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Nigeria’s credit profile constrained by inability to expand non-oil taxes – Moody’s DIPO OLADEHINDE

Tony Elumelu (l), chairman, Heirs Holdings Group, and Benedict Oramah, president, African Export-Import Bank (Afreximbank), during the signing of $600m Facility Deal between Afreximbank and Heirs Holdings Group to scale Heirs Holding’s Energy Investments in Africa, in Cairo, Egypt, yesterday.

Extortion, misuse cloud Trader-Moni ability to deliver economic boost O TEMITAYO AYETOTO

ver the last two months, Muyinat Ajibulu, 50, has been utterly distraught with her unsuccessful attempt to access the federal government’s Trader Moni loan. Ajibulu was enumerated in September and received a mes-

BD INVESTIGATIVE SERIES

sage congratulating her that her loan was ready for collection around 3:17pm on October 11 from Aku, a mobile money outlet assigned to manage the disbursement process of the loan. In the message were instructions on how to get the N10,000. But shockingly, she received

another message notifying her of fund transfer to a strange account two hours later and that was the last she saw of the loan. Ajibulu believes she has missed her share of the recovery from ex Nigerian military dictator Sani Abacha’s loot being shared by the government

to help the poor bottom-level people in business like herself. “Others have received the money and are rejoicing. I want to rejoice as well. With it, I can buy a bag of salt at N3500 and gain almost N2, 000 from it. I don’t plan to return any money. I may when I get the next one,” she explained. Continues on page 38

igeria’s credit profile currently at B2 stable is constrained by the sovereign balance sheet’s continued exposure to shocks because the government has been unable to expand its non-oil revenue base sufficiently, according to global credit rating agency, Moody’s Investors Services. The New York based firm noted in a report released on Tuesday that only a durable increase in Nigeria’s non-oil revenue will improve its resilience to oil price volatility and increase realization rates of capital spending on the large infrastructure projects that are crucial to its economic development. “Until it does, the government’s balance sheet will be Continues on page 38

Inside EFInA Survey shows 63.30% of Nigerian adults now financially served P. 2 Atiku, Ezekwesili absent as Buhari other Presidential candidates sign peace accord P. 39

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Microfinance banks raise alarm over CBN’s planned National MFB

HOPE MOSES-ASHIKE

xisting Microfinance bank operators in the country on Monday pushed back on the plan by the Central Bank of Nigeria (CBN) and the bankers committee to set up a National Microfinance Bank across the 774 local government areas leveraging the Nigerian Postal Service or NIPOST. Godwin Emefiele, governor of CBN said on Saturday that the National MFB will operate with N5 billion capital base funded through the Agri-Business/Small and Medium Enterprises Investment Scheme (AGSMEIS). The move is part of efforts to enhance access to finance by Small and Medium Enterprises (SMEs), create jobs and promote financial inclusion. Reacting to the development, Rogers Nwoke, president of the National Association of Microfinance Banks (NAMB) who spoke with Busi-

... see negative impact on sub-sector nessDay yesterday by phone said the development will affect the industry negatively. “The wisdom of the CBN in coming up with this, is what I don’tunderstand.Severalthings are wrong with this. Is the CBN now an operator? I don’t understand,” Nwoke said by phone. He said the CBN should help the moribund NIPOST to deliver on its mandate before giving it additional service. He sees the fund going to be passed through the NIPOST to small businesses as going down the drain. “It is totally unacceptable and we hope they do not implement it because it does not make any sense at all.” Nwoke added that if the CBN wantstoenhanceaccesstocredit, it should rather than licencing NIPOST, fund the existing microfinance banks to achieve this. The CBN governor had on Sunday raised concern that the microfinance banks

operating in the country are not lending at single digit interest rate. Nwoke said the reason why microfinance banks loans are expensive is due to the high cost of fund. The latest update of licenced microfinance banks operating in the country, obtained from the CBN, show that there are 1,028 microfinance banks as at May 31, 2018 out of which about eight are in the National licence category. Ayodeji Ebo, managing director, Afrinvest Securities limited, said, this initiative will crowd out the private sector in the micro-finance Industry. He added that the move will not necessarily improve lending to the real sector. “The funds advanced would be perceived as a social intervention fund which will not be repaid. I’m surprised the CBN is going this route to solve lending problem in Nigeria. As long as the struc-

tural issues like ease of doing business, infrastructure and power challenges are not resolved, businesses will remain challenged, and as such unprofitable and unable to repay back their loans” Ebo said in an emailed response to BusinessDay questions. Another operator based in Lagos, who spoke with BusinessDayonMondayunderanonymitysaid,“letuswaitandsee.” The recent move by the CBN is akin to a blast from the past. The Federal Government in 1998 established the Peoples Bank of Nigeria with an initial allocation of N30million to meet the credit needs of small borrowers who cannot satisfy the stringent collateral requirements demanded by conventional commercial banks. The Federal Government abolished the bank but in 2014 the Federal High Court ordered FG to re-establish the bank.

Vice President Yemi Osinbajo (m), shown around by Mark Scholze, the MD/CEO of Pektus, flanked by Nigeria ambassador to Germany, Yusuf Tuggar, during his business trip to Germany.

usinesses and residents on the LagosBadagry Expressway are yet to heave a sigh of relief nine years after work commenced on the reconstruction and expansion of the expressway to 10 lanes with a BRT lane and a light rail track. Work on the road, whose contract was awarded in 2009 under the administration of Governor Babatunde Fashola in Lagos State, has progressed at a very slow pace, leaving businesses and residents constantly counting their losses as grinding gridlock leads to loss of man-hours, business opportunities, health hazards, and even deaths. Lagos-Badagry Expressway’s strategic economic

Lagos Christmas market 2018 to kick off December 14

he Lagos Christmas Market (LCM), the first Christmas Market in Nigeria is set to kick-off. The market is open market styled to key families into festive spirit and fairy tale. It would also support small and medium businesses. LCM will have fun activities

for adults and kids in the cool of evening from Dec 14th 2018 to Jan 2nd 2019 from 5pm at Lagos Regatta Jetty, Ikoyi. Local and foreign delicacies, fashion and arts will be on display. This year Lagos Christmas market 2018 will put Lagos on the map with other big cities that celebrate Christmas Market.

EFInA Survey shows 63.30% of Nigerian adults now financially served BALA AUGIE

nhancing Financial Innovation and Access (EFInA), a financial sector development organization has released its 2018 survey that shows the number of people with access to financial services has increased, but the organization says there room for improvement as the formal labour market is not absorbing enough Nigerians. The result of the EFInA Access to Financial Services in Nigeria 2018 survey revealed that 39.50 million (39.70 percent of the adult population) have access to a formal bank account, while a further 8.9 million (9 percent) are banked formally through other means. Some 14.6 million (14.6 percent) use informal means for financial access, while 36.6 million people (36.8%) are

financially excluded. According to the financial sector development organization, of the total adult populations, 46.10 percent (22.7 million) are male while 33.30 percent (15.60 million) are female. “The aim of the report is to engage policy makers and the regulators to come up with the right regulations that will ensure the actualization of central bank’s vision of achieving 80 percent financial inclusion by 2020,” said Esaie Diei, Chief Executive Officer of EFInA. “The report will let us where we are and what we need to do,” said Diei. On her part, Sarah Alade, former acting governor at Central Bank of Nigeria (CBN), is of the view that the survey will enable stakeholders with pragmatic solutions to bridging exclu-

Continues on page 38

Heirs Holdings signs $600m loan with Afreximbank, to scale up energy investments ENDURANCE OKAFOR

No respite for businesses, residents on Lagos-Badagry Expressway 9 years on CHUKS OLUIGBO & JOSHUA BASSEY

Wednesday 12 December 2018

importance stems from its position as the gateway to Nigeria’s West Coast neighbours of Benin Republic, Togo, Ghana, Cote d’Ivoire, etc. It is also home to West Africa’s largest electronics hub, Alaba International Market, Lagos International Trade Fair Complex which currently harbours four major markets, the proposed Badagry Deep Seaport, among others. When completed, the reconstruction/expansion project is expected to transform the face of Lagos, unlock the gridlock on the expressway that is prone to heavy traffic flow, and open up opportunities for greater investments and regional trade between Nigeria and its neighbours on the West Coast of Africa. BusinessDay’s recent tour of the road showed that apart from skeletal work on the

flyover bridge around Finiger trader today depends on wayBus-stop, the contractor han- bill to survive because the dling the project, China Civil direct customers are no lonEngineering Construction ger coming as a result of the Corp. (CCECC) has practically bad roads,” Christian Oguike, vacated site as there was no treasurer, Alaba International sign of the company’s work- Market (Electronics), said. ers anywhere else. MeanOguike said customers while, virtually all the major coming to Alaba from some junctions on the expressway parts of Lagos, like the Island, – from Alakija to Abule-Ado, Ikeja and environs, must acTrade Fair under-bridge, Ojo cess Mile 2 road before getBarracks, Volkswagen, Iya- ting to the market, and those na-Iba, etc – remain terrible coming from the West African traffic points depending on side, Cote d’Ivoire, Republic where you are headed. of Benin, Ghana and so on, Traders at Alaba Interna- also have to use the same tional Market told Business- Badagry road. But most of Day last week that the bad the customers have diverted shape of the road has adverse- their patronage rather than ly affected volume of business having to spend several hours activity in the market. and sometimes the whole day “When you talk of the ef- trying to access Alaba. fect on trade, the bad road has reduced trading activities •Continues online at in the market by more than 90 percent. An average Alaba www.businessdayonline.com

s a further demonstration of the African ExportI m p o r t B a n k ’s (“Afrexim”) mandate to facilitate the growth of intraAfrica trade and support the development of African businesses, Afrexim yesterday, signed financing facilities totalling $600 million with the Heirs Holdings Group, a pan-African proprietary investment holding company. Heirs Holdings has significant investments across Africa, in the financial services, resources, real estate and hospitality and power sectors. The facilities will further support the Group’s power, oil and gas strategy, as it positions itself as an African leader in integrated natural resources. The signing ceremony took place at the Afrexim Intra-Africa Trade Conference taking place in Cairo, Egypt. The proceeds of the facilities will assist the Heirs Holdings Group vision of creating a dynamic resource based division, focused on ensuring value creation occurs on the African continent and that value chains

are developed, that directly benefit the broader African economy and consumer. C o m m e nt i ng at t h e ceremony, Benedict Oramah, President of Afrexim who signed on behalf of the Bank, stated that the investment by Heirs Holdings would play a key role in addressing some of the fundamental challenges that have affected the power and energy sectors in Africa. He stated that “A world class energy sector is fundamental to the sustainable growth of businesses in Africa. If we do not deal with these basic matters, growth of trade and exports will always be limited”. Tony Elumelu, the Chairman of Heirs Holdings, commented that “We are delighted to be partnering with Afrexim. The Bank continues to play a critical role in the economic and social development of the continent. Together, we illustrate that Africa can create world class institutions, which are capable of successfully making the long-term investments necessary for Africa’s economic transformation and catalyse the enabling environment that will unleash Africa’s potential”.

Wednesday 12 December 2018

BUSINESS DAY

Wednesday 12 December 2018

BUSINESS DAY

Wednesday 12 December 2018

BUSINESS DAY

8 BUSINESS DAY NEWS

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Only 9 states signed Local Government Autonomy Bill into law HOPE MOSES-ASHIKE

nly nine states out of the 36 states of the federation are said to have signed the Local Government Autonomy Bill into law, according to a report by BudgIT. BudgIT, a civic organisation, is calling for transparency and openness in the implementation of local government projects. Lots of funds are allotted yearly for capital expenditure yet capital projects are left undone or uncompleted thereby giving room for critical gaps in infrastructural development in Nigeria. A statement made available to BusinessDay by its communications lead stated

Customs intercepts 3,792 parcels of Indian hemp smuggled from Ghana AMAKA ANAGOR-EWUZIE

igerian Customs Service (NCS) Federal Operations Unit (FOU) Zone ‘A’ has intercepted 3,792 parcels of Indian hemp of 1kg each smuggled into Nigeria from Ghana. Addressing newsmen in Lagos on Tuesday, Aliyu Mohammed, area controller of the unit, said the drugs, valued at N379.2 million, were seized along the borderlines of Idiroko and Oyo axis with two suspects arrested. Aliyu, who described the seizure as ‘special,’ said it was one of the largest so far made in the history of the unit and was achieved as a result of officers’ due diligence and non compromise on anything that would affect the health of Nigerians. He said the negative impact the drugs would have on youths, especially as the general elections draws near, if they had not been intercepted. He said, “I look at this seizure as a gift for Nigeria because if our officers will not compromise and will be in the sun and rain to bring this type of seizure not because they are going to smoke it but the effect that will cause Nigerians by those who will take it. “The responsibility of Customs is not only for revenue generation, it is also concern about the health of Nigerians. You can imagine the danger on somebody taking this either robbery or kidnapping. If you leave this kind of seizures for thugs going for campaign, we don’t know how many atrocities they are going to commit.” He said the command also intercepted 39,664 bags of smuggled rice amounting to 66 trailers along the creeks and 34 units of vehicles.

that Local Government Areas (LGAs), being the third tier of government, were created with the ultimate goal of bringing governance closer to the people at the grassroots. LGAs in Nigeria have not lived up to expectation in their operations due to interference by state governors. As of today, only nine states have signed the Local Government Autonomy Bill into law. Signing the bill into law in some states did not metamorphosed into financial autonomy for the councils, as the governors still interfere with their finances. The local government chairmen are handpicked by state governors who in turn dictate their operations and

also prevent them from getting their allocations directly from the Federal Government, and this has resulted to a total collapse of local government administration in Nigeria. Suffice to say that the narrative is slightly different in the Federal Capital Territory (FCT.) Abuja Municipal Area Council raised the bar of transparency and accountability in Local Government Administration in Nigeria. The council under the leadership of Abdullahi Adamu Candido is the first to release the council’s 2018 budget in the Federal Capital Territory. Kwali and Abaji area councils have since followed suit by releasing their 2018 budget to the public.

Wednesday 12 December 2018

‘It is high time Nigeria moved from being ‘work-in-progress to a success story’ SEYI JOHN SALAU

igerians have been urged to look beyond the physical for the overall success of the country. Speaking with the media in Lagos yesterday to announce its annual conference tagged ‘Beauty for Holiness,’ Seyi Adeyemi, senior pastor, The Worship Centre (An Assembly of Sons and Daughters of Christ Apostolic Church), said what Nigeria needed at this time was spirituality rather than mere religion, which he noted had not helped the country. “I’ve heard people comment severally that religion

has contributed to the Nigerian problem. I’ve said before at a different press forum that Nigeria is more religious than spiritual! Religion is subject to human manipulation and deceit but spirituality is the essence of godliness. The difference is clear,” Adeyemi said. Lamenting the state of the country amid many religions and professors of such religions who have been in power since Independence, the cleric said: “Nigeria has been a ‘work in progress’ since independence. The comments I heard as a young boy is what I’m still hearing as an adult. “The citizens of this nation have become more impoverished than ever before.

This then results in a national question, where is the progress? There may have been development here and there but by and large, we’ve become the poverty capital of the world. The responsibility lies squarely on the shoulder of leadership which has been the bane of Nigeria project.” Announcing the Church’s upcoming annual Apostolic Fire Conference, he said: “The event is slated for January 11 & 12, 2019, to be followed on Sunday, January 13 with our assembly’s 9th anniversary thanksgiving. The Lord inspired us to start this conference in 2016 and the inaugural edition came up in January 2017 with the theme, ‘Tongues as of fire.’

Wednesday 12 December 2018

BUSINESS DAY

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comment Small Business handbook

Emeka Osuji Dr Emeka Osuji School of Management and Social Sciences Pan Atlantic University Lagos. eosuji@pau.edu.ng @Emyosuji

i g e r i a n s a re c u rrently upbeat on the subject of entrepreneurship, no doubt. The signs of their determination to innovate and create are everywhere evident. In the very recent past, several events promoting the cause of entrepreneurship have been taking place every now and again. The Central Bank of Nigeria (CBN), this week, announced its intension to strengthen its support to entrepreneurs. It proposes to give further support to those involved in the performing arts as well as MSMEs. We can therefore safely say that the people of Nigeria have woken up to the reality of modern economic life. While the people are increasingly realizing that government cannot do everything for them, government is willing to do even more. Essentially, the people have to do most things for themselves, under the protective shadows of the government, and within the universally acknowledged duties of government. That should be the basis of a forward looking and healthy socio-economic partnership between government and the people. Indeed, government owes the people a lot of duty, in addition to the provision of increased access to finance for entrepreneurs. For instance, government is to secure the lives and property of the people. It is to provide them with the so-called enabling environment for the operation of their daily undertakings, including their

ABIMBOLA OGUNBANJO Ogunbanjo is the President, National Council, Nigerian Stock Exchange

arlier on, the stockbroking community together with Mrs Patience Alile, her children and grand-children gathered on the trading floor of the Nigeria Stock Exchange House, the house which Apostle Hayford Alile of blessed memory often called his 2nd home, to say goodbye to a loving and God-fearing husband, father, grand-father and pioneer Director-General of the Nigerian Stock Exchange. I could not but note some of the poignant adjectives made by well- wishers to describe Apostle Alile, such as, “he was a fair man”, “he personified humility”, “the stock Exchange has become what it is today due to the leadership of Apostle Alile,” “he was deeply committed to building Nigerian institutions”, “he touched the lives of people in the thousands”. As his dear wife,

Wednesday 12 December 2018

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Equipping the new generation of entrepreneurs with skills and funds businesses, big or small, and to facilitate the conduct of business. In this regard, government is to guarantee functional infrastructure, including healthcare facilities, educational curricula and institutions, effective criminal justice system and the rule of law. Although most African governments, not limited to those of Nigeria, have not been famous for their ability to discharge these duties, their failure has not in any way minimized the widely acclaimed principles on which the purpose of government rests – security of life and property and assurance of a conducive environment for legitimate human activity. It is the responsibility of government to create new opportunities for those interested in taking the entrepreneurial route. And not just making them aware, it should also create incentives for them to appreciate in that way of life. The promotion of technical education and artisanry training is a fundamental function of government. It is to ensure the availability of adequately equipped technical and vocational training institutions, to support the development and growth of the fundamental technical manpower needed to support economic development. Part of the complaint against our current educational system is that it produces unemployable graduates. This notion may have some merit but it is fundamentally flawed because we are heaping the blame on the wrong quarters. The thinking, which is obviously wrong, is that the universality system is to blame for the seeming incongruence between the output of the educational system and the requirements of commerce and industry. Unfortunately, that is not the case. The output of the universities is

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…the problem of Nigeria is not lack of finance but the inability of those charged with the responsibility of managing our finances to effectively utilize what we have

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a product of the direction given to them by those running the system. Our educational system has lost the stratification that is needed to guarantee the production of the varied skill sets critical to a modern economy. Owing to the very warped reward system we operate, everybody wants a university degree for the name of it, especially in areas of least resistance – particularly in the arts and humanities – with little interest in science, technology, engineering and mathematics (STEM). The fields of STEM have borne the brunt of the corrupt reward system in Nigeria, and no longer command the followership that is critical for national development and even national survival. When colleges of technology begin to specialize in arts and humanities with tangential attention to STEM, we know who to blame – those running the education bureaucracy. The universities and, indeed all educational systems, follow the curricula provided to them by the powers that be. If we set a direction, like focusing on technical skills, we must also be ready to provide the supporting institutions to produce the raw materials (intakes to the courses) for the areas and skills that

are relevant to industry. This also has implications for the calibre of faculty emplaced. At Pan Atlantic University there is adequate emphasis on the needs on industry. This has been a major index for faculty emplacement. Student internship, which is compulsory for almost all study areas, is a unique way of keeping tab on the needs of industry as feed backs help us to reform and restructure programmes to meet the needs of employers. The mix of faculty, blending high level corporate experience and academic excellence, ensures that faculty is up to speed with the reality outside the school gates. The concept of enabling environment has been overused in Nigeria to the extent that it has become a mantra for politicians seeking electoral victories. However, it is a complex amalgam of all that is good in the operating environment. It begins with the rule of law, whereby justice is free and available to all. Enabling environment encompasses the removal of bottlenecks on the way of business transaction, such as delays created by corrupt public officials as a means of extorting money from the public. It presupposes timely response to enquiries at public institutions regarding, for example, registration of business, titles and such. It include the promulgation of living (as against dead-on-arrival law) that facilitate business, such as the Movable Asset or the Collateral Registry Law of 2017. The challenge we face most of the time is that government deals with disabling challenges in a piecemeal fashion, and not on a continuous basis. The provision of water, for instance, in a location where insecurity is evident and electricity is epileptic may be a good effort on the part of government, but it does not relieve the

entrepreneur of much of the environmental headaches he faces. Although problems sometimes have to be tackled in units and individually, especially under situations of limited resources, the solution to the next adjoining problem must be sought if the one already addressed is to be of any value. In other words, in our system in which most public facilities are lacking, we cannot successfully lay claim to enabling environment if we face the challenges in isolation. Providing one and leaving out the rest is sloppy and ineffective. The least we can do to be successful in this regard is to tackle the problems individually but on a continuous unbroken basis. This may be hindered by finance but as we all know, the problem of Nigeria is not lack of finance but the inability of those charged with the responsibility of managing our finances to effectively utilize what we have. The debate of this topic has long been settled. However, no amount of enabling environment or provision of social overhead capital will take the place of the peoples’ capacity to think, as they say in business schools, out of the box. The people must accept that it is their duty and not of government to envision and think themselves out of the various challenges they confront. Therefore, the onus is substantially on the people to think, innovate and exercise their humanly possible capacity to advance the wellbeing of society. Nigerians appear to have woken up to this great challenge. We must therefore look again at our educational and training institutions, as well as our funding institutions and partners to adequately support this trend of progress.

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Tribute to Apostle Hayford Alile, former Director-General of the Nigerian Stock Exchange Aunty Patience, rang the closing gong to signify the end of the trading day in his honour, never had I heard such loud applause from the Brokers on the floor in the several closing sessions that I have been privileged to attend. It was clearly a demonstration of the respect and love the Broking community has for Late Apostle Alile and his family. Not only did he work tirelessly to lay the foundation for the contemporary exchange its users are privileged to enjoy today, he was responsible for training the vast majority of stockbrokers of his era. Having only met 3 on assumption of office he ended up training over 180 stockbrokers by the time he retired in 1999. I was made to understand today that of the roughly 250 operating stockbroking houses, he was responsible directly or indirectly for training or mentoring 90% of their CEOs. There are many other pioneering and unprecedented achievements recorded under Apostle

Alile’s tenure as DG of the Exchange but are too numerous to mention on this short occasion so I hope the family will take it upon themselves to document his successes, his feats and the challenges he faced on his way up not only for the benefit of the unborn generations of stockbrokers, but for posterity of corporate Nigeria. For those of us whose profession revolves around the stock market, Apostle Alile’s name is synonymous with the Nigerian Stock Exchange, as a matter of fact he is truly worthy to be called “Mr Stock Exchange.” He lived and breathed the stock market, a fact that can be corroborated by his family. Some of you may not know that Apostle Alile, led the physical movement of the Exchange’s operations to its current location and the ingenuity and boldness with which its implementation was undertaken constitute a tribute to him and former director of the Exchange, Prince M. A. Odedina, for their foresight of conceiving the idea. Apostle Alile, though slight in

frame and soft spoken in nature, was a humble, effective and quiet achiever who bestrode the corporate landscape with dignity and forthrightness as exemplified by the several multinational, nongovernmental organisations and sovereign boards he sat on. He was a highly sought-after personality and he did not mind to spare of his time in passing down his reservoir of knowledge and immense intellect. Even most recently, the Exchange benefited from his wise counsel and measured contributions when he agreed to serve on the Exchanges’s Membership Verification Panel, whose activities assisted the National Council in finalising the Exchange’s membership register. We must not overlook the fact that Apostle Alile served the Nigerian Stock Exchange for 24 years unblemished and never had any rancour or disagreements with the several presidents and council members, of which, my late fatherin-law, the Ogbeni Oja of Ijebu land,

Chief Bayo Kuku was one. I was therefore privileged to have known him in relatively close quarters and I am acutely aware of the very deep affection they had for each other. Though one a devout catholic and the other a devout muslim, they both attended each other’s religious ceremonies and their children are bosom friends till date. As the journey to his ancestral home begins, I salute a distinguished and noble Nigerian as he joins the likes of Chief Babatunde Jose, Chief Samuel Asabia, Mr Gamaliel Onosode and other formidable architects of the Nigerian Stock Exchange who have departed this earthly plain. We honour his legacy and mourn his loss alongside your family and the people of Edo State where his remains will be interred. May his soul find peace profound. Amen!

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Wednesday 12 December 2018

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comment Character Matters with Daps

Dapo Akande Graduate of the University of Surrey, UK, author of the acclaimed book: “The last fight: A personal journey to discovering values.” Contact: dapsakande25@gmail.com

he late Jamal Khashoggi was a Saudi journalist who spent the last few years of his life working in the US as a columnist for the famous Washington Post. He was alleged to have been brutally murdered by Saudi officials in the Saudi Arabian embassy in Turkey. I say alleged because till date, his body has not been found. According to the Turkish government this is because his body was dismembered and subsequently dissolved by members of the fifteen strong Saudi team of officials who flew into Istanbul on two private jets the day before Khashoggi’s disappearance. We have both the Turkish government who have made strong insinuations and the American CIA which actually reached the conclusion, after examining supposed recordings of the murder, that the hit was ordered by someone at the very top of the Saudi government, who didn’t much like his critical views

Zonta Club of Lagos Zonta International is a leading global organization of professionals empowering women worldwide through service and advocacy. Zonta Club of Lagos 1 which was chartered in Lagos in April 1970 is a member of Zonta International founded in Buffalo, New York in 1919.

ovember 25 marked the United Nations International Day for the Elimination of Violence Against Women. It also marked the beginning of the 16 days of activism against gender-based violence (November 25 - December 10) - a global campaign to challenge violence against women and girls. Violence against women and girls includes, physical, verbal, sexual, psychological and emotional forms and result in physical, mental, sexual, reproductive health and other health problems, and may increase vulnerability to HIV. Research shows that globally, one in three women will experience intimate partner violence as well as non-partner sexual violence in their lifetime. Worldwide, up to 50 percent of sexual assaults are committed against girls under 16. More than 700 million women alive today were married as children (below 18 years of age) and more

BUSINESS DAY

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Have we all been “Trumped”? (2) ‘ I was nothing short of of the ruling royal family. Most fingers point at the reform minded but notoriously ruthless, youthful Crown Prince, Mohammed Bin Salman; the de facto leader of the oil rich nation when one considers the almost unlimited power ceded to him by his father, the King, who’s forced to spend more of his time managing his delicate health. Now, after presenting that background, let’s look at where my interest lies concerning this issue. I for one was nothing short of flabbergasted at uncle Trump’s response to this rather sordid event. With one side of the mouth, he condemns the act in its totality but with the other side of the mouth he says business must go on. Literally! His position is that what happened was terrible and quite unfortunate but at the end of the day it’s not America’s direct problem. To use his exact words, “Khashogghi’s murder was a shame....it is what it is”. Wow! But then again, I guess it didn’t involve a US citizen and neither did it take place on American soil so why should it for heaven’s sake jeopardize the $110bn arms deal Saudi Arabia have committed to bringing America’s way? Or the apparent $480bn worth of trade deals proposed between the two countries? Anyway, like uncle Trump said regarding the deal in so many words, “someone’s got to do it”. If the USA bungles this opportunity by allowing its heart to dictate rather than its head, the Russians

flabbergasted at uncle Trump’s response to this rather sordid event. With one side of the mouth, he condemns the act in its totality but with the other side of the mouth he says business must go on

’

and Chinese will grab it with both hands if the Saudis turn to them instead. Very compelling argument I must say. But it raises a couple of ethical issues worth pondering over. Should what happens to others concern us if it doesn’t affect us directly? If yes, why? If not, then would it be ethical to spurn an opportunity to do that which would massively benefit your compatriots? Would you not be doing your people more harm than good by intentionally rejecting something that could turn around the economic fortunes of millions of your people? So which course of action better scales the moral bar at the end of the day? To serve the interest of your countrymen, who you swore to faithfully lead, by lining

their pockets with gold or to protect the values without which the very existence of humankind itself could be threatened? Here lies the dilemma, not only for a president whose all consuming business instinct reduces everything to a transactional level but to each and everyone of us. Having said this though, I strongly believe there are some things which should never be open to a trade-off. One can just imagine the multiplier effect such deals would have for countless US businesses and the economy in general. Increase in revenue leading to expansion of operations and subsequent increase in staff base. This enlarged workforce will naturally pay for goods and services too as they go shopping, send their children to school, patronize restaurants and so on. The beneficiaries of this will in turn enjoy an increase in revenue due to increased patronage. They too will expand, employ more hands and this wonderful cycle will just continue. But then you may ask, “what does it benefit a man if he gains the whole world but loses his soul?” Would it serve the interest of mankind to blur the once bold line between right and wrong any further? Can a nation of soulless citizens truly make the country great again? Can people who have lost sight of what makes them human attain greatness? I can hear one of Gandhi’s seven social sins loudly reverberating in my ear; commerce without morality. For a nation which for so long

took pride in dutifully performing the role of a self-appointed global police cum arbiter of democratic ideals such as justice, this seemingly isolationist disposition however doesn’t present very good optics. For the sake of upholding a sacrosanct global moral code, without which chaos is imminent sooner or later, some things must be valued above others. A blasé approach to humaneness and the sanctity of human life would eventually cost mankind as we know it dearly and this is why I’m in agreement with those who reason that injustice anywhere is in fact a threat to justice everywhere. If you turn a blind eye to it today because you place a higher premium on your selfish interest, it will one day find its way to your doorstep. What moral right will you boast of to resist it then? Nigerian politicians who ride on the back of the tiger of injustice when their party sits pretty in the saddle of government shouldn’t complain when they later find themselves in its stomach, after being deposed to the opposition. Uncle Trump, please make America great again, not only by catalysing a quantum leap in enterprise but also by standing up, like your country was once known to do, against fascist tendencies; no matter where on earth they raise their ugly heads. And just as importantly, no matter what might be at stake.

Send reactions to: comment@businessdayonline.com

What provision do our political candidates have for women’s rights in their mandates? than one in three—or some 250 million—were married before 15. Despite the global prevalence of violence against women, many cultures still view and treat women as inferior or as second-class citizens and consequently the level of gender-based violence continues to rise. What makes the situation even direr is the taboo and perceived shame attached to it. Survivors of violence are blamed, victimised further and ultimately discouraged from coming forward because there are limited structures and support in place. Recently in Nigeria, women activists came together to mourn and strongly condemn the death of Ochanya Elizabeth Ogbanje, a 13year old girl who died as a result of prolonged sexual abuse and violence perpetrated by her uncle and his son since the tender age of 8. Her death was painful because she had her whole life ahead of her but sadly it was cut short because the system failed to protect her. Why is advocating for an end to violence against women and

girls important now? Come 2019, Nigerians will go to the poll to elect leaders at all levels. In the run-up to the political transition aspirants are busy campaigning and highlighting their manifestos if elected. A key feature of all concerned (both aspirants and citizenry alike) should be the prioritization of gender equality at all levels because of the numerous benefits it provides. For instance, prioritizing equitable gender agenda ensures that adequate policies and structures are clearly budgeted for, laws that support the end of child marriages, abuse and violence are promulgated while programmes that economically empower women are headlined. Prioritising gender equality will move Nigeria closer to meeting the UN Sustainable Development Goal 5 which calls for the “ending of all forms of discrimination against women and girls, a basic human right, crucial to accelerating sustainable development.” This is particularly true given the multiplier effect empowering girls and women has on the community, contributing to economic growth

and social development. Zonta Club of Lagos 1 calls for political candidates to prioritise gender equality in their mandates, and to highlight and discuss the plans they have to promote gender equality if elected. We also call for more civil society organizations to participate in the campaign for gender equality and to advocate for the rights of women. Cases of violence against women need to be treated with the importance it deserves. In the world of business, women are represented in the informal sector of the economy, naturally because of the flexibility this provides, but if we are serious about including women in leadership, in the formal sector, advancing the cause of women, then we need to prioritise in addition with gender equality, more flexible working arrangements for women, more inclusive society where women are seen as equal contributors, levelling up the workplace environment where women have to leave employment when they become mothers, and also

contributing to easing the return to work for women, after work. We call for an end to the discrimination against women, the systematic instances of violence and for the situations where this occurs to be met with the most serious application of the rule of law. We also call for more significant representation of women in public offices as this is vital to the development of any nation. • “Zonta Says NO to Violence Against Women campaign” was launched in 2012, the campaign has raised awareness of the global pandemic of women’s rights violations and has united Zonta clubs worldwide in conducting impactful advocacy actions to fight violence against women and gender inequality. Join us on @zontalagos from November 25 to December 10. #ZontaSaysNo and share your stories of how you are participating in the campaign. Send reactions to: comment@businessdayonline.com

BUSINESS DAY

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Editorial Publisher/CEO

Frank Aigbogun editor Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure GENERAL MANAGER, ADVERT Adeola Ajewole ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

Wednesday 12 December 2018

Again, who’s in charge in Nigeria

he first lady, Aisha Buhari, has, once more, drawn the attention of Nigerians to the rape of democracy happening right inside Aso rock and the cowardice of Nigeria’s political elite to confront the situation head-long, preferring to play along so long their nests are feathered. She revealed that two persons – perhaps unelected and unappointed - control the government and frustrate her husband, thereby limiting his ability to perform to the expectation of millions who voted him into office. She made the assertion at a national women leadership summit organised by a political group, Project 4+4 for Buhari & Osinbajo 2019. Hear her: “Our votes were over 15 million in the last election, and after that only for us to be dominated by two people that hinders collective team work that we started, which is totally unacceptable,” she said. “If 15.4 million people can bring in a government, and only for the government to be dominated by two people; where are the men of Nigeria? Where are the Nigerian men? What are you doing? Instead of them to come together and fight them, they kept visiting them one after the other, licking their shoes. I am sorry to use that word.” Regardless of Mrs Buhari’s intentions of raising the alarm, the revelation still raises the question

we have asked numerous time: Who is really in charge in Nigeria? Sometime in March, it emerged that for two months, the president did not know that the Inspector General of Police disobeyed his direct orders for him to relocate to Benue state to stop the killings by herdsmen in the state. The IGP stayed only one day in Benue state and relocated to Nasarawa. “It is only now that I am hearing this. But I know that I sent him here, Buhari retorted in shock to General Atom Kpera (rtd) who pointedly challenged him that the IG did “not do the work you sent him. He stayed for less than 24 hours in Benue and relocated to Nasarawa.” But even after the president knew and said publicly the IGP disobeyed him, the IGP still retained his position and even dismissed insinuations from some presidency sources that he was ever queried for disobeying the president’s orders. Similarly, last year, the Senate twice rejected the nomination of Ibrahim Magu as substantive Chairman of the Economic and Financial Crimes Commission (EFCC) by President Muhammadu Buhari all on the advice of the Department of State Security (DSS) that he (Magu) “has failed the integrity test and will eventually constitute a liability to the anti-corruption drive of the present administration.” After the first refusal, the president ordered the Attorney-General of the Federation and Minister of Justice, Abubakar Malami, to investigate the validity of

the allegations. No report was ever made public on the investigation but the president re-nominated Mr Magu and the DSS again gave a damning report of Magu leaving the Senate with no option other than to reject Magu’s nomination again. Curiously, both the EFCC and the DSS are agencies under the presidency and they both report to the president. Interestingly, the DSS was then headed by Buhari’s trusted kinsman from Daura, Lawal Musa Daura, recalled from retirement to head the agency. The whole country was baffled that the DSS that constitutionally reports to the president could directly undermine the president and presidential authority so blatantly without any consequence. Perhaps, it is the boldness gained from overriding the president that emboldened Lawal Daura to order the invasion of the National Assembly by fully armed and hooded DSS operatives earlier in the month to enable a leadership change without any authorisation. Many analysts believed Daura could still have gotten away with it were the president not away in London and Yemi Osinbajo acting as President at the time. With Buhari’s return, there have been reports that he is under tremendous pressure to reinstate Daura to his position. The existence of a strong cabal that controls Aso Rock has been an open secret. The President’s wife, again alluded to the existence of such a group who “don’t know our party

manifesto…don’t know what we campaigned for…” but who have now hijacked her husband’s presidency and are steering it in the direction of they so decide. So strong were the rumours that his nephew, Mamman Daura, was in charge of his administration that the president, in 2016, had to offer a rebuttal insisting he, and not Daura, was in charge. Analysts and behavioural Psychologist insist that when a leader is forced to issue such a rebuttal, it is most likely the allegation is true. For what president – and a former military general at that who is well versed in matters of command and authority – will allow his direct appointees to continually defy his authority without consequences? What president will be unaware for two months that his appointee defied him even when the news was everywhere and virtually all citizens knew about it? Does that not tell of a president with limited ability to function and is walled-off from happenings in the country he is supposed to be leading? Nigerians must come to terms with the bitter truth: Nigeria is under the grips of some vicious powerhungry cabal who are desperate to continue to wield awesome powers without responsibility by propping up a president fast diminishing in ability and health. They have to determine whether they will accept this illegal power grab or get back power and hand it to those who would wield it on behalf of the people and be accountable to them.

