricity within Otakikpo Industrial Park in Adoni Local Government area of Port Harcourt, Rivers State. The application has been reviewed and the applicant met all requirements.

Tuesday 11 September 2018

NPA breaks silence on Escravos contract award JONATHAN ADEROJU

he management of Nigerian Ports Authority (NPA) has finally broken its silence on allegations of fraud in the award of contract for the dredging of Escravos Bar in Warri. In a statement issued in September, the management of NPA said it had “maintained a dignified silence on the allegations until now as a result of the confidence that all processes as enumerated in the Procurement Act, 2004 were followed in the award of the contract.” NPA management said that they had also assumed that if anyone had any issue with how the contract was given out, the right approach would have been to go to the courts to seek redress instead of engaging in a media campaign to discredit the process. “However, after due consideration of our obligations to be accountable to the people of Nigeria that we serve, the Authority has decided to provide the following information in response to the spurious allegations and campaign of calumny being spread in the media.”

Explaining the process of the award of the contract, NPA stated that “the Authority is guided by provisions of the Procurement Act in all its procurement processes.” The NPA also disclosed that all procurements by the Authority is subject to the supervision/approval of the Bureau of Public Procurement(BPP) and the authority received the necessary approvals before going ahead with the award of the contract for the dredging of Warri Channel. “All arithmetic computations so far done by the Authority are in line with the PPA which permits the procuring entity to do such and consequent documentations of the computations were submitted to BPP for no objection which was obliged.” “The Authority, upon receipt of the petition alleging that Dredging International Nigeria Limited had been convicted by a law court in Switzerland, sought the legal counsel of the Office of the Attorney General of the Federation and requested an investigation of the petition by the Economic and Financial Crimes Commission (EFCC).” “In addition to this, al-

though Dredging International Nigeria Limited provided us with a sworn affidavit in support of claims that they were different from the company that was so convicted, the Authority engaged a legal practitioner who embarked on an independent investigation of the petition and the claims of the company.” “These investigation revealed that allegations that Messers Dredging International Services Nigeria Limited had been convicted in a law court in Switzerland for corrupt practices involving some officials of the Nigerian government including the NPA were incorrect. The Company so convicted in the Swiss Court is Dredging Cyprus Ltd which is a cosubsidiary of DISN. The two companies have different legal personalities as so recognized by the provisions of the Companies and Allied Matters Act (CAMA), 2004. The conviction of a subsidiary company indeed is not the conviction of all companies within a group of companies. In addition, none of the directors so convicted for complicity by the court in Switzerland is on the board of Dredging International Nigeria Limited.

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Tuesday 11 September 2018

Despite huge oil receipts, trafficking Moody’s says AFC expansion risk in persons unabated in Nigeria-UNDP balanced by strong liquidity CYNTHIA EGBOBOH, Abuja

…1m citizens under slavery

he United Nations Development Programme (UNDP) has disclosed that over 1 million Nigerians are under slavery as trafficking in persons remains unabated despite the country’s huge oil receipts. Maria Grazia Giammarinaro, United Nations Special Rapporteur, speaking at a press briefing in Abuja on Monday said that despite Nigeria being the largest oil producer and ranks sixth in the world, with 2.5 million of oil produced daily, 64 percent of its citizens still live below the poverty line and trafficking in persons remains unabated. Grazia, presenting findings from her visit to some states in Nigeria said that the fight against trafficking in Nigeria appears significantly underfunded by the government and highly relying on other actors, and particularly civil society organisations. “Nigeria remains a source, transit and destination country for victims of trafficking; I would like to highlight that the first

indicator of political commitment lies in allocating adequate resources to specialised agencies and programmes dedicated to the fight against trafficking, which at present, appear significantly underfunded by the government”, she said. “With the wealth and political leverage in Nigeria, the Government of Nigeria cannot be seen to leave its people behind, to put people at the forefront of development, it is of utmost importance to ensure that the fight against trafficking in persons, remains high on the national agenda” she added. According to her, a revived political will and a better coordination across relevant federal inter-governmental departments, as well as between NAPTIP and State’s initiatives is needed to put in place dedicated actions and holistic anti-trafficking responses Speaking on the adverse effect of trafficking, Grazia said that the victims are often subject to all forms of human rights violations such as torture, rape, extortion,

and exploitation amounting to trafficking, slavery and forced labour adding that severe forms of exploitation are also perpetrated by traffickers and final exploiters, through organised crime networks. She said Internal trafficking mainly from rural to urban areas is also rampant in Nigeria, although often overlooked, mainly affects women and girls for the purpose of domestic servitude and sexual exploitation and men and boys for the purpose of child begging, including in connection with Almajiri practice in some parts of the country. “Other forms of internal trafficking reported include the issue of so-called ‘baby factories’, namely orphanages, maternity homes or religious centres where women are held against their will, raped and forced to carry and deliver children who are sometimes sold with the intent to exploit them in sexual and labour exploitation, according to information received during the visit” she added.

