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news you can trust I ** thursDAY 12 DECEMBER 2019 I vol. 19, no 455

Buhari’s proposed $22.72bn loan in line with debt strategy, favours economy – Debt office SEGUN ADAMS

he Debt Management Office (DMO) says moves by President Muhammadu Buhari for a $22.72bn (N6.9 trillion) external loan is in line with objectives for Nigeria to tap into cheap long-term debt in the international market for fixing infrastructure gaps and moderating the country’s level of debt servicing. DMO’s defence comes amid public concerns about Nigeria’s rising debt burden. The debt office, alongside the finance minister and the minister of works, on Tuesday defended the borrowings before the House of Representatives Committee on Aids, Loans and Debt Management. President Buhari had failed to secure the approval of the 8th Assembly for the same loan in his first term. “The proposed new borrowing is consistent with the subsisting Debt Management Strategy which seeks to replace shortterm high-interest cost domestic debt with low-interest long-term

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BD Investigative Series

How Lagos’ revenue goes into private pockets ODINAKA ANUDU

Continues on page 38

Inside Reps move to end N600bn monthly loss to Apapa gridlock P. 2

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L-R: Abubakar Suleiman, chief executive officer, Sterling Bank; Bright Jaja, convener, iCreate Skills Festival, and Chukwuemeka Nwajiuba, minister of state for education, during Africa’s biggest technical skills and vocation competition powered by Sterling Bank in Lagos.

nce you click on http://www.lasaa. com, the official website of the Lagos State Signage & Advertisement Agency (LASAA), you will be welcomed with a caveat, “We do not accept cash payments.” Perhaps, the manager of the website could also have added, “We do not recognise private accounts.” The reason is simple: LASAA at Isolo Local Council Development Area (LCDA) accepts cash payments in violation of that warning. Worse still, businesses in the LCDA pay LASAA rates into a private Zenith Bank account belonging to an individual, Assumpta Omozejele, who is in charge of the agency in the LCDA, BusinessDay investigation shows. LASAA is an agency responsible for regulating and controlling outdoor advertising and signage displays in Lagos State. It displays two bank accounts on its website: Zenith Bank account (1011119620) for enforcement, and Eco Bank account (2832037833) for mobile permit and branding. But swathes of cash from businesses at Isolo Continues on page 38

Thursday 12 December 2019

BUSINESS DAY

news Banire’s replacement as AMCON chairman in line with new law OLUWASEGUN OLAKOYENIKAN

ven though Muiz Banire, the immediate past chairman of the Governing Board of the Assets Management Corporation of Nigeria (AMCON), had about three years and eight months before the expiration of his five-year tenure going by the confirmation of his appointment by the Senate in October 2018, his continued stay in office would have been against the provisions of the AMCON (Amendment No. 2) Act, 2019, according to BusinessDay findings. President Muhammadu Buhari had in a letter to the Senate, which was read on the floor of the Red Chamber on Tuesday, requested the lawmakers to confirm the appointment of Edward Adamu as the new AMCON chairman, signalling the termination of Banire’s appointment. Coming barely 24 hours after Babatunde Fowler was replaced with Muhammad Nami as the chairman of the Federal Inland Revenue Service (FIRS), Banire’s removal sparked public outcry, with some reading political undertones in the move. “You don’t play this kind of politics!” said Tunde Shelle, a former chairman of the main opposition People’s Democratic Party (PDP) in Lagos, who accused Buhari’s administration of nepotism.

But BusinessDay checks show that Banire’s replacement was in accordance with the provisions of the law. Section 3 (a) of the AMCON (Amended) Act, 2019, which was passed by the eighth National Assembly in May 2019 and signed into law by President Buhari in August 2019, provides that there shall be “a parttime chairman who shall be a Deputy Governor in the Central Bank of Nigeria (CBN) to be nominated by the Central Bank of Nigeria”. The signing into law of the AMCON (Amendment) Act, 2019 by the president is part of the new moves to get the corporation ready for its sunset around 2021, BusinessDay finds. Adamu, who replaces Banire, has been sitting on CBN’s Board as the bank’s deputy governor for corporate services since March 23, 2018, while Banire, who is a former national legal adviser of the ruling All Progressives Congress (APC), has no spot on the Board. But despite the above finding, political commentators have continued to raise concerns over the choice of Adamu, a northerner, as AMCON chairman amid repeated replacements of key officeholders from especially the South-West with northerners.

•Continues online at www.businessday.ng

Growing population, 15% yield offer investors compelling opportunities in student housing CHUKA UROKO

rowing student population and rising number of universities with few accommodation facilities are offering investors and developers investment opportunities that guarantee about 15 percent yield. Out of Nigeria’s estimated 200 million population, about 70 percent are those below 30 years, forming the bulk of the student population. Available statistics show that there has been a 12 percent annual average growth of student enrolment in Nigerian tertiary institutions while the provision of purpose-built student accommodation is less than 30 percent of the demand, hence the opportunity. Student housing is still a green field which some investors remain riskaverse to. But now that other investment asset classes, especially Trea-

sury Bills, have plummeted with yield in low single digit, the next destination for yield-hungry investors is student housing with its ready market. “The ability to sign a long lease on land belonging to a higher institution or acquiring land adjoining a higher institution, building and charging a ready pool of student offtakers a market rent with 100 percent occupancies leading to a stable cash-flow, sounds like any developer’s dream,” says Munachi Okoye, CEO, MCO Real Estate, in a market report. The report says many developers are already taking advantage of this development. Universities are latching on to the trend, offering land parcels to developers under a long-term Build Operate and Transfer model and seeking a share of revenues in exchange.

•Continues online at www.businessday.ng www.businessday.ng

L-R: Fola Ogunsiakan, president, Harvard Business School Association of Nigeria (HBSAN); Nike Akande, member, board of trustees, HBSAN; Wole Oshin, MD/CEO, Custodian Investment plc/winner, 2019 HBSAN Leadership Award; Rabiu Olowo, commissioner for finance, Lagos State, and Prisca Ndu, financial secretary/treasurer, HBSAN, at the 2019 Annual Black Tie and Leadership Award in Lagos.

Reps move to end N600bn monthly loss to Apapa gridlock … as Lagos plans 600-capacity truck park

JOSHUA BASSEY, Lagos, & JAMES KWEN, Abuja

he House of Representatives on Wednesday took steps to end the monthly loss of N600 billion revenue to the Apapa gridlock/congestion and the dilapidated terminal infrastructure in some terminals. The House urged the Nigerian Ports Authority (NPA) and other relevant government agencies to as a matter of urgency repair the quay wall and apron at Tin Can Island port (RORO terminals) under the concession agreement. It also mandated the Committee on Privatisation and Commercialisa-

tion to immediately convene a stakeholders’ consultative meeting to find a lasting solution to the gridlock and congestion on the Apapa and Tincan Island access roads. The Green Chamber made these resolutions on Wednesday at plenary when it took the motion sponsored by Benjamin Mzondu (PDP, Benue), Kolade Akinjo (PDP, Ondo), Timehin Adelegbe (APC, Ondo), Sani Mauruf, Abonta Mkem (PDP, Abia), and Olumide Ojerinde (APC, Oyo). Presenting the motion on behalf of his colleagues, Mzondu said the House noted that the Apapa and Tin Can Island Ports were concessioned to private

operators under the Federal Government Port Reforms and modernisation policy for efficiency and cost reduction through privatisation by the Bureau of Public Enterprise (BPE) in 2006. The move by the House coincides with the announcement by the Lagos State government that it is planning a 600-capacity truck park to decongest the Apapa-Ijora Bridge which is currently occupied by hundreds of petroleum tankers and dry cargo trucks. The state governor, Babajide Sanwo-Olu, disclosed this on Wednesday during a live interview monitored on one of the national television stations in Lagos.

Sanwo-Olu did not specify the area where the truck park is to be sited and when it would be ready. He, however, said talks were ongoing between the government and stakeholders to get the facility off the ground. There had been efforts by previous governments in Lagos to build a truck park at the Orile-IganmuWhite Sand area with the collaboration of some stakeholders in the downstream sector of the oil and gas and maritime sectors of the economy, with no success achieved. Among the key stakeholders in the previous efforts were Nigerian Union of Petroleum and Natural Continues on page 38

Nigeria begins issuing visa on arrival for Africans January 2020 TONY AILEMHEN

resident Muhammadu Buhari on Wednesday revealed that Nigeria would commence issuing visa on arrival in January 2020 to all holders of African passport as a way of promoting free movement and facilitating the full implementation of the African Continental Free Trade Agreement (AfCFTA). The Nigerian leader said that Africa must take its destiny in its own hands by minimising reliance on donor funding for the

execution of its vital peace, security and development agenda. Buhari disclosed this during the opening session of the ongoing Aswan Forum for Sustainable Peace and Development in Africa taking place in Egypt. In order to realise its pan-African vision of an integrated, prosperous and peaceful Africa driven by its own citizens and representing a dynamic force in the global arena, President Buhari said Nigeria has already taken the strategic decision to bring down barriers that have hindered

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the free movement of people within the continent by introducing the issuance of visa at the point of entry into Nigeria to all persons holding passports of African countries with effect from January 2020. According to him, as Africans it is important to focus on the issues of conflict prevention and resolution. Buhari declared that the resolution of conflict situations in African countries remains a key component in the overall development of the continent. “Nigeria is not only host to our sub regional body ECOWAS but has also been @Businessdayng

supporting substantially the ECOWAS budget up to about 60 percent,” Buhari said. “Nigeria has been funding by almost a 100 percent the operations of the Multinational Joint Task Force (MNJTF) fighting Boko Haram Terrorists in the Lake Chad Basin,” he said. Buhari said conflicts have devastating effects on societies and they militate against progress. He said in this regard, the need to silence the guns cannot be overemphasised.

•Continues online at www.businessday.ng

Thursday 12 December 2019

BUSINESS DAY

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BAFEST returns for second edition SEGUN ADAMS

he stage is all set for the return of Africa’s biggest art and culture festival, Born In Africa (BAFEST), a day event created to showcase Africa’s talent and creativity in Music, Film, Fashion and Art. The festival, the brainchild of Access Bank, is billed to kick off at 9am on December 15, 2019, at the Eko Atlantic City, Victoria Island Lagos. This year’s BAFEST edition themed “More for Culture” combines all elements of art (Music, Film, Fashion and Creative Art) and is aimed at projecting and celebrating the true unbreakable African spirit, while shining a positive light on the richness of the African culture and unparalleled dynamism of her creativity. The daylong event will kick off with the fashion, art and film park, where various artists, fashion designers and filmmakers will showcase their works. The Nigerian Film industry will also be adequately represented, as short films, feature-length films and Accelerate Filmmaker project films will be screened during the festival. Some of the films to be featured include; Short Films like Black Monday by Adetola Films, Blast by Tosin Ibitoye, Last by Olabisi Akinbinu, and Scars by Miriam Dera. The festival will be concluded with a music concert featuring Africa’s biggest music talents. The music concert will feature a line-up of talents in the African creative industry. Africa’s finest music artistes such as Burna Boy, Tiwa Savage, Niniola, Patoranking, MI, 9ice, Ice Prince, Naira Marley, Sheyi Shay, and Fireboy, as well as other phenomenal acts will be gracing the stage. Not leaving out other facets of the creative industry, some of Africa’s most prolific models, fashion designers and filmmakers will also be present, exhibiting their works. Commenting on the upcoming festival, Amaechi Okobi, group head, communications/external affairs at Access Bank, says, “Access Bank is proud to be projecting the best of African creativity through BAFEST. This crowns all our efforts aimed at changing the negative narrative associated with Nigeria and Africa. Our line of events partnerships such as the Access Bank Lagos City Marathon, Art X Lagos, The Africa International Film Festival (AFRIFF), and the likes all aim to showcase the continent in good light as well as to project it as a hub for entertainment and creativity.” The bank is an institution that has properly positioned itself through passionate support for African creativity as Africa’s gateway to the world and providing more than just banking services. The bank has continued to show its support to promote the vibrant creative spirit that abounds in Nigeria and Africa.

Again, Nigeria drops further in UNDP’s human development index for 2018 BUNMI BAILEY t seems Nigeria, Africa’s most populous country, is not showing any sign of improvement in its human development as its ranking dropped further in 2018. According to a new report released on Monday by the United Nations Development Programme (UNDP), Nigeria’s Human Development Index (HDI) dropped by one position to 158 out of a total of 189 countries in 2018, from 157 and 152 in 2017 and 2016, respectively. A further analysis shows that from 2013 - 2016, the county’s ranking remained unchanged, and in 2017, it dropped by five positions to 157 and by one po-

… shows pitfalls in government’s underinvestment in human development

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sition in 2018. But it has shown a consistent increase in terms of HDI value since 2010, scoring 0.484 to 0.534 in 2018, but still remains in the low human development category. Human development, according to UNDP, can be defined as the process of enlarging people’s choices and the said choices allow them to lead a long and healthy life, to be educated, to enjoy a decent standard of living as well as political freedom, other guaranteed human rights and variousingredientsofself-respect. Damilola Adewale, a Lagosbased economist, said, “The result is unsurprising because when you look at Nigeria’s per-

formance using these indicators such as life expectancy, adult literacy rate, average enrolment rate and living standard measured by per capita income, it is relatively poor.” Adewale further said, “And the government is yet to give attention to key sectors for human development basically health and education. These two sectors are in shambles. Our health system is bad; moreover our quality of our education is poor. No Nigerian varsity ranks among top 500 University in the world.” In 2018, the country’s life expectancy at birth was at 54.3, an expected year of schooling was 9.7, mean years of school-

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ing was 6.5 and gross national income was $5,086. According to Gbolahan Ologunro, an equity research analyst at Lagos-based CSL Stockbrokers, Nigeria’s recurring feature in the low human development category is reflective of underinvestment in education and health sectors of the economy. “This has been exacerbated by the slower pace of growth in GDP compared to the population growth, a condition that has resulted in falling per capita income and in turn lower standard of living among the populace,” Ologunro said. Over the years, the budgetary allocation to education and

@Businessdayng

health, which are the critical and vital sectors of the economy, had beenunderwhelmingwhencompared to other African countries. The top five Africa countries in the high human development category are Mauritius, Algeria, Tunisia, Botswana, and Libya, which ranked 66, 82, 91, 94 and 110, respectively. “The impact of this is evident in the deterioration in major health indices leading to lower life expectancy levels, subdued productivity among its labour force leading to widening output gap amidst decline in real incomes owing to a weaker domestic currency and elevated food prices,” Ologunro said.

Thursday 12 December 2019

BUSINESS DAY

news

Latest report predicts ‘Digital Paradox’ for media industry in 2020 Daniel Obi

s technology continues to redefine media landscape even in year 2020, latest reportpredictsthatmarketersand media owners will be challenged to develop the skills, engagement models and measurement capabilities to meaningfully engage consumersinthecrowdedmedia landscape. Kantar’sglobal2020latestMedia Trends and Predictions report notes as ad spends on social and tech platforms continue to grow, technology innovations will also enable a rebirth in real-world engagement. Kantar further predicts there will be a digital paradox; while new and evolving media channels will create opportunities, the deluge of digital touch-points will make it more difficult to connect with consumers. Marketers will also need to navigatethe‘datadilemma,’meeting consumer demand for relevant,personalisedcontent,without breaching trust and privacy. The report says, “2020 will be an exciting year for marketers. Increasedadvertisingandcontent

possibilities, along with the data generated, create a plethora of opportunities for marketers and media owners.” With new opportunities though come new challenges. “Emerging foundational technologies could transform media usage, and other industry shifts, such as the demise of third-party cookies, will force marketers to evolve how they measure audiences across screens and wider campaign effectiveness. “Other channels, like influencer marketing and the newer audio channels will face a makeor-breakmoment;theircredibility could be at risk unless they evolve and live up to their promise. Marketers will need to improve their understanding of how different touch-points effectively work for their brands – online and off,” says Jane Ostler, global head of Media Effectiveness, Kantar in the report. Kantar’s 2020 Media Trends and Predictions fall into three major themes: The technology trends transforming the media landscape; the spaces that brands can credibly occupy, and the context and catalysts for change. Under technology trends, it

predicts that 5G will get real and the marketing industry will be one of the key beneficiaries of the 5G era, enabling far greater capabilities to reach and engage with consumers but taking advantage of the 5G opportunity will require a significant transformation from marketers. “Newplayerswillseethebattle of the streaming platforms heat up, but an increasingly cluttered market will drive subscription fatigue among consumers,” it notes. Looking at spaces that brands can credibly occupy, the reports notes that brands will balance their digital presence with more real-world experiences, meaning “we could see a slowdown in the pace of digital advertising growth. “Taking the lead from consumers,brandswillbecomemore radical in 2020. But they need to ensure their media strategy is aligned with their values and purpose and influencer marketing must measure what matters, this means influencer marketing will mature as brands start to collaborate more deeply and take measurement more seriously in 2020.”

Reps summon power, labour ministers, PENCOM over impending strike by electricity workers James Kwen, Abuja

ouse of Representatives has summoned the minister of power, Mamman Saleh, minister of labour and employment, Chris Ngige, and director-general, National Pension Commission, Aisha Dahir-Umar, to appear before it on Thursday so as to find ways of averting the impending strike by the National Union of Electricity Employees (NUEE). This is as the House asked the leadership to intervene within 24 hours to avert the strike, and urged the Federal Government to direct the ministers of power and labour to amicably resolve all issues as raised by the NUEE. It also directed the committees on Power and Labour, respectively, to invite the ministers of power, labour and heads of the various GENCOS and DISCOS to investigate the allegations against the companies and report back to the House in two weeks. These resolutions were reached Wednesday during plenary, following a motion of urgent national importance on: ‘Urgent need for the Federal government tointerfacewiththemanagement of electricity companies and the National Union of Electricity Employees(NUEE)toavoidimpending electricity blackout’ moved by Toby Okechukwu (Deputy Minority Leader). Presenting the motion, Okechukwu said the House was aware that a petition dated November 7, 2019, was written to the Minister of Power by the National Union of Electricity Employees, and copied to all DISCOS and GENCOS, where the Union warned, and gave a 21-day ultimatum, that they will declare a nationwide strike if their demands which includes non-payments of salary arrears, remittance of pension deduc-

tions, refusal to pay over 2000 disengaged workers of the ex-PHCN staff since 2013, underpayment of over 50,000 ex-PHCN staff, casualisation/outsourcing of workers, were not met by the electricity companies. According to Okechukwu, the House was further aware that the workers under the aus-

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pices of the NUEE accused the Ministry of Power of failing to respond to their strike notification letter which expires the 10th day of December 2019 and the Union having exhausted every avenue for resolution at the dispute, has no other option than to withdraw services without further notice.

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Thursday 12 December 2019

BUSINESS DAY

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Edo, UNICEF strengthen partnership on rural development EFCC secures conviction of BankPHB managers

overnor Godwin Obaseki of Edo State has assured support for the implementation and sustainability of United Nations Children’s Fund (UNICEF) intervention programmes in the state. The governor gave the assurance during a courtesy visit by the chief of UNICEF Akure office, Tushar Rane, at Government House in Benin City. The governor noted that his administration has put mechanisms in place to drive the implementation of UNICEF’s programmes at the grassroot level, adding, “We have the Ward Development Committees (WDC) in every ward that give us feedback on government’s programmes executed through the local government councils. This will ensure that the programmes are effective in our communities. “It is important we put in

place systems and processes to make sure we get things done and done rightly and sustainably.” The governor said the state would complete the study of the UNICEF’s Social Protection Policy before the end of the year, adding that the issue of child malnutrition was being tackled holistically to ensure the right intervention policies are put in place. “We want to know the policy requirements that are needed to deal with the issue of malnutrition and we will like to link the school feeding programme to some of our agricultural programmes,” he said. For the Airing of Fact of Life Radio programme proposed by the UNICEF Chief, the governor said the state would support its airing as soon as the programme series are ready, adding that the state government would col-

laborate more with UNICEF to ensure that the implementation of its intervention programmes are data-driven. The chief of UNICEF office, Akure, commended Governor Obaseki on the giant strides being recorded in support of children and women with more than 50 percent of the state recurrent expenditure on healthcare and education. He commended the launch of the Edo Health Care Insurance scheme with the state government committing N1 billion for the implementation of the programme in the 2020 budget and the appropriation of N1 billion for the implementation of primary health care reforms in the state. Rane sought for the support of the state government in the implementation for social protection policy, Open Defecation Free and State Committee of Food and Nutrition in Edo State.

wo top officials of BankPHB (now Keystone Bank), Anayo Nwosu and Olajide Oshodi as well as Ashok Israni, an Indian businessman, have been sentenced to five years imprisonment each over N800 million fraud by a Lagos High court. However, one of the defendants, Sunny Obazee, the former head of Investment banking at BankPHB, was acquitted of all the charges against him. The defendants were brought before Justice Kudirat Jose of the Lagos High court Igbosere by the EFCC following a petition alleging that they had defrauded in connection with a private placement handled on behalf of Nulec Industries by BankPHB. The complainant had invested about N855 million in the private placement. The convicts were re-ar-

raigned on October 4, 2016, on an amended 15-count charge bordering on conspiracy and obtaining by false pretence to the tune of N855 million. During the course of the trial, the prosecution counsel, Rotimi Jacobs, presented witnesses and tendered several documents that were admitted in evidence by the court. When delivering her judgment, Justice Jose discharged and acquitted Obazee on all charges and the prosecution counsel said he accepted the judgment and added that he had advised his clients that Obazee should not have been charged in the first place. The major plank of the prosecution’s case was that the primary objective of the private placement was to enable Nulec Industries repay its debt to BankPHB. Obazee was neither a staff of the bank when the loan

was extended to Nulec or when it took the decision to raise capital through a private placement. There was also no evidence advanced that he participated in the packaging of the Private Placement Memorandum even though it was handled by a department under his division and he was not a signatory to the Issue proceeds Account. Nothing in the evidence adduced by the prosecution showed that he derived any personal benefit from the transaction and he was not involved in marketing the Complainant nor was he aware that the complainant invested in the private placement. This gained more weight after the complainant himself told the court that he met Obazee for the very first time two years after the private placement ended.

NIMC extends diaspora enrolment to Togo, Niger Republic, Ivory Coast, Ireland Jumoke Akiyode-Lawanson

igerian citizens residing in Togo, Niger Republic, Ivory Coast and the Republic ofIrelandcannowbeaddedtothe national identity database, as the National Identity Management Commission (NIMC) has extendedtheenrolmentofNigerians in these countries. The NIMC has a mandate to ensure that all Nigerian citizens and legal residents are enrolled in the national identity database and issued the unique National Identification Number (NIN) upon successful enrolment. In a statement signed by Abdulhamid Umar, general manager, operations and corporate communications, NIMC, the commission revealed that the extension of diaspora registration to the aforementioned countries was in partnership with Kevonne Consults Limited, Slogani Consults Nigeria Limited and Knowledge Square Nigeria Limited, all Nigerian-owned companies licensed to serve as agents on behalf of NIMC across the globe. With only about 38 million Nigerian citizens and legal residents registered into the database collection for the NIN, out of a population of about 200 million, the NIMC has intensified efforts to capture all citizens home and abroad to attain legal identity for all, in line with the United Nation’s Sustainable Development Goal (SDG) 16.9 – to provide legal identity for all, including free birth registrations by 2030. Recall that Aliyu Aziz, the DG/ CEO NIMC, had earlier said that the programme was planned to make it easier for Nigerians in diaspora to be identified, especially as the federal government of Nigeria had made the possession of NIN a mandatory requirement for acquisition and renewal of the international passport, bank account opening, pension services, land transactions, access to legal/ health services, driver’s license, exam registrations like UTME/ DE, access to other government services amongst others. “The exercise, which will involve the demographic and biometrics data capture of Nigerian citizens residing in the four countries willcommence inNiger Republiconthe20thofDecember,

2019 at Institut des EnseignementsProfessionneletTechniqueLA REFERENCE- IEPTR. Sis au quqrtier Faiseaux Quest non loin de la Francophonie batiment ONGGNLDandEcole:Complexe Scolaire Prive- MON AVENIR. Sis CiteDepute,magasin6portes,cote oppose ECOLE KOIREE, and It in Lome, Togo on the same date at 2073JeanPaulIIBoulevardAncien Immeuble Air Burkina. The exercise will also commence December 20, 2019 in Ivory Coast, at Cocody Angre 7 eme tranche entre le terminus 81/82 et le terrain D Angre. And in Dublin, Ireland on the 14th of January, 2020 at Unit 9 Porters Avenue, Cool mine Ind Estate Dublin15,” the statement read. Furthermore, Knowledge Square Nigeria Limited has also been licensed to open centres in Chicago, Canada and London to complimentthecentresoperating in these countries. The exercise will commence in Chicago, USA on the 13th of December, 2019 at Africa International House 6200 S Drexel Ave, Chicago, IL 60637, and in Ontario, Canada on the 17th of December, 2019 at 8 Melanie Drive, Ste. 202, Brampton, ON.L6K 4L2 and in London, UK on the 8th of January, 2020 at 160 Maple Road, London SE208JB. NIMC has also licensed UGS Technologies Limited to operate as an agent in Minnesota, USA, which is set to commence on the 10th of December, 2019 at Orange HookInco.319-BeryAve.S.Ste.-300 Wayzatta Minnesota. The Nigerian companies licensed to work with their respective partners across all countries to carry out the enrolment of Nigerian adults and children in the diaspora into the National Identity Database (NIDB) are; BiosecSolutionsLimited,CHAMS Consortium Limited, Dantata Universal Services/VFS Global, Defcon Systems Limited/OIS Services, File Solution Limited/EYEID LLC, IRIS Smart Technologies Limited, Kevonne Consults Limited/Iris ID Systems Inc., National eAuthentication Limited/OIS Services, Slogani Consults Limited, Thebez Global Resources/ Cox & Kings, UGS Technologies Limited/OrangeHook African Continental/Carvus, Venn Technology Limited and Knowledge Square Nigeria Limited. www.businessday.ng

L-R: Vivian Ikem, head, government relations, NB plc; Sade Morgan, corporate affairs director, NB; Jordi Borrut Bel, managing director/chief executive officer, NB; Niyi Adebayo, minister of industry, trade and investment, and Wole Bakare, director, industrial development, during the visit of a team from NB to the minister in Abuja.

Africa needs business case with opportunities to attract climate change investments - AfDB Josephine Okojie, Madrid

espite accounting for less than 4 percent of global carbon emission and most vulnerable in terms of the impact of climate change, Africa still accesses very little of climate finance meant to adapt to changing climate risks. This, the African Development Bank (AfDB) has attributed to the continent’s inability to present its self as a business case with opportunities to attract climate finance. “We are a continent that has what it takes to create the Africa we want. I believe what has been the missing link is the ability to brand right and act on the market signals,” Anthony Nyong, director, climate change and green growth department at AfDB, said during the Africa Day side event at the ongoing Madrid conference - COP25. “We continue to present

… accesses only 3% of global climate fund

Africa as a vulnerable case and not a business case with opportunities. Were we have attempted the later the result have been on spot,” Nyong, who is representing Akinwumi Adeshina, president of the bank, said. He said the continent was able to attract 52 deals worth $40 billion investments within three days during the 2019 Africa Investment Form because it presented itself as a business case with opportunities. According to Nyong, Africa can only deliver climate action urgently and at scale when it adopts the business model, as “the entire ecosystem model at national and sub-national levels has to be mobilised to remove the snags that block capital flow.” Africa currently accesses 3 percent of climate fund made available through international bodies, he said.

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Currently, at the Madrid conference, the continent is demanding a fair share of global climate change finance to support adaptation and full implementation of Article 6.2 of the Paris Agreement. Environmental ministers of various African countries complained that they were yet to receive the climate finance promised by rich countries, and whatever was made available through international bodies was very difficult to access. “Africa is the continent that is most vulnerable to climate change impact and the least contributor to emissions,” said Barbara Creecy, chairperson of the Africa Ministerial Conference on the Environment (AMCEN), at the side event. “Yet, we do not get enough finance for climate adaptation. We believe that ambition @Businessdayng

for action must be matched with ambition for response,” she said. A UN study notes subSaharan Africa would need an estimated climate adaptation finance of around $50 billion (£37bn) annually by 2050. Ferzina Banaji, spokesperson for the World Bank, said the global bank group had announced a five-year financing plan of $200 billion to support countries to take ambitious climate action. She said 70 percent of the fund, which commences in 2020, would go for climate adaptation and mitigation projects in developing countries. Other key issues apart from climate finance that is key for Africa negotiators at the ongoing COP25 are land and damage and the full implementation of the Paris Agreement by developed countries.

Thursday 12 December 2019

BUSINESS DAY

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Green tech in Lekki Pearl Estate lowers energy cost for residents CHUKA UROKO

esidents of Lekki Pearl Estate are to pay less for energy as a result of the developer’s adoption of green technology that transforms biomass into heat and electrical energy for use in homes. Lekki Pearl, a moderate estate developed by Alpha Mead Development Company (AMDC), a subsidiary of the Alpha Mead Group, notes that energy cost constitutes about 30 percent of annual household spend in Nigeria where electricity supply from the national grid is neither here nor there. “What we have here is a green estate that is environmentally friendly; all the sewage systems here are underground

and they are channelled in such a way that they are used to generate electricity. This is the first of its kind in Nigeria today,” Dada Thomas, AMDC’s chairman, explained to BusinessDay. It is estimated that residents of this estate will be saving 1520 percent of their energy and maintenance costs per month. “These savings could be channelled into other domestic needs,” Thomas said. Lekki Pearl offers different house types including 2-bedroom and 3-bedroom apartments; Town-houses and standalone houses, all targeted at buyers within the low and medium income group. The houses, the developer said, are affordable chiefly because there is a flexible payment plan in place.

NAF, Edo partner to safeguard night-landing facilities at Benin Airport

ommander, 107 Air Ma r i t i m e G rou p, Nigerian Air Force (NAF), Benin City, Nasiru Saidu, a group captain, has commended the Edo State governor, Godwin Obaseki, for rejigging the state’s security architecture, noting that the government’s collaboration with security agencies has ensured peace and development in the state. Saidu said this while receiving the governor’s special adviser on security matters, Yusuf Haruna, who paid him a courtesy visit. The Commander said the 107 Air Maritime Group was collaborating with the Edo State government to provide 24-hour control of the night-landing facilities at the Benin Airport, after the state government facilitated the installation of the expensive aviation equipment. Saidu said, “We have been rendering assistance to Edo State Government in general and we will continue to collaborate with the government when the need arises, and we will do our best in terms of security. We have our men on patrol 24 hours at the Benin Airport and this has safeguarded the

night landing facilities at the Airport.” He said the NAF had continued to enjoy good and harmonious relationship with Edo State Government and has rendered some important services to the state. “We have had a smooth and cordial relationship with the state government. We have been collaborating with our sister agencies and we are doing our best to keep the state safe and peaceful. Edo State Government, under the leadership of Governor Godwin Obaseki, has executed some projects for us and we have had good working relationship, which has led to growth and development in the state. “We have responded to distress calls on fire disasters within the state by sending our fire fighters whenever there are fire outbreaks. We are always the first point of call in such instances.” Special adviser said the Edo State government had enjoyed robust relationship with the Nigerian Air Force, commending the pivotal role played by the Airforce in maintaining peace and order in the state and country.

Reps okay N140.38bn budget for NCC James Kwen, Abuja

ouse of Representatives has approved the budgetary sum of N140.38 billion for the National Communications Commission (NCC) in the 2020 fiscal year. The approval was sequel to the consideration and adoption of the budget defence report of NCC by the chairman of the House Committee on Telecommunications, Akeem Adeniyi, at Wednesday plenary. Presenting the report, Adeniyi requested “that the House do consider the Report of the Committee on Telecommunications on the issue from the Statutory Revenue Fund of the NCC, the total sum of N140,383,591,000 only. “Of which the sum of N39,297,043 only is for Recurrent Expenditure, the sum of N8,129, only is for Capi-

tal Expenditure, the sum of N20,863,690 only is for Special Projects while the sum of N64,208,446 only will be transferred to the Federal Government of Nigeria.” According to repor t, “N7,500,000,000 only is for Transfer to Universal Service Provision Fund (USPF) with a surplus of N384,949 only. “ThesumofN11,594,920,847 only is for the Budget of the Universal Service Provision Fund (USPF) for the period ending on 31 December, 2020 and approve the recommendations therein.” The approved report indicated that the Commission revenue for 2020 would be sourced from Licensing Fees, Annual Operating Levy, Spectrum Fees, Numbering Plan, Admin Charges, Type Approval Fees, Sanction Fees, Sundry Income. www.businessday.ng

L-R: Yahaya A. Yahaya, company secretary/legal adviser, Momas Electricity Metering Company Limited (MEMMCOL); Saleh Mamman, minister of power; Kola Balogun, chairman, Momas Electricity Metering Company Limited (MEMMCOL), and Bello Abba Tukur, special adviser to the minister on protocols, during the visit of the minister to MEMMCOL’s state-of-the-art factory at Orimerunmu, Mowe, Lagos-Ibadan Expressway.

Despite significant increase in birth registration, 17m Nigeria’s children remain ‘invisible’ – UNICEF Cynthia Egboboh, Abuja

nited Nations Children’s Fund (UNICEF) has announced that despite increase recorded in child birth registration in Nigeria, about 17 million children under age 5, representing 1 in every 5 child birth are still unregistered. According to UNICEF global birth registration report, the number of childbirths officially registered increased significantly in Nigeria from 30 percent in 2013 to 43 percent in 2018 by integrating birth registration into health services. The operation of two parallel and competing systems for birth registration at federal and state levels, insufficient birth registrars, lack of public awareness on the importance of birth registration for children, coupled with ingrained social beliefs that do not encourage the registration of children have been identified as major barriers to high registration coverage in Nigeria.

Peter Hawkins, UNICEF representative in Nigeria, in a statement, said, “We have come a long way in Nigeria and ensuring that children are registered through the health services is making a big difference but still too many children are slipping through the cracks.” Hawkins stressed that as a result of the unregistered births most children were often excluded from accessing education, health care and other vital services, and were vulnerable to exploitation and abuse. “These children are uncounted and unaccounted for, and are non-existent in the eyes of the government or the law. Without proof of identity, children are often excluded from accessing education, health care and other vital services, and are vulnerable to exploitation and abuse. “Every child has a right to a name, a nationality and a legal identity. We have just marked the 30th anniversary of these rights as enshrined in the Convention on the Rights of the

Child and 2020 will mark the 30th anniversary of the African Charter on the Rights and Welfare of the Child which provides that every child be registered immediately after birth. We must continue to register and not stop until every Nigerian child is registered – every child counts,” he said. The report shows that globally, 166 million children underfive, or 1 in 4 children is unregistered, while in West and Central Africa, under-five registration increased in 10 years from 41 percent to 51 percent, despite the multiple challenges the region is facing. “Birth registration in West and Central Africa remained stagnant for a long time, leaving millions of children without their basic right to legal identity. This situation has now changed and millions more children are registered at birth,” said MariePierre Poirier, UNICEF regional director for West and Central Africa. “With UNICEF’s support and under the leadership of the

African Union and of national governments, countries have invested in integrating birth registration in health and immunisation platforms to extend the coverage and accessibility of services and reach even the most vulnerable populations. This simple shift in service delivery is not only low cost but effective in increasing national registration rates, contributing to progress in the region as a whole.” Despite progress, the majority of countries in sub-Saharan Africa lag behind the rest of the world and some of the lowest levels of registration are found in Chad 12 percent and GuineaBissau 24 percent. UNICEF in its “Birth Registration for Every Child by 2030” campaign calls for five actions to protect all children, to include; Provision of certificate upon every child birth, parents empowerment, including single parents, regardless of gender, to register their children at birth and for free during the first year of life.

FG calls for multilateral approach to tackle terrorism in APC countries Innocent Odoh, Abuja

resident Muhammadu Buhari has recommended a multilateral approach to combat terrorism in the African, Caribbean and Pacific (ACP) states. He made the call during plenary of the 9th Summit of the Heads of State and Government of the ACP Group of States in Nairobi, Kenya. The President, represented by the minister of foreign affairs, Geoffrey Onyeama, said terrorist activities continued to cause serious threats to both human security and international peace, maintaining that without an assurance of global peace and sanctity of lives and property, the ACP would be impossible. In a statement issued by Sarah Sanda, special assistant on media to the minister, the President said: “Today, terror-

ist activities continue to pose serious threats to human security and international peace. Without assured global peace as well as sanctity of lives and properties, the ACP of our dreams would be a mirage. “The ACP Group of States is well-positioned to recommend multi-lateral deterrent measures and future readiness mechanisms that would discourage the spread of terrorism through advancement of the rule of law, human rights, democratic values, tolerance and inclusiveness as articulated in the Sustainable Development Goals (SDGs) 10 and 16 in the Post Cotonou Agreement.” The President further said the ACP Group of States must take the measures since the ACP nations and neighbourhoods are most vulnerable to terrorism. According to the President, “It is only within a peaceful en-

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vironment that our economic cooperation and national development can thrive.” The President also stressed the issue of illicit financial flows in relation to human development and the achievement of the SDGs, adding that it was imperative that measures are included in the Post-Cotonou Agreement to curtail illicit financial flows and promote the fight against corruption and recovery of stolen assets. “This is the way to minimise the negative impact of illicit financial flows on the economies of ACP States. ACP States will also be better served if we embrace and implement cross-jurisdictional instruments and bilateral agreements on illicit financial flows,” he said. Speaking on behalf of the African Group, the minister said for terrorism to be defeated in Africa, there was the need for a holistic and well@Businessdayng

funded approach. He noted that terrorism and violent extremism have had adverse effects on the economy, culture, psychology and social life of the African people. He also said unfortunately, the African continent has had to wrestle with different forms of terrorism and terrorist actors such as Al Qaida, Al Shabaab, Boko Haram and the Lord’s Resistance Army. He added that as a result of the terrorist activities, Africa has had to actively engage in efforts to prevent and combat terrorism by strengthening regional frameworks, as well as to put in place a coordinated response mechanism to counter terrorist threats. “However, significant challenges still abound which require that we all continue to work together to strengthen our capacities and resilience against terrorism.