HEAD, HUMAN RESOURCES Adeola Obisesan

EDITORIAL ADVISORY BOARD Dick Kramer - Chairman Imo Itsueli Mohammed Hayatudeen Afolabi Oladele Vincent Maduka Keith Richards Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Mezuo Nwuneli Charles Anudu Tunji Adegbesan Eyo Ekpo

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Wednesday 12 December 2018

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BUSINESS DAY

Live @ the Stock exchange Prices for Securities Traded as of Tuesday 11 December 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. 216,959.79 7.50 -0.66 76 1,722,568 UNITED BANK FOR AFRICA PLC 266,755.49 7.80 1.96 136 7,704,245 726,828.83 23.15 0.43 313 58,298,758 ZENITH BANK PLC 525 67,725,571 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 269,214.70 7.50 -0.66 197 25,558,923 197 25,558,923 722 93,284,494 BUILDING MATERIALS DANGOTE CEMENT PLC 3,161,014.12 185.50 0.71 60 1,554,674 LAFARGE AFRICA PLC. 108,417.85 12.50 1.63 63 738,915 123 2,293,589 123 2,293,589 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 352,419.45 598.90 - 7 514 7 514 7 514 852 95,578,597 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 69,635.43 73.00 - 4 283 PRESCO PLC 62,150.00 62.15 - 6 13,636 10 13,919 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,410.00 0.47 - 11 673,590 11 673,590 21 687,509 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 714.77 0.27 - 3 5,946 JOHN HOLT PLC. 155.66 0.40 - 1 300 1,903.99 2.93 - 0 0 S C O A NIG. PLC. TRANSNATIONAL CORPORATION OF NIGERIA PLC 46,338.71 1.14 0.88 60 3,869,963 U A C N PLC. 28,524.84 9.90 6.45 35 399,156 99 4,275,365 99 4,275,365 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 27,720.00 21.00 - 8 14,720 165.00 6.60 - 0 0 ROADS NIG PLC. 8 14,720 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 3,845.63 1.48 - 6 23,077 6 23,077 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,900.00 95.00 - 0 0 11,300.89 45.20 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) UPDC REAL ESTATE INVESTMENT TRUST 21,612.98 8.10 - 0 0 0 0 14 37,797 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 12,448.90 1.59 - 4 100,000 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 159,897.95 73.00 - 18 172,084 INTERNATIONAL BREWERIES PLC. 253,148.13 29.45 - 11 82,050 NIGERIAN BREW. PLC. 627,756.81 78.50 0.64 63 374,211 96 728,345 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 31,750.00 6.35 0.79 42 1,482,606 DANGOTE SUGAR REFINERY PLC 167,400.00 13.95 3.33 32 157,757 FLOUR MILLS NIG. PLC. 86,107.97 21.00 5.00 38 427,640 HONEYWELL FLOUR MILL PLC 8,643.92 1.09 -0.91 40 521,267 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 855.36 4.80 - 0 0 NASCON ALLIED INDUSTRIES PLC 47,424.95 17.90 - 17 333,540 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 169 2,922,810 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,688.11 9.95 5.29 18 514,903 NESTLE NIGERIA PLC. 1,177,094.53 1,485.00 - 63 430,996 81 945,899 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 6 7,920 VITAFOAM NIG PLC. 3,585.75 3.44 - 34 963,194 40 971,114 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 45,660.49 11.50 4.55 30 315,161 UNILEVER NIGERIA PLC. 223,480.71 38.90 - 25 147,415 55 462,576 441 6,030,744 BANKING DIAMOND BANK PLC 22,002.37 0.95 -7.77 251 17,062,972 ECOBANK TRANSNATIONAL INCORPORATED 284,418.04 15.50 - 37 2,973,465 FIDELITY BANK PLC 55,052.11 1.90 -1.58 100 11,223,030 GUARANTY TRUST BANK PLC. 1,012,432.57 34.40 -1.01 272 7,104,918 JAIZ BANK PLC 12,964.27 0.44 - 3 53,100 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 51,822.75 1.80 3.45 34 35,125,096 UNION BANK NIG.PLC. 155,796.03 5.35 - 35 320,087 UNITY BANK PLC 8,065.64 0.69 - 21 28,951 WEMA BANK PLC. 21,987.45 0.57 5.56 23 640,510 776 74,532,129 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,504.63 0.65 -2.99 25 1,639,278 AXAMANSARD INSURANCE PLC 21,000.00 2.00 - 0 0 CONSOLIDATED HALLMARK INSURANCE PLC 2,660.00 0.38 - 1 100 CONTINENTAL REINSURANCE PLC 18,670.94 1.80 2.27 11 401,362 CORNERSTONE INSURANCE PLC 2,945.90 0.20 - 3 100,100 GOLDLINK INSURANCE PLC 2,411.47 0.53 - 0 0 GREAT NIGERIAN INSURANCE PLC 1,913.74 0.50 - 0 0 GUINEA INSURANCE PLC. 1,535.00 0.25 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,050.56 0.28 -3.45 6 534,344 LAW UNION AND ROCK INS. PLC. 2,191.13 0.51 8.51 2 232,500 LINKAGE ASSURANCE PLC 4,880.00 0.61 - 2 2,600 MUTUAL BENEFITS ASSURANCE PLC. 1,600.00 0.20 -4.76 5 844,794 NEM INSURANCE PLC 11,881.13 2.25 -4.26 10 268,000 NIGER INSURANCE PLC 1,547.90 0.20 - 5 155,537 PRESTIGE ASSURANCE PLC 2,314.50 0.43 -8.51 8 890,250 REGENCY ASSURANCE PLC 1,400.44 0.21 5.00 3 130,000 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 4 62,110 4,483.72 0.48 - 0 0 STACO INSURANCE PLC STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 516.46 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 1 100 VERITAS KAPITAL ASSURANCE PLC 3,189.33 0.23 9.52 3 105,100 WAPIC INSURANCE PLC 5,486.92 0.41 2.50 16 745,915 105 6,112,090

MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,315.62 1.45 - 6 70,010 6 70,010 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,452.00 1.06 - 0 0 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 0 0 5,664.87 0.50 - 0 0 RESORT SAVINGS & LOANS PLC UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,440.00 3.72 - 32 312,958 29,997.51 5.10 - 5 39,854 CUSTODIAN INVESTMENT PLC 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 29,704.07 1.50 -0.67 93 9,096,792 411.91 552.20 - 0 0 NIGERIA ENERYGY SECTOR FUND ROYAL EXCHANGE PLC. 1,029.07 0.20 - 7 142,376 471,065.44 46.00 - 11 3,674,277 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 17,100.00 2.85 1.06 61 2,424,363 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 209 15,690,620 1,096 96,404,849 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 852.75 0.24 -4.00 4 684,000 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 4 684,000 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 1 814 1 814 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 7,350.00 4.90 - 3 9,000 FIDSON HEALTHCARE PLC GLAXO SMITHKLINE CONSUMER NIG. PLC. 17,340.21 14.50 - 11 47,888 MAY & BAKER NIGERIA PLC. 2,352.00 2.40 - 21 346,015 984.11 0.57 - 11 162,340 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 329.57 1.52 - 0 0 PHARMA-DEKO PLC. 46 565,243 51 1,250,057 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 - 0 0 TRIPPLE GEE AND COMPANY PLC. 0 0 PROCESSING SYSTEMS CHAMS PLC 1,033.13 0.22 - 1 100 E-TRANZACT INTERNATIONAL PLC 16,590.00 3.95 - 0 0 1 100 1 100 BUILDING MATERIALS BERGER PAINTS PLC 1,883.85 6.50 - 6 30,797 22,050.00 31.50 - 7 9,941 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 20,106.84 16.00 -3.03 27 481,065 FIRST ALUMINIUM NIGERIA PLC 633.11 0.30 - 0 0 MEYER PLC. 313.43 0.59 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,999.41 2.52 - 3 30,000 PREMIER PAINTS PLC. 1,279.20 10.40 - 0 0 43 551,803 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 3,469.80 1.97 - 7 85,240 7 85,240 PACKAGING/CONTAINERS BETA GLASS PLC. 34,148.09 68.30 - 3 5,097 GREIF NIGERIA PLC 388.02 9.10 - 1 500 4 5,597 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 54 642,640 CHEMICALS B.O.C. GASES PLC. 1,752.39 4.21 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 1 1,000 1 1,000 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 50.60 0.23 - 0 0 0 0 1 1,000 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,315.17 0.21 5.00 13 771,306 13 771,306 INTEGRATED OIL AND GAS SERVICES OANDO PLC 61,535.49 4.95 -1.00 53 553,725 53 553,725 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 57,695.24 160.00 - 16 28,060 CONOIL PLC 15,613.92 22.50 - 7 43,774 ETERNA PLC. 5,477.41 4.20 - 11 27,862 FORTE OIL PLC. 26,049.62 20.00 4.44 65 6,962,182 MRS OIL NIGERIA PLC. 7,833.01 25.70 - 7 4,955 TOTAL NIGERIA PLC. 67,225.32 198.00 - 15 4,166 121 7,070,999 187 8,396,030 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. 447.02 0.38 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,593.79 4.40 - 7 101,746 TRANS-NATIONWIDE EXPRESS PLC. 300.06 0.64 - 0 0 7 101,746 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 3,887.35 1.87 - 4 18,216 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 46,362.46 6.10 - 2 427 6 18,643 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 5,280.00 0.44 - 1 100

BUSINESS DAY

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Wednesday 12 December 2018

In association with

a g @ bu s ines s dayo nl ine. co m

Nigeria’s oil palm import from Malaysia hits 215,654MT in eleven months Josephine Okojie

igeria has seen the importation of its Crude Palm Oil (CPO) from Malaysia reached 215,654 metric tons (MT) in the first eleven months in 2018 despite it being among the 41 items restricted from forex by the Central Bank of Nigeria (CBN). Data from the Malaysian Palm Oil Council (MPOC) on a year on year basis, shows that the import over the period declined by 7 percent from 228,788MT in 2017 to 215,654MT in 2018. On a month on month basis, it declined by 48 percent from 29,790MT in October to 15,468MT in November 2018. To reduce importation, Nigeria had in 2015 restricted importers of a list of some 41 items which palm oil is inclusive from accessing forex. Also, to protect the country’s palm oil industry and spur the industry growth the government had imposed a 35 percent tariff (10% duty and 25% levy) on the importation of palm oil into the country. But despite these policies, the

Tajudeen Akinwande, communication and event manager BATN Nigeria Foundation; Abimbola Okoya, executive director, BAT Nigeria Foundation; Godwin Obaseki, executive governor, Edo State; Osarodion Ogie, secretary to Edo State Government; Ololade Johnson-Agiri, general manager, BAT Nigeria Foundation and Olusegun Adewole, project manager, BAT Nigeria Foundation at the visit of the foundation team to the Governor in Benin City, Edo state recently.

country has seen it imports on oil palm maintain same trajectory in recent years. Henry Olatujoye, president, National President, National Palm Produce Association of Nigeria (NPPAN), stated that the inability of government to provide a reliable data for the industry has remained a major problem for the industry, saying that some foreign investor

are taking the advantage to deceive the government in allowing the importation of the produce into the country. He added that some Indian investors always seek for reasons to keep importing CPO into the country under the pretence that the country’s CPO is of low standard and unable to meet demand. Nigeria imported about 552,000

Aquaculture production receives boost as BATN donates smoking kiln to farmers group Josephine Okojie

igeria’s quest for selfsufficiency in fish production has received a boost as the British American Tobacco Nigeria (BATN) Foundation has donated a 250kg capacity coal smoking kiln to farmers in Lagos. The smoking kiln provided by BATN will ensure that the farmers add value to their fish, thereby hedging them against market price volatility. “This donation of smoking kiln will be the ninth kiln donated to fish farmers groups in less than 15 months. The first sets of kilns were donated to farmers in Niger Delta region and to date we have heard liberating stories of economic bliss,” Abimbola Okoya, executive director, BATN Foundation said during the handover ceremony of the smoking kiln to fish farmers in Lagos.

“The fingerlings to fork capacity building project implemented with the Lagos State Agricultural Development Authority (ADA) was implemented to help the state bridge the widening supply and demand gap in Nigeria’s fish production. “Our objective was to empower 200 farmers on good agricultural practices in fish hatchery and production, improve their source of income and enhance food security in the state,” Okoya said. She stated that in order to encourage the adoption of the skills learned by the farmers, the organisation is empowering the farmers group with a smoking kiln. Also, she noted that in addition to the capacity building, BATN has supported farmers in the state with the construction of agro processing and fish hatchery training centre. Aquaculture production accounts for 32percent of the Nigeria’s total fish production, data from the Nigerian

Bureau of Statistics fish production report states. Freddy Messanvi, director, BATN Foundation said that despite the huge potential in the country’s fish industry, Nigeria is still unable to meet up to 60 percent of its fish demand. Messanvi said that the huge gap provides opportunity for fish farmers to increase their income by switching from low to high value fish production. “Over time, in our support to fish farmers, we observed that in addition to teaching them good agricultural practices for improved fish production it is also important to do three things; first, teach them cost effective ways to get maximum output; secondly, provide access to market and empower them to add value to their commodity so they are immune against price volatility,” he said. Receiving the smoking kiln on-behalf of the farmers, Olayemi Oluwakemi, a fish farmer appreciated BATN for their support while promising to make effective use of the kiln. “Our joy knows no bound when we were chosen as beneficiary for the smoking kiln. It is therefore an opportunity for us to process more of our fish as it has helped in reducing our waiting time,” Oluwakemi said.

metric tons of crude palm oil in 2016, according to data from Solidaridad Network. Nigeria is currently producing about 970,000 metric tons, making the country the 5th largest palm oil producer behind Indonesia with 36 million MT, Malaysia with 21 million MT, Thailand with 2.2 million MT and Colombia with 1.3 million MT, data in the global oil

palm industry shows. While local consumption is estimated at 2.7 million tons per annum, indicating an estimated demand-supply gap of over 1.7 million MT. Experts say Nigeria can regain its status as a net exporter of crude palm oil when there is a welldeveloped development plan for the subsector with clear targets, strategies and timelines. “With a development plan, c r i t i c a l s e g m e nt s a l o n g t h e entire value chain would then be addressed using sustainable private sector led approach in its implementation. Also reorganisation of smallholder farmer associations to cluster them around big mills for sectoral growth,” said Steven Babajide, country representative, Solidaridad’s Network earlier in a response to BusinessDay questions. “We need to also organise new plantings for smallholders especially youths and women and facilitate the development of improved seedlings, farm m a n a g e m e n t s e r v i c e s, a g ro chemical, fertilisers to increase productivity,” babajide added.

Kogi women farmers solicit for land to achieve zero hunger target Victoria Nnakiaike, Lokoja

omen farmers in Kogi have called on the Federal and state governments to allocate land and grant ownership and control to smallholder women farmers towards achieving the country’s zerohunger target. Sefiya Yahaya, coordinator, Small Scale Women Farmers Organisation of Nigeria (SWOFON), Kogi Chapter, made the call during the 2018 Annual Women Farmers Forum in Lokoja recently. The forum which was organised by the Participation Initiative for Behavioural Change in Development (PIBCID) with support from Action Aid Nigeria (AAN) had hundreds of smallholder women farmers in attendance. In her remarks, Yahaya stressed that tradition and other hindrances militating against women’s’ ownership and control of land had impacted negatively on the smallholder women farmers’ capacity to produce. According to her, women account for over 60 percent of the country’s farmers and granting them ownership and control of land will help the country attain its zero hunger target of 2030. Ya haya a l s o ca l l e d f o r t h e agricultural budgetary processes to be open and transparent with allocation of 10 percent of Federal and State

annual budgets to the sector, in line with the 2003 Maputo Declaration. She also urged the government to intervene and relax the conditions for women farmers to access credit facilities from financial institutions to boost their productivity. The coordinator of SWOFON also spoke of the need to engage women extension agents for women farmers to enable them learn new technologies and methods of farming to improve their yields. She commended ActionAid Nigeria and PIBCID for their intervention saying, “ActionAid is our mother and hope. They have built our capacity, supported us over the years and this forum is their initiative.” Yahaya equally tasked government on community access to roads, requesting that roads be constructed in communities to enable farmers evacuate their produce to the markets among other demands. Kehinde Oloruntoba, commissioner for Agriculture, while receiving the document, said government had intervened in several ways to better the lot of smallholders’ farmers and would continue to do so. Represented by Alhassan Iyaji, coordinator of commercial agriculture in the Ministry stressed that before the charter of demands, government had embarked on clearing of land in the three senatorial districts for allocation to small scale farmers.

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Boost for food products as Flour Mills delivers 16 trucks to customers ODINAKA ANUDU

lour Mills of Nigeria (FMN) has awarded 16 new trucks to customers in its food segment to enable them grow their businesses and reach wider markets. FMN said on Monday in Lagos that this was in line with its earlier promise in March to reward the efforts of its partners while appreciating and celebrating them. “Doing this means that we are supporting the businesses of our partners, dealers and customers, so that they can grow. Once they grow, you can be sure FMN will continue to grow,” Paul Gbededo, group managing director, Flour Mills of Nigeria, said. Gbededo said FMN was fulfilling a promise it made to various categories of customers earlier in the year that it would provide them with vans to support their businesses to enable them take goods from its factories to their warehouses and from warehouses into the retail. “This is just the start. In years to come, we are going to be doing it in tranches so

L-R: Devlin Hainsworth, MD, Foods, FMN; Elizabeth Olufunmilayo Ajibola of Mt. Olives Nigeria Ltd, a customer; John Coumantaros, chairman, FMN, and Paul Gbededo, GMD, FMN, at a ceremony to award delivery trucks to key FMN distributors, in Lagos on Monday.

that we will be seen to be feeding the nation every day,” he added. Devlin Hainsworth, managing director, Foods, said, “Two, three months ago, we gathered our biggest partners and customers to really acknowledge their performance through the year and a particular category that took the most in terms of

performance and driving the overall food business in terms of Golden Penny or FMN, we award them with trucks.” Hainsworth said FMN was serious about partnership with customers, adding that the company had achieved a lot from this. “We have reached the level in terms of market share and size. We are really creating

Group calls for more research funding to develop Nigeria’s aquaculture Desmond Okon

i s h e r i e s He r i t ag e Group, a professional body comprising of graduate students and academic staff of the L ag o s St at e Un i v e r s i t y , Ojo, has called for more research funding to develop aquaculture production in Nigeria. The group made the call at a conference held in Lagos to mark the World Fisheries Day, with the intent to chart a course for the subsector. “We need to fund research to develop the sector but research alone is not the problem, but implementation of such research when carried out,” said Dawodu Michael, permanent secretary, deputy governor’s office, representing Shakirudeen Olayiwola, permanent secretary, Department of Fisheries, Ministry of Agriculture, Lagos State. Fish is an important part of the household diet in Nigeria. More than 80 percent of Nigeria’s total domestic

production is generated by artisanal smallholder farmers from coastal, inshore, creeks of the Niger Delta, lagoons, inland rivers and lakes, according to Food and Agriculture Organisation of the United Nations, (FAO). Nigeria’s per capita fish consumption is 11kg, which is significantly lower than the global average of 21kg and just less than the estimate of 13.5kg for Côte d’Ivoire. But according to experts, with adequate research, the country can develop the industry, thereby made fish available to Nigerians. Speaking to Business Day, Linda Agua Onyekwelu, CEO Linda Farms Ltd, Ogun State, who is also, the chairperson - organising committee of the group said “committed to position fisheries as a noble way of life and culture primed to drive food security and sustainable development of the nation”. Onyekwelu added that collaborations between the farmers and other stakeholders

across the value chain will help in enhancing the contribution of fish subsector to the socioeconomic development of Lagos State and advancing action for the development of the industry. On funding, Oluwafemi Afolabi, principal manager, Bank of Agriculture, Ikeja branch, explained that individuals often defaulted on loan repayment, saying that such act would not deter the bank for carrying out its core mandate. Humyinbo Idowu, managing director, Fish Party, wants adequate advocacy and policies to help in sustainable fisheries management. He b elie ves that the water resources have been badly damaged through piracy and illegal fishing in Nigeria territorial waters. Other issues such as inadequate research, support for researchers, and the need for scholarship to encourage the study of fishery in institutions of higher learning, were raised during the interactive session.

number one brands in the key categories and still have the opportunity to go to another level. In striving for more and more, let’s go to the next level. There are so many consumers from length and breadth of the country and it is important we reach them,” he stated. While addressing customers, Hainsworth said the company would continue

to show customers how much it valued them by constantly supporting their businesses. “The real action is in the market, not in the glass house. We know it is not easy out there. We know you have so many things to contend with. Together, we will continue to feed the nation every day and grow your business. You have helped build FMN and we are excited about our future.” Paul Udochi, head of sales, B2B, said the company was convinced that empowering its customers meant empowering itself, saying that FMN intended to make this an annual event. Udochi said it would eventually affect all sections in FMN, though each always had one way or the other of rewarding customers. One of the customers from South-West region, Elizabeth Olufunmilayo Ajibola of Mt Olives Nigeria Limited, said the gesture proved that FMN was customer-centric. Ej i d e Ay i n d e, w h o represented the North-West region, pointed out that the van would enable him to access communities that were hitherto difficult. “I am happy. I wish to

extend my gratitude to Flour Mills of Nigeria. This will help us in distribution and to access communities that we have never accessed,” Ayinde, who came from Abuja, said. Dosunmu Funmilayo of Michelle Edmund Ventures Limited said it was an indication that FMN was a good company and cared about its partners. “It is an indication that Flour Mills keeps to its promises. The van will help us to get to certain places we need to be. It will help us in distributing the products,” he added. FMN is one of Nigeria’s largest conglomerates with interests in flour milling, sugar, palm oil, noodles, animal feeds, grains and logistics, among others. FMN has invested N50 billion in the sugar value chain, providing a concrete example of efforts to cut sugar importation into Africa’s most populous country. The group’s Sunti Golden Sugar Estate , near Mokwa, in Niger State, is situated on 17,000 hectares of irrigable farmland, and a sugar mill that processes 4,500 metric tons of sugar cane per day.

Udom inaugurates 42-hectares integrated farm project ANIEFIOK UDONQUAK, Uyo

overnor Udom Emmanuel of Akwa Ibom State has inaugurated a 42 hectares integrated farm project in Awa Ndon, Onna local government of the state, describing it as part his administration’s agenda of agricultural revolution and food sufficiency. Emmanuel who lauded the opportunities presented by the farm initiative said his vision is to ensure that in the next few years, Akwa Ibom shall produce 80percent of what it consumes. Commissioning a Songhai Model Farm, known as Ibom Integrated Farms limited at Awa Ndon in Onna Local Government area, said he was pleased to commission such a large scale community development project. He encouraged all owners of hospitality facilities in the state to patronise the initiative by purchasing birds, fish,

tomatoes, pepper, vegetables, livestock, and other products from the farm to boost local production. Emmanuel who noted that even as a Governor he owned a large farm in Ini Local Government, advised businessmen and community leaders to encourage c re a t i v i t y a n d i d e a s i n their communities, as his administration is ready to support such initiatives. “If creativity and ideas are found anywhere, I will follow. So take creativity and ideas to your community, I congratulate the Paramount Ruler of Onna and his dear wife on this great and inspiring initiative.” “It takes a dedicated, passionate patriot to add value to our common enterprise of diversifying an economy and helping the government expands the layers of its growth and productivity. He explained that the farm, purely Onna Community D e v e l o p m e nt C o u n c i l’s

initiative shared by the Paramount Ruler, has already employed 200 young people with a prospect of employing 1000 at full capacity. He described agriculture as the largest employer anywhere in the w orld, maintaining that it w ill provide raw materials for the industries in the state. Introducing the far m, Edidem Raymond Ti m o t hy Inya ng w h o i s also the chairman, Ibom Integrated Farms limited and chairman of Onna Community Development Council said Ibom Integrated farms limited is focused on affecting the mindset of the local population and creating enterprise awareness within the community. “The farm has a vision of replicating Songhai capacity in Nigeria by systematically transforming Agricultural practice through improved farming methods that deliver superior products in terms of quantity and quality.”

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Ogbeh cautions beans farmers in IDPs against use of sniper …assures farmers of support peers also promised the beans farmers supply of harvesters, threshers and a specific number of tractors for the next planting season for easy har vesting and processing of their products. He said that the National Emergency Management Agency (NEMA) and Coordinator of the School Feeding Programme will be engaged to patronise the beans produced by the IDPs in order to provide markets for their produce. Ogbeh commended the efforts of John Onaiyekan,

Josephine Okojie

udu Ogbeh, Minister of Agriculture and Rural D evelopment, has cautioned the Internally Displaced Persons beans farmers against the of deadly sniper pesticides for storing the legume. The minister made the warning during his recent inspection of Auta Ballefi beans market in Nasarawa state owned by the IDPs in Borno state, while assuring them of government continuous interventions in creating an enabling environment. “I am very excited to be here, it’s quite surprising but also quite indicative of what Nigerians can do even in adversity. We are very proud of them. The first thing we are going to say to them is that nobody should put sniper in the bag of beans. They

should never put sniper, it’s a poison. They should rather put pepper,” Ogbeh advised. “ This is to show that Nigerians have resilience in spite of their challenges; see what they are doing for themselves. I am surprised and elated, instead of IDPs waiting for somebody else to bring them food, here is a group of people from essentially Borno State who

found refuge here and have created an industry of their own”, he said. Ogbeh assured the farmers of necessary government’s interventions with the provisions of market access, security, water and other amenities in the market as well as creating linkage roads to farmlands. The minister urged other IDPs to emulate what their

Expert calls for increase in ethanol production from cassava tubers Victoria Nnakiaike, Lokoja

aruna Madisca president of Geron Oil and Gas has called for the increase in ethanol production from cassava tubers to assist smallholder famers of the crop in improving their livelihood. Madisca made the at the just concluded Cassava City Day held in Lokoja, Kogi state recently, saying that many nations of the world are producing ethanol from cassava tuber used as renewable fuel which is friendly to the environment. “Ethanol is the best fuel for the climate that is why the

whole world is diversifying to agricultural products such as cassava to produce more ethanol,” he said. He equally stated that his organisation will soon commence the production of ethanol from cassava and when the project kick-started it will be having a pure ethanol refinery. Highlighting the advantages in cassava production, he disclosed that the waste of cassava that would be generated from the factory will serve as animal feed as nothing about the crop is wasted. He noted that the factory will recycle water from the project adding that the

organisational goal is to ensure the protection of the ecosystem. Madisca also hinted that his mission is to fight poverty from the street, adding that he grew up in the street and knows what poverty means. “I appreciate Governor Yahaya Bello for giving the people of Kogi this enabling environment. It is about what we can do for our people. I have travelled to many countries to understudy how they run power fuel refinery and we are working in synergy with NNPC. We are ready to see what we can do in Kogi State that will create jobs and improve livelihood in the state. If all hand should be on deck, I believe we will go far with this project. We have for long ignored the opportunities in Kogi and now we are going to explore it “. He equally commended Oyisi Okatahi the managing director of ADP, for leaving his comfort zone in Canada to come to the state to work. Madisca equally emphasised that the organisation is ready to for collaborations in helping the state realise its objectives.

Metropolitan Archbishop of Abuja, Cardinal and other personalities who saw it as a responsibility in helping to facilitate the process of acquiring land for both farming and market for the IDPs. In his remarks, Onaiyekan said the IDPs at Auta Balefi, Keffi Road are very resourceful and talented in the production of beans in spite of their challenges and he urged ogbeh to build on the achievements recorded by ensuring that government provides them with necessary

supports. Earlier, Philemon Yakubu, c ha i r ma n o f t h e B e a n s Market, in his welcome address appreciated the minister for honouring their invitation to inspect the market. He informed the Ogbeh that the market which is fast developing needed some critical areas of intervention such as supply of water boreholes, toilet facilities, security, ware houses and agricultural machineries among others, in order to boost their production.

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CBN’s low tolerance for naira liquidity pushes yields higher

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C o m pa n y n e w s a n a ly s i s a n d i n s i g h t

AIRLINES

Emirates slides to first half loss despite 10% increase in revenue IFEOMA OKEKE

he Emirates Group struggled to shake-off the impact of rising costs after profit slumped by more than half in the first six months of the year. The Dubai-based airline’s profit was down 53 percent in the first half of 2018 compared to the same period last year, with the Group reporting a half-year net profit of 296 million dollars. The profit erosion was primarily due to a 37 percent increase in fuel costs compared to the same period last year, as well as the negative impact of currencies in certain markets. Revenue came to 14.8 billion dollars in the period under review, up 10 percent from 13.5 billion dollars during the same period last year. “Demand for our high quality products and services remained healthy, as we won new return customers across our businesses and this is reflected in our revenue performance,” Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive, Emirates Airline and Group said. However, the high fuel cost as well as currency devaluations in markets like India, Brazil, Angola and Iran, wiped approximately AED 4.6 billion from our profits, according to Al Maktoum.

Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive, Emirates Airline and Group.

“We are keeping a tight rein on controllable costs and will continue to drive efficiency improvement through the implementation of new technology and business processes. “The next six months will be tough, but the Emirates Group’s foundations remain strong. I’m pleased to note that our home and hub in Dubai continues to attract travel demand, as the airline saw nine percent more customers enjoying Dubai as a destination in the first half of 2018-19 compared to the same period last year,” Al Maktoum said. “We expect this demand to remain healthy as new attractions come online and the city gears up for Dubai

Expo 2020,” he added. The airline’s Nigeria operations which it defines as a “strategic market” was more of a boost than a drag to overall performance on the back of improved foreign exchange liquidity and the economy’s exit from recession. In 2017, the airline accounted for 19.8 percent of Nigeria’s foreign airline market share in 2017, which translated to $266 million of total ticket sales of $1.4 billion, according to data from the National Association of Nigeria Travel Agencies (NANTA). In the first eleven months of 2018, ticket sales by foreign airlines already add up to the total for the whole of

last year, according to Bernard Bankole, President of NANTA, who said “Emirates

controls the largest market share of foreign airlines in Nigeria, followed by British Airways.” Using NANTA data, Nigeria operations contributed 0.95 percent to the airline’s full year 2017 revenue of $27.9 billion. The Emirates Group’s cash position as at 30th September 2018 was 5.9 billion dollars, compared to 6.9 billion dollars as at 31st March 2018. In the past six months, the Group’s employee base reduced by one percent compared to 31 March 2018, from an overall average staff count of 103,363 to 101,983. This was largely a result of natural attrition, together with a slower pace of recruitment as the business continues its various

CONSUMER GOODS

Nigerian Breweries slumps to 5-year low David Ibidapo

hares of Nigerian Breweries declined 2.5 percent Monday to close at N78, the lowest in five years and a more than 62 percent decline from a peak of N191 in August 2017. BusinessDay analysis revealed that the stock is down 42 percent year to date, underperforming the All Share Index (ASI) which is down 19 percent. The company has lost a whooping N456 billion in market value amid political uncertainties ahead of the 2019 general elections

coupled with a sell-off by foreign investors due to higher risk perception of the Nigerian market. Despite the general market gloom, Nigerian Breweries has had to weather some personal storm. BusinessDay third quarter analysis of the company’s financial statement revealed a loss after tax of a whooping N3.6 billion compared to N259.9 million recorded in 2017 during the same period. Meanwhile profit after tax declined 35 percent from N34.4 billion to N22.5 billion during the

period 9 months ended 2018 financial report. A five-year analysis of Nigerian Breweries also revealed that while the company recorded a consistent growth in its revenue from N269 billion in 2013 to N345 billion in 2017, profit before tax (PBT) declined consistently to N47 billion in 2017 from N67 billion in 2013. Recently, Nigeria Breweries published a notification on the Nigeria Stock Exchange (NSE) stating the resignation and appointment of some board of directors. Information released Continues on page 19

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

internal programmes to improve efficiency through the implementation of new technology and workflows. During the first six months of 2018-19, Emirates received eight widebody aircraft – three Airbus A380s, and five Boeing 777s, with five more new aircraft scheduled to be delivered before the end of the financial year. It also retired seven older aircraft from its fleet with further 4 to be returned by 31 March 2019. The airline’s long-standing strategy to invest in the most advanced wide-body aircraft enables it to improve overall efficiency and provide better customer experiences. As of 30 September, Emirates’ global network spanned 161 destinations in 85 countries. Its fleet stood at 269 aircraft including freighters.

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COMPANIES & MARKETS MARKET COMMENTARY

CBN’s low tolerance for naira liquidity pushes yields higher WALE OKUNRINBOYE, head of research, Sigma Pensions

he Central Bank of Nigeria (CBN)’s response to exchange rate pressures at the parallel market last week was to ramp up its mop-up of Naira liquidity in the financial system via Open Market Operations (OMO) auctions. Consistent with this position, the CBN maintained that aggression over the course of the week with the total sale of NGN1.33 trillion OMO bills (relative to NGN685 billion in OMO maturities over the week). This resulted in a jump in Open Buy Back (OBB) and Overnight rates, which are good thermometers of system liquidity levels, to 24 percent and 26 percent respectively at the end of last week from single digit levels at the start of the week. The cumulative impact of the CBN attack on system liquidity was the rise in front-end interest rates by an average of 97 basis points (bps) to 15.11 percent for three-month bills, 14.52 percent for six-month bills and 17.41 percent for oneyear bills.

The DMO announced opening of the second Sukuk bond sale on the following terms: NGN100billion, 7-year tenor and a rental yield of 15.74%. Sukuk I was issued in September 2017 at a yield of 16.47% which has tightened to 15.42% at the end of last Friday. The new supply is being priced off the 7-year FGN bond. The strength of the Sukuk is that it helps to crowdin a class of investors in Nigerian debt outside the traditional investor profile. For example, Middle-East based Islamic fund managers looking for exposure to high-yield EM/frontier local currency instruments have been scouting around for fresh issue given the high yield. At the investor forum, the sense one got is that demand for the sukuk issue could overshoot the planned amount on offer. Retail investors are also provided a window as the sale will include stockbrokers as against only banks for the first sale. The offer will close on December 17 with subscrib-

Figure 1: Naira Yield Curve

Source: FMDQ, NBS revenues miss forecasts by nearly 52%, zero implementation of NGN1.4trillion capital budget for H1 2018 resulted in a lower than planned fiscal deficit of NGN771billion (budget : NGN997billion) or 1.3% of H1 2018 nominal GDP.

Figure 2: Fiscal Revenues, Expenditure and balances (% of GDP)

dent revenues (-48%) and the various plug-in items included to massage the budget: recoveries, debt & fines as well as proceeds from oil asset sales. For implementation, the budget was passed in June so talk of capex imple-

solidation but doubts over execution Perhaps reflective of the wild misses in 2018, the 2019 budget process, which is already well-off the usual calendar schedule for passage, looks likely to be presented either this week

budget. While details are sketchy, fiscal deficit and borrowings are forecast lower but oil prices at USD60 per barrel sounds a tad optimistic in view of the steep plunge in oil over November 2018. In my view, the 2019 bud-

Figure 3: 2019 Budget highlights

Source: Budget Office, * H1 2018 In a similar vein, FGN bond yields climbed on average by 13 bps last week to 14.87-15.97 percent. Presently, most segments of the Naira yield curve are now higher or at least at par with levels obtained in December 2017 even though inflation is much lower now than then. DMO opens NGN100 billion Sukuk bond sale

ers able to buy NGN1,000 per unit subject to a minimum subscription of NGN10,000. H1 2018 budget accounts shows lower deficit on zero capex The Budget Office released the Q1 2018 and Q2 2018 budget implementation reports which showed that despite revenue challenges which saw the FGN

From the look of things, it appears that the Buhari government has reverted on to the recurring trick with Nigerian budgets where lack of credibility over capital budget implementation translates to ‘fiscal savings’ in the event of revenue disappointments. Revenue misses roughly stemmed from oil (-33%), non-oil (-40%) indepen-

Source: Newspaper reports, Minister of Budget mentation is moot. For the record, the widely watched debt-service to revenue ratio remained elevated at 61% (or 62% inclusive of sinking fund debt contribution, 2017: 69%) given the revenue disappointments. Delayed 2019 budget shows signs of fiscal con-

or next. For context, President Buhari presented the proposed budget to the National Assembly in November in 2017, but this time, he was required to sit-in for over two hours last week Friday to ensure presidential assent to the draft 2019

get as with all election year budgets in Nigeria is unlikely to record any serious implementation in terms of execution as fiscal inertia is likely to exist over the first half of the year due to the election and lengthy transition period.

Wednesday 12 December 2018

BUSINESS

COMPANIES & MARKETS

Business Event

DAY

PUBLIC INSTITUTIONS

NNPC advises petroleum consumers against panic buying HARRISON EDEH, Abuja

he Nigerian National Petroleum Corporation (NNPC) has assured petroleum products consumers across the country not to engage in panic buying as it holds 2.6billion litres of Premium Motor Spirit otherwise called petrol and 90,000 metric tonnes of Dual Purpose Kerosene (Diesel), saying the holding is expected to last 52 days, assuming no single drop of products is imported from now. NNPC Group General Manager, Group Public Affairs, Ndu Ughamadu, in a statement late Sunday in Abuja said the purported shut down of operations by Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) would not affect products distribu-

tion as NNPC has ordered all its depots across the country and those of bulk purchase Marketers it recently entered agreements with to undertake a 24 hour operations to avert any shortages in products distribution in the country. Ughamadu stated: “All NNPC depots, Petroleum Products Marketing Company (PPMC) throughput partner depots, the Major Marketers depots and depots of Depot and Petroleum Products Marketers Association of Nigeria (DAPMAN) members who signed the Bulk Purchase Agreement, BPA, with PPMC as well as NNPC Retail stations, Major Marketers Association of Nigeria (MOMAN) and Independent Petroleum Marketers Association of Nigeria (IPMAN) filling stations, will continue to operate at maximum levels to ensure uninterrupted distribution

of petroleum products nationwide. The statement said despite the threats by DAPPMAN government was committed to going ahead with settling the N236bn first tranche of the verified subsidy claims of the Oil Marketers in line with the approval of Federal Executive Council (FEC) and National Assembly (NASS) by Friday, 14 December, 2018 as noted by the corporation’s Chief Operating Officer, Downstream, Engr. Henry Nkem Obih in a statement recently. The NNPC spokesperson advised members of the public to report to offices of the Departments of Petroleum Resources (DPR) across the states any fuel stations which attempts to take advantage of the situation to inflate products price, saying that the price of PMS remains N145 per litre.

L-R: Segun Ajibola, immediate past president, Chartered Institute of Bankers of Nigeria (CIBN); Osaretin Demuren, chairman of the council, Bank Director’s Association of Nigeria (BDAN); Uche Olowu, president, CIBN, and Jude Monye, secretary of the council, BDAN, during the courtesy visit of the BDAN members to the CIBN in Lagos.

PROFESSIONAL SERVICES

Taxpal debuts in Lagos to drive tax compliance Josephine Okojie

n a bid to drive tax compliance rate in the country and ensure that the Federal Government generates more revenue, Taxpal Nigeria– a tax consulting firm has debut into the Nigeria’s taxation industry. In a chart with journalists during the launch, Jide Banjo, chief operating officer, Taxpal Nigeria said that the solutions Taxpal provides, tax compliance rate in the country would increase. “Taxpal is that tax hub that serves taxable Nigerians and Nigerian residents with spot on tax information required to help fulfill their end of the social contract – paying their taxes,” Banjo said. Citing a recent study by PWC on why Nigerians fail to pay their taxes, he stated

that 22.5 percent of the respondent interviewed did not comply with tax payments due to unclear tax rules. He noted that Taxpal is positioned to bridge the gap and increase the compliance rate of Nigeria through the dissemination of vital information to Nigerians. “Our mission is to make it as clear as possible and disseminate this via the social media platforms and at the palm of your fingers,” he said. “The government has the responsibility of being transparent and efficient with how the taxes are spent. Tax apathy and evasion can be reduced where there is high level of transparency and visible development,” Banjo added. Also speaking during the launch, Adeola Erinle, managing partners said that Taxpal is a one stop shop for tax payers.