…introducing callable capital may improve ratings OGHOGHO EDOSOMWAN

he credit profile (A3 stable) of the Africa Finance Corporation (AFC), balances its sound though eroding capital adequacy and strong liquidity position against its exposure to a challenging operating environment and balance sheet expansion risks, according to Moody’s Investor Services in an annual update. The corporation has a track record of profitability and it also implements the International Financial Reporting Standards (IFRS), as well as conservative risk management policies aimed at reducing credit risk in its growing portfolio, Moody’s said. According to Moody’s, AFC is facing key challenges which include an absence of callable capital and a narrow sovereign shareholder base, both of which limit strength of member support. However, the introduction of callable capi-

tal or other indications that member support is strengthening, possibly including new sovereign shareholders, could put upward pressure on the rating. The corporation’s lack of callable capital and absence of investment-grade shareholders point to low contractual and extraordinary support, Moody’s said. As a result, its credit profile reflects its intrinsic financial strength, as represented by Moody’s assessments of capital adequacy and liquidity, and does not include any uplift from member support. On the other hand, downward rating pressure would be likely if the AFC experienced a substantial shock to its capital adequacy or liquidity. “The Africa Finance Corporation has a track record of profitability and a liquid treasury portfolio that consists mainly of placements with large international financial institutions,” Christian de Guzman, a Moody’s Vice President, Senior

Credit Officer said. “Its credit challenges include the risk that the expansion of its balance sheet and increased leverage will weaken its capital adequacy metrics.Also, its exposure to sub-Saharan Africa’s challenging operating environment has resulted in increased impairment charges and significant past due amounts on its loan portfolio, “ Guzman added. According to the report, AFC also has a strong but declining capital position and conservative financial management. These strengths are however balanced by low borrower quality and a weaker asset performance than indicated by its zero nonperforming loan (NPL) ratio. However, the pristine NPL ratio is likely to understate the risks underlying the corporation’s total portfolio of development assets. This is because the NPL measure does not account for the performance of debt securities and equity investments.

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NEWS YOU CAN TRUST I TUESDAY 11 SEPTEMBER 2018

INSIGHT/INNOVATION

2019 elections: The state of play

OGHO OKITI Dr. Okiti is the president, Time Economics Ltd @ Dr_Okiti 081.7153.0058

lem Chambers, a Forbes contributor once wrote an article titled “politics drives economics, so politicians should be drug tested”. This aptly describes Nigeria’s situation today ahead of the 2019 presidential elections scheduled for February 2019. Given this, and the weight upon Nigerians to elect a leader that will lead us into the third decade of this century, I have decided to focus my commentary on politics in the period leading to the elections. For a start, let us summarise where we are. The elections will be contested on four major themes. The first is the continuing economic fragility in Nigeria. Since the last election, the highest quarterly growth rate recorded was 2.84% in the third quarter of 2015 - a few months after the government assumed office. Since then the growth rate has trended downwards and the country endured a painful 5-quarter economic recession, which has been followed by a tepid recovery, and the highest level of unemployment since records began, reaching 18.8% in Q3 2017, while the national debt at its highest rate since Nigeria’s debt cancellation in 2005, growing to 19.11% of GDP from 11.94% in December 2014. Second, it will be fought in the context of