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Naijaphobia, curse or cause

ik MUO

he recent recrudescence of hostility between Ghanaians against Nigerian traders has retained the incidences of naijaphobia in the front burner, where it has been since the show of shame in South Africa. I chose to refer to all these cases as Naijaphobia, deep-seated hostility against Nigerians, and at worst, blackophobia, unjustifiable hostility against blacks. We all know that in these places where it happened and continues to happen, the so-called whites continue to do their legitimate and illegitimate business unperturbed. The only new development is that Ghanaian traders have blamed their acts of lawlessness on the closure of Nigerian borders, which is probably harming Nigeria traders and citizens more than Ghanaians. Both the citizens and government of Ghana have become increasingly hostile to Nigerian businesses at least in the past one decade. Whenever Ghanaian government initiates any policy on foreign businesses, it is actually directed at Nigerians. This included the policy that foreign businesses should pay a fee of $300,000 to be allowed to do business in Ghana. That is N11,000,000.00! If those Nigerian petty-traders in Ghana had N11m, they would not have gone to Ghana in the first instance. I also wonder how many Ghanaian traders who could afford to pay a licensing fee of $300000 in Ghana or elsewhere. But that was Government policy, backed by law. The Ghana Union of Traders Association formed them-

selves into an enforcement arm of the government and crudely roughened some Nigerian traders over the $300,000 license fee. Eventually, that matter died or so we thought. Then, the government of Nigeria decided that the best economic policy to pursue in this year of our Lord 2019, is to close its land boarders, in a situation where Nigeria controls about 75 percent of the ECOWAS market. This is to encourage Nigerians to go into rice cultivation and to curtail revenue leakages. The minister of information said the other day that 6 million Nigerians have gone into rice farming since then. But many Nigerian businesses are comatose and the newly elected President of T&C group of MAN, Barr Uchenna Okafor last week declared that 70 percent of their products are for the West African market. And while we closed the legal routes, the 1001 illegal and unmanned routes continue to blossom. Consequently, importers who ordered their goods through the official boarders were caught pants down. These included Nigerians who bought from or sold goods to the Ghanaian market. How can the attack against, and closure of Nigerian shops impact on the boarder closure and in a situation when government pays deaf ears to the cries of Nigerian citizens? I believe that the Ghanaian traders have lost out in the competitive arena, together with other pent-up animosity, and they are holding onto all straws to dislodge Nigerian traders. So far, at least 1000 shops have been closed and GUTA still based their action on the contentious Ghana Investment Promotion Centre (GIPC) Act 865 and the flouting of ECOWAS treaty by Nigeria. So GUTA has taken it upon itself to be an extra-legal enforcer for the government of Ghana and the ECOWAS authority The same thing had happened in South Africa, where the people suffering harsh socio-economic woes, decided to vent their anger against the easiest

targets, Nigerian and other black businesses. This is irrespective of the fact that 85 percent of the country’s wealth is owned by white families, who constitute 8 percent of the population. As was the case in Ghana, the government looked the other way while Nigerians were being attacked, dispossessed and murdered. One Nigerian, lost up to N60 million in the attacks. In some instances, the security officials get involved in the heinous act, as in the case of the police officer recently convicted and sentenced for the murder of a Nigerian. The perpetrators branded all Nigerians as criminals, drug barons, sex-trade consultants and so on. But why did they not deploy their advanced security system to track and deal with the guilty ones? What of the nationals of other countries also molested and dispossessed? Anyway, there was global outrage, most exhibited by the booing of the president of South Africa in Zimbabwe. Nigerians vented their anger on businesses linked to South Africa, an act that impacted more on Nigeria than the targeted “enemies”. About 5000 jobs were lost and MTN shareholders suffered losses running into billions of Naira. There was tension everywhere in Africa; social and cultural engagements were cancelled; Nigeria recalled its High Commissioner to SA and shunned the World Economic Forum in S/A; National Association of Nigerian Students issued quit notice to South Africans/ while Zambians attacked SA businesses and withdrew from an international friendly. Alen Onyema and his AirPeace patriotically rose up to the occasion; President Buhari visited and jaw-jawed with the South African authorities but the attacks have continued. It continued because ‘blackophobia’ is a state policy in South Africa, where it is not an offense and because the government did not deal with the perpetrators, who are thus emboldened to continue with the carnage, where government has deliberated frustrated foreigners who

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So, are we cursed or are we the cause? I believe that we are the cause, both as individuals and as a country. We are the cause as individuals when we rush to other countries on the false belief that the grass is greener on the other side

wanted to renew their papers and where Nigerians were frustrated from returning, where the current President made some xenophobic statements during his campaign . It continued because the presidents were drinking tea and taking pictures, activities which do not affect the perpetrators or the victims While local and global attention was focused on South Africa, a lot more was happening in Libya, which has been in multidimensional crises since the exit of Ghadaffi. The number of Nigerians that have been sent packing from Libya in the past one year is in multiples of those that forcefully exited S/Africa. Up to this moment, they are still returning in batches and with their tells of woes. A lot has happened since all these developments. Former present Obasanjo had asked Nigerians to be prepared to return to South Africa; about 120 Nigerians are in the death row in Malaysia; Libyan returnees have been calling on Obaseki to come to their help and the fate of the Nigerian returnees, especially, their integration, is still uncertain. So, are we cursed or are we the cause? I believe that we are the cause, both as individuals and as a country. We are the cause as individuals when we rush to other countries on the false belief that the grass is greener on the other side because they have seen some foreign residents showing some real or fake affluence. We do not take pains to find out what obtains in those countries, what they can and cannot do there. And unfortunately, some of us, like the indigenes, get involved in unholy activities. We are the cause as a country because our country has been so hostile to businesses and non-concerned about its citizens that the undeclared war-cry is “everywhere but home”. Note: The rest of this article continues in the online edition of Business Day @ https://businessday.ng Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye

Nigeria must become a nation of angel investors

igeria’s unemployment rate is a ticking time bomb, and without urgent action, it risks exploding. After years of slow economic growth, the unemployed population in Nigeria has surged to 20.9 million. The trend is not slowing down. Unemployment hit an all-time high of 20.3 percent last year. The task at hand is daunting: Nigeria must create over 40 million additional jobs by 2030 to keep pace with people entering the workforce. As part of his “The Next Level” campaign agenda, President Buhari has made it a priority to solve youth unemployment. Last month, the Ministry of Labour vowed to invest in skills training for young people as part of plans to boost employability. But this response is astonishingly inadequate. Rather, to stimulate job creation at scale, Nigeria must encourage and support entrepreneurship. Nigeria is full of entrepreneurial dynamism and hustle; we are not a nation that lacks extraordinarily capable, hardworking, and driven people. But what Nigerian entrepreneurs do lack is capital to grow and scale their businesses. To solve this problem, Nigeria must become a nation of angel investors. Capital is the life force of growing and scaling businesses. Yet, access to capital is visibly and painfully absent in Nigeria. Despite being the backbone of the economy, less than a third of the country’s small and medium-sized businesses have successfully obtained a loan from a bank. And, for the lucky few entrepreneurs who can access credit, the cost of capital from banks is eye-wateringly expensive. This means

that entrepreneurs must usually fund their businesses with their own savings in a country where only 40 percent of adults have access to a transaction account. Not only does the funding barrier tend to restrict entrepreneurship to the elite, it excludes potential entrepreneurs who have great ideas but no money to test or scale their concepts and limits the critical mass of successful businesses that can produce jobs. Despite the limited access to capital in Nigeria, all is not lost. Angel investors, individuals who are able to invest between $25,000 and $250,000 in businesses, can close the crucial funding gap. Angel investors provide early stage funding to entrepreneurs, many of whom have built a successful minimum viable product which they have introduced into the market, but need more capital to test, refine, and grow their business. Moreover, angel investors, who are often entrepreneurs themselves, are able to spot entrepreneurial talent at an early stage. Through their own experiences and proximity to the market, they can mentor and coach entrepreneurs. They can also serve as partners through multiple rounds of funding, providing guidance through the process, while brokering introductions for entrepreneurs to investors in their networks. By this definition, Nigeria already has the makings of an angel investor hub. Nigeria’s commercial capital, Lagos, is famous for its concentrated pool of extreme wealth, with three billionaires, hundreds of multimillionaires, and thousands of millionaires calling it home. Yet, few of Nigeria’s high net-worth individuals (HNWIs) have the appetite to invest in early-stage companies, especially in the tech sector. Nigerian

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wealthy industrialists and oil magnates, the majority of whom are in their 60s, do not understand tech start-ups as an asset class, preferring to put their money in real estate or commodities. But, Nigeria’s industrialists should take the lead in investing in promising tech start-ups. Not only would angel investing allow top industrialists and CEOs to develop experience and knowledge in backing tech start-ups, it could serve as a pathway to developing venture investments led by large Nigerian corporates. This would help deepen Nigeria’s nascent but thriving tech ecosystem even further. The recent fundraise by Nigerian fintech company TeamApt points to the way that large Nigerian corporates can start approaching investments in start-ups. In February, TeamApt announced a $5 million series A fundraise to fund its expansion and move into consumer finance. Jim Ovia, the founder and CEO of Zenith Bank, led the investment round in TeamApt via his investment firm Quantum Capital Partners. As TeamApt provides payment solutions for banks, it is logical that banking clients, such as Zenith Bank, familiar with its technology and its contribution to the bottom line, would invest. Nigeria needs hundreds of more deals like TeamApt’s. Jim Ovia is the exception, not the rule, of an older generation of Nigerian businessmen investing in tech start-ups. Yet, among Nigeria’s young tech founders, who have returned to Nigeria from the US or Europe, angel investing is a logical next step after building a successful start-up. In recent years, I’ve backed a number of fintech entrepreneurs focused on creating

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OPEYEMI ODEYALE value and improving people’s livelihoods. These include amongst others, Bankly, founded by Tomilola Adejana. Bankly is an innovative twist on agent banking, digitizing cash to increase financial inclusion in Nigeria. I’ve also backed Agromall, founded by Adefemi Adeniyi, which revolutionizes African agricultural value chains by digitising the entire farming value chain from end-to-end. Agromall ultimately improves financial inclusion by making farmers bankable with access to credit markets. Nigeria has no lack of brilliant business ideas which can employ millions of Nigerians. The dire outlook on employment makes supporting entrepreneurs all the more urgent. Given the scarcity of institutional capital, Nigerian angel investors must serve as a bridge to capital and resources that will allow entrepreneurs to scale their businesses. If Nigeria is to grow its pool of promising and talented entrepreneurs, it must become a nation of angel investors. Odeyale is the Co-founder/COO of Ping Express a USbased money transfer company serving the Nigerian market. He is also an advisor/board member of Bankly and Agromall.

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Nigeria’s democracy: An epitaph CHRISTOPHER AKOR

ne of the consequences of the fall of the Berlin wall and the collapse of the Soviet Union was the almost world-wide appeal of Western liberal democracy. So popular did the concept become that even the worst totalitarian/fascist regimes in the world began to lay claim to the word “democratic” and use it as a prefix in describing their countries. In Africa especially, the second wave of democratisation came so fast. Totalitarian, military regimes and one party states that were so popular in the period after independence began to give way as more and more countries succumb to the liberal democratic pull and elections became a regular feature in African states. For African autocrats who have often relied on playing the West over the East during the Cold War to remain in power, adjustment became really tough as the main game in town in the new unipolar world order became liberal democracy signified by regular periodic elections and a cocktail of rights that must be allowed. After some notable African autocrats succumbed to defeats at elections, the remaining ones quickly learnt their lessons and found ingenious ways to maintain the facade of democracy while in reality maintaining all the features of an autocratic state. Elections

started to be rigged so blatantly that the very idea of elections in most African states became a means of perpetuating the status quo rather than a means of expression of the choice of the citizens. Autocrats and dictators in Africa who wish to remain in power perpetually need not abolish other parties or outlaw all oppositions. That no longer works and will inevitably invite Western powers to try to end such regimes. All the autocrat needs to do is proclaim his country to be democratic, abolish term limits, and hold regular/periodic elections with predetermined outcome. That way, his country will be viewed to a democracy and at the same time, he can remain in power in perpetuity. He needs not worry too much about the other necessary components of democracy – political rights and civil liberties. He can tell the West that his country is on a journey to full democratic consolidation. Besides, the policemen of the liberal order don’t care too much since as they believe, democracy is a journey. So long as there are regular/ periodic elections, the country could be safely termed a democracy. This has generally led to a gradual decline in the quality of democracies around the world. The American pro-democracy think tank, Freedom House, for instance, in 2017, adjudged that seventy-one countries suffered net declines in democratic freedoms – political rights and civil liberties – with only thirty-five making progress. In Nigeria however, by some queer circumstances, since 1999, more gains seem to have been made in guaranteeing political rights and civil liberties than in conducting credible elections. The highest point of Nigeria’s democratic experience came in 2015 when Nigerians were allowed to both enjoy their democratic and civil rights at the same time. This led to the very first defeat of an incumbent in the elections

and peaceful transfer of power from one political party to another. Not a few Nigerians became very optimistic that democracy has come to stay in the country and that Nigerians were getting to exercise their rights to choose their leaders. However, since ascension to power of Buhari in 2015, that right has been gradually diminishing to the point now where the ruling party is expected to win all major elections conducted in the country either through intimidation of voters, political violence or direct falsification of results at the collation centres. A Diplomatic Watch (which deployed teams from Austria, The European Union, Germany, Ireland, the Netherlands, the United Kingdom and the United States to monitor recently conducted elections in Kogi and Bayelsa states) raised “alarms at reports of widespread incidents of violence and intimidation, some of which were witnessed by our teams in Kogi.” But not done with just reversing the gains made in conducting credible elections in Nigeria, Mr Buhari and his party have also begun to shrink the civic space and making concerted efforts to outlaw free speech and civil liberties that Nigerians have been increasingly enjoying since 1999. Currently, there are about four bills before the National Assembly all seeking to outlaw free speech and even lawful association. Also, as I argue last week, Buhari has achieved the uncommon feat of emasculating all three arms of government – a feat no previous Nigerian elected president has been able to achieve. As proof of that, the Senate President, a Buhari lackey, recently promised to approve any request made by the president since “any request that comes from Mr President is a request that will make Nigeria a better place.” His counterpart in the House of Representatives, Speaker Femi Gbajabiamila

‘ The highest point of Nigeria’s democratic experience came in 2015 when Nigerians were allowed to both enjoy their democratic and civil rights at the same time. This led to the very first defeat of an incumbent in the elections and peaceful transfer of power from one political party to another

Opay: Are Nigerians really helping start-ups to grow or killing them?

hen business owners say it is difficult to operate in Nigeria many people do not understand especially those who do not own any business. It always looks rosy from the outside but when you pay close attention to these startups operating in Nigeria you realise that they are just there struggling. Even some actions portrayed by the government seem hypocritical and usually go the opposite direction. For a government to ensure that businesses become more sustainable within its environs, then, it must think beyond just signing several MoUs with investors and sending representatives during launch. It’s about developing the right policies to ensure that businesses operate peacefully while making it easy for them to scale and sustain. It is about lowering taxes and eliminating unnecessary levies. In Lagos State, the biggest problem is traffic which appears to be an insurmountable task. It does not matter if there are policies in place to mitigate the ever-rising surge. The reality remains that to date, residents have continued to have been affected by the problem. And I find it ludicrous for someone to think that bikes operating in the state is the major reason for the gridlock. Shying away from the major problem to inconsequential matters is just heart-breaking. The dilapidated state of the roads is the major cause of traffic in Lagos. Period! Interestingly, the emergence of bike-hailing start-ups in Nigeria’s economic hub was to save millions of Lagosians from the none-stop traf-

fic. Nobody wants to waste 3 hours on a thirty minutes journey, that is the problem these startups are solving. More so, the fares charged by these bikehailing start-ups via their Apps are way too low compared to what the regular bike man charges on the streets of Lagos. Tremendously, residents who can afford these low-cost services get relieved from the damning Lagos traffic. With any of the bike-hailing Apps, you can just book a ride, in a few minutes, the riders arrive and take you to your destination. Let me also remind you that, these start-ups have taken off many unemployed Nigerian youths from the streets, so, their so-economic impacts in general cannot be questioned. Before Gokada, Oride and Max.ng, three of the major start-ups in the space, commenced their operation they met certain requirements. And I must tell you that it wasn’t an easy one. The Lagos State Government proposed regulations that include licensing fees and annual taxes. Each of the bike-hailing start-ups were required to pay annual licensing fees of N25 million ($70,000) per 1,000 bikes and then N30,000 ($83) per bike after the first set of 1,000. The start-ups are also expected to pay annual taxes on revenue. After Opay had acquired its operational license from the Lagos State Government. The start-up also rubbed minds with MC Oluoma, the leader of the National Union of Road Transport Workers (NURTW). Both parties signed a pact and this essentially involves Opay remitting some portion of its profit on a monthly basis to NURTW. All of these MoUs that were signed

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was to ensure that riders on the platform do not encounter problems while operating in Lagos. The truth is the regular Okada rider does not enjoy this sort of operational freedom in Lagos. They are constantly harassed by the Police and another gang of miscreants known as Agbero. At designated checkpoints, they pay a certain amount of money to them. This is a reoccurring phenomenon in the state. As a resident who continues to patronize Opay ride services, I can attest that Opay riders have enjoyed certain rights and privileges. However, in the last couple of weeks, the story has changed and could go worse if not speedily and properly handled. First, riders on the Opay platform are getting arrested by the Police, while the Agberos have begun to demand money from riders. The Lagos State Government claims that the seizure of Opay bikes was geared towards sanitizing the Lagos highways. What will the Lagos state government gain if they continue to seize Opay bikes? Absolutely nothing. These riders are not causing traffic or any mishaps to Lagosians. In fact, they are doing what the Government has failed to do. Even the Agberos are taking advantage of the situation. And it’s quite sad State Government uphold the “Agberos” in high esteem. These bunch of miscreants are becoming too powerful and enriching themselves via extortion from transporters. If Lagos State Government claims it does not hold them in a high esteem, then, they should be banned their operations. But then, if you get them banned, how will politicians get thugs who will help them snatch ballot

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has also never failed to show his absolute loyalty to his master in Aso Rock. Some months ago, the Speaker invited Service Chiefs to brief the House on the spate of insecurity in the country. The Service Chiefs ignored him and the only response he could give was that he will report them to Buhari. Of course, nothing came out of his reporting them to the president neither has he summoned the courage to invite them to the House again. It is the total submission of the Nigerian National Assembly to the president that has led to the believe that the draconian bills to outlaw free speech in the name of anti-social media and Hate Speech bills will be passed by the National Assembly regardless of opposition from Nigerians. The Judiciary on its part had long been intimidated into silence since the illegal removal of the Chief Justice and the harassment and intimidation of high ranking judges and those with the temerity to give judgements not favourable to the government or its agencies. The government not only routinely disobeys and disregards court orders, it now sends security agencies to harass and arrest citizens right inside the courts when judges are sitting. Of course, with absolutely no separation of powers, and with the people unable to elect their leaders or enjoy civil liberties, Nigeria has become a virtual dictatorship. What exist right now is what Ricardo Hausmann terms ‘isomorphic mimicry’ – the creation of institutions that act in ways to make themselves “look like institutions in other places that are perceived as legitimate,” but which in reality are not. Perhaps, after this chapter is over and Nigerians have another opportunity to build a democratic society, they will finally get rid of their atavistic attachment to, and longing for strongmen.

JUSTICE OKAMGBA boxes during elections? Further, another observation is that Opay riders are beginning to exhibit their innate greed instincts. The average Nigerian wants to exploit, that’s the sad truth. During peak hours, usually from 4pm, Opay riders purposely go offline. The end goal is for them to charge you like the regular Okada rider. Once they are offline, the App will not be able to generate the amount to be paid after a ride. Normally, when you book an Opay ride, the App shows the amount you are to pay at the end of the trip. Ironically, the average Opay driver during peak hours wants to inflate fares. During those peak hours, when you request a ride, they hardly accept the request because the fare is just too small for them. At this point, it is imperative for Opay to critically introspect and have another discussion with the Lagos State Government to thrash out these recent unwelcoming and ugly incidents. If the State does not address the issue of Police harassment and extortion from Agberos, then, they should have an alternative plan. If it’s not going to cost them financially, then they should consider closing down it Oride business and focus on other services. Conclusively, Opay should be stringent with riders on its platform and have an effective monitoring system that detect riders who go offline during peak hours for selfish aggrandizement. Once a rider does provide a justifiable explanation for not being online during peak hours, they should stop such rider from operating.

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BUSINESS DAY

Thursday 12 December 2019

Editorial Righting the wrong on political pensions and unearned emoluments

Publisher/CEO

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu HEAD, HUMAN RESOURCES Adeola Obisesan

he Lagos State House of Assembly (LSHA) jumped ahead of the pack on Sunday, December 8th 2019 to defend its law on pensions and payments for former state officials. Spokesperson Tunde Braimoh swore that the LSHA would not review the law as Zamfara State did nor would it listen to court judgements on the matter. He based their defiance on the alleged legal independence of state assemblies to “make laws that are in tune with the yearnings and dynamics of their society”. The LSHA statement brings to the front burner the vexed matter of legislation that rewards former public officials with unearned remuneration. The payments are in reality higher than the earnings of current occupants of the office who citizens employed for that purpose. Lagos State stands out for provisions for former officials that are wasteful and obscene. It places a considerable burden on the resources of the state. The responsibility would grow exponentially as more officers join the ranks of ex-this and ex-that.

Lagos State provides two houses each to former Governors and their deputies, one in Lagos and the other in the federal capital territory. Each of the officers gets six new cars every three years or two cars every year. The rewards or awards include earning the same basic salary as the serving governor. They receive free healthcare for themselves and their families, with no indication of any ceiling to the number of such family members. The allowances are mindboggling. They include a furniture allowance of 300 percent of their annual basic salary, currently translating to N23.3m annually. There is a house maintenance allowance of ten percent of basic; utility allowance of 20 percent of basic; car maintenance allowance of 30 percent of basic and entertainment allowance of 10 per cent. Their assistants would earn 25 percent of the governor’s annual basic salary. The governors would be entitled to eight police officers and two officials of the DSS for security. It is instructive that assemblyman Braimoh mounted this defence two days after the burial of Brig General Mobolaji Johnson, the first governor of Lagos State. John-

son ruled for eight years, built a solid foundation of prudence, vision and project execution for Lagos State but did not build any personal house or take a hefty “pension” from the state. Johnson’s sacrificial leadership and that of leaders like Lateef Kayode Jakande laid the foundation for the success of Lagos State in addition to an over-abundance of resources. Most authorities agree with Wikipedia that “A pension is a fund into which a sum of money is added during an employee’s employment years and from which payments are drawn to support the person’s retirement from work in the form of periodic payments”. Common types of pensions are “defined benefits” and “defined contribution” plan. With the 2014 pension reforms, Nigeria moved to a contributory pension scheme whereby employees and their employers contribute to a pool of funds. The pensions awarded to former public officials are defined benefits with no contribution element. Pensions are usually also paid for lifetime employment of an average of 35 years, not for political appointments of eight short years. Greed is the actuating principle behind the pensions. It

builds on irrationality. Why would a former employee, doing nothing to serve the state, earn the same basic salary as the elected official in office? How does one rationalise it? Or explain getting as many allowances as the person in the office? Forty-seven former governors in 21 states cost their states N37.36 billion in socalled compensations in 2017. There is no justification for paying unearned remuneration to former political officeholders. Lagos State, riding on the hubris of its alleged financial strength, is also the most indebted state in Nigeria, owing $1.45 billion in foreign debts and N542.3 billion in domestic obligations. The so-called pension payments to former governors are wrong on several counts. They are also immoral, insensitive and reek of sleaze and greed. Those who passed them lack vision, compassion and care for the common good. BusinessDay calls on the states to follow the example of Zamfara State and the injunctions of the judiciary to repeal these repellent pension acts. They do not make economic sense, nor can they stand the test of political or civic morality. Do away with them now.

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BUSINESS DAY

Thursday 12 December 2019

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Orji Uzor Kalu in the ‘Evil Forest’ The Public Sphere

CHIDO NWAKANMA

he jubilation in Ala Igbo over the incarceration of former Abia state governor, Orji Uzor Kalu speaks to deeper concerns beyond affirming the truism that failure is an orphan. Individuals and groups in the land have affirmed the necessity for the former governor of Abia State to serve his 12-year jail term for the heist of Abia State funds. The court found him guilty of stealing N7.5 billion from the state. I agree with the majority view that Orji Uzor Kalu earned his just deserts and should spend time in jail. He may deploy the period to think about his disservice to Abia state and its citizens. He may even find in the loneliness of imprisonment the opportunity to reflect on his eight-years and offer an apology. People point to not just the stealing of resources but the swagger and impunity with which Kalu carries on. After stealing the state blind, he brazenly stated that he was more prosperous than Abia state. At other times, he claimed to have governed Abia State with his own money. In the wake of the 2019 elections

after which he became a senator, Kalu disavowed his Igboness or interest in fighting causes dear to the Igbo. First, he played the double-dealing game. Ahead of the contest for offices, he deployed the Igbo card. He was a fighter for Igbo interests. Soon as he lost the prime positions, he changed. The people quote him by asking him to “carry your cross, brother”. His volubility and support for RUGA against the direction and views of Ndigbo have come handy to his traducers. He also lied against the Igbo, blaming them for his business failures. Kalu stated, “I know what I have lost to politics, defending Igbo and fighting to see Igbo take what belongs to them. This cost me my bank, airline, oil blocks and many other businesses. I lost friends in politics, business and my social friends both at home and abroad. Do you think I would have quarrelled with Obasanjo if not for Igbo? Do you think that I would have left PDP? Do you think I will have been on the EFCC list? “…Ohaneze and co can do Igbo as they like, I don’t give a damn. Everyone must carry his cross. I am not afraid to speak the truth; I’m trained by a Hausa Fulani, I brought RUGA to the south-east. I built a mosque for the Moslems when I was governor. I have business scattered in the northern part of the country. We are one Nigeria. We must support Buhari to implement RUGA across the country. Anytime a vote is called for any bill to be passed in favour of RUGA, I, Orji Uzor Kalu, will vote in support.” The convict Orji Uzor Kalu may still regain his freedom on appeal to higher courts. Quality representation

in court or political gamesmanship may bring him freedom. Good luck to him. Ndigbo are currently happy with the message of the 5 December 2019 judgement. Welcome to the Evil Forest. In speaking out volubly in support of his incarceration, Ndigbo sentenced Orji Uzor Kalu to the “Evil Forest”. They have also reaffirmed belief in the fundamental values that served as anchors for the society. The “Evil Forest” in Igbo lore was a physical location usually at the extremities of each community where they sent people the community sanctioned for various offences. It is a place of abomination and condemnation. It is a place worse than the modern correctional facility of a prison. The Evil Forest today is a metaphorical place of abandonment and sequestration of undesirable elements the society has condemned. It is reputational. The Evil Forest today resides in the minds of citizens. It is a dangerous location. The Evil Forest is the Vox Populi. It is an opinion poll that reports the perceptions of stakeholders concerning public figures and celebrities. It is a barometer that provides an instant update, but that may change with time and circumstance. Ndigbo say the Evil Forest awaits other former governors of the region. The result of the referendum is foreboding. They are bitter concerning the evidence of failure to provide dividends of governance in the region by these men. Some of these former rulers joined in the cry of marginalisation of the region when they were the ones doing the damage.

‘

His volubility and support for RUGA against the direction and views of Ndigbo have come handy to his traducers. He also lied against the Igbo, blaming them for his business failures

his column’s last week article tagged “Kano versus Dubai-the difference” has been described by most of the readers as a tale of two cities. That was one of my options. Still, the desire to relate it to the Nigerian situation prevailed and helped me in using Kano, one of the principal cities in Nigeria to explain my message. However, the theme and the lessons are clear to all from the responses I received. The difference between our Kano and the Dubai we craved for is in one word, leadership. Most of the organisations have in December marks the end of the year for many organizations and comes with a rush of activities. It is either there is a pressure to finish well, or there is an ongoing reflection on how to be better in the year 2020. Whichever way, organisations have begun communicating with their staff and other stakeholders in the form of expected financial result or divided to be declared, teams to be applauded or sanctioned, policies and strategies to be reviewed or refined following the impacts of regulations, economic environment or government pronouncements. There are two sides of the divide when it comes to accountability after a period of engagement with the stakeholders. Some companies will be celebrating the year given the success of their strategies, as reflected in the results year-to-date. To these companies, it is time to reward the staff and other stakeholders, plan to repeat the performance in 2020, noting where there are needs for adjustment. The second side of the divide are compa-

nies trying to meet up with the financial projections. Here, the slogan “finishing strong” and the threat of sanctions for staff is the order of the day. , negative communication by leaders who are threatened for being accountable for the poor outcome and what the excuse to give the shareholders for the below-average performance on their investment at the annual general meetings (AGM). The difference between the two organisations with different year-end narratives is not far-fetched. some organisations have fewer branches and resources invested, moderate staff strength and publicity, but better return on investment to the shareholders, engaged staff, loyal customers and good internal process for managing the stakeholders. While their counterparts are not effective even with enormous opportunities and resources deployed during the year The difference between what is going on in the companies is nothing other than the productivity of the staff and the culture. Productivity is, however, not a word that is infused into organisations without efforts. It is an output of the mixture of the brand, products, and process, staff commitment and engagement with customers in the organisation. The culture of any organisation is so influential that it always eats the strategy, customers and even the most cerebral workforce for lunch if not in alignment with them. In other words, any commercial project or aspirations not in line with the culture will be confined to the casket soon or later. So, if culture is that powerful, who is

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responsible for it in any organisation? The custodians of the culture are the owners and leaders of the organisations. The culture that has helped some companies deliver value year on year and transformed businesses into sustainable institutions is simply the ownership culture of the employees. Productivity is a function of ownership. I will illustrate this with how the fans of Flamengo FC of Brazil displayed the concept of extreme ownership on Wednesday 20th November 2019. Flamengo FC was billed to play River Plate FC, the champions at the Copa Libertadores final match on 23rd November at the Estadio Monumental, Lima Peru. The fans of Flamengo gathered in a first of its kind send forth procession for the team. All the fans gathered around the team official bus, and were shouting, singing and escorting the team to the airport for the flight to Peru. The outcome of the send forth procession is in the history book. Flamengo FC came back from a one-goal deficit to defeat River Plate FC in the final. The winning goal was scored by Gabriel Barbosa in the 92nd minutes to give the Brazilian giant the most prestigious trophy of South America’s biggest club football competition. Behind Flamengo’s performance was the motivation by an essential element of the stakeholders before the match. The victorylike send forth parade was a motivation playing in the mind of the players and gave them the ownership mindset to do all it takes to bring home the cup for the fans. Employees of organisations who lead in

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Watch out, say the people to current rulers, from governors through local government chairpersons to those in state and national assemblies. Perform. Or citizens will join in ensuring that the long arm of the law grabs you after the removal of immunity. Persecution of Igbo highflyers? 2023? Forget it. Nothing in this case that started under the Yaradua administration links to those issues. Zilch. There are cultural issues around values arising from the Orji Uzor Kalu jailing. Many have questioned the rejoicing because Ndigbo do not rejoice at the downfall of one of their own. Then the matter of the expectations of the people from public officeholders. Ndigbo generally do not rejoice at ill-fortune. The Igbo are fair-minded. They crave for justice. The seeming ululation is not mockery but appreciation for justice. More significantly, a man who wilfully appropriates what belongs to all for himself alone is an enemy to the generality. The trending YouTube video of his humungous estate speaks to the overweening greed, impunity and lack of discretion of the otherwise streetwise former governor. The message of values is that the people still care about the sanctity of public trust and public finances and noblesse oblige. To whom much is given, the public is right to expect so much. They also have the right to express their displeasure and disappointment. Nwakanma is a Visiting Member of the BusinessDay Editorial Board and serves on the Adjunct Faculty at the School of Media and Communication, Pan Atlantic University, Lagos. Email chidonwakanma@ gmail.com.

A tale of two organisations

Positive Growth with Babs

Babs OlugbemI accomplishments and deliver values for their shareholders consistently have the infusion of skill, and the culture of extreme ownership in a learning and performance-oriented environment. A perfect strategy and out of the world process will fail if the human aspect of business engagement is not motivated to deliver beyond the tools. My journey as a business and leadership consultant has validated the fact that there no sustainable business without engaged employees who are not necessarily the highest paid in the industry but feel valued. What makes employees valuable is the culture in the workplace environment. So, the starting point for a consistent business performance and industry leadership is the creation of extreme ownership culture in the employees and, not the slogans and threat of replacing the people at will. In 2020, your culture will determine the engagement of your employees and the rate of returns on the shareholders’ investment. Babs Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.

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Thursday 12 December 2019

BUSINESS DAY

TECHTALK Innovation

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Fin-Tech

Start-up

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Broadband Infrastructure

Bank IT Security

Why Pantami should revisit failed 2013-2018 National Broadband plan FRANK ELEANYA

lthough it has taken nearly one year, the Minister of Communication and Digital Economy has finally gotten the process for a new National Broadband Plan underway. The new plan which is expected to have a lifespan of six years is being drafted in partnership with the UK government would need to borrow significantly from the previous plan which in terms of implementation would be considered a failure. T h e o n l y p ro m i n e n t achievement that came as a result of the plan was the broadband target which grew from 6 percent in 2013 to 33 percent in 2018. It is currently at 37 percent according to data from the Nigerian Communications Commission (NCC). The National Broadband Plan’s headline target was to achieve 80 percent penetration of 3G mobile wireless broadband by 2018 and the five-fold increase of broadband penetration, from the 2013 penetration of 6 percent

to 30 percent, by the end of 2018 While 33 percent may look like success for the government, but the process of making that happen was largely left unattended to. For instance, the plan defined broadband as an internet experience where the user can access the most demanding content in realtime at a minimum speed of 1.5 Mbps, and without buffering of video content. It also acknowledged that

mobile broadband was the fastest route to the attainment of its objectives for coverage and penetration, and recognised that detailed rollout of broadband fibre infrastructure from international broadband cable landing points off the coast of Nigeria (particularly Lagos) into the Nigerian hinterland as city and metro networks was a prerequisite to gaining stable internet. To make that happen, the plan set out to define

5G in Nigeria: MTN, Ericsson demonstrate use cases to end Lagos traffic, medical emergencies CALEB OJEWALE

or some people in Nigeria, 4G connectivity is still a mirage, but as the world looks ahead and prepares for 5G, MTN Nigeria, collaborating with Ericsson, held a public demonstration of 5G in Lagos last week, and what possibilities are to be expected in the near future. Sean Cryan, country manager, Ericsson Nigeria, at the 5G trial highlighted some use cases like connected ambulance, which demonstrated how 5G can help improve healthcare in Nigeria. Ericsson, which is MTN’s technology partner for the 5G trial in Lagos, is providing the radio infrastructure network. In one use case, the chaos Lagos roads represent may become a thing of the past. Using 5G enabled interconnected traffic lights; flow of traffic across the state can be monitored from one location. Here, an operator can with the click of a button, give priority to flow of traffic in some places, in order to decongest certain

areas of the state. During medical emergencies, the possibilities of 5G in healthcare delivery by saving lives through swift diagnosis and treatment were also demonstrated. When an ambulance is called to evacuate someone in need of medical attention, it is equipped with IoT devices that communicate across a 5G network. With cameras providing live streaming from the ambulance, the use of Active Gloves, and using other medical devices connected to 5G, live signals are sent instantaneously to more experienced doctors, from where they conduct the actual diagnosis and give directions on what should be done. When diagnosis has been connected for such a patient over the 5G network, it could be determined that such a patient needs urgent surgery, but perhaps cannot be provided at the hospital where the ambulance is headed. Still using 5G, doctors can transfer the patient’s medical record to another hospital, where the ambulance can be redirected to a team of doctors already provided

with all the information to proceed with surgery. The risk to patient’s life that could come from delayed diagnosis, or even travel time when being moved from one hospital to another, is completely eliminated. Also, for industries, a 5G demonstration showed how precise troubleshooting can be done inside various equipments running in a factory, to determine when any part needed to be replaced. It perhaps even get better, as an entire factory could run by itself, with very minimal human interference. Complete production processes can be controlled over a 5G connection, running a factory seamlessly with the touch of button from a remote location. From factories made to run seamlessly with little human intervention, medical procedures performed much faster, life saving decisions made quicker, and factories remotely controlled over 5G, the possibilities appear very exciting. With time, it will be seen how much of these will become realities in Nigeria, and in scale.

the open-access framework and secure Right of Way (RoW) waivers with states. Many years later, the federal ministry of communication technology and the NCC saddled with that responsibility, has been unable to make any progress. Presently, the government said instead of waivers it would work towards harmonisation of the RoW. Right of Way charges constitutes a major hindrance to fixed fibre deployment,

sometimes constituting 50 to 70 percent of the cost of fibre deployment in some states in Nigeria. The National Broadband Plan also projected to enable expedited RoW permits for the rapid rollout of base stations. Stakeholders say this is yet to be achieved as the Ministry of communication and the Ministry of Works are yet to commence working together. The plan also projected to engage the National Assembly, state governments and NCC to declare fibre cables critical national infrastructure. Again, the ministry did not execute an action on this. Only recently the government said it would come up with an executive order to make the declaration. While that may be a quick fix, an executive order is an order issued by the President that is enforceable by members of the executive branch of government until either overturned by a law established by NASS or overturned by a ruling by a court. Only the national assembly has the power to make the declaration a lifelong achievement by making the declaration

New digital bank by Standard Chartered offers zero charges on most transactions CALEB OJEWALE

new ‘Digital Bank’ has been launched by Standard Chartered bank, which it says will offer several benefits including Zero charge on all interbank transfers, Zero charge on SMS Notification, Zero charge on ATM withdrawals, Performing funds transfer without adding beneficiaries, Generating a soft token for all transactions, and Free bank card delivery nationwide. Named SC Mobile 2.0, the digital platform will initially offer savings accounts, current accounts, fixed deposits (with the option of joint accounts) along with Lending and Wealth Management solutions. Lamin Manjang, CEO, Standard Chartered Bank Ni g e r i a d e s c r i b e d t h e launch, which he said was done with support of the Central Bank of Nigeria (CBN), as “a key milestone

on our digital journey as a Bank and underlines our commitment to investing and growing in the market.” He explained that the bank has been steadily investing in expanding its footprint in Africa over the years, launching earlier in Cote D’Ivoire, Ghana, Kenya and Tanzania, and this will continue to be a priority moving forward. “Digitising Africa remains at the heart of our business strategy for the region and we look to continue to grow our business in Nigeria being the best financial partner to our clients,” he said. The bank’s digital serv i c e s a re av a i l a b l e by downloading the Standard Chartered mobile application on the app stores. New clients can execute all their banking activities from their mobile devices, starting by opening their bank account in less than 10 minutes. They can also provide all verification documents by uploading to the application and fully

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

constitutional. There are numerous actionable plans that are yet to be achieved. Nevertheless, it should be noted that the 2013-2018 National Broadband Plan was by no stretch of imagination, a perfect one. Experts still say the 30 percent target was too low and could have gone higher. But many see it as the first document that made an effort to set a clear course to where Nigeria ought to be in terms of digital technology. As it stands, all that’s left as a memory of the plan is the 33 percent broadband penetration. While a new 6 years National Broadband Plan is long overdue, its progenitors can borrow so many things from its predecessor. Interestingly, the current minister was then the director-general of NITDA, the agency with the biggest responsibility for executing the national broadband plan. Although his stewardship of the agency may raise some doubts, he now has an opportunity as the minister to push Nigeria into the 21st century by going back yo where it all started - the National Broadband Plan 2013-2018.