“We believe that with Taxpal we would be able to provide businesses, individuals with needed information on taxation. If people know how to pay tax, what to pay as tax, this will increase the compliance level of tax payments among Nigerians,” Erinle said. Similarly, Shade Coker, director at Lagos Inland Revenue Service said that the organisation is ready to collaborate with any organisation helping to increase tax compliance level in the country. Coker said that with Taxpal, Nigerians will be provided the needed information about taxation. She highlighted the challenges experienced by regulators in tax collection. “The inability to capture online transactions – ecommerce is a big challenge to us the regulators,” she said.

L-R, Duncan Mackay, acting interim general manager and head, Management Center South Africa Roche Diagnostic, Alash’le Abimiku, executive director International Research Center Excellence Institute of Human Virology and Taofik Oloruko- Oba, country head, Roche Diagnostics during a press briefing on the preventing and controlling the next epidemics: the role of the Laboratory in Abuja. Pic by Tunde Adeniyi

L-R: Uzo Obi, executive director, Resourcery plc.; Yeye Nwidaa, company secretary, Jackson Etti & Edu law firm; Tani Fafunwa, managing director, Resourcery plc., and Andrew Ejoh , executive director, Resourcery plc. at Resourcery’s 28th annual general meeting in Lagos recently.

CONSUMER GOODS

Nigerian Breweries slumps to 5-year... Continued from page 17

by Nigerian Breweries explained the resignation of Chief Samuel O. Bolarinde, a Non-executive director from the board to be effective on the 31st December 2018. This was granted to enable pursue other personal interest. Oluseyi Bickersteth and Adeyinka Aroyewun were

both appointed into the Board as Non-Executive directors with effect on the 1st of January 2019. Meanwhile, in October 2018, the Board of Directors of the company declared an interim dividend of N4.8 billion, that is, 60 (sixty) kobo per ordinary share of 50 kobo in the share capital of the Company. According to report,

“The Interim Dividend shall be paid subject to the deduction of withholding tax at the appropriate rates. For the purpose of the Interim dividend, the Register of Members and Transfer Books will be closed from Friday, 23rd November 2018 to Thursday, 29th November 2018 (both dates inclusive) for the preparation of an updated Register of Members”.

L-R: Mazen Mroue, chief operations officer, MTN Nigeria; Umar Garba Danbatta, executive vice chairman, Nigeria Communications Commission; Reckit Benckiser marketing director, West Africa, Aliza Leferink; Fatima Dalhatu Adamu, chairperson, Kaduna Tennis Association, and Sunday Dare , executive commissioner, stakeholder management, Nigeria Communications Commission, presenting the 1st place trophy and cheque of 7 Million Naira to Team Teach Vibes, winners of the 2018 NCC Tennis League in Lagos.

BUSINESS DAY

Wednesday 12 December 2018

Wednessday 12 December 2018

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BUSINESS DAY

COMPANIES & MARKETS TECHNOLOGY

England Seso partners CIBN to deepen Blockchain technology penetration Hope Moses-Ashike

he Chartered Institute of Bankers of Nigeria (CIBN) and the Seso Global, a fintech firm based in Cambridge, England have collaborated to deepen penetration of blockchain technology across various sectors of the country’s economy. Speaking during the launch of the partnership and a workshop in Block chain technology organised by CIBN and Seso Global, in Lagos, Uche Olowo, president and chairman of council, CIBN said Blockchain technology is unarguably among the top ground breaking technologies of the 21st century. Olowo said this technology is most popular for creating disruptions in the banking and finance industry by way of peer-to-peer transactions and cryptocurrencies, adding that though blockchain technology is most famous for its role in facilitating the rise of digital currency, the concept of Blockchain has grown far beyond its use for Bitcoin generation and transactions. According to him, “indeed, Blockchain technology has great potentials and could

be implemented in multifaceted monetary and nonmonetary systems such as in: distributed storage systems, healthcare, decentralized voting and the distribution of humanitarian aid. “In the finance industry, Blockchain has the potentials to transform KYC processes, financial inclusion initiatives and the mortgage financing process. Indeed, Blockchain technology can bring greater transparency and efficiency to real estate transactions further providing a platform for financial institutions to efficiently determine issues such as credit worthiness, land ownership while also providing improved security for transactions through digitized contracts.” Also speaking during the workshop, Daniel Bloch, cofounder and CEO, Seso Global, disclosed that industries in Nigeria ripe for disruption in Blockchain include identity management, health care, intellectual property, proof-ofownership, digital assets and their market places, scientific journals and reviews, banking, accounting, audit and taxation amongst others. Bloch explained that some distruptive potentials of Blockchain include remov-

L-R:Gbadebo Adeleke, executive assistant to the managing director/CEO Credit Direct Limited, Fola Ogunsiakan, non executive director, and managing director/CEO Akinwande Ademosu; wife of the managing director/CEO; Toluntola Ademosu, executive director finance and strategy, Chukwuma Nwanze, country head sales; Abiodun Adigun, during the award presentation to Ademosu by the Harvard Business School Association Nigeria, in Lagos.

ing human corruptibility, bypassing human inefficiency, automating the world and rapidly prototyping distributed systems. He said that so far, Blockchain technology has been used for remittance, tracking of payment, digital identity, and transactions on real estate marketplace amongst others.

REAL ESTATE

ecently, Eximia Realty Company Limited entered the Nigerian property market focused on developing retail outlets, small-size residential housing units and ultimately to build future dreams today. Out with a vision to become Africa’s pacesetting property company by creating real value for its customers and investors, Eximia aims to build these future dreams through innovative, value-driven and customer-focused real estate solutions. Eximia was conceived as a real estate company that will ‘lead the world through Africa’. The overall objective is to re-define the narrative by challenging the status quo and creating a unique and innovative platform to deliver real estate solutions in Nigeria and eventually Africa. It is a real estate company that focuses on

workshop themed ‘Beyond Cryptocurrencies: Where the True Innovation Lies’ provides excellent opportunities for subject matter experts to share knowledge and experience on relevant issues in the banking industry and other allied sectors of the economy. He said the CIBN is committed to fulfilling its man-

date to build the capacity of professionals and would be professional bankers in the industry and by doing so, adding that CIBN would ensure that banking professionals have the necessary knowledge and competence required to operate optimally within the industry.

BANKING

Eximia Realty targets value for customers, investors CHUKA UROKO

He further disclosed that Nigeria customs is currently leveraing Block chain technology to issue company registration documents, track funds through out process and automatic renewals and payments. Speaking earlier on the importance of the workshop, Uche Olowo, said the

creating a unique and innovative platform to deliver real estate solutions with special interest in the retail segment of the market. Eximia has made a promise to provide 5, 000 units of single and two-bedroom apartments in the next five years. “Our unique offerings are targeted primarily at the mid-tier market, especially first time home buyers, with two projects currently in the category that are set for launch in Lekki by November”, explained Hakeem Ogunniran, the CEO of the Company limited. Already, the company is developing two projects in this category. These are the Lawton Park which offers 64 apartments comprising studios, 1 and 2 bedroom flats, and Maestroville which offers 42 apartments comprising studios, 1 and 2 bedroom flats. The two projects boast facilities and amenities that include communal lounge, 24 hour power supply, children playground, gym, laundromat, sewage/water

treatment plant, CCTV/ controlled access/security, Wifi/hot spots, etc. Expectation is high from Eximia because Ogunniran, who is the immediate past managing director of UAC Property Development Company (UPDC), will be bringing his rich experience and success streaks that made UPDC the real estate market leader to bear on the running of this young company. According to him, Eximia has chosen to focus on studio, one bedroom and two bedroom apartments because lots of real estate decisions drivers cater to this category of the market. “We are committed to promoting the ideal of sustainable development and creating a perfect harmony between the environment and our deliverables,” Ogunniran assured. Eximia is also a joint developer of The Mews at Katampe, Abuja, Genesis Commercial Park in Opebi Ikeja, and a joint promoters of the new Lake City in Lekki, Lagos.

Union Bank trains 400 youths in Delta Hope Moses-Ashike

nion Bank recently completed an 8-month mentorship scheme tagged We Lead Mentorship Programme (WLMP) for youths in the Igbodo community of Delta State, as part of its Corporate Social Responsibility (CSR) initiatives. Four hundred youths from the community benefited from the intensive programme which focused on training and grooming the young people over the eightmonth period, encouraging them to shun the appeal of illegal migration and instead, channel their talent and focus towards self-development and leadership. The WLMP programme was implemented by Union Bank in partnership with Rural Development and Reformation Foundation (RUDERF) and the Igbodo Development Union (IDU),

as a community-based mentorship scheme that trained local mentors and facilitators and deployed them to tutor community youths working closely with the RUDERF team. The main aim of the scheme was to curb various societal issues ranging from illegal migration to violence, extremism and other vices. Igbodo community leaders, Delta State Government functionaries, beneficiaries of the project and their parents were in present at the graduation ceremony which held recently to mark the close of WLMP 2018 at the Comprehensive High School, Igbodo. Commenting on the WLMP project and the Bank’s sponsorship of the initiative, Ogochukwu Ekezie-Ekaidem said; “Talent development is a core focus area for Union Bank’s Citizenship Programme. We are pleased

to have impacted over 400 youths through the We Lead Mentorship Programme and will continue to provide support and mentorship for the youths as they strive for a better future.” Union Bank’s sponsorship of the We Lead Mentorship Programme underscores its commitment to talent development among Nigerian youths. The bank recently released its second Citizenship, Sustainability and Innovation Report, an annual report which highlights its strategic approach, initiatives and impact made in the areas of Citizenship, Sustainability and Innovation in the past year. Last year, as Union Bank celebrated a century of trusted service and rich heritage, it reiterated its focus on maintaining its leading position as a socially driven and responsible corporate organisation.

BUSINESS DAY

Shipping

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Wednesday 12 December 2018

Maritime e-Commerce

SON plans to increase monitoring exercise, market surveillance in 2019 …Exercise aims at reducing influx of fake, substandard products Stories by Uzoamaka Anagor-Ewuzie

he Standards Organisation of Nigeria (SON) is perfecting plans to increase its monitoring exercise and market surveillance in order to reduce the rate of influx of fake and substandard products into the country. Speaking at a maritime stakeholders’ awareness forum held in Lagos recently, Obiora Manafa, director, Inspectorate and Compliance Directorate (ICD) of SON, who said that there are many sub-standard products coming into the country, stated that it has become challenging in terms of cost for SON to destroy the impounded substandard goods. According to Manafa, dubious importers that escape with fake and substandard products from the port would be restricted from selling the products in Nigerian market as the organisation will concentrate in taking samples of suspected products from the

sellers for laboratory testing. “And if found with low quality, the seller of product must be forced to disclose the source, distributor or supplier of the products before he or she would be released,” Manafa said. Manafa, who noted that SON’s invitation to partake in cargo examination at the port was stalling its effective operations curbing influx of fake products, said that SON in 2019 hopes to reduce the importation of substandard products by 75 percent, if permitted to stay in the ports. Manafa, who said that the Organisation has many seized items that are awaiting court order before they would be destroyed, noted that people spend billions of Naira on importation of substandard goods. Alternatively, Manafa said that instead of destroying some of the impounded products, the SON also force the importers to do the right thing by writing the correct capacity of the product, and to also pay penalty to cover for the cost of making the correction. “For instance, an importer of 40 watts of electric bulbs that

L-R: Boniface Aniebonam, founder, National Association of Government Approved Freight Forwarders (NAGAFF); Yahya Bukar, head, Ports & Borders, Standards Organisation of Nigeria (SON), and Kabir Muhammed, representative of the director general of the SON, Osita Aboloma during the Maritime Stakeholders Awareness Forum organised by SON in Lagos recently.

came in with an inscription that says the product is 60 watts, would after the test be forced to do the right thing. Importing used cylinder is a time bomb that is waiting to explode. Importation of used cylinder is prohibited because cylinder has 15 years life span,” he said. Manafa, who pointed the challenges facing importation of products into the country to include false declaration

and over rating of product capacity, said that the essence of the forum was to educate the agents and freight forwarders, who stand as middlemen to the importers. He cited instances, where importer of a container carrying used tyres- a life endangering product, were declared as a paper, with the intention of short-changing the government of its revenue and to also

smuggle in prohibited items into the country. According to him, to ease demurrage paid on impounded goods, SON escort suspected containers of substandard products to the importers’ warehouses to enable SON to get samples of the products for laboratory testing to assess the quality of the products. He however urged import-

ers and their agents to do the right thing by adhering to the rule guiding quality assurance for product importation. Yahya Bukar, head, Ports and Borders of SON, who reaffirmed that SON is being invited by Nigeria Customs to participate in cargo clearance at the ports, acknowledged that being on Nigerian Single Window platform enables the organisation to see importers’ declarations. He pointed at false declaration, inconsistent and incomplete declaration in Single Goods Declaration (SGD) form and Form ‘M’, done with the intention of shortchanging government of it revenue, as the major challenges facing SON. “Some of the SONCAP certificates in circulation are fake that is why SON picks up product sample for testing during physical examination of consignment and market monitoring exercises,” he explained. Bukar identified increased creation of unemployment for Nigerian youths especially on goods that can be manufactured locally as well as loss of lives and property as the major dangers of importing substandard goods.

How NPA, Connect Rail partnership aims to boost export of agro-commodities

etermined to support the Federal Government’s effort to diversify the economy from being oil driven to non-oil, the Nigerian Ports Authority (NPA) recently entered into partnership with the management of Connect Rail Maritime Services Limited to power agro-commodities export through the nation’s seaport. This effort was seen in the designation of Ikorodu Lighter Terminal by the NPA as an agricultural export terminal to significantly improve the challenges that agrocommodities exporters have been facing in moving their cargo as a result of the ports congestion in Apapa. With the designation, Connect Rail Services Limited was able to move containerised export cargoes from Ikorodu Lighter Terminal to Apapa port through the inland waters using barges to avoid gridlock on Apapa road, which hold trucks for weeks before accessing the port. Statistics shows that Nigeria has about 10,000 kilometres waterways, which if developed through dredging

and provision of auxiliary facilities will provide all yearround navigation for transportation of bulk cargo and passengers. Also, with Over 8, 000km of navigable waterways, Nigeria has the second longest length of waterways in Africa. This is as 28 of the nation’s 36 states can be accessed through water, linked to five neighboring countries (Benin Republic, Equatorial Guinea, Cameroon, Chad and Niger). It is also worthy to note that globally, in the US for instance, coal for the electricity industry, petroleum products, construction industry aggregates and cement, chemicals, including fertilizers, metal ores and minerals, heavy products such as steel and many other manufactured products are moved through its inland waterways. “Cargos evacuation through the waterways is a very significant development that seeks to enhance and strengthen intermodal transportation system. It means a lot to the nation’s economy, because the current concerns for port users revolves around the huge revenue lost to con-

gestion on the roads leading to the ports,” Hadiza BalaUsman, managing director of the NPA, said during the flag-off ceremony held in Lagos recently. According to her, NPA believed that export of agric produce and solid minerals require priority consideration, and intermodal transportation was seen as one of the initiatives to achieve that target. Giving insight into why Connect Rail entered into the partnership, Edeme Kelikume, managing director of Connect Maritime Services,

said in an interview that the Nigerian Ports Authority is an example of an agency working hard to provide an enabling environment for businesses to thrive. “Their unwavering support in encouraging the emerging barging services industry is why we are still in barging business today. According to him, Nigeria’s internal freight mix is dominated by road haulage, as the country’s rail network remains dilapidated and underdeveloped while the utilisation of inland waterways has also

remained extremely poor. Customers, he said, are looking for cost reduction, efficiency, enhancements for their growing markets especially as regards to dealing with congested roads and ports. “Inter-modality becomes more important to provide them with guaranteed services and capacities at reasonable prices. Kelikume, who attributed Connect Rail achievement to a consistent focus on building business despite the myriad challenges and continued support from the leadership

of the NPA, said that shippers and consumers in the 38 states in the USA depend on inland waterways to move about 630 million tonnes of cargo, valued at over 73 billion dollars annually. “The untapped opportunity in utilising barge, rail and truck for cargo transportation as a critical driver for economic growth of the nation and the significant environmental and social impact on its people, is what inspired us to setup of Connect Rail,” he said. Continuing, he said: “Nigeria’s railway infrastructure if well-developed like countries like South Africa can carry larger volumes over greater distances, making it more economical, and quicker for transporting heavy cargo. The use of rail over trucks to transport containers from maritime facilities could help ease container backlogs and reduce congestion on Nigeria’s roads.” Kelikume however disclosed that Connect Rail is looking to build a regionally focused business with inland waterways as a means for cargo transportation.

Wednesday 12 December 2018

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BUSINESS DAY

Shipping

Logistics

Maritime e-Commerce

Maersk shipping targets zero CO2 emission by 2050 Stories by Uzoamaka Anagor-Ewuzie

. P. M o l l e r - Ma e r s k ha s announced that it aims at accelerating the transition to carbon neutral shipping by 2050 to reduce environmental hazards in line with the global target implemented by the International Maritime Organisation (IMO). According to the company, it aims at having carbon neutral vessels that are commercially viable by 2030, even as it calls for strong industry involvement of other players to achieve this global target. To achieve this goal, Maersk believed that carbon neutral vessels must be made commercially viable by 2030, and acceleration in new innovations and adaption of new technology is also required. Research has shown that climate is one of the most important issues in the world, and carrying around

Soren Toft

80 percent of global trade, the shipping industry is vital to finding solutions. By now, Maersk´s relative CO2 emissions have been reduced by 46 percent (baseline 2007), which is approximately 9 percent more

than the industry average. This is why Maersk plans to initiate open and collaborative dialogue with all possible parties to tackle together one of the most important issues in the world; which is climate change in 2019.

Also, as shipping volumes continue to grow, efficiency improvements on the current fossil based technology can only keep shipping emissions at current levels but not reduce them significantly or elimi-

nate them. “The only possible way to achieve the so-muchneeded decarbonisation in our industry is by fully transforming to new carbon neutral fuels and supply chains,” Soren Toft, chief operating officer of A.P. Moller – Maersk, said. A c c o r d i n g t o To f t , Maersk is putting its efforts towards solving problems that are specific to maritime transport, and it calls for different solutions than automotive, rail and aviation. “The yet to come electric truck is expected to be able to carry maximum of two twenty-foot equivalent units (TEU) and is projected to run 800km per charging. In comparison, a container vessel carrying thousands of TEUs sailing from Panama to Rotterdam makes around 8800km. With short battery durability and no charging points along the route, innovative developments are imperative,” Toft stated. Given the 20-25-year life time of a vessel, Toft suggested that it is time to join forces and start developing

the new type of vessels that will be crossing the seas in 2050. “The next five-10 years are going to be crucial. We will invest significant resources on innovation and fleet technology to improve the technical and financial viability of decarbonised solutions. Over the last four years, we have invested around USD1 billion and engaged over 50 engineers each year in developing and deploying energy efficient solutions. Going forward we cannot do this alone,” Toft added. Continuing, he said: “Research & Development is critical to taking the industry away from today’s fossil based technology and by setting this ambitious target, Maersk hopes to generate a pull towards researchers, technology developers, investors, cargo owners and legislators that will activate strong industry involvement, co-development, and sponsorship of sustainable solutions that are yet to be seen in the maritime industry.

Senate assures on passage of outstanding maritime bills to enhance growth …As stakeholders seek legislative intervention on Apapa road decay

etermined to g row t h e na tion’s economy through increased contribution of maritime sector to Gross Domestic Product (GDP), the upper chamber of the National Assembly has promised to leave no stone unturned in ensuring that every bill relevant to the growth of the maritime sector got the required legislative backing within the shortest time possible. Ahmed Sani Rufai, chairman Senate Committee on Marine Transport, who gave the assurance in Lagos last week during a one day maritime stakeholders’ assembly organised by the committee in conjunction with the Federal Ministry of Transportation, said that the committee will partner the Federal Ministry of Transportation (FMOT) to pay more attention to the development of the maritime sector. Sani listed some of the maritime industry-related bills currently under consideration in the National Assembly to include the Nigerian Ports Authority (Act repeal and re-enactment)

Bill 2016; Nigerian Maritime Administration and Safety Agency (NIMASA) Act (Amendment) Bill, 2018; Coastal and Inland Shipping (Cabotage Act) Bill, 2018; and Suppression of Piracy and Other Maritime Offences Bill 2018. “One of the reasons we are here is to discuss the progress, challenges and the way forward for the realisation of a robust maritime sector in Nigeria. We will, therefore, depend on feedback from the stakeholders, which will help in our legislative processes,” Sani stated in a statement signed by Isichei Osamgbi, head, Corporate Communications of NIMASA. According to him, the Senate was willing to partner with stakeholders in the sector through proper legislation to find ways of harnessing the opportunities that abound in the maritime sector. Rotimi Amaechi, the Minister of Transportation, who said that the Federal Government was committed to the growth of the maritime sector, added that the growth could only be

achieved through proper legislation. Amaechi, who was represented by the director, Maritime Services of the FMOT, Galadenchi, also pledged the commitment of the ministry to partnering with the Senate and industry stakeholders to enable the Nigerian maritime sector fully realise its enormous opportunities. Dakuku Peterside, director-general of the Nigerian Maritime Adminis-

tration and Safety Agency (NIMASA), who delivered a goodwill message at the occasion, commended the Senate Committee on Marine Transport for its doggedness and patriotism in ensuring that the sector took its rightful place in the comity of maritime nations. Peterside said NIMASA is committed to the realisation of a robust maritime sector in the country through collaboration with the committee and other stakeholders.

He called for synergy among sister agencies in the maritime sector, saying it is the only way to fully harness the opportunities in the sector. Peterside appealed to the Senate to ensure speedy passage of the anti-piracy bill to provide a legal backing for the prosecution of issues relating to piracy and other criminal activities on the nation’s territorial waters. Industry stakeholders

R-L: Ahmed Rufai Sani, chairman, Senate Committee on Marine Transport; Dakuku Peterside, director-general, Nigerian Maritime Administration and Safety Agency (NIMASA), and Abdullahi Gumel, committee member at the maritime stakeholders assembly tagged a lunch with the Senate held in Lagos recently.

at the event bemoaned the state of the access roads to the ports and called on the Senate Committee to assist in finding a lasting solution to the congestion on the roads. They believed that there is need for the government to pay more attention to the maritime sector for the country’s economic prosperity. Also, Temisan Omatseye, former director-general of NIMASA said that one of the ways to optimise the benefits of the maritime sector was to decentralise the ports and make them more attractive and competitive. He further said this would help to boost investor confidence and decongest the traffic situation in the Lagos ports. Kunle Folarin, chairman of the Ports Consultative Council, welcomed the Federal Government’s attempt to provide viable port access roads in Nigeria. “An efficient multimodal transport system is the only way to realise a viable maritime sector that can compete favourably with others in the world.”

BUSINESS DAY

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Wednesday 12 December 2018

In association with E-mail: insurancetoday@businessdayonline.com

Hygeia health insurer, The Audrey Pack collaborate on maternal wellbeing

Regulation on Group Life, Motor Third Party most positive for insurers in 2018 - Cornerstone GMD Stories by Modestus Anaesoronye

wo major reforms that have impacted positively on insurance industry performance and growth in 2018 are regulatory interventions on group life business as well as on Motor Third Party policies, Ganiyu Musa, group managing director/CEO, Cornerstone Insurance Plc has said. The reforms, which were driven by the National Insurance Commission (NAICOM) he said corrected the pricing of the products and enhanced compliance of operators. Musa who spoke in Lagos during an interview section with a select journalists said the insurance market had suffered huge losses as a result of uncompetitive pricing of these products due to unhealthy competition by operators, stating that with the intervention of NAICOM which stabilized Motor Third Party at N5, 000.00 and group life at 6 per-mill, companies have garnered resources to meet claims obligation.

“Before this policy on group life, some life businesses were getting to stress level as a result of uncompetitive pricing, while claims kept coming”. He said today, majority of them can be able to pay their claims because premium is right, “what is the need being in business and you cannot be able to pay claims, Musa asked. The GMD speaking on the business environment in the outgoing year lamented that the year was very challenging as result of the overall social and political environment, which impacted on investor confidence. He noted that increasing insecurity in North East; delays in passage of the Petroleum Industry Bill, increased regulatory militancy, across the sectors, which saw telecommunication giant, MTN fined twice heavily were among the issues that affected the business environment in 2018. “Even in our own industry, we also go a share of the regulatory downside, and all of these are impacting negatively on investor confidence, he said.

Other issues that affected insurance business in 2018, which Musa enumerated includes the declining prices of products and premium war that has continued to affect growth of the industry. For Cornerstone as a company, Musa said 2018 was not bad in terms of numbers, as approved result up to last September shows that top line growth was over 30 percent. According to him, the company also recorded profitability having overcome the negative position it went through the previous year. Again, exciting for him was the firms N8 billion corporate head office, almost at the level of completion, which he said is an investment and would start to impact on her books at the end of 2018 financial year. Going into 2019, he said he is hoping that the industry will cure itself of the price war that has characterized the business, and compete effectively in other fundamentals rather than price. This he hops will support industry growth and performance in the coming year.

HMO’s said that this special plan which takes care of maternal needs was essential as a privatesector led initiative to improve the quality of healthcare that women get throughout their maternity experience. “Hygeia HMO has a long term goal to ensure that the vast majority of Nigerians get covered by health insurance and this is an effective way to pool the power of aggregated risks and use it to improve Nigeria’s efforts towards the crucial SDG 3.1 goal to reduce maternal mortality ratio to less than 70 per 100,000 live births by 2030. HyMat + The Audrey Pack gets us closer to bridging that gap” The Audrey Pack also brings with it access to a community of women who volunteer their expertise and experience to help expectant mothers. The plan with Hygeia HMO also includes a free subscription to the MTNAudreyCare service where enrolees receive SMS updates on nutrition, fitness and other developmental content. Lilian Odim the chief executive

the woman’s pregnancy as well as the costs of the actual delivery. Included in this package, as a result of the partnership with The Audrey Pack, will be a mum-to-be pack for the expectant mother and a newborn pack after delivery that contains essentials for each stage of the life giving journey. Announcing this partnership recently, Obinna Ukachukwu, executive head for Business Development & Strategy, Hygeia

officer and founder of The Audrey Pack Company said “In line with the SDG 3 goal, I believe that the health and wellbeing of mothers is an indication of the health and state of a nation. The decline in maternal and child mortality lies in the collaborative efforts between different industries, including the public sector. This is why I am certain that the Hygeia HMO Audrey Pack partnership will take us closer to this goal”

2015

L-R: Toks Bello, executive director, Technical & Operations; Ganiyu Musa; group managing director; and Chidiebere Nwokeocha, executive director, Institutional Business, all of Cornerstone Insurance PLC during a press conference at the Company head office in Lagos

igeria’s number one health insurance provider, Hygeia HMO, and The Audrey Pack Company Limited, have entered a partnership to focus on the reduction of maternal and child mortality in Nigeria. The memorandum of understanding between the parties was signed in Lagos recently. When 800 women die in every 100,000 live births, it is clear that Nigeria has an unacceptably high maternal mortality rate. This problem and associated ones for pregnant women and new mothers need new approaches and collaborative solutions to address them, experts said during the signing ceremony. This partnership will enable Hygeia HMO’s HyMat healthcare plan for pregnant women now come with even more benefits to help improve outcomes for pregnant women across Nigeria. Starting at only N65, 000, this dedicated Hygeia HMO’s healthcare plan provides cover for antenatal care throughout

Wednesday 12 December 2018

C002D5556

Pension Today

BUSINESS DAY

In Association with

As pension industry walks towards transfer window …PenCom directs RSA holders to key into NIN

Wilson ideva (6th from left), chief executive officer of High Street Consulting Ltd with staff of first Guarantee Pension Ltd during a workshop on ‘ micro pension implementation in Nigeria’ held in Abeokuta, Ogun State

able pension contributors who are dissatisfied with the services of their current Pension Fund Administrators (PFAs), to transfer their retirement savings account (RSA) to any Pension Fund Administrator of their choice The issue of the transfer window is the discussion at every gathering of Pension Fund Administrators. The reason is not far- fetched; they are going to be most affected by the window of change because tranfer window is an avenue for PFAs to increase their industry market share in terms of RSA size or size in the Fund under management (FUM) or lose same to competitors depending on how they play

their card. From what is playing out, many PFAs are earnestly awaiting for the opening of the transfer window rather than wishing it away. The open transfer window affords them the opportunity to showcase their competitive advantage including the quality of customer service, I.T. Infrastructure, staff etc. These they believe will enable them acquire a larger share of the market. The transfer window promises to be an exciting happening within the industry as PFAs are set to slug it out with each other in a competitive market to retain old contributors and as much as possible win new ones.

RC634453

Diamond Pension Fund Custodian Limited 1A, Tiamiyu Savage Street, Victoria Island, Lagos State. Tel: 01-4613753, 2713680, 2713954 Fax: 01-2713955 Email: info@diamondpfc.com Website: www.diamondpfc.com

‘

One topical issue in the nation’s pension industry today is the transfer window, with stakeholder’s expectation that will soon be open

‘

concrete step towards getting the pension industr y ready for transfer window as provided in the Pension Reform Act 2014 may have started for real, if the issue of biometrics as being said was actually the biggest challenge delaying its take off. This presumption is coming on the heels of the recent directive by the National Pension Commission (PenCom) mandating all Retirement Savings Account (RSA) holders to update their bio-data’s particularly the National Identification Number (NIM) and Bank Verification numbers with their respective Pension Fund Administrators(PFAs). PenCom in an advertorial said “The Federal Government of Nigeria has made it mandatory that every Nigerian must have a National Identification Number (NIN). To achieve this, all data generating organisations have been directed to harminise their database with National Identity Management Commission (NIMC), whose mandate is to implement the National Identity System in Nigeria.” “To enable the pension industry comply, PenCom has directed all PFAs to update the records of their clients. Consequently, all RSA holders, both active and retired, are advised to approach their PFAs to provide their NINs and BVN, as well as their other mandatory biodata information”. One topical issue in the nation’s pension industry today is the transfer window, with stakeholder’s expectation that the transfer window will soon be open. The transfer window is a platform created by the Pension Reform Act 2004 as amended in 2014 to en-

PenCom had said that the transfer window is a reality for those who have doubts; but however will depend on how fast the factors delaying it are resolved. Some of the identified issues, which experts in the industry say remain a hindrance, which current biometrics will address includes: The Issues of double registration and I.T. infrastructure. Double or Multiple Registrations: Double or multiple registrations occurs when a prospective contributor registers with two or more PFAs and in the process is given different PIN numbers. This is a regular occurrence in the market place.

Marketers are known to do this sometimes, i.e. going ahead to register an individual who informs them of registration and PIN receipt by from another PFA . They do this probably to try and meet the RSA target or for fear of losing their jobs or in retaliation The immediate impact of this is that it does not allow the prospect to have a consolidated pension remittance because while a certain part of his remittance goes to one PFA another part goes to a different PFA. At the point of retirement, the retiree has to write to PenCom for consolidation and the Commission will mandate the PFAs involved. Sometimes one PFA is instructed to remit the retirees contribution to the PFA with the first Pin (First pin rule). This is a big problem as all these ends up delaying the benefit payment process. PenCom is trying to put infrastructures and modalities in place for data base cleanup to reduce incidences of double registration. This will facilitate the opening of the transfer window once completed. I.T. Infrastructure Preparation for the transfer window will also involve huge capital investment in Information technology. Pension Fund administrators are expected to update their data base. From the above we can deduce that the transfer window is a reality but will require a complete cleansing system which will in turn be dependent on the deployment of Information technology systems both from the side of the National Pension Commission and the Pension Fund Administrators. In conclusion the Pension Fund Administrators should assiduously prepare for the coming window, so they are ready when it finally opens.

This section is created to increase awarness and deepen knowledge about the contributory pension scheme. If you have enquiries or contributions, send to this e-mail: diamondpfcbusday@yahoo.com

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E-mail: insurancetoday@businessdayonline.com

A.M Best revises global reinsurance outlook over stability in pricing Stories by Modestus Anaesoronye

ating agency, A.M. Best has revised its outlook for the global reinsurance segment to stable from negative. This change primarily reflects a pricing environment in the global non-life reinsurance segment that has stabilized—albeit currently at levels still below long-term adequacy and ongoing stability in the global life reinsurance segment. Although the operating and competitive landscape of these two major reinsurance business segments is distinct, the diversification benefits the global reinsurance segment from an overall

earnings perspective. The positive outlook was based on the th belief that alternative third-party capital will hold the line on future return expectations following the catastrophe losses incurred in 2017 and 2018; A decline in capital consumption and earnings volatility caused by tail events, due in part to the increased utilization of third-party capital in retro programs, and the growing alignment between traditional and third-party capital; a rising interest rate environment, particularly in the US, which could lead to alternative investment opportunities for third-party capital—rising interest rates could cause mark to-market losses for bond portfolios, but investment incomes could increase for reinsurers who have managed their duration profile prudently

There is also a renewed emphasis on underwriting discipline driven by potential loss cost inflation, coupled with lower loss reserve redundancies; as well as ongoing US economic growth, greater use of reinsurance by cedents, new risk transfer opportunities, and M&A all providing greater growth opportunities. That the glory days of a robust non-life pricing environment may not return is clear. Rates have stabilized, as the industry was reminded again in 2017 that almost $150 billion dollars of capital can disappear over a very short period of time. What’s also clear is that property catastrophe pricing is still being driven by the availability of alternative third-party capital and is not as heavily influenced by the traditional reinsurance companies.

Sovereign Trust strategies for better performance in 2019

nderwriting firm, Sovereign Trust Insurance Plc has concluded its Management Retreat/ Budget Session for 2019 with the quest for greater performance and sustainable profitability in the new year. The retreat session which was held in Lagos brought together all top Management staff and Heads of revenue generating units of the company across the country for a two-day intensive discourse on the way forward for the organization in the coming year. The performance and challenges faced by the organization in 2018 formed part of the highlights of the Session which was also used in celebrating the company’s feet of meeting and surpassing the 2018 target of N10.1 billion. Olaotan Soyinka, managing director/CEO, urged his colleagues in Management to bring to bear an unrelenting commitment and dedication like never in ensuring that the target set for 2019 is met and surpassed exceedingly. His plea centered on accomplishment as the watchword for the organization’s operations in the coming year. He enjoined them not to relent in their quest of wanting to make the STI brand one of the most preferred and patronized brands in the insurance industry in Nigeria. He further said that the com-

Olaotan Soyinka

pany’s Management is committed to providing an enabling environment conditioned to bringing out the best in each member of staff. In his words, “we are undoubtedly resolute in our quest to attracting the best hands in the industry through competitive remuneration/welfare packages. I require your full support and cooperation in bringing this dream to a reality as we forge ahead in the coming year and the years to come”. The theme of the 2019 Budget Session/Management Retreat was tagged Budget of Sustainability which espoused on the need to consolidate on the gains of the outgoing year while also re-strategizing on how to make the business more profitable and providing customer-focused solutions to the insuring public.

Lagos NCRIB appoints Ifemade new chairman L-R Tope Smart, guest speaker chairman of Nigerian Insurers Association; Funmi Babington-Ashaye, past president, Chartered Insurance Institute of Nigeria (CIIN); Eddie Efekoha, president, CIIN; Sakiru Oyefeso, deputy president and Sunny Adeda, past president, during the Institute’s 2018 induction of Fellows and Associates in Lagos.

CIIN pledges to adopt creative approach to improving skills set for industry

raining arm of the insurance industry, the Chartered Insurance Institute of Nigeria (CIIN) said it’s aware of skills demand in the emerging business landscape and will continue to ensure that the gaps are filled for sustainable growth of the sector. Eddie Efekoha, president and chairman of council of the CIIN speaking at the 2018 Induction and Investiture of Graduands and Associates of the Institute said “We are ever conscious of the demands of the dynamic business environment and the role that technology is playing in the evolution of current business trends. Consequently, there is a need to substantially adopt a creative approach to improving the skill set of insurance practitioners. The event witnessed the induction of 138 new associates and three fellows into the fold of Insurance professionals. Efekoha said “There is consid-

erable effort being put into constantly retooling the examination system through regular review of the syllabus and examination structure in order to make it relevant to addressing modern day business challenges. Eddie noted that the goal is to ensure that Insurance practitioners retain the competitive edge and are well equipped to perform to optimal levels in order to tackle the current challenges in the business landscape and to stand out successfully. He added that the “completion of the Institute’s examination and your induction as Associates of the institute does not put an end to the quest for knowledge. You are admonished to develop yourselves in order to keep abreast of developments that will ensure you stay relevant in the ever-changing business environment. I urge you all to take advantage of the Mandatory Continuous Professional Development (M.C.P.D) programmes of-

fered by the institute in addition to other post-qualification, ”he said. He added that the professional qualifications are a source of pride to the institute and as I stated earlier, it should be the same for all holders “It is extremely important to point out that by attaining our professional qualification, you have become custodians of the ethics and codes of practice of our noble profession. The institute he said has recently introduced a new code of ethics for insurance practitioners in Nigeria and this will be distributed amongst you all today. The purpose according to him is to set forth the values, principles and standards that will guide the conduct of all insurance practitioners. Instilling ethical behavior among insurance professionals is the principal way to improve corporate governance and ultimately improve the public image of the insurance business.

Josephine Okojie

he Nigerian Council of Registered Insurance Brokers (NCRIB) has appointed Bukola Ifemade as the ninth chairman of the Lagos area committee of the organisation. “With the confidence being reposed on me to lead this current executive commitee, we shall be taking critical look, obtaining and implementation solutions and programs that will aid stability and growth of the business of our members so that we can all play the role of driving growth collectively in the insurance industry,” she said “The new board at the Lagos

Bukola Ifemade

area committee will be complementing the efforts of the national leadership of the council towards building the insurance businesses. “We would e focus on capacity building, mentoring, business training workshops and clinics, possibility of exchange programs for learning and exposure as well as learning and going in depth about technology incursion especially as it pertains to financial inclusion for insurance brokers,” Ifemade further said. She stated that as the new chairman, she would seek for collaborations that would support members with resources, hubs and business opportunities for scale. Prior to her appointment, Ifemade has served as the managing director of Orthodox Insurance Brokers, a position she has held in the past 12 years. She has worked in both the public and private sectors in different capacities. She has worked with various insurance firms among which are the African Development Insurance Company (ADIC) now known as NSIA Insurance Limited and Guaranty Trust Assurance Company Limited, now AXA Mansard Insurance Plc. She has been in the forefront of driving the country’s insurance industry and penetration rate.