who is best placed to deal with corruption. This is especially going to be the case because President Muhammadu Buhari won his 2015 elections largely on the back of his perceived integrity and his ability to deal with corruption. In the last three years, the government has aggressively pursued those that were corrupt in the past, especially those in opposition. While the government has ramped up rhetoric on corruption, and has used existing laws and established systems to secure convictions and the return of stolen monies, the administration has not improved on those systems. Therefore, the debate will be between continuing with the current strategy pursued by the administration of “punishing” corruption after it has occurred or improving the system to reduce the possibility for corruption in the first place. Third, it will be contested in the context of the desire for changes in the structure of the Nigeria’s federal system. Although there is no clear nationwide definition or agreement on the nature and description of the structural changes required, the common theme is devolution of powers from Abuja to the States within the federation. The structural debate has been elevated following recent escalation of insecurity, and poor economic conditions that is exacerbating poverty. The fourth major theme in the election will be insecurity. President Buhari is a former army general who electorates in 2015 thought was better placed to solve the many security challenges facing the country. However, while Boko Haram has been slightly weakened in the past three years, a bloodier conflict has erupted in the North Central in the form of violent attacks on many communities, largely by herdsmen. Nonetheless, there is no doubt that President MuhammaduBuhari will be the All Progressives Congress (APC)’s candidate, especially after a very generous but faceless group has painstakingly raised the money for the APC nomination form. The President, before winning the last general elections had contested three previous elections in 2003, 2007, and 2011. As it was in 2014, when he won the APC primaries, his candidature will be supported by large sections of

Although there is no clear nationwide definition or agreement on the nature and description of the structural changes required, the common theme is devolution of powers from Abuja to the States the party. The main challenger to the ruling APC will be the People’s Democratic Party (PDP). The party, which is in opposition for the first time since 1999, has scheduled its primaries for 5 – 6 of October 2018. So far, it has a very bulging group of politicians willing to contest against President Buhari. They include Atiku Abubakar, former Vice President (1999 – 2007), who has contested every presidential ticket since 2007. At over 70 years old, this is perhaps his last shot at the country’s number one job. He defected back to PDP from the APC. Other contestants are SuleLamido, the former governor of Jigawa State and a veteran of Nigerian politics, and Bukola Saraki, current Senate President and former two-term governor of Kwara State. Also in the running is Rabiu Kwankwanso, the former governor of Kano State, who recently defected from the ruling APC. Ibrahim Dankwambo, the former Accountant General of the Federation and a two-term governor of Gombe State. Ahmed Makarfi, the former chairman of the party, who midwifed the party’s successful conclusion to its legal chairmanship debacle, and KabiruTanimuTuraki, former minister and Senior Advocate of Nigeria from Kebbi State complete the list of serious expectations on the platform of PDP. We do not see, nor expect the PDP choosing a candidate from outside of this group. However,

each candidate has different implications for the fortunes of the party at the elections as well as the policy dynamics ahead and after election. Besides the APC and the PDP, there are other parties, which have very limited chances of producing the next president of Nigeria. Leading this group of contestants are former Deputy Governor of the Central Bank of Nigeria Kingsley Moghalu on the platform of Young Progressive Party (YPP) and former Governor of Cross River State, Donald Duke, whois contesting on the platform of Social Democratic Party (SDP). Other famous ones are the KOWA Party, which has a former development specialist and staff of the Department for International Development (DFID) Sina Fagbenro, the Abundant Nigeria Renewal Party (ANRP), an interesting party that sprang up from Facebook, who has as chairman and presidential aspirant former banker and economic consultant Tope Fasua while motivational speaker Fela Durotoye is expected to contest on the platform of Alliance for a New Nigeria (ANN). The number of presidential hopefuls will not surprise those familiar with Nigerian politics, but that is not important for now. What is important is that, after the elections in 2019, three issues will become urgent, if they are not dealt with before the elections. The rising national debt will have severe implications for fiscal policy and expenditure after the general elections in 2019. The next government will also have to deal with the issue of fuel subsidies. Since the rise in the price of crude oil last year, the Nigerian government has started to pay subsidies on petroleum products in order to maintain the fuel pump price at N145. The decision to raise the price of fuel, liberalise the downstream sector, or be transparent about the level of subsidies will likely remain on hold until after the elections. Third, and in the power sector, the government has stalled on the multi-year tariff order (MYTO) that seeks to ensure a cost reflective electricity pricing. This is imposing serious economic strain on the power sector chain. These are the issues being driven by politics, and since we are still dealing with these mundane ones in 2018, it is the reason politicians should be tested for drugs. I thank you.