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complete their onboarding process within minutes. W h i l e D av i d I d o r u , head of Retail Banking says all accounts are fully functional when setup, he however, noted there are three tiers when users set up an account ; with the third tier offering unlimited transactions, even without customers having to step into a banking hall for any physical KYC. “Our digital bank was developed with our clients in mind. We have taken into consideration the feedback received by our clients at each stage of the design process and have incorporated innovative technology to allow them to execute all banking activities from a mobile device,” said Idoru. The App he says, includes 70 banking services, including its offers of zero charge on all interbank transactions, zero charge on SMS notifications and free delivery of cards to them wherever they are.

Thursday 12 December 2019

BUSINESS DAY

cityfile Accidents claim 25 in Abia GODFREY OFURUM, Aba

he Federal Road Safety Corps (FRSC), Abia command has revealed that 25 persons lost their lives and 326 injured in 71 auto crashes recorded between January and November this year. Meshach Jatau, sector commander of the FRSC in Abia State, gave the figures at the 2019 “Ember Months” road safety campaign at Umuahia, the state capital. The campaign marked the climax in a series of sensitisation to remind motorists on the need to drive carefully and obey traffic rules and regulations this festive season. Also, Osadeba Osadebamwen, the FRSC zonal commander, zone 9, Enugu, who spoke at the campaign, listed absent mindedness and careless driving among the factors promoting road crashes. “There is nothing like accident on the road. It is absent mindedness that leads to a crash. Don’t leave anything to chance on the road,’’ the zonal commander said. Governor Okezie Ikpeazu of Abia, represented by his deputy, Ude Oko Chukwu, also blamed 90 per cent of road crashes on human elements. “I wish to tell our drivers that there is nothing special about ‘Ember Month’, no demon associated with it. It is our action that is responsible for the accidents,’’ he said. The governor appealed to FRSC and other security agencies to help the state and the nation in minimising the level of mortality on the roads.

L-R: Ademola Akinlabi, chairman, Photo Journalists Association of Nigeria (PJAN); Qasim Akinreti, chairman, Nigerian Union of Journalists (NUJ), Lagos chapter; Ralph Akinfeleye, council member, World Journalism Education Congress; Idris Aina, head, digital and mainstream media, Modion Communications; Pius Okeosisi, photo editor, BusinessDay/winner of candid photo of the year 2019 PJAN award, and Precious Ubah, head of growth, Modion Communications, at the PJAN 1st national conference and awards night in Lagos.

Flood submerges 280 N/Delta communities ... as 2m persons displaced JAMES KWEN, Abuja

70% of gas facilities in Ado-Odo/Ota illegal

uinat Bello-Zagi, operations controller, Department of Petroleum Resources (DPR), Abeokuta Field Office has said that 70 per cent of gas facilities in Ado-Odo/ Ota local government area of Ogun State were illegal. Bello-Zagi while speaking at the 2nd annual general meeting of the DPR, Abeokuta field office, decried the proliferation of gas facilities in the local government, saying that “certain roads in the state had an average of 10 gas facilities at a stretch of 5kms -10kms. Bello-Zagi told the audience that the DPR was already mapping the area and conducting proximity analysis to ensure safety and guide future approval. “The mapping of gas facilities has demonstrated the capacity of technology to monitor and evaluate DPR procedures, enhance surveillance and enforcement. “The mapping will also serve as useful advocacy tool for the department to engage stakeholders and other relevant agencies in terms of provision of facilities, business opportunities and tax collection,” she said. She noted that the DPR had directed gas pipeline facility owners to clear their pipelines right of way and the department had sanctioned some facilities for encroaching on gas pipeline right of way. NAN

bout 280 communities in the Niger Delta region of the country have been submerged by flood. Among the states in the oilrich region mostly affected are Bayelsa, Delta, Rivers, Ondo, Akwa Ibom, Imo, Abia and Cross River. Most of the states in the region are below sea level, and therefore, prone to flooding. They, however, account for over 80 percent of Nigeria’s foreign earnings through crude oil. Cairo Ojougboh, executive director of project at the NDDC, who spoke with journalists in Abuja, further observed that the 280 communities have “nothing going on for now.” According to Ojougboh, the commission can no longer sit and watch the affected persons in their state of hopelessness. Consequently, the NDDC plans to resettle the over two million persons displaced by flood. He added that the commission was

working to address the challenge and resettle the victims in their homes. “The rains had just stopped and the flood is receding, most of the indigenes are now in Internally Displaced Persons camps (IDP) and will have to go back home. “When they return, they will find their homes occupied by dangerous insects and reptiles, including snakes, and their properties would have been damaged. “So we have to find a way of resettling them, these are the things the commission is looking at now. “We are not going to stop there, we must project into the future and find out how we can stop this catastrophe from happening every year, because every year, it is the same story and these are the issues in the Niger Delta.” Ojougboh noted the commission had started interfacing with the ministry of works and housing to ensure that the right things were done, adding that the NDDC was now more focused to deliver on its mandate.

He said the commission was currently going through reformation to ensure more participation between it and its supervisory ministry, adding that each of the commission’s departments has been repositioned for efficient service delivery to the Niger Delta people. He, however, identified conflict between tiers of government with regards to contract award for road construction as a major challenge facing the commission. “You go to some states, you find out that contract that had been awarded by the NDDC is also awarded by the state and local government. “And you go to some places, you find out that the NDDC is on a road, and the ministry of works and housing is also on the same road. “We need to know where everybody is, so we don’t pay contractors twice for jobs that had been done. These are the areas where the ministry and the commission must cooperate and collaborate,” he said.

Osun requires N27bn to fix collapsed infrastructure

ot less than N27 billion would be required to fix critically damaged infrastructure across Osun State, Remi Omowaye, the commissioner for works and transportation has disclosed. Omowaye stated this while appearing before the joint finance and appropriation committee of the state House of Assembly on Tuesday to defend his ministry’s budget for 2020. According to him, the state governor, after collating data on the critical needs of the people of the state, discovered that about N27 billion would be needed to fix public infrastructure and roads in Osun. Omowaye told the committee members that most of the infrastructure and roads

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needed urgent overhauling, repairs and maintenance but that lack of funds was impeding the work. He noted, however, that government was working towards rehabilitating some of the damaged roads and public buildings. “The governor is doing the best to raise funds for work on critical infrastructure. Some contractors being owed have stopped rehabilitation works on some of the damaged roads. “The ministry’s department of public building is, however, rehabilitating some public structures and schools with the available funds. “The ministry of works is also working with the federal authorities to fix some fed-

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eral roads in the state. “We are, however, hoping and working towards getting refunds from the Federal Government for the rehabilitation works undertaken on these federal roads so that we can have funds to do repair works on other projects,” he said. The commissioner solicited for the support of the lawmakers to enable the executive to embark on more critical projects. He also asked for the approval of the funds to execute the proposed 2020 projects. Taiwo Adebayo, chairman of the joint committee, praised the ministry’s efforts and that the legislature would render the needed assistance in the area of facilitating approvals of funds for project execution in the state.

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Thursday 12 December 2019

BUSINESS DAY

RESEARCH&INSIGHT

In association with

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

briu@businessday.ng

08098710024

The prevalence of bribery across six geopolitical regions ADEMOLA ASUNLOYE

he most solitary obstruction to economic development and political integration in modern societies is bribery and corruption. This is so because ministries, departments and agencies (MDAs) are constantly faced with the challenge of bribery and other corrupt practices. Transitioning from one regime to another in the country promises honest and transparent government. However, succeeding governments have been accompanied with malfeasance of different proportions. It is far-flung in Nigeria despite the well-developed anti-corruption legal framework because enforcement of same remains very weak: gifts, bribery and facilitation payments among others are the norm. It was estimated that corruption could cost Nigeria up to 37 per cent of its GDP by 2030 or circa $1,000 per person if not overcome (PWC 2017). Corruption in Nigeria dates far before independence and the evil still exists till now: in the judicial system, public services, land administration, tax administration, customs administration, public procurement, natural resources, legislation, embassies, health institutions, FRSC, educational institution, and the police force among others. It is a major holdback to achieving the 2030 agenda on “Sustainable Development”. Hence, the need to put up better strategy and legal frame work in stamping out corruption in the country as it is pervasive across all institutions. Although, Nigeria scored 27 out of 100 points in the 2018 Corruption Perceptions Index (CPI) and was ranked 144 out of 180 as one of the most corrupt countries in the world, the prevalence of bribery dropped by 2.1 percentage point from 32.3 per cent in 2016 to 30.2 per cent in 2019. According to the survey by the National Bureau of Statistics (NBS) and the United Nations Office on Drugs and Crime (UNODC), the amount of bribe paid in cash to the Nigerian public officials alone amounts to the tune of N675bn in 2019. The results of the survey showed an 11 percentage increase in the number of Nigerians who were in contact with public officials from 52 per cent in 2016 to 63 per cent in 2019. Similarly, 30.2 per cent of all Nigerian citizens who had at least a contact with a public official in the 12 months prior to the 2019 survey paid a bribe to or were asked

Source: NBS

to pay a bribe by a public official. This figure represents 2.1 percentage change from 2016. Across the six geo-political regions, North-East, North-West and South-West recorded decrease in the prevalence of bribery since 2016; however, the NorthCentral, South-East and South-South recorded further increase in the prevalence of bribery from 2016 till date. Analysing the region from the least prevalent to the most prevalent in bribery; North-West region did not only recorded the most significant decrease in the prevalence of bribery at 11 percentage change from 36.2 per cent in 2016 to 25.2 per cent in 2019, it is also the region where bribery

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is least prevalent. Although South-East comes after North-West at 25.9 per cent as the second least prevalent region in terms of bribery, there is an indication that bribery became more prevalent in the region as it increased by 1.5 percentage points over 2016 level. Followed is the South-West region at 31.4 per cent bribery prevalence level, which represents a 1.4 percentage point decline in the prevalence of bribery within the same period. The North East, numbered 4th at 31.9 per cent prevalence of bribery recorded the seconded biggest percentage point decrease at 3.4 from 2016 level. The North-Central and the South-South

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at 32.6 per cent and 35.4 per cent prevalence of bribery both top the regions respectively. The level of bribery prevalence is accompanied by a 1.5 percentage point increase. The highest 3.5 percentage point increase in the prevalence of bribery was in the South-South and the North-Central regions respectively. In the urban areas across the six geopolitical zones, all zones but two showed decline in the prevalence of bribery within three years (2016 -2019): bribery and corruption was most prevalent in the SouthSouth and North-Central urban regions as it increased by 7 percentage points each respectively from 38 per cent to 45 per cent for urban South-South and from 30 per cent to 37 per cent in urban North-Central region during the reference period. Although urban areas in the South-East recorded the least prevalence of bribery among others, the most appreciable decline in the prevalence of bribery was recorded in urban areas in the North-West. Trailing is the North-east, South-East and South-West from high to low. “In 2019, the prevalence of bribery among people living in urban areas (34 per cent) in Nigeria was around 6 percentage points higher than among those living in rural areas (28 per cent). This difference shows that in densely populated areas, where there are more opportunities for interacting with different types of public official, bribes may be more necessary for overcoming bottlenecks and facilitating the delivery of services by public officials than in less densely populated areas. In contrast to the prevalence of bribery, the average number of bribes paid by bribe-payers is slightly larger in rural than in urban areas of Nigeria”, said NBS. Similarly in the rural areas across regions, all but two regions showed decline in the prevalence of bribery within the three years: bribery and corruption was most prevalent in the North-East, then SouthSouth. However, there was a 2 percentage and 1 percentage points decrease in the prevalence of bribery in the North-East and South-South respectively within the same period. The rural areas in the North-West did not only record the least prevalence of bribery among others, it also recorded the most appreciable decline in the prevalence of bribery at 11 percentage points. This is followed by the North-East at a 2 percentage points decline, while both South-South and South-West declined at 1 percentage point each.

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Thursday 12 December 2019

BUSINESS DAY

Investor

In association with

Helping you to build wealth & make wise decisions Market capitalisation

NSE All Share Index

NSE Premium Index

N11.721 trillion

Week open (29 – 11–19)

31,924.51 27,002.15

N13.033trillion

2,188.11

Week close (06 – 12–19)

26,855.52

N12.962 trillion

2,169.31

Year Open

Percentage change (WoW) Percentage change (YTD)

-0.13 -14.56

2,241.37

-0.86 -1.17

The NSE-Main Board

NSE ASeM Index

NSE 30 Index

NSE Banking Index

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

130.95

723.46

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

291.84

2,272.45

1,254.54

1,212.79

801.09

1,438.19

426.64

1,125.22

757.63

120.20

541.72

234.98

1,759.38

1,082.82

1,012.60

757.63

1,136.06 1,134.61

361.12

1,123.02

356.93

119.16

551.01

233.97

1,776.52

1,069.12

1,012.93

-1.16

-0.87

1.71

1,456.29

-0.20 -22.00

0.00 -4.56

-0.13 -19.94

-10.53

-5.79

-26.42

-0.43

0.97

-1.27

0.03

-22.59

-20.48

-13.63

-16.11

Tax provision weighs on Anino International profit …despite growing Q3’19 revenue to N307.941mn

L – R: Oladeji Babalola, head, market Surveillance, The Nigerian Stock Exchange (NSE); Olumide Bolumole, head, Listing Business Division, NSE; Abbas Abdulkadir, deputy director/head Securities & Investment Services, Securities and Exchange Commission (SEC); Agboola Pius, director Policy & Regulation, National Insurance Commission (NAICOM); Ayodeji Oyetunde, Partner, Aluko & Oyebode; Eric Idiahi, Partner, Verod Capital Management Limited; and Suru Daniels, head, Projects & Structured Finance, Coronation Merchant Bank at the NSE Insurance Sector Forum themed: “Recapitalisation – A Panacea for Insurance Industry Growth” which held at The Exchange in Lagos.

Worst performing stocks this year …ETI, GSK, Unilever, Guinness, PZ, International Breweries, NB, Presco, Total, others …prices decline by over 40% Iheanyi Nwachukwu

or investors who took positions early this year in some notable stocks at the Nigerian Stock Exchange (NSE), their objective of having happier ending through price increase is truly in doubt. Most investors prefer to buy low and sell high. This is barely 17 days to the end of this year but such investors expectations aren’t coming through in some counters. INVESTOR tracked stocks have this year underperformed the NSE All Share Index (ASI), losing over 40

percent of their year-open values. Chief among them is International Breweries Plc which as at December 9 lost 66.9 percent of its year-open value. Others in this category are Ecobank Transnational Incorporates Plc (-53.6percent), GlaxoSmithKline Consumer Plc (-60.7percent), Champion Breweries Plc (-53.3percent), Guinness Nigeria Plc (-59.7percent) and MRS Plc (-40.5percent). Also included in the basket of stocks that have over 40percent negative returns this year are Nigerian Breweries Plc (-40.1percent), Presco Plc

(-40.9percent), PZ Cussons Plc (-58.7percent), UAC Property Development Company Plc (-47.6percent), Total Plc (-45.4percent), and Unilever Nigeria Plc (-48.9percent). Stock investors make money in two ways. The first group hopes to take advantage of short-term trends (speculative buyers) while the latter expects to see the company’s earnings and stock price grow over time. They both believe their stockpicking skills allow them to outperform the market. Despite the absence of any positive market catalyst, Vetiva

Securities believe the consistent declines create opportunity for position taking in value stocks. The Nigerian stock market has not impressed lately and it has continued to experience significant profit taking action. This is because investors are selling down stocks that moved higher in previous sessions. Despite this trend, the NSE ASI which remained in the negative region of returns of -15.11percent is far better than returns seen in some individual stocks. Despite this, Afrinvest research analysts expect investors to cherry-pick stocks with sound fundamentals.

nino International Plc reported N307.941million revenue in the third-quarter ended September 30, 2019, higher than N277.424million revenue in Q3’2018. The company which is listed on the Alternative Securities Market (ASeM) of the Nigerian Stock Exchange (NSE) is into drug manufacturing (intravenous solutions etc). Its Q3’19 profit after tax (PAT) of N902, 567 represents a remarkable increase when compared to PAT of N140, 250 in Q3’18 but it was impacted by high provision for taxation of N 1.084million in Q3’19 against N 976,826 in Q3’18. The company recorded pretax profit of N1.986 million in Q3’19 against N1.117million profit before tax (PBT) in Q3’18. Gross profit increased to N12.471million from Q3’18 level of N10.728million. At 25kobo which its shares trade on the NSE, the 24,200,000 shares outstanding are valued at N6.05million. Its unaudited interim financial statements for the nine months period ended September 30, 2019 was released to the investing public on December 10, 2019.

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Thursday 12 December 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

Investor’s Square

United Capital Investment Views

Equities market kicks off the month on a bearish note

quities opened December 2019 on a bearish footing as the NSE-ASI declined on all five days in the prior week. Notably, the NSE-ASI dipped 0.5percent week-on-week (w/w) to settle at 26,855.52 point and year-to-date (YtD) return deteriorated slightly to -14.6percent (previously -14.5percent). On a w/w basis, the market shed N70.8billion as the market capitalisation closed at N13.0trillion. In terms of trading activities, average value and volume traded fell 3percent and 18percent w/w to settle at N2.5billion and 190.5million units respectively. Sectoral performance was underwhelming as the sectors under our coverage save for the Consumer Goods sector closed the week in the negative region. The Industrial Goods (-1.3percent) sector topped the losers’ chart, dragged by CCNN (-4percent), CAP (-1.2percent) and DANGCEM (-0.1percent) price declines. The Banking sector (-1.2percent) followed closely

breadth declined to 0.7x (previously 1.0x). Notably, 18 stocks advanced, and 25 stocks declined w/w. This week, we expect interest to remain tepid as investors queue up for new Nigerian Treasury Bills (NTB) issuance. However, we expect pockets of buying interest as short term investors hunts for bargain buys. Mo n e y Ma rke t : L o w interest rates environment spur a surprise Dec-19 NTB issuance For the previous week, overall system liquidity remained buoyant, as naira inflows overshadowed outflows. In terms of inflows, the largest came in from OMO maturities (N507.6billion), which outweighed total OMO sales, worth N190.8bn. Also, a FX retail refund occurred during the week. However, it was mopped up by a corresponding FX retail auction on Friday. In all, average interbank funding rates Open Buy Back (OBB) and Over Night (O/N) rates shed 139 bps, to close the week at 2.8percent. At the primary market

amid w/w losses recorded by UBA (-5percent), FBNH (-0.8percent) and GUARANTY (-1.8percent). Similarly, the Insurance (-0.9percent) as well as the Oil & Gas (-0.4percent) index ended the week in the red territory, dragged by LAWUNION (-7.7percent), MANSARD (-2.9percent) and OANDO (-3.7percent). On the flipside, price appreciation in UNILEVER (+17.4percent), FLOURMILL (+4.1percent) and NB ( + 0 . 2 9 p e rc e nt ) s p u r re d the Consumer Goods (+1.7percent) sector higher. Investors’ sentiment was underwhelming as market

segment, the outcome of the OMO auction was tepid, as bid to cover ratio on all maturities offered were 0.02x for the 96day, zero for the 187-day as there was no subscription, and 0.8x on the 362-day bill. Accordingly, stop rates were left unchanged at 11.5percent and 13.3percent for the short and long end bills. Overall, total allotted amount was N190.8, versus N400billion offered. Elsewhere, secondary market activities in the NTB space was quiet, as local players held tightly to existing bills. As a result, average NTB yield fell marginally, by about 0.4bps to 7.28percent. At the secondary OMO market, bears

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took the lead, as sell pressures caused a 11bps increase in average OMO yield, closing the week at 14.03percent. Notably, the Debt Management Office released the Q1-20 Issuance calendar, including two surprise auctions on 12th and 19th Dec-19, worth N52billion, in a bid to take advantage of the current low interest rate environment. For this week, we expect liquidity to remain elevated, amid sizable OMO maturities (N493billion) set to hit the system. Meanwhile, with the DMO set to auction N45billion, we expect yields to crash significantly, given the heavy weight of demand. Bond Market: Average real yield declines to 0.02percent During the prior week, we saw strong demand for FGN bonds, as local investors with excess funds from OMO maturities piled into the secondary market in the absence of re-investment alternatives. Total trading volumes improved by 12.9percent w/w to N514.1billion. The activities were concentrated on the 2021s, 2028s, 2034s and 2036s bond maturities. Accordingly, average yields declined by 42bps w/w, to settle at 11.6percent - just 2bps above Oct-19 Inflation. Despite a sustained recovery in crude oil prices, above $60/b, activities at the secondary Eurobond market was lethargic as foreign investor priced in Moody’s rating outlook downgrade from B2 stable to B2 negative. Thus, the average yield on FGN dollar notes inched higher by 4bps, to 6.58percent. Meanwhile, yields on Corporate Eurobonds stayed flat at 5.3percent. This week, we expect bond yields to continue to trend lower as locals look for investment outlets in FGN notes. In the Eurobond space, we expect the rating downgrade to dampen foreign interest for Nigeria’s dollar notes. Currency market: FX rate remain relatively stable Naira performance across the three windows we track was mixed.

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

Economy & markets

Still on Cordros Dollar Fund offer Iheanyi Nwachukwu

ecently, Cordros Asset Management held a launch and information session for its Cordros Dollar Fund. It was meant to formally present its Dollar Fund and enlighten investors on the features and benefits of having a dollar-denominated investment in one’s portfolio. Cordros Asset Management Limited, the fund manager of Cordros Dollar Fund are currently in the market to raise about N720million ($2million) from the Cordros Dollar Fund ongoing initial offering. The application list of the Dollar Fund opened on Monday November 25 closes on December 27, 2019. Cordros Asset Management Limited is a wholly owned subsidiary of Cordros Capital Limited, currently licensed by the Securities and Exchange Commission as a fund/portfolio management company. The fund manager is currently offering to investing public 20,000 units of the mutual fund at $100 each. The fund is targeted at retail, mass affluent, high net worth individuals (HNIs), Africans in Diaspora, and institutional investors who desire to meet future medium to long term liabilities. The minimum holding period of an investment in the fund is 180 days (6 months) from the date of subscription. However, an early redemption fee of 1.5percent on the redemptive value of the units to be redeemed applies before the expiration of the minimum investment period. Unit-holders can sell their units in the Fund after the initial 180-day holding period. The Fund, like all Unit Trust Schemes in Nigeria, will be regulated by the SEC. Emeka Ndu, chairman of Cordros Asset Management Limited while narrating t h e g ro w t h o f C o rd ro s said, “Cordros started as a stockbroking business about 12 years ago and has grown into a financial service group that consistently provides investment solutions that suits various classes of investors. “We now have a total of 4 mutual funds, Cordros

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Money Market Fund, Cordros Milestone Fund 2023, Cordros Milestone Fund 2028 and the new Cordros Dollar Fund and this is a testament of our sustained growth over the years”, he said. He went on to speak on the relevance of the Fund saying, “Cordros Dollar Fund is highly beneficial to investors; especially at a time when investors need to protect their investments from the eroding effect of inflation”. According to the Managing Director of Cordros Asset Management Limited, Morenike Da-silva, “A good number of Nigerians have dollar obligations for academic and medical tourism. She stressed the importance of having dollar-based investment for individuals who have dollar obligations. Cordros Dollar Fund was created to enable Nigerian investors who desire exposure to USD denominated investments to achieve capital appreciation in the medium to long term. The Fund has a minimum subscription amount of $500 and an additional subscription amount of $500. “ Inve st o rs w h o have been discouraged by high entry levels for US-based investments can now invest their US Dollars conveniently” said Adegbolahan Aina, the portfolio manager. Group Managing Director, Wale Agbeyangi said, “Cordros Asset Management Limited has consistently played in the top tier of Nigeria’s investment management space with an excellent track record of delivering exceptional value to clients. Being a customerfocused company, Cordros was one of the first Fund Managers to adopt a T+0 redemption period in the Money Market Mutual Fund space”. @Businessdayng

The fund is structured to pay dividends annually, thereby giving investors a medium term investment horizon, liquidity and maximum capital appreciation. The minimum initial investment for the offer is 5 units of the fund while additional/ subsequent investments will be issued in multiples of 5 units and payable in full upon subscription. The Cordros Dollar Fund is a mutual fund that allows investors to conveniently invest and earn returns in US Dollars. The Fund invests in US Dollar denominated securities like Sovereign Eurobonds, Corporate Eurobonds, Money Market instruments and other quoted Corporate Eurobonds. The objective is to offer investors competitive returns than is obtainable from an average domiciliary bank account, the fund managers said. The fund removes the high entry-level barrier that has discouraged many investors f ro m i nv e s t i ng i n U S D denominated securities. It helps investors diversify their portfolio and also helps them hedge against the risk of local currency devaluation. “You can invest towards Dollar obligations such as education, trade, healthcare, or periodic foreign travels,” the fund manager stated. The Fund is meant to manage the asset allocation in Sovereign Eurobonds, Corporate Eurobonds, money market instruments and other quoted corporate Eurobonds. Returns from Eurobonds will be accumulated as income and distributed periodically as stated in the Trust Deed. The income from investing this fund by way of dividends and cash would be accumulated and reflected in its unit price.

Thursday 12 December 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

NSE looks to insurance companies for Premium Board listing Iheanyi Nwachukwu

he Nigerian Stock Exchange (NSE) hopes to have the first insurance company listed on its Premium Board after the current recapitalisation exercise in the sector. If the listing happens as the NSE wishes, it will help grow the number of Premium Board listed stocks beyond the current eight. Access Bank, Dangote Cement, FBN Holdings, Lafarge Africa, MTN N, Seplat, United Bank for Africa and Zenith Bank the eight Premium Board listed companies. Oscar Onyema, CEO, NSE who spoke at an insurance sector forum in Lagos said an estimated capital of N200billion is expected to be injected into the Nigerian insurance industry post-recapitalisation with a 400percent increase in the minimum capital required for life, 333 percent for non-life, 360 percent for composite and 200 percent for re-insurance. He said that with the ongoing recapitalisation exercise, “we will encourage the insurance operators by providing a special window to fasttrack the approval process, provided the operators have demonstrated high standards of corporate governance, deep social impact, high regulatory

compliance and enhanced returns for their shareholders.” “While I am optimistic that this directive by the industry regulator would enhance performance, bring about efficiency, innovation and profitability, the industry needs significant support to unleash its growth potential. “At the NSE, we see close parallels between this recapitalisation and that of the banking sector in 2005. The immense growth seen in banking

oremost life insurer, African Alliance, continues to defy the odds with a string of impressive performances that have seen the 59-year-old insurer stabilise its business and earn positive reviews from industry watchers. Funmi Omo, Managing Director/ CEO, African Alliance while listing the giant strides the firm has made in less than two years restated the management’s commitment to sustaining the upward growth trajectory across all metrics. “Ours is a business that has seen it all and survived it all. Our position in just two years compared to now is testament to the unstinting leadership and guidance of our Board, the relentless drive of the executive management and a most committed and flexible staff who never shies away from challenges in any form,’ Omo said. According to a statement

objectives whilst also implementing strategic initiatives that have improved investor confidence. This has allowed listed companies to be positioned on the Exchange as attractive investment opportunities”, Onyema stated. The National Insurance Commission (NAICOM) recently announced the upward review of the minimum paidup share capital requirement of insurance and reinsurance companies.

industry, the reality and headwinds faced by operators in the sector are quite formidable. Many licensed insurers are largely undercapitalised, thus limiting their ability to take on big ticket in-country risks, as is often required in the Oil & Gas, marine and aviation sectors. “As at Q3 2019, the insurance sector contributed less than 1percent to the Gross Domestic Product (GDP) of Nigeria. Having a penetration rate of 0.31percent and an insurance density of 6.2percent, the Nigerian Insurance Industry still lags behind its African counterparts – with South Africa having a penetration rate of 14.7percent, Kenya 2.8percent, Ghana 1.1percent and Egypt 0.6percent”, the NSE CEO said. He believes that the insurance industry presents perhaps the most remarkable investment case of any industry in Nigeria and despite present challenges it presents numerous opportunities for enhancing the economic fortunes of this country. “Foreign investors, recognising these opportunities have acted accordingly with the likes of AXA, Prudential, Liberty, Swiss Re, SUNU Group, Saham Group, taking strategic positions in the industry,” he added.

Experts believe capital markets can fund Nigeria’s infrastructure development

African Alliance rebounds, records impressive figures Modestus Anaesoronye

industry in large part can be attributed to successful capital raised through the capital market. “The crucial question before us is unravelling how to replicate similar successes within the insurance space and leverage the platform of The Exchange to successfully raise rightsized capital to fuel accelerated growth. “The NSE provides a platform to support listed corporates to meet their business

The ongoing recapitalisation and consolidation exercise is expected to significantly impact the industry and equally present new opportunities in Mergers and Acquisitions (M&A) as well as private equity and public offerings. The forum was part of the Exchange’s strategic efforts towards supporting the insurance sector, especially at this pivotal time of their recapitalisation. Onyema noted that the Nigerian Insurance industry has grown remarkably over the years, generating a Gross Premium Income (GPI) of N448.6 billion in 2018, reflecting a 12percent growth from 2017. The industry also recorded an increase in its asset base by an estimated sum of N1.3 trillion as at December 31, 2018, reflecting a 17percent Compound Annual Growth Rate (CAGR) over the last three years. According to the National Bureau of Statistics (NBS), the Insurance sector recorded a nominal growth rate of 6.69percent and a real GDP growth rate of 3.96percent in third-quarter (Q3) 2019 from 4.48percent in second-quarter (Q2) 2019 and 1.03percent in Q3 2018. “Although this data indicates a positive outlook in the Nigerian insurance

…. FMDQ says committed to tackling housing development

obtained from the company, the firm’s premium income grew by 68 percent from N3billion at the end of third-quarter (Q3) of 2018 to N5.12 billion at the end of Q3, 2019; while by the end of the third quarter, the firm has also paid claims of about N6 billion naira to keep up with its promises of maintaining customer amazement. In her submission, Olabisi Adekola, executive director, Finance, added that the firm’s all round growth earned it a ‘stable outlook’ and Bb+ by Agusto, foremost financial ratings agency in Nigeria. “That Agusto rated us Bbb+ is a win for us, considering where we were. But we are not relenting, all hands are on deck to sustain this growth and earn a most elite rating consistent with the elite investments we have made in the business. On the company’s recapitalisation plans, Omo said: “NAICOM gave a ‘No Objection’ to our plans which means we are on course. www.businessday.ng

Iheanyi Nwachukwu

he capital market represents a very good platform for raising funds for infrastructure development going by some landmark transactions in recent years, said Oluseun Olatidoye, an investment banker and the Head, Debt Capital Markets, FBNQuest Merchant Bank Limited. Olatidoye stated this in his presentation themed “Bridging Nigeria’s infrastructure Gap, the Capital Market Option” at the 2019 annual conference of the Capital Market Correspondents Association of Nigeria (CAMCAN). According to him, the market has funded over portions of 26 roads across the six geopolitical zones in the country with the sum of N200billion on the FGN Sukuk I and II. “We have raised N11.4billion for the development of primary, middle and secondary schools facilities in Osun State, we have funded the develop-

ment of affordable housing on the Mixta Real Estate Plc Bond Issues and we have developed a number of roads, bridges, health facilities using the opportunity presented by the capital markets,” he said. However, considering the huge financial outlay that runs into trillions of Naira, needed to bridge the gap, Olatidoye said to successfully tap into the capital market for infrastructural financing, the existence of sound macroeconomic and policy frameworks are preconditions, hence, freedom must be given market forces to take its course. “As much as the government has its role, political interference must be limited. This insures investors against any form of political risk, and most importantly corruption which has the potential of crippling the entire endeavour”, he said. “Retail investor size sums to circa three million and to have meaningful participation would require a great deal of education of this investor category. Besides, the mobilisation

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of retail funds is more likely through mutual fund schemes. Earlier, in her keynote address, Mary Uduk, the acting Director-General, the Securities and Exchange Commission (SEC) noted that Nigeria has a huge gap in infrastructure base measured through levels of physical capital of roads, public education, electricity production, health infrastructure, and access to treated water. Uduk, who was represented by Sufian Abdulkarim, SEC, Head of Department, External Relations said government cannot be the sole provider of infrastructure, noting that active private sector participation is also needed. Uduk said that the Nigerian government like other developing countries continues to face significant challenges in implementing programmes to build basic infrastructure, as the traditional source of infrastructure funding was through public expenditure and development finance aids. According to her, these @Businessdayng

sources of infrastructure financing have been found to be inadequate as evidenced by the country’s infrastructure gap. Meanwhile, FMDQ Securities Exchange (FMDQ) Plc said it remains committed to tackling the housing infrastructural deficit facing Nigeria through mobilisation of funds from the capital market. Bola Onadele.Koko, Chief Executive Officer, FMDQ said at the annual workshop that infrastructure is central to the development of the economy, adding that FMDQ is poised to providing workable means of housing provision in the country, amongst other programmes to address infrastructural gap in Nigeria. Speaking on the theme, “Bridging the infrastructure gap in Nigeria: The Capital Market Option”, Onadele who was represented by Kaodi Ugoji, Associate Executive Director, Corporate Development noted that the Exchange had set up a housing development project team to work directly with the office of the Vice president.

Thursday 12 December 2019

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

MARKETS

Nigeria’s biggest listed companies may end 2019 on decade-low SEGUN ADAMS

he thirty biggest companies on the Nigerian Stock Exchange (NSE), excluding the Telcos, are set for their worst performance in ten years, underscoring an awful year for the domestic bourse which is one of the worst-performing globally. The NSE30 index, which tracks the movement of price in the shares of the bellwethers, has declined 21.59 percent as of Tuesday with an annualized return of -22.83 percent. This underperforms previous annual returns based on available data from January 15, 2009, to date. While the analysis excludes MTN Nigeria and Airtel Africa, the two Telcos which listed in the course of the year and are yet to be included on the NSE 30 index, the grim outlook for Nigeria’s biggest firms shows a continued pessimism in the market since a record 42.3 percent rally two years ago. So far this year around 20 percent of the NSE 30 companies currently on the index

have noted an increase while the rest have declined with some already half their worth since the start of the year. Outperformers include Access Bank (34.56%), Custodian Investment (6.19%), Union Bank of Nigeria (25%), Sterling Bank (4.21%), Wapco (9.24%), and Fidelity Bank (0.49%). MTN Nigeria has a year’s return of 19.19 but peer, Airtel Africa is struggling having lost a quarter of its value since listing. Analysts say the downturn of the market which has lost 16.06 percent year-todate (annualized return of -16.98%) reflects the broader economy which is yet to improve compared to pre-recession levels. Companies in the economy have been struggling; 56 percent of NSE 30 companies reported a decline in profit by half-year and in the third quarter earnings across the board was weak. Investors are unsure about what policies the government would announce and how it would affect their investments; they are wary about how unpredictable the government and regulators are. Despite prices at a record

Aviation

Traveling this December? You might pay 100% more for an air ticket IFEOMA OKEKE

omestic airlines and travel agencies operating in Nigeria have increased prices of tickets to over 100percent to locations such as Lagos, Abuja, Port Harcourt, Owerri, Asaba, and Kano as Christmas approaches. This is also as airlines have recoded full load factor to these destinations from 20th of December to 2nd of January already. BusinessDay’s checks show that airlines tickets increased from 30,000 to 60,000 and above to some of the frequently flown des-

tinations. Travel agencies and airlines had earlier advised travellers to purchase their tickets before September 1st to guide against high ticket cost. “Expectedly, Christmas periods are often the period when airlines recoup their costs. This is the busiest period for them. After the season, they may not have full load factor as they have today,” Tayo Ojuri, is an industry expert and Chief Executive Officer, Aglo Limited, an aviation support service said. BusinessDay’s checks

Continues on page 21

low, the stock market has stubbornly remained down with investors largely uninterested. The peaceful outcome of the general elections, rally in oil price earlier in the year, and listing of two Telcos giants have been opportunities for a rebound. When the price rose, it was short-lived.