Wednesday 12 December 2018

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In Association with

How Accion MfB is leveraging technology to promote financial inclusion Stories by Hope Moses-Ashike

he advent of technology is widely appreciated as it is transforming the way businesses operate and deliver products to consumers across many industries. As it were, the banking industry, especially the microfinance bank sub-sector is not left out in this digital space as many of these institutions are leveraging technology to reach more customers. Accion Microfinance Bank (MfB) last week brought together critical stakeholders to deliberate on the options and opportunities of achieving the goal of empowering over 190 million Nigerians to have their destiny in their hands and actually live a much better life. The stakeholders who gathered at the annual financial inclusion seminar discussed extensively on digitisation as a tool for deepening financial inclusion and the role of regulation. “For us at Accion financial inclusion is not just a theme, terminology, it is about really changing life positively”, Patrick Akinwuntan, chairman, board of directors, Accion MfB said. Consequently, the bank is leveraging the mobile phone to reach more people through its USSD number, *572#. “We are rolling out agency. We are rolling out

Patrick Akinwuntan, chairman, board of directors, Accion MfB

branches. We have extended the number of states we are in. we are present in the North, East, and west. We are a national microfinance bank entity. We are really deepening our reach and our goal is using *572# to be present in every household in Nigeria”, Akinwuntan said. Akinwuntan stressed the need for collaboration among stakeholders to achieve 80 percent financial inclusion target by 2020. “It is possible to achieve the goal in 2020, technology allows us to leapfrog. Things are not done over 10 years anymore. Things are done at the speed of thought. If you want to communicate today and you send something on whatsApp, it gets to everybody within the next five minutes. That was not possible 10 years ago. We need

to bring financial inclusion to that level, ease of access, ease of service, reliability and at a low cost”, Akinwuntan said. Responding to question on meeting the new capital requirement for microfinance banks by the CBN recently, Akinwuntan said, “We are fully ready. We have grown our business. We are actually very close to the N5 billion already in terms of the capital that we have currently, running the bank. We are much ready and we have been in full compliance from day one”. Taiwo Joda, managing director/CEO, said by first quarter of 2019, the bank will be coming out with fully digitised product. “Accion MFB is set ready to leverage financial technology. It is not that we are going to start. Actually 80 percent of our activities on our plat-

forms are already automated, from our loan creation, appraisal to loan disbursement, are fully automated”, Joda said. Accion Microfinance Bank has very reputable shareholders like Ecobank, Zenith Bank, Citi Bank, IFC and Accion international as shareholders. However, the Central Bank of Nigeria (CBN) is working on introducing agent solutions that will enable microfinance banks operating in the country to deploy new services via agents. This move is part efforts to encourage microfinance banks to embrace and promote financial inclusion in the sub-sector. Tokunbo Martins, director, Other Financial Institutions Supervision (OFIS) department of CBN disclosed this at the 2018 annual financial inclusion seminar organised by Accion Microfinance Bank Limited, in Lagos. Represented by Haruna Bala Mustafa, deputy director, OFIS, she said the capital requirements of microfinance banks was reviewed upwards to strengthen and to ensure that the banks are robust and well positioned to support financial inclusion. “We are committed to ensure we push financial inclusion vigorously. We intend to reach 80 percent financial inclusion by the year 2020”, she said at the seminar with the theme, ‘digitisation as a tool for deepening financial inclusion and the role of regulation’.

Heritage Bank advocates legislation to facilitate funding of creative industry

eritage Bank Limited has called for appropriate legislation that will enhance flow of funds to the creative industry and help maximise the potentials of operators in the industry. Ifie Sekibo, managing director, made this call while speaking on the contributions of Heritage Bank to the creative industry, stressing: “Financial institutions will be able to invest more if there is a proper law militating against piracy, there will be value for your money and creativity and thereby making the banks to want to invest more in the creativity industry.” He noted that collaboration between the government and banks is needed to maximise the potential of the creative industry, saying, “We need to push government to be able to create legislations, policies that will enhance this seeming passion and turn it into business opportunities and by so doing, it will turn to economic and empowerment of our people. There is a lot we need to do as banks and government so that we can enhance creativity in terms of culture. “Government policies are extremely important in achieving this. If there are no proper policies, funding becomes a problem. And the collaboration between banks and government is needed to define what kind of policy and what kind of funding needs to be applied. These and many more are things to look at critically. Take for example,

Nollywood script writer that has no proper propriety or intellectual property law protecting his script, he is unable to monetize it but if there is proper government policy, then he is able to take it to the bank and monetize it and he is able to grow the industry. This cuts across, even if it is an artist and there is no law or policies guarding artworks, anybody can steal and sell his ideas anytime.” Highlighting some of Heritage Bank’s contributions to the creative industry, Sekibo said: “We have been in this

Ifie Sekibo, managing director/CEO, Heritage Bank

creative sector by sponsoring SEKI, a pantomimic dance drama which traces the America tap dance to the indigenous people of the lower Niger Delta area of Nigeria. We are also part of the Nigerian Festival of Arts and Culture and Tourism, which showcases Nigeria’s culture and tourism, and beyond that we have also tried to support HIP TV which is a new generation television station. We are part of the building of a digital platform called OCTOPUS that brings both communities and digital platform together.”

CIBN accredits Unity Bank Academy for human capital development

he Chartered Institute of Bankers of Nigeria (CIBN) has given a Certificate of Accreditation to Unity Bank’s staff training academy. Aimed at continuous human capacity development, the Accreditation according to the institute, would enable staff of Unity Bank and other institutions be eligible for ex-

emptions from various subjects in the banking professional examinations, thereby facilitating their completion of the professional programs in good time. At the execution of linkage agreements with tertiary institutions and presentation of certificates of accreditation to bank academies and training service providers held at

the bankers’ house in Lagos, over the weekend, CIBN said Unity Bank Academy has attained a position of recognition and distinction. Since the emergence of the new Board and Management, Unity Bank has continued to push the limits of its transformation and growth agenda to new heights.

A statement from the Bank said the accreditation is one of the Management’s efforts towards building a competitive workforce that are capable of delivering effective and efficient services to its numerous customers. Commenting on the development, Tomi Somefun managing director/Chief Executive Officer, said in view

of the ever-evolving financial technology landscape, fuelled by advances in mobile technologies, there is a growing need for continuous professional capacity development in order to meet the demands of increased customers’ sophistication. “While the Bank is focusing on retail and SMEs and the technology to drive and

encourage savings culture, it is also developing its workforce through continuous capacity buiding initiatives. This is in line with the twopronged customer-centric banking approach being deployed to deliver quality banking services to Small and Medium scale Enterprises in the agricultural value chain, Somefun said.”

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Emirates plans wholly biometric boarding process in Dubai Page 30

Mercedes sets new sales record despite market volalility Stories by MIKE OCHONMA

ercedes-Benz has once again set a new sales record towards the end of this year despite a volatile market environment during which a total of 198,545 vehicles with the three-pointed star were delivered to customers all over the world last month. Under ongoing challenging conditions, Mercedes-Benz sold more units than ever before in a November (+1.5%). Further progress with vehicle availability, particularly in some international markets, had a positive impact on sales development in the three core regions. In the first eleven months of the year, 2,103,653 MercedesBenz passenger cars were handed over to customers, which is slightly above the high level of the prior-year period (+0.4%). Demand for the E-Class Saloon and Estate was higher last month than ever before in a November. More than 31,000 units of these two models were sold worldwide, an increase of about 6.2%. The long-wheelbase version of the E-Class Saloon was particularly popular in the Chinese market, posting double-digit growth in November and thus achieving a new sales record. The SUVs from MercedesBenz continue to sell in record numbers, with about 750,000 units of the models GLA, GLC, GLC Coupé, GLE, GLE Coupé, GLS and G-Class sold in the

period of January to November (+2.4%). The sales growth was primarily driven by the GLC, which also set a new record for unit sales last month. And thanks to double-digit growth, the new G-Class posted a new sales record for a November. Last month, the brand maintained its market leadership in the premium segment in markets including Germany, France, Italy, Spain, Switzerland, Portugal, South Korea, Japan, Australia and the USA. With more than 198,000 vehicles delivered worldwide, it has achieved its best-ever November sales. According to Britta Seeger, Member of the Board of Management of Daimler AG responsible for Mercedes-Benz Cars Marketing and Sales, ‘’In a challenging market environment, we’ve been able to increase unit sales slightly also since the beginning of the year. In China, we have delivered more than 600,000 Mercedes-Benz and smart vehicles since the beginning of this year. We are particularly

pleased to be the first premium carmaker to achieve this sales milestone in China within one year’’. In Europe, 82,007 vehicles were sold in November, an increase of 2.6% and a new record and from January to Noember this year, 850,957 units were sold (-3.3%). The development in Germany was particularly pleasing. Furthermore, 29,188 passenger cars in its domestic market were sold last month, another double-digit increase of +12.5%. Once again, the new A-Class was very popular in Germany where sales of the compact car doubled compared to last year’s November. In France, Switzerland, Poland, Denmark, Portugal and Hungary, more cars were sold last month than in any November before. New records were set in the Asia-Pacific region with 75,392 vehicles hand over to customers under the period (+1.5%) and 862,419 in the first eleven months (+7.5%). In China, the biggest sales market, 52,151

passenger cars were sold last month (+2.6%). Under the period, the brand achieved growth of +11.7% with 603,089 units sold. This November, together with the models delivered by the smart brand, the car division of Daimler AG became the first premium automobile manufacturer to pass the milestone of 600,000 vehicles delivered in China within one year. It achieved further sales records last month in the markets of South Korea, India, Malaysia, Thailand and Vietnam. In the NAFTA region, Mercedes-Benz sold a total of 35,842 vehicles in November (-1.8%). In the first eleven months of this year, 340,564 Mercedes-Benz passenger cars were handed over to customers in that region (-5.4%). For the United States, a total of 31,022 customers were delighted to receive their new model with the star last month, an increase of 0.6%. This means that a total of 283,943 vehicles were delivered in the United States in November.

Mandilas Motors new Festac service outlet opens …to cover Amuwo, Badagry, Apapa axis

etermined to take its services to all the nooks and crannies of the country, Mandilas Motors, has set up a modest express auto service centre located inside Mobil Filling Station along the Mile 2-Badagry Express road, Lagos. Speaking at the opening ceremony, Kemi Koyejo, Operations Manager, Mandilas Motors, explained that the workshop will cater for their numerous customers along the Festac, Amuwo Odofin, Badagry, and Apapa axis who may find it stressful coming to the Lagos Island or other workshops in the city. Mandilas she noted is known for quality service and hopes to bring the service to the door steps of loyal customers. While noting that the company plans to set up more express service centres across the country aimed at making life easy for the customers, she stressed, that “this is a continuous expansion project by Mandilas aimed at making life easy for customers.” Koyejo said the new Mandilas auto service centre concept will cater for the maintenance needs of teeming vehicle owners in the country as well allow more auto technicians acquire more new skill in automobile

maintenance. On his part, Akin Adiatu, Aftersales and Service Manager, maintained that, the service centre will provide the same level of quality service with any Mandilas outlet across the country, adding that, the technicians manning the centres were drawn from existing Mandilas workshops across the nation. He said, “our customers will enjoy the same quality service which Mandilas is known for in this new centre because only the best is good for them. As a service oriented company, we want Mandilas in every neighbourhood and all over the country too, and we are looking at strategic locations to set up more centres. “In the next six months, 20 more outlets will be built across the country to make our excellent service accessible to our numerous and prospective customers.” Mandilas branch manager, Taofik Lasisi also explained that more than 30 vehicles can be handled daily at the centre. He said, “On the average, we can service a car every 30 minutes. Customers can drive in and have their cars serviced in less than 30 minutes or call for appointment to do the service’’.

Hyundai free service camp gets underway

Hyundai Motors Company team led by the After Sales Deputy General Manager, Africa and Middle East, Jin Tae (4th left), HMNL Service Manager Srinivas Jayaram (5th left) with General Defect Manager- Global Warranty, Jun Eun Suk (6th left) and other officials at the flag-off of the 2018 ‘Before Service Free Check-up Camp’ which began Monday across all HMNL service workshops in Nigeria.

ree routine service checkup and maintenance for Hyundai vehicles is currently underway at the Hyundai Motors Nigeria Limited (HMNL) service outlets nationwide, the dealership has announced. The planned vehicle repairs scheme which is themed ‘Before Service Free Check-up Camp’ started last Monday, December 10 - Sunday, January 20, 2019. Announcing the incentive

in Lagos, HMNL Service Manager Srinivas Jayaram said the free service module will offer a comprehensive 25-point checkup spots, which will include a thorough examination of the engine,brakes,suspensionandairconditional system among others. He said the dealership understands the evolving needs and preferences of Hyundai customers, pledging “We won’t relent until we have made own-

ership of Hyundai vehicles a remarkable experience.” The objective of the campaign according to him is to provide the best of products and services while also availing customers’ an unprecedented value-added experience. An absolutely maintenance exercise, ‘Before Service Free Check-up Camp’ is an initiative of HyundaiMotorsNigeria,uniquely targeted at helping customers

rediscover the value of their cars and appreciate the commitment ofStallionHyundaiMotorsNigeria dealership to the brand. Also as part of the campaign, customers would be trained on basic ways to maintain their vehicles to avoid needless downtime and breakdowns. The exercise will include routine vehicle inspection, tips on managing emergency situations as well as safe driving tips, Jayaram said.

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JAC Pick-Up gaining entry in Nigeria, says Ade-Ojo â&#x20AC;ŚAs T6 Pick pass terrain test Stories by MIKE OCHONMA mikeochonma@gmail.com

t was an evening of glitz and razzmatazz right last week in front of the Landmark Event Centre beachfront in Victoria Island, Lagos at which event, JAC Autoland, franchise owners of the JAC model line-up of passenger vehicles prevented the JAC Pick-up utility vehicles for a rest-drive for the invited audience. While the test-drive with motoring journalists and other, individual and fleet customers lasted, Demola Ade-Ojo, managing director of Elizade Autoland, (distributor of JAC passenger and light truck vehicles in Nigeria), gave four reasons why the JAC T6 pick up is fast gaining grounds in Nigeria.

According to Ade-Ojo, the four reasons why buyers now go for the T6 are Value for money, technology, luxury and price. Built with the latest Toyota Hilux chassis and body technology, bird-net structure body with light weight, the vehicleâ&#x20AC;&#x2122;s high-tensile steel sheets is above 50%, anti-collision intensity bar inside the door, C-NCAP 4-Star collision test, ABS/EBD applied etc. T6 also features 7 inch touch screen, four speakers, multi-function steering, Bluetooth, leather seats, electric 4x4, 4x2. Its turbo charged engine also delivers efficient fuel economy. Eco-friendly and highly efficient power powertrain of T6 has also been a major boost for the Pick-up. The impressive JAC logo and extremely chroming grille, muscular and sportive streamline,

body colour front bumper as standard, hawk-eye modelling halogen combined lamps and LED turn light are some other impressive attributes of the Pick up. It comes big as it is same size as the new Hilux, high bed chas-

sis with greater passing ability and high body size, coming with a minimum ground clearance of 207mm and bigger tyres of 245/65R17. Ade-Ojo stated that the Elizade brand, with its pedigree in the successful distributorship of

Toyota vehicles in Nigeria, has the wherewithal to make the JAC brand a household name. According to him, Elizade will not venture into the distributorship of JAC if it was not sure of its quality, comfort and durability, as more and more Nigerians are now patronizing the brand. He recalled that just as the Elizade brand nurtured Toyota in the Nigerian market, Elizade Autoland is steadily spreading the JAC brand, even as he also said his company subjected JAC to thorough road tests on Nigerian roads for about three years. Other models of the JAC on the Nigerian market are the J4, S2, S3, S5, S7 and Sunray mini bus. The light trucks are X5, L40 and the N-Series. Major patronage of the JAC has come from individuals, companies and fleet buyers.

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odern

Africa tourism sector generates $38 billion

MIKE OCHONMA, mikeochonma@gmail.com

rrangements are now set for the World Travel & Tourism Council 2019 Global Summit scheduled to hold Seville, Spain, on April 3-4 next year. With ‘Changemakers’ as the theme, it will be hosted by Ayuntamiento of Seville, Turismo Andaluz and Turespaña. This is the first time that WTTC is extending the invitation to attend the Global Summit to a wider group of senior industry professionals and leaders that will be able to attend by paying a recovery fee.. Tourism leaders will celebrate the 500th anniversary of the departure of the first circumnavigation of the world, which set out from Seville, while shaping the future of the sector. Until now, the summit has been by invitation only, encompassing WTTC members and

ecent reports have revealed that within the first four months of 2018, international tourist arrivals grew 6 percent, compared to the same period last year, not only continuing the strong 2017 trend, but exceeding the United Nation’s World Tourism Organisation’s (UNWTO’s) forecast for 2018. Across Africa, $38 billion was generated by the tourism sector. The UNWTO’s panel of experts described this situation as the most optimistic they’d seen in a decade and declared that, they were particularly upbeat about growth in tourism arrivals in Africa, which matched the global level of 6%. Their report singled out the need to increase capacity to develop and manage tourism in a sustainable way, building smart destinations and making the most of technology and innovation. And in some African countries, great strides are being taken to ensure that all those elements are woven into a tourism growth and development strategy. From a continent-wide viewpoint, it’s tricky to note all of the contributing factors that go into this, but from a destination’s-eye

‘Changemakers’ dominates WT&TC 2019 global summit

view, it’s possible to isolate independent efforts in the journey to sustainability. For instance, recently, UNWTO secretary general, Zurab Pololikashvilli, acknowledged the efforts undertaken by the Cape’s tourism sector stating that the organisation recognises the huge efforts that the Cape Town local authorities are undertaking in addressing the water situation as well as the inclusive approach that has been taken throughout the campaign in raising awareness for the end users and tourists in becoming more responsible. With that in mind, the city has been invited to participate in a panel at the UNWTO World Con-

ference on Smart Destinations 2018. Bearing in mind all of the doomsday-speak regarding the water crisis at the beginning of the year, it’s remarkable that a participative multi-stakeholder approach has yielded this kind of fruit within a few months. Indeed, the sustainability challenge has turned the spotlight on what is a global challenge; destinations across the world are realising that resources are finite, and yet tourism is a valuable contributor to the economy. As evidenced by the recent UNWTO World Conference on Smart Destinations, among many other international meetings on

the topic, consultative and consolidated strategies will generate remarkable benefits. The leaps ahead afforded by technological advances allow for the implementation of multiple measures to ensure that sustainable tourism is not simply a catch-phrase, but a reality. Developing our relationships with other African nations will allow us to capitalise on tourism growth across the continent; just as a city such as Cape Town is popular for visitors across Africa, we; too, look with excitement to a continent full of destinations that are smart, attractive and worth exploring.

travel leaders. Next year thus marks the first year that a limited number of guests from across the sector will be able to join. Gloria Guevara, WTTC president, commented: “The global summit is the principal event where the global public and private leaders of our sector meet. “We are happy to be back in Europe and especially in beautiful city of Seville, where we will celebrate the 500 years since the first circumnavigation, while we define and shape the future of our sector and recognise the ideas which will make it happen. “Anyone wanting to know what the future of our sector looks like should come to the WTTC Global Summit.” As always, the summit attracts best speakers of the highest calibre from the private and public sectors.

Travelport sees Q3 modest increase in income

ravelport Worldwide has reported net revenue increase of two percent for the three months to September 30th, to $623 million. Net income for the period increased 25 percent to $6million, while adjusted EBITDA increased two per cent to $139 million. Shares in the company slipped more than five per cent following the release of the figures. Reacting on the development, Gordon Wilson, chief executive of Travelport, said, “The continued strong performance of Beyond Air, driven by our virtual payments business eNett, helped us overcome the more challenging market and customer environment we anticipated for the second half of the year. In the quarter, we continued to build the business in line with our strategy’’.

Beyond Air revenue increased 14 per cent to $193 million, contributing 32 per cent of Travel Commerce Platform revenue. In his submission, “Our Travel Commerce Platform delivered further business successes, especially in the regional corporate and online sectors where we are clearly benefiting from the investments we are making in the quality of our content and the capabilities and efficiency of our technology. “We also strengthened our value proposition by concluding long-term deals to distribute the content of Air India and Jet Airways, in both cases as the preferred distributor. These add to our exclusive distribution contract with IndiGo and give us significant additional advantage in India and key markets beyond it’’. He concluded.

Emirates plans wholly biometric boarding process in Dubai

mirates is gearing up to launch the world’s first “biometric path” which will offer its travellers a smooth and truly seamless airport journey at the airline’s hub in Dubai International airport. Utilising the latest biometric technology which is a mix of facial and iris recognition, Emirates passengers can soon check in for their flight, complete immigration formalities, enter the Lounge, and board their flights, simply by strolling through the airport. The latest biometric equipment has already been installed at Emirates Terminal 3, Dubai International airport and can be found at select

check-in counters, at the Lounge in Concourse B for premium passengers, and at select boarding gates. Areas where biometric equipment is

installed will be clearly marked. Trials for the Smart Tunnel, a project by the General Directorate of Residence and

Foreigners Affairs in Dubai in collaboration with Emirates, were launched earlier this month. It is a world-first for

passport control, where passengers simply walk through a tunnel and are “cleared” by immigration authorities without human intervention or the need for a physical passport stamp. Once its internal tests are completed, Emirates will shortly launch trials for biometric processing at the other key customer points at the airport like the check-in, lounge, boarding gate and subsequently at transit counters/gates, and for its chauffeur drive services. All biometric data will be stored with GDRFA, and customers invited to participate in the trials will be asked for their consent. Adel Al Redha, Emir-

ates executive vice president and chief operations officer said: “After extensive research and evaluation of numerous technologies and new approaches to enhance our passenger journey, we are now satisfied with the preliminary work we have carried out and are ready to commence live trials of the world’s first biometric path at Emirates Terminal 3. “These ground-breaking initiatives are a result of close collaboration with our stakeholders particularly GDRFA who have been instrumental in the programme to bring the biometric path to fruition’’. He concluded.

Wednesday 12 December 2018

BUSINESS DAY

32 BUSINESS DAY Financial Inclusion

& INNOVATION

C002D5556

Wednesday 12 December 2018

Supported by:

One size does not fit all: Importance of understanding Bottom of the Pyramid Personas Usoro Usoro

n 2010, Nigeria expressed its commitment to reduce the number of financially-excluded adults from 46.3% to 20% by 2020. This ambition was reinforced with the introduction of a National Financial Inclusion Strategy in 2012, wherein various tools were proposed to drive inclusion. Despite the implementation of these, the number of excluded adults still increased from 34.9 million (39.5%) in 2014 to 36.9 million (41.6%) in 2016. This begs the question, ‘What are we doing wrong?’ Developing and providing long-term solutions that create the desired impact require a complete understanding the people at whom the solutions are targeted. Traditionally, Financial Service Provider (FSP) segmentation is conducted by grouping segments of the population by gender, age, profession, location and education; this model, however, does not accommodate for how the combination of grouping factors determines the people’s needs, preferences and patterns of behaviour. Bottom of the Pyramid personas — the poorest and most underserved socioeconomic group — make up majority of the financiallyexcluded, and as with most efforts at reaching and appealing to a target group, de-

signing effective interventions requires an in-depth understanding their unique characteristics — who they are; how they act; and why they act the way they do. The Sustainable and Inclusive Digital Financial Services Initiative (SIDFS) of the Lagos Business School (LBS) recently undertook a study into the behavioural and attitudinal traits of the Bottom of the Pyramid (BoP) population. This study (developed in collaboration with Dalberg, with the support of the Bill & Melinda Gates Foundation), sub-divides the general Nigerian population into 6 unique personas, including: the vulnerable believers;

resilient savers; dependent individualists; skeptical cultivators; digital youth and confident optimists. The “vulnerable believers” (who make up 12% of the general population) are a predominantly rural-based population; they are religious, with limited education, use financial services infrequently and their income instability leads to difficulty with paying their bills. Their level of income instability could make savings products and financial planning particularly attractive to this group. Their low technology usage in combination with only 55% living a minimum of 30 minutes from a bank makes the

agent banking model a more effective means through which to reach them and cater to their needs. Dependent individualists (22%), who have a lower than average trust in banks, and a reliance on others to make financial decisions for them, will also likely have a greater affinity for the direct oneon-one engagement and personalised service provision that agent banking provides. Resilient savers (21%) are primarily men who are responsible for household financial decisions, and save frequently (largely for emergencies) through family, friends, and groups. Their strong savings habits

indicate the strength of their propensity for long-term investment plans. Their regard of financial services as complex makes this group particularly in need for improved financial literacy initiatives. More importantly, as frequent users of mobile and digital financial services, this presents a suitable channel through which to reach and communicate with them. Skeptical cultivators (12%) are also a rural subgroup, usually older than average individuals who struggle with planning, but excel at saving; they distrust banks and the broader community and are most likely to trust only those they have known for long. As they don’t have a strong affinity for technology, approaches such as mobile money would prove ineffective, and there is a clear necessity for enhanced financial literacy efforts, and agent banking would prove to be most effective as including this group in the financial system. The impending launch of Payment Service Bank licenses will introduce new industries into the financial services market, and this study emphasises the need for these organisations to take the time to filter their databases according to the most critical characteristics (gender, locations, and professions); in addition to spending a significant amount of time gaining an understanding of this audi-

ence’s affinity, attitudes, familiarity and behaviours related to financial services and FSPs. What is particularly clear is that these BoP personas require a significant amount of trust-building for all communication efforts to be effective. Leveraging existing brand familiarity, especially with skeptical cultivators, will engender trust amongst these audiences and enhance the likelihood of including them in the financial system. If FSPs keep adopting one-size-fits-all approaches and creating products from the standpoint of what they think consumers need as opposed to what consumers actually need, they are likely to misidentify their needs. With the dependent individualists, for example, who have a lower-than-average trust in banks, efforts need to be focused on forming and building relationships as opposed to developing products. This continuous focus on investing in products and channels that miss the mark are more likely to slow down the process of financial inclusion in the country. Most importantly, understanding these individuals, and taking actions that showcase that understanding is likely to breed trust. According to CGAP, BoP customers will not automatically trust financial service providers; this disposition will only be a direct outcome of a successful design and an embedded customer-centric approach.

LBS proposes finance-led growth hypothesis to increase Nigeria’s financial inclusion Endurance Okafor

igital Financial Services in Nigeria- State of the market Report 2018, a financial inclusion report by the Lagos Business School (LBS) has point the way to go for Nigeria to include more of its citizens into the financial cycle. The report which was launched yesterday on the side line of this year’s international financial inclusion conference proposes finance-led growth hypothesis to spur financial inclusion growth in the country. “We propose a financeled growth hypothesis or a supply–leading response

which argues that financial sector development drives the real sector of the economy and causes growth,” LBS said in the report. The report further said that “increase in capital financial infrastructure should increase financial inclusion and access to credit. Also, increase in investments should increase employment and job creation.” The 2018 financial inclusion conference with the theme; Stimulating Sustainable Economic Development through Financial Inclusion was organized by the Lagos Business School in collaboration with BusinessDay. Nigeria with the high-

est population in the African continent currently has about 40.1 million of its adult population not having access to financial services and product. The LBS 2018 financial inclusion report took a broader approach to exploring financial inclusion as a national imperative and according to its figures, financial inclusion rate in 2017 inched up to 49 percent. The banked and underbanked segments grew by 7.5 percent and 0.2 percent respectively, while the unbanked declined by 7.6 percent. The report disclosed that the current financial inclusion rate of 49 percent

after Nigeria’s eight years of growing the inclusion rate shows that the country still has a steep journey to attaining the 80 percent goal. “Yet, this presents a formidable challenge for attaining the projected national target of 80 percent by 2020. DFS awareness and utilisation remain low or non-existent among the under-banked and unbanked. Even among the banked many remain in informal channels (thrift and group savings), especially women,” the report said. The report therefore recommends that; Nigeria government should blend job creation policies at the grassroots level to stimulate and grow informal finan-

cial inclusion and that the government should also pursue strategies which complement the existing job creation framework, social support and conditional transfers, with a guard against leakages which can undermine expected and positive policy effects. “The government should sustain credits to SMEs through development institutions - CBN, BoI, BoA and DBN,” it mentioned. It also cited that the central bank should seek to curb the increase in cash holdings that may hinder price stability and enhance digital financial transactions to better manage liquidity. Further explaining its

proposed hypothesis, the 2018 state of the market report said an increase in government spending should lead to a rise in aggregate demand and thus increase financial inclusion. However, it said fiscal policy interventions that lead to increases in the taxation rates on bank transactions will cause a rise in financial exclusion. “Financial inclusion interventions that focus on socioeconomic activity which lead to outcomes like higher literacy levels, infrastructure improvements and higher levels of education amongst the youth will increase the access and use of credit, boost economic activity and job creation.”

Wednesday 12 December 2018

C002D5556

Financial Inclusion

& INNOVATION

L-R: Chuma Ezirim, head e-Business, First Bank; Titilola Shogaolu, divisional CEO, Interswitch Financial Inclusion Services; Christabel Onyejekwe, executive director, Business Development, NIBSS; Temitope Akin-Fadeyi, head, Financial Inclusion Secretariat, CBN; Kolapo Solesi, executive director, TerraPay Limited; Jim Larson, partner and managing director, Boston Consulting Group

Abi Jagun, programme officer, Financial Services for the Poor, Bill & Melinda Gates Foundation, Sunkanmi Adenuga, Lagos Business School; Frank Aigbogun; publisher, BusinessDay

BUSINESS DAY

Supported by:

L-R: Chuma Ezirim, head e-Business, First Bank; Titilola Shogaolu, Divisional CEO, Interswitch Financial Inclusion Services; Christabel Onyejekwe, executive director, Business Development, NIBSS; Temitope Akin-Fadeyi, head, Financial Inclusion Secretariat, CBN; Abi Jagun, programme officer, Financial Services for the Poor, Bill & Melinda Gates Foundation; Jim Larson, partner and managing director, Boston Consulting Group; Olayinka David-West, SIDFS project lead and academic director, Lagos Business School

L-R: Lauren Rawlings, senior advisor, Enclude; Godwin Nwabunka, CEO, Grooming Center; Peter Bamkole, director, Enterprise Development Centre, Pan Atlantic University; Eniola Akinsete, senior manager, Microenterprises, Bank of Industry; Yinka Fisher, deputy director SMEDAN; Adebayo Adams, president, Nigerian Association of Small and Medium Enterprises Lagos Chapter Cooperatives; Lolade Akinmurele, Financial Analyst, BusinessDay.

Enase Okonedo, dean, Lagos Business Schoool

Jim Larson, partner and managing director, Boston Consulting Group

Lehle BaldĂŠ, Strategy & Partnerships, BusinessDay with a guest.

Doyin Salami, SIDFS, Lagos Business School

Olayinka David West, Lagos Business School

Guests at the event

BUSINESS DAY

C002D5556

LegalPerspectives

With

Wednesday 12 December 2018

Odunayo Oyasiji

LOCUS CLASSICUS

Nicholl and Knight v Ashton, Eldridge & Co [1901] 2 KB 126

rinciple- Frustration in contract Fact: It was agreed between the parties that a cargo of cotton seed was to be shipped from Egypt to England. A specific ship was named in the

Do you know?

FCC (Economic and Financial Crimes Commission) is not a body established for the purpose of recovery of debt or loan. The same thing applies to the police. The commission is established under the Act to tackle issues that has to do with financial crimes. Section 6 of the EFCC Act 2004 states the powers of the commission as “(1) The Commission has power to (a) cause investigations to be conducted as to whether

any person has committed an offence under this Act; and(b) with a view to ascertaining whether any person has been in offences under this Act or in the proceeds of any such offences, cause investigations to be conducted into the properties of any person if it appears to the Commission that the person’s life style and extent of the properties are not justified by his source of income. (2) The Commission is charged with the responsibility

of enforcing the provisions of (a) the Money Laundering Act 1995 ;(b) the Advance Fee Fraud and Other Fraud Related Offences Act 1995 ;(c) the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act 1994, as amended; (d) the Banks and other Financial Institutions Act 1991, as amended; and (e) Miscellaneous Offences Act; and (f) any other law or regulations relating to economic and financial crimes.

Recovery of possession under tenancy law of Lagos State 2011

ervice of Statutory Notices by the Solicitor or Agent Before a solicitor or an agent can issue a valid statutory notice on a tenant, such solicitor or agent must first obtain the authority of the landlord in writing. Where it can be established that the solicitor was not authorized in writing by the landlord to issue and serve on the tenant the notices, the judicial attitude is to hold that no valid notice has been issued. Grounds for Seeking Possession There are two categories of grounds under which the court could make an order for possession: 1. Grounds for possession, subject to the tenancy agreement; and 2. Grounds for possession, regardless of the terms of tenancy agreement Grounds for Possession, Subject to the Tenancy Agreement a) Arrears of rent: Since the Lagos State Tenancy Law does not indicate the period for which the rent may be in arrears, it suggests that even rent in arrears for only one day month may suffice to seek recovery. b) Breach of any covenant or agreement in the Tenancy Agreement. c) Where the premises is required by the landlord for personal use. d) Where the premises requires substantial repair. Grounds for Possession, Regardless of the Terms of Tenancy Agreement Upon proof of any of the fol-

lowing, the court may grant an order for possession: a) Premises being used for immoral or illegal purposes. b) Premises has been abandoned. c) Premises being unsafe and unsound as to constitute a danger to human life or property. d) The tenant or sub-tenant or any person residing with him constitutes, by conduct, a source of intolerable nuisance or induces a breach of tenancy agreement. What the Landlord may Claim in an Action for Recovery of Possession The landlord may claim the following: a) Possession of the premises b) Arrears of rent c) Mesne profit or a sum for the use and occupation of the premises

Distinction between Rent and Mesne Profits Rent differs from mesne profits in the following ways: a. While rent is liquidated, mesne profits are not. b. While rent is operative during the subsistence of the tenancy, mesne profits start to run when the tenant holds over after the expiration of the tenancy. c. While the entitlement to rent by the landlord is a right flowing from the landlord and tenant relationship, mesne profit is a penalty for tort committed by the tenant. d. Mesne profits are generally calculated on the yearly value of the premises and so the landlord is not bound to use the rent payable during tenancy as an index of determining the rate or value of mesne profits while rent is generally predetermined by the agreement of the parties.

Arrears of Rent and Mesne Profit Mesne profit has been defined as another term for damages for trespass. The term is used to describe the sum payable by the tenant from the time his tenancy lapses until he gives up possession. It refers to an intermediate profit between two points in time – between the date the tenant ceases to hold the premises as a tenant and the date he gives up possession. The concept covers the rent or profits, which the tenant might have received or made during his occupation and use of the premises after tenantlandlord relationship has ceased, which have to be paid over to the true owner of the property, as compensation for the tort committed by the tenant.

Self-Help in Recovery of Possession Where the landlord seeks to recover possession from the tenant, he cannot resort to self-help. Any person entitled to possession must regain it by following due process of the law. This is because only the court of law can declare a person a trespasser. The landlord has no unbridled right to invade a premises in the lawful occupation of a tenant. Where the landlord fails to obtain an order of court before entering and taking possession of the premises, he has invaded and committed an infraction of the rights of the tenant and renders himself liable in trespass. Possession must only be obtained by the help of a court order obtained after hearing the parties.

contract agreement as the ship that will carry the cargo (The Orlando). As at the time the contract was due to be performed, the specified ship was damaged and undergoing repairs. Therefore, it could not

carry the cargo to the agreed destination. The court held that the contract was frustrated as the specified ship could not undergo the trip when it was time for the performance of the contract.

The United Nations Commission on International Trade Law (UNCITRAL) Model on E-Commerce (1996) and The UNCITRAL Model E-Signature Law (2001) he UNCITRAL Model on Ecommerce applies to any kind of information in the form of a data message used in the context of commercial activities. The purpose for which the Model Law was adopted by the United Nations is to enable and facilitate commerce conducted using electronic means by providing national legislators with a set of internationally acceptable rules aimed at removing legal obstacles and increasing legal predictability for electronic commerce. Particularly, it is intended to overcome obstacles arising from statutory provisions that may not be varied contractually by providing equal treatment to paperbased and electronic information. Such equal treatment is essential for enabling the use of paperless communication, thus fostering efficiency in international trade.

nature of a person, that requirement is met in relation to a data message if: (a) a method is used to identify that person and to indicate that person’s approval of the information contained in the data message; and (b) that method is as reliable as was appropriate for the purpose for which the data message was generated or communicated, in the light of all the circumstances, including any relevant agreement. (2) Paragraph (1) applies whether the requirement therein is in the form of an obligation or whether the law simply provides consequences for the absence of a signature.” The UNCITRAL Model E-Signature Law (2001) built upon the principles of the Model Law on ECommerce of 1996 by extending the provisions of Article 7 of the Model Law on E- Commerce in order to promote reliance on electronic signatures. The UNCITRAL Model ESignature Law goes beyond the basic

The Model Law covers areas of e-commerce like application of legal requirements to data messages, communication of data messages, formation and validity of contracts, recognition by parties of data messages, attribution of data messages, acknowledgement of receipt, time and place of dispatch of receipt of data messages, as well as carriage of goods. One of the essential elements of contract identified in this paper is acceptance. In a largely paper-based contractual set-up, the major way by which acceptance of an offer is conveyed is by appending signatures to documents. In adapting commerce to the paperless/electronic dispensation, the UNCITRAL Model Law on Electronic Commerce gave recognition to electronic signature. Article 7 of the UNCITRAL Model Law on Commerce provides: “(1) Where the law requires a sig-

principle that signatures should not be denied effect simply because they are electronic. Rather, it prescribes the legal requirements for electronic signature in commercial transactions. An interpretation of the foregoing is that acceptance can now be conveyed through identification marks, usernames, passwords, certifications, box ticking, scanned iris of the eye, fingerprints and other forms of indications. Several jurisdictions have adopted this feature of e-commerce in their domestic laws. The European Union Directive on E-commerce and ESignatures is essentially to the same effect. This model was also adopted and used in the drafting of cyber legislation in the Singapore Electronic Transactions Act 1998, the South Africa Communication Act 2002 and the Tunisia Electronic Commerce Law (2000), among others.