Why so little has changed since the financial crash •The power of vested interests in today’s rent-extracting economy

MARTIN WOLF Wolf is the Chief Economics Commentator of The Financial Times.

ere I am back again in the Treasury . . . but with one great difference. In 1918 most people’s only idea was to get back to pre1914. No one today feels like that about 1939. That will make an enormous difference when we get down to it.” John Maynard Keynes wrote this in 1942. It did make a difference. After the Great Depression and a second world war, people wanted change. They got it. France calls what followed les trentes glorieuses. The stagflation of the 1970s brought a counterrevolution: the 1980s saw a radical change of ideas on the role of the state and markets, the goals of macroeconomic policy and the job of central banks. Again, the aim was a fundamental transformation. So what happened after the global financial crisis? Have politicians and policymakers tried to get us back to the past or go into a different future? The answer is clear: it is the former. To be fair, they have tried to go back to a better past. That is what happened in 1918. Then they had just come out of a devastating war. So the new ideas were about peace — “collective security” and a League of Nations. But they wanted to return to the prewar economy, especially the gold standard. In 1918, then, they mostly wanted to go back to a

It is little wonder populists are so popular, given this inertia, not to mention the miserable experience of so many citizens since the crisis and, in important cases, before that better version of the past in international relations. After the crisis of 2008, they wanted to go back to a better version of the past in financial regulation. In both cases, all else was to stay the way it was. The chief aim of post-crisis policymaking was rescue: stabilise the financial system and restore demand. This was delivered by putting sovereign balance sheets behind the collapsing financial system, cutting interest rates, allowing fiscal deficits to soar in the short run while limiting discretionary fiscal expansion, and introducing complex new financial regulations. This prevented economic collapse, unlike in the 1930s, and brought a (weak) recovery. Note how closely these actions hewed to the pre-crisis policy consensus. Central banks acted as lenders of last resort, as they should. They also played the dominant role in macroeconomic stabilisation, as pre-crisis thought suggested. Their principal instrument remained interest rates, though they included long rates this time, because short rates reached zero. Shortly after the worst of the crisis had passed, fiscal policy turned towards austerity. The financial system is much

as before, albeit with somewhat lower leverage, higher liquidity requirements and tighter regulation. Efforts to lower debt in the private sector were modest. The financial crisis was a devastating failure of the free market that followed a period of rising inequality within many countries. Yet, contrary to what happened in the 1970s, policymakers have barely questioned the relative roles of government and markets. Conventional wisdom still considers “structural reform” largely synonymous with lower taxes and de-regulation of labour markets. Concern is expressed over inequality, but little has actually been done. Policymakers have mostly failed to notice the dangerous dependence of demand on ever-rising debt. Monopoly and “zero-sum” activities are pervasive. Few question the value of the vast quantities of financial sector activity we continue to have, or recognise the risks of further big financial crises. It is little wonder populists are so popular, given this inertia, not to mention the miserable experience of so many citizens since the crisis and, in important cases, before that. Politics abhors a vacuum. Ideas as dangerous and divisive as those of US president Donald Trump or Matteo Salvini, Italy’s deputy prime minister, are bound to fill it. One cannot beat something with nothing. The persistent fealty to so much of the precrisis conventional wisdom is astonishing. The failure of Keynesianism in the 1970s was significant but certainly no greater than the combination of slow economic growth with macroeconomic instability produced by the pre-crisis orthodoxy. What makes this even more shocking is that there is so little confidence that we could (or would) deal

effectively with another big recession, let alone yet another big crisis. What explains the complacency? One reason might be the absence of good ideas. The economist Nicholas Gruen argues just that in a provocative article. Yet there are some perfectly good ones. Some have argued for a shift from debt to equity finance of house purchases. Others have called for the elimination of the tax deductibility of debt interest. Some note the perverse impact of executive incentives. Some argue convincingly for higher equity requirements on banks, rejecting the argument that this would halt growth. Others ask why only banks have accounts at central banks. Why should every citizen not be able to do so? Some wonder why we cannot use central banks to escape dependence on debt-fuelled growth. Beyond finance, it seems ever clearer that protection of intellectual property has gone too far. Also, why not shift taxation on to land? Why are we letting the taxation of capital collapse? And why are we not trying to revitalise antitrust? An all-embracing new ideology may be unavailable today. That is probably a good thing. But good ideas do exist. A more likely cause of inertia is the power of vested interests. Today’s rent-extracting economy, masquerading as a free market, is, after all, hugely rewarding to politically influential insiders. Yet the centre’s complacency invites extremist rage. If those who believe in the market economy and liberal democracy do not come up with superior policies, demagogues will sweep them away. A better version of the pre-2008 world will just not do. People do not want a better past; they want a better future.

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