More recently, both the NSE and the Central Bank of Nigeria have made efforts towards improving the market such as increasing the minimum trade quantity required to change prices for equity securities, and the Apex Bank restricting access to its OMO Bills in hopes of steering domestic funds back

to the stock market. Short-lived as well, the impact of that policy has waned off with the market on a week-long bearish run as of Tuesday, the longest streak of losses since early October. The valuation of stocks in Africa’s biggest economy is much lower than the emerging market at African peers,

but investors are more concerned about the growth prospect for the listed Nigerian companies. Nonetheless, Financial Derivatives Company (FDC), led by renowned economist Bismarck Rewane, says there are brighter days ahead for the market next year which is “likely to be better than 2019”

Thursday 12 December 2019

BUSINESS DAY

COMPANIES&MARKETS

FINANCIAL SERVICES

Investors to get 4-6% returns on new Cordros dollar mutual funds ... launches $2m funds amid speculations of devaluation MICHAEL ANI

nvestors in the new Cordros dollar mutual funds will get as much as 6 percent returns on their investments on an annual basis. The new dollar mutual funds which was officially launched recently after approval from the Securities and Exchange Commission (SEC), has a fund size of $2 million, that would allow participating investors hedge against currency risk amid speculations of a likely devaluation. Investors subscribing to the funds within the offer period of Monday, 25th November, 2019 – Friday, 27th, December, 2019, would be coming in at an investible amount of $100 per unit for a least subscription of five units

or $500 while subsequent subscribers would pay a higher amount on the same minimum subscription unit. The dollar fund is an open ended one, meaning investors can continuously add new subscription to their already subscribed units. It also has a minimum holding period of 180 days and an early redemption fee of 1.50 percent, paid at T+5 (five business days after an investor decides on pulling investment out of the fund The launching of the fund came at a time when speculations around a possible devaluation is growing in the heart of investors who say the naira is overvalued at its current exchange of N360 to the dollar. “Our survey when dealing with clients have shown that there is strong demand

for foreign currency denominated product to enable them hedge against devaluation while getting returns on their funds,” said Wale Agbeyangi, Group Managing Director, Cordros Capital. “Hence, the need to come up with the product to enable them diversify their portfolio. Since the start of the year, Nigeria’s foreign reserve which portfolio investors view as a shock absorber, used to weather the storm from external

volatility, has declined by over $5 billion to $39.6 as at Friday, 6th Dec, according to CBN data, thereby taking investors’ mind back to a 2016 scenario when a naira devaluation followed by spiraling inflation, wiped off totally their investments. Godwin Emefiele, Governor of the CBN, last month, said he sees “no devaluation in sight”, but he can only adjust the exchange rate if oil price trades below $50 and the

external reserve falls below $30 billion. Cordros says it will spread allocations of the funds across three asset classes with sovereign Eurobonds taking the larger share of 50 percent, Corporate Eurobonds to get 30 percent allocation and money market about 20 percent. According to Agbeyangi, the reason for the “mutual funds” was to give retail investors, those having as low as $1000, an opportu-

Traveling this December?... Continued from page 20 show that AirPeace return economy class ticket on the Lagos-Asaba, Abuja and Port Harcourt route, which previously cost below N30,000 a few weeks ago now costs N70,000 to N100,000. However, there are no longer available seats for travellers who intend to travel to Asaba from 20th to 25th of December as already fully booked. The same situation appears to be the case in other destinations as seats are no longer available for some dates in December. A travel agenc y who craved anonymity told BusinessDay that some airlines deliberately removed their lesser classes of tickets, so it can sell highest economy rate. Also, the closure of Enugu airport for repairs is also putting strains on the travelling public. Recalled that the Federal Airports Authority of Nigeria (FAAN) shut down Enugu airport for major repairs on 24th of August 2019 and with the new date of re-open, the airport will be shut down for

eight months. Since the closure, airlines have had to divert traffic to Port Harcourt, Owerri and Asaba airports. While business owners around Enugu airport are experiencing low patronage this period, it seems to be a merry moment for business owners and airlines that operate into Port Harcourt, Owerri and Asaba airports. Passengers appear to be the worst affected by the development as they are forced to either travel through alternate airports or travel by road. Some other passengers who spoke to BusinessDay said since the development, they have had to change their travel plans pending when the airport is ready as a result of incessant attacks, insecurity and the bad condition of the roads. According to figures (FAAN), Akanu Ibiam International Airport, Enugu is the sixth busiest airport in Nigeria after Lagos, Abuja, Port Harcourt, Kano and Owerri. The airport processes an average of 273,000 local passengers and 41,000 passengers annually. www.businessday.ng

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nity to key into the dollar denominated securities. The abridged prospectus of the fund seen by BusinessDay shows SLT Trustees Limited as trustee to the fund; Stanbic IBTC Bank Plc as custodian to the fund; Babalakin & Co as Solicitors to the trustee; Moore Stephens RoseWater as reporting accountants; First Registrars and Investors Services Limited as registrars and PKF Professional Services as auditors to the fund.

Thursday 12 December 2019

BUSINESS DAY

COMPANIES&MARKETS COMPANY RELEASE

Airtel commence ‘Five Days of Love’ annual initiative in Lagos …feeds over two thousand persons in Oshodi

irtel, one of Nigeria’s leading telecommunications services provider, has kicked off its annual Christmas feeding programme dubbed ‘Airtel Five Days of Love’ as it rolled out the drums to celebrate with Lagosians at the Oshodi Local Government Secretariat on Monday, December 9, 2019. The Airtel ‘5 Days of Love’ programme is designed to identify with less privileged persons as well as support the downtrodden in communities where Airtel operates. About two thousand persons including children, women, youth and the elderly were served nutritious meals in a fun-filled atmosphere. Since the commencement of the initiative five years ago, Airtel has partnered with leading Fast Food vendors to feed over 20,000 people across 25 major cities. Following the Oshodi event, the Airtel ‘5 Days of Love’ train will move to Abeokuta, Ogun State, on Tuesday, 10th December.

Speaking at the event, Segun Ogunsanya, Chief Executive Officer and Managing Director, Airtel Nigeria, stated that the Christmas period is a season of giving and, “at Airtel, we believe we can spread love during the season through our ‘5 Days of Love’ programme. So, across the country, we are providing quality, hot meals amidst an electrifying atmosphere of fun, good entertainment and love. “Airtel is committed to touching the lives of underprivileged persons in the society as well as empowering stakeholders in the communities where we operate. As a critical stakeholder in the Nigeria, we are also passionate about uplifting the less privileged and providing support for the vulnerable as this aligns with our overall CSR theme of touching lives and improving the standard of living of the less privileged.” Also speaking at the event, Idris Bolaji Muse-Ariyoh, Chairman, Oshodi/Isolo Local Government Area, expressed his gratitude to Airtel for the gesture.

“I want to say a big thank you to Airtel Nigeria and the CEO, Segun Ogunsanya. Through this programme, Airtel has demonstrated true love for the people and we are happy that this year’s edition is in Oshodi. “Without a doubt, this initiative echoes Airtel’s commitment to touching lives as some us will not only be fed but also go home with gifts. Once again, thank you Airtel for visiting the Gateway of Nigeria,” he said. On Wednesday, 11th December, over 1,000 underprivileged persons will be fed in Onitsha, Anambra State while Karu in Nasarawa and Maiduguri in Borno will also host the Airtel ‘Five Days of Love’ goodie train on Thursday, 12th December and Friday, 13th December, respectively. Through the ‘Five Days of Love’ programme, Airtel says it is uplifting the less privileged and providing support for the vulnerable as this aligns with its overall CSR theme of touching lives and improving the standard of living of the less privileged.

L-R: Ngozi Nkwoji, portfolio manager, non-alcoholic brands, Nigerian Breweries Plc; Ozinna Anumudu, fashion Influencer; Denola Grey, fashion influencer; Emmanuel Oriakhi, marketing director, Nigerian Breweries Plc; Linda Osifo, actor; Ahneeka, BBNaija 2018 Contestant, and Freya Doessel, brand manager, as Fayrouz unveils 33cl sleek can with #FindYourDifference campaign in Lagos.

L-R: Oche Abu; Justina Abdulateef, national president, Air Force Secondary School, Makurdi and Johnson Ivase national public relations officer, Air Force Secondary School, Makurdi during the Air Force Secondary School Makurdi Alumni, Lagos Chapter family picnic held at Elegusi Beach, Lagos on Saturday

L-R: Adeyemi Oyewumi, chief business development officer, Eye Foundation; Adetokunbo Ayo-Ogunsanya, group head, human resource and administration, Inlaks; Lakshmi Gopinathan, initiator, Hope for Sight Initiative, and Femi Omotayo, managing director, AOS Orwell Limited, at the press conference to announce Inlaks’ partnership to sponsor free cataract surgery being organized by the Hope for Sight Initiative in Lagos

L-R: Mutiu Sumonu, chairman, Alpha Mead Group; Damola Akindolire, managing director, Alpha Mead Development Company (AMDC), and Femi Akintunde, group managing director, Alpha Mead, at the Grand Opening ceremony of Lekki Pearl Estate by AMDC in Lagos. Pic by Olawale Amoo

L-R: Sam Onyemelukwe, managing director, Trace TV; Ghislain Noumbessy, managing director, Robert Bosch Limited, Nigeria; Boris Dolkhani, vice president, brand management and marketing communication, Robert Bosch GmbH; Frank Nweke Jr., Chairman, Advisory Board, ICreate Africa, and Ajayi Samson, retail and user marketing manager, Bosch Power Tools, Nigeria, during the opening ceremony of National Finals of ICreate Festival 2019 held in Lagos

L-R: Folorunsho Aliu, MD Telnet; Chekwube Ohaeri of Access Bank; Omomene Odike, CEO, U-Connect and Gr8jobsng; Yemisi Imasi, CEO, Yellow Point Media, and Ubong King, business consultant and motivational speaker, at the gr8jobsng youth summit held in Lagos

Osayi Alile – CEO, ACT Foundation (l), and Bolaji Dada - Honourable Commissioner Ministry of Women Affairs and Poverty Alleviation, during the ACT Foundation courtesy visit to the Lagos State Ministry of Women Affairs and Poverty Alleviation in Lagos.

L-R: Josephine Sarouk, general manager, regional operations, Lagos and South West, MTN Nigeria; Taofik Kassim, CEO, FT Global Concepts; Ugonwa Nwoye, chief customer services officer, MTN Nigeria; Odunayo Sanya, general manager, planning and customer management, MTN Nigeria, and Olumide Olufade, CEO, E5icient Global Services, at the MTN High-Value Customers Forum held at Oriental Hotel, Lagos

Thursday 12 December 2019

BUSINESS DAY

BUSINESS TRAVEL How Aero is developing human capacity in Nigeria’s aviation sector Stories by IFEOMA OKEKE

he International Air Transport Association (IATA) in 2018 revealed that present trends in air transport suggest passenger numbers could double to 8.2 billion in 2037. Over the next two decades, the forecast anticipates a 3.5 percent compound annual growth rate (CAGR), leading to a doubling in passenger numbers from today’s levels. However, few years ago, IATA warned airlines all over the world of a severe pilot and engineer shortage unless industry and government work together to change training and qualification practices. The body also issued a new estimate that the industry may need 17,000 new pilots annually due to expected industry growth and pilots retirements. With Nigeria’s Murtala Muhammed International Airport ranking as one of the 10 busiest airports in Africa, these figures are significant to Nigeria and therefore there is a need to bridge gap of impending shortage in human capital in the aviation sector. In a bid to address this challenge, Aero Contractors, one of Nigeria’s major carriers has signed a Memorandum of Understanding (MOU) with the Management of the Nigerian College of Aviation Technology (NCAT), Zaria, which would facilitate On the Job Training (OJT) for NCAT student engineers. The event was said to be a demonstration of Aero’s efforts in deepening Hu-

L-R: Taofeek Sanni, chief flight officer, Aero Contractors, Jim Hassan, training manager, Nigeria College of Aviation Technology (NCAT), Zaria; Ado Sanusi, chief executive officer, Aero Contractors, Abdulsalami Muhammed, the rector and chief executive of NCAT; Gerald Nmuoka, director of flight operations, Aero Contractors, and Nasiru Mohammed, head of Aircraft Maintenance Engineering School, NCAT, when Aero Contractors signed MoU with NCAT on manpower development recently at the School.

man Capacity Development (HCD) which both organisations are committed to achieving for the growth of the Nigerian aviation sector. This MOU is going to set in motion, the annual OJT for NCAT Student Engineers for a three months period to enable them gain practical experience on aircraft maintenance knowledge before proceeding for another specialized intense training at Aero’s Rotary and Fixed Wing Departments. Aero shall expose the student engineers to invaluable experience in its workshops, on planning, detailed knowledge on airframe and other matters vital to acquiring knowledge on aircraft maintenance. Speaking during the occasion of signing of MOU with the NCAT in Zaria, Ado

Sanusi, chief executive officer and accountable manager, Aero Contractors said on completion of the robust maintenance exposure, Aero Contractors will offer immediate employment to the best 10 student engineers that emerge from the OJT. He assured that they shall be distributed five each to Aero’s Rotary and Fixed Wing Departments, adding that Aero has chosen this course of action to demonstrate its unequivocal support to the stated policy of the Federal Government of Nigeria, which is to create employment opportunities for our youth demographic. “Indeed Aero is one of the few AMOs which has made the critical linkage between HCD and employment creation as the basis for effectively servicing Nigeria’s ever

growing aviation sector. “It is our stated objective in Aero to contribute to making aviation professionals have technical capacity thus making them employable and most importantly, to create employment opportunities for younger Nigerian aviation professionals to aide them compete favourably with their colleagues from other parts of the world,” Sanusi said. He said he was pleasantly surprised to see the improvements and the vision that NCAT under the leadership of Abdulsalami Mohammed has shown. He said the college is moving towards the real time maintenance of electronic aircraft like the A220 and the Embraer, amongst others. “The institution has grown and has shown they will start

producing students that will meet the challenge of the new maintenance we are going to enter. We will just increase our capability list. We have seen the basis and from what we have seen, it is beyond what we needed and we are very pleased with the kind of students that we will be receiving because with this level of equipment they have and exposure they have, the students will not be lost when they come to our facility,” Sanusi added. He therefore urged the federal government to continue encouraging companies who have a proven antecedent of HCD and employment creation, as this is a proven path by which the organized private sector can accentuate the attainment of employment creation as advocated by the Federal Government. Abdulsalami Mohammed, Rector, NCAT who also spoke at the occasion said NCAT is ready to supply even twice of what Aero needs as the college currently has about 60 students that are due for Onthe-Job Training (OJT )next month and some of them will be going to Aero and others will be going to other airlines. “We have quite enough students and don’t forget, it is not only the engineering schools. We also have other schools whose students require OJT as part of their training because there is a limit to what you can teach someone in the classroom. There is a need for him to go out on the field to experience real life way of doing this. This is why OJT is part of their training,” Mohammed said. He explained that the training takes two years and

for the air traffic controllers; there is a component of flight training because they want them to appreciate what the pilots go through. “If a pilot tells them something, they know what they are talking about. Virtually all the air traffic controllers of NAMA and Nigeria Air Force were trained here in Zaria. There are also some other people that come from outside Nigeria. Right now, we even have students from Gambia training and Cameron that just left. They came to do English language training, which is part of what this whole place offers,” he disclosed. While inspecting the facilities at NCAT, the rector showed the visitors the college’s 3-D control tower simulator, where students are taught like they are in real life situation. “We can simulate any airport that we want. This one is Abuja airport. If the controller is sitting at the control tower in Abuja, this is what they see. So, the students will have a better view. “So after this training, we also take them on the job training in these airports, so, they go and work under the supervision of the air traffic controllers there and they see how things are done in real life situations. By going through this, you know they are better equipped now to appreciate and participate in it,” he explained. He mentioned that his desire is to see that the college’s graduates are gainfully employed. “So, we do whatever we can to improve on this and get employment opportunities for them.”

Yuletide: MMA2 assures travellers, other airport users of seamless operations

s the year gradually winds down, operators of the Murtala Muhammed Airport Terminal Two (MMA2), BiCourtney Aviation Services Limited (BASL) has assured travellers and other airport users of hitch-free flight and business operations during the yuletide season. This is as BASL unveiled some of its AVSEC staff who were recently certified as Aviation Security (AVSEC) Instructors by the Nigerian Civil Aviation Authority (NCAA). The certification was part of a larger plan designed to

further entrench safety and security awareness; and the provision of customer-centric services at the terminal. According to a statement made available to Journalists in Lagos by Ayotunde Osowe of the Corporate Communications Department, BASL has constantly invested in facility upgrade and also, developed robust staff training programmes and sound maintenance culture at the terminal – to always keep the facility in top shape. This, according to the statement, has placed MMA2 in a vantage position as the www.businessday.ng

yuletide activities are in top gear – with travellers, airport users and other individuals scheming to make the season worthwhile. In the area of security and quality customer relation, BASL has committed huge resources to train and re-train its workforce – all in a bid to deliberately deliver top-notch services to all airport users in line with world best known practices. At a brief ceremony recently where certificates were issued to the newly certified AVSEC Instructors, Olatunbosun Okeowo, BASL’s Aviation

Security (AVSEC) Manager, described it as a welcome development, saying it will go a long way to boost the standards already set by the terminal operators, which according to him, have received commendations from aviation regulatory bodies. While commenting on the facility’s preparedness to cope with expected surge in passenger traffic in and around the terminal, Okeowo said adequate human and material resources have been put in place; adding that workable strategies have also been

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planned and formulated to make the season count for all visitors. He noted that those recently certified by NCAA will definitely deploy their expertise in conjunction with all other security agencies to enhance passenger facilitation in and around the terminal before, during and after the year end festivity. In the same vein, Charles Aroguma, BASL’s Safety Manager, noted that as regards safety, all fire-fighting equipment and integrity of MMA2 facilities for seamless operation is guaranteed. He added @Businessdayng

that, “We are well prepared for the season. We have the capacity to respond to emergency and ensure business continuity.” To this end, notable innovations have been introduced at MMA2 to make terminal users’ stay at the facility memorable. These include seamless passenger facilitation aided by technology; nonaeronautical and marketing business innovations; the recently launched KidZone for fun lovers; Pineapple TV Christmas Grotto arena; general turn-around of the terminal among others.

Thursday 12 December 2019

BUSINESS DAY

Markets + Finance

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

With Saudi Aramco listing, dividend hunt begins among oil majors BALA AUGIE

audi Aramco became the largest company in the world after it raised $25.60 billion in the world’s biggest initial public offering (IPO), as the Crown prince remain steadfast in diversifying the Kingdom away from reliance on crude oil. The state oil giant set a final price of its shares ($8.53), valuing the world’s most profitable company at $1.70 billion. It received total bids of 119 billion. The successful listing of the giant oar means a race for dividend hunting has begun among the big oil majors, and investors crave for the stocks of companies that reward them generously from distributable profit. Saudi Aramco has a dividend yield (DY) 4.41 per cent, and investors expect its shares price to rally when they start trading today. The company plans to increase the dividend to $75 billion from $52 billion it declared in 2018. The current dividend yield is based on a proposed dividend of $75 billion, which means as it will pay-out 68 percent of its earnings to owners of the business. Total SA, the French oil major, has a dividend yield of 5.43 per cent, and it plans

to increase the dividend by 5 per cent and 6 per cent by 2050 as it bets that investment in fast-growing gas and electricity markets will steadily bolster earnings will bolster. Other oil majors like Chevron, ExxMobil, Conoco Phillips and Royal Dutch Shell, have yields of 4.03 percent, 3.48 per cent, and 4.03 per cent, respectively, as they seek to woo investors with higher returns and share appreciations.

Investors in the oil and gas industry pay attention to the cash-flow of a company because it shows the extent to which they have the financial ammunition to drill more oil well, pay down debt and reward shareholders for taking a risk in the enterprise. In this regard, Saudi Aramco is king. This is because the Middle East firm reported cash flow from operations of $121 billion as at December 2018.

That compares with Chevron’s, ($30.61 billion); ExxonMobil, ($69.51 billion); Total SA, ($52.98 billion); and Conoco Philips, ($61.97 billion); and Royal Dutch Shell, $50.33 billion. However, Aramco reported funds flow from operations- a measure closely watched by investors and similar to cash flow from operations -$26 a barrel equivalent to last year, according to global rating agency Filch. That’s below what Big Oil

companies such as Shell and Total SA enjoy, at $38 and $31 per barrel, respectively. Aramco is more efficient in converting sales to dollar as its cash flow margin of 33.98 per cent, which dwarfs Chevron’s, (19.27%); Exxon Mobil, (12.89 %); Total SA, (13.42 per cent), Conoco Philips, (12.89 per cent), and Royal Shell, (12.96 percent). The sharp drop in the crude oil price of mid-2014, brought on by a supply glut, dented the earnings of companies and paralyzed the economies of the country that rely on black gold of most of their foreign exchange earnings and government revenue. Brent crude price fell from $100 in 2014 to price at $64.19 Tuesday, according to data gathered from Bloomberg. Saudi Arabia and Organisation of Petroleum Exporting Countries (OPEC) had embarked on an aggressive output cut with a view to stabilizing the price of the commodity. Last week Friday, the group of more than 20 producers agreed to cut an extra 500,000 barrels per day (bpd) to take their target to 1.7 million bpd, or 1.7 per cent of global demand. Saudi Energy Minister Prince Abdulaziz bin Salman said effective cuts could be as much as 2.1 million bpd as Saudi would carry on cutting

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more than its quota. “A tight crude oil market, weak refining margins environment, no excess inventory as such which Saudi Arabia was acutely aware of and yet it also knew the pervasive bearish sentiment that is prevalent, which meant without a “surprise”, the risk to prices correcting lower was significant,” said Amrita Sen, co-founder, Energy Aspects. Analysts are of the view that the future could be bleak for Saudi Aramco as its shares could well be valued at $0. Simon Watkins, former senior FX trader and salesman, financial Journalist said that Aramco does not actually own any of the sites from which it extracts oil and gas, or a single field. Wartkins added that Saudi pumping an average of nearly three billion barrels of oil every year from 1973 to the end of 2017 - totalling 132 billion barrels – with no new significant oil finds were made during that period. It is not even connected to the multiple class-action lawsuits that Saudi The actual killer blow for Aramco is on the cards from the renewed impetus to finally get U.S. President Donald Trump to sign the ‘No Oil Producing and Exporting Cartels’ (NOPEC) Bill, as examined in depth in my new book on the oil market, according to Watkins.

Thursday 12 December 2019

BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

Legal technology deployed in-house is yet to have direct impact on relationships with external law firms As part of our feature on emerging technologies in the legal industry in Nigeria, LEGAL BUSINESS sought in-house counsel perspective from ADEDOYIN PEARSE of Siemens Limited Nigeria. In this interview, she shares her experience with legal tech as it impacts her work and interactions with external Nigerian counsel, as well as her perspectives and firsthand observation on the use of emerging legal technologies in the global legal services industry.

ow did you become interested in Legal Technology? First, I must state that I have always been a technology enthusiast. We are living through one of the greatest technological revolutions in history affecting every area of our lives and I have been intrigued by the transformation and innovation brought about by technology and how this is continuing to evolve daily. From self-driving cars to smart phones and devices and innovations in medical technology, its applications are endless and still evolving! We have seen also how businesses that fail to adopt digital transformation and an innovation culture run the risk of becoming extinct. A good example is our yellow taxis vis-a-vis other digital transport platforms like Uber, Taxify and Lyft. My interest was further driven by the need to upskill to align with my company’s global business strategy on digitalization (Siemens has developed innovative tools in energy and industrial automation to help our customers harness the power of this digital transformation). The business world of tomorrow is about digitalization and companies that tackle digital transformation and Internet of Things (IoT) will be the leaders shaping the future of their industries. Therefore, it only makes common sense for professionals who want to remain relevant and act as trusted advisors to these businesses to be able to speak and understand the language of technology. How has legal tech impacted your work at Siemens? As part of our digitalization strategy, several technological tools and solutions have been (and are being) adopted in-house by corporate and business unit functions to support their day to day operations and provide best in class services to our customers. Within my area of function, we have rolled out legal tech tools that have automated functions that we (that is, legal) had hitherto performed manually. These range from basic contract preparation and review to case management, M&A transactional reporting and external counsel engagement, renewal & evaluation. For example, our smart contract templates, which has our standard terms and

additional legal tech tools and solutions, it is certain that in the mid to long term, more work would be undertaken in-house with services of external law firms limited to other types of legal work that technology is not going to displace (at least for now) with increased demand for value and transparency in the fee billing structure from external law firms. This also provides opportunities for law firms to be creative and develop alternative business models, which are customer centric.

conditions have been automated alongside our contract’s playbook. This has empowered our sales and business teams to draft some of these basic contracts without recourse to the legal team. We have also optimized our existing cloud-based enterprise solutions for digital signatures, customer relationship management, information and knowledge management and real time collaboration across the organization. We have some upcoming projects in the areas of legal chatbot development , data management and analytics and spend management. So far, the adoption of legal tech tools has empowered my team by driving efficiencies and cost www.businessday.ng

savings as routine and repetitive tasks are being phased out allowing us to focus on medium to high risk tasks that truly add value to the business. More importantly, its adoption has led to process improvements and innovative culture and mindset as we are continuously having conversations around which of our processes we should be automating, what we should be doing better and/or faster or how we can achieve more efficiencies with our processes. On the flip slide however, with cost savings and process efficiencies, it becomes increasingly difficult to justify additional spend on resources (both in-house and external). https://www.facebook.com/businessdayng

How would you say legal technology has impacted your relationship with external Law Firms? The efficiencies brought on by legal technology so far deployed in-house is yet to have a direct impact on relationships with our external law firms or spend as we have been in-sourcing for quite some years. We engage external law firms in defined circumstances such as where we lack in-house expertise on a subject matter, to address regulatory concerns or to support large scale transactions that need to be completed on very tight timelines. With the implementation of @Businessdayng

What changes if any have you observed in legal service delivery from your external law firms that may be directly attributable to the use of emerging legal technology. The area where I have felt the most impact from our external law firms is in the area of automation of knowledge management through the electronic distribution of periodic newsletters (some would argue that this not tech). That is not to say that the law firms are not using emerging technologies to automate their other back office operations in the areas such as billing, timekeeping, invoicing, information management and legal research. However I think that innovation regarding use of legal technology in actual commercial practice or front office is currently driven by corporate legal departments/inhouse counsel. To the best of my knowledge (though the jury is still out) only a few multinationals and large corporate legal departments of local companies and financial institutions are currently able to deploy emerging legal technology tools because of cost. An organization like Siemens can deploy to the extent that we do, because we have scale. Each country adopting these technologies contributes to the cost of procuring the tools. Local law firms may not have the benefits of this scale; hence it may not be cost effective for law firms to procure these tools. Your work and masters programme must have exposed you to global practices and trends regarding utilization of legal technology in legal service delivery. Please share with us some of the trends/tips that you think Continues on page 26

Thursday 12 December 2019

BUSINESS DAY

LEGALTECH TALK

LegalBusiness

Legal technology deployed in-house... Continued from page 27

would be easily adaptable in the Nigerian space Apart from my work, which daily exposes me to some of the ways that in-house and external law firms both in Nigeria and other jurisdictions utilize emerging technologies, this year, I had the privilege of being exposed to the global legal tech eco system through my executive course in Legal Tech. Our immersion learning experiences took me to Silicon Valley, Madrid and Tel-Aviv, where I met various stakeholders in the legal tech eco system; from tech lawyers, to academics, legal tech entrepreneurs, big tech companies, venture capitalists and vendors. It was an eye-opening experience as I saw firsthand the many advances in the legal tech space. First, I would like to highlight the fact that across the three different continents that we visited, the consensus amongst all stakeholders was that legal tech had come to stay and law firms including corporate legal departments that do not adapt will be left behind. It was also clear that the drive to adopt legal tech is coming from in-house corporate departments who are under pressure from their management to deliver ‘more for less’ whilst also increasingly demanding for transparency in their budgets and spend management with their law firms. A common trend in all the jurisdictions visited is the rise and growing influence of Alternative Legal Service Providers (ALSPs) who are driving the creation of new business models by driving the ‘disaggregation of legal services’ from the practice of law (sale of legal expertise) to legal expertise leveraged by technology and process (business of law). The ALSPs are beginning to be a core service provider just like law firms to many corporate legal departments doing pretty much of what

law firms do except the practice of law (which is in line with local bar rules in most jurisdictions). More and more international law firms (particularly the magic circle law firms) are also partnering with the ALSPs for back office operations and other tasks that are traditionally not in scope for lawyers. Other trends which we can also adopt from other jurisdictions include the establishment of separate arm (incubators) to create legal tech solutions alongside clients. This is prevalent among the global top tier law firms. One of the most interesting and profound lessons for me was that despite all the hype and developments in the field of legal tech, its adoption is still evolving albeit not as fast as we are witnessing in FinTech. Its adoption has not been as widespread as it is being made to believe particularly amongst the law firms. Apart from the USA, some of the foremost law firms in the jurisdictions we visited still rely on very basic simple technology tools. For example, in Tel-Aviv, we saw two very different tech utilization approaches among the two top tier firms which we visited. In one of the firms, the

Director of Legal operations after giving us a very detailed talk on all the advancements in the tech space, disclosed that they did not use most of the tools that she had discussed. She told us that after analyzing their processes, they discovered that many of those tools would not necessarily enhance their processes and so they utilized simpler basic tools which were enough to provide the results they needed. In the other firm however, they had most of the state-of-the-art technology available in the market. Bringing it back home, I would summarize by saying that law firms and corporate legal departments should ensure that they have a legal technology plan as part of their overall innovation strategy. Firms need not go for the most sophisticated or expensive legal tech tools out there in the market. They can start by examining and documenting their processes and thereafter deploying very simple technology solutions or utilizing their existing enterprise systems which can be integrated with new tools to make the practice more efficient. Firms need not go for the most sophisticated or expensive legal tech tools. They can start by reviewing and documenting their processes. Technology will not create processes but rather will rather help optimize them. Thereafter, law firms can deploy very simple technology solutions or utilize their existing enterprise systems, which can be integrated with new tools to make the practice more efficient. Innovation is not magic! Real change comes by taking small and incremental steps. Most importantly, an innovation strategy must also embed a change mindset and culture amongst legal professionals, who are generally renowned to be very traditional, inflexible and reluctant to embrace change. This also entails the development of new skillsets among professionals in

emerging areas such as data privacy, cybersecurity, blockchain and smart contracts, artificial intelligence and ethics and in technical areas such as programming. In what other ways do you think law firms can leverage emerging technologies to enhance their relationship with in-house departments? As I mentioned earlier, legal technology has changed the landscape for in-house lawyers in corporate departments and eventually this will spread to even to local companies. General Counsels (GCs) are starting to feel pressure from the business to reduce legal costs, whilst we in turn are looking to the law firms to get more value for less or even the same amount of what was spent in the past. Therefore, law firms need to be more efficient. They must review and optimize their processes and remove waste from these processes (which are usually monetized and passed on as costs to clients). This may entail law firms looking into their existing business models to meet up with the requirements of 21st century “lawyering”. Truth be told, we cannot continue to use business models adopted since the 18th or 19th century to deliver services to clients confronted with 21st century issues. Many law firms, particularly top-tier firms approach billing from the perspective of their pedigree and ranking, rather than from a client-centric perspective. This results in pushback from in-house counsel and in some cases loss of the few engagement opportunities that still exist. I am of the opinion, that leveraging on e-billing, matter management and reporting solutions would help law firms price their services better while providing the transparency that we require. Another area where I think law firms can immediately leverage on technology, is in the area of data mining and analytics.

Data is the new oil and many law firms are sitting on a gold mine of data, hidden in their emails, files, cabinets, legal opinions and transaction documentation. Law firms can focus on leveraging the appropriate artificial intelligence (AI) data analytical tools to structure their data and use analytics to derive ancillary insights that are beneficial to their clients, not just delivering the output anymore. For instance, a firm having analyzed its client’s data over a period of time can approach the client to show the client that it faces significant risks in a particular area and provide strategies and solutions to address such risk. This is the direction in which legal service delivery is headed.

Adedoyin is the General Counsel and Company Secretary of Siemens Limited, the Nigerian affiliate of Siemens AG, one of the world’s largest producers of energyefficient, resource-saving technologies with strong focus on electrification, industrial automation and smart infrastructure. In this capacity, she has oversight of all legal, regulatory, compliance and governance functions for Siemens in Nigeria. She is a commercial and energy lawyer, technology enthusiast and a member of Siemen’s global legal technology practice group, a virtual in-house advisory community with the mandate to evaluate, drive and support the implementation of tools and promote a digital mindset across corporate legal departments at Siemens. She recently completed an executive course in Legal Technology and Innovation at the IE Law School in Madrid, Spain. .

PERSPECTIVE

Legal and institutional restructuring for the next Nigeria It is crucial to design a comprehensive institutional development design, which is like an architectural plan to transform Nigeria. It is important that the design take into account development law as it is a vital element of any successful model. Some thoughts.

DR OLISA AGBAKOBA

resident Mohammadu Buhari’s 2019 Independence Day address to the nation may have created an enabling platform to encourage new discussions on how to transform Nigeria’s economy. The President’s setting up of an Economic Advisory Council (EAC) is an important tool in this regard. At the Platform, a biannual televised conference organized by Covenant Christian Centre in Lagos, Prof Chukwuma Soludo and Bismarck Rewane laid out a strategy upon which economic transformation can work. Prof. Soludo aptly likened Nigeria’s current reality to building a 100-storey building upon the

foundation of an old bungalow. I agree entirely with Prof. Soludo that it is not feasible to build a 100-storey building on the founda-

tion of an old bungalow. Likewise, economic transformation can’t be built on Nigeria’s outmoded economic development model.

DEVELOPMENT LAW AS PART OF ECONOMIC REFORMS Development law is a public policy tool that intersects law and economic development. Development law scholars agree that there is a strong link between law, regulatory institutions, governance, economic development and national welfare. It is argued that the Nigerian legal and judicial framework is hopelessly outdated and needs an urgent review to

meet current challenges. Yet governments generally fail to link legal policy, economic development and governance. The late Prof. Mansur was the leading scholar on this linkage. Economic transformation depends on vital legal institutional, regulatory and governance frameworks. The links unfortunately between legal institutions, political economy and development have often, and in our case, been completely overlooked or missed, hence under-development. Hernado De Soto in his unique book “The Mystery of Capital” gives a striking example of law as a key primer of development using just one index; property law. Property consists of two values, physical Continues on page 29

Thursday 12 December 2019

BUSINESS DAY

LAWBRAND BOX

LegalBusiness

Five ways to promote your legal brand

e understand that the rules of professional conduct have seemingly built certain constraints as regards how legal practitioners can develop their brands/practices and increase their visibility whether as a firm or a person. n this edition, we have highlighted five ‘harmless ways’ you and your law firm can increase your brand visibility and reputation while staying within the ambits and provisions of the legal practitioners’ Rules of Professional Conduct (RPC). CREATE A BRAND Branding is basically perception. It might not be who you are, but definitely who you’re seen (or perceived) to be. This demands that a firm takes control to build and nurture her corporate image in a way that inspires trust in her clients and prospects. First things first… To initiate visibility into your brand as a lawyer or law firm, you must start by intentionally creating a solid brand strategy around your uniqueness and corporate purpose that goes beyond acquiring a physical space, recruiting staff, or winning cases. This entails activities and even minute details being adjusted to fit into the core vision of the firm or lawyer. A law firm through creating and strategizing around her brand must shape the public perception of image or services. Whether from firm’s logo design and colour theme, or design template that appear in publications, to office décor, which will also be in unison to the presence of the brand across online and offline platforms. In addition, law firms must also take note of the personal branding of the lawyers in their firms. The perception or branding of a firm is incomplete without the inclusion of the personal brand of her lawyers. This is vital because clients do not just employ the services of the firm as an institution but rather they hire the competence, skill and general excellence of the lawyers

For instance, creating a podcast on how to cook ‘Afang’ soup is valuable, but irrelevant to the primary audience of an auto dealership. As regards your niche, your content should include industry insights, trends, and news to keep your clients and prospects informed.

who do the work. So in this regard, a legal firm seeking to create a strong brand must ensure the alignment of the personal brands of her lawyers to the corporate vision. BUDGETING FOR BRAND VISIBILITY Part of creating and growing your brand as a legal practitioner or law firm demands you budget for it. You must understand that projecting your brand or growing your corporate visibility is beyond an event or couple of actions, it is establishing a structure on the corporate culture to help the brand stand out against its competition. So this requires a well-considered budgeting. Effective branding of your law firm has financial implications ranging from continuous research and development of processes and business structure, to implementation, or even restructuring of obsolete strategies. Having a financial plan in this regard is vital, which should be in line with the growth of the firm. The more growth experienced, or share of the market gained, the more demand placed on sustaining and increasing the branding. BECOME A THOUGHT LEADER

A very vital way of positioning your law firm as a top brand is through thought leadership. According to Wikipedia, a thought leader is a person or firm that is recognized as an authority in a specialized field, and whose expertize is often sought and rewarded. Thought leadership as a strategy is employed globally across industries to effectively establish a brand as an authority, and this is basically done through content marketing. With several law firms constantly dishing out educative content and demonstrating their thought leadership through online platforms using tweets or blog posts, or offline via publication of quality articles, content marketing is vital in establishing your brand visibility. Talking about thought leadership and how content marketing helps grow your visibility, you must understand that your content should be VALUABLE and RELEVANT. Valuable in the sense that it should be educative and enlightening, not stale or mundane. By relevant, your content should address the right audience, or rather be apt to your audience. It should contain blocks of thought that interests and addresses the needs and wants of your clients or prospects.

NETWORK AND COLLABORATE Across industries and niches, networking is a vital growth and expansion strategy, of which the legal industry is no exception. Networking as a firm or individual of legal practice helps you come across diverse and similar firms, individuals, or opportunities, which can be leveraged on for growth, exposure and dominance. Constant attendance and participation at conferences, seminars, business luncheons, symposia, dinners and other industry events, is a good leverage that increases the visibility of your law brand, expand your connections and produce referral opportunities, symbolic alliance, and vital partnership. Top law firms who have come to understand the power of networking in positioning their brands at the top by budgeting huge sums in hosting events to attract industry stakeholders, or sponsor their bright minds to selected events, and having annual parties for clients / prospects. Similar to networking is partnership, but this exist more with firms than individuals. Often times when lawyers or firms partner on temporary or permanent basis, it fosters a strong brand identity. LEVERAGE THE INTERNET Only homo erectus/homo habilis) living under a rock for tens of millenniums wouldn’t understand the power and potency of the Internet in establishing brand identity today. Whether by running a blog or website, or using the social media, the Internet has become a vital tool for PR for law firms and

legal practitioners. When it comes to branding/publicity, the Internet is your biggest platform. Not forgetting the Rules of Professional Conduct (RPC), we understand that there are restrictions on advertising for legal practitioners in places like Nigeria, but there are still ways to effectively show up and show off in this space without breaking a stick or hurting a fly. The idea is to position yourself effectively on online communities that harbor your prospective clients. For instance LinkedIn is a hive for professionals where you can easily showcase your value and image across a network of professionals and prospects. Other social media platforms like twitter, Facebook, or Instagram are useful but different social media platforms have their diverse uniqueness and structures. While twitter is best for tweet, threads, and conversations within a block of 280 characters, Facebook gives more liberty in volume of texts, videos and photos. This means you can’t have long articles on twitter as you would on Facebook. Instagram is typical for pictures and videos, but can allow for text in form of captions. LinkedIn poses as a platform for executives and professionals – more business, less social, which is ideal for a law firm to build good profile on, dish out content, network unlimited and stay aware of trends and changes. ‘The Law Brand Box’ our latest column, seeks to address critical issues in the business of law – touching on legal brand/ business development, brand strategy and positioning for law firms, competitive business intelligence, brand communication, and strategic partnerships, amongst other things. The segment is the initiative of our content partners, The LoorbrandBox & Consult - a Legal Business Support, Brand Development and Strategic Communication Company that caters to the legal industry.