ADETOLA ADELEKE,

Lead Partner, Crowncourt Attorneys

Wednesday 12 December 2018

C002D5556

LegalPerspectives

With

BUSINESS DAY

Odunayo Oyasiji

The Role of E-Payment Systems in Doing Business in Nigeria (2) ROTIMI ADENIYI-AKINTOLA

of Perchstone & Graeys

1,000,000 naira. These measures have not been enough to catalyse Nigeria’s financial inclusion goals.

hat is financial inclusion, and why is it important? Financial inclusion is one of the major challenges to the growth of e-payments in Nigeria. Despite the Central Bank of Nigeria’s (CBN) target of 80% financial inclusion by the year 2020, the nation continues to struggle to provide financial products and services to its adult population, particularly the lowincome demographic. Financial inclusion matters, as it is one of the most important drivers of economic development. The benefits of financial inclusion for the poor are extremely significant. Money which sits outside the banking system; in drawers, mattresses and the like, is unable to appreciate in value by earning interest, and hence has a lower worth or net present value when used in the future. Financial inclusion would provide low income individuals and families with the means to safely make day-to-day transactions, safeguard their meagre savings, manage cash flow spikes and build working capital. This capital

can finance small businesses or microenterprises, mitigate shocks and expenses related to unexpected events such as medical emergencies, and improve overall welfare. According to a 2016 report by Enhancing Financial Innovation & Access (EFInA), a financial sector development organisation, 40.1 million Nigerian adults, representing 41.6% of the adult population are financially excluded – do not have access to bank accounts or financial services. This is a huge setback to the drive towards more advanced e-payment solutions. Radical measures are required

LOCUS CLASSICUS Central London Property Trust v High Trees House

rinciple: Doctrine of Promissory Estoppel was established in this case. Denning J “In my opinion, the time has now come for the validity of such a promise to be recognised. The logical consequence, no doubt is that a promise to accept a smaller sum in discharge of a larger sum, if acted upon, is binding notwithstanding the absence of consideration” Fact : Central L ondon Property gave out a property on lease to High Trees for a rent of 2500 pounds in 1937. High Trees (defendant) had a problem getting tenants to rent the property out to and the 2500 pounds became too high as the defendant was not making profit from the business. Many of the flats were still unoccupied in 1940 and the fact that there was war made the situation worse as the possibility of getting people to rent the unoccupied flats became very low. Because of the foregoing, the plaintiff decided to reduce the rent to 1250 pounds during the war years. This agreement was put in writing and the reduced rent was paid from 1941. After the end of the war, all the flats were fully occu-

pied and the plaintiff sought to return to the original rent of 2500 pounds. The court held that the rent will be returned to the originally agreed price for the future rents. The plaintiff was not allowed to claim back the amount reduced on the rent that was paid during the period of war. Promissory estoppel made it impossible for the recovery of reduced amount on the rent during the period of war despite the fact that the promise (of a reduced rent) was not backed by consideration.

to effectively provide a population of over 170 million citizens with access to financial services. To this end, the Nigerian government has introduced key regulatory initiatives to drive financial inclusion and electronic payments. In 2012, the cashless society project - to make Nigeria a top-20 economy by 2020 was introduced, as part of a larger Financial System Strategy 2020 vision to boost Nigeria’s financial system. Further, in 2017, the CBN reintroduced charges for cash handling, starting with 1.5% for cash deposits and 2% for cash withdrawals between 500,000 to

Boosting Financial Inclusion and E-payments A major untapped resource for advancing financial inclusion would be to leverage existing telecommunications networks. Current mobile penetration stands at over 238,116,977 active lines according to the Nigerian Communications Commission, with 21 million smartphones in circulation according to Jumia Mobile Report 2018. Compared to the 97.57 million bank accounts reported by the Nigeria Inter-Bank Settlement System (NIBSS) as being in existence as at February 2017, it is evident that more Nigerians own mobile phones than those that operate bank accounts, even accounting for double or multiple mobile line registrations. A report by KPMG Africa, estimated that only 30 million Nigerians have access to bank accounts. There is therefore a clear incentive to harness mobile penetration as a means of driving e-payments and in turn driving economic growth. The example of

Kenya could provide some guidance here. Kenyans transacted a record US$33 billion on mobile money transactions in 2016, up from US$27.8 billion from the previous year, according to data from the Central Bank of Kenya. In recognising this potential, and in an effort to bolster the use of mobile money, the CBN has repealed its decision to exclude telecommunications companies in Nigeria entirely from operating as purveyors of mobile money. Approval was given to Globacom, Nigeria’s second national operator, to create 500,000 mobile money agent outlets in the country through the Glo Xchange, a mobile money agent network in partnership with 3 commercial banks. Whilst this is a positive development, much more is required by the CBN in opening mobile payments to the telecommunications companies without restricting them to commercial banks. This will further harness their rich subscriber base. The CBN is advised to identify opportunities to engage stakeholders and experts in dialogue, to identify avenues for collaboration on mobile payments, and mitigate potential problem areas.

Jurisdiction, choice of law and evidence issues in e-commerce ADETOLA ADELEKE

Lead Partner, Crowncourt Attorneys

imply put, jurisdiction can be defined as scope of authority. It is the inauguration of legal authority. Jurisdiction is the authority which a court/tribunal has to decide matters that are litigated before it or to take cognizance of the matters presented in a formal way for its decision. The issue of jurisdiction is fundamental and it is the centre pin any litigation hinges on. Since most contracts set out the mechanism for the resolution of disputes between the contracting parties, the issue of jurisdiction and choice of law becomes a very important one in e-commerce. The problem is often a determination of which court assumes jurisdiction in a dispute arising from an e-commerce transaction. This is due to the fact that the parties may reside at different locations with different legal systems. Complex issues of conflict of laws arise here. Is it the law of the place of residence of the defendant? Where is that residence if the only address available is an email address? Do you use the residence of the registrar for the “url” for the email account or that of the ISP from where the mail was generated? Again is the law the place of performance or principal place of business of the defendants. What if the defendant has warehouse around the world and can direct supply from a warehouse in China to a call centre in Ghana, which is the place of performance? It could be argued that current conflict rules and conventions can be stretched to accommodate electronic transactions but this is not always an easy task. In International Private Law, the Brussels Convention on Jurisdiction

and Enforcement of Judgment in Civil and Commercial Matters apply to answer some of the above questions. However, the Convention is not domesticated in our laws. The jurisdictional challenge emphasises the need for regional and/or international harmonisation of e-commerce regulations and laws. Evidence Issues Prior to the amendment of the Evidence Act, one of the greatest challenges facing the courts in Nigeria was the (in)admissibility of computer-generated evidence. However, section 84 of the Evidence Act 2011 (EA) provides for the admissibility of computer-generated evidence. It makes computer-generated evidence admissible in any proceedings upon the fulfilment of certain conditions, including the production of a certificate identifying the document and confirming that the information contained in it were produced by proper operating computers. There is no gain saying that all evidence to be tendered in proceedings bordering on e-commerce will be of a computer-generated nature. Consequently, section 84 of the EA must

be complied with. Section 93 (2) and (3) also operates to recognise the admissibility of electronic signature in Nigerian courts, upon the fulfilment of conditions in section 84. In Kubor v Dickson (2013) 4 NWLR (Pt. 1345) 534, the Supreme Court held that for computer-generated evidence to be admissible in court, all the conditions set out in section 84 of the EA must be fulfilled. Despite the innovations of the EA, the precise nature of the requirement of section 84 of the EA remains unclear and it is certain that the admissibility of computer generated evidence will still remain a challenge. There is therefore the need for a liberal approach for the admissibility of electronic contracts and electronic signatures. A case in point is section 15 of the South African Electronic Communications and Transactions Act 25 of 2002, which provides that the ‘rules of evidence must not be applied so as to deny the admissibility of a data message, in evidence on the mere grounds that it is constituted by a data message.’ It further mandates that information contained in data messages must ‘be given full evidential weight.’

BUSINESS DAY

Wednesday 12 December 2018

BUSINESS DAY

Wednesday 12 December 2018

Leadership

Shaping people into a team

Why Trump and Xi’s 90-Day trade truce is a step in the right direction Clyde V. Prestowitz Jr

he audible global sigh of relief in the wake of last weekend’s decision by Presidents Donald Trump and Xi Jinping to negotiate trade war issues over the next 90 days was well justified. The deal is a big step forward for all concerned. Let’s quickly dispense with the scoffing critique voiced by several professional doubters that little can be accomplished in 90 days and that the agreement therefore is nothing more than an arrangement to kick the can down the road. While it is true that a comprehensive deal is very unlikely to be completed in the next 90 days, it should be obvious that presidents who can agree to talk for the next 90 days can also agree to talk longer if the first 90 days seem to augur something promising. If they don’t, then it probably makes sense to shut the talks down — and at least it will then be clear that we didn’t move rashly ahead to impose massive tariffs without giving negotiations an honest try and will garner more domestic and international support for some form of further trade actions if talks fail. Indeed, this was the only sensible alternative. It was clear that the Chinese were not immediately going to yield to American requests, and it was equally clear that imposing American sanctions without any further effort at negotiation was likely to be counterproductive. A second important step forward was the clear designation by Trump of U.S. Trade Representative Robert Lighthizer as the key leader of the U.S. negotiating team. Because he is known to be a knowledgeable and tough

negotiator, the Chinese have tried over the past two years to drive discussions through Treasury Secretary Steve Mnuchin and Larry Kudlow, the president’s national economic adviser. These two were perceived to be softer, less knowledgeable, more pro-globalization and more concerned about financial markets than Lighthizer. By specifically pointing to the trade representative as the guy in charge (as his title indicates he should be), Trump made it clear that the United States is serious. Lighthizer knows the World Trade Organization and the global trade rules upside down and backward. He is a leading strategist and a seasoned negotiator who knows all the key global players as well as where all the bodies are buried. He won’t be deceived, and he will demand concrete, measurable results. One of the most interesting statements to come out of the Buenos Aires dinner was President Xi’s comment that

Qualcomm’s offer to acquire NXP Semiconductors might now be approved if it were to be proposed again. Qualcomm scrapped the deal in July after the Chinese antitrust regulator didn’t make a ruling by the deadline for consummating the deal. In other words, the Chinese government’s objection had been political rather than legal all along. Qualcomm quickly stated that there would be no new proposal. But the important point here is that the main U.S. complaint about China’s tradeglobalization policies is precisely that Chinese trade and industrial policies are political and lead to government intervention in markets that contradicts China’s stated commitments to the spirit and rules of the WTO and to market-oriented globalization. This issue is not new to veterans (like Lighthizer) of the U.S.-Japan and U.S.-South Korea trade negotiations of the 1980s and 1990s. The heart of

the problems in these cases was the commitment of these countries to equaling and surpassing the capabilities of the United States in targeted industries such as chemicals, steel, autos, semiconductors, aircraft, computers, machine tools, biotech, ship building and computers. These governments intervened in markets to provide investment guarantees, trade and R & D subsidies, dedicated government procurement and trade protection, including “buy national” policies. China has been a careful student of the Japanese and South Korean strategies as well as of those of Taiwan and Singapore. It has adopted the key elements of each and then added its own. Particularly significant has been China’s approach to foreign investment. While Japan, South Korea and Taiwan largely eschewed foreign investment, China has welcomed and promoted it. But, of course, it has done so on its own terms. So

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

foreign investors have often been required to enter joint ventures and to transfer technology as a condition of being allowed to invest. They were required to export a certain proportion of their production and subject to extensive theft of their intellectual property. Even in the cases of Japan and South Korea, it was always difficult for foreign companies to have their complaints heard. The biggest problem was that government bureaucrats had extensive informal power. They could wink or nod at corporate leaders and the complaints would be buried. Or they could wink and nod and distributors would suddenly no longer buy foreign products for distribution. They could also impose new testing standards or ignore requests for testing. There were a hundred ways in which the bureaucracy could quietly carve up a company, and the company would have no effective recourse. In China, this situation is even more difficult. There is what is known as the “death by a thousand cuts.” A company may find itself wounded and not have any idea of the source of the cut. Lighthizer’s task will be to find a way to compel China’s policymakers and bureaucrats to minimize intervention and to conform to the spirit as well as the letter of the WTO’s rules and of the broader free-trade doctrine to which they aver they are dedicated. It will be no easy task. Lighthizer deserves the support and good wishes or all who hope for a friendly resolution of U.S.-China differences and for the continued success of globalization.

Clyde V. Prestowitz Jr. is the president of the Economic Strategy Institute.

38 BUSINESS DAY NEWS Extortion, misuse cloud trader Moni ability to... Continued from page 1

Ajibulu is just one of the several market women at Mushin, embittered for being schemed out and shortchanged by agents working with the Bank of Industry to distribute the loan. Owing to their lack of account holdings with banks, some were forced to strike a 50/50 deal with agents to receive N5, 000 while others had to consent to a 70 to 30, 90 to 10 and worse of all 95 to 5 sharing formula. Non-collateralised loan is what the government says it is but on the market streets of Mushin, Ketu, AbuleEgba and Ikotun among others, the common impression is that the money is free and synonymous with the “stomach infrastructure concept”. The trend has stirred questions on the modalities intended to be used in recouping the loan when most of the recipients appear to have no formal record or ability to be tracked. “It is controversial; in light of ongoing politicking,” Rafiq Raji, chief economist at Macroafricaintel told BusinessDay. “Cashtransfer type poverty alleviation programs have worked in Brazil. The problem is that the political connotation is hard to argue against; due to the timing.” Launched in August through the Bank of Industry (BoI) under the Government Enterprise and Empowerment Programme (GEEP), the ‘Trader Moni’ is a social intervention programme of the President Mohammed Buhari’s administration designed

to eliminate the hurdles to accessing financing for the vast majority of Nigeria’s petty traders, Laolu Akande, the spokesman to the Vice-President Yemi Osinbajo told Business Day. Under the scheme, traders, he said, don’t need any document or property to obtain the N10, 000. They only need to register, get captured and receive the money through their phones. The repayment plan is for six months and beneficiaries are expected to pay a paltry N250 interest on the N10, 000 before qualifying for a higher loan. According to Akande in a tweet on VP’s visit to Bodija and Oje markets, Ibadan to monitor the progress of the scheme, the loan has been disbursed to over 1 million Nigerians with the target being 2 million by the year end. He debunked the widespread accounts, saying that the fund is neither a product of Abacha loot nor a strategy for inducing political sympathy towards President Buhari in the 2019 elections. “The specific Abacha loot is $322 million that was returned from Swiss government to us. But this is targeted at conditional cash transfer. The social intervention of the Buhari administration has four categories and there is the conditional cash transfer where we pay N5,000 per month to the most vulnerable and poorest among us,” he said. “The Trader Moni comes under the Government Enterprise and Empowerment Programme which is a

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micro-credit scheme and it is funded by the budget. We have a N500 billion budget that covers the entire social investment programme in the last two to three budget cycles. As to the timing, we conceived it alongside market money under the GEEP in 2016. We have four years to deliver. If you go back to check, these programmes started in 2015 with GEEP.” However, what transpires between the Trader Moni agents and the traders at the point of collection leaves doubt as to whether the government truly designed the fund as a loan. Most of the traders who were successful at obtaining the fund, Business Day observed, had similar pattern of actions upon receipt. They addressed first their pressing domestic needs at the period of collection. And given that they have no bank holdings, third party account details were predominantly used for withdrawal, giving room for extortion from agents. Speaking on how she utilised the loan, Muyinat, a noodles seller at Ojuwoye said: “I received complete N10, 000 and it came at a period when I needed money. In spent it on feeding and transportation because I stay far from the market. I spend N600 daily from Sango to Mushin.” Nigeria emerged from a devastating recession in 2017 but growth has yet to return to levels seen between 1999 and 2014. The economy expanded by 1.81 percent in the third quarter of 2018 (1.75%forQ1–Q3),theNationalBureau of Statistics (NBS), said on Monday, lower than the annual rate of popula-

Babatunde Fashola (r), minister of Power, Works and Housing, and Feda Natour, chief enginneer, Reynolds Construction Company Nigeria Limited (l), during the inspection of the rehabilitation of outstanding sections of Onitsha -Enugu Expressway: Enugu – Amansea (Enugu State border) in Enugu State and Umunya – Amawbia Section in Anambra State.

Nigeria’s credit profile constrained by... Continued from page 1

exposed to further shocks. Defi-

cits will remain elevated and debt affordability challenged,” Moody Investor Service said. Moody explained that the sharp decline in oil prices from mid-2014 severely weakened Nigeria’s public finances as general government revenue halved to 5.6percent of GDP in 2016 from 10.5percent in 2014. “Since late 2015, the authorities have stepped up their efforts to increase non-oil revenue,” Moody said. “However, despite these efforts and even though oil prices have recovered to above the budgeted oil price, government revenue has mostly been below target and significantly below pre-crisis levels at around 6percent of GDP.” “Although oil revenue has risen in 2018, deficits remain elevated relative to revenue and debt affordability is still weak but improving,” said Aurélien Mali, a Moody’s Vice President -- Senior Credit Officer and co-author of the report.

“We expect debt levels to remain contained at around 20% of GDP in 2019.” Credit strengths include the large size of the economy and the country’s robust medium-term growth prospects, supported by strong domestic demand, according to Moody’s. The economy has emerged from a 2016 recession, though real growth remains subdued. Higher oil prices and oil production of around 2 million barrels per day helped the economy to improve this year. Moody’s forecasts economic growth of 1.9 percent of GDP this year, up from 0.8percent in 2017. Nigeria’s ranks near the bottom of a number of international surveys assessing institutional strength. Surveys point to the country’s relative weakness compared to peers in respect of rule of law, government effectiveness and control of corruption. Moody stated that the stable outlook on Nigeria’s sovereign rating reflects the low likelihood of a shock that further impairs Nigeria’s

economic and fiscal strength. “External vulnerabilities have receded, supported by a rebound in oil prices and production.” Structural institutional improvements and reforms that increase the diversification of government revenue away from oil would be positive for Nigeria’s credit profile. A sufficient increase in fiscal savings with the potential to offset a protracted economic shock would also be positive, Moody’s said. Downward pressure could emerge in the event of a prolonged slowdown in growth and investment, an extended deterioration in Nigeria’s fiscal position or further delays in implementing key structural reforms, particularly in the oil sector. Nigeria’s economy expanded 1.81 percent in the third quarter of this year and is tipped by the International Monetary Fund (IMF) to grow 2 percent by year-end compared to 0.8 percent in 2017 and -1.6 percent in 2016. In GDP per-capita terms, the economy is still in doldrums with economic growth rate below the population growth rate of around 3 percent.

tion growth of about 3 percent. GDP per capita in Nigeria is forecast by the International Monetary Fund (IMF) to fall for eight straight years (2015-2022), contradicting the government’s expectations for a steady rise from $2,542 in 2017, $2,640 in 2018, $2,731 in 2019 and $2,854 in 2020. In actual terms, GDP per capita has fallen four years straight, having gone from $3,268 in 2014 to $2,763 in 2015 and $2,207 in 2016. In 2017, income per capita fell by 10.7 per cent to $1,994. When widowed Idayat Raheem, a steel pots hawker at Oko Oba Market, Abule-Egba received N9, 000 (following a deduction of N1,000 by agents), she was homeless and passed the nights at a nearby mosque. After the demise of her husband, she couldn’t raise rent of the one room apartment she lived in but on receiving the money, she began processing a new one. Maryann Anyawu, an agent confirmed the commission recipients often pay, saying “they are not supposed to return the money. This is how we do it. We first transfer the money to our own accounts and then withdraw for them. This is because after doing it for them, they promise to pay N1, 000 but fail to redeem their pledge afterwards”. Unlike others, Tawa Kazeem, a pepper seller at Ketu market feels the initiative is laudable as it has been useful for her business, she only wishes it was more because N10,000 can hardly afford a basket of tomatoes. “The money can’t buy a basket of tomatoes which is N15,000 and there are times I record losses. People are just managing. There is lack of money. Before, I could make gain of about N16, 000 or N17, 000 from a basket but now, I struggle to even hit N500 profit,” explained the mother of six from Ikire, Osun state. Atoke Sulaimon, a smoked fish seller at Abule-Egba shares the same sentiment with Kazeem. “There is hardly a huge impact that N10, 000 can make in our business because things are too expensive,” she said. According to financial and business experts, schemes that throw money at the masses for buying and selling purposes rather than for productive purposes achieve minute or no result in stimulating the economy. Even while he agrees that the initiative, if well implemented with the right technicalities could boost the economy, Abayomi Obabolujo, a business analyst said the mechanism for disbursement only presents the loan as dividends of democracy. “When you give N10, 000 to a trader, the question you should ask is that what does the fellow want to do with the money. Let’s assume that the person sells pepper in Nigeria today, what quantity of pepper can the per-

Wednesday 12 December 2018

son sell for N10,000 and what is the profit element? The probability is that most of the people that are being given the money will end up spending it at onexpenses. You don’t just start giving people loan. What is the structure that has been built for the business that the money is being given and how long has the person started the business? These are critical questions to really put into consideration,” he said. Obabolujo suggests that social interventions should target people in the productive sector if Nigeria is determined to lift the economy out of being in excessive reliance on consumption of imported items. “You see people in Nigeria that are making shoes on their own and these shoes are beautifully designed. These are the people you should empower so that when they are empowered, we don’t need to go to Italy to buy foreign shoes again. And you look at people that are even farmers, fashion designers and people that are producing something,” he said. Correspondingly, Austin Nweze, a political economist and lecturer at the Pan Atlantic University, believes loans like Trader Moni achieve less impact with necessity entrepreneurs compared with opportunity entrepreneurs. For him, businesses that are incapable of creating jobs or paying taxes cannot grow the economy. As such, the categories of the businesses targeted by the scheme are motivated mainly the needs of daily survival and hardly contribute meaningfully to the economy. “Opportunity entrepreneurs are those who conceive ideas, have a plan on how to employ other people, organise their businesses, pay rents and pay government. This way, they are able to really contribute to the economic growth. They have not told us the truth. It is free money. What can you do with it? Even if you buy recharge card to sell, how will it impact you?” Nweze said. His recommendation further touches on the need for government to intensify the improvement of the ease of doing business in Nigeria. With stable electricity, road infrastructures and creation of industrial estates, big business can be more confident to invest and it will trickle down growth to the lowest in business cadre. “When I went to South Africa looking at business opportunities, they showed me an industrial area which the government did with water, electricity, roads and all I needed to do was to bring in my equipment and I would not pay tax for 5 years but employ their people. The employees will pay tax. If you improve on the ease of doing business, every body will benefit,” the economist explained.

EFInA Survey shows 63.30% of Nigerian... Continued from page 2

sion rate. “It will help in the identification of best practices. The data will enhance the evolution of the financial market. The outcome of the survey will improve policy stance. We are also able to compare ourselves with other bench mark elsewhere,” said Alade. Alade said that financial inclusion is impact long term economic growth and that the higher the money outside the banking system the more difficult it is to monitor money in circulation. Indeed there is more money outside the financial system as over 97 percent of both subsistence farmers and business owners (farming and non-farming, and services) receive their income in cash, according to EFInA.

According to EFInA, majority of Nigerian adults set aside money but savings was low. A breakdown shows savings in informal sector increased to 42.70 percent in 2018 from 31.40 percent in 2016. On the other hand, savings in banks fell to 38.30 percent in 2018 from 40.70 percent in 2016. “The reason why the growth is not as expected is due to decline in savings in banks,” said Oluwatomi Eromosele, Research Officer, EFInA. Stakeholders attribute the low savings culture to low disposable income, high unemployment rate, and sluggish economic growth. According to a recent World Bank data, 92.10 percent of Nigerians live at below $5.50 a day. The reality is that most people cannot afford to buy a packet of Spaghetti or proteins.

Wednesday 12 December 2018

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39 NEWS

BUSINESS DAY

SHIN/LADOL legal tussle: Lagos court grants interlocutory injunction in favour of SHIN KELECHI EWUZIE

L-R : Aisha Mahmood, special adviser to the Central Bank of Nigeria (CBN) governor on sustainability; Quyen Thuc Nguyen, senior climate finance specialist, International Finance Corporation, and Omobolanle Victor-Laniyan, group head, sustainability, Access Bank, at the Nigerian sustainability banking principles sustainability champions training hosted by Access Bank in Lagos.

Atiku, Ezekwesili absent as Buhari other Presidential candidates sign peace accord ... EU, Gowon, Abdulsalami charge security agencies, INEC on credible polls ... Atiku not invited - Paul Ibe TONY AILEMEN, Abuja

takeholders on Tuesday charged the Independent National Electoral Commission INEC and security agencies to ensure credible, free and fair elections in the 2019 general election. This was the general concessions at the signing of the National Peace Accord on Tuesday by President Muhammmadu Buhari and the Presidential candidates of the parties taking part in the 2019 general elections. The main opposition candidates Atiku Abubakar, Obiageli Ezekwesili and Austin Moghalu were however not present at the accord signing. BusinessDay gathered that the Presidential candidate of

the People’s Democratic Party PDP, Atiku Abubakar was not informed about the ceremony. Atiku’s Media Aide, Paul Ibe said the PDP candidate was not aware. According to Ibe, “l can confirm to you that His Excellency Atiku Abubakar, Presidential candidate of the PDP and former Vice President of Nigeria did not receive any formal invitation to the signing of the Peace Pact.” President Muhamamdu Buhari in his speech at the signing of the Peace accord amongst the Presidential candidates of all the political parties called on the INEC to put the National interest above every other consideration in the conduct of the 2019 elections. The President emphasized the need for trust amongst the

contestants as only through such can confidence be built into the process the will produce the victorious interest candidates. He reiterated his administration’s commitments to building the necessary trust and confidence required for a credible process and urged INEC to put the “nation’s interest above other interests while conducting the 2019 elections.” According to him” To guarantee trust, there must be rules. Rules and regulations which must be enshrined and accepted by both the government and the people.” Head of European Union Delegation to Nigeria and ECOWAS, Kertil Karlsen, in his good will message at the signing of the Peace Accord

in Abuja, called on security agencies and INEC to maintain impartiality. The EU also urged politicians to shun hates speeches, votes buying and violence while it expressed the organization’s neutral roles and support for successful elections in 2019. Former Head of state, Yakubu Gowon who spoke on the concept “ trust “ also appealed to the security agencies and INEC to ensure that the process leading to emergence of democratically elected candidates in 2019 are both transparent and credible. Gowon, who was the guest speaker, speaking on the concept of “Trust” called on the political class to focus on building trusts in all the segments of the society.

peaker of the House of Representatives, Yakubu Dogara, on Tuesday, expressed displeasure over the failure of federal revenue generating agencies to remit funds collected into the Federation Account as provided by extant laws. Dogara, who expressed the concern while declaring open a four-day investigative hearing into alleged under-remittances of revenue to the Federation Account, chaired by Abiodun Faleke (APC-Lagos), frowned at the recurring face-offs with respect to revenue remittances and figures between Federal Ministry of Finance and Nigerian National Petroleum Corporation (NNPC). “When government is

making efforts toward diversifying the economy in order to reduce the country’s overreliance on the oil sector, it is disheartening to hear repeated allegations of non-remittances of huge amounts of revenue by agencies required to generate and manage our revenue. “You may recall that the Federation Account Allocation Committee meeting in July was stalemated, two or three times, due to controversies over unremitted revenue. “This led to delays in the payment of salaries by the Federal and State Governments and other budgetary expenditures in most Federal Government agencies and establishments. “The continuous face-offs with respect to revenue remittances and figures between the Ministry of Finance and

NNPC on one hand as well as State Governments and revenue generating organs of the Federal Government on the other hand, only show some of the many instances of unending issues of revenue leakages in our economy. “With the dwindling oil fortunes and the spirited efforts being made in the country to diversify our economy base, there is no gain saying the fact that closing up leakages in our economy has become imperative if we must grow our economy and accelerate the development of the country at this period of economic downturn,” Dogara urged. On his part, Abiodun Faleke, chairman, Ad-hoc Committee investigating alleged under-remittances of revenue to the Federation Account, expressed optimism

Access Bank out with Born In Africa Festival

that the “outcome of the ongoing investigation will help in no small measure to reposition the revenue generating system at all levels of government towards adequately achieving their goals and mandate.

rue to the cause of developing new functional initiatives and constantly pushing boundaries, Access Bank is introducing to the African entertainment and lifestyle scene, a very entertaining fusion of music, art, film and fashion - Born in Africa Festival (BAFEST). Designed uniquely to retell the African story globally and better connect the world to Africa, BAFEST is set to hold on December 16, 2018. The Born in Africa Festival is a celebration of the unparalleled dynamism of the true African spirit, birthed from a need to tell the true African story in all its glory. A full day’s event where Africa’s finest creatives showcase their talents to the world. Speaking about BAFEST 2018, Amaechi Okobi, group head, communications and external affairs, Access Bank, said, “We are proud to be showcasing the best of African Vibes at this historic event. It is the climax of all our efforts to change the Nigerian and African narrative. “Our string of events part-

CHANGE OF NAME

Non-remittance of revenue by MDAs stifles payment of salaries, spurs corruption - Dogara, Faleke KEHINDE AKINTOLA, Abuja

new twist has emerged in the legal tussle between Samsung Heavy Industries (SHIN) Nigeria Limited and LADOL as a Lagos State High Court sitting in Igbosere has granted an interlocutory injunction restraining Global Resources Management Limited and LADOL from ejecting SHIN and its subsidiary, SHI-MCI FZE, from the LADOL free zone in Lagos, pending the delivery of the judgment to the substantive suit on January 25, 2019. Frank Ejizu, chief operating officer, SHIN, in a statement says the court order restrains LADOL from further unlawful interference with Samsung’s use of its fabrication and integration yard within the LADOL Free Zone Area. According to Ejizu, “The High Court in Lagos granted an interlocutory injunction order restraining LADOL

I, formerly known and addressed as Duyilemi Omolayo Afusat now wish to be known and addressed as Faremi Duyilemi Omolayo Afusat. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Miss Ekukwor Chioma Lilian now wish to be known and addressed as Mrs Ubani Chioma Lilian. All former documents remain valid. General Public please take note.

from evicting Samsung from Samsung’s fabrication and integration yard within the LADOL Free Zone. “The Court ordered that Samsung be free to move in and out of its yard with its employees, agents and service providers. Furthermore, the court has directed LADOL to provide all services such as water and power supply to Samsung.” Ejizu says this crucial court order allows Samsung to continue its operations unhindered while legal proceedings are ongoing. “This is an important decision in favour of Samsung and Nigeria at a critical time. It will allow Samsung to continue to provide services vital to the completion of the Egina project, Nigerian oil production and the Nigerian economy. This decision of the High Court in Lagos is binding on LADOL and prevents it from unlawfully evicting Samsung from the fabrication yard or interfering with Samsung’s proprietary rights”.

I, formerly known and addressed as Balikees Oyinlomo Rotinwa now wish to be known and addressed as Balikees Oyinlomo Rotinwa-Oseni. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Oyekanmi Lawrence now wish to be known and addressed as Oyekanmi Lawrence Oyeleke. All former documents remain valid. General Public please take note.

nerships such as the Access Bank Lagos City Marathon, Art X Lagos, the African International Film Festival and the finale, the Born in Africa Festival, all aim to change the continent’s negative narrative as well as to project it as a hub for entertainment and creativity.” BAFEST is a daylong event, which kicks off at 9am with the Fashion, Art and Film Park, where various artistes and fashion designers will exhibit their works, while some of Africa’s finest Filmmakers will host movie screenings. The main concert featuring Africa’s biggest talents starts at 6pm.” The Born In Africa Festival takes place at Eko Atlantic City and features notable music stars such as Awilo, Sho Madjozi, Davido, Burna Boy, Tiwa Savage, Falz, Olamide, Yemi Alade, Kizz Daniel, D’banj and lots more. Venue opens at 9am with the Fashion, Art and Film Park, where various artists and fashion designers like David Tlale and Tiffany Amber will exhibit their works, while some of Africa’s finest Filmmakers will host movie screenings. CONFIRMATION OF NAME

This is to notify the general public that Adebisi Taye Oluwafemi and Ajibade Taiwo Oluwafemi refers to same and one person. All former documents remain valid. General public should take note.

CHANGE OF NAME

I, formerly known and addressed as Miss Akawa Blessing now wish to be known and addressed as Mrs. D’Anna Blessing. All former documents remain valid. General Public please take note.

BUSINESS DAY

Wednesday 12 December 2018

FEATURES NMRC: A new leadership and the prospects of a stronger Nigerian housing finance market Terhemen M. Chieshe

Kehinde Ogundimu

in the world behind Deloitte, and is one of the Big Four auditors, along with Deloitte, EY and KPMG. He later worked in various capacities at Texaco Overseas (now Chevron Nigeria Ltd), where he was the Outstanding Employee of the Year 2000. He subsequently worked in the Washington DC region at Pepco Energy Services as Senior Accountant. Between 2004 and 2012, Ogundimu worked at the two largest Secondary Mortgage Companies in the World. This include the Federal Home Loan Mortgage Corporation, known as Freddie Mac, which is a government-sponsored enterprise. Freddie Mac is ranked No. 38 on the 2018 Fortune 500 list of the largest United States corporations with a revenue profile of $67,81 billion in 2017. In October 2004, Ogundimu started work as a Manager with another publicly traded United States government-sponsored enterprise the Federal National Mortgage Association, commonly known as Fannie Mae. Fannie Mae was founded in 1938 during the Great Depression to expand the secondary mortgage market by securitizing mortgages in the form of mortgage-backed securities (MBS), allowing lenders to reinvest their assets into more lending and in effect increasing the number of lenders in the mortgage market by reducing the reliance on locally based savings and loan associations. As of 2018,

Fannie Mae is ranked 21 on the Fortune 500 list of the largest United States corporations by total revenue. Fannie Mae is the world’s fifth-largest financial services company by revenue with over $131.9 billion . During his time at Fannie Mae, Ogundimu managed daily derivatives accounting operations with a notional value of over $700 billion. A notable accomplishment includes leading a 12-person accounting and technology team in the implementation of Summit® (Misys) a

‘

With the strong support of the new Board Chairman, Charles Adeyemi Candide-Johnson SAN, NMRC looks set to go beyond sustaining the current momentum in its mortgage market development activities to building a stronger, robust and liquid housing finance system for the country

‘

he Nigeria Mortgage Refinance Company (NMRC) has a new leadership team to drive its efforts to deepen Nigeria’s primary and secondary mortgage markets and make home ownership more affordable. The Board of the private sector-driven mortgage liquidity facility on 30, November announced the appointment of Mr. Adeyemi Candide-Johnson as its new Chairman and confirmed Mr. Kehinde Ogundimu as the substantive Managing Director/Chief Executive Officer. Mr. Candide-Johnson takes over from Dr. Charles Okeahalam who retired effective 30th November. The development at NMRC is significant because of the central role that the company plays in Nigeria’s emerging housing finance industry. The new leadership team blends remarkable professional qualifications and a wealth of global experience in the housing financial services industry. This inspires hope for sustained innovation and ingenuity that is required to provide fillip to the momentum of mortgage market development that NMRC has ignited for deeper and expansive impact. Take the professional profile of Mr. Kehinde Ogundimu, who was until the confirmation the Chief Finance Officer (CFO) and acting MD/CEO. Ogundimu is a fellow of the Institute of Chartered Accountants of Nigeria (FCA), a member of the American Institute of Certified Public Accountants (CPA), and a Chartered Financial Analyst (CFA) Charter holder. Ogundimu holds a Bachelor of Electrical Engineering degree from the University of Ibadan and obtained an MBA from the University of Lagos, Nigeria. The new NMRC boss is an experienced international housing finance professional. His working career spans over 20 years at top management levels in the financial services - secondary mortgage, diversified banking - energy and public accounting industries. He has built a track record as a results-oriented manager who is effective in reorganizing, streamlining and strengthening financial operations to maximize performance and profitability. Ogundimu started his career at PricewaterhouseCoopers (PWC), a multinational professional service company in Lagos, Nigeria. PwC ranks as the second largest professional services firm

project that impacted the entire treasury operations. Key results of the project include creating a straight-through process from Front Office through Middle & Back Office to Accounting; reducing monthly close/reporting process time; improving accuracy and reliability of financial statement by generating daily accounting results. Ogundimu’s working time at Freddie Mac and Fannie Mae perhaps, mark the most significant period that would most impact his management approach, strategy and mapping of the overall corporate direction of NMRC. This is because NMRC is Nigeria’s version of the two companies. NMRC was specifically designed to replicate the catalytic and developmental role that the two corporations play in America’s robust primary and secondary mortgage markets. Prior to joining NMRC as Chief Finance Officer (CFO), a job he has held for the past three years, Ogundimu worked at Capital One Bank, the 10th-largest bank in the US by total assets ($363 B) for over three years as the Head of Debt, Derivatives and Securitization. He led efforts to improve compliance with regulatory guidelines, enhanced trade execution & analytics and significantly reduced operating costs. A key part of his work also included the consolidation of mortgage origination and mortgage servicing systems where amongst other accomplishments he sig-

nificantly accelerated growth in loan origination and loan servicing business. Ogundimu has also been a key factor in the success stories of NMRC. As the Chief Finance Officer, he led NMRC’s first and second bond issuances that have seen the company raise N19billion from Nigeria’s capital market – N8 billion in July 2015 and N11 billion in June 2018. NMRC has used the proceeds from the bond issues to refinance mortgage loan portfolios of member mortgage banks. He also contributed immensely in NMRC’s strategic policy effort to leverage technology and integrate Nigeria’s fractured housing market. This policy focus led to the development of NMRC’s Mortgage Market System (MMS) under the leadership of his predecessor, Prof. Charles Inyangete. The MMS is the country’s first mortgage management technology infrastructure proffering an end-to-end solution for the housing finance market in Nigeria. It is designed to address the barriers created by the cumbersome processes surrounding home ownership in the country. The MMS infrastructure integrates the financing operations of the key components of the entire housing value chain from construction finance, to primary mortgage origination and administration to secondary market mortgage refinancing. The platform also integrates the Housing Market Information Portal (HMIP) to help address the critical gap in credible data on the mortgage and housing market in Nigeria. Overall, his contributions as NMRC’s CFO have helped the company to maintain an impressive track record of profitability, probity and transparency in its financial activities. As the MD/ CEO with the responsibility to set and drive company direction, his wealth of experience in global financial services companies, exposure to international best practices and strong grasp of strategy, business process engineering and proven resultsoriented management approach will in many ways influence the shape, pace and style of activities at NMRC. With the strong support of the new Board Chairman, Charles Adeyemi Candide-Johnson SAN, NMRC looks set to go beyond sustaining the current momentum in its mortgage market development activities to building a stronger, robust and liquid housing finance system for the country. Terhemen M. Chieshe – a housing industry professional

Wednesday 12 December 2018

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BUSINESS DAY

Tax Issues

Joint Tax Board sees Nigeria taxpayer database exceed 33 million Iheanyi Nwachukwu

ith the ongoing database consolidation o f t h e Jo i n t Ta x B o a r d (JTB), an initiative being executed in collaboration with the Nigeria Interbank Settlement System (NIBSS), a National Taxpayer database of over 33 million individual taxpayers across the country is now a reality. Tunde Fowler, Chairman, Joint Tax Board and Executive Chairman, Federal Inland Revenue Service (FIRS) said at the 142nd meeting of the Joint Tax Board in Bauchi State last month that having this consolidated database, which is clean and credible, opens the door to immense opportunities for the tax administrator at all levels. Speaking further at the JTB meeting themed “Consolidated Credible Database and Exchange of Information: Role of Stakeholders”, Fowler said that the JTB seeks to play an important role in an emerg-

Dele Obanla, staff of Taxpal Nigeria; Adeola Erinle, managing partner, Taxpal; Kunle Ogundipe, chairman of the launch; Sade Coker, director, Lagos State Internal Revenue Service (LIRS); Jide Banjo, chief operating officer, Taxpal and Onotode Jitoboh, at the official launch of Taxpal Nigeria, in Lagos.

ing global community where boundaries have moved beyond physical geographic expressions and where financial flows have become seamless a n d e l e c t ro n i c, ma k i ng i t increasingly challenging for Governments to collect the taxes that are due them. “As we build on this data, we shall also be ensuring that the technological infrastruc-

tures that will facilitate the seamless exchange of data across levels of competent authorities are present. This entails significant investment in Information Technology via the provision of required infrastr ucture, equipment and as capacity building for personnel that will drive the processes,” he noted. The Nigerian government,

in a quest to diversify the economy and increase tax revenue has in recent times introduced numerous measures to widen the tax base at the domestic level and internationally. The Federal Inland Revenue Service (FIRS) in particular has been developing strategies and approaches to improve the non –oil tax revenue collection and even

recovery processes, in order to improve the revenue yield. Nigeria’s tax-to-GDP ratio at 6percent is one of the poorest in Africa and Fowler-led Federal Inland Revenue Services said it is on course to achieving its target of N5trillion from taxes in 2018 fiscal year. He hopes to achieve taxto-GDP ratio of 16 percent to 20 percent by 2020.