GLOBALREPORT

Law firm’s £10m fund ‘resets the bargaining position’ with defendants

K law firm Royds Withy King has announced a partnership with a litigation funder worth £10m. The firm will link up with Affiniti Finance to offer clients another avenue to pursue litigation claims to trial where the costs are seemingly prohibitively expensive. The partnership is the latest example of a firm extending its commitment to third party funding by signing up to a specific financier. The firm says funding under the facility will spread the risk for clients and is provided on a ‘non-recourse’ basis, meaning if the claim fails there is no come-

back. Funding has been tailored to support a variety of practice areas in the UK and abroad, including arbitration. The terms of the arrangement have not been disclosed. Jamie Lester, dispute resolution partner at Royds Withy King’s City office, said: ‘The facility is designed to provide clients with a tool to hedge risk, eliminate budget constraints and monetise pending claims to free up capital for other business needs. ‘It also resets the bargaining position against deep pocket defendants. The facility can also be accessed within a matter of www.businessday.ng

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@Businessdayng

days rather than the customary lead time of two-three months.’ Affiniti Finance was founded in 2014 and provides funding mainly for financial mis-selling and civil litigation, personal injury and clinical negligence, commercial funding and group or class actions. The funder last year entered a ‘no win, no fee’ arrangement with commercial firm Edwin Coe to finance a group action challenge over alleged anti-competitive conduct by European truck manufacturers.

LAW SOCIETY GAZETTE

Thursday 12 December 2019

BUSINESS DAY

INDUSTRYFILE

LegalBusiness

Employment Law Industrial Relations Committee tackles future of work at 2019 seminar

here is no doubt that today’s world of work is drastically different from what it used to be. In the past, most organisations would oversee the recruitment process creating a relationship between the employer and the employee in a strict sense. However, what is obtainable today is that, some organisations would rather employ its workforce through a third party also known as the labour contractor, thereby creating a triangular employment relationship between the outsourced staff, the labour contractor, and the organisation. This type of relationship is not without its challenges in the workplace Indeed, while outsourcing has overtime proven to be an effective means of minimizing associated costs and risks to direct employments, the legal questions around it has made it necessary for employers who intend to be the end users to be more circumspect on the practical aspects of the outsourcing practices as distinct from the form. Again, the present world of work has navigated towards heavy reliance on technology with the use of technologies and associated features such as Artificial Intelligence, Robotics, Machine learning and others. The likelihood that all these could disrupt the workplace

Oseinoma Okpeku

has raised concerns. Employers and employees are particularly pitched against one another in this regard such that innovations at the workplace are sometimes opposed by employees on the ground that they stand the risk of losing out eventually. The use of social media by employees is another talking point in

today’s world of work. Several questions have been asked and continue to be asked including (i) whether an employer can howsoever fetter the right of an employee to use their personal social media platforms in a particular way especially where it may affect the employer’s business?, (ii) whether an employer should have access to the data exchanged

over an employee’s mobile or computer devices?, (iii) whether an employer can own or be held accountable for an employee’s social media or general media activities, (iv) whether an employee is obligated to share the same views by his employer when he expresses himself in public space?. With the advent of professional social media applications such as Linked-in with an estimated 660 Million members on Linkedin, the largest professional network on the internet and Nigeria accounting for 4 Million members, an even more interesting question is whether an employee is bound to follow or share contents emanating from the employer’s social media/ general media platforms. In 1973, the Supreme Court delivered a landmark judgment in the case of Koumoulis v. Leventis Motors Ltd on the legality or otherwise of contracts in restraint of trade and till date, the issue has remain at the front burner of the subject matters being litigated at the National Industrial Court of Nigeria. A new dimension to this subject of discourse is the statutory recognition for restraint of trade clauses to ensure fair competition by the Federal Competition and Consumer Protection Act 2018. Perhaps, employees will consider it to be a pro employer provision and may push for its review? It will be interesting

to see how the National Industrial Court will interpret this provision if it ever gets to be contested. In consideration of the thoughts aforementioned and many more, The Employment, Labour and Industrial Relations Committee of the NBA Section on Business Law (“SBL-EIRC”) is organising its second annual seminar on Wednesday, December 18, 2019 by 8am with the theme “Realties of Today’s World of Work” at Lagos Oriental Hotel, 3 Lekki Road, Victoria Island, Lagos. The theme is informed by the current realities and in the today’s world of work. The seminar will interrogate these issues extensively with the help of as very rich faculty of experts comprising seasoned legal practitioners, in house lawyers, human resource management experts and Justices of the National Industrial Court. They will be sharing insights on the theme and taking on hard questions. For this year’s seminar and going forward, we have created a special Question and Answer session with judges of the National Industrial Court. Who should attend? Stakeholders in the employment and labour sector such as, Lawyers Human Capital or Resource Managers, Administrators, Employees and knowledge seekers.

Andersen global strengthens Presence in Nigeria with The New Practice (TNP)

ndersen Global has signed a Collaboration Agreement with Lagosbased law firm, The New Practice (TNP), increasing the global organization’s footprint in Africa and strengthening its presence in Nigeria. TNP was founded in 2007 by Baba Alokolaro who heads a team of over 20 legal professionals. The firm provides a large range of commercially oriented legal services in a number of disciplines including capital markets, commercial dispute resolution, corporate finance, infrastructure, construction, real estate, energy and natural resources, corporate, commercial, mergers and acquisitions, private equity, FinTech, technology, e-commerce and business advisory. Speaking about the collaboration, Baba said, “We are driven by the firm belief in doing things better and exploring new ways to deliver results and solutions to our clients, which is why we feel so strongly about our collaboration with Andersen Global,”

He added that collaboration was an opportunity for the firm to strengthen its service offerings and expand its global platform in a seamless manner that aligns with our firm’s values. In his remarks, Mark Vorsatz, Andersen Global Chairman and Andersen CEO, added, “This is www.businessday.ng

another strategic group that is relevant to our strategy in Africa and rounds out our platform in Nigeria. Baba and his team demonstrate our organization’s values of stewardship and transparency as well as a commitment to providing their clients with the best-in-class services. The https://www.facebook.com/businessdayng

TNP team has a close working relationship with our Andersen Tax team in Nigeria, which is instrumental as we continue our expansion in Africa.” Andersen Global is an international association of legally separate, independent member firms compromised of tax and

legal professionals around the world. Established in 2013 by U.S. member firm Andersen Tax LLC, Andersen Global now has more than 5,000 professionals worldwide and a presence in over 166 locations through its member firms and collaborating firms.

@Businessdayng

Thursday 12 December 2019

BUSINESS DAY

INDUSTRYFILE

LegalBusiness

Akpata supports construction of NBA Akure branch law centre

he Akure branch of the Nigerian Bar Association (NBA) held its Law Week last week in Ondo

State. The event, which was themed, “National Interest and the Rule of Law” was attended by both members of the branch and other practitioners from across the country, including Olumide Akpata, former Chairman of the NBA Section on Business Law and Senior Partner at Templars. Akpata who felicitated with the branch for curating the hugely successful event, emphasised the role of the NBA in strengthening the rule of law as the bedrock of the country’s constitutional democracy. He highlighted the responsibility of lawyers in nation building, especially in defending the constitutional rights of the masses and providing guidance on issues of national discourse. The former chairman of the NBA-SBL who visited the

construction site of the law centre, donated one million naira towards completion of the building. The branch was thankful for Akpata’s gesture and commended him for his consistent commitment and contributions to the development of the association and its branches. When completed, the Law Centre will serve as a resource centre for both members of the Akure Branch of the NBA and the public.

Legal and institutional restructuring... Continued from page 26

and conceptual. The physical value may be fixed in say, a house. The abstract or conceptual value is fixed in property law systems. In developed nations, property law allows owners of housing, to represent their value in the conceptual realm. This possibility allows easy access to credit that in turn generates capital for development. In Nigeria with a very weak legal regime, conceptual representation of property to create value is absent. Yet the assets inventory of Nigerian housing exceeds six trillion dollars. But this is dead capital. If the housing value is indexed to the banking system by massive legal reform of the property law system, we can create an instant credit market with major impact on development. In this way, we wake up dead capital for development. It is important therefore that policymakers must, consider that although macro policies are unquestionably important, there is a growing consensus that the quality of business regulations and the legal institutions that enforce it are a major determinant of development. If development law is applied as a public policy tool in the following areas, for example, Financial Services Sector, National Trade Policy, Maritime, Aviation and Space, Legal and Justice Sector,

Land Administration, Corruption, Social Security Administration etc. It will transform the economy, create millions of jobs and pull 200 million Nigerians out of poverty. FINANCIAL SERVICES SECTOR The Financial Services Sector (FSS) is the oxygen and lifeblood of a strong economy. The FSS ought to consist of the following key institutions, the Banks, the National Credit Guarantee Agency, a Development Bank and the CBN. The banks lend to the real sector of the economy and consumers and ensure the economy is stimulated. In Nigeria, it is doubtful if the banks have performed optimally, delivering on cash to the real sector and consumers. They seem to be engaged in short term lending including treasury bills. The result is that the economy is anaemic. A banking policy that delivers resources to the economy is needed. In the US, the Glass – Steagall Act and Frank-Dodd Act focused banks on the proper role to lend to consumers at low-interest rates. The second key FSS institution is the National Credit Guarantee Agency. This is absent in Nigeria. The National Credit Guarantee Agency supports viable business proposals. When viable business proposals are guaranteed, the economy gets stimulated and expanded and that gets converted to goods and services that are sold on to consumers. The economy will www.businessday.ng

benefit from the establishment of the National Credit Guarantee Agency. The third FSS institution is a Development Bank to lend to the vital sectors of the economy. The Development Bank of Nigeria is undercapitalized and so the CBN plays a distorted role. The Development Bank of Nigeria needs to be properly capitalized so it can support the economy. The CBN is the fourth FSS institution. The CBN as presently constituted is overburdened with far too many things – monetary policy, banking supervision and banking. The major role of the CBN is monetary policy stability and so the CBN may benefit from streamlining and strengthening its legal framework. A new policy and legislation can unbundle the CBN and create a new agency to regulate banks by ensuring they deliver on core mandate. In England, they have the Prudential Regulatory Authority. NATIONAL TRADE POLICY Tied to the FSS is the need for a National Trade Policy to stimulate local industry, grow export and reduce dumping of foreign goods. The Central Bank of Nigeria recently stated at the launch of its vision and policy thrust for the next 5 years, that it will target unscrupulous individuals and businesses that embark on massive smuggling and dumping of goods that can be produced in the country thus leading to the demise of our agriculture and manufacturing sectors. This

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needs to be supported. There is a need to strengthen the National Office of Trade Policy. This Office has to be ministerial level. Trade laws have import substitution as their main goal. This means to reduce imports and create local industries. The National Assembly can pass legislation to establish the Trade Remedies Agency, devoted fully to fair trade issues. This will support our local industries around Rice, maize, cassava, cotton, cocoa, tomato, oil palm, poultry, fish, etc. Trade policy on Fly Nigeria will grow Nigeria Airlines, a strong Cabotage Act will grow shipping lines, oil and gas, legal, banking, insurance, shipping etc. If trade legislation is favourable, Trillions of Naira will flow with Job creation in the millions. REVIEW OF NIGERIA’S BILATERAL INVESTMENT TREATIES Flowing from the discussion on trade policy; there is a need to review Nigeria’s Bilateral Investment Treaties (BITs). BITs are part of a countries trade policy. Nigeria is a signatory to over 30 bilateral investment treaties. To be continued next Week

ABOUT OLISA AGBAKOBA Dr Olisa Agbakoba is a Senior Advocate of Nigeria (equivalent of Queen’s Counsel) and a life bencher of the Body @Businessdayng

of Benchers. He is one of Nigeria’s leading experts in Maritime Law and has litigated several complex maritime cases. He has championed legal reforms in maritime law including the Cabotage Act, the National Oceanic Policy and other strategic legislations. He played a major role in the reform of both State and Federal High Court Rules for speedy dispensation of justice. He is the founding President of the Nigerian Chamber of Shipping, a member of the National Assembly Business Environment Roundtable (NASSBER) and Vice Chairman Presidential Committee on the review of the maritime sector. Dr. Agbakoba is also a leading arbitrator, an initiator and pioneer of Law Firm Annexed Arbitration/ Mediation Centre in Lagos (Nigeria), the Olisa Agbakoba Legal (OAL) Arbitration & Mediation Centre. He designed the ADR mechanism and rules for Asset Management and Recovery of Nigeria (AMCON). He has been involved as counsel and arbitrator in various national and cross border multi-million dollars disputes. He is a Development law expert and has advocated the application of Law in development planning and economic growth. He has consulted and provided advisory services to the federal and state governments, as well as government ministries, departments and multilateral agencies on legal reforms and legislative advocacy. He has served in various appointive governmental positions and a member of the Nigerian Economic Summit. Dr. Agbakoba is a leading Human Rights activist, a democracy and Rule of Law scholar. He became the President of the Nigerian Bar Association (20062008) and in 1987; founded the Civil Liberties Organization (CLO) of which he was the president from 1987 to 1995. He has authored numerous books such as the National Oceanic Policy, Development Law Policy, Federal High Court Practice Manual, Maritime Newsletter Volume I & II among many others.

Thursday 12 December 2019

BUSINESS DAY

Corporate Social Impact NESG-JAN My Naija Civic School tour

Billionaire David Geffen Donates $46 Million To UCLA Medical School KRISTIN STOLLER

reamWorks cofounder David Geffen announced on Tuesday an additional $46 million donation to the medical school at UCLA, which is named after him. His latest contribution will support a scholarship fund at the David Geffen School of Medicine and will bring his total giving to UCLA to more than $450 million. Forbes pegs Geffen’s net worth at $8.5 billion. Geffen, who is also the founder of record labels Asylum Records, Geffen Records and DGC Records, created the David Geffen Medical Scholarship Fund in 2012 with a $100 million donation. Now, 414 students are expected to receive scholarships over a 10-year period, according to the school. Because the scholarships provide a full free ride and include a living stipend, the percentage of UCLA medical students graduating without debt has nearly tripled since Geffen gave his first gift—from 17% in June 2013 to 45% in 2019, according to the school. Geffen, who did not graduate from UCLA, has a history of making big gifts to the institution. The medical school was named after Geffen in 2002

when he announced a $200 million donation to the school. According to the university, Geffen also donated nearly $250 million to UCLA’s Centennial Campaign, which has raised more than $5.3 billion in anticipation of the university’s 100th birthday this year. Early in his career, to keep his job in the mailroom of the William Morris talent agency, Geffen lied about having graduated from college and created a fake UCLA degree. He admitted doing so once he became successful. “Mr. Geffen’s groundbreaking contributions have inspired others across the nation to assist more students with the cost of their medical education,” UCLA

Chancellor Gene Block said in a statement. “His support has made it possible for UCLA to lead the way.” In addition to his educational philanthropy, Geffen has also been a patron of the arts. In 2017, Geffen pledged $150 million to the Los Angeles County Museum of Art, the largest single cash gift from an individual in the museum’s history. Two years prior, he pledged $100 million to Lincoln Center for the Performing Arts to renovate the Avery Fisher concert hall, which was renamed Geffen Hall.

(Culled from Forbes magazine)

Cardi B, in Lagos, shows her wacky and charity side

eginning last week, has been in the news for all kinds of reasons. One of the not-so-flattering ones that got splashed all over social media was when she sampled what she called Nigerian beer that immediately knocked her brain out. She was seen slurring her words as she swore that Nigerian beers had things inside that other beers elsewhere didn’t. We can take her word as everyone knows Cardi B is a social gadfly who has seen and sampled quite a bit in her time. But that’s the Cardi B ever yone knows. What would a rapper worth the name be if not controversial and not exactly coherent under the influence? The other side emerged, though when she ran up a huge tab at Ebeano supermarket, getting stuff worth thousands of dollars for donation to Lekki Orphanage. The rapper’s manager, Brooklyn Johnny, explained on Instagram that they could have bought more provisions for the children if they had more space in their cars: ‘We spent our only free time in Nigeria shopping for

children in need. We literally bought as much as the vehicles we had in our convoy could carry... Today was a good day. Tonight’s show will be special. THANK YOU LAGOS for all the love!’ The lady was all drama from beginning to the end. And she left with a new name, Chioma B, even though no one believes that as a name that will stick. She’s too busy being Cardi. In the evening of Saturday, December 7, 2019, the 27-year-old international star stormed Ebeano supermarket in Lekki where she bought children’s daily needs worth millions. She then went on to a motherless babies home to donate them. The rapper’s manager, Brooklyn Johnny, took to Instagram to explain how

they could have Cardi B who has had quite an entertaining Insta story feed, recently had an Insta live in which she spoke about the reasons she loves Nigeria as a country. According to her, one can find everything they need in the country. Meanwhile, the rapper’s arrival in Nigeria has gained attention all over Nigeria. In a recent post, she was said to have stated that she wants to have a taste of the Nigerian jollof rice. In another post, the top rapper gave herself a Nigerian name in honour of being in the country. The mother of one named herself Chioma B. (For feedback, contact us at csrmomentum@gmail.com/ 08023314782)

Onwuka Kalu and that Landmark Children of Africa Concert

ack in the 1980s/90s Benefit concerts were not exactly the thing to do in these parts. Parties were mostly for fun and for a heartfelt display of joie de vivre, to reassure oneself that one was alive and well and not having life pass them by. Would you know anyone back then who would block streets just because they were trying to raise funds for the less privileged? And as you know that was when our soon to be ex-senator, Ben Bruce was bringing in Shalamar, Kool and The Gang and that whole tribe of American entertainers to Nigeria. Lekki Sunsplash was also making waves and people like Blackky (Edward Inyang) were getting discovered and riding the wave. All of this was going on when Onwuka Kalu decided in 1991 that there had to be something for the proverbial African Child who, going by artistic and

psychological depictions, was anything but happy. He/she was missing out big time from all the fun. While others were kicking it at the beach, at the club and other places, the www.businessday.ng

African Child was thinking about the next meal, the next place to lay his/ her head, the next school fees, the next foster family (if any), etc. So much pathos is built

into the misfortunes of the African Child that it’s a wonder some make it to adulthood. Now for clarity, it’s important to situate the Africa Child properly. He/ she is a mental construct that may have no relationship with the person reading this piece even if that person so happens to be an African who was once a child and grew up in Africa. We all have accepted that mental imagery of the African Child as deprived, hungry, uneducated, in the dark, full of potential but with no way of harnessing them, forever needing support from non-Africans as Africans have proven themselves incapable of looking after their young. As I said, it’s a mental construct which many Africans especially the educated and urban dwelling, add Diaspora African to it, are at odds with. They kick against and fight it with all their being. But the evidence for that construct not being far from reality is overwhelming. Back

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when Chief Kalu organised the concert in 1991, the United Nations estimated that 1 million African children died each year from diseases preventable by vaccine. Chief Kalu drove this home further when he said “there is hardly any family in Africa that has not felt the pains of losing a child”. True. And what’s the case today? According to USAID: Sub-Saharan Africa has the highest risk of death in the first month of life and is among the regions showing the least progress Sub-Saharan Africa, which accounts for 38 percent of global neonatal deaths, has the highest newborn death rate (34 deaths per 1,000 live births in 2011) The highest rates of child mortality are still in Sub-Saharan Africa— where 1 in 9 children dies before age five, more than 16 times the average for developed regions (1 in 152). So while we argue back and forth on the propriety @Businessdayng

or not of the African Child tag, there clearly is a lot to do by Africans for Africans. Despite the famed African extended family system, that traditionally manages vulnerabilities occasioned by disease and decease, too many kids fall through the cracks leaving us a situation where Africa has become the world headquarters for NGOs and with most of them seeking to give the African Child meaning. The energy we’ve used to fight the stereotype should be deployed to doing what needs be done so our kids can live meaningful, welladjusted lives like their counterparts in other parts of the world. That was something Onwuka Kalu back then wanted to right. It needs be said that he had traducers aplenty. He was, after all, the whip smart young man who had taken Onwuka Hi-Tek public, the very first indigenous company to do so. Was the foray successContinues on page 31

Thursday 12 December 2019

BUSINESS DAY

Corporate Social Impact

Onuwa Lucky Joseph (08023314782) Editor.

Prominent Facilitators at the MyNaija Civics program with NESG

Yinka Sanni - Chief Executive of Stanbic IBTC Holdings PLC.

Niyi Yusuf – Managing Partner, Verraki Partners

Emeka Oparah - The Vice President, Communication & CSR, Airtel Networks Nigeria

Asue Ighodalo - Founding Partner, Banwo and Ighodalo Frank Aigbogun – Chief Executive Officer, BusinessDay Media Limited

Bioye Davies – MD/ Team Lead Senantra Limited

Folawe Omikunle – CEO, Teach For Nigeria

Onwuka Kalu and that Landmark... Continued from page 30

ful? Maybe not, as it was eventually delisted from the stock exchange after many years of subpar performance. Not to forget, he was also the founder, or as some have said, cofounder of Fidelity Bank. Ideas were his forte, but as well was the fortitude to execute. It is for his presence of mind which helped catalyse this whole new movement of Africans being there for Africans, that we remember him. Being a natural showman, he pulled out all the stops to ensure that the Who is Who of the day was present to give out of their abundance or just to grace with their presence. Listed to make an appearance was then ANC President, Nelson Mandela, who had just been released from a

27 year incarceration at Robben Island. He was to come along with his wife, Winnie. Also on the roster was General Ibrahim Babangida, the then military president of Nigeria, as well as Paul Boateng and the late Bernie Grant two black MPs from the UK. The late Augustus Aikhomu, then Chief of General Staff, also had a prominent role penciled in. On the bandstand for three days of extravagant music were the hit makers of the day: Dionne Warwick, the late Miriam Makeba, the late Blues king, BB King; Gladys Knight (without The Pips), the late Natalie Cole, The Commodores, Eddy Grant, Third World, Aswad, Color Me Badd, the late Nina Simone, Kool & The Gang, Shabba Ranks and Yvonne Chaka Chaka. www.businessday.ng

The big plan included an album from the event, a la We Are the World and Live Aid. The 3-day concert was also to be taped and the rights sold to foreign broadcasters for additional revenue. The plan was for the moneys raised to be disbursed to “a lot of individual organisations that are doing a lot of good work that we are affiliated with”. This was according to Faith Isiakpere, the Vice President of Children of Africa. But it was not all about the concert. A full day before the instruments and voices ignited, there was a plan to have a seminar to look at practical ways to ensure that governments and individuals did the needful to end the almost inevitable victim status that the African Child could expect to be his/her lot.

Unfortunately, that time (and not much has changed, doubly unfortunately), was known for promissory notes/pledges and cheques that could never be cashed. In fact, the story is told of an exgovernor, now soon-to-be senator, (subject to the outcome of the election tribunal judgment), who infamously put a few actual currency notes on top of what was a pile of wellcut paper all contained in a briefcase which he donated at an event, and to thunderous applause. In the end, the Children of Africa concert didn’t yield anywhere near what it had promised, and that, for all kinds of reasons which are beyond the ambit of this write-up. Visionaries are known to have those blind spots that leave them susceptible to self-destructing. Again,

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Dr. Jummai Zainab Umar Ajijola - Board Chairperson, ActionAid Nigeria

Some CSR takeaways from the responsible business summit ‘13

usinesses cannot be successful when the society around them fails.” “We need to give leaders the time, space and resources to think if we want business to drive sustainability transformation.” “Business has come to believe the solution to problems lie within their own resources rather than in collaboration.” “When we inspire people by explaining why the destination is important, they develop the motivation to see the race through.” @Businessdayng

“CSR can be very hard for employees to relate to if we don’t make it tangible to their everyday working lives.” “CSR isn’t a particular programme, it’s what we do every day, maximising positive impact and minimising negative impact.” “Loyalty is to the values of the company, not to the company. If there are no values, there is no loyalty.” “When the wind blows there are those that build walls and then there are those that build windmills.” (Courtesy HRZone. com)

Thursday 12 December 2019

BUSINESS DAY

UNDERSTANDING NIGERIA’S

DAIRY VALUE CHAIN

What the Nigerian Dairy Sector can learn from the Indian Dairy Cooperative Model Ayodeji Ojo

airy development re q u i re s a c o n certed effort and cooperation by all stakeholders especially smallholder farmers whose livelihoods depend on the sector. There are several lessons that can be applied from developing countries such as India that have built their dairy sector using farmerdriven innovations and support systems from the government. In 1946, the Indian dairy farmers rejected milk payments from the colonial processors due to low prices and the exploitative activities of middlemen. The farmers sought out Mr. S.V. Partel, a reputable opinion leader in Anand, Gujarat for advice and support. He advised the farmer representatives to establish a dairy cooperative to improve their income from milk and limit the activities of middlemen in the dairy value chain. This led to the Indian “white revolution” in which farmers formed self-help groups to co-own milk collection infrastructure and improve access to markets. The dairy farmers proposed four conditions for dairy development in India, which included: a) setting up of milk cooperative societies, b) the establishment of district union in Anand, Gujarat, c) ensuring that only milk farmers could register in the society regardless of religion, social class or political views and d) the routing all milk purchases through the same cooperatives. The dairy cooperative (names Amul) started in 1946 with less than 50 members producing 250 liters per day. Today it has grown into 162,186 dairy cooperatives consisting of 15,495,000 farmers that are currently producing about 34,174,000 liters of milk per day across India, accounting for about 21% of the domestic milk production as of 2018. The milk cooperative structure was formalized in 1965 and referred to as the “Anand Pattern”, a three-tier cooperative structure which consists of a dairy cooperative society at the village level and is affiliated to a milk union at the district level. In turn, the milk union in is integrated into a milk

Sahel delegation to India

federation at the state level. Under this arrangement, milk collection is handled at the village dairy society. The district milk union purchases the milk and adds value for onward transmission to the State Milk Federation, responsible for marketing the dairy products. This system eliminates internal competition and enhances economies of scale. The dairy cooperative membership requires the ownership of lactating cows and supply of milk, while the leaders of the various village cooperatives are automatic members of the district milk union and the leaders of milk unions constitute the dairy marketing federation. The Anand Pattern has succeeded in breaking barriers in dairy development by providing access to markets and processes in which farmers determine their own business models, adopt modern production and marketing techniques and access services that they cannot afford or manage individually. A key success factor of the Anand pattern is the participatory approach to development where professionals are accountable to the leadership of Village Cooperative Society (VCS) that are elected by dairy farmers. The Anand pattern provides a platform www.businessday.ng

for smallholder farmers to co-own critical infrastructure such as feed plants, animal health services and genetic improvement centers. This model was replicated all over the country under the ‘Operation Flood’ program otherwise known as the “Anand Pattern of Dairy Cooperatives”. Through the cooperative model, India has transformed dairy sector by investing in artificial insemination, animal health services, feed and fodder, training and research.

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A key success factor of the Anand pattern is the participatory approach to development where professionals are accountable to the leadership of Village Cooperative Society (VCS) that are elected by dairy farmers

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One of the key service delivery units of the cooperative is the Amul Research Development Association (ARDA) which was established to provide training for personnel and quality animal health services to smallholder dairy farmers and artificially inseminate their cows. ARDA runs a call-center that allows farmers to report animal diseases or request for services such as artificial insemination and pregnancy diagnosis. The organization deploys veterinary doctors to the farmer’s location within 30 minutes in cases of emergency and 2 hours in normal cases. Farmers pay 100 rupees (N505) per cow, for treatment. ARDA charges 250 rupees (N1,264) for emergency situations, which can be paid directly by the farmer or deducted from milk proceeds by the cooperative. Another key achievement of the Anand pattern is the shared ownership of milk collection infrastructure by smallholder farmers and the innovative milk collection system. Under this arrangement, each farmer is assigned a unique identification code by the Village Cooperative Society (VCS) to easily track, check for consistency and provide value add services. The VCS invests in farmer level data collection including name, amount @Businessdayng

and quality of milk supplied which is printed on a voucher each time the farmer supplies milk. The milk payments are based on quality and the proceeds could be withdrawn as cash, allocated to animal feed and drug procurement, payment for artificial insemination and animal health services or saved with the union. Each VCS employs a quality assurance personnel who ensures milk quality by carrying out various tests. The VCS does not accept poor quality milk and offenders are prevented from future supply of milk. At the end of each year, the VCS shares part of its profits with members as patronage bonus based on the quantity of milk supplied during the year. The Nigerian ecosystem can adapt many of these best practice examples from India. For example, the Federal Government of Nigeria can integrate the Indian cooperative system into the implementation of the National Livestock Transformation Plan (NLTP) by partnering with Miyetti Allah Cattle Breeders of Nigeria and National Veterinary Research Institute to deliver similar animal health services and cooperative systems in a sustainable manner in order to achieve its goals. In addition, the Nigerian dairy development needs to be championed by the farmers themselves for the gains to be sustainable and inclusive. A strong dairy cooperative system will increase farmers’ access to inputs and markets. As a result, it is imperative for governments at the state and national level and development organizations to provide the required policy and investment support, respectively to build a sustainable and integrated dairy system through cooperatives in Nigeria.

Ayodeji Ojo www.sahelconsult.com

Thursday 12 December 2019

BUSINESS DAY

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

Changing face of local content development as exemplified by MG Vowgas Olusola Bello

he visitation of MG Vowgas fabrication yard in Por t Harcour t was the climax of the 2019 Practical Nigerian Content conference and exhibition held in Yenagoa, Bayelsa State recently. As it is the practice, the closing ceremony of the conference always end with a tour of a designated local facility by participants so that some of them can have a firsthand experience of what such a local company can do in the areas of fabrication and Marine services. MG Vowgas was the one designated this time around by Nigeria Content Development and Monitoring Board (NCDMB). The fabrication yard marks a new dawn in the issue of local content development in Nigeria. It has every facility for any form of fabrication in the country. The facilities there would convince anybody, including the international oil companies that never believe that indigenous companies can do anything great and

complex works that meet international standards. The international oil companies will now have no excuse to carry their jobs outside the country or contract them to international companies on the excuse that there no Nigerian companies that can do it. Surprisingly, while many fabrication yards have either folded up or struggling to stay afloat because of lack of jobs, MG Vowgas has in-

stalled high tech equipment that reduces the timelines for even difficult jobs. From next year the company will begin to fabricate modular refinery and boilers for both refineries and oil companies. Fabricating modular refineries would go a long way to solve the problems of raise foreign exchange for promoters of modular refineries in the country. The company which is

purely is an indigenous one is into EPC projects such as fabrication of topsides, building of structural steels, platforms, pressure vesselsm and has also been active in flow lines repairs. It also provides marine support services by building marine vessels. All of these activities are carried out under the supervision of ASMES. The yard has graduated from four workshops in two years ago to having eight

workshop today which are equipped with sophisticated machines that are capable of doing various fabrication works of international standards. However what baffles many of the visitors was the level of underutilisation of the yard despite all the investments that has gone in there. Azikwe Ajounuma, one of the visitors told BusinessDay that just like many other yards across the country, MG Vowgas fabrication yard is not getting the required jobs to justify the level of investments that has taken place there. He said what is happening in the yard is a reflection of the general lull in the oil and gas industry which the government must address. “There is need for government to ensure that more foreign direct investments (FIDs) are sanctioned so that many companies like this can get jobs and increase employment opportunities in the country.” If a few projects like Bonga South West, Zabazaba and NLNG train 7 can come on stream many of these yards would be engaged.

G o dw in Izomor, the group managing director of MG Vowgas Nigeria Limited said it was the negative attitudes of the international oil companies that indigenous companies cannot carry out jobs that would meet international standards, that challenged him to push for the establishment of this massive yard that is sitting on around 85,000 square meters of land covering marine warehouse and fabrication yard. He expressed appreciation to the Nigeria Content Development and Monitoring Board NCDMB for its encouragement as regard the activities in the yard, despite the lull in the industry The greatest asset of the company is the quality of its personnel. Around 98 percent of the work force is Nigerians. With all these investments put in place if necessary projects are not sanctioned by the government and other stakeholders, such as the international oil companies sustaining such facilities may be a challenge. Patronage is very important for the sustenance of the facility.

Sahara Power Group repositions power sector with training programme Olusola Bello

he issue of manpower gap has been a challenge in the power sector. This is because the hands inherited by the new investors, especially after the privatisation exercise are getting to their retirement age and needed to be replaced by energetic and vibrant young men who are well equipped with modern trends in the industry. This is very important since a lot of the operations in the sector have become digitalised for efficiency sake. Unfortunately, most of the graduates produced by Nigerian higher institutions these days are considered not employable except they are made to under serious retraining after graduation. This is why the introduction of Sahara Graduate Engineering Programme (GEP) became apt at this material time. Recently, 38 young engineers comprising 29 males Olusola Bello, Team lead,

and nine females were graduated from the 2019 Sahara Graduate Engineering Programme (GEP). This figure makes the total number of engineers trained so far through such programme to 198. The essence of the programme is to help close up the manpower gap in power industry. The aging workforce in the industry is a major source of concern to critical stakeholders. This is because most of the present crops of technician / engineers are those brought from the National Eletric Power Authority NEPA . They are highly tested and skilled because they had the best of trainings then but most of them are nearing their retirement age and they no longer have the agility needed for the modern power sector that is driven through digital process. It has therefore becomes imperative for the various companies that inherited the assets of the old Power Holding Company of Nigeria (PHCN) to begin to make arrangement on how

Graphics: Joel Samson.

to replace these old and tiring hands. No wonder the Chairman of the Nigerian Electricity Regulatory Commission, Prof James Momoh, had said there is a need for capacity building to design and build a new power grid that is sustainable in order to achieve optimal energy generation, transmission and distribution By any standard, the investments in human capital by the group is huge and enormous. But going by what is needed in the industry, this is just a scratch on the surface especially when compared to the manpower requirement of the industry. This step by Sahara Power Group is commendable given the positive impact it is having already on the industry. The GEP is an annual capacity building initiative of the power group jointly organised by Egbin Power Plc, First Independent Power Limited (FIPL) in collaboration with the National Power Training Institute

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(NAPTIN). It would ensure that the graduates are treated to various aspects of the power sector. Such as engineering, marketing, transmission and how to maintain the distribution networks. It is designed to develop a workforce of home grown talent pool to raise a new generation of talents and leaders that will drive ongoing transformation of the company A carefully designed accelerated 12 months training program which combines both technical and non- technical curricular via a customized program of in-class training, on the job training, continuous feedback and supportive team members. Speaking at the event, Kola Adesina, group managing director of Sahara Power Group, speaking at the event, said the trainees were selected out of over 8,500 applicants after a very rigorous process, adding that they were chosen from various fields of engineering profession including elec-

trical, chemical, electronic and mechanical. Ad e s i na s a i d : “O ve r the past 12 months, they have embarked on intensive classroom training and hands-on activities across Power Generation, Operations, Distribution, Transmission, Electricity and Commercial Awareness.” These rigorous sessions led by seasoned power experts have given the graduates a strategic understanding of the entire value chain of the Nigerian Power Sector. He said he was confident that this foundation will empower future power experts to disrupt and transform the sector as they progress in their careers. He expressed the believe that the programme will remain a robust platform for developing the next generation of power experts that will ensure Sahara Power Group continues to bring energy to life in Nigeria and Africa. “Since 2014, Sahara Power Group has recruited over 130 graduate engineers in line with our commitment

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@Businessdayng

to empower the youth and develop local capacity in the power sector,” he added. Adesina, also charged the new graduates to be focused in life and use lessons and skills acquired during the training to add value to the society particularly to the Nigerian power sector. Ahmed Nagode, director general of NAPTIN, on his part, said the GEP was a very important and fundamental programme in the career of a professional engineer in the power sector. “It is a programme that bridges the gap between academic qualification of BSC/HND in Electrical and Mechanical engineering and the skills required to operate on the power networks,” Nagode said. He urged them to ensure that they are better industry players by giving back to Sahara Power the gains of this investment on their competence.” The new graduates were offered certificates during the graduation ceremony in Lagos. The programme started 2014.

Thursday 12 December 2019

BUSINESS DAY

Retail &

consumer business Luxury

Malls

Companies

Deals

Spending Trends

CONSUMER SPENDING

Vegetable oil brands jostle for market space as consumers make yuletide season shopping OLUFIKAYO OWOEYE

According to her, in recent times, there has been an increase in the number of vegetable oil brands available in the market with each jostling for market presence. In the past, vegetable oil market in Nigeria was dominated by foreign brands like Turkey and Kings Oils. Interestingly, market dynamics have changed. Currently, the market has more than 10 players which include Power Oil by Dufil Prima Foods Plc, makers of Indomie Instant Noodles, Mamador and

Devon King’s brands produced by PZ Wilmar Limited, a subsidiary of PZ Cusson Nigeria Plc, and Sunola Oil brand which is produced by Sunseed Nigeria Limited, member of Kewalram Chanrai Group. Other brands are Grand Oil, a product of Grand Cereals and Oil Limited, Nosak Group, makers of Famili Pure Vegetable Oil, Sidex Nigeria Limited, makers of Lesieur Pure Vegetable Oil. Brands have also adopted packaging in smaller sizes and sachets to enjoy patronage from price-sensitive customers and

low-income earners. A sachet pack goes for between N30-N50 per sachet. While the prices for the bigger sizes in bottles also vary depending on the sizes of the bottle. 25liters of vegetable oil goes for N16,000-14,000, 10liters stood at N9,000-N8,000, 5liters goes for N3,399-N2,800, 3liters price is between N2,240-N2000 They have also employed endorsements from the Nigerian Heart Foundation (NHF) and Nutrition Society of Nigeria (NSN) to raise the awareness of safe edible oil.

TECNO launches youth-centric spark 4 with bigger screen, enhanced camera features

brands to reach beyond their existing communities, aimed at growth. Twitter’s Promoted Products suite, Facebook’s contextual, friend-based banners and “Sponsored Stories” program, and YouTube’s Promoted Videos are some of the social marketing options. And recent studies of consumers show an increase in the amount of time spent engaged with social networks and a decrease in time spent with email and traditional websites. According to a 2019 mobile report by Jumia, Africa’s biggest online retailer, the number of

ing power in the economy. Other international scene, countries like Britain and the United States of America (US) also recorded increase in its Black Friday sales For Britain, the value of Black Friday sales in jumped by 16.5 percent compared with last year, according to data from payments firm Barclaycard. And for US, consumers spent $7.4 billion online, an increase of $1.2 billion over Black Friday 2018, making it the biggest Black Friday ever for digital sales, according to Adobe Analytics.

COMPANY

frica’s most preferred smartphone brand, TECNO has announced the release of the 4th generation device under its Spark smartphone series, the Spark 4, again setting a new pace of commercializing access to high end technology and delivering same to more young Nigerian mobile users nationwide. Compared to its previous versions, the new Spark smartphone comes with a lot of visible upgrades informed by consumer insight and research – a validation of TECNO understands of the evolving choices of mobile consumers in Nigeria, and the active steps taken to produce devices that are for Nigerians. “The Spark 4 is yet another evidence that TECNO has more for its users. The de-

igeria’s top retailers, Spar and Hubmart recorded increased year-on-year sales by close to 20-25 percent and 50-60 percent respectively, in this year’s Black Friday promotions and social media played a big role. According to BusinessDay conversations with the retailers, the aggressive publicity of their offers on social media platforms like Facebook, Twitter and Instagram was the major reason for the higher increase in their sales. A top official at Spar said, “This year was better for us in terms of sales. We recorded approximately about 40 percent increase in sales unlike in the previous year and this was due to the fact that we focused more on advertising our discount offers on social media.” The Spar official further said, “We had consumers lining up and begging us to extend the days. We also planned early and our offers were lucrative, reaching over 80 percent of Nigerians.” Spar’s black Friday sales which typically runs for eight days from November 23-30th, was extended further by three days this year due to high demand from consumers. For Hubmart, they extended it by two days from the one day offer in 2018. Worldwide, Social media platforms offer digital marketing programs that enable

Nigerian’s active social media users rose from 17 million in 2017 to 24 million at the end of 2018. “We posted our offers on facebook, twitter and the rest, tagging social media influencers who helped share out our videos like the town storm to attract more customers and it worked for us. We were able to record close to 50-60 percent rise in sales this year compared to the previous year,” Akin Akanni, the supervising manager at Hubmart said. Black Friday is a name given to the shopping day after Thanksgiving where consumers shop at discounted prices all over the world and it has continued to be a fantastic opportunity for retailers and consumers. “The increase in their Black Friday sales is impressive which can be traced to improved publicity, extension of offer days, and the fact that typically when you look at the items discounted in the stores, they are consumables that consumer use on a daily basis compared to a Jumia or Konga, where items are not really of the focus to consumers,” Ayorinde Akinloye, a consumer goods analyst at Lagos-based CSL Stockbrokers said. But Akinloye warned that this might be a negative one for retailers in the coming months as demand might be slower due to people taking advantage of the Black Friday cheaper prices to stock up their household. Retail stores in Nigeria have been experiencing low demand and sales due to weak purchas-

BUNMI BAILEY

he end of the year usually comes with a spike in demand for foodstuff, household equipment and other basic necessities that can be consumed during the festive period. The sluggish economy notwithstanding, shopping malls and markets are always filled to the brim with consumers making purchases ahead of the yuletide season. Checks by BusinessDay shows that local manufacturers are already positioning for bumper sales during this period. The restriction placed on importers of palm oil and vegetable /edible oils by the Central bank of Nigeria from accessing the Import-Export window for Foreign Exchange coupled with a recent closure on the nation’s border posts have increased patronage for local edible oils. “Major foods items such as Rice, vegetable oil, are one of the most sought after commodities during the festive season,” Mama Joy, a trader at the popular Ipodo Market in Ikeja said.

Black Friday: Retail stores record higher growth in sales on use of social media

vice comes with advanced features that would help users achieve the desired output from their mobile device. Ranging from its dot notch screen which is currently the biggest phone display in the market within its category, to its AI triple rear camera, the Spark 4 is a perfect choice”, said Jesse Oguntimehin, PR and Strategic Partnership Manager at TECNO Nigeria. He also added that:“This device gives users an amazing mobile experience at an impressive price range – the more reason to be on the Spark 4 train.” The Spark 4 is built with an impressive bigger screen. The device comes with a 6.52-inch HD dot notch display with a 20:9 aspect ratio, guaranteeing users a bigger mobile screen experience. Users of the Spark 4 would www.businessday.ng

firsthand get to enjoy watching movies, playing games or just surfing the internet on the device. For the first time on a Spark device, the Spark 4 spots an AI Triple Rear Camera set of 13MP+2MP+AI, each camera with distinctive functions fusing into one to enable users take amazing pictures on the device. Its 13-megapixel main camera is built with a f/1.8 aperture for HD photo capturing, the 2-megapixel depth camera provides the background bokeh effect, an AI Camera to enable users take clear pictures in low-light situations. The rear camera includes features such as eight scene modes, AR Stickers, custom bokeh, AI HDR, AI Beauty, and Panorama The Spark 4 also comes with an 8MP front camera, which is by accompanied a

pair of dual LED flashlights, enabling users capture those clearselfies even under lowlight conditions. Other features on the Spark 4 include Bluetooth 5.0 which makes connecting one device to another easier and transferring files faster; 4G LTE capacity for smooth high-speed browsing and the first on a Spark device; and an impressive 4,000mAh Battery. In terms of storage capacity, the Spark 4 would be available for sale in a sizeable 2GB ROM+ 32GB RAM and an expandable memory capacity of up to 128GB through an SD card. The Spark 4 is shipped to Nigeria inRoyal Purple, Vacation Blue, Misty Grey and Energetic Orange and is immediately available for purchase in authorized retail outlets nationwide.

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Thursday 12 December 2019

BUSINESS DAY

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Thursday 12 December 2019

BUSINESS DAY

INTERVIEW We have enough capacity to carry out all necessary lubricant tests - Keshinro Nigeria’s lubricant market has been growing and worth over $600m but the influx of sub-standard products and the absence of commercial laboratories for testing have slowed the growth of this industry. In this interview, AYODAPO KESHINRO, general manager, sales and technical at Pacegate Limited told STEPHEN ONYEKWELU about what the PG Lab is doing to reverse this trend.

acegate Limited is a subsidiary of the Hana Group of Companies, what is your operational profile? The Hana Group of Companies was established in 1979 and specialises in building materials, household products and plastic manufacturing with a factory in Isolo, Lagos is known as Hana packaging. Pacegate is one of the companies under the Hana Group and is a business to business (B2B) distributor of specialty chemicals, industrial greases as well as a leading manufacturer of United Nations certified steel drums. We are a customer-focused company and over the years have provided our customers with the best of products and services. Close to our desire to develop local capacity in manufacturing, we commenced steel drum manufacturing. Our newest drive to improve the quality of testing services led to PG Labs, the first dedicated lubricants testing laboratory in Nigeria. It gives us great pleasure to offer our competence to the public and contribute to the growth of the lubricants business in Nigeria and Africa. How significant is PG Lab to the growth of the Nigerian lubricant industry and market, what is going to change? The Nigerian lubricant industry has come a long way from the international oil companies (IOC) dominating the market. Thirty to forty years ago we only had the multinationals; Shell, Total, BP, Agip and the likes dominating the market. However, in the last 20 years, we have had many independent indigenous plants springing up. Currently, there are also some lubricant manufacturers in the country who do not have blending facilities. We also see a number of companies importing products from the Middle-East. This proliferation of lubricants in the market highlights the need for local capacity that will enable proper independent testing within the country. In addition, many lubricant manufacturers are not fully equipped with the means to properly assess the quality of their products. The Standards Organisation

like this comes in, you can just send your lubricant to the lab for condition monitoring, and it is preventive maintenance. The engine oil is to machinery what blood is to the human body. When you go for a medical test, your blood is taken and diagnosis is given. It is the exact thing that happens in engines, you can take the lubricants they use, run the test and then advise depending on the result of the analyses. So it is not just manufacturers and regulators but also people who have expensive equipment that should be interested. PG Labs can go into contract with your organisation, run the test and advise you on the kind of engine oil to use as well.

of Nigeria (SON) has set some standards as guidelines to ascertain lubricant quality; however, the unavailability and inadequacy of testing equipment has been a major issue. This is where we feel PG Labs has a significant role to play; we have enough capacity to carry out the necessary tests which are a game-changer in the industry. In addition, SON can now check via PG Labs that lubricants meet all necessary parameters which were hard to do in the past due to the unavailability of testing equipment. For example, shear stability, homogeneity and miscibility were tests that could not be carried out before now thus limiting the ability to assess the quality of the products. With PG Labs starting commercial operations, many companies bringing products into the country will be forced to meet up with the requirements because there is now a local laboratory where you can test products. Both regulators and businesses can have comfort that PG Labs is able to check for all necessary parameters and users will have a good idea of how genuine the lubricants are. What forms of relationships exist between you and regulators of the lubricant industry, such as the SON? We are completely independent of the Standards Organisation of Nigeria. We invited SON to our open day where we dem-

onstrated our equipment and service offerings, then we had a discussion on how we can best be of service. Before that, SON, was worried regarding the equipment unavailability for testing these parameters. They know the importance of testing but they haven’t been able to get laboratories that can test these parameters until now. Now that they are aware and have witnessed, they are very excited and happy to work with us. We are having further discussions with them and we are more like an answered prayer right now in the industry. We are also in the final process of registering with the Institute of Public Analysts of Nigeria (IPAN). Tell our readers more about the laboratory. The laboratory is open and it is affordable. As I said, the focus is to have international standard and reference that everyone can rely on, be comfortable with and rest assured of accurate results. It is not just for the makers of lubricants or regulators, there are people who buy lubricants for very expensive equipment. For example, you have a gas engine generator; the gas generator is very expensive and capital intensive. As a user of such equipment servicing with lubricant, you would want to also monitor the equipment by carrying out preventive maintenance, so if there is any issue you will be able to identify it before it finally breaks down. That is where a lab

For how long has the laboratory been here? PG Labs just opened up to the customers in October 2019 after being International Standards Organisation (ISO) 17025 certified. We had our opening day on the 29th of October 2019 and we have since been open to the public. So the ISO certification you got, what does it do? The ISO certification is a quality management system certification. ISO is a world collection of countries coming together to form standards for management systems. It could be general organisation management, it could be environmental management, and it could be laboratory management. In this case ISO 17025 as it were, is for the laboratory. This is because we were going to service the industry we wanted to really give them a standard that is comparable to anywhere in the world so we went on with the ISO accreditation where we got the United Kingdom Accreditation Centre (UKAC) body to accredit us. We are also working with the American Society for Testing and Materials (ASTM). All the tests at PG Labs are run according to ASTM manuals and procedures. We are participating in the ASTM proficiency testing programme, and how that works is that we receive their sample and send the test reports back to them. All the labs across the world participate and then they plot a graph for z score to compare the results and then let you know

how well you have done regarding the accuracy of your own test. All of this is to ensure that our customers have reliable, accurate and consistent results. The ISO accreditation also serves as proof of our quality assurance to clients or customers. How do you handle samples for people outside Lagos? They can send the samples through courier. We would test the samples and send a report to them via mail. Do you plan to expand your services outside Lagos? For now, no. Expansion for us would mean running more tests and getting more equipment. In time, we hope to increase our capacity to carry out more tests. What other expansion plans do you have? The Laboratory right now is catering to a specific test, but of course, we will do more over time. We will bring in more equipment, run more tests; a wider range of tests both for lubricants and other products. What kind of policies do you think the government needs to implement or put in motion help the sector? Over the years, there has been a lot of dialogue with the Government to ban importation of finished lubricant into the country, so far they have increased the tariff on the importation of finished lubricants but that is not enough because people still find a way to bring these lubricants into the country and sell cheaply thereby killing the local manufacturers. If it is banned, many plants will increase their capacity and the market will be there for local production. Nigeria has enough blending plants to cater to our customers’ needs as of now. As we develop further and our motorisation rate improves, we may then have a gap, but for now, we have about 60 cars per thousand Nigerians, which is still a very low motorisation rate. As at last year, according to the National Bureau of Statistics (NBS) we only had about 11.8 million cars on the road, which is still not enough. Going by these numbers, we have enough blending plants that can meet customers’ needs in Nigeria and by extension West Africa.

Thursday 12 December 2019

BUSINESS DAY

FEATURE

How manufacturers are protecting buyers against counterfeits this Christmas The Christmas season triggers mass and sometimes panic buying of gift items for loved ones. This comes with its own challenges in the various forms of holiday crimes. STEPHEN ONYEKWELU writes that counterfeit goods also flood the markets and manufactures are out to stop this from escalating through awareness campaigns.

ounterfeit purchases tend to boom before holidays such as Christmas and during designated sales periods, such as Black Friday and the January sales. Some studies show that there is a higher chance of counterfeit purchases in the runup to the holiday period as well as in the January sales that traditionally follow Christmas’ excess. Research recently commissioned by MarkMonitor, an American software company, suggests that 45 percent of shoppers are concerned that they might accidentally purchase fake goods during the Christmas season. Additionally, almost one third have been tricked into buying a counterfeit product, despite 91 percent saying they wouldn’t intentionally purchase one as a Christmas gift. The state of the counterfeiting industry as it stands is becoming almost impossible to predict and even more difficult to control. A 2018 Global Counterfeiting & Trademark Infringement report said the amount of global counterfeiting reached $1.2 trillion in 2017 and it is estimated that it could reach $2.3 trillion by 2022. Clothing brands are among the worst affected by the sale of fakes. In 2017, the EU’s external border detained over 31 million counterfeit products with a value of over €580 million and clothes were in the top five detained categories. The sport shoes category continues to be the most counterfeited item. Nigeria as target In Nigeria, clothing, household items, foods and drinks, beddings and mattresses are the worst hit by counterfeiters. Premium quality brands such as Mouka Foam, Vita Foam, Sara Foam and other brands have been targets of counterfeiters. Mouka Foam Limited, one of Nigeria’s top mattresses and other bedding products maker, who recently marked its 60th anniversary of business operations in Nigeria, has restated its commitment to quality products in order to maintain its market share leadership. Raymond Murphy, managing director and chief executive officer of the company explained that the future of the company is couched in “quality brands, product renovation and innovation laced with investments in infrastructure and increased investments in the development of the Mouka people.” “At 60, we are the market share leader in the foam and beddings sector. Recent research, according to some marketing professionals whom I met on my last trip to Dubai also attest to the fact that Mouka is not only the leader in Nigeria, but also in Africa and the

with headquarters in Apapa, also quoted sources close to the company that presently there is no evidence to support that Zhe Long has EUC for its TDI’s importation, which according to security experts, constitute a serious national security breach. According to Ye Shuijin, president, China Chamber of Commerce in Nigeria, the quantum of investment in the Nigerian economy by Chinese companies has hit $20 billion. This humongous figure oozes out of 160 Chinese firms operating in the country which also employed over 200,000 Nigerians.

Most counterfeited goods across the world

Middle East,” he was quoted to have said. The company, whose product was recently endorsed by the Nigeria Association of Orthopaedic Manual Therapists (NAOMT), is known for quality products and standards. The endorsement according to the National President of the association, Onigbinde Ayodele, comes on the back of consistency in quality delivery and innovative mattress production, which have characterised the brand’s market path in Nigeria. Counterfeiting and crime Buying counterfeit products this Christmas could fund a slew of criminal activities. According to KPMG, a professional service company and one of the Big Four auditors, 39 cases involving more than £116 million worth of counterfeit goods have been prosecuted in Britain over the past two years. The company has warned United Kingdom consumers to be watchful of counterfeits during the Christmas period as buying them could result in them funding organised criminals in human trafficking, drug smuggling, or even terrorism In February, the Importers Association of Nigeria (IMAN) Special Task Force on Illegal Importation, (South West Zone) sealed five Chinese warehouses over trade infractions. The group also disclosed that a total of ten containers of 6 by 20ft and 4 by 40ft with various infractions ranging from concealments, smuggled goods were intercepted from various parts of Lagos State.

Prosper Okolo, chief operating officer (COO) of IMAN Special Taskforce, said some of the affected warehouses were found to have contravened import laws and duty underpayment. Okolo noted that some of the warehouses visited by the team involved in the illicit trade are owned by foreigners, mostly Chinese, adding that five suspects have been arrested in the last two months. He also enumerated some of the companies allegedly involved in some of the counterfeiting activities. “Between January and February, the Taskforce also received credible intelligence of some warehouses involved in production and importations of fake and sub-standard products without approval from the Standards Organisation of Nigeria (SON) and National Agency for Food, Drugs Administration and Control (NAFDAC) regulations,” Okolo said. McKinsey, a global consulting firm, said out of the 930 Chinese companies operating in Nigeria, only 317 are documented by the Chinese Ministry of Commerce. For instance, the company, Zhe Long Investment Limited, owned by two Chinese Wang Fuzeng and Chen Yuping, has as its main objective “to carry on business as manufacturer, buyers, sellers, traders, importers, exporters and merchant exporters”. But import and shipping documentations published by a Nigerian newspaper allege that Zhe has been falsely declaring a chemical known as Polyol as Polyacetals. Polyols are a group of low-digestible carbohydrates derived from the hydrogenation of their sugar

or syrup Polyols react with isocyanates to make polyurethanes, which find use in making mattresses, foam insulation for refrigerators and freezers, home and automotive seats, elastomeric shoe soles, fibers (such as Spandex), and adhesives. On the other hand, polyacetal is an engineering thermoplastic used in precision parts requiring high stiffness, low friction, and excellent dimensional stability. It is among plastic materials, with the most crystalline structure Similar to the above, the company is also accused of declaring a chemical called TDI as Toluene. Global pricing of Toluene is US$6,000 as against TDI’s US$2,300. The consequence of this false declaration, according to experts, is duty under-payment and the consequent defrauding of the government of necessary duty and value added tax (VAT) on these transactions. Aside the loss of revenue accruing to the government, there is major security implication for the false declaration of TDI. Apart from a chemical used in the production of polyurethanes, primarily for flexible foam applications including furniture, bedding and carpet underlay, as well as packaging applications, TDI is also used in the manufacture of coatings, sealants, adhesives and elastomers. But due to TDI’s potential explosive properties, the material is a controlled substance that requires an End User Certificate, EUC issued by the office of the National Security Adviser, NSA for its importation to Nigeria. The national daily newspaper,

The way out Although there is no specific legal framework for enforcing measures against counterfeiting that covers every economic sector in the country, there are several Acts and regulations that address the issue directly. Nigeria, unfortunately but not surprisingly, is indicated as one of the countries in jeopardy, since its market has become a huge target for second generation goods, with a major focus on pharmaceutical drugs. Nigeria has no specific anticounterfeiting law – at least, not a broad one that covers all types of goods and all species of anticounterfeiting. Hence, the fight against counterfeits involves the creative application of the various laws that affect rights holders in one way or another. Brand protection is important to ensure the legitimate brands that sell their products. But now counterfeiters are becoming increasingly innovative with their techniques and skills. Marketing experts also advise companies to liaise with local agents and involve local police and authorities where counterfeits are produced overseas. They are also to educate their consumers and prospective consumers on the risks posed to them by threats, and see if you can join forces with like-minded companies to share data and even the costs of enforcement action. Buying the right gift is always tricky but, perhaps worse than forgetting to buy a present, would be getting something which wasn’t as it first appeared. So how can we avoid being fooled, and make sure counterfeit goods don’t appear under our Christmas tree? Olumide Jenyo, a brand and marketing analyst in Lagos, concluded last week that since the various reports about counterfeiting and Chinese malfeasance have not received the required dose of attention from the concerned authorities, the best gift for the yuletide is for buyers and shoppers to check out what they buy.

Thursday 12 December 2019

BUSINESS DAY

news Buhari’s proposed $22.72bn loan in line... Continued from page 1

external debt and is one of the measures that is being implemented to moderate the level of debt service,” the DMO said in a press release. Domestic debt costs Nigeria as high as 16 percent to service annually. Last year the government paid N1.8 trillion to service its local debt compared to $1.47bn or around half a trillion naira for external debts. According to the debt office, the objective to restructure Nigeria’s debt mix has seen a declining share of domestic debt in the total public debt from over 83 percent in December 2015 to about 68 percent in June 2019. DMO wants domestic debt to be 60 percent of its total borrowings. The $22.72bn loan Buhari seeks lawmakers’ approval for would be sourced from multilateral and bilateral lenders like the World Bank, Africa Development Bank, China Exim Bank, among others. The loans are concessional, semi-concessional, and long-tenored which would be used for financing infrastructure and other developmental social projects, the government said. BusinessDay reported the loan is the final tranche of a $29bn infrastructure plan first tabled by Buhari in 2016, and would cost Nigeria over half a billion dollars annually to service for an average of 21 years. The DMO said Nigeria has a low debt to GDP ratio which is below the maximum 25 percent limit, by the Fiscal Responsibility Act. Debt to GDP by end of June 2019 stood at 18.99 percent down from 19.09 percent at the start of the year, which means Nigeria’s ratio is relatively low compared to countries like United States, China and Canada, the debt office said. It, however, admitted that Nigeria’s debt service to revenue ratio has been higher

than desirable due to low revenue to the government and providing strong justification for the government’s push for more oil and non-oil revenue. Lately, the government has taken steps to increase its revenue through a new Finance Bill and Strategic Revenue Growth Initiative that will increase its intake from VAT, among other things, and has also amended the PSC Act (Deep Offshore and Inland Basin Production Sharing) to increase its income. Nigeria’s debt service to revenue last year was at 51 percent, 6 percent points lower than in 2017 owing to the increase in the debt stock and relatively high domestic interest rates, DMO said. It also said Buhari should not be blamed for the public debt stock, at N25.7trn as at the last count in June, because the debt stock is a cumulative figure of borrowings by successive governments over many years. BusinessDay reported Monday that the country’s debt stock has almost tripled in the last four years with little to be shown for the borrowings, which has caused many concerns over the move to add $22.7bn to the stock. Bababtude Fashola, minister for works, however, said the country cannot ignore the concerns and demand for the provision of life-sustaining infrastructure would have a positive multiplier effect on the economy. Asides infrastructure, other loans such as those for the educational sector will contribute to the development of Nigeria’s human capital, while loans for agriculture will be used to diversify the economy. There will also be funding for Development Finance Institutions to enhance access to finance for micro, small and medium scale enterprises, DMO said.

Reps move to end monthly loss of N600bn... Continued from page 2

Gas Workers (NUPENG), Depots Association of Petroleum Products Marketers of Nigeria (DAPPMAN), Major Oil Marketers Association of Nigerian (MOMAN) and Association of Maritime Truck Owners (AMATO). The Ambode-led administration had brought in Planet Project Limited, a construction firm which also handled key infrastructural projects in the state, to begin work at the site. According to the government at that time, the proposed park would take about 2,800 trucks and petroleum tankers. But the project was abandoned as Planet Project subsequently mobilised its personnel and equipment out of the site.

The contractor had told BusinessDay that they had to leave site because of the political uncertainty that surrounded the Ambode administration’s last months in office as no official contract agreement was signed between it and the state government to guarantee payment amid the unstable political atmosphere in the state prior to the 2019 general elections. Apapa and its environs have remained a sad narrative in terms of gridlock and traffic management, as efforts by both federal and the state authorities have led to nothing cheery. The roads and bridges have remained blocked year after year, forcing businesses to close shop and residents moving out to “saner” areas of the state. www.businessday.ng

L-R: Simi Nwogugu, executive director, Junior Achievement Nigeria (JAN); TC Achievers team; Enoch Vanderpuye, country team lead, marketing & corporate communications, FBNBank Ghana, subsidiary of FirstBank; TC Achievers team and staff of JAN sponsored by FirstBank to represent Nigeria at the African Company of the Year (ACOY) competition held in Ghana.

How Lagos’ revenue goes into private... Continued from page 1

LCDA are paid into a private account of Omozejele. After a series of complaints about Omozejele and her high-handed taskforce team which collects payments without issuing receipts, this BusinessDay reporter went undercover as a business owner at one of the streets at Ajao Estate in Isolo LCDA to verify the claims. I visited Omozejele’s office and told her I was constructing a signpost. We both agreed that it was a 3 square-foot signpost and she asked that I pay N14,784 for that, including N6,000 for registration and N7,392 (50 percent of the original rate) for advertising. The total amount I would pay, from her calculations, was N28,176. But she promised to ‘prorate’ the payment and asked me to pay N15,000 for the whole of 2020. In a recorded phone call, she reduced the amount to N13,000 and read out her account number to me. I paid the agreed amount on December 10 and demanded a receipt in a text message the following day. “Don’t worry it does not matter am the only one in charge of Ajao but if you still want it you can come around,” she replied in an unedited text message. Entrepreneurs at Isolo LCDA told me that there is no specific amount for both shop permit and LASAA rates – it all depends on who you know and agreement you reach with them. A young lady whose shop was locked paid N9,000, but she was issued with a receipt for N4,500 after demanding it for two months. If you think that Isolo is the only culprit, you are mistaken. Government officials, especially those working for local governments, are always quick to present their account numbers once

businesses are ready to pay certain government fees, levies or taxes. At Mushin LCDA, I met a man, Aliu Olaoye, who claims to work as a member of the taskforce. I told him I had a shop at Isolo Road and he asked me to pay a parking permit of N30,000 and shop fee of N5,500 into his Polaris Bank account. In a recorded telephone call, he promised to pay N20,000 to Mushin Local Government, while he and ‘the leader’ would pocket N5,000 each. “Oga, this is Mushin. As you know me, nobody will touch you except the person wants to die,” he told me. I finally paid N5,000 into his account, assuring to pay the rest later. He called many times to find out the location of the shop, but I assured him he would learn the location soon. The phenomenon is not limited to the two local governments. At Alimosho LCDA, I asked two young men the way to the revenue office and they claimed they were in charge of it. One of them gave me his account number to pay in shop permit of N3,500 for 2019, despite that it is less than three weeks to the end of the year. BusinessDay’s three weeks of intensive investigation on taxes across Lagos

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show that a lot of government revenue may be going into private pockets. In Ikeja Local Government Council, traders without standard shops at Ogunbiyi Community Development Authority pay as much as N1,800 every day. The money is collected by three sets of touts who do not issue receipts or tickets for the payments. Some of them claim to be ‘land owners’ while others pretend to be working for the local government. “Some of us have decided to stay outside of that place. Yet we pay N25,000 every year to the area boys,” a trader, who preferred anonymity because of her safety, told me. In Oshodi Local Government, more businesses are outside the shops than inside. This is tied to the cost of shops in the area. A shop costs N1.2 million to N1.8 million annually, and small businesses are often asked to pay between two and five years. As many cannot afford it, they choose to stay in make-shift shops and in open areas. Yet, these micro businesses pay between N500 and N1,050 every day. None of these payments is receipted. Business owners told this reporter that they pay N500 to N1,000 to Kick Against Indiscipline (KAI) officials who mostly harass them from time to time. “The best way to plug the revenue leakages is through technology,” Emeka Amadi, group head of tax at United Bank of Africa, said.

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Lagos State government is struggling to cope with population explosion as infrastructure deteriorates. Critical infrastructure such as light rail is lacking in the state as the government struggles with cash to ease movement. But the money to rehabilitate and build infrastructure appears not to be suffering leakages. “The state should designate accounts for payments of all levies and taxes, and start a campaign to educate people on why they must pay into official accounts,” Amadi said. “There must be a mechanism for punishing people who extort money from businesses after they pay their taxes,” he said. Muda Yusuf, directorgeneral, Lagos Chamber of Commerce and Industry, said most of the inaccuracies are found in local governments than the state government. “We need to put technology in place,” he said. “Urge people to pay into the bank and monitor the process.” Ike Ibeabuchi, managing director of MD Services Limited, a servicing and manufacturing outfit, said public offices should not be used to compensate individuals after elections. “People who pay these fees into private accounts should know they are taking a risk. So they should also be bold enough to report any official who wants public funds paid into their private accounts,” he suggested.

Thursday 12 December 2019

BUSINESS DAY

news

Challenges hindering our core mandate - NDIC boss Felix Omohomhion, Abuja

anaging director/ CEO, Nigeria Deposit Insurance Corporation (NDIC), Umaru Ibrahim, said on Wednesday in Abuja, that the inability of the corporation to fully discharge its core mandate had been as a result of various challenges. Ibrahim spoke at the sensitisation seminar for Justices of the Court of Appeal, Abuja, on the theme: ‘The Role of Deposit Insurance in Promoting Financial System Stability.’ Ibrahim, represented by Aghatise Erediauwa, executive director, operations, said the corporation since inception had been confronted with challenges that include the misconception of its mandate and basic principles of Deposit Insurance System among Nigerians. He noted, “Phenomenon had been responsible for challenges such as, unclaimed deposits following bank closure, judgments being obtained against the corporation for liabilities of closed banks as well as attachment of corporation’s assets and garnishee of its corporate accounts in bid to enforce judgments obtained against closed banks, among others unpleasant experiences.” He asserted that the sensitisation exercise in collaboration with the Court of Appeal was tilted towards remedying the situation, adding, “The corporation considers this collabo-

ration a valuable investment in development of Nigeria’s financial system. “Consequently, in course of deliberations at the seminar, some of the challenges associated with Deposit Insurance Law and Practice in Nigeria will be highlighted and we shall be looking forward to drawing as much as we can from your rich knowledge and experience.” He observed that legal issues involving deposit insurance system were very critical to the achievement of the corporation’s statutory mandate of deposit guarantee, supervision and distress resolution. He said further that for the seven years the sensitisation had run, it had been worthwhile and “its positive outcomes are obvious.” He said the relationship between the corporation and the judiciary is predicated on the desire to ensure continuous enlightenment on the Justices’ knowledge on Deposit Insurance System and law. President of the Court of Appeal, Justice Zainab Bulkachuwa, in her opening address, said deposit insurance scheme was critical component of the financial safety net arrangement, which main objective is to protect depositors. She said the scheme would ultimately ensure confidence in the banking system, promote financial stability and economic growth, and urged judges to discharge the task placed on them, saying the judiciary was a major stakeholder in the scheme.

Declare state of emergency on unemployment now, Senate tells Buhari Solomon Ayado, Abuja

isturbed by the escalating rate of unemployment in Nigeria, the Senate on Wednesday said the time was ripe for President Muhammadu Buhari to urgently declare a state of emergency to end the challenge of joblessness faced by Nigerian graduates. Although this is certainly not the first time the Senate would be urging Buhari to end unemployment, but unfortunately, it is obvious that the Federal Government lacks the commitment to truthfully address the unemployment rate. The Senate noted that the high-level of criminality and rural-urban migration in the country were majorly caused by

unemployment. Specifically, it blamed the federal, state and local governments for not doing enough to provide adequate jobs to the teeming unemployed persons. Also, it noted that critical sectors such as agriculture, tourism andvocationaleducation,among others, that if at all were made viable should have created abundant jobs, were not revitalised. The motion on the escalation of unemployment rate was moved by Ike Ekweremadu. Senators during plenary took turns to make contributions on the matter. They blatantly said government was ineptitude and that it lacked the political will to tackle the employment challenges. According to Ekweremadu, any nation with such worrying

number of unemployed, but employable youth population, is only sitting on a keg of gunpowder. “Perturbed that the most pressing demand on the hand of every legislator and public officer is the rising number of Curriculum Vitae and application for employments from constituents and Nigerians. “Convinced that a situation where every graduate has to queue up for job only in government offices is an indication of the breakdown of private sector, which is the major driver of world economies. “Worried that these energies and potential talents that are lying idle and wasting away are usually misdirected toward many unprofitable and harmful ventures and lifestyles.

“Further Worried that the most active percentage of the nation’s population is forcefully caged by unemployment from participating in the economic development of fatherland and from contributing toward the Gross Domestic Product (GDP). “Aware that high level of crimes in any society are most times related to high rate of unemployment,” Ekweremadu said. For Smart Adeyemi (Kogi West), the unemployment level in the country cannot be eradicated till government, especially states, initiate and set up functional small-scale industries. To achieve this, Adeyemi urged banks and other relevant institutions to grant loan facilities to unemployed persons so as to make them self-reliant.

Vivien Shobo retires as Agusto & Co. CEO BUNMI BAILEY

gusto & Co., Nigeria’s foremost credit rating agency, has announced the retirement of Vivien Shobo as chief executive officer effective December 31, 2019. Shobo has spent over two decades in the company during which she recorded stellar achievements, including fortifying the company’s formidable market position and leading African expansion initiatives by obtaining credit rating agency licences from the Capital Market Authorities of Kenya and Rwanda. Under her leadership, Agusto & Co has rated most of Nigeria’s major banks and pioneered domestic credit ratings of notable large corporates, such as Dangote Cement plc, MTN Nigeria Communications plc, Lafarge Africa plc, Nigerian Breweries plc, Guinness Nigeria plc, Julius Berger, among others. Yinka Adelekan, executive director, has been appointed chief executive officer designate. Adelekan is an astute finance executive with over 20 years’ experience in the financial services industry, and her expertise spans credit ratings, corporate banking, risk management, product development, financial analysis, and information management. Agusto & Co has played leading roles in landmark multibillion transactions including

the largest Municipal Bond programme and single largest tranche issuance - Lagos State Government’s N500 billion Bond programme and N87.5 billion Bond issuance; first bond issued by a deposit money bank in Nigeria in 2006 “the Access Bank N13.5 billion-naira redeemable bond”, and first bond issued by an insurance company in 2008 “Crusader Nigeria Plc N4 billion Unsecured Convertible Debenture, the company said in a statement. Agusto & Co’s landmark transactions include the first 15-year corporate green bond fully guaranteed by Infrastructure Credit Guarantee Company Limited (Infracredit) NSP-SPV PowerCorp Plc’s N8.5 Billion 15-year 15.60 percent Series 1 Guaranteed Fixed Rate Senior Green Infrastructure Bond Due 2034, and the first commercial paper issuance under the new guidelines of FMDQ – UPDC’s N24 billion commercial paper programme, the company further said.

L-R: Tokunbo Awolowo-Dosunmu, publisher, Nigerian Tribune, presenting the Platinum Award as Nigeria’s Outstanding and Most Innovative Entrepreneur conferred on Mike Adenuga, Jr., Globacom chairman, to Yomi Ogunbamowo, Glo’s national commercial coordinator, at the 70th award ceremony in Lagos.

IFC berates Nigeria on access to credit Economy, nation building in focus as IFMA ... warns 120m may be poor by 2030 Iheanyi Nwachukwu

nternational Finance Corporation (IFC) on Wednesday came hard on Africa’s largest economy, saying that it is still behind all of its peers using all indices to analyse access to credit. IFC, through its country manager, Eme Essien Lore, acknowledged that though a lot has been done in making credit available to businesses, “a lot needs to be done”. Lore spoke at the 10th anniversary celebration of CRC Credit Bureau Limited. The event was not to celebrate CRC but to stimulate discussion in the important area of its focus which is access to credit. In her anniversary lecture titled “Evolving a new lending model for the economic development of Nigeria”, Lore warned that GDP average growth rate of 2 percent per annum will not be enough to take many Nigerians out of poverty line. She warned that Nigeria would have 120 million poor people by 2030 if the current

Shobo www.businessday.ng

trend is not checked. “Access to credit/finance is a key constraint to private sector growth in Nigeria. We have seen much progress in the past 10 years. A lot has been done and a lot still needs to be done,” she stated. She is optimistic that CRC Credit Bureau would continue to confront the challenges around access to credit. “Nigeria plays important role in Africa and the country is critical in the growth of the continent. There is urgent need to ramp up activities that will help MSMES grow and create jobs for the citizens,” Lore said. IFC wants Nigeria to build confidence in the whole credit ecosystem. “Confidence is not something one can buy or sell. There has to be confidence on the side of both the lenders and borrowers. Credit reporting is critical part of the solutions and part of the foundation for building the required confidence in the whole ecosystem,” Lore said.

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Nigeria gathers stakeholders

CHUKA UROKO

hen facilities management stakeholders gather tomorrow for the International Facilities ManagementAssociation’s(IFMA)Nigeria roundtabletaggedAdvocacyDay, theconversationwillcentreonthe economy and sustainable nation building. The Round Table which is just in its maiden edition has as theme ‘Facility Management: A Panacea for a Sustainable Nation Building’ and will be holding in Victoria Island, Lagos. The association in a statement obtained by BusinessDay on Wednesday, says the purpose of the gathering is to achieve a quality and impactful conversation that will influence the economy positively. Expected at the one day event are Babatunde Fashola, Minister ofWorks&Housing, astheSpecial Guest of Honour; Benedict Alabi, deputy governor, State of Osun as Guest of Honour and Simbi Wabote, the Executive Secretary of Nigeria Content Development @Businessdayng

and Monitoring Board, as the keynote speaker. The statement explains that the round table is aimed to further strengthen and advance the knowledge and appreciation of facility management and will be hosting economic leaders and influencers. IFMA Nigeria is a not-forprofit association incorporated in 1997 and is an affiliate of IFMA worldwide with headquarters in Houston USA. The association is dedicated to promoting excellence in the management of the work environment. With a vision to universally represent facility management as a profession, IFMA’s mission is to lead and sustain progress of the FM profession that encompasses multiple disciplines to ensure functionality of the built environmentbyintegratingpeople,place, process and technology. IFMA Nigeria offers the opportunity to develop contacts and exchange information with otherfacilitymanagementprofessionals locally and internationally through conferences, seminars, chapter and council programs.