Tax revenues in advanced countries increase …over shifts towards corporate, consumption taxes

ax revenues in advanced economies have continued to increase, with taxes on companies and personal consumption representing an increasing share of total tax revenues, according to new research by the Organisation for Economic Co-operation and Development (OECD). The 2018 edition of the OECD’s annual Revenue Statistics publication shows that the OECD average tax-to-GDP ratio rose slightly in 2017, to 34.2percent, compared to 34percent in 2016. The OECD average is now higher than at any previous point, including its earlier peaks of 33.8percent in 2000 and 33.6percent in 2007. An increase in tax-to-GDP levels was seen in 19 of the 34 OECD countries that provided preliminary data for 2017, while tax-to-GDP levels fell in the remaining 15 countries.

Tax-to-GDP levels are now higher than their pre-crisis levels in 21 countries, and all but eight (Canada, Estonia, Hungary, Ireland, Lithuania, Norway, Slovenia and Sweden) have experienced an increase in their tax-to-GDP ratio since 2009. Consumption Tax Trends 2018 highlights that valueadded tax (VAT) revenues continue to be the largest source of consumption tax revenues in the OECD, and have now reached an all-time high of 6.8percent of GDP, representing 20.2percent of total tax revenue, on average in 2016. After experiencing an upward trend since the economic crisis, standard VAT rates stabilised at 19.3percent on average in 2014 and have remained at this level since. Ten countries now have a standard VAT rate above 22percent, against only four in 2008. Two countries (Greece and Luxem-

bourg) increased their standard VAT rate between January 2015 and January 2018, while two countries (Iceland and Israel) reduced their standard VAT rate over this period. With less scope to raise already relatively high standard VAT rates, countries are increasingly implementing or considering base broadening measures to protect or increase VAT revenues. This includes increasing some reduced VAT rates, limiting or narrowing their scope and curbing VAT exemptions. A growing number of tax authorities have implemented or are considering implementation of measures to tackle the challenges of collecting VAT on the ever-rising volume of digital sales, including sales by offshore vendors, in line with new OECD standards. Revenue statistics also contains a Special Feature that measures the convergence of

tax levels and tax structures in OECD countries between 1995 and 2016. The Special Feature highlights ongoing convergence across the OECD toward higher tax levels, with greater reliance on corporate income tax (CIT), VAT and social security contributions, and a slight downward shift in personal income taxes. The latest data confirms this convergence, with CIT, as a share of total taxes, now reaching its highest levels since the global economic and financial crisis, increasing on average from 8.8percent in 2015 to 9percent in 2016. CIT revenues are still lower than their peak in 2007 (11.1percent of total revenues), but are now higher than at any point since 2009 (8.7percent). Between 2015 and 2016, personal income tax revenues decreased from 24.1percent to 23.8percent of total tax revenues. The increase in the aver-

age share of CIT was driven by increases in revenues from CIT in 23 countries in 2016, while the fall in personal income tax was seen in 20 countries. In 2017, the largest increases in the overall tax-toGDP ratio relative to 2016 were seen in Israel (1.4 percentage points, due to tax reforms which increased revenues from taxes on income) and in the United States (1.3 percentage points; due to the one-off deemed repatriation tax on foreign earnings, which increased revenues from property taxes). Nineteen countries had increases but no other country had an increase of more than one percentage point. Ten OECD countries decreased their tax-to-GDP ratios in 2016, relative to 2015, with the largest decreases observed in Austria and Belgium. There were no decreases of more than one percentage point.

Wednesday,BUSINESS 5 December 2018DAY

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InvestJigawa

Jigawa State Investment Promotion Agency www.investjigawa.gov.ng

Wednesday 12 December 2018

BUSINESS DAY

...tune to the future

@investjigawa

E marketing@investjigawa.gov.ng

Land Reforms in Jigawa and unique opportunities for Agribusiness

As a fallout of the crashes in global oil prices in 2014, the need for diversiﬁcation became a mainstream issue in nations who rely on oil as their major source of earnings. In Nigeria, the economy was at the receiving end of the sharp decline in oil prices as it slipped into a recession after recording two consecutive quarters of negative economic growth. It became apparent that sustainable economic development cannot be built solely on the dictates of the oil market. The focus of policy makers quickly shifted to expanding the non-oil sector of the economy and agriculture was given a top priority. In Jigawa State, Government took steps to explore the commercial potentials of agribusiness for job creation and macro-economic development. More people became interested in agribusiness leading to a substantial increase in the demand for land and other natural resources. These resources are ﬁnite and needed to be managed judiciously to ensure sustainable growth in the sector. Efforts were directed towards improving the productivity of farmers through initiatives like the cluster farming models and private sector led organised outgrower schemes. In addition to this, there were deliberate efforts geared towards ensuring that investments in the agriculture sector are compliant with the principles of Responsible Agriculture Investments (RAI). In this report, we are considering the various reforms in land administration, innovative approaches to farmers productivity and the opportunities it opens up for agribusinesses in Jigawa State. ‘ At the forefront of the land for investment reforms is the Land Acquisition and Resettlement Framework (LARF), which seeks to promote responsible agricultural investment in Jigawa state. This means that while agribusiness investors are being greatly sought after, they will have to operate within this framework to ensure a win-win situation for all parties concerned. LARF presumes that large scale land acquisition, typically above 100ha, will only be undertaken as a last resort, where outgrower

arrangements with local farmers for raw material supply is not a viable option and the specialized nature of the investment requires outright control of the land resource.

According to LARF, where land acquisition is paramount, there must be exhaustive consultation and s e n s i t i z a t i o n o f t h e a ff e c t e d community for as much buy-in of the project as practicable. They must be apprised of their rights and educated of the importance of the project and the opportunities available to them. In the LARF implementation, livelihood restoration and guarantee is prioritised over one-off monetary compensation. A classic example of LARF implementation is the 80 million dollars Gagarawa Sugar Project. The promoters of the project were issued land titles for 12,000ha in

2014 without a clear assessment of the impact of the project on the communities involved. On assumption of ofﬁce in 2015, Governor Muhammad Badaru Abubakar ordered a renegotiation of the project, a move that ensured it tilts towards being RAI compliant. The company agreed to embrace a 50 percent out grower arrangement for the project and an agreement to design a program that allows intercropping of local crops by Project Affected Persons (PAP) within the sugar cane stems to ensure food security. This is in addition to the understanding reached to allow local farmers produce their crops during the sugarcane off season which stretches from April to September.

potential of his farming activity. The Jigawa State Government took the initiative of registering individual small holder farmers and clustering them for target input provision and extension service. Good Agriculture Practice (GAP) was introduced to the farmers on the scheme leading to high crop the scheme leading to high crop yields and productivity across the target crops. The scheme has led to massive production output in the selected crops. For instance, the yield of rice has increased from an average

of 2.4 tonnes per hectare to about 5.5 tonnes. Some farms have recorded yields as high as 8 tonnes per hectare. Other crops like wheat, sesame, soyabeans and ground nut have also witnessed signiﬁcant growth So far, a total of 1,306 clusters were established with 64,184 farmers participating. The scheme has been adopted by NIRSAL and is being piloted for 2018/19 wheat season.

His Excellency, Governor Muhammad Badaru Abubakar Inspects one of the cluster farms

The successes recorded in the cluster model has encouraged many investors to enter into contract farming agreements with local farmers for large scale commercial crop production.

engaged more than 10,000 farmers to grow rice paddy. In the same vein, WACOT PLC has cultivated more than 12,000ha of sesame using 6,604 farmers, many of whom have small land holding but To support its 32 MT per hour rice w e r e c l u s t e r e d i n t o mill that is currently under cooperatives. construction, Dangote group PIC: 120,000MT per annum sugar reﬁnery complex in Gagarawa.

The intervention of Government ensured that community buy-in increases tremendously. An open, transparent and accountable compensation process was adopted in guaranteeing that only the real title owners were paid what was due. When the project comes fully on board in 2022, it would have employed more than 6,000 people, with preference given to qualiﬁed members of the host communities. Training centres will be developed within the host communities to bridge the skills gap and prepare community members to take up technical roles in the sugar estate.

Land Titling Registration (SLTR) where GIS technology is being deployed to capture land titles and properly document data of land owners using a secured, efﬁcient and effective database. The exercise is empowering land owners with a timely access to land titles, making it easy for land owners to access credit for their businesses. More than 30,000 parcels of land have been registered in the scheme and is being expanded to cover more agricultural lands in the State. The database generated from the SLTR is being used to feed the State cluster program. The Cluster Program was established Another land reform that is to refocus the subsistence mindtransforming agribusiness in set of the small holder farmer and Jigawa State is the Systematic open his eyes to the commercial

Executive Director Dangote Group, Mlr Edwin Devakumar presenting factory plan to dignitaries during the groundbreaking ceremony of the Dangote Rice Mill, Gagarawa

The State Government is currently simplifying the process through the development of a contract farming policy and an overseeing agency that will see the seasonal cropping based out grower purchase agreements extended to longer contract purchase arrangements between processors and cluster farmers that can last up to two

years or more. The agency will maintain a real time database for all transactions between the farmers, investors, processors and aggregators. It will ensure that investors derive a value for money invested on outgrower transactions, prevent side selling and creates an accountability matrix for both the investor and the farmer.

WEST AFRICA

ENERGY intelligence oil

gas

power

Wednesday 12 December 2018

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BUSINESS DAY

OIL

West Africa: Qua crude offered lower, Angolan cargoes linger sell slowly

Page 44

POWER

South Africa: Eskom wants government to take on $7.2bn of its debt Page 46 INTERVIEW

Debrief

What Qatar’s OPEC exit means for the market FRANK UZUEGBUNAM

Q Carbon Holdings secures $1.25bln to build petrochemicals complex Page 48

OPEC weekly basket price DAY

PRICE

7/12/18

59.2

6/12/18

58.79

5/12/18

60.08

4/12/18

61.09

3/12/18

60.57 Source: OPEC

atar’s decision to leave OPEC effective from January 2019 came as a surprise al though it is more the timing of the announcement that bears significance. The longstanding Saudi-led economic and political boycott of Qatar may have played a large part in the decision, though the country’s energy minister disputes that. “It is absolutely not a political decision,” Saad Sherida alKaabi, newly appointed energy minister said. “Some people say it is because of the blockade and because of other political moves and so on. I am a technocrat all my life and I am a gas man all my life.” Kaabi said the decision had more to do with Qatar focusing on its gas potential and acknowledging its minnow status within crude producer bloc.

“We are small in OPEC,” Kaabi said, referring to Qatar’s approximately 600,000 b/d of crude production. “We don’t have enough weight in OPEC to have an effect, and that is why we are leaving.” Qatar accounts for less than two percent of the cartel’s output, but it is one of the world’s largest LNG producers. Qatar produces almost 80 million mt/ year of LNG along with close to 1 million b/d of condensate and LPG. “We estimate that Qatar’s move, while likely to fuel tensions with its Gulf Cooperation Council (GCC) neighbours, will not decisively affect OPEC’s ability to influence the oil market as Qatar represented a very small player within the cartel,” Fitch Solutions Macro Research analysts stated in a report. “However, negative consequences for OPEC might be more of a reputational order, as the organization has been trying to attract new members and might struggle to retain some

if Qatar’s withdrawal paves the way for other small producers to leave too,” the analysts added. Qatar’s decision may work in favor of major Asian oil consumers as the Persian Gulf producer could focus on increasing its condensate output, while ensuring stable supply of its light and medium sour crude oil in the Middle Eastern spot market, industry sources and analysts said. Many Asian refiners and petrochemical companies have been struggling to access Iranian South Pars condensate amidst the re-imposition of US sanctions on Tehran that took effect November 5 and left Qatar as the only supplier capable of exporting 300,000 b/d or more of ultra-light crude oil. Various Asian refinery sources said Qatar’s flagship deodorized field condensate (DFC) and low sulfur condensate (LSC) are crucial feedstock grades for their petrochemicals production and gasoline blend-

ing. Asian refinery and trade sources, therefore, see plenty of positives in Qatar’s exit from the OPEC as the move could potentially free Doha from any major crude oil production cut obligations. “This could mean Asia can at least find steady supply of light and medium sour Qatari crudes in the Middle Eastern spot market,” said a source at a Chinese state-run oil trading company. Unlike many of the Persian Gulf crude oil grades including Saudi Arab Light and Kuwait export blend that are strictly sold on term contract basis with destination restriction, Qatar’s flagship Land, Marine and Al-Shaheen crudes are actively and freely traded in the international spot markets. As a result, Qatar’s detachment from official OPEC output cut agreements should help keep spot trading activities, liquidity and supply volume in the Dubai benchmark basket stable to some extent, market sources said.

44 BUSINESS DAY WEST AFRICA Outlook

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oil

West Africa: Qua crude offered lower, Angolan cargoes linger sell slowly

ffers of Nigerian crude were heard to be steady while Angola crude oil cargoes are slowly finding buyers, traders said. Angola crude oil cargoes remained in ample supply while offers of Nigerian crude were heard to be edging lower from previously reported levels. Qua Iboe was being offered at dated Brent plus $1.65 a barrel, the lower end of a range given ear-

lier. The Nigerian market has suffered the most from freight rates, which for a VLCC sailing east from West Africa are at the highest in three years. The market has around 14 unsold January cargoes of Angolan crude available, down by 3 cargoes but still a sizeable overhang given that next month’s programmes will be out in just over a week. Cargoes have sold for weaker differentials than in the previous month, a trader said, putting the

Wednesday 12 December 2018

month-on-month decline at around 50 cents a barrel, due to softer demand. The Angolan unsold cargoes include two cargoes of Cabinda, two of CLOV, two of Pazflor and two of Saturno. West Africa crude buyers have been deterred by weak Asia refining margins and high freight rates. Asian gasoline margins have hit their lowest in seven years, against a backdrop of vast supply in the region, making it uneconomical to process

Brief

the fuel. Slow demand from Chinese refiners that have more than enough oil in storage, along with expensive freight have created a backlog of unsold cargoes. The forward market is in contango, which in theory would favour storing and shipping oil, but the structure simply is not deep enough at the moment to make either of these options particularly economical, two traders said.

Ghana: Tullow oil seeking partners in bid for additional Ghana block

K oil explorer Tullow Oil is seeking partners in a bid to acquire a new oil block in Ghana which launched its first oil bidding round in October, Kweku Awotwi, the company’s managing director said. Tullow is already lead operator of two oil fields in Ghana including its flagship offshore Jubilee field, with cumulative output currently at around 160,000 barrels per day, Awotwi told reporters in Accra. “We are looking for both local and international companies to partner with in the bidding rounds and we have spoken to a number of them,” he said. “It is obvious there is

good resource out there and the thinking has always been that you cannot do it alone,” Awotwi later told Reuters. Tullow had to delay the development of its second field - Tweneboah, Enyenra, Ntomme (TEN) due to a maritime border dispute between Ghana and its western neighbour Ivory Coast. Awotwi said following a resolution of the dispute by the International Tribunal of the Law of the Sea last year, Tullow had drilled three wells for TEN and two more for Jubilee. “Things are improving and production is going up,” he said, projecting that output could reach 180,000 barrels daily by the end of March next year.

NOC warned that the forced closure would have “devastating” consequences affecting the country’s economy, other nearby upstream and downstream projects and exacerbate a local fuel supply crisis. This comes as Libya’s oil production has fallen sharply over the past few weeks as bad weather hit output and exports at its key oil facilities. On December 5, all of its oil export terminals were shut but by December 7 all terminals reopened, according to a NOC spokesman.

Security problems continue to plague the Libyan oil sector, which has seen dramatic swings in production over the past few years, as rival militias vie for power and control of fields. “Supply to the Zawiya refinery would also be affected. This would equate to a combined daily cost to the Libyan economy of $32.5 million. The oilfield at present remains open,” added the organization. The NOC has termed the protests by PFG who threatened employees to shut down production as an “occupation”.

Libya: Forced shutdown of Libya’s largest oil field would be ‘catastrophic’

roduction from Libya’s largest oil field is under threat due to a protest from the Petroleum Facilities Guards and a forced closure would have “catastrophic” consequences, the state-owned National Oil Corporation warned. “A shutdown of the Sharara field would result in a production loss of 315,000 b/d, with a knock-on effect of 73,000 b/d at El Feel due to its dependence on Sharara electricity supply,” NOC said in a statement.

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Wednesday 12 December 2018

gas

ENERGY intelligence

GLOBAL LNG: Prices at six-month lows as floating cargoes released

Low demand during the northern hemisphere winter and falling prices follow frantic buying by Asian utilities in September and October, filling up storage for the coming months. Nevertheless, some traders bet on continued high demand and began using laden LNG carriers as storage in waters off Singapore, Malaysia and South China, while others had cargoes waiting there for delivery slots to become free. When the market turned to backwardation, some of these traders sold the cargoes if only to gain from skyhigh shipping rates by subleasing the newly freed-up tankers. Despite the low de-

WEST AFRICA

Brief

sian spot prices for liquefied natural gas (LNG) slumped to a six-month low, bucking the usual winter trend, as low demand persisted and supplies were boosted by deliveries from tankers that had been floating in north Asian waters for weeks. Spot prices for January delivery dropped a dollar to $8.80 per million British thermal units (mmBtu), the lowest since May and below the levels of a year ago, for the first time in 2018. Prices for February delivery, although also weaker, dropped less and returned to contango with the January. Prices were estimated at around $9.00 to $9.30 per mmBtu for February.

BUSINESS DAY

mand, several cargoes were sold in both Pacific and Atlantic basins, according to trade sources. US producer ExxonMobil has sold a late December cargo from Australia’s Gorgon plant on a delivered ex-ship (DES) basis, a trader said. Australia Pacific LNG (APLNG) sold a DES cargo for January below $9 per mmBtu, a shipping source said. Kuwait Foreign Petroleum Exploration Company (Kufpec) is closing on Friday a tender for a free on board (FOB) cargo loading on Jan. 18-23 from Australia’s Wheatstone plant. Russia’s Novatek will sell the rest of its winter cargoes to Europe, having covered three positions in Asia — a way of cutting down on ship-

ping costs from Europe to Asia, a source with knowledge of the matter said. Novatek bought cargoes for December at a $1.60 premium to the Dutch gas hub benchmark price, a January cargo at a slight discount to the spot Asian LNG price and February cargo linked to Brent crude, the source said. Novatek is trying to sell two summer cargoes to Asia, with prices expected to be linked to oil, according to the source. In the Atlantic, Nigeria LNG sold an FOB cargo for December loading from its Bonny plant, after offering at least two at the end of November, several sources said.

Egypt: Egypt approves BP purchase of 25pct of Nour gas concession

P and UAEb a s e d Mubadala Investment Co are to buy stakes in the Nour deepwater gas concession off the northern coast of Sinai, following approval by Egypt’s petroleum ministry. Eni announced that the sale of a 20 percent participating interest to Mubadala Petroleum, a wholly-owned subsidiary of Mubadala Investment Company, and a 25 percent participating interest to BP in the Nour North Sinai Offshore concession, Egypt, has been approved by the Egyptian Government. The transactions were approved during a ceremony in Sharm El Sheik by the Egyptian Government represented by the Egyptian Petroleum Minister, Tarek El Molla. The approval follows the signing of farm out agreements with Mubadala Petroleum in November and BP in early December respectively. In the concession, which is in participation with Egyptian Natural Gas Holding Company (EGAS), Eni now holds a 40 percent stake, BP holds a 25 percent stake,

Mubadala Petroleum a 20 percent stake while Tharwa Petroleum Company a 15 percent stake of the contractor’s share. This transaction is part of a wider business alignment with BP internationally and further strengthens the relationship with Mubadala Petroleum in Egypt. Nour is a block located in the prolific East Nile Delta Basin of the Medi-

terranean Sea, approximately 50 km offshore in the Eastern Mediterranean, with a water depth ranging from 50 m to 400 m, covering a total area of 739 km2. Eni is currently carrying out the drilling of the exploration well as foreseen in the first exploration period of the Nour concession. Eni has been present in Egypt since 1954, where it operates through the sub-

sidiary IEOC. The company is the main producer in the country with an equity production of around 340 Mbpoed. Nour lies near the Zohr gas field, which was declared the biggest in the Mediterranean when it was discovered in 2015. Zohr is estimated to hold about 30 trillion cubic feet of gas and has raised interest in gas exploration in Egypt.

Ukraine: Ukraine launches first international bidding round to boost gas output

kraine has launched a landmark international bidding round for the rights to explore at some 30 license areas throughout the country as Kiev seeks to boost its domestic gas production and reduce its import dependency. The State Geological Service of Ukraine said 10 blocks would be offered in the first stage of the licensing round, with applications invited from interested parties for a period of 90 days. The first auction will then take place on March 6 next year. The remaining 20 blocks will be auctioned at a later date. Ukraine’s gas production has been steady at some 20 Bcm/year for

the past 25 years, but it has vast untapped potential in its onshore blocks, both for conventional and unconventional resources, as well as in the Black Sea. While looking to produce more gas domestically, Ukraine also wants to eliminate imports, which currently all come from Europe after Kiev

halted direct Russian gas purchases in November 2015. Kiev has the ambition of achieving gas selfsufficiency in the coming years, raising production levels to meet gas demand that is currently running at some 28 Bcm/year. But Ukraine has struggled to attract international investors into its

upstream in recent years, not least due to the ongoing conflict in the east of the country. International majors such as Chevron and Shell came to Ukraine in the early 2010s in an attempt to develop the country’s unconventional gas resources, but none remain. The recent escalation in tensions between Moscow and Kiev after Russia seized three Ukrainian naval vessels could also detract investors from taking acreage in the country. Nonetheless, Ukraine is moving ahead with the licensing round, with the first 10 blocks covering some 1,810 sq km to be auctioned in March via the public trading platform ProZorro.Sale.

46 BUSINESS DAY WEST AFRICA ENERGY intelligence

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Wednesday 12 December 2018

power

South Africa: Eskom wants government to take on $7.2bn of its debt

outh Africa’s struggling staterun power firm Eskom wants the government to take on 100 billion rand ($7 billion) of its debt as part of a turnaround plan to shore up its balance sheet, Jabu Mabuza, Eskom Chairman said. Cash-strapped Eskom is struggling to emerge from a financial crisis characterised by declining electricity sales, ballooning debt and liquidity problems. Mabuza made the comments as Eskom was meeting investors on a roadshow to London and country. Universal access to the United States. A financial market electricity is a key requirement for meeting source in London conKenya’s development goals under Vision 2030 of becoming a newly industrialised and middleincome country. Kenyan households and businesses will need olar projects competitively-priced, restretching across liable, safe and sustainthe Sahel region able energy to deliver on are expected its Big Four Agenda prito connect 250 million orities: affordable houspeople with electricity by ing, manufacturing, food security, and universal tapping into the region’s abundant solar resource. healthcare. The details of the Des“The World Bank is committed to helping ert to Power Initiative Kenya extend modern, have been outlined as affordable, reliable and part of the Paris Agreeclean energy services to ment climate change talks all its citizens,’’ said World at COP24 in Katowice, PoBank country director, Fe- land. Energy poverty in Aflipe Jaramillo. “Currently, the bank is rica is estimated to cost financing electrification the continent 2-4 percent under the ongoing Kenya GDP annually, according Electricity Modernisation Project (KEMP) and Kenya Off-grid Solar Access Project which targets to connect 235,000 and 1.3 million new beneficiaries, respectively,” Jaramillo added. The electrification strategy will deploy geospatial technology to develop a mechanism that provides objective planning data. This data will assist national and county policymakers in making informed decisions regarding grid and off-grid investments required for electric service provision.

Kenya: Kenya rolls-out roadmap to achieve universal electricity access by 2022

he Kenyan government has launched the Kenya National Electrification Strategy (KNES), developed in partnership with the World Bank, which provides a roadmap to achieving universal electricity access for all Kenyans by 2022. “Tremendous achievement in scaling up connectivity has been made over the last few years. Total access to electricity now stands at 75 percent. However, there was a need to come up with a new National Electrification Strategy to deal with the challenges of bringing the entire country under electrification in an economically viable manner,” said Charles Keter, Cabinet Secretary, Ministry of Energy. With the help of the geospatial tool, the strategy has identified leastcost options for bringing electricity to households and businesses throughout the country. The strategy recognises the key role played by offgrid options, mini-grids and stand-alone solar systems that complement grid extension and intensification. Above all, it highlights the crucial role that the private sector will need to play in providing offgrid solutions for Kenyan homes, businesses and community service centres in remote parts of the

firmed that Mabuza had told investors about moving 100 billion rand of Eskom’s debt onto the government’s balance sheet during the roadshow. Khulu Phasiwe, Eskom spokesman declined to elaborate on Mabuza’s comments, saying the company’s turnaround plan was still the subject of discussions with key stakeholders in government. Mabuza told a news conference recently that asset sales could not solve Eskom’s problems and that a bailout or debt relief were preferable. The utility company expects to make a loss before tax of more than 11.2 billion rand this financial year.

Africa: Desert solar initiative to provide electricity to 250m people

to the African Development Bank (AfDB), which is leading the project. The initiative aims to develop and provide 10GW of solar energy by 2025 and supply 250 million people with green electricity including in some of the world’s poorest countries. At least 90 million people will be connected to electricity for the first time, lifting them out of energy poverty. Currently, 64 percent of the Sahel’s population

- covering Senegal, Nigeria, Mauritania, Mali, Burkina Faso, Niger, Chad, Sudan, and Eritrea - lives without electricity, a major barrier to development, with consequences for education, health and business. By harnessing the exceptional solar resource in the region, AfDB and its partners hope to transform the region. Magdalena J. Seol in the AfDB’s Desert to Power Initiative said: “The project will provide many benefits to local people. It

will improve the affordability of electricity for low-income households and enable people to transition away from unsafe and hazardous energy sources, such as kerosene, which carries health risks. Construction of the project will also create jobs and help attract private sector involvement in renewable energy in the region. The project has been launched in collaboration with the Green Climate Fund, a global pot of money created by the 194 countries who are party to the UN Framework Convention on Climate Change (UNFCCC), to support developing countries adapt to and mitigate climate change. The programme is designed to combine private sector capital with blended finance. “If you look at the countries that this initiative supports, they are the ones who are very much affected by the climate change and carbon emissions from other parts of the world,” underlined Seol.

Wednesday 12 December 2018

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WEST AFRICA

ENERGY intelligence

BUSINESS DAY

Carbon Holdings secures $1.25bln to build petrochemicals complex

Brief

Chevron sets first capital spending budget increase in 4 years

hevron Corp plans to spend $20 billion next year on oil and natural gas projects, the second-largest US oil producer said in a statement, its first increase in four years. Its 2019 capital spending budget is at the high end of an $18 billion to $20 billion per-year range that Chevron executives set earlier this year as the annual target through 2020. The company has said it expects to spend $19.8 billion this year. Among the highlights of its budget, Chevron plans to spend more on shale production next year and more on investments in refining and chemicals, according to its spending projection. It plans to spend $3.6 billion in the Permian Basin of West Texas and New

Mexico and $1.6 billion for other shale regions, or $5.2 billion in total, up from $4.3 billion on such investments this year. Two-thirds of the 2019 budget will go toward projects that “realize cash flow within two years,” Chief Executive Michael Wirth said in a statement. Chevron also said it would spend $4.3 billion on the giant Tengiz field in Kazakhstan, up from the $3.7 billion budgeted this year. About $2.5 billion of planned spending will go towards its business that refines, transports and markets fuels and petrochemicals, up $300 million from the amount it projected to spend this year. Most oil producers have yet to disclose their 2019 budgets, which generally are released in December and January.

gypt’s Carbon Holdings has secured $1.25 billion in financing to build a giant petrochemicals complex in the Red Sea port of Ain Sokhna. The Tahrir Petrochemicals Complex, a $10.9 billion project, would be the largest in the Middle East and is expected to create 48,000 jobs. Carbon signed the financing contract with Africa Finance Corporation (AFC), a Lagos-based development financier, on the sidelines of an Africa business forum in the resort of Sharm al-Sheikh, the Egyptian cabinet said in a statement. Sanjeev Gupta, AFC executive director for financial services, was quoted in the statement as saying: “We are proud of our partnership with Tahrir Petrochemicals Complex which will be a major breakthrough in one of the most important petrochemical industries in the region.” Carbon, a private company, signed the contract to build the complex in June. Work is expected to begin in the first quarter of 2019. Tahrir will have to export all its production in the first year but as out-

put increases, domestic manufacturers will be encouraged to expand and foreign ones will consider setting up next to the Suez Canal, he had said. Carbon Holdings already has a polypropylene plant and a mining grade ammonium nitrate plant. The government says

the 460-square-km economic zone around the canal will be used to develop an international industrial and logistics hub to attract foreign investment. The Tahrir Petrochemicals Complex, which is being funded by credit agencies in the United States, Britain and Ger-

many, is Egypt’s first naphtha cracker and will produce different types of petrochemicals used to make various consumer and industrial goods. Egypt aims to step up exports and reduce imports to revive the economy, which was hit by unrest that followed the 2011 popular uprising.

Kenya Pipeline Company’s CEO arrested over loss of funds

enya has appointed an acting chief executive to the state pipeline company KPC after five of its senior executives, including the CEO, were arrested in connection with the loss of funds at the firm, the latest move to crack down on corruption. Dozens of Kenyan government officials and business people have appeared in court since May on charges relating to the alleged theft of hundreds of millions of shillings from public coffers in a new drive to tackle widespread graft.

Hudson Andambi, an official at the ministry of petroleum has been picked as acting CEO of KPC, the ministry said, saying the move was due to “unfolding events at the Kenya Pipeline Company and the arrest of the top management.” “This is to ensure that operations continue without interference for purposes of ensuring security of supply of petroleum products,” the ministry said in a statement. Joe Sang, the MD of KPC, was arrested with four other senior officials in connection with the loss of an unspecified

amount of money during the construction of an oil jetty in the western city of Kisumu. In a statement the director of public prosecutions Noordin Haji said there was “sufficient evidence to support various charges” against six suspects related to the oil jetty project which cost 2 billion shillings ($19.55 million). He listed the charges as abuse of office, failure to comply with procedures and executing a project without prior planning. Sang, who has been in his post since early 2016, wrote to KPC’s board ear-

lier saying he would not seek an extension of his contract on its expiration next April. He cited unspecified personal reasons for his decision. KPC’s board said it had decided to allow oil marketing companies to carry out a forensic audit of their fuel stocks after they complained about excessive losses. President Uhuru Kenyatta promised to stamp out graft when he was first elected in 2013, but critics say he has been slow to pursue top officials. No high profile convictions have occurred since he took office.

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marketinsight Oil extends gain near $62 a barrel

OPEC Flakes OPEC coalition agrees 1.2m b/d cuts deal as Iran secures exemption

exacerbated a global glut by pumping at record levels. Brent for February settlement increased as much as 66 cents to $62.33 a barrel on London’s ICE Futures Europe exchange and traded 0.5 percent higher at $61.96 a barrel in London. Futures rose $1.61 to $61.67 a barrel. The global benchmark crude traded at $9.28 above US West Texas Intermediate for the same month. WTI futures for January delivery were little changed

and traded at $52.50 a barrel on the New York Mercantile Exchange. Prices rose 2.2 percent to $52.61. Total volume traded was 32 percent above the 100-day average. Crude futures both in London and New York surged as much as by at least 5 percent after OPEC+ coalition managed to reach a deal to remove more than 1 percent of global production to revive prices. The deal is testament to the strength of Saudi Arabia’s two-year-long cooperation

with Russia and showed Crown Prince Mohammed bin Salman is willing to defy the wishes of Trump even after the murder of Jamal Khashoggi. In Libya, production from the Sharara oil field was shut after the state oil company declared force majeure. The closure will result in a production loss of 315,000 barrels a day, with an additional decrease of 73,000 barrels a day at the El-Feel due to its dependence on Sharara for electricity supply.

European Commission wants crude oil price indices in euros, more euro energy trade he European Commission wants price reporting agencies and market players to consider euro-denominated price benchmarks for crude oil, EU climate action and energy commissioner Miguel Arias Canete said.

WEST AFRICA

ENERGY intelligence

il extended gains near $62 a barrel on prospects for a shrinking glut as the OPEC+ group agreed to curb output and protesters forced Libya’s biggest crude field to close. Brent futures rose as much as 1.1 percent after jumping 2.7 percent as producers including Saudi and Russia committed to removing 1.2 million barrels a day of output, more than the market had expected. Skepticism before a producer meeting in Vienna last week had seen money managers boost bets against crude. Meanwhile, Libya’s state oil firm declared force majeure at its largest oil field after members of the Petroleum Facilities Guard shut down pumps leading to tanks. Crude is paring this year’s losses after the Organization of Petroleum Exporting Countries and its partners defied US President Donald Trump’s call for the producer group to keep taps open. Prices have slid from a four-year high in early October highs after Washington gave temporary exemptions from sanctions to eight nations to continue purchasing Iranian oil, while America

Wednesday 12 December 2018

Targeted consultations starting next year will gather feedback on the need to set up a euro-denominated crude oil price benchmark to be referenced in contracts, Canete told reporters as he presented an EC recommendation to increase energy trading in euros.

“We will invite stakeholders to express their views on the market potential for a broader use of euro-denominated transactions for crude oil, refined products and gas,” he said. The EU spends around Eur300 billion/year ($340 billion) on average on energy imports, and around 85 percent of this is paid in US dollars, despite energy imports from the US being only 2 percent of the total, Canete said. Most of the EU’s energy imports come from Russia, Norway, the Middle East and Africa. This US dollar dominance, combined with “recent unilateral actions by third countries”, a reference to the US decision to re-impose sanctions on Iran, can make energy trade more difficult, Canete said. The EC plans to consult national governments, central oil stock holding entities, energy market players, price reporting agencies,

commodity exchanges, and European companies providing financial services on how to use more euros in energy trading. It also plans to consult separately on using the euro more in contracts for metals and minerals, for agri-food commodities, and for transport manufacturing. It plans to report on the results of these consultations next summer, with the next steps to be decided afterwards. The EC’s recommendation has no legal force and EU officials stressed that market players retain their free choice as to which currencies they use. EU officials said the EC was not expecting major dollar-denominated crude benchmarks would switch to euros, but wanted to explore the potential for new euro benchmarks, or for paying in euros for contracts linked to a dollar benchmark.

PEC and its allies led by Russia agreed after a tension-filled week to implement 1.2 million b/d of production cuts from January 2019 to shore up flagging oil prices and prevent a supply surplus building. The result no doubt came as a relief to Saudi Arabia, which had strongly pushed the cuts, but saw several OPEC members, notably geopolitical rival Iran, seek exemptions that threatened to undermine the deal. Even close ally Russia put the squeeze on Saudi Arabia to bear more of the cuts. In the end, the kingdom relented on exemptions for Iran, Libya and Venezuela. OPEC would cut 800,000 b/d under the deal, or 2.5 percent of production for each member, with the 10 nonOPEC partners slashing 400,000 b/d, or 2 percent. The cuts, using October as the baseline level, except for Kuwait, which

will use September, as its production was impacted by bad weather in October, will last for six months, through the end of June. The 24-country OPEC/non-OPEC coalition will meet in Vienna again in April to assess progress amid concern over the health of the global economy and the impact of trade wars on demand. OPEC and its allies have been forced into action by a slump in crude prices since October when Brent was trading at $86/b. The benchmark fell below $60/b this week before rebounding following the decision.

OPEC November crude output rises 40,000 b/d to 33.08 mil b/d

S sanctions pushed Iran’s crude oil production to below 3 million b/d in November, but a massive 350,000 b/d increase by Saudi Arabia and a 130,000 b/d surge by the UAE, both of whom hit record highs, kept OPEC’s collective output from falling, an S&P Global Platts survey of shipping data, analysts and industry officials found. OPEC’s 15 members produced 33.08 million b/d in November, a 40,000 b/d rise from October, according to the survey. That is the highest since July 2017, when barrels from the Republic of Congo, which joined the organization in June, are not included. Saudi Arabia, OPEC’s largest producer,

pumped 11.02 million b/d in the month, just over 1 million b/d more than it did in May, when it began ramping up output under pressure from the US to keep oil prices low. This is the second month in a row the kingdom has set an all-time high in production, according to survey data. Close ally the UAE, meanwhile, also set a record for a second straight month, boosting production to 3.30 million b/d in November, up 430,000 b/d from May, the survey found. Iran took a 310,000 b/d hit in the month to average 2.98 million b/d in November, dropping the country behind the UAE to become OPEC’s fourth largest producer. This is the first time Iran’s output has fallen below 3 million b/d since January 2016, when the US sanctions were suspended by the nuclear deal. Overall, compliance among the 12 OPEC members with quotas under a production cut deal in force since January 2017 fell to 109 percent in November from 118 percent in October.