Thursday 12 December 2019

BUSINESS DAY

POLITICS & POLICY

I am not a turncoat, but a realistic, flexible activist – Agbakoba …Says, ‘I have not dropped my crusade against restructuring’ Zebulon Agomuo

lisa Agbakoba, a former president of the Nigerian Bar Association (NBA), has dismissed the “turncoat” appellation affixed to him by some critics over his call for pursuit of cooperative federalism for the good of the masses as against the endless wait for restructuring. Recall that Agbakoba had recently canvassed for cooperative federalism to address urgent needs of the country, while waiting for the eventual political and economic restructuring of the country. His stand attracted a barrage of criticism and he was accused of chickening out from the struggle. But speaking with BusinessDay yesterday to set the record straight, Agbakoba said: “Most of the sub-na-

tionalities kicked against it and called me a turncoat, but I am saying that I am not; I am a realistic, flexible activist.” “I have made a choice based on a lot of factors. The most important factor is the decline I have seen in the standard of living in Nigeria, it is going down. I have made a choice because I have seen government response, extremely poor; and I have made a choice that in as much as I believe in the ultimate goal of restructuring, there are other steps that can lead to it. I have made a choice going back to Thabo Mbeki’s advice to me in Lagos in 1989. I have made a choice because the demand placed on the Federal Government by civil society is completely a dysfunction of state governments and it is not understandable. I made a choice because the state governors are not as helpless as we

Agbakoba

think,” he said. He explained that if state governors should embrace

Makinde signs anti-corruption bill into law …‘I will wave my immunity as governor if found guilty’ REMI FEYISIPO, Ibadan

o curb all forms of corruption and corrupt practices in both public and private sectors, Governor Seyi Makinde has domesticated the long awaited anti corruption bill into law in Oyo State. Signing the bill into law amidst the state executive council as well as the speaker, Oyo State House of assembly who was represented by the majority leader of the House, Sanjo Ogundoyin, stated that the law is not in place to witch hunt anyone but aimed at protecting the state resources from those who see positions of power both in public and private sectors as opportunity to steal public funds for personal aggrandisement. The governor noted that there was nothing to be afraid of as far as the law is concerned, and that the state government is committed to guarding the scarce resources of the state

up to the local government level just as it is committed to bringing good governance closer to the people at the grassroots. According to Makinde, corruption, if not checked could kill the development and progress of any society, the anti-corruption law is neither to witch-hunt APC nor PDP members as it is a law meant to protect Oyo state. Reaffirming that he has not reneged on his earlier declaration to wave his immunity as the executive governor to face any charge that may be pressed against him if found culpable in any corrupt practice said: “If am, as the governor is not above the law then no member of the state cabinet is above the law”. He cautioned members of his executives to avoid the temptation that may come as a result of the offices they occupy noting that temptation will always come but they must always ensure to live above board in order to www.businessday.ng

maintain the integrity of the present administration. “There is nothing to be afraid of really. Why we have domesticated the anti-corruption law, just as we want governance to get closer to the grassroots, the same way we have to guard the resources of the state and local government up to grassroots level because corruption kills the society. When money meant projects, money meant for salaries, money meant for certain developmental initiatives are diverted then, we miss the opportunity. “So, we believe that we have to tackle corruption, and I said it during my inaugural address as the executive governor of Oyo State that I will be ready to wave my immunity to face any corruption charges against my person and I still maintain that position. “This is not a law to witch hunt anyone, it is not about politics or political interest, it is not about APC or PDP, it is about our state, Oyo State.”

the cooperative federalism being suggested and also exercise their powers as

contained in the constitution, Nigeria would be the better for it. According to him, “Governors can build roads, hospitals, power stations, virtually everything. There are things, of course, that governors cannot do like federal roads, solid minerals and this is where the principle of cooperative federalism comes in. If there is this East-West road that covers three or four states, why can’t the Federal Government in cooperation with those states get the programme done? Because if the idea of cooperative federalism or restructuring is about people, I don’t see any reason anyone should say it is either this or nothing, which is what the argument sounds like; which I don’t accept at all. It cannot be either restructuring or nothing. “So, my short clarification is this, I hope that

the time will come when we will reach to the stage of political and economic restructuring. But to the extent that we don’t have it, the limited space that, for instance, Governor Rotimi Akeredolu has to have cooperative federalism with the Federal Government to explore his bitumen is there, but his people are not making demands. Ondo is a poor state, but they have one of the world’s richest bitumen. Enugu is a poor state, but they have one of the world’s reserves for coal. Ebonyi is a poor state but has one of the world’s salt mines valued at N14billion. So, is it not possible that we, the people should also make demands, not only on the Federal Government, but on the states? So, what stops these states from cooperating with the Federal Government to harness these natural endowments?”

Labour Party lambasts NASS over hate speech bill Iniobong Iwok

he Labour Party (LP) has kicked against the hate speech and social media bills, saying that the bills were ridiculous and a setback on the nation’s democracy if passed into law. Recall that the controversial bill for the establishment of Hate Speech Commission Bill was read the first time at plenary in Senate, November 12. Sponsored by the Deputy Chief Whip of the Senate, Senator Sabi Abdullahi, APC, Niger North, while that the Bill for an Act to Make Provisions for the Protection from Internet Falsehood and Manipulation had passed second reading in the Senate sponsored by Senator Sani Musa, APC-Niger East. However, speaking in an interview with BusinessDay, Wednesday, Mike Omotosho, national chairman of the Labour Party, advised the Muhammadu Buhari administration to rather concentrate its effort on fulfilling its campaign promises to Nigerians

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and alleviate the excruciating poverty level in the country. “I think it is a little laughable. Even though hate speech is abominable, having a death sentence for it is equally laughable. “To me, what is important now is for the government to strive and fulfil its campaign promises to Nigerians and eliminate hunger and poverty to the barest minimum in the country,” Omotosho said. Omotosho charged the National Assembly to focus on making laws that impact on the lives of Nigerians, stressing that such bill was not in the interest of the country at this point. The national chairman further urged the current administration to rather concentrate effort on re-orientating Nigerians on the dangers of hate speech rather than promulgating such laws. “But I canvases for a reorientation as a nation, discipline as an individual. We should respect each other’s religion and dignity. The National Assembly members need to refocus their attention on making laws that @Businessdayng

would impact on Nigerians. “We would appreciate why we are together as country. Imagine your family member involved in hate speech, would you suggest that they should be beheaded? Rather, you would look for ways in which everyone would leave in harmony in the country,” he said. When asked on the zoning of the 2023 presidency to the Southwest, Omotosho said zoning was not constitutional, but urged Nigerians not to be bothered about insinuations about 2023 presidency because it was still early. “That is just beer parlour talk, I am not bothered by zoning; it is not written in the constitution that there must be rotational presidency in the country. But at the same time there is rule of law must prevail. “People understand what needs to be done automatically. So, I don’t think those are issues we should bother ourselves with, because they are just rumour because at the right time things would unfold and we would know where,” he added.

Thursday 12 December 2019

BUSINESS DAY

news

Kuda sets precedent in banking transfers NCAT still awaits approval for adoption of SEGUN ADAMS

uda, a digital-only bank licensed by the Central Bank of Nigeria, has kickstarted a revolution in Nigeria’s banking sector. Only three months old, Kuda already provides full banking services through its apps for android phones and iPhones, allowing everyday Nigerians with internet access to run a current account, save money automatically and earn up to 15 percent annual interest without the burden of bank charges. By running a business model that excludes card maintenance fees, account maintenance fees and excessive transfer fees, Kuda hassetaprecedentthatsetsitapart from other banks. The bank also provides its customers free debit cards that are delivered at no cost nationwide, differentiating it from digital wallets. Speaking at the bank’s first town hall meeting - a gathering of finance experts, investors and Kuda customers at Radisson Blu Hotel, Ikeja, Lagos, Kuda CEO Babs Ogundeyi, emphasises that being exclusively digital saves the bank the heavy cost of running a network of branches, savings that are then transferred to customers in the form of free banking services. Ogundeyiusestheoccasionto announce Kuda’s lifetime offer of 25 free interbank transfers every monthforallitsexistingcustomers

and everyone that opens a Kuda account before January 1, 2020. “We discovered that most peoplemakelessthan20transfers every month for personal use, so we decided to give everyone who opens a Kuda account this year25freetransferseverymonth forever,” he says. At the same event, Kuda’s efforts to make banking affordable for Nigerians were praised by several stakeholders in the finance and tech sector including Samuel Goriola Oluyemi, the Head of Emerging Markets/ IFR/Agency Management at the Nigeria Inter-Bank Settlement Scheme (NIBSS). “Kuda has revolutionised banking in Nigeria. Things we never thought could be done are things you’re doing,” he states. Earlier this year, Kuda announced a pre-seed funding of $1.6 million. The bank has since processedoverN6.5billionworth of transactions and saved its customers tens of millions in fees. Alsoinattendanceatthetown hall meeting were the deputy managing director of eTranzact, HakeemAdenijiAdele;Chidinma Iwueke,apartneratNigerianventure capital firm Microtraction, and Wale Olokodana, business group director, Cloud & Enterprise at Microsoft Nigeria. The town hall meeting was supported by Microsoft Nigeria through the 4Afrika Initiative, an important partner in the bank’s mission to democratise financial services for Africans through digital technology.

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template on drone training – Rector IFEOMA OKEKE

ector, Nigerian College of Aviation Technology (NCAT), Abdulsalami Mohammed, says NCAT, the foremost aviation training institution in Nigeria, would have since commenced training for operators of drones, but it was awaiting approval from the Nigerian Civil Aviation Authority (NCAA), after clearance from the office of the NSA, on the template to be adopted for the training. According to Mohammed, the Federal Government is monitoring the importation remotely piloted aircraft, otherwise known as drones, because they pose security threats when operated unregulated in the Nigerian airspace. Speaking in an interview in Lagos on Wednesday, Mohammed said there was need for operators of drones to understand the limitations of the equipment before NCAT would design a template for training that fell within such envelope. He said, “The College would have started training for operators of drones, but have to subject the programme to on - going investigations by office of the National Security Adviser, which based on security considerations, is monitoring the importation

of drones into Nigeria. “There is need for operators of drones to know the limitations of their operations .This will ensure they fit within such envelope .These are the areas the proposed training will focus on to enable them carry out such operations safely and securely. But, we await Nigerian Civil Aviation Authority’s approval to advance it to the next level.” He said the college had begun training for Aviation Security personnel/ Aerodrome Fire Fighting and safety as well as Search and Rescue personnel, the first of its kind in Africa. Such training programmes, the rector, said will benefit workers of Federal Airports Authority of Nigeria (FAAN) and other aeronautical and emergency management agencies. He said the college due to budgetary constraints had to put on hold its order for 20 Diamond trainer aircraft, saying the aircraft order had been broken into batches as funds were made available for the college. Currently, he said 10 trainer aircraft were serviceable in the college’s fleet to enable it actualise its mandate as an International Civil Aviation Organisation (ICAO ) regional training centre of excellence.

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FEC approves tax waivers automation platform to cut revenue loss ...okays N40.4bn for roads, N307m for 15 vehicles TONY Ailemhen, Abuja

ederal Executive Council (FEC) presided over by Vice President Yemi Osinbajo, on Wednesday, approved the automated platform for the issuance of Import Duty Exemption Certificate (IDEC) as well as vehicle identification and registration number. The platform is for government to effectively track and manage all revenue accruable from import duties and other charges. Speaking with State House correspondents after the cabinet meeting, the minister of finance, budget and national planning, Zainab Ahmed, said the automated process would enhance efficiency, block leakage and reduce the amount of time it took to review exemption request and provide the necessary approvals. The Federal Government had announced early in the year that it lost N4.6 trillion from waivers granted to importers in 2017 and 2018. The loss came as a result of the ministry not implementing the IDEC project. It had said it hoped to cut the huge revenue losses to the tune of over N2 trillion due to manual processes. She said: “Today, the min-

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istry of finance sort the approval on a project which is designed to manage an automated gate way platform for the issuance of import duty exemption certificates as well as vehicle identification and registration number. The Federal Ministry of Finance, Budget and National planning is responsible for the ministry and the country’s national finance and one of our responsibilities is implementing fiscal incentives that are used to attract investors to promote non-oil exports as well encourage industrialisation programme and stimulate growth in the economy. “So, what we do is to handle applications for exemptions that come to the ministry. Various categories of import duty payments and other tax incentives and some of these exemptions cover a number of sectors including the downstream gas utilisation projects, the Agro Allied processing projects, Aviationcommercial aircraft engines and spare parts, automobile assembly, iron and steel production, power including thermal hydro, solar and wind, textiles- plants, machinery and equipment that are imported for use for mining operations.

Thursday 12 December 2019

BUSINESS DAY

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Thursday 12 December 2019

BUSINESS DAY

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Thursday 12 December 2019

BUSINESS DAY

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Thursday 12 December 2019

BUSINESS DAY

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Thursday 12 December 2019

BUSINESS DAY

Garden City Business Digest Report identifies threats to Ogoni clean up •Communiqué says absence of compensation may provoke seething anger Ignatius Chukwu

report compiled after one week of brainstorming has found that absence of compensation to address environmental injustice in Ogoni land may pose a big threat to the $1Bn clean up ordered by the United Nations through its agency on environment called the UNEP. The report compiled by the Correspondents’ Chapel of the Nigeria Union of Journalists (NUJ) in Rivers State after the 2019 Press Week with a special day dedicated to evaluating compliance of the UNEP Report of 2011 stated in the communiqué that the Ogoni people danced when the UNEP released its report in 2011 thinking that compensation was captured. Witnesses who spoke during the symposium during the Correspondents Week said whereas the harm to the soil was handled by the $1Bn clean up exercise, but the human and material loss was not mentioned in the UN verdict. They said this caused dampening of spirits in the land. Reflecting the comments of the witnesses, the communiqué signed by the officials of the Chapel led by Ernest Chinwo, the communiqué urged the federal government to heal the wounds by floating a compensation fund while Shell continues to bear the $1Bn clean up burden. “The discussants also held that since the underpinnings of Ogoni struggle have been environmental injustice, remediation without compensation still harbours injustice; and this seems to make the scheme a hard sale to the Ogoni community. “There was therefore a demand for the Federal Government to address the under-

pinning desire for compensation because cleaning brings environmental remediation but does not address the aspect of human loss over the years.” The communiqué also condemned massive re-pollution going on in Ogoni, fearing that this would make nonsense of the efforts and funds pumped into the clean up scheme. This is as the report noted the submission of key participants that funds are no more the constraint of the scheme but excessive bureaucratic bottlenecks that have stifled the procurement process. The communiqué called for waivers to allow the impact of the clean up be felt. It pointed out that; “Despite the hype by government and stakeholders, the issue of Ogoni Clean-Up seems to drag so slowly that it has created the perception of motion without movement. The participants averred that it is difficult for journalists to go into Ogoniland to do independent and investigative reports due to grave security situation in the enclave. On repollution, witnesses insisted that the FG must act and leave protection of oil assets to unarmed communities. On the general condition of Rivers State and the Niger Delta, the communiqué emphasized the need for Nigerians and their government to take the issues of environment seriously if we must ensure national security; including security of lives and property and food security. The participants had commended the Correspondents’ Chapel of the NUJ for such a successful symposium and urged them to sustain the watch on the environment and the Ogoni Clean Up. The one week attention to the environment may result on a media action on the environment and an ‘observatory’ on Ogoni clean up.

Colloquium marks National Accounting Association AGM in Rivers Kelechi Esogwa, Port Harcourt

colloquium marked the holding of the annual general meeting and conference of the National Accounting Association (NAA), the body of lecturers in accounting, in Rivers State for the year 2019. The 2-day programme was held at the conference hall of the post-graduate school/centre of excellence, Ignatius Ajuru University of Education, Rumuolumeni, recently. The theme of this year’s conference was ‘Harmonising Accounting Education, Research and Practice for Sustainable Development in Nigeria’. In his address, president of the association, the professor of accounting, Clifford Obiyo Ofurum, said the gathering signaled the importance they attached to the unifying body of Accounting teachers in Universities, Polytechnics and Colleges of Education in Nigeria. He said the 2019 annual general meeting/ conference is unique in the sense that it was the first time a colloquium would be added to the programme and also the first time a single university would host two different conferences of the association back to back. Extolling the theme of the AGM/Conference, Ofurum said it came at a time the federal government of Nigeria is waging a war against corruption. “The question is: to what extent has the accounting profession aided the current administration’s effort to curb corruption? Sadly, one school of thought has it that most financial

crimes were aided and abetted by professional accountants. There is need for us to go back to the basics; stewardship and transparency are the hallmarks of our profession.” In his keynote address, Akpan Ben Ekwere said the theme of the conference was in consonance with global and national discussions in the accounting profession. Ekwere, who is the chairman, management board, Dorben Polytechnic, Bwari, Abuja, argued that the importance of research in national development and globalization could not be over-emphasized. He said; “Today, the whole world is looking up to the accounting profession not only as a role model but as the only profession that can proffer solutions to the problems of ethics and accountability.” In his remarks, the Dean, Post-Graduate School of the host university, Daniel Ogum, another professor who represented the Vice Chancellor of the University, Ozo-Mekuri Ndimele, urged the association to make accounting paramount in its discussions. He said the post-graduate school is the fastest growing school in Nigeria, noting that while 600 students graduated in 2018, now, 1500 would graduate in 2019 with 45 of them being doctorate students. Speaking with Business Day shortly after the conference, one of the participants, Ogboin Juliet, expressed delight over this year’s AGM/ conference which would feature a colloquium. Juliet, a PhD student, described it as an improvement compared to past conferences.

Past president of the National Accounting Association, S.A Arua of Nasarawa State University (l) with present President, Clifford Ofurum

Soot, kpo-fire: FG should tell us to flee or still stay in PH - As apostle charges journalists to action Port Harcourt

IGNATIUS

orrespondents in Port Harcourt ended their Press Week last Sunday with a thanksgiving service, but there, they were conscripted into what one may call the ‘Environment Protection Squad’ by a man commissioned by God Almighty, the apostle, Eugene Ogu. The apostle is the general overseer of Abundant Life Evangel Mission with head-

quarters on Psychiatric Road at Rumuigbo area of the Garden City. After the journalists had talked and gave testimonies, the GO took the mic and admonished journalists to take up the task of forcing whoever was responsible to protect the masses. Ogu, a man of God who rose from the ashes of abject want as a carpentry apprentice to heading a gigantic Ministry said the right authority must take responsibility and end soot and illegal refining (kpo-fire); and that the press must rise up and lead the populace to track the right authority that must act. These were the charges last Sunday where he said the proper authorities have kept mute over the years. He declared that the FG has the capacity to stop the pollution of the atmosphere in Rivers State but has deliberately refused to do so. This is as he commended members of the Correspondents’ Chapel of the Nigeria Union

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of Journalists (NUJ) in Rivers State, for their commitment to fight against environmental injustices in the Niger Delta region. The cleric said: “There is lack of commitment to the problem facing the masses of this country. Government has the capacity to stop the Soot in just one day. “The government has the capacity to stop any of its agencies that is involved in the menace of Soot in Rivers State. If it is the Police that is involved, government can stop it. If it is the Army, government can stop it and if it is the Navy, government can stop it.” He called on the media, especially members of the Correspondents’ Chapel of the NUJ to be committed to the reporting of the menace of soot and other environmental challenges facing the state and the Niger Delta region. Ogu said: “Your profession does wonders around the world. Great Press cannot be

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compromised; great press does investigative journalism. Great press people are not influenced by bribe, by money or by any kind of influence to say what is right. “The press needs to give 24 hours commitment to this menace called soot. The press should not just talk or write about it. They should follow the Ministry of Health until we know what they are doing about it” Earlier in his remarks, chairman of the Correspondents’ Chapel of the NUJ in Rivers State, Ernest Chinwo, said the group came to thank God for guidance and protection all through the year, especially during the 2019 general elections in Rivers State and the November 16, 2019 governorship election in Bayelsa State. Chinwo said the 2019 Press Week was devoted to raising awareness and getting stakeholders on issues of environment as it affects Rivers State as well as the ongoing clean-up of Ogoniland.

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Thursday 12 December 2019

BUSINESS DAY

Investing in Rivers State Echoes of NACCIMA boss visit: Rivers to launch Security Trust Fund Ignatius Chukwu

ivers State Governor, Nyesom Ezenwo Wike has declared that the state will launch a State Security Trust Fund as part of its move to strengthen security in the state to attract more investments. Many felt this was much awaited to fight insecurity and restore the confidence of investors. During the gubernatorial debate in 2015, then Candidate Wike of the PDP had said his plan was to give support to the security agencies and allow them do their work, whereas his counterpart of the APC, Dakuku Peterside, had proposed setting up a vigilante unit and a security fund. Wike won and did all he promised but security rather broke down further. He now tried to do what Dakuku proposed, setting up a state vigilante, but seemed to be stopped by lawsuits from the same party that had proposed the vigilante outfit. Gov Wike stated that all major companies operating in the state must contribute to the state security fund because they benefit from the resources and infrastructure of

Gov Wike Wike (r) and the NACCIMA President, Iya Aliyu in PH; far left is PHCCIMA president, Nabil Saleh.

Rivers State. He spoke during a courtesy visit by the President of Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Iya Aliyu, on Monday

at the Government House Port Harcourt. He said: “By January, 2020, we will hold a security summit and also launch a security trust fund. All the major companies operating

Over 1000 youths and women graduate from Total E&P skills training scheme Ignatius Chukwu & Favour Ichemati

ome 1014 youths and women have graduated from Total E&P skills training scheme that lasted over 12 months, now ready to begin entrepreneurial careers. The graduation was flagged off by the deputy managing director, PH District, Guillaume Dulout. The graduands come from the 2017 and 2018 batches who he said acquired various vocational skills. “This skills training programme is designed to support the human capital development of youth and women of our target host communities. He stated: “The training programme is also in consonance with the continued and sustainable corporate social responsibility policy thrust of the Total Group to touch lives in a positive and sustainable manner and in tandem with the following United Nations Sustainable Development Goals aimed at reducing poverty and hunger; improve health and wellbeing; encourage participation of women in particular in the building of sustainable cities and com-

munities; and engender partnerships with governments, private sector and the civil society which, in this case, are the governments and peoples of Rivers and Abia States towards the achievement and sustainability of these goals.” He told the participants that the workshop on entrepreneurship just concluded that morning was designed to equip them with the business knowledge indispensable to starting up their own businesses. “For you to be skilled in your trade, you must continue seeking ways to hone the skills that you have acquired. You will also need to exercise a great deal of humility to continue learning at the feet of those who have mastered your respective trades.” He said in furtherance of its MOU and CSR-related programmes, Total annually sponsors in her host communities of Rivers, Abia and Akwa Ibom States, other educational development programmes including the award of scholarships at post-primary, post-secondary, post-graduate local and foreign levels to deserving scholars of the communities. “We also sponsor adult literacy programmes, build, renovate schools, donate educational equipment www.businessday.ng

and other learning materials. Our profound gratitude goes to our senior partners; NNPC, the Ministry of Employment Generation & Economic Empowerment, Ministry of Youth Development and our community leaders for their continuous support in the realization of this and other NNPC/TEPNG MoU related programmes.” In his remarks, a resource person, Dennis Epelle, lectured the graduands on how to start a business, how to grow the business, and manage income from the business. He stated that the word entrepreneurship has a French origin, and that the meaning in English is to undertake. He said an entrepreneur is a self-employed person who possesses ideas of business creation with risk-bearing, creativity and innovativeness as major characteristics of an entrepreneur. Epelle mentioned strategy as the procedure for business to continuously be in existence, and not fail. He also mentioned business plan, value proposition, channel, retaining customers, resources and partners as well as book keeping and budgeting as key functions never to be ignored.

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in the state are under obligation to contribute. We are committed to improving security in order to attract more investments in the state. We are developing the right infrastructure for economic devel-

opment.” Governor Wike said that the Rivers State Government will write Dangote Plc to contribute, as it does in other states, pointing out that the company uses the state’s infrastructure for her businesses. “Dangote has not contributed anything to this state. I will write him to support the security trust fund. I cannot do roads and your trailers will take over our roads. If you go to G.U Ake Road, you will see Dangote trailers all over the state. “Zenith Bank, Access Bank and other major companies must contribute to Rivers State Security Trust Fund as they contribute to Lagos State. This is sufficient notice. As they contribute there, they must contribute here. If they don’t support Rivers State, we will not agree. “We need the private sector to drive the economy. Look at what is happening in the USA; 200,000 jobs were created in one month through the private sector “, he said, and mentioned ways he his administration had encouraged the private sector. Earlier, Aliyu declared that Rivers State is safe for investments. She applauded the improved infrastructure and security that are attracting businesses.

Joi Nunieh says IMC has Buhari’s mandate as NDDC to complete 46-km Ohanku-Aba Road

he Niger Delta Development Commission (NDDC) has pledged to complete the 46-kilometre road linking several communities in Ukwa East Local Government Area of Abia State to the commercial city of Aba. The NDDC Ag CEO, Joi Nunieh, who made the promise while inspecting the road assured that the project would be tackled as a matter of urgency. The NDDC CEO said that the Interim Management Committee of the Commission had the mandate of President Muhammadu Buhari to take development to the rural communities, especially those in the oil-producing areas. Nunieh described the situation at Ndiegoro as a disaster that called for an emergency intervention, stating that the densely populated community would be made to feel the impact of the Federal Government through the NDDC. She said: “We are assuring the people that President Buhari cares for the welfare of the less privileged people in the rural communities and we are here on his instructions to make sure that the people benefit from development @Businessdayng

projects.” The NDDC boss said that the Commission was determined to get all communities in the Niger Delta, particularly the oil-producing areas, working again. adding that the fact that they have oil in their area should confer some benefits on them in the sharing of national resources. She wondered how the people of Ndiegoro were coping in situations of medical emergency, given that they were not likely to get help quickly because it would take two to three hours to get to the next city. Thousands of residents of the community trooped out on sighting the NDDC inspection team to express their desire for urgent intervention which had earlier been highlighted by the Abia State governor. Dr Ikpeazu had told the NDDC team, during a courtesy visit, to address the challenges that had delayed the completion of the Ohanku-Aba Road. According to the governor, “the road is a major link to the commercial city of Aba and an alternative route to Port Harcourt, Rivers State.”

Thursday 12 December 2019

BUSINESS DAY

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PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 330,570.60 9.30 1.09 226 12,976,899 UNITED BANK FOR AFRICA PLC 230,846.09 6.75 3.85 143 29,334,502 ZENITH BANK PLC 580,835.14 18.50 -0.27 255 19,853,596 624 62,164,997 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 222,550.82 6.20 -1.59 173 2,964,577 173 2,964,577 797 65,129,574 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,401,832.54 118.00 1.72 81 488,941 81 488,941 81 488,941 BUILDING MATERIALS DANGOTE CEMENT PLC 2,385,671.04 140.00 0.86 112 4,977,549 LAFARGE AFRICA PLC. 219,066.02 13.60 -0.74 60 1,801,124 172 6,778,673 172 6,778,673 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 323,467.98 549.70 - 3 7,502 3 7,502 3 7,502 1,053 72,404,690 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 11,873.80 4.45 - 1 55 1 55 1 55 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 1 55 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 1 25,000 51,988.10 54.50 - 6 3,404 OKOMU OIL PALM PLC. PRESCO PLC 37,850.00 37.85 - 4 1,210 11 29,614 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,530.00 0.51 - 12 222,000 12 222,000 23 251,614 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 953.02 0.36 - 3 4,600 JOHN HOLT PLC. 217.92 0.56 - 4 23,205 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 40,647.99 1.00 1.01 57 10,520,515 TRANSNATIONAL CORPORATION OF NIGERIA PLC U A C N PLC. 23,914.76 8.30 3.11 100 11,564,052 164 22,112,372 164 22,112,372 BUILDING CONSTRUCTION ARBICO PLC. 577.67 3.89 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 25,080.00 19.00 - 5 31,100 ROADS NIG PLC. 165.00 6.60 - 0 0 5 31,100 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,598.40 1.00 - 4 8,170 4 8,170 9 39,270 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 7,281.43 0.93 - 1 100 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 63,521.10 29.00 1.72 52 15,638,048 INTERNATIONAL BREWERIES PLC. 86,818.21 10.10 - 6 12,246 NIGERIAN BREW. PLC. 409,841.23 51.25 - 57 317,922 116 15,968,316 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 181,200.00 15.10 0.67 83 2,297,888 FLOUR MILLS NIG. PLC. 79,137.33 19.30 1.58 64 1,022,941 HONEYWELL FLOUR MILL PLC 7,850.90 0.99 - 10 134,050 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 37,092.14 14.00 - 22 128,521 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 179 3,583,400 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 16,997.73 9.05 - 10 4,099 NESTLE NIGERIA PLC. 1,030,453.13 1,300.00 - 54 297,111 64 301,210 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,878.29 3.90 - 21 37,443 21 37,443 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 19,852.39 5.00 - 15 373,395 UNILEVER NIGERIA PLC. 106,282.60 18.50 - 44 359,244 59 732,639 439 20,623,008 BANKING ECOBANK TRANSNATIONAL INCORPORATED 117,437.13 6.40 -1.54 95 2,499,839 FIDELITY BANK PLC 57,949.59 2.00 2.00 80 12,524,492 GUARANTY TRUST BANK PLC. 824,073.02 28.00 -2.27 208 13,322,567 JAIZ BANK PLC 18,562.48 0.63 -3.08 22 816,919 STERLING BANK PLC. 56,717.12 1.97 2.60 52 7,832,276 UNION BANK NIG.PLC. 192,196.97 6.60 - 23 167,464 UNITY BANK PLC 8,182.54 0.70 - 9 24,605 WEMA BANK PLC. 25,844.89 0.67 -4.48 48 3,288,118 537 40,476,280 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,989.75 0.72 - 8 98,700 AXAMANSARD INSURANCE PLC 18,900.00 1.80 - 1 200 CONSOLIDATED HALLMARK INSURANCE PLC 3,008.10 0.37 - 6 287,642 CONTINENTAL REINSURANCE PLC 22,820.04 2.20 - 0 0 CORNERSTONE INSURANCE PLC 9,132.29 0.62 - 4 229,500 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,830.86 0.25 -3.85 7 474,958 LAW UNION AND ROCK INS. PLC. 2,362.98 0.55 - 1 2,200 LINKAGE ASSURANCE PLC 3,840.00 0.48 -5.88 4 252,900 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 0 0 NEM INSURANCE PLC 10,296.98 1.95 -2.50 5 121,500 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,745.10 0.51 - 2 63,478 REGENCY ASSURANCE PLC 1,333.75 0.20 - 1 355,000 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 4 101,164 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 - 2 1,500 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 1 3 WAPIC INSURANCE PLC 4,683.96 0.35 2.86 31 909,181 77 2,897,926 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,629.63 1.15 - 1 5,000 1 5,000

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,200.00 1.00 - 2 4,500 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,796.93 1.39 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 2 4,500 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 8,200.00 4.10 - 36 236,055 CUSTODIAN INVESTMENT PLC 35,291.19 6.00 - 7 333,927 DEAP CAPITAL MANAGEMENT & TRUST PLC 600.00 0.40 - 0 0 FCMB GROUP PLC. 35,644.88 1.80 -2.17 61 5,232,715 ROYAL EXCHANGE PLC. 1,492.16 0.29 - 6 255,519 378,091.62 36.10 -1.90 18 530,464 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 12,960.00 2.16 -3.14 82 4,843,119 210 11,431,799 827 54,815,505 HEALTHCARE PROVIDERS EKOCORP PLC. 2,069.19 4.15 - 2 270 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 781.69 0.22 -8.33 1 105,000 3 105,270 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 6,467.72 3.10 - 22 414,400 GLAXO SMITHKLINE CONSUMER NIG. PLC. 6,936.08 5.80 - 94 2,851,589 3,692.00 2.14 - 9 39,769 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,386.38 0.73 - 1 9,000 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 126 3,314,758 129 3,420,028 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 888.00 0.25 4.35 8 1,000,386 8 1,000,386 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. 486.00 4.50 - 0 0 316.77 0.64 - 0 0 TRIPPLE GEE AND COMPANY PLC. 0 0 PROCESSING SYSTEMS CHAMS PLC 1,596.66 0.34 -8.11 14 1,487,108 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 0 0 14 1,487,108 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,123,311.48 298.90 - 8 1,358 8 1,358 30 2,488,852 BUILDING MATERIALS BERGER PAINTS PLC 1,956.31 6.75 - 5 4,406 CAP PLC 16,800.00 24.00 - 8 7,772 247,097.82 18.80 - 24 46,693 CEMENT CO. OF NORTH.NIG. PLC MEYER PLC. 286.87 0.54 - 0 0 1,769.32 2.23 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 37 58,871 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 2,624.37 1.49 - 2 5,000 CUTIX PLC. 2 5,000 PACKAGING/CONTAINERS BETA GLASS PLC. 26,898.49 53.80 - 6 8,103 GREIF NIGERIA PLC 388.02 9.10 - 0 0 6 8,103 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 45 71,974 CHEMICALS B.O.C. GASES PLC. 2,539.09 6.10 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 83.60 0.38 - 0 0 0 0 0 0 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 8 280,700 8 280,700 INTEGRATED OIL AND GAS SERVICES OANDO PLC 46,617.80 3.75 4.17 47 1,650,209 47 1,650,209 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 53,332.04 147.90 - 9 7,301 CONOIL PLC 12,838.11 18.50 - 18 36,832 ETERNA PLC. 3,912.43 3.00 - 8 9,284 FORTE OIL PLC. 23,574.91 18.10 - 21 52,120 MRS OIL NIGERIA PLC. 4,663.23 15.30 - 4 7,464 TOTAL NIGERIA PLC. 37,652.97 110.90 - 5 6,778 65 119,779 120 2,050,688 ADVERTISING AFROMEDIA PLC 1,509.28 0.34 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 1 100 1 100 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 247.03 0.21 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,623.26 4.45 - 2 7,280 464.16 0.99 - 0 0 TRANS-NATIONWIDE EXPRESS PLC. 2 7,280 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,259.15 2.75 - 0 0 IKEJA HOTEL PLC 2,120.37 1.02 - 1 70 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 41,042.18 5.40 - 0 0 1 70 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,320.00 0.36 - 1 1,400 1 1,400 PRINTING/PUBLISHING ACADEMY PRESS PLC. 223.78 0.37 - 1 400 LEARN AFRICA PLC 964.31 1.25 - 0 0 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 578.09 1.34 - 1 84,500 2 84,900 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 729.39 0.44 - 4 32,400 4 32,400 SPECIALTY INTERLINKED TECHNOLOGIES PLC 757.44 3.20 - 0 0 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 0 0

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Thursday 12 December 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper JAMES POLITI AND JUDE WEBBER

rade negotiators from the US, Canada and Mexico signed changes to the USMCA trade pact in Mexico City after Nancy Pelosi and Donald Trump finally reached an agreement removing obstacles to US ratification of the treaty replacing Nafta. The ceremony in Mexico’s National Palace on Tuesday came just over a year after leaders of the North American countries signed the new trade agreement in Buenos Aires. That kicked off months of bitter wrangling, especially over US Democrats’ demands to tighten enforcement of higher labour standards in the text. Robert Lighthizer, the US trade representative; Chrystia Freeland, Canada’s deputy prime minister; and Jesús Seade, Mexico’s USMCA negotiator and under-secretary for North America, signed the additional agreements that pave the way for legislative approval in the US. The treaty, which updates and expands the 25-year-old Nafta, is expected to come into force next year. Jared Kushner, Mr Trump’s sonin-law and senior adviser, also attended the ceremony to seal what the US president forecast on Twitter would be “the best and most important trade deal ever made by the USA”. “This is very good news for Mexico,” said Marcelo Ebrard, Mexican foreign minister. “All we can say today is: mission accomplished.”

Deal reached on revised USMCA trade pact Mexico City ceremony follows agreement between Trump and Democrats

Canadian deputy prime minister Chrystia Freeland gestures next to Mexico’s president Andres Manuel Lopez Obrador and Mexico’s foreign minister Marcelo Ebrard, during a meeting at the Presidential Palace, in Mexico City © Reuters

US businesses welcomed the progress, and said it sent a positive message about the prospects of improving America’s trade relations with countries in Asia and Europe as well. “Those wondering about the future of the [US] as a trading partner have gotten an answer ”, Tom Donohue, chief executive officer of the US Chamber of Commerce, a lobbying group for corporate America, told the FT. “The US is in the trading business and we plan to stay.” Mexican stocks appeared to be

Most forecasters see modest gains for S&P 500, but Morgan Stanley is a bear

all Street is predicting that the record-setting US stock market rally will continue next year, supported by the Federal Reserve’s accommodative interest-rate policy and a resilient domestic economy. But strong gains this year may have stolen the market’s thunder for 2020, while the US presidential election and US-China trade talks risk causing fresh volatility, according to analysts and strategists from the major US investment banks. The benchmark S&P 500 is on track to close this year up roughly 25 per cent, its best performance since 2013 and the third-strongest annual gain since the start of the century. Hopes of at least a partial USChina trade pact and the Fed’s three rate cuts this year have aided the market’s run to fresh record highs in the final quarter of 2019. That has led US investment banks to positive, albeit muted, forecasts for the new year: The average price target for the S&P 500 in 2020 stands at 3,278 — an 4.6 per cent increase from the current level — based on forecasts from eight major banks. This time last year, forecasters were too cautious, bracing for an economic slowdown after the Fed had raised rates and the stimulus from tax cuts faded. Goldman Sachs, for instance, lowered its recommended alloca-

tion to stocks and added that cash should represent a competitive asset class to stocks “for the first time in many years”. Cash is the lowest-returning asset class so far this year. Goldman has since taken a more bullish view and set a price target of 3,400 on the S&P 500 for the end of 2020. JPMorgan’s chief US equity strategist, Dubravko Lakos-Bujas, has the same 3,400 target, which would be a 9 per cent gain from the current level. “Easier monetary and fiscal policies are in motion globally with majority of the benefits expected to flow through the economy in the coming quarters,” he wrote in a research note. Global business sentiment should start to heal and investment activity should improve as fears related to US-China trade, Brexit and other one-off shocks to large economies fade, Mr LakosBujas added. Credit Suisse has emerged with the most bullish prediction among the major banks, expecting defensive sectors to lag and instead favouring technology, consumer discretionary, financial, industrial and material stocks. “However, with the S&P 500 up roughly 25 per cent in 2019, we expect limited gains from current levels,” the bank said. It is forecasting an end-of-2020 level of 3,425. Bar chart of S&P 500 price gain (%) showing US equities are on course for their biggest gain since 2013 www.businessday.ng

basket of major peers, was 0.2 per cent weaker. Earlier on Tuesday, Ms Pelosi, the Democratic Speaker of the House of Representatives, announced that her party had reached a deal with Mr Trump to allow ratification of USMCA, following months of talks with Mr Lighthizer and parallel discussions with officials in Canada and Mexico to secure changes to the original text. “It’s a victory for America’s workers, it’s one that we take great pride

Saudi Aramco shares jump 10% in oil group’s trading debut

Wall Street expects bull run to continue in 2020 MATTHEW ROCCO AND JENNIFER ABLAN

the biggest winner, with the country’s benchmark index up as much as 1.7 per cent in late trading on Tuesday. Canada’s S&P/TSX Composite was fractionally lower, performing closer in line with Wall Street’s S&P 500, which fell 0.1 per cent despite hopes a December 15 deadline for new tariffs to be imposed on Chinese imports could be delayed. The Mexican peso weakened 0.1 per cent, while the Canadian dollar strengthened slightly. The dollar index, tracking the buck against a

in advancing,” Ms Pelosi said, calling the outcome “infinitely better” than the original deal reached by Mr Trump. Congressional ratification of USMCA has been among the highest legislative priorities for Mr Trump, although its prospects were uncertain until this week. The move towards a green light on Capitol Hill will be touted as a big win for the White House heading into the 2020 presidential campaign, and evidence that Mr Trump’s disruptive approach to trade is delivering results at a time of heightened commercial tensions with China and the EU. Democrats successfully pushed for tighter labour standards, strengthened environmental protections and the removal of advantages for pharmaceutical companies in exchange for allowing a vote on USMCA in Congress. Ms Pelosi was able to extract enough concessions from Mr Trump for the deal to be endorsed by the AFL-CIO, the largest trade union federation. The union is highly influential in Democratic politics and has traditionally opposed trade deals. “The USMCA is far from perfect . . . but there is no denying that the trade rules in America will now be fairer because of our hard work and perseverance,” said Richard Trumka, the AFL-CIO’s president.

Stock climbs by maximum amount after world’s biggest initial public offering AHMED AL OMRAN AND ANJLI RAVAL

audi Aramco shares rallied 10 per cent on Wednesday as the state oil company began trading on Riyadh’s Tadawul stock exchange, giving the group a market value of nearly $1.9tn. The company’s stock market debut marks the culmination of a nearly four-year process since Crown Prince Mohammed bin Salman, the heir apparent, first disclosed plans for a listing. After a series of delays in which the company was forced to scale back its ambitions, Saudi Aramco raised $25.6bn in the largest IPO, surpassing the $25bn raised by China’s Alibaba when it debuted on Wall Street in 2014 and giving it a valuation of $1.7tn. Saudi Aramco’s shares rose by the maximum level with bids at 35.2 riyal, confirming its position as the world’s most valuable company — more than the combined market capitalisation of the five biggest international oil companies. Riyadh has sought to ensure the shares trade higher after Saudi Aramco’s debut by asking Saudi institutions and wealthy families to buy shares following the start of trading. Officials are pushing to secure a $2tn valuation long sought after by Prince Mohammed. Chairman Yasir al-Rumayyan and chief executive Amin Nassir, flanked by senior officials from Saudi Aramco and the Tadawul,

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rang a golden bell on a stage bathed in the blue and green colours of the company’s logo as confetti flew over attendees. “The government was the only shareholder. Today, the company has more than 5m shareholders,” Mr Rumayyan said. “Today, all Saudi Aramco employees and every person in the kingdom has the right to be proud. This IPO is considered the largest IPO in the history of humankind.” Mr Rumayyan is also head of the country’s Public Investment Fund which is due to receive the proceeds from the IPO. The PIF is the crown prince’s main vehicle for overhauling the Saudi economy by making non-oil investments. The IPO received $119bn in orders with the listing nearly 4.7 times oversubscribed. Should the kingdom exercise the greenshoe option it could raise $29.4bn. After initial ambitions to raise $100bn from the sale of 5 per cent on an international stock exchange, Saudi Arabia has sold a pared back 1.5 per cent of the company through a listing largely dependent on local investors and state funds in the Gulf. Foreign institutions balked at the valuation expectations of Saudi officials, forcing the kingdom to abandon international marketing roadshows, amid concerns about geopolitical risks and corporate governance. Retail demand has been strong in the kingdom. The company enticed investors through bank loans @Businessdayng

and bonus share offers together with an advertising spree calling on regular Saudis to buy a stake in the country’s crown jewel. The Public Pension Agency, the PIF and the PIF’s Sanabil Investments unit are among the statebacked institutions that may be relied on to support shares in Saudi Aramco once they are trading. Many wealthy families, some of whom were caught up in a 2017 anti-corruption crackdown, have already bought shares and some are now being asked to pledge further funds, advisers to the families said. Several western hedge funds, seeing the listing as an effective one-way bet, applied for and received large allocations, two people familiar with the matter said. Some intend to sell once the company nears a $2tn valuation, they added. The flotation is also relying on investment from regional sovereign wealth funds from Abu Dhabi and Kuwait. Abu Dhabi, a close ally of Saudi Arabia, has lifted its investment to as much as $5bn, two people briefed on the deal said. The inclusion of the Saudi stock exchange in MSCI’s flagship emerging market index is also expected to provide long-term support for Saudi Aramco shares from passive funds. “We anticipate that upside momentum will continue, Aramco is likely to trade up to become the first company in the world valued at over $2tn,” said Zachary Cefaratti, chief executive of Dalma Capital.

Thursday 12 December 2019

BUSINESS DAY

NATIONAL NEWS

Chevron to take $10bn writedown on shale gas glut US Appalachian region assets put up for sale as producers face persistently low prices GREGORY MEYER

hevron has put shale gasfields up for sale in the prolific US Appalachian region as it plans to write down more than $10bn from these and other businesses, underlining how persistently low natural gas prices have stung big producers. The oil major holds hundreds of thousands of net acres in the Marcellus and Utica shale regions running through the Appalachian states of Pennsylvania, West Virginia and eastern Ohio. Gas production from Appalachia has climbed 18-fold in the last decade to almost 34bn cubic feet per day, according to the US Energy Information Administration. The booming supply has kept gas prices stubbornly cheap at about $2.50 per million British thermal units, the lowest 20 years. Chevron acquired its Appalachian assets when it purchased Atlas Energy for $5.5bn in 2011. In 2018 it produced 240m cu ft/d from the region. Late Tuesday Chevron said it was evaluating alternatives including divestment of its Appalachian shale assets as well as international projects and Kitimat LNG, a liquefied natural gas export project in Canada in which it holds a stake. It also took an impairment charge

on Big Foot, an offshore oil project in the Gulf of Mexico. The writedowns combined will trigger impairment charges of $10bn-$11bn in the fourth quarter, more than half of them related to Appalachia, Chevron said. Strong gas production has led to a race to built terminals capable of liquefying it for export abroad. By the middle of next decade this battle for market share may lead to “material oversupply,” analysts at Tudor Pickering Holt said. Chevron said it would exit its 50 per cent interest in Kitimat LNG in British Columbia, where its partner is Woodside Petroleum of Australia. The stake “may be of higher value to another company,” Chevron said. The announcement came as Chevron announced a capital spending plan of $20bn for 2020 focused on oil-rich areas in the Permian Basin of the US south-west, deepwater projects in the US Gulf and a project at the its Tengiz oilfield in Kazakhstan. Michael Wirth, chief executive, said this would be the third year in a row that organic capital spending would be held steady at $20bn. “We believe the best use of our capital is investing in our most advantaged assets,” he said. “With capital discipline and a conservative outlook comes the responsibility to make the tough choices necessary to deliver higher cash returns to our shareholders over the long term.”

Visa in partnership with MFS Africa digital payments hub Tie-up aims to allow people with mobile wallets to pay for international online services DAVID PILLING

isa will enter a partnership with MFS Africa, a pan-African mobile money hub, with a view to linking Africa’s mobile money ecosystem with global digital payments and tapping into the $50bn African remittance market. The partnership is intended to enable people with mobile wallets in Africa to pay for international online services that are currently unavailable to most African users as well as to receive money sent from abroad. MFS Africa says it is Africa’s largest cross-border digital payments hub, connecting more than 180m mobile wallets accessed through phones in 30 countries. Under the Visa partnership, mobile money users on the MFS Africa platform will be able to generate a 16-digit virtual card to use for remittances and online transactions, the companies said. Dare Okoudjou, founder and chief executive of MFS Africa, said his company already handled tens of thousands of intra-African crossborder transactions between different phone networks, something that will become more important as the 54-nation African Continental Free Trade Area begins to come into effect from next year. Partnering with Visa, he said, would enable users to extend their transactions outside Africa. “Now you can receive money from the US and make a payment in France,” he said. “Any kid with a mobile wallet in Kigali should now have enough to deal with the rest of the world,” he said, referring to the Rwandan capital.

In the future, MFS Africa would explore the possibility of extending the service to Chinese digital money transaction services, such as Alipay, he said. Jack Forestell, Visa’s chief product officer, said: “Africa is adopting a mobile-led, digital payments ecosystem and with Visa looking to accelerate the distribution of payment credentials and expand the acceptance space for digital payments, this partnership is an important one.” There is increasing interest from fintech providers in building on Africa’s digital money network, which was pioneered a decade ago in east Africa but is still fragmented and patchy. Some countries, including Nigeria, have been more cautious about allowing telecoms companies to move into banking. Advocates say this is excluding tens of millions of potential customers who cannot afford to open a bank account from accessing financial services. It is also making life harder for ecommerce companies such as Jumia, which listed in New York this year, but has since retrenched from some African markets. Visa has shown an appetite for investing in Africa. In November, it took a stake, reported as 20 per cent for $200m, in Nigerian fintech Interswitch, valuing the company at $1bn. Mr Okoudjou said the Visa partnership should help lower the cost of remittances into Africa, which are currently the most expensive in the world with providers taking a nearly 10 per cent cut in transaction fees. “Our mission is to bring down the cost of remittances into and within Africa,” he said. www.businessday.ng

IMF criticised over bailouts for central Africa’s petrostates Fund poised to lend Equatorial Guinea $280m despite record of graft and rights violations NEIL MUNSHI

he IMF is facing criticism over a $280m bailout intended for Equatorial Guinea, a tiny oil-producing state in central Africa, where the long-serving regime of President Teodoro Obiang Nguema is accused of institutional corruption and human rights violations. The IMF said the programme included provisions that were meant to make the petrostate’s oil and gas industry more transparent. But anti-corruption and human rights groups warned that the IMF risked damaging its own reputation by lending its credibility to a regime with no history of serious reform. “Knowing the penchant for corruption in this country, knowing about the human rights violations, I don’t see how [the IMF] can justify bailing this country out with millions of dollars that they should know will be squandered once again,” said Tutu Alicante, executive director of EG Justice, who like many Equatoguinean critics of the government lives in exile. But the IMF’s programme in Equatorial Guinea, expected to be approved this month, is not unique. It is only the latest in a series of similar lending programmes the IMF has approved in central Africa in the past four years. Nearby Gabon received a $642m bailout in 2017, while Republic of Congo got $450m in July. Both governments are oil producers like Equatorial Guinea, with comparatively high gross domestic product per capita but poor records on graft and public finance management. The governments in all three countries have been accused of profiting from corruption. Rights groups and creditors challenged the IMF before it bailed out Republic of Congo, questioning the logic of funding a government accused of misappropriating large portions of its oil revenues and failing to honour its private debts. Now, eight civil society organisations, including

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Human Rights Watch, have sent a joint letter to the IMF asking it to delay its decision on Equatorial Guinea. Sarah Saadoun, a researcher who works on corruption for Human Rights Watch, said the IMF programme would serve as a badge of validation for the Equatoguinean government, sending the wrong signal to potential partners about the state of the country’s politics. “The IMF [will be giving] them the imprimatur of reform and that signals something to investors,” Ms Saadoun said. “In a country where rule of law and corruption are perennial issues for investors, that signal is very, very valuable for them.” The IMF declined to comment. In October, it said the programme would help to promote financial stability, economic diversification, good governance and transparency. Mr Obiang has ruled Equatorial Guinea with absolute power since 1979, when he overthrew his uncle in a violent coup. His regime has outlawed most opposition parties and arbitrary detention, extrajudicial killings and torture are all common. American oil groups discovered giant crude deposits in the country’s maritime waters in the mid1990s. Oil production has since generated billions of dollars in annual revenue for Mr Obiang’s administration but failed to improve the lives of most Equatoguineans GDP per capita in the country of 1m people is among the best in Africa and higher than Turkey, Brazil and China, and yet its social indicators are some of the worst in the world. The oil windfall funded a huge infrastructure building spree that has given the country some of Africa’s finest roads but also seen money misspent on boondoggles such as new luxury cities. The building bonanza collapsed, along with the economy, after the 2014 crash in the price of crude, which provides nearly all government revenue. Still, the government says it @Businessdayng

does not need the bailout. “Equatorial Guinea is not a country that needs $200m,” said Gabriel Obiang Lima, the minister of mines and hydrocarbons and one of the president’s sons. “We make that in two months.” Mr Lima said the government had agreed to the IMF programme as an act of “solidarity” with the five other countries in the Central African Economic and Monetary Community, which share a currency. Most were hit hard by the oil price crash and began talks with the IMF for a regional programme in 2015. Chad, Cameroon and Central African Republic have also received support in the past four years. Mr Lima dismissed the criticism from international human rights organisations and pointed to Equatorial Guinea’s evolving relationships with international bodies as proof that the country has changed. “They are giving the indication of the development of the country,” he said. “[We already have an] agreement by IMF, we already have an agreement by the World Bank, how come those organisations don’t want to read or respect the report of [international institutions]?” But the regime’s critics increasingly see the IMF and World Bank as part of the problem, arguing that their engagement with the government legitimises the economic crimes committed by members of the president’s family such as his son, vice-president Teodoro Nguema Obiang Mangue. Better known as Teodorin, the deputy leader was convicted by a French judge in 2017 of siphoning off payments from investors to fund a lavish international lifestyle including a sprawling collection of yachts, supercars, mansions and fine art. “Why would they bail out a violent kleptocracy with public money the amount of which could easily be covered in the blink of an eye by Teodorin selling a few of his cars in France?” said Simon Taylor, co-founder of Global Witness.

BUSINESS DAY

Thursday 12 December 2019

FINANCIAL TIMES

COMPANIES & MARKETS

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UK competition watchdog ‘concerned’ over Amazon-Deliveroo pact Regulator to launch in-depth probe if groups do not offer remedies KATE BEIOLEY

he UK’s competition regulator has said Amazon’s investment in Deliveroo could harm competition in the online food delivery and grocery markets in the UK and will launch a deeper investigation if the groups do not offer remedies. Amazon revealed in May that it was the lead investor in a $575m funding round in Deliveroo, having pulled out of its own food delivery company Amazon Restaurants in December last year. On Wednesday the Competition and Markets Authority said that the deal could hamper competition in two key markets, even though the minority investment would not enable Amazon to take full control of Deliveroo’s business. The regulator said the investment could mean Amazon, which reported UK net online sales of £11bn in 2018, was less likely to re-enter the online food delivery market in the UK. Amazon demonstrated a “strong continued interest” in the sector according to evidence uncovered in internal documents and its decision to use the Deliveroo deal instead of re-entering the market on its own would trigger a competition issue, the watchdog said. The deal also

presented an issue for “ultrafast” grocery delivery in the UK, a market with only a small number of suppliers, making competition important. Andrea Gomes da Silva, CMA executive director, said: “Millions of people in the UK use online food platforms for takeaways, and more than ever are making use of similar services for the same-day delivery of groceries. “There are relatively few players in these markets, so we’re concerned that Amazon having this kind of influence over Deliveroo could dampen the emerging competition between the two businesses.” Deliveroo was founded in 2013 and generated global sales of close to £500m last year, operating in more than 100 towns and cities in the UK. The company offers online takeaway delivery and convenience deliveries from suppliers like Co-op Food. “If the deal were to proceed in its current form, there’s a real risk that it could leave customers, restaurants and grocers facing higher prices and lower quality services as these markets develop,” added Ms Gomes da Silva. “This is because the significant competition which could otherwise exist between Amazon and Deliveroo would be reduced.”

Edinburgh Investment Trust sacks Invesco’s Mark Barnett Former star stockpicker had suffered prolonged investment underperformance SIOBHAN RIDING

nvesco stockpicker Mark Barnett has been sacked as the manager of Edinburgh Investment Trust following poor performance, dealing an embarrassing blow to the former Neil Woodford protégé. Mr Barnett, who has been the trust’s appointed manager since 2013, will be replaced by Majedie Asset Management in the first quarter of 2020. The Edinburgh Investment Trust board said it was ousting Mr Barnett in response to prolonged investment underperformance caused by a number of stock-specific issues within his portfolio. The trust’s net asset value lost 3.1 per cent over the six months to the end of September, compared with a 4.6 per cent gain for the FTSE All-Share index. The trust has lagged behind the index over three years, delivering 1.6 per cent versus the benchmark’s 21.7 per cent. This is a major disappointment for the board as well as our shareholders,” said the Edinburgh Investment Trust. The board singled out Mr Barnett’s stockpicking ability, dismissing the idea that his value investment style, which is currently out of favour, was the main reason for the underperformance. “[The] portfolio has suffered from a number of stock-specific issues,” it said. “Collectively these stocks have been a significant contributor to the weak performance of the [trust] and increasingly has led the board to question the effectiveness of the investment process.” The board said it had intensified its scrutiny of the way the portfolio was managed a year ago and subsequently enlisted investment consultant Willis Towers Watson and Investec Bank to look for alternative managers. James de Uphaugh, Majedie chief

investment officer, will take over the management of the trust, supported by Chris Field as deputy manager. Majedie will receive an annual management fee of 0.48 per cent of the trust’s market capitalisation up to £500m and 0.465 per cent on amounts above £500m, a reduction on the 0.55 per cent charged by Invesco. Mr Barnett’s dismissal comes amid a torrid time for the former budding star stockpicker, whose flagship equity income funds have been hit by heavy outflows, poor performance and negative publicity from the blow-up at Mr Woodford’s investment business. Barnett’s role was recently scaled back when Invesco appointed a cohead of UK equities to work alongside him. He was also forced to apologise to investors after ratings consultant Morningstar downgraded his funds, citing concerns over their exposure to smaller and illiquid companies, as well as stock-selection issues. Mr Barnett’s bad bets include litigation financing specialist Burford Capital, whose share price has plummeted following a damaging short-selling attack in the summer, and Provident Financial, the doorstep lender. Both stocks were also held by Mr Woodford. Invesco said it was “disappointed” with the trust’s decision to dismiss Mr Barnett but said it continued to support Mr Barnett’s investment strategy. “We believe that there are compelling opportunities for investors who are able to look beyond the market’s short-term pessimism in selective areas of the UK market,” it said. “The range and breadth of recent M&A activity from industrial and especially financial buyers is clear evidence that there is unrecognised value in the UK stock market.” www.businessday.ng

Zack Wheeler in action for the New York Mets. Hedge fund manager Steven Cohen has confirmed he is in talks to buy a majority stake in the baseball team © USA Today/Reuters

Best of Lex Midweek: Sports, bets and trophies

To own a sporting team you need to be both rich and have a strong stomach for risks PAN KWAN YUK

W Dear readers,

hat do billionaire (and aspiring billionaire) financiers want for the holidays? Sports teams rank pretty high up on their wish lists it seems. The past two weeks have seen a rush of masters of the universe make a play for the owner’s box at major sports franchises on both sides of the Atlantic. On Monday, the Financial Times reported that Todd Boehly, the former president of asset manager group Guggenheim Partners, had made an offer to buy Chelsea Football Club from Russian oligarch Roman Abramovich. This came just days after hedge fund manager Steven Cohen confirmed that he was in talks to buy a majority stake in the New York Mets, the beloved underdog baseball team. Meanwhile, California-based private equity group Silver Lake snapped up a $500m stake in Manchester City owner City Football Club (CFG) at a record $4.8bn valuation last month. Sports team valuations tend to defy logic and these deals were no exception. As Lex noted, Silver Lake’s deal puts CFG on a six times sales multiple, steep even by Silicon Valley standards. Mr Cohen, a controversial Wall Street figure who was banned

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by the Securities and Exchange Commission in early 2016 from managing outside money for two years, is in talks to acquire as much as 80 per cent of the Mets at a $2.6bn valuation. That would mark a sharp jump from 2012 when he first bought a 4 per cent stake for a reported $20m, equivalent to $500m for the whole business. The new implied valuation represents 7.6 times the estimated 2018 revenue of the Mets. By comparison, publicly traded Madison Square Garden, which owns the New York Knicks basketball team and the New York Rangers hockey club along with the eponymous arena and TV networks, fetches a multiple of about three. A deal would hand current owners, the Wilpon family, a handsome profit. The family, whose involvement in the Mets began in 1980 with a 1 per cent stake, reportedly bought out the remaining 50 per cent of the team it did not already own in 2002 for a mere $135m. The desire for a trophy asset and the prospect of rubbing elbows with famous athletes have long drawn the ultra-rich into buying sports franchises. But these days, multibilliondollar media rights deals and the ever-growing appeal of professional sports as live content are also boosting the case for sports as a financial investment. Not only do you have to be rich to own a sports team but you also need to have a @Businessdayng

strong stomach for risks. It is no coincidence that the latest scramble for deals is being led by hedge fund managers and private equity types. These include David Tepper, founder of Appaloosa Management, who bought the Carolina Panthers American football team last year for about $2.2bn. Marc Lasry, co-founder of Avenue Capital, owns a stake in the Milwaukee Bucks basketball team, while the former hedge fund manager Jeff Vinik owns the Tampa Bay Lightning ice hockey team. All this helps explain why prices are being driven to stratospheric heights. The average baseball team is now worth $1.7bn, 8 per cent more than a year ago, according to Forbes. The Mets, valued at $2.3bn by the magazine, ranks as the sixth most valuable team in the league. This despite having won only two World Series, in 1969 and 1986. It’s a similar story with football. The enterprise value of the 32 most prominent European clubs totalled $41bn at the start of the year, a one-third jump from three years ago, according to a KPMG report. The run-up in prices for top teams has prompted at least one buyout group to get creative in its dealmaking. Instead of betting on one team, CVC Capital Partners is considering funding a new global football tournament that would challenge the sport’s most popular leagues.

Thursday 12 December 2019

BUSINESS DAY

ANALYSIS

Paul Volcker issues warning for America in final essay Donald Trump’s attacks on the Fed are helping to undermine faith in democratic institutions PAUL VOLCKER

his piece was written in September, three months before the author’s death on December 8, as the afterword to the forthcoming paperback edition of his autobiography. By the late summer of 2018, it was already clear that the US and the world order it had helped establish during my lifetime were facing deep-seated political, economic, and cultural challenges. Nonetheless, I drew reassurance from my mother’s reminder that the US had endured a brutal civil war, two world wars, a great depression, and still emerged as the leader of the “free world”, a model for democracy, open markets, free trade, and economic growth. That was, for me, a source of both pride and hope. Today, threats facing that model have grown more ominous, and our ability to withstand them feels less certain. Increasingly, by design or not, there appears to be a movement to undermine Americans’ faith in our government and its policies and institutions. We’ve moved well beyond former president Ronald Reagan’s credo that “government is the problem”, with its aim of reversing decades of federal expansion. Today we see something very different and far more sinister. Nihilistic forces are dismantling policies to protect our air, water, and climate. And they seek to discredit the pillars of our democracy: voting rights and fair elections, the rule of law, the free

press, the separation of powers, the belief in science, and the concept of truth itself. Without them, the American example that my mother so cherished will revert to the kind of tyranny that once seemed to be on its way to extinction — though, sadly, it remains ensconced in some less fortunate parts of the world. When I was writing my book, I observed that President Donald Trump had not attacked the independent US Federal Reserve, for which I was grateful. To say that is no longer true would be an understatement. Not since just after the second world war have we seen a president so openly seek to dictate policy to the Fed. That is a matter of great concern, given that the central bank is one of our key governmental institutions, carefully designed to be free of purely partisan attacks. I trust that the members of the Federal Reserve Board itself, the members of Congress responsible for Fed oversight, and indeed the public at large, will maintain the Fed’s ability to act in the nation’s interest, free of partisan political purposes. Monetary policy is important, but it cannot by itself sustain global leadership. We need open markets and strong allies to support economic growth and the prospects for peace. Those constructive American policies have been a large part of my life. Instead, confidence in the US is under siege.

BlackRock strives for moral high ground with Wiseman firing Larry Fink champions company’s culture even if it means losing a potential successor RICHARD HENDERSON

or years BlackRock’s Mark Wiseman was among a handful of senior managers tipped as potential successors to Larry Fink, chief executive of the world’s largest asset manager. Mr Fink had played a key role in the 2016 recruitment of Mr Wiseman to oversee BlackRock’s roughly $300bn active equities business. When he joined, the BlackRock chief highlighted his experience running the Canada Pension Plan Investment Board, one of the world’s largest and most sophisticated pension funds, as a boon for BlackRock’s sprawling investment empire. On Thursday, Mr Wiseman’s hopes of one day leading the firm crashed after he was fired for having a relationship with a subordinate. In a further blurring of the boundaries between the personal and professional, Mr Wiseman’s wife also works at BlackRock. Marcia Moffat joined a year before her husband and remains at the firm, where she leads its Canadian business. Mr Wiseman, an ice hockeyloving Canadian, leaves BlackRock after three years leading its active equities unit, a struggling corner of the company. During his tenure he has pushed to slim down the number of fund managers and analysts in the group and incorporate more computer-driven tools. He also chaired BlackRock Alternative

Investors, a private equity and hedge fund business, which this year launched the Long Term Private Capital fund. Mr Wiseman is “a very talented individual” and his departure is a loss for BlackRock, but the group’s depth of management will cushion the blow, said Kyle Sanders, an analyst at Edward Jones. The dismissal of Mr Wiseman followed that in July of Jeff Smith, the company’s chief human resources officer, for an unspecified violation of company policy. Both men sat on BlackRock’s global executive committee and their departures mark a rare shock to the elite group of two dozen internal leaders that govern the $7tn fund manager. The departures also challenge external perceptions of the corporate culture Mr Fink has helped build since founding the firm in 1988 and which he commonly promotes as a selling point. They come after Mr Fink last year warned members of the executive committee that their conduct would face added scrutiny given BlackRock’s desire to act as a beacon of good corporate conduct. BlackRock’s assets under management give it a prominent role in supporting or blocking board decisions across the thousands of listed companies in which its funds invest. Mr Fink’s annual letter to chief executives has become required reading across corporate governance circles. www.businessday.ng

Is the EU’s green policy protecting the planet or European industry? Critics argue that co-opting environmental measures into trade policy has more to do with protectionism ALAN BEATTIE

or many European governments, saving the world’s forests and halting global warming has been elevated to the moral imperative of a “climate emergency”. Yet for a growing number of developing countries, translating these European ideals into trade policy evokes darker traditions of protectionism and oppression. High-profile leaders including Jair Bolsonaro, Brazil’s president, his Indonesian counterpart Joko Widodo and Malaysia’s prime minister Mahathir Mohamad, have attacked EU plans to project its environmental values abroad through trade. The outspoken Mr Bolsonaro and Mr Mahathir — whose countries stand to miss out on access to the EU market because of concerns over their environmental stewardship — have gone so far as to describe it as “colonialism”. Facing pressure from a big electoral swing to green parties in Europe and climate issues leaping up the political agenda, the new president of the European Commission, Ursula von der Leyen, has pledged that it will be the most environmentally aware administration in history. In a speech at the COP25 climate change conference in Madrid earlier this month, she said: “Our goal is to be the first climate-neutral continent by 2050. If we want to achieve that goal, we have to act now.” On Wednesday, the commission presents its “Green New Deal” aiming to integrate economic, regulatory, competition and trade policy to help the environment. But the EU’s own annual climate action progress report says reductions in emissions will have to speed up significantly for the EU to become carbon-neutral by 2050. Ms von der Leyen’s team have limited tools to reduce carbon emissions and prevent environmental degradation without causing problems in international trade. European industry is resisting being undercut by cheaper, dirtier imports of energy-intensive products like steel, while foreign governments protest that the new

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policies are simply old protectionism writ large. In its own region, the commission has more flexibility to cut emissions. Some measures are relatively simple, such as standardising low-energy “ecodesigns” for electrical goods like washing machines, vacuum cleaners and kettles. The rules apply to all products sold in the internal market and so affect domestic and foreign companies alike. But once the commission starts getting into heavier-duty policies such as extending the EU’s emissions trading scheme to shipping and aviation, it starts to become an international issue. The price of emissions under the ETS, which issues companies with tradable permits to discharge carbon dioxide, will almost certainly have to rise to meet targets under the Paris agreement on climate change. But as it does, so will complaints from business that they are being undercut by imports from countries with low or no taxes on emissions. Manfred Weber, leader of the centre-right European People’s party — the largest grouping in the European Parliament — says the EU needs “a proper check of the impact” of the commission’s emissions reduction plans and their effect on international competitiveness. “I want to see what it means for SMEs, the steel sector and the chemical industry,” he adds. Ms von der Leyen, the former German defence minister, has responded to the initial backlash by adopting a proposal — long championed by France — to impose a carbon border tax. An import tariff is charged equivalent to the difference between the EU carbon price and that in the exporting country. But though widely accepted in theory, a comprehensive CBT covering all imports would be fiendishly difficult to design and enforce. To create the right incentives — and try to comply with World Trade Organization rules, which are unclear on the subject — the EU will have to make an assessment not just of the total carbon footprint of imported goods but also at which stage of the international supply chain the emissions were created. For an imported car, for example, @Businessdayng

the materials and components — steel panels, tyres, electronics — may come to the country of final assembly from many different economies, all of which have varying regimes of carbon-emission pricing. Putting a fair carbon price on the import would be immensely complex. In reality the commission will probably start off with a small number of energy-intensive products such as steel, glass and cement to see how the tax works before broadening its coverage. Column chart of Share of steel imports in 2018, by origin (%) showing EU covers 74% of its steel needs but China dominates global market There are political as well as technical objections. European industry is often divided on the issue. Energy-intensive sectors such as steel have always been enthusiasts for a carbon border tax. The car industry and others, which use imported inputs and are concerned about retaliation against their exports from aggrieved trading partners, are much more cautious. The pushback has already begun. “The BDI is very concerned about CO2 import tariffs, especially with regard to their WTO compatibility,” says a spokesperson for the German business association. “Tariffs could quickly become a gateway to protectionism.” Europe’s steel industry — which faces competition from big producers such as China and South Korea — admits it will have to work hard to convince other sectors that such a tax is a good idea. “We need to discuss this more intensively with users including the automotive industry,” says Axel Eggert, directorgeneral of the European Steel Association. “We need policy actions to ensure that carbon border measures benefit everyone.” Given the technical and political complexities, the odds are against a carbon border tax being in place by the end of Ms von der Leyen’s presidency in 2024. There are more pressing challenges for combining trade and environmental policy. Next year or early 2021, a trade deal signed this summer with the South American Mercosur trade bloc of Brazil, Argentina, Uruguay and Paraguay will come up for ratification.

Thursday 12 December 2019

BUSINESS DAY

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Nigeria’s Malthusian challenge - Escaping the poverty trap Matthias Chika Mordi

igeria is enjoying a sustained period of high oil prices and nine successive quarters of economic growth. That’s the good news. Lurking beneath that is arguably the most formidable economic challenge confronting Nigeria since the civil war-era depression. Simply put, the economy is on an unsustainable trajectory. Average income for Nigerians declined for four consecutive years. Poverty and unemployment are growing at alarming rates; and,despite high oil prices, external borrowing ballooned to a fiscal constricting level where debt servicing now surpasses capital expenditure. Arable land growth is not commensurate to population. The structural problem: population is growing at a faster rate than economic output. Simultaneously, labor supply growth is outstriping job creation. This is happening within an economy already problematized by elevated unemployment(The World Bank estimates 40% of Nigerian youth are unemployed) and astronomical levels of extreme poverty in which almost half of Nigerians exist on less than a dollar a day. To use a dark analogy, it is like a person who falls into a very deep well on a rainy day, and sinks below the water line. Rescuers throw the individual a rope and stop the descent. This is akin to halting a recession. But, if rain fills the well faster than the rescuers can pull out the victim, drowning will occur. Here, rainfall is population growth, the speed of ascent of the victim is GDP growth. Malthusian catastrophe The classical economist Reverend Thomas Malthus in 1798 famously theorized that population will grow at a faster rate than food supply with calamitous consequences for society. Malthus advocated for “preventive” interventions through population control to avert “positive” corrections through catastrophes like war, famine, epidemics and natural disasters. While Malthusian theory has largely been “repudiated” by economic schools across the spectrum, current conditions in Nigeria might support its assertions. Economic booms and recessions in Nigeria are intricately linked to the cadences and vicissitudes of the oil and gas markets. Experts such as XX

opine that we are currently approaching the apogee of an oil boom. Unlike prior episodes, this boom has not translated to per capita income growth. Though GDP stopped contracting in 2017, growth oscillates between an inadequate 1.0 to 2.4 percent,according to NBS and World Bank data. Conversely, population growth remains between 2.6 and 3.1 percent, according to NBS and UNICEF. The implication: a sustained drop in average per capita income from $2,564 in 2015 to to $2,396 in 2018.This decline is exacerbated by extant and worsening poverty. In 2018, 87 million Nigerians or 47 percent of the population, were living in extreme poverty the worst of any country in the world according to World Data Lab, which created the World Poverty Clock. Nigeria’s fundamental challenge resides in the dependence on oil and gas for foreign exchange, government revenue and essential goods & services production.Because oil is the linchpin of Nigeria’s economy, oil price volatility and Nigeria’s stagnant oil output leaves the economy vulnerable to external shocks. The situation is critically compounded by structural impediments to non-oil economic growth and diminishing resources. Vanishing resources Nigeria is experiencing ominous declines in the ratio of petroleum and farmland resource per person. Nigeria’s oil production peaked at 2.63 million barrels per day (bpd) in 2005 (US EIA figures) and thereafter remained within a 15percent band of 2 million bpd. In 1980, Nigeria produced one barrel of oil for every 36 people. In 2000, that

figure declined to one barrel of oil daily for 56 people. In 2018, Nigeria produced one barrel of oil daily for 109 people! (interpolations based on US EIA and UN figures). It is a similarly dire narrative with arable land. The average Nigerian in 1970 had more cultivated land than three Nigerians today. Massive urbanization and desertification have taken their toll on available land and water. From 0.6 hectares per person in 1970, we have 0.18 hectares per person in 2016. Meanwhile, total arable land plateaued at 34 mm hectares (modified world bank data). Population growth will worsen these figures. Already lethal conflicts have emerged between pastoralists and farmers over farmland with disruptive consequences for agricultural output. In hundreds of reported cases, violence led to destroyed and abandoned arms and livestock fatalities. The consequence: worsening food production. Solutions Progressive growth in food production and public policy interventions largely averted Malthusian catastrophes. In some countries, policies such as food stamps and income redistribution circumscribed the scope of extreme poverty. Indeed, critics of Malthus’ theory point to the capacity of humans through science and technology - to expand food resources, alter consumption, and moderate population growth. When confined to a single country, empirical evidence points to “positive” corrections from famines, wars and pandemics. Nigeria requires bold interventions: 1. rapidly transform the economy, and

2. restrict population growth. Economic transformation To transform the economy, policy makers must target sustained double digit growth in GDP. Growth that is inclusive and resilient enough to endure future oil shocks and the impending debt crisis. A necessary policy portfolio for transformative growth will address government revenue, business growth, job creation, economic diversification and debt levels. To create fiscal space and increase business productivity: • Expand the tax collection net for corporates and individuals and eliminate leakages. Nigeria has less that one third of Ghana’s 18 percent tax to GDP ratio (OECD figures) and The World Bank prescribes a minimum of 15 percent for poverty reduction. • Privatize and sell 51percent of NNPC and monetize saleable real estate and business assets to raise over $10 billion. • Grant concessions and licenses as a revenue generator and financing tool for infrastructure and utilities. • Reduce the cost of governance by exploiting efficiencies in operation and plugging financial loopholes. • Eliminate subsidies on imported oil products. • Merge the current multiple forex windows • Restructure the national debt to improve domestic access to credit for businesses currently crowded out by public debt. • Implement business enabling policies and friction reduction that translates to higher corporate profits, financial market activities and higher employment (taxable persons). PEBEC is in the right direction and should be further resourced and

supported for scale. • Open the borders and avoid economic dampeners like higher value added tax or taxes on cash deposits. • Support trade agreements that favor Nigerian exports and drive standardization of Nigerian produce. Population management Multiple studies establish a causative link between female literacy/workforce participation and lower fertility ratios. Female illiteracy reached 47 percent in 2018, according to UNESCO data. An ambitious national scale four-year program that incorporates players in the education ecosystem-- including large international donors, FG and State governments, epistemologists, religious and cultural leaders - can radically reduce the level of female illiteracy and ultimately fertility ratios. A second palliative measure is to incentivize family planning with non-coercive methods. For example, policies linking the cost of some government benefits (cost of education or healthcare) to family size. Nigeria is a graveyard of failed policies. For successful implementation, the first step is to articulate a cohesive and comprehensive program with clear implementation timelines, responsible persons, measurable metrics and precise definitions of success for each goal. The next step is leadership commitment that cascades from the highest echelon to the lowest nodes of implementation. Time to Act Nigeria faces strong economic and demographic challenges today. Yet it is capable of turning this impending demographic “bomb” into a window of opportunity. Nigeria’s large population implies large market potentials, massive available pools of human capital and entrepreneurial talent. Nigerians are a resilient people and - when given the opportunity - display creativity and excellence in many endeavors. One only has to observe Nigerians in the diaspora to recognize this. It is our collective responsibility (government, businesses and citizens) to confront the enormity of the problem and act.

•Mordi is an economist, Chairperson of United Capital PLC and adjunct Professor at SAIS Johns Hopkins. He holds masters degrees from Harvard University, Johns Hopkins and American University.

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