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The Nigerian oil, gas (upstream) industry on rally with healthy margins sustained OLUSEGUN OWADOKUN

fter the challenging operating environment that dotted 2016, the Nigerian Oil & Gas (Upstream) Industry has rebounded, posting relatively better results in the financial year ended 31 December 2017 (FYE 2017). This was quite evident in the fact that most Industry players grew their topline in 2017 on the heels of the depressing results of 2016. The change in the fortunes of most operators was attributed to the rally in crude oil prices in 2017 after the global oil price crash of 2014 to 2016. For instance, one of the key players in the Nigeria Oil & Gas (Upstream) Industry, Seplat Petroleum Development Company Plc grew its turnover by 106% year-on-year (“yoy”) to US$417.4 million1 in 2017. In the same vein, Oando Plc grew its exploration and production (“E & P”) business to ₦103.5 billion in 2017, representing a 34% yoy rise over prior year. The scenario also plays out for the global oil majors such as Shell, ExxonMobil and Total, who equally recorded relatively exciting results over the last one year. These key players have ridden on the momentum in 2018 posting impressive nine months’ results. Seplat’s turnover rose by 104% yoy to US$568 million for the nine months ended 30 September 2018 (“9M 2018”). As a result, Seplat posted an impressive gross profit margin of 54% in 9M 2018 (9M 2017: 45%) and profit before tax margin of 37% on the back of a loss before tax margin of 0.9% recorded in the corresponding period of 2017. Similarly, Oando Plc’s E & P turnover grew by 56% yoy in 9M 2018. Movements in oil price volatility remain the single most important determinant of Upstream Industry’s performance The recovery in topline performance among Industry players could be attributed first to the single most important determinant of success in the Upstream Industry – oil price. There is a strong positive correlation between the Industry’s earnings growth and oil prices. Periods of sustained oil price regime are almost always associated with the boom period for Industry operators and the converse is sadly very true for them. Higher oil prices not only result in generally better profit margins for operators, they also encourage the players to invest in profitable capital expenditure to develop and expand their oil reserves. This ultimately assures of the sustainability of earnings and invariably the going concern of the E & P companies. Another key factor that influences the Industry’s performance is geo-political risks associated with the incidence of militancy in the oil-rich Niger Delta region of the country. It is a known fact that militant activities in the region have been responsible at various times for disruptions to production, leading to declaration of force majeure by E & P companies. These activities also result in pipeline vandalism, making it difficult for operators to export their crude oil for sale to their foreign trading partners. In May 2016, the country recorded a low crude oil production of

1.67 million barrels per day2 (“mbpd”) due principally to pipeline vandalism and production disruption linked to militant activities. The third element that has a serious impact on the performance of Industry centres on the passage of an omnibus Industry legislation, popularly referred to as the Petroleum Industry Bill (“PIB”). The PIB seeks to address the fiscal, administrative, legal and social issues around the Industry in general. Most Industry stakeholders, for example, have attributed the stall in the country’s proven crude oil reserves, which have stood unchanged at about 37 billion barrels for almost a decade to the lack of adequate investments in the Upstream Industry caused by the prolonged delay in the passage of the PIB. Unfortunately, none of these factors fall under the direct control of Industry’s operators. They are largely influenced by external variables. Some of these variables include: Oil price volatility is influenced by a host of external factors It is an incontrovertible fact that the Upstream Industry swims or sinks depending on the direction of crude oil prices which are extremely hard to call. The commodity’s prices are determined by a complex interplay of different variables including demand/supply dynamics; health of the global macro-economy; OPEC influence bordering on output control with a view to regulating prices; the level of global inventory or stock of the product; the appreciation/depreciation of the United States dollar; technological innovations; and other factors such as weather and natural disasters. Despite the unpredictability of global crude oil prices, we believe the current rally in oil prices is sustainable in the short to medium term with the OPEC Reference Basket (“ORB”) to average about US$65 per barrel in 2018. This is hinged on the assumption that OPEC will sustain its cur-

rent policy on production cuts as well as the growing demand for oil from emerging economies like China and India. Respite from the militants in the Niger Delta region Following the testing start of the current administration of President Buhari regarding the issue of militancy in the Niger Delta, which led to oil production challenges, the Industry seems to have turned the corner with oil production averaging 2.1 million barrels since November 2017. We expect production to remain stable at 1.1million barrels in the near, as any pockets of unrest in the oil-rich region have been curtailed by the government, at least for the time being. Passage of the PIB – A signal of investors’ confidence in the Industry? After so many failed attempts at passing a comprehensive PIB, the National Assembly decided to split the original bill into several parts to aid easier passage. The National Assembly passed the first leg of the PIB, known as the Petroleum Industry Governance Bill (“PIGB”) in the first quarter of 2018. The PIGB is intended to create, amongst other things, efficient and effective governing institutions with unambiguous and separate roles as well as provide the requisite framework for the establishment of commercially-oriented and profit- driven entities for the Industry. We believe the other parts of the bill which border on fiscal, administrative and host community issues will be passed after the conclusion of the 2019 general elections. Although the President has withheld assent to the PIGB on constitutional and legal grounds, we are of view that the enactment of the bill into law will signal confidence in the oil & gas sector generally. Nevertheless, there are some areas of concern regarding the content of the new PIGB. First, we are worried about the effectiveness of the proposed Nigerian Petroleum Regulatory Commission

(which will replace DPR) to monitor all operators in the upstream, mid-stream and downstream sub-sectors. In order to address this, there would be need for future amendments that seek to unbundle the Commission into separate regulators to cater for the different segments of the oil & gas sector. Second, the current PIGB still vests the President with too much powers, as the President (who presently doubles as the Minister of Petroleum Resources) is vested with the power to suspend or remove any member of the Commission’s Board without the approval of the National Assembly. This may need to be reviewed in subsequent amendments. And lastly, the omission of the tenure of office of Managing Directors and Executive Directors for both the Nigeria Petroleum Assets Management Company and the National Petroleum Company (two new entities to be created under the PIGB) should be fixed in subsequent amendments in line with corporate best practice. Conclusion In conclusion, we are of the opinion that the current rally in crude oil prices as well as the relatively stable operating environment in the Niger Delta should continue in the near term. In addition, the regulatory uncertainty which has stalled capital investments especially in offshore exploration and development is being addressed with the eventual passage of the PIGB. However, Industry players should be cautious in engaging in over-investing and excessive leverage, which might make it difficult for them to withstand any shocks in oil prices and other uncontrollable factors highlighted in the foregoing. All things considered, we are hopeful that the performance momentum in the Upstream Industry should be sustained in the short term to medium term. Olusegun Owadokun, CFA, is Senior Analyst, Corporate & Municipal Ratings Agusto & Co. Limited

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Investors face big call as Mexico’s López Obrador prepares budget Fund managers start to form a view on new president in wake of falls for peso and stocks Colby Smith

h e n M e x i c o ’s Andrés Manuel López Obrador secured one of the strongest political mandates in the country’s history in July, investors initially held out hope that the leftist nationalist would toe a more moderate line once in office. In recent weeks, that prospect has dimmed following a raft of policy decisions that have thrown into question the soundness of Mexico’s investment climate and ratcheted up the cost of capital at a time when Mr López Obrador needs financing from abroad to make good on campaign promises that won him the presidency. “Sentiment has definitely changed in Mexico,” said Cathy Hepworth, co-head of EM debt at PGIM Fixed Income. “Our base case is that things are probably going to get worse.” Spreads between Mexico’s government bonds and US Treasuries have widened substantially since early November, indicating that investors are pricing more risk in Mexican assets. The peso has fallen more than 7 per cent against the dollar over the past two months following Mr López Obrador’s embrace of some of the more populist edges of his platform. Making the right call on Mexico matters to emerging market investors given the country’s sovereign debt has the largest weighting in the widely followed JPMorgan EMBI Global Diversified index. As fund managers decide where to put money in 2019, the new government’s debut budget this month will attract close scrutiny. The run-up to it has been marked by a clash between the ad-

ministration and investors holding $6bn worth of bonds sold to finance a new airport in Mexico City now slated for cancellation. Mr López Obrador, known as Amlo, has promised to uphold the results of a controversial “public poll” he organised as president-elect, which called for the project’s end despite it being a third of the way complete and nearly 70 per cent financed. Last week, holders of more than $1bn of the bonds rejected the government’s deal to buy back a portion of the debt in return for a loosening of creditor protections on the remaining balance. Despite asking investors to accept less than they initially paid out, the offer showed a “willingness on the government’s part to find an amicable solution”, said Luis Yance, a local investor with Compass Group and a sub-adviser for Investec Asset Management, which holds the debt but has not joined the group of bondholders rejecting the deal. “The risk has definitely increased because this was supposed to be a growth stor y, and the bonds were originally underpinned by much more collateral,” Mr Yance conceded. But the government’s “lowball” offer, he said, was just part of the negotiating process. “They aren’t going to give up everything they’re willing to give up right at the start.” Investors also balked at Mr López Obrador’s decision last week to suspend oil auctions for three years. While the president confirmed that his administration will honour any outstanding contracts, Henry Peabody, portfolio manager at Eaton Vance, said the energy sector’s reform narrative had “paused”.

UK development arm CDC to invest $180m in Africa’s Liquid Telecom Fibre optic and cloud computing provider plans expansion as demand for data surges

David Pilling

he CD C is investing $180m in Liquid Telecom, Africa’s largest independent fibre optic and cloud computing provider, in one of the biggest equity investments in the 70-year history of the UK government’s overseas development arm. Liquid Telecom, which has built fibre optic networks across 13 African countries, including a Cape Town to Cairo link, said it would use the capital to accelerate its expansion in the face of what it called “exploding” demand for data in Africa. Strive Masiyiwa, chairman of Econet Global, which has a

51 per cent stake in Liquid Telecom, said of the estimated 800m mobile phones in Africa, 300m were smartphones. He said he expected that number to double by 2020. “The amount of screen time that people are spending on their mobile phones is averaging two to three hours now,” he said. “That is what drives our business. We need to provide data centres and build the network much more quickly.” Liquid Telecom had been expected to launch an initial public offering in London this year, but had pulled back because of what bankers called adverse market Continues on page 51

In addition to raising pensions for the elderly, Andrés Manuel López Obrador wants to extend educational grants to Mexico’s youth and increase subsidies for farmers © FT montage; Reuters

In 2013, then president Enrique Peña Nieto launched a landmark campaign to untether the country’s oil industry from state control and regenerate Mexico’s flagging production capacity. The 107 contracts Mr Peña Nieto’s government awarded to nearly 80 companies are expected to generate roughly $200bn in investments in the coming years, according to Samantha Gross at the Brookings Institution. Mr López Obrador has likewise prioritised boosting Mexico’s oil production, but by different means. He has proposed a $4bn capital injection into the highly indebted, state-owned oil company Pemex, as well as an $8.6bn refinery to be built over the next three years. Beyond these outlays and other infrastructure improvements, the president has also promised a number of social reforms. In ad-

dition to raising pensions for the elderly, he wants to extend educational grants to Mexican youth and increase subsidies to farmers, all without adding to the national debt or raising taxes. “The intentions are great and it’s for these policies that he won,” said Federico Kaune, head of emerging market debt at UBS Asset Management. “But it’s difficult to see how his government will be able to finance everything promised as well as future public polls without generating a large deterioration of the budget.” All of which sharpens the focus on his budget for 2019. Reneging on fiscal discipline and blowing out the now-balanced budget will inject more uncertainty into Mexican assets, cautioned Mr Kaune. Amid the peso’s fall, the central bank has maintained a hawkish stance. At its last meeting, Banxico

tightened its benchmark rate to a nine-year high of 8 per cent. For Andrea DiCenso, a portfolio manager at Loomis Sayles, the central bank’s continued independence is crucial. “If you want to see investors get scared of a market, look at Turkey,” she warned. The Turkish lira lost roughly half of its value this year after President Recep Tayyip Erdogan rebuffed economic orthodoxy. “The moment you start to doubt whether central bank independence is valid or not, a country can quickly become an uninvestable market,” said Ms DiCenso. Less than two weeks into his presidency, both Mr López Obrador and investors are still setting expectations for one another. Ultimately, Mexico needs access to international capital markets, said Mr Peabody at Eaton Vance.

Verizon to take $6.7bn hit on Oath writedown and planned lay-offs Media business formed from merger of AOL and Yahoo operations suffers hit to earnings Pan Kwan Yuk

erizon Communications will take a hit of as much as $6.7bn to its fourth-quarter earnings as a result of a large writedown in the value of its ailing Oath media business and costs related to its mass voluntary redundancy programme. The country’s second-largest telecoms group said Oath, the media business formed from the merger of Verizon’s AOL division and the Yahoo operations it acquired in 2017, has suffered a sharp deterioration in sales and earnings this year. As a result of this and lower-than-expected synergies from the deal, Verizon said it would record a $4.6bn non-cash goodwill impairment charge on the business. “Oath . . . has experienced increased competitive and market pressures throughout 2018 that

have resulted in lower than expected revenues and earnings,” Verizon said in a regulatory filing on Tuesday. “These pressures are expected to continue and have resulted in a loss of market positioning to our competitors in the digital advertising business.” In additional Verizon said it will also been taking a charge of between $1.8bn and $2.1bn this quarter over the planned lay-off of 10,400 employees — or about 7 per cent of its workforce. The writedowns come as Verizon looks to dial back its oncelofty ambitions in media, to focus instead on building faster phone networks and better compete in the cut-throat US telecoms landscape. The US telecoms group had contemplated spinning off Oath, a bold acquisition overseen by AOL pioneer Tim Armstrong that aimed to build an online advertis-

ing behemoth to rival Google and Facebook. Verizon paid $4.5bn for Yahoo’s internet business last year in a deal that Mr Armstrong vowed at the time would create “the best company for consumer media”. However, this summer the company instead opted to fold the unit, which was previously run with much autonomy by Mr Armstrong, into Verizon’s wider telecoms business. The company announced in September that Mr Armstrong was leaving. The US telecoms industry has been under pressure from everthinner margins after T-Mobile disrupted the market, fuelling a price war. But while rival AT&T has responded by diving into the media business with its blockbuster acquisition of Time Warner, Verizon has taken a different tack, instead investing in telecoms infrastructure.

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NATIONAL NEWS

FT UK development arm CDC to invest $180m in Africa’s...

US Senate urged to guard democracy as Mueller probe nears end

Continued from page 50

conditions. Econet Media, a content provider division of the group, had run into problems rolling out services quickly enough after spending large sums on sports and entertainment rights, though Mr Masiyiwa said this was unrelated to the current capital raising. “We were advanced in the Liquid IPO,” Mr Masiyiwa conceded, adding that CDC’s money was attractive because it was long term. “The IPO will still come, but we are no longer chasing it as a primary objective,” he said. “We are not expecting to come to market in the near term.” Nick O’Donohoe, CDC chief executive, said the UK development arm was taking a roughly 10 per cent stake in Liquid Telecom, giving the company an implied equity value of around $1.8bn. The company also raised $700m in a bond and long-term loan issue last year. “From a return perspective we think it is a very attractive investment,” Mr O’Donohoe said, while “improved connectivity made a huge difference to people’s lives”. The investment “ticked both boxes” he said, referring to the CDC’s aim to help poor countries develop while making a return for the British taxpayer. “This is pretty close to our biggest investment ever,” said Mr O’Donohoe, who added that the CDC’s last big bet on telecoms was more than two decades ago when it invested in Celtel, a telecoms company founded by Sudanese billionaire Mo Ibrahim. Mr Masiyiwa, a Zimbabwean businessman, said Liquid Telecom was in the process of building a fibre optic cable from Port Sudan on the east coast of Africa across the continent to Abuja, Nigeria’s capital. The group also plans to invest $400m in network infrastructure and data centres in Egypt over the next three years, according to an announcement earlier this week. Liquid Telecom has built 70,000km of cable in southern and eastern Africa and is expanding into countries that lack affordable and reliable broadband, said Nic Rudnick, its London-based chief executive. That included countries such as Chad, Sudan and Democratic Republic of Congo, the latter a central African country the size of western Europe with internet penetration of only 6 per cent. Liquid Telecom is primarily a business-to-business provider, supplying fibre optic and satellite services to the likes of MTN, Orange, Bharti Airtel and Vodafone.

Former lawmakers from both parties warn country ‘entering a dangerous period’

Demetri Sevastopulo

Chief executive Tidjane Thiam is aiming to draw a line under his turbulent first three years in charge and win support from investors for the next phase of his strategy © Bloomberg

Credit Suisse capital return plans risk disappointing investors Bank will commit to ‘significant’ buyback but amount ‘nowhere near’ analysts’ estimate for next year Stephen Morris

redit Suisse will unveil a fresh share buyback programme and boost its dividend this week, but the Swiss lender risks disappointing investors who are expecting more capital to be returned after a sharp fall in its share price this year. The bank will commit to a “significant” buyback worth billions of Swiss francs over time, but the amount will be “nowhere near” the SFr2bn analysts at Citigroup have estimated for next year, according to one person familiar with the strategy. “While there will be significant capital accretion going forward . . . one has got to be careful to retain capital in order to invest in the business for the future,” the person said. “Much better to start a buyback in a more modest way, then add more as profitability increases.” Credit Suisse will also detail “modest and progressive” hikes to the dividend, which was SFr0.25 a share for 2017, as part of its strategic update on Wednesday, the person said. Swiss newspaper Sonntagszeitung has reported the share buyback may total about SFr3bn over three years. A spokesman for the bank declined to comment. Tidjane Thiam, chief executive, has transformed Credit Suisse since joining in July 2015, slashing the volatile and capital-intensive trading operations to expand the higher returning and more predictable

wealth management and private banking units, particularly in Asia. The event in London on Wednesday is a vital forum for Mr Thiam to draw a line under his turbulent first three years in charge and win support from investors for the next phase of his strategy. Shareholders are feeling bruised after a 27 per cent plunge in the stock in the past six months — the fifth-worst performance among major European banks and a larger decline than struggling rivals Deutsche Bank and UniCredit. The French-Ivorian former boss of UK-listed insurer Prudential has spent much of his tenure so far dealing with legacy issues. Memories are still fresh of the SFr10bn of equity he raised to support the balance sheet as the bank made heavy losses in 2015 and 2016, driven by a costly wind-down of toxic trading positions and big misconduct fines around the world. At the end of September, the bank’s common equity tier 1 ratio was at 12.9 per cent, which has risen well above the 10.3 per cent level Mr Thiam found when he took over and is now slightly ahead of its 12.5 per cent target. The 56-year-old has also faced down fierce resistance from inside the investment bank, the main target for his cuts, and brushed off persistent rumours he is unhappy and wants to leave, including a denial this year that he planned to run for president in his native Ivory Coast. The moves to return capital are far from unexpected. Mr Thiam and chief financial officer David Mathers have repeatedly vowed to return

half the bank’s net income through buybacks or special dividends over 2019 and 2020. In October, Swiss rival UBS also announced it would buy back SFr2bn of shares by 2020. However, some analysts had similarly predicted UBS would repurchase double that amount. A Credit Suisse buyback would “highlight management’s confidence in delivering earnings projections” and “a further positive change would be if the group announces a higher payout ratio”, Barclays analyst Amit Goel said. “That said, we do not think there is as much capacity to return capital as some market participants may believe.” On Wednesday analysts will also be focused on what executives say about the outlook for trading revenue and whether there are any plans to reduce the amount of capital allocated to the investment bank. In the third quarter the global markets division made an unexpected pre-tax loss of SFr96m after fixed-income revenues plunged 20 per cent, overshadowing an otherwise improving set of results in which overall pre-tax profit surged 70 per cent. Credit Suisse will also use the investor day to set revised financial targets and spell out how the bank can achieve a 10 per cent return on tangible equity in 2019 without requiring much additional revenue growth, the person familiar with the plans said. Much of the bank’s operational improvements are expected to come from lower funding costs and a further trimming of expenses.

Verdant Zeal marketing and subsidiaries relocate to Opebi

he Pan- African marketing communications group, Verdant Zeal Group has moved office from Ikeja GRA to the Opebi area of Lagos. This move also include all the subsidiaries of the company namely RedGecko Public Relations Limited; Gr8 Measures Media Limited; BrainBox i-Media Limited; Neo-Mantra Limited;Sizuul Africa Limited; First2Market Limited and Traxeon Limited. The new office is located on 3, Aderoju Adewuyi Street off Alfred Olaiya Street, Opebi. According to the Chief Operations Officer of the group, Dipo Adesida, the move to the new of-

fice is strategic in ensuring that all the activities of the organization is being coordinated from the same location and it will help all the organizations within the group synergize seamlessly. “We have operated from the GRA office for more than one decade and we have grown in leaps and bounds; we have had subsidiaries situated all over Lagos and we need more space to aid our ever-growing operations. This necessitated the need to move to a bigger territory. We assure our clients that we are poised to deliver better and faster as we would keep making concerted efforts to

delight them with the quality of our outputs across all the subsidiaries,” said Adesida. Verdant Zeal Marketing Communications Group remains one of the fast growing consultancies within the Integrated Marketing Communications Industry in Africa with subsidiaries in Ghana and Gambia. The company has led many leading campaigns for clients across all the sectors of the economy. The company was founded by Tunji Olugbodi who is currently the Executive Vice Chairman and the President of International Advertising Association, Nigeria Chapter.

everal dozen former Democratic and Republican senators have urged the Senate to be a “zealous guardian” of US democracy as special counsel Robert Mueller moved towards completing the Russia investigation. The 44 retired senators — who included Democrats such as Tom Daschle, Max Baucus and John Kerry, and Republicans such as William Cohen and Chuck Hagel — said the US was “entering a dangerous period” as the country faced challenges to the rule of law, its constitution, government institutions and national security. While the senators did not mention Donald Trump, they urged that “partisanship or selfinterest not replace national interest” in a letter that indirectly referred to criticism of the president’s attack on institutions. They said the US was “entering a dangerous period” as Mr Mueller moved towards ending his probe and the House of Representatives, which will revert to Democratic control in January, started investigations into Mr Trump. “At other critical moments in our history, when constitutional crises have threatened our foundations, it has been the Senate that has stood in defence of our democracy. Today is once again such a time,” the senators wrote. The letter, published in the Washington Post, came just three days after prosecutors in New York made clear they believed that Mr Trump had told Michael Cohen, his former lawyer, to make payments to two women — porn star Stormy Daniels and former Playboy model Karen McDougal — to silence them ahead of the 2016 election. Both women said they had sexual relationships with Mr Trump many years ago when he was married. Mr Trump on Monday repeated his mantra that the Russia investigation was a “witch-hunt” orchestrated by Democrats. He said Democrats were focusing on a “simple private transaction” and saying it was a campaign contribution because they could not find a smoking gun. “Cohen just trying to get his sentence reduced,” he tweeted. “WITCH HUNT!” The president lashed out after Democrats suggested that he had been complicit in the felony Mr Cohen was charged with committing. Jerry Nadler, a New York Democrat who will chair the House judiciary committee from January, said Mr Trump had committed “impeachable offences”. Adam Schiff, the California Democrat who will become chair of the House intelligence committee, said it was conceivable that Mr Trump would go to jail. “There’s a very real prospect that on the day Donald Trump leaves office the justice department may indict him, that he may be the first president in quite some time to face the real prospect of jail time,” Mr Schiff told CBS News.

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Wednesday 12 December 2018

2019: Atiku unveils his plans to CAN, gets commendation from group

he Christian Association of Nigeria (CAN) on Monday night in Abuja commended former Vice President of Nigeria, Atiku Abubakar for being the first presidential candidate to honour its invitation for an interactive session on his plans for governance if he wins the 2019 Presidential election. “You have made history today by being the first presidential candidate to honour our invitation and we do not take it for granted”, Stephen Adegbite, a Methodist Bishop of Ikeja Diocese and CAN Director of Mobilisation and National Issues, told Atiku. Atiku, presidential candidate of the PDP in the 2019 election, was at the Ecumenical Centre in Abuja on Monday night for a two-hour interactive session with members of CAN who wanted to know how he would govern Nigeria if he wins the 2019 presidential election. Adegbite also observed that Atiku, who up for the two hours duration the programme lasted and convincingly addressed all the fears, issues and concerns raised by members of CAN, is an indication of his physical fitness. Issues discussed during the session included how an Atiku government will improve power supply, increase the number of

Atiku

women and youth in governance, whether he was under any influence by foreign concerns to do their bidding, how the challenge of high maternal mortality rate will be addressed, how to grow the economy, put a check on insecurity and how he would stop nepotism in governance. On power supply, Atiku said, he would adopt the “captive power strategy” where specific power stations would provide power supply for specific areas adding that the

strategy would ensure availability of power supply across the country within his first two years in office. He said that a study has revealed that the adoption of captive power stations will yield greater results than reliance on gas to generate power. He also said that there were companies willing to provide power at affordable rate using the captive power strategy. On growing insecurity in the country, he said that the incident would be stemmed by providing

Why we left APC for PDP, by former chairmen in A/Ibom ANIEFIOK UDONQUAK, Uyo

ormer chieftains of the All Progressives Congress (APC) who defected to the People’s Democratic Party (PDP) in Uyo, Akwa Ibom State have given reasons for their defection, saying they were not satisfied with the apparent lack of focus by the leadership of the party. Twenty-six chairmen of the party in various local government chapters defected with their supporters to the PDP in a move described by analysts as a historic event that has never been witnessed in the state. Speaking in Uyo, the state capital, Joseph Thomas Amah on behalf of other chairmen, said they decided to pit their political tents with the visionary, focused and result-oriented leadership of Governor Udom Emmanuel because of the governor’s sterling

leadership qualities. Amah, who spoke at a news conference, said that prior to their defection, “there were spirited moves to prevent us from the event but we gallantly marched on knowing that the true measure of a man isn’t where he stands in moments of comfort and convenience but where he stands in moments of controversy.’’ Amah, who alleged that their members were attacked by hoodlums in Nsit Atai with the vehicle belonging to the former chapter chairman destroyed, said the same incident recorded was in Ibesikpo Asutan, Eket and Ikot Ekpene on their way back describing the action of the hoodlums as most reprehensible which must be condemned by all. In his reaction, Emmanuel Ibiok, spokesman for the Divine Mandate campaign organisation, the governor’s campaign council said the defection of the party leaders with their supporters

jobs for the teeming youths who were idle and willing to be used as instruments of destruction. According to him, instead of the present administration providing three million jobs yearly as it promised, a total of 11 million jobs have been lost since the President Muhammadu Buhari came into office in 2015. He listed the retooling of the nation’s armed forces for better performance among other strategies that have been penciled down as means of improving the effective security network of the nation. On how to revive the economy, he said that he would create the right environment that would attract foreign and local investors who ran away from the country due to harsh economic and investment climate. Atiku observed that the private sector and not government should be the highest employer of labour and the main engine of economic growth. He noted that Nigeria slipped into recession because of capital flight and attendant closure of companies in the country following government’s pronouncements which sent the wrong signals to investors. He also said that the clampdown on domiciliary accounts forced investors to massively with-

draw, close accounts and move their funds elsewhere, adding that the impact of the capital flight was the closure of companies and loss of jobs. On the inclusion of women and youths in governance, he said that 40 per cent of his cabinet would be made of youths, 35 per cent for women while the remaining 25 percent would be filled by older Nigerians, adding that he plans to hand over to a younger generation. Speaking on nepotism, Atiku said: “By my nature, I am not like that,” assuring that he would run an all-inclusive government devoid of any kind of cabal. Responding to a question on how challenged persons would be accommodated in his government, he said that they would be accorded opportunities to manifest their full potentials and that he had granted scholarship to some of them to study up to their doctoral degrees. Speaking on how to reduce Nigeria’s high maternal mortality rate, Atiku said that his administration would promote healthcare delivery system that is comprehensive, efficient and can deliver effective and qualitative services to women. He added that his policy document which was launched in November 2018 details in full what was in store for women.

‘Politicians who cannot provide amenities, pay salaries should not vie elective positions’ UDOKA AGWU, Umuahia

showed the wide acceptance of Governor Udom Emmanuel and the indication that he would be re-elected by the people. “The joy on the faces of the defectors was a referendum that the people are happy and satisfied with the sterling leadership of Governor Udom Emmanuel hence, they are fully out to ensure that the governor continues to lead the state to greater heights beyond 2019,” he said. In a statement made available to the media, he said the defectors by declaring their support for the governor had made their position clear that Akwa Ibom State is safe under PDP, saying the defection was a “dress rehearsal of more of such massive support , open declaration and endorsement for the second term bid of Governor Emmanuel.’’ According to him, “most of those still on the side are only bidding their time and in a matter of days, they will join the train of prosperity and good governance.”

amuel Chukwuemeka Kalu Uche, prelate of Methodist Church, Nigeria (MCN), has advised those seeking elective positions in the country not to come out if they cannot provide social amenities, security for the masses and pay workers salaries. Uche gave the advice in Umuahia while addressing journalists at the end of his apostolic tour of all dioceses under Umuahia Archdiocese of MCN. He advised governments at all levels to rise up and live up to their obligations to the people, adding that workers and pensioners had been complaining of non-payment of their salaries and pensions. “Governments at any level that do not provide social amenities, security for the masses and pay salaries as and when due should not vie for election again,” said Uche. He further said: “Governments deliberately impoverish the people so that they can manipulate them. It is a deliberate attempt by politicians to use our students as thugs during

elections. I have not seen any politician that means well for the people. They are all hawks and wolves.” The Prelate admonished INEC not to be biased in the 2019 elections but to conduct free, fair and credible election where people’s votes would count. “We don’t mind party but people who are credible should be elected,” Uche added. On the 2018 amended electoral bill which President Buhari refused to accent to fourth time, the Methodist Prelate said even though he was not familiar with the contents but the Executive should not hold the Legislature to ransom. “The Legislature has the constitutional right to veto the bill. You cannot be a leader and the led at same time,” he fumed. On IPOB proposed boycott of the elections, Uche noted that what led to the ill-fated Biafra-Nigeria Civil War was still abetting in Nigeria. He said that although Igbos were still being marginalized, all registered voters should ensure that they exercise their franchise by voting, adding that violence could not solve any problem.

Wednesday 12 December 2018

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BUSINESS DAY

Secondus warns Magu, says EFCC fighting one-sided corruption war JOSPEH MAURICE OGU

he national chairman of the main opposition party, the People’s Democratic Party (PDP), Uche Secondus, has rained a series of warnings to the chairman of the Economic and Financial Crimes Commission, Ibrahim Magu, saying the country is very fragile and if not handled with proper care could explode if Magu “continues in his impunity.” “Nigeria in a keg of gunpowder. I want to sound a note of warning to the Chairman of the Economic and Financial Crimes Commission (EFCC), Ibrahim Magu, that the country could explode any moment if he continues in his impunity,” Secondus said. Secondus, who directs his grievances to Magu, accuses him of using EFCC to harass and intimidate opposition members, especially top members of PDP. “The country is in a keg of gunpowder at the moment as a result of your hatchet job for the ruling government and I warn you to get away from this illegitimate job of using instruments of state to harass and intimidate opponents. “The Federal Government and the ruling party have listed critical players in opposition including myself the presidential candidate Atiku Abubakar, his vice Peter Obi, the Senate president Bukola Saraki, speaker of the House of Representatives Yakubu Dogara, and other top party leaders and their associates for arrest on frame-up crimes. The chairman of the EFCC, Ibrahim Magu, has made himself a willing tool to carry out the APC script on how to cage and crush the PDP.” Secondus, who relied on the

Uche Secondus

information he got, also accused the former Lagos state Governor, Bola Tinubu, and his Akwa Ibom counterpart, Godswill Akpabio, of strategising on behalf of the ruling APC to dislodge, arrest and detain PDP leaders and family members, as well as freeze their bank accounts. “Available intelligence shows that the former Lagos state Governor Bola Ahmed Tinubu and former Akwa Ibom state Governor Godswill Akpabio are presiding over clandestine meetings and developing strategies for the APC which is aimed at freezing critical leaders of the opposition. “Aside arrest and detention of opposition leaders, their family members and business associates have been lined up for intimidation and harassment including freezing their business interests and their bank accounts,” Secondus alleged. The warning was not uncon-

nected with the recent search of the Abuja residence of the sons of Atiku Abubakar, Aliyu and Mustapha Atiku. Although EFCC has cleared the air that Abubakar and Aliyu were not the target of the impromptu search, but Theodore Orji’s son, Ogbonna Orji, Secondus insisted that it was a plot to intimidated the PDP presidential candidate. He said it was an afterthought fabrication that the son of the PDP presidential candidate was not the target in the raid of an apartment housing him in Abuja, insisting that the game plan privy to the party was clear on who was the ultimate target. Secondus said the search was the continuation of a search conducted on Atiku’s plane few weeks ago when he arrived in Abuja from Dubai. He alleged that because no incriminating evidence was found on the aircraft of the former vice president by security operatives,

EFCC extended the search to his children’s home thinking of finding something incriminating. “I want to remind Nigerians that these acts of impunity are in continuation of the embarrassment they caused our presidential candidate and former vice president of this country when he was thoroughly searched at the Nnamdi Azikiwe International Airport by operatives of the state on his return from overseas on November 11, 2018.” Secondus also said that the bank account of our vice presidential Candidate, Peter Obi, as well as that of his friends and family members as part of a large scheme to keep the party distracted from its focus of regaining power in 2019, were frozen, alleging that, by January, APC has plans to dislodge, falsely accuse and jail PDP members. Meanwhile, EFCC has confirmed the arrest of Theodore Orji’s son, Ogbonna Orji, on accusation of money laundering, but denied searching Atiku’s children’s homes nor arresting them. “We have received several calls and email messages asking us to confirm the arrest of the sons of the presidential candidate of the People’s Democratic Party, Atiku Abubakar, as being alleged in some quarters. Some only said we raided the apartments of Atiku’s sons looking for foreign currencies. This is nothing but another tales by moonlight,” EFCC said. “We never went after Atiku’s sons neither were Atiku’s sons among the two boys arrested. There is no link whatsoever to Atiku,’’ the commission reiterated. In the same trend, the presidency has equally debunked the PDP’s version of the story, calling it “fake news” and asking Nigerians to “ignore them.” Reacting to the alleged raid of Atiku’s son’s home and seizure

of Obi’s account, the presidential spokesperson on media and publicity, Garba Shehu, said, “The story about the raid [supposedly] ordered by Buhari-led government on the home of PDP presidential candidate, Atiku Abubakar’s son and the fairy tale on the alleged blockage of the bank accounts of the running mate, Governor Peter Obi and his family are both untrue, and should be dismissed as just another manifestation of the Peoples’ Democratic Party, PDP’s growing expertise in fake news” for “it is impossible to find in Nigeria today, anyone propagating fake news more than the PDP.” Often, EFCC faces criticism from different quarters for working to the dictates of the government in power in order to bring down opposition. The opposition often alludes that EFCC only accuses its (opposition) of being corrupt but closes its eyes on the members of the ruling party who are deemed to be corrupt. Such accusation did not start today. But analysts say such one-sided fight against corruption has been very pronounced during the current administration led by President Muhammadu Buhari. Why such accusation? It has been often said that EFCC, as it stands today, is not independent from the dictates of the ruling party. The former boss of EFCC, Mallam Nuhu Ribadu, has called on federal government to free the EFCC from all form of external influence in order to win the war against corruption. Ribadu said for Nigeria to move forward in its fight against corruption, the anti-corruption institutions such as the EFCC and ICPC must be independent in order to function optimally in the discharge of their duties without undue external interference.

Ezekwesili harps on human capital development via education investment Hope Mose-Ashike

by Ezekwesili, former World Bank vice president, Africa Region, has harped on the urgent need for human capital development via investment in education, which she described as the new oil. An erstwhile minister of education, who was among the speakers at the third edition of the Under 40 CEOs Forum, held in Lagos on Thursday, said local productivity and competitiveness have to improve if the economy must grow, and that this only achievable through human capital development. “As a country, blessed with enormous human and natural resources, it is regrettable that we have wasted five cycles of oil boom, according to available data. We really need to disrupt the pattern we

have followed because our prosperity would have come by now if it were to come from oil. So the best thing to do is to say let us find a new trajectory,” Ezekwesili said. “With too much dependence on oil, our economy is so volatile that we basically have a situation where the country’s fortune goes up and drops. Such volatility is not good for economic growth; it has definitely not helped us. That is why, for me, education is the new oil and human capital development is the way forward. Because by investing in human capital, we raise income, and when we raise the Income capacity of a people we raise them out of poverty.” Ezekwesili stressed that prosperity is tied to how well an economy is run, noting that the Chinese had the same problems and were deep into poverty until a certain

leader came up and stopped it. She charged the Under 40 CEOs Forum not to accept the status quo but to rise up to the challenge of redirecting the economy by creating more opportunities for mentorship of aspiring entrepreneurs so that, together, they can move the nation in the right direction. “You must all join in rebuilding the economy, and not sit down hoping that friends will get government appointments and open doors for you.No! Everybody has to be involved. The difference between China and India is that China spent so much on human development. That is what brought about the economic wonder that China is today. So, we’re going to have to develop our human capacity to make significant progress,” she said. Other speakers at the forum

were Akin Oyebode, pioneer executive secretary of the Lagos State Employment Trust Fund; Adeola Azeez, deputy country representative and deputy managing director of Deutsche Bank Nigeria; Victor Ndukauba, deputy managing director, Afrinvest(West Africa) Limited; and Ola Brown, CEO, The Flying Doctors Nigeria. Each of them also harped on the need to maximize the abundant human resources and boost the economy by nurturing creative talents and encouraging innovation. The Under 40 CEOs Forum—an extension of the Under 40 CEOs television show—is a live interactive event, which offers a unique opportunity for current and aspiring CEOs to meet, share ideas and collaborate to create economic value across the continent. The highlight

of the forum was the launch of the book ‘Under 40 CEOs – How We Made in Africa, volume 1’ featuring authentic stories of 52 of the brightest young African business leaders from Nigeria, Ghana and South Africa. In his remark, Familusi Akin Babajide, executive director – Africa, Under 40 CEOs, noted that the book launch is in furtherance of the objectives of the Under 40 CEOs, which is to create value for the younger generation of entrepreneurs and business leaders through learning and mentorship. He noted that the Under 40 CEOs Network currently has 381 members, and that 91 have so far featured on the television show. Membership is currently drawn from Nigeria, Ghana and South Africa, with plans to expand into other African countries.

BUSINESS DAY

Wednesday 12 December 2018

Live @ The Exchanges Market garners N44bn as investors snap up downbeat stocks Stories by Iheanyi Nwachukwu

he Nigerian equities market gained approximately N44billion on Tuesday December 11 in line with analysts’ views that investors will continue buy low priced stocks. At the sound of closing gong on the nation’s bourse, 24 stocks gained as against 16 losers. Investors raised more wagers on Dangote Cement Plc stocks making it the highest gainer on the Nigerian Bourse. Dangote Cement Plc stock increased from N184.2 to N185.5, up N1.3 or 0.71percent; Flour Mills Nigeria Plc followed

after increasing from N20 to N21, adding N1 or 5percent. Forte Oil Plc advanced from N19.15 to N20, up 85kobo or 4.44percent; UAC Nigeria Plc rallied from N9.3 to N9.9, adding 6kobo or 6.45percent; while Nigerian Breweries Plc rose from N78 to N78.5, adding 50kobo or 0.64percent. The equities market closed high as the Nigerian Stock Exchange (NSE) All Share Index (ASI) appreciated by 0.34percent to close at 30,718.72 points as against 30,614.73 points recorded previously. The stock market’s year-to-date (YtD) returns currently stands at minus 19.68percent. The value of listed stocks increased from N11.176trillion to N11.220trillion, up by N44billion. Cement Com-

pany of Northern Nigeria Plc recorded the highest decline after its share price dropped from N16.5 to N16, down by 50kobo or 3.03percent; while GTBank Plc followed from N34.75 to N34.4, losing 35kobo or 1.01percent. Also, C&I Leasing Plc stock price declined from N1.94 to N1.75, down by 19kobo or 9.79percent; NAHCO Plc lost 10kobo from N3.45 to N3.35, down by 2.90percent; while NEM Insurance Plc declined from N2.35 to N2.25, losing 1kobo or 4.26percent. Zenith Bank Plc, Sterling Bank Plc, FBN Holdings Plc, Diamond Bank Plc, and Fidelity Bank Plc were actively traded stocks on the NSE. In 2,933 deals, stock traders exchanged 215,380,560 units valued at N3.398billion.

L-R: Hajara Adeola, managing director, Lotus Financial Services Limited; Patience Oniha, director general, Debt Management Office; Taiwo Okeowo, deputy managing director, FBN Merchant Bank Limited, and Monday Usiade, head, Market Development Department, Debt Management Office, during the media launch of N100Bn Sovereign Sukuk Bond Offer held in Lagos recently.

DMO calls for retail investor participation in second N100bn Sukuk

s part of efforts to address Nigeria’s infrastructural deficit, the Federal Government of Nigeria through the Debt Management Office (DMO) has launched the sale of the second N100billion Sovereign Sukuk. Sukuk or Islamic bond is a financial instrument structured to generate returns to ethical investors without infringing on the Islamic laws, which forbids interest payments on loan. Speaking at the investor launch held last week Friday in Lagos, Patience Oniha, Director General, Debt Management Office expressed delight, explaining that the government is happy with the success of the first tranche of the bond which had resulted in the improvement of infrastructural facilities across the country.

She said that this outcome has informed the decision to issue another bond to further strengthen the country’s infrastructure. The launch, which was witnessed by representatives of several banking institutions, representative of the Federal Ministry of Power, Works and Housing, individual investors, portfolio investors, among others was held to announce the call for more private sector involvement in this second tranche which would lead towards a more sustainable economy. “We are glad that past investment in Sukuk bond has yielded fruit as we can see from the number of roads that are being built across the country. The government is really impressed with what the bond has been able to achieve in the area of road

infrastructure. We believe this outcome alone would create more enthusiasm from the private sector to be part of it”, she said. The bond which aims to fund road infrastructure across the six geopolitical zones, is payable semi-annually for seven years, and is at a rental rate of 15.74 percent to be due in 2025. The bond opens on December 6 and ends on December 17, 2018. The bond is offered at 1,000/unit (minimum of N10, 000 or 10 unit) as a regular bond. The bond is certified by the Financial Regulatory Advisory Council of Experts (FRACE) of the CBN and is listed on the Nigerian Stock Exchange (NSE) and on FMDQ Over-TheCounter platform and classified as liquid asset by the Central Bank of Nigeria (CBN).

Wednesday 12 December 2018

BUSINESS DAY

Wednesday 12 December 2018

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Oil bearing states urged to commit to transparency, accountability ANIEFIOK UDONQUAK, Uyo

il producing states in the country have been urged to commit to transparency and accountability by signing up to the Open Government Partnership as a veritable tool in the fight against corruption. Niger Delta Open Government Observatory (NOGO), a non-governmental organisation (NGO), stated this in a statement made available to the media to mark this year’s International Anti Corruption Day. Jointly signed by Tijah Bolton-Akpan and Ken Henshaw of Policy Alert, the NGO said it had become worrisome that despite the region being rich in oil and gas resources, it had remained with high incidence of poverty. “Despite its abundant natural resource wealth,

which oils the wheels of the national economy, the region remains steeped in under-development while critical infrastructure continues to deteriorate,” the statement said. It said several development indicators, including life expectancy, health, education and employment, the region’s performance remained below the national average. “The biggest culprit why things are the way they are is corruption. And a novel approach to dealing with the issue is to sign on to and implement the OGP,” it noted. Describing the OGP as a platform that brings together government reformers and civil society leaders to create and implement specific commitments that make governments more inclusive, responsive and accountable, it noted that would as well encourage the use of new technolo-

gies to strengthen governance in the region. “We are concerned that of the eight states that have signed on to the OGP so far, only two - Abia and Edo – are part of the Niger Delta. The slow uptake of the OGP in this region belies the huge governance challenges – including corruption and budget inefficiencies – that the region is surmounting. On this 2018 International AntiCorruption Day, we call on the governments of Akwa Ibom, Bayelsa, Cross River, Delta, Imo, Ondo and Rivers states to sign on to the OGP without further delay,” the statement said. “As the 2019 elections approach, we call on the citizens to make the OGP an election agenda and extract commitments from candidates on their plans to make government more open, responsive and accountable,” it said.

57 NEWS

BUSINESS DAY

Edo sues for peaceful coexistence in boundary communities

fforts by the Federal Government through the instrumentality of the National Boundary Commission (NBC) to resolve the lingering boundary dispute between Edo and Delta states have been scuttled by the Delta State delegation who staged a walkout at a peace meeting coordinated by the NBC. According to the Chief Press Secretary to the Edo State deputy governor, Musa Ebomhiana, “The joint meeting of officials on Edo/Delta Interstate Boundary Committee, including stakeholders from the two states and top officials of the NBC, was held in Benin City, the Edo State capital.” He explained, “Stakeholders had converged on Benin City, as a follow-up to the last meeting held at the NBC headquarters in Abuja, with a view to taking collective decisions at ensuring official demarcation of the disputed boundary areas. “After successful deliberations on all the issues on the adopted agenda at the meeting which lasted over six hours, a top member of the

Delta State delegation and former Surveyor-General of the state, Surveyor Dickson Akpoghene suddenly became unruly, while instigating other members of his team against signing the joint communiqué drafted by the NBC and led them on a walkout, in spite of pleas by the directorgeneral of the NBC and other stakeholders present.” Ebomhiana, who was at the meeting, further said: “Earlier at the meeting, the Edo State deputy governor and chairman State Boundary Committee, Rt. Hon. Comrade Philip Shaibu, commended the efforts of the DirectorGeneral of NBC, Dr. Muhammad Ahmed, and his team for hearkening to the calls of Edo and Delta state governments at expediting actions in resolving the lingering boundary conflict between our twosister states of Edo and Delta.” He quoted the deputy governor as saying, “Edo State government will continue to enjoin her people, especially those in the border axis of the state to coexist peacefully with

their border-neighbours, even in the face of provocations.” The Secretary to the State Government, Osarodion Ogie, represented the deputy governor. The CPS to the Edo deputy governor, also said, “The deputy governor of Delta State who doubles as chairman of the State Boundary Committee, Kingsley Burutu Otuaro, expressed optimism that the renewed commitment by relevant stakeholders to resolve the crisis will mitigate skirmishes and violent confrontations between Edo and Delta State.” He added: “Addressing newsmen on the outcome of the meeting and the way forward, the NBC Director General, Dr. Muhammad Ahmed, stated that the commission had worked closely with the joint committee of the two states with the singular objective to permanently resolve the boundary dispute, while assuring that the Commission would spare no efforts at reaching out to Delta State so as to ensure that both parties resolve all the contentious issues at stake.”

Afreximbank’s virtual intra-African Trade Fair goes live HOPE MOSES-ASHIKE

L-R: Umar Farouk, head, research and strategy management, Pension Commission; Esaie Diei, CEO, Enhancing Financial Innovation and Access (EFInA); Adeyemi Adeniran, deputy director, household statistics, National Bureau of Statistics; Sarah Alade, former deputy governor, Central Bank of Nigeria; Richard Sandall, private sector development adviser, department for international development, EFInA, and Segun Aderele, board chairman, during EFInA’s biannual flagship financial inclusion data 2018 unveiling in Lagos.

Lagos gridlock: Motorists risk 3 years, forfeiture of vehicles JOSHUA BASSEY

n a move aimed at tackling the increasing traffic crisis in Lagos, the state government says it is bringing the full weight of the law upon unruly motorists as they risk a three-year jail term. The attorney-general and commissioner for justice, Adeniji Kazeem, who issued the warning on Tuesday, said violators of the state traffic law also risk forfeiture of their vehicles. Kazeem said the Ministry of Justice, through the Mobile Courts ,which number is being increased, would spare no one found culpable in the efforts to restore sanity to the roads. Recall that the state governor, Akinwunmi Ambode, on Monday directed the attorney-general and the ministry of justice to curb the lawlessness of motorists by prosecut-

ing apprehended offenders. The state government had seemingly gone to sleep while allowing motorists, tricycle and motorbike operators turn the roads into a crisis zone; riding/driving against traffic flow without a care in the world. Kazeem said the ministry would ensure full implementation and compliance with the road traffic law and other extant laws on road management applicable in the state. According to Kazeem, “The public is hereby reminded of the provisions of the Road Traffic Law, Laws of Lagos State 2015 and in particular, Section 7, which provides: Where an officer of the authority is for the time being engaged in the regulation of the traffic on the highway or where any traffic sign being a traffic sign direction for regulating the movement of traffic or regulating the route to be

followed by vehicle has been lawfully placed on or near a Highway in accordance with the provisions of this law, any person driving or propelling any vehicle who- (a) neglects or refuses to stop the vehicle or to make it proceed or to keep to a particular lane or direction of traffic when directed to do so by the Officer in execution of his duties or (b) drives his vehicle against oncoming traffic or fails to conform to the direction or indication given by the traffic sign, shall be guilty of an offence and shall be liable on conviction for: (i) first offender one (1) year imprisonment and forfeiture of the vehicle to the state (ii) second and subsequent offender three (3) years imprisonment and forfeiture of the vehicle to the state. (c ) all offenders shall have their data and biometrics captured.”

head of the kick-off of the inaugural IntraAfrican Trade Fair (IATF 2018) opening in Cairo tomorrow, the African Export-Import Bank (Afreximbank) Tuesday in the Egyptian capital announced the ‘go live’ of the Virtual Intra-African Trade Fair (IATF Virtual). A statement by the bank described IATF Virtual as an online platform for buyers and sellers to meet, exchange trade and market information and showcase their products and capabilities to new markets. According to the statement, IATF Virtual mimics the inaugural IATF, which will run from December 11 to 17,

but will continue well after the physical trade fair would have been concluded, with companies with a virtual presence being able to meet attendees, answer questions, and pursue deals in real time. All companies exhibiting at the IATF 2018 will be granted free access to IATF Virtual for 12 months while other exhibitors will be required to pay a standard rate of $750 for 12 months. Exhibitors will receive a Virtual Booth package that consists of an interactive booth, custom-branded with company logo; a custom visitor search feature; live private and group chats with buyers around the world; windows to corporate information.

World Bank commits $18.5m to Edo SEEFOR in 2019, targets 9,000 new jobs

ask Team Leader of the World Bank, Parminder Brar, has disclosed that the institution is committing about $18.5 million to be spent on State for Employment and Expenditure For Results (SEEFOR) projects in Edo State in 2019. Parminder Brar, who led a team of World Bank officials on a courtesy visit to the Edo State governor, Godwin Obaseki, commended the state for proficient execution of World Bank projects in the outgoing year in the state. He added that the performance has led to the release of another tranche of $18.5 million to complete 59 subprojects, which will provide jobs for about 9,000 youths in the next twelve months. The Task Team Leader assured the state that SEEFOR would be supporting Technical and Vocation-

al Training (TVET), as the institution is pleased with the progress recorded at the Government Science and Technical College (GSTC), for which the bank has committed $2 million. “Edo State is on the front-line of using Integrated Financial Management Information System, but I urge the state to pass the proposed audit bill. We have planned a one-week Information and Communication Technology (ICT) intervention and have brought all the SEEFOR states to learn from the Edo State experience. Edo is doing well. “We need to work with your team, as you have got the basics in place but need to see the benefits being rolled out, and the model fully implemented.” Governor Obaseki expressed appreciation to the World Bank for its interven-

tion in the state, noting that it has helped the state domesticate a number of development models through the SEEFOR programme. He expressed the willingness to assist sister states’ SEEFOR programmes but called for a switch to an open system to enable inter-platform interaction. “We understand what SEEFOR is all about and ready to assist our sister states in the sub-region. We are open and willing to share our experience and knowledge with them. We now have our own home-grown SEEFOR for which we are committing five billion naira of our fund to be managed by the SEEFOR team,” he said. The governor assured the delegation of speedy transmission of the draft document of the proposed Audit Bill to the Edo State House of Assembly for passage.

58 BUSINESS DAY NEWS Apapa: Beyond gridlock businesses die, investments decay, jobs lost CHUKA UROKO

ver time, Apapa, home to Nigeria’s busiest seaports, has garnered notoriety for its unending traffic that has made it a destination easily avoided by people who have no compelling need to be there. Apparently, the major worry of casual onlookers, especially those who merely see the interminable fleet of trailers and tankers snaking their way into the port city, is the gridlock that keeps motorists on the road for hours in their bid to get into the city. But Apapa means much more than gridlock, especially to residents, business owners and sundry workers. Beyond the gridlock, a lot of things are happening. Many erstwhile thriving businesses have died or left Apapa for good; people’s investments are either decaying or collapsing like pack of cards, just as jobs and other means of livelihood that depend on port activities are lost almost on daily basis. In the last five to six years,

Apapa has and continues to redefine and redirect people’s lives in a manner that compels them to ask endless questions about existence and the real essence of living. As Nigeria’s premier port city, Apapa harbours the two busiest seaports in the country, accounting for over 70 percent of the nation’s export and import activities. The economy of this port city is estimated at N20 billion a day and could have been more if its environment had been enabling. The two seaports, Tin Can Island and Apapa, account for about 80 percent of non-oil revenues going into Federal Government’s coffers. Import duties and levies are collected by the Nigeria Customs Service (NCS); royalties, rents and dues by the Nigerian Ports Authority (NPA); dues and levies by the Nigerian Maritime Administration and Safety Agency (NIMASA), while certification levies are collected by the Standards Organisation of Nigeria (SON). In 2017, NPA declared its annual revenue estimated at N299.56 billion, which exceed-

ed the 2016 figure of N162.20, representing over 80 percent increase. In the last five years, the authority’s revenue profile has been on the increase and, according to a source close to the ports authority; in 2013 it generated N154.50 billion while the revenue increased to N159.30 billion andN180.50 billion in 2014 and 2015, respectively. What this means is that in the last five years, NPA alone generated about N956.06 billion for the government. Unconfirmed report has it that the Customs Service (NCS) surpassed its revenue target of N1.2 trillion in 2017, while NIMASA and SON also declared revenues that ran into billions of naira. Yet, in the midst of all these, Apapa is in a mess, gradually degenerating into a wasteland where infrastructure has collapsed and the entire environment is degraded. As a port city, Apapa has a near-perfect master plan, which, if implemented, will make it rank among the best port cities in the world. The master plan remains a

mere draft because both the Lagos State and the Federal Government lack the political will to deploy part of the huge revenue they rake in from Apapa to address the many challenges of the city including roads infrastructure, a standard rail track, a functional loading bay for trailers and tankers, motorable and well maintained bridges, etc. For these actions or inactions of government, many landlords, especially retirees who invested in property, hoping to live on rents from the houses for the rest of their lives are today biting their fingers as over 50 percent of houses, residential and commercial, in Apapa are empty, depreciating in value. “You can’t compare the situation now to how it was before. No one has been to hell or heaven but from our experience, we can liken the situation in Apapa to hell. Apapa used to be a place for good businesses and, in those days, both residential and commercial property were in high demand”, a landlord who did not want to be named told BusinessDay.

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Miniso to open more franchise stores in Nigeria MBATA JEREMIAH

iniso, a Japanese lifestyle designer brand famous for its high quality product at low price, co-founded by the Japanese designer Miyake Junya and Chinese young entrepreneur Ye Guofu, says it is set to open more franchise stores in Nigeria. Miniso pursues a simple, natural and quality life philosophy and a brand proposition of simplicity and going back to the essence. Its commodities include health and beauty, seasonal products, fashion bags, digital accessories, home accessories, stationary and gifts, etc. Miniso is appraised as a strong competitor by some well-known enterprises such as UNIQLO, MUJI, and Watson. Since 2013 of its establishment, Miniso has been expanding globally from Japan and has opened more than 3,300 stores in almost 80 countries within five years. It launches new products every seven days and its reve-

nue hit $1.5 billion in 2016 and reached $1.8 billion by 2017. Miniso has gotten a positive feedback from Nigeria within 15 months of its operation. Between September 2017 and October 2018, Miniso has been able to open 30 stores in Malls like - Ikeja City Mall (Lagos), Circle Mall (Lagos), Festival Mall (Lagos), Novare Mall (Lagos), Palms Mall, Lekki (Lagos), Maryland Mall (Lagos), MM2 Airport departure lounge (Lagos), Leisure Mall, Surulere (Lagos), Jericho Mall (Ibadan), Palms Mall (Ibadan), Gateway Mall (Abuja), Apo Mall (Abuja)and Jabi Lake Mall (Abuja). Currently, Miniso Nigeria offers franchise investment opportunity that yields results within 18 months or less. In addition to her very first franchisee store opened on the 27th October 2018 in Lagos, Nigeria and to enable MINISO achieve her strategic plan to open 100 stores in 2019, MINISO has announced the opening of 4 more franchise stores in Enugu, Kano, Imo and Rivers state by Mid-December, 2018.

Group advocates NDIC admitted into Islamic gender inclusion in Financial Services Board infrastructure sector HOPE MOSES-ASHIKE DANIEL OBI

omen in Infrastructure Community Africa (WICA), a professional women advocacy platform with focus on sustainable infrastructure delivery in Africa, has called on the government and corporate organisations to make and implement gender and social inclusion policies in the infrastructure sector. According to the group, ensuring meaningful participation of women in the infrastructure sector will enhance sustainable social economic development, structure women empowerment, mitigate poverty and boost the emergence of Sustainable and resilient cities and communities in the face of climate change challenges. This submission was made known during the Consultative Forum of women in the infrastructure sector to discuss ways of advocating women and social inclusion in the industry and in Private Public Partnership (PPP) with the theme: Diversity in Infrastructure. According to Olajumoke Akiode, executive director, Centre for Ethics and Sustainable Development and the founder of WICA, the myth of infrastructure being gender neutral is responsible for existing public utilities that do not adequately meet the needs of every member of society.

ouncil of the Islamic Financial Services Board (IFSB), which has its headquarters in Kuala Lumpur, Malaysia, has admitted the Nigeria Deposit Insurance Corporation (NDIC) as a full member of the board. The NDIC joins the Central Bank of Nigeria (CBN) as the other Nigerian institution on the Board of the IFSB. The approval for the membership of the NDIC was conveyed to the Corporation via mail dated Tuesday, December 6, 2018, which was subsequently posted on the website of the IFSB. A statement signed by Mohammed Kudu Ibrahim, head, communications and public affairs, stated that the decision to admit the NDIC was taken at the 33rd meeting of the IFSB Council, hosted by the Islamic Development Bank Group (ISDB), on December 6, 2018, in Jeddah, Kingdom of Saudi Arabia. The Council meeting was chaired by Mohammad Y. Al Hashel, the Governor of the Central Bank of Kuwait and chairman of the IFSB for 2018, attended by the President of the ISDB, Bandar Mohammed Hajjar, 12 central bank governors and commissioners of regulatory and supervisory authorities, and 10 senior representatives from among the Council and Full members of the IFSB, representing 19 countries.

Edo State governor, Godwin Obaseki (right), with Patience Oniha, director-general, Debt Management Office, during a courtesy visit by the DG to the governor, at Government House, Benin City, Edo State yesterday..

Alleged N9.7bn fraud: Senators Ndoma, Jubrin rented Umar’s property for N25m pa - witness FELIX OMOHOMHION, Abuja

prosecution witness in the ongoing trial of a former Chief of Air Staff, Air Vice Marshal, Mohammed Dikko Umar (rtd), told a Federal High Court in Abuja on Tuesday, that former senator, Victor Ndoma Egba and Kano lawmaker, representing Kiru/Bebeji Federal Constituency, and former chairman, House of Representatives Committee on Appropriation, Abdulmumin Jibrin, rented apartment belonging to the former Air force chief in the sum of N25 million per annum. The eighth prosecution witness, Abubakar Abdulkadir, who described himself as Estate Agent and Valuer, said both men paid the said sum for the apart-

ment located at No. 14 Macedonia Close, Maitama, Abuja, for a period of one year before the Economic and Financial Crimes Commission sealed the property under investigation. Abdulkadir, who said he managed the property on behalf of another company, Stycon Properties, which he was in partnership with, said he never knew the property belonged to AVM Umar until the EFCC sealed it. Led in evidence by prosecution counsel, Sylvanus Tahir, the witness said: “I managed the property from October 15th, 2011 till December 31, 2016. I manage, let it out to tenants, I collect rents and carry out maintenance. My first tenant was Senator Victor Ndoma Egba. He paid N25 million per annum for the apartment. I paid the money into accounts given to me by my

partner, Chuka Odjimbu. “The second tenant was a corporate body known as Grey Forest Limited. But Senator Abdulmumin Jibrin came and said he wanted to use it as a guesthouse. The company paid N50 million for two years and I paid the money into the accounts given by my partner, Chuka Odjimbu.” The witness disclosed that he got to know the real owner when the EFCC marked the house as under investigation. “My attention was drawn to it by Jubrin and asked me who is the landlord. I told him the landlord was not in the country because we used Stycon as the landlord, which belongs to Chuka. To my surprise, Jubrin told me AVM Umar was the owner of the property. He said he went to find out why the house was marked and that

his friends in EFCC told him. I reached out to Chuka, who confirmed it was Umar who owned the property,” Abdulkadir said. Thereafter, counsel to the defendant, Hassan Liman moved a motion praying the court to grant the defendant leave for medical vacation. The prosecution did not oppose the motion. Justice Nnamdi Dimgba granted the motion and ordered that Umar’s international passport be released to enable him travel to the United Arab Emirates (UAE) for the check up. The court adjourned till February 5 and 6 for continuation of trial. Umar is standing trial on a seven-count charge bordering on alleged financial misappropriated of funds, amounting to N9.7 billion. The money is said to belong to the Nigeria Air Force between 2010 and 2012.

BUSINESS DAY

Wednesday 12 December 2018

CITYFile

Polio: Community appeals for access road, immunisation

obirawa Barham community in Dala local government area of Kano has appealed to the state government to provide them with access road in the area. The ward head of the area, Hassan Garba, made the call at a rally organised by the state ministry of health. Garba explained that polio immunisation had gained 100 per cent compliance in the area, unlike previous months when there was low level awareness. He revealed that the community was in need of access road to reach a facility in case of emergencies. According to him, “The people have been facing difficulty in accessing healthcare services in the city where the facilities are situated, so we appeal to government to rehabilitate the road to make it easier for us.” The traditional ruler further appealed to the government to consider providing a small health facility to ease the suffering of the community. The primary healthcare coordinator of the local government, Aisha Wali, said the area had been consistent in receiving polio vaccine. She explained that over 100,000 children have targeted for the December round of immunization in the area. The state ministry of health had organised a rally in the three metropolitan local governments to mobilise people for the December round of immunisation.

Police, HP confiscate 67,000 fake products

ewlett-Packard, an Information Technology (IT) company says it has confiscated 67,000 counterfeit print cartridges in the country, in collaboration with the Nigeria Police. The director, Global Anti-Counterfeit Programme, HP, Glenn Jones disclosed on Monday in Lagos that the fake print cartridges were confiscated through HP’s Anti-Counterfeiting and Fraud (ACF) programme. Jones said that over 12 outlets trading in counterfeit HP printers were identified and closed down. He said that since working in conjunction with the police in October, numerous premises across Nigeria were raided in Abuja, Lagos, Edo State and Rivers States. “The sites raided included outlet stores and hidden manufacturing sites for fakes. In total, the authorities confiscated 67,000 illicit print cartridges,’’ he said. He said that counterfeiting was a crime and for users, such illegal imitations could cause a multitude of problems. “Should your printer break because of using counterfeit printer ink or toner, you could also have issues with your manufacturer’s warranty becoming not applicable. “In contrast, original HP products are designed to meet HP’s strict quality and reliability standards, based on a long history of inventing and testing.

Men and women living with risk in Apapa Lagos.

Pic by Pius Okeosisi

School-based committee to monitor renovation of 230 schools in Edo IDRIS UMAR MOMOH, Benin

do State governor, Godwin Obaseki, says School-Based Ma n a g e m e n t C o m m i t t e e (SBMC) will play a critical role in monitoring the refurbishment of the over 230 primary schools under the Edo Basic Education Transformation (EdoBEST) programme. The governor disclosed this at the Edo State Universal Basic Education Board (SUBEB) appreciation banquet organised for EdoBEST field workers in Benin, the state capital. He said plans were underway to ensure that the refurbishment of is completed before the end of the holiday season, adding that in 2019, another batch of 230 schools will be renovated. “My goal is to refurbish all the schools under EdoBEST before the end of 2019. I will rely on the School-Based Management Committee (SBMC) to help the state

government monitor all the contractors to ensure good service delivery and, where necessary, draw government’s attention to poor jobs,” he said. The governor assured: “We will provide furniture in all the schools slated for refurbishment. We will start with schools in deplorable conditions before moving to other schools and we will ensure all our schools in the state have toilet facilities.” He said Edo State government started focussing on physical infrastructure in schools ten year ago, with the red roof revolution, but added that the buildings didn’t solve all the problems. “Our administration is now focusing on the people, the system as well as the process. When we get it right, things will fall in place,” he said. He commended the field workers under the EdoBEST programme for the success and progress recorded so far in less than one year, adding that his administration will start the Federal Government’s

home-grown school feeding programme in 2019 to encourage enrolment. Obaseki said: “I thank all the field officers that have driven the process, making it possible to attain this success in revamping the education sector in the state. Education marshals shall be introduced into the school system in 2019.” Emmanuel Agbale, the commissioner for education, said the field workers comprise 106 social mobilisation officers, 54 learning and development officers and five quality assurance officers. Agbale said the EdoBEST programme was core in the education reforms of the Obaseki-led administration, aimed at improving teaching and learning as well as infrastructure. Joan Osa Oviawe, chairman, SUBEB and special adviser to the governor on basic education, thanked the government for giving them the opportunity to contribute their quota to the development of basic education in the state.

Group flags off waste recycling in Lagos MICHEAL ANI

group, LasGidis Recyclers has flagged of community waste recycling activities in Lagos, targeting women for empowerment. Idu Okwuosa, the initiator of the waste recycling venture, says it is aimed at raising the living condition of about 30 widows who would be provided, employment, health insurance scheme, and bank accounts into which their salaries would be paid. The initiative involves keeping the environment free from waste by engaging women to collect plastic wastes, which are being scaled, recycled and used for other purposes. “This initiative started on one of my morning walks where I found out that there

are plastics lying around all the streets of Lagos. I told myself that this is money laying waste so I decided to do some research on what I can do with them, hence the need for the LasGidi initiative, where I can get these wastes recycled and make good money from them”, Okwuosa told BusinessDay, noting that the agency is in need of investors willing to invest with the hope of getting considerable returns. “We are still looking for investors; however, we decided to start collection which is solely funded by me. The maiden edition cost me about N1 million”, she noted. LasGidis Recyclers is the recycling arm of SFQ ventures limited. Its objectives revolve around solving the excess waste problem in the environment by creating a sustainable solution in recycling waste, reducing the pollution

generated by wild burning and dumping and the provision of employment opportunities to the unskilled people in the community. “We are currently at the set up stage as our core business is recycling, Okwuosa said. “We are starting with PET plastic and will expand to plastics, tyres and more plan is to crush, wash, dry these plastics and make flakes and granules from them. We have a permit from Lagos State Waste Management Authority (LAWMA)”. The waste collection initiative kicked off at the Oniru private beach, and will hold in 12 selected cities across Lagos including Lekki, Ajah, Sangotedo, Surulere, Amuwo- Odofin, Maryland, Ikeja. “We are encouraging people to call us in their own neighborhood as long as there are heaps, we will come and pick them up,” he said.

BUSINESS DAY

Opinion

Franklin Nnaemeka Ngwu (PhD)

Dr. Ngwu is a Senior Lecturer in Strategy, Finance and Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum. E-mail: fngwu@lbs.edu.ng

bserving my unusual excitement for about a month now, a very close friend asked if I have secured a well paid consulting job. With more excitement I explained to him that he is correct in his observation but wrong on the possible reason. Most interestingly and on the contrary, my excitement is from doing a voluntary job- serving as a member of the selection committee for the 2019 Rhodes scholarship for West Africa. This is my second year of serving on the committee and I can with all sincerity say that it has been one of the most rewarding experiences in over 20 years. It is most rewarding not because it is an unpaid service or because of my dislike for money but for what it connotes, the potentials it exposes, the hope that it creates,

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Rhodes scholarship: An insight to our untapped human capital potential the faith in Africa and Nigeria that it rekindles, the humanity that it encourages and supports, and the innate desire to serve for the common good that it instills. Rhodes scholarship regarded as one of the most globally competitive and celebrated award to pursue postgraduate study in prestigious University of Oxford started in 1902 in honor Cecil John Rhodes, an English businessman and politician. Reserved for outstanding candidates of between 19-25 years and a desire to create global unity, it aims to create future leaders through instilling a sense and culture of civic minded leadership and moral resilience regardless of the chosen career paths of the recipients. About 100 scholars are selected from over 60 countries every year and depending on the degrees being pursued a community of about 250 Rhodes scholars is found studying in Oxford at every point in time. With one scholarship valued at about £50, 000 (about N23 million) allocated to West Africa this year, candidates were selected not just on their outstanding academic intellect but also on their commitment to serve, moral force of character and ability to lead. Even with the very stringent criteria, about 2,948 applications were received for this year’s se-

lection. Of the 2,948 applications and 505 that properly completed the scholarship information requirements, 244 graduated with a first class. As one scholar will be chosen, the 244 were further pruned down to 65 and then to 10 and finally to 3 and then 1, the winner- 22 years old Cyril Kofi Gunu of Ghana! After reading his application and interacting with him, I was convinced that he will emerge the winner. I read his application and references three times not because I was required to but because of the rich contents and excellence to which it was presented. With a first class degree in Government/International Affairs from Augusta University, South Dakota, US, He also obtained a Masters degree in Global Affairs from Tsinghua University in Beijing China as a Schwarzman Scholar. From our interaction, his greatest concern is how he will repay humanity for all the blessings and awards he has received. He is a gracious human being with an uncommon intellect! Let me say that serving on the selection committee creates a deep mixed feeling of sadness and joy. Sadness due to about three reasons. First are the immense but deeply unexploited exceptional talents that West Africa and Nigeria are blessed

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The candidates, even though very young, demonstrate unparalleled understanding of our socio-economic and political problems. With an infectious excitement, they exhibit an uncommon eagerness to be the change agents or contribute to a better society

with. Second is the myriad of our socio-economic and political problems that can be solved through effective development and utilization of these talents, and third, the limited opportunities for the full development of these unique and cerebral Nigerians and Africans. Even with the mixed feelings, reading through the applications helped to dilute and replace some of my sad feelings to that of increasing joy and excitement. The candidates, even

though very young, demonstrate unparalleled understanding of our socio-economic and political problems. With an infectious excitement, they exhibit an uncommon eagerness to be the change agents or contribute to a better society. Not only can they individually be described as the African renaissance, their innate humility and instant collective spirit to address our social problems gives impression that they are divinely created and born in Nigeria and other parts of West Africa. After interacting with the final 10 candidates at George Hotel Ikoyi, I had a feeling of a temporal existence in an island of moral rectitude and then thrown back to a sea of moral turpitude called Lagos. Lamentably, Nigeria was recently re-admitted among the benefiting countries after about 21 years of exclusion due to government involvement and abuse of the selection process. With an unquestionable commitment for a better society, Mr Ike Chioke, the Managing Director of Afrinvest, a Rhodes Scholar himself presently coordinates the Rhodes scholarship in West Africa. Consistently demonstrating the four criteria of selection of a Rhodes scholar (outstanding intellect, character, commitment to serve and effective leadership), he has

most commendably with the assistance of many other outstanding and humane Nigerians and other Africans ensured that the selection process has been what it is- transparent, accountable, collective, intrinsically rewarding and meritocratic. With opportunities such as Rhodes scholarship and the effective leadership in the selection process, my hope in Nigeria is rekindled and my faith for a better Nigeria strengthened. But the question is how scholarships such as Rhodes can mutate and expand in Nigeria for these exceptional human beings. With human capital currently the most valued asset in a competitive global economy, it means that our focus should be on how to develop the quantum and immeasurable intellect of about 200 million Nigerians. While the fight for more oil revenue might be necessary, what is more important is how the oil revenue is utilized to develop and harness our human capital potentials. With multitude of candidates seeking elective positions especially the executive ones (President, Governors and Local Government Chairmen), it is of immense importance that we properly question them on how they intend to properly develop and utilize our human capital for our sustainable growth and development.

companies, and therefore a prime target in Trump administration’s effort to slow or stop China’s advance into several high-technology sectors. America’s motivations in this economic war are partly commercial – to protect and favor laggard US companies – and partly geopolitical. They certainly have nothing to do with upholding the international rule of law. The US is trying to targeting Huawei especially because of the company’s success in marketing cutting-edge 5G technologies globally. The US claims the company poses a specific security risk through hidden surveillance capabilities in its hardware and software. Yet the US government has provided no evidence for this claim. A recent diatribe against Huawei in the Financial Ti m e s i s re v e a l i n g i n t h i s regard. After conceding that “you cannot have concrete proof of interference in ICT, unless you are lucky enough to find the needle in the haystack,” the author simply asserts that “you don’t take the risk of putting your security in the hands of a potential adversar y.” In other words, while we can’t really point to misbehavior by Huawei, we should blacklist the company nonetheless. When global trade rules o b s t r u c t T r u mp’s ga ng s t e r tactics, then the rules have to go, according to him. US Secretary of State Mike Pompeo

admitted as much last week in Brussels. “Our administration,” he said, is “lawfully exiting or renegotiating outd a t e d o r h a r m f u l t re a t i e s, trade agreements, and other international arrangements that don’t serve our sovereign i n t e r e s t s, o r t h e i n t e r e s t s of our allies.” Yet before it exits these agreements, the a d m i n i s t rat i o n i s t ra s h i n g them through reckless and unilateral actions. The unprecedented arrest of Meng is even more provocative because it is based on US extra-territorial sanctions, that is, the claim by the US that it can order other countries to stop trading with third parties such as Cuba or Iran. The US would certainly not tolerate China or any other country telling American companies with whom they can or cannot trade. Sanctions regarding nonnational parties (such as US sanctions on a Chinese business) should not be enforced by one country alone, but according to agreements reached within the United Nations Security Council. In that regard, UN Security Council Resolution 2231 calls on all countries to drop sanctions on Iran as part of the 2015 Iran nuclear agreement. Yet the US – and only the US – now rejects the Security Council’s role in such matters. The Trump administration, not Huawei or China, is today’s greatest threat to the international rule of law, and therefore to global peace

The war on Huawei

JEFFREY D. SACHS Jeffrey D. Sachs, Professor of Sustainable Development and Professor of Health Policy and Management at Columbia University, is Director of Columbia’s Center for Sustainable Development and of the UN Sustainable Development Solutions Network

he arrest of Huawei CFO Meng Wanzhou is a dangerous move by US President Donald Trump’s administration in its intensifying conflict with China. If, as Mark Twain reputedly said, history often rhymes, our era increasingly recalls the period preceding 1914. As with Europe’s great powers back then, the United States, led by an administration intent on asserting America’s dominance over China, is pushing the world toward disaster. The context of the arrest matters enormously. The US requested that Canada arrest Meng in the Vancouver airport en route to Mexico from Hong Kong, and then extradite her to the US. Such a move is almost a US declaration of war on China’s business community. Nearly unprecedented, it puts American businesspeo-

ple traveling abroad at much greater risk of such actions by other countries. The US rarely arrests senior business people, US or foreign, for alleged crimes committed by their companies. Corporate managers are usually arrested for their alleged personal crimes (such as embezzlement, bribery, or violence) rather than their company’s alleged malfeasance. Yes, corporate managers should be held to account for their company’s malfeasance, up to and including criminal charges; but to start this practice with a leading Chinese businessperson, rather than the dozens of culpable US CEOs and CFOs, is a stunning provocation to the Chinese government, business community, and public. Meng is charged with violating US sanctions on Iran. Yet consider her arrest in the context of the large number of companies, US and non-US, that have violated US sanctions against Iran and other countries. In 2011, for example, JP Morgan Chase paid $88.3 million in fines in 2011 for violating US sanctions against Cuba, Iran, and Sudan. Yet Jamie Dimon wasn’t grabbed off a plane and whisked into custody. And JP Morgan Chase was hardly alone in violating US sanctions. Since 2010, the following major financial institutions paid fines for violating US sanctions: Banco do Brasil,

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The unprecedented arrest of Meng is even more provocative because it is based on US extra-territorial sanctions, that is, the claim by the US that it can order other countries to stop trading with third parties such as Cuba or Iran. The US would certainly not tolerate China or any other country telling American companies with whom they can or cannot trade

B a n k o f A m e r i c a, B a n k o f Guam, Bank of Moscow, Bank of Tokyo-Mitsubishi, Barclays, B N P Pa r i b a s, C l e a r s t re a m Banking, Commerzbank, C o mp a s s, C ré d i t A g r i c o l e, Deutsche Bank, HSBC, ING, Intesa Sanpaolo, JP Morgan Chase, National Bank of Abu Dhabi, National Bank of Paki-

stan, PayPal, RBS (ABN Amro), Société Générale, TorontoDominion Bank, Trans-Pacific National Bank (now known as Beacon Business Bank), Standard Chartered, and Wells Fargo. None of the CEOs or CFOs of these sanction-busting banks was arrested and taken into custody for these violations. In all of these cases, the corporation – rather than an individual manager – was held accountable. Nor were they held accountable for the pervasive lawbreaking in the lead-up to or aftermath of the 2008 financial crisis, for which the banks paid a staggering $243 billion in fines, according to a recent tally. In light of this record, Meng’s arrest is a shocking break with practice. Yes, hold CEOs and CFOs accountable, but start at home in order to avoid hypocrisy, self-interest disguised as high principle, and the risk of inciting a new global conflict. Quite transparently, the US action against Meng is really part of the Trump administration’s broader attempt to undermine China’s economy by imposing tariffs, closing Western markets to Chinese high-technology exports, and blocking Chinese purchases of US and European technology companies. One can say, w ithout exaggeration, that this is part of an economic war on China, and a reckless one at that. Huawei is one of China’s most important technology

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Ghana office: Business Day Ghana Ltd; ABC Junction, near Guinness Ghana Limited, Achimota – Accra, Ghana. Tel: +233243226596: email: mail@businessdayonline.com Advert Hotline: 08034743892. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Anthony Osae-Brown. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.