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Nigeria fails to consolidate past electoral gains W ISAAC ANYAOGU

hile the Independent National Electoral Commission (INEC) headed by Attahiru Jega recorded three inconclusive elections in Imo, Bayelsa and Kogi State after the 2015 governorship elections,

As inconclusive elections turn norm in 2019 Violence, voter apathy mar polls

the commission under Mahmood Yakubu has recorded twice that number in the 2019 polls, besides rising violence and voter apathy. Results of an election are de-

clared inconclusive where the total number of registered voters in units where the results are cancelled, or where the elections are postponed, Continues on page 38

Market I&E FX Window CBN Official Rate Currency Futures

($/N)

FGN BONDS

TREASURY BILLS

Spot ($/N)

360.23 306.95

-0.23 12.19

0.04 14.28

0.27

NGUS MAY 29 2019 362.05

14.47

NGUS AUG 21 2019 362.50

10 Y -0.01

20 Y 0.08

14.30

14.33

NGUS FEB 26 2020 363.40

Nigerians demand airlines cancel B737 Max order after deadly crash ... China, Ethiopia ground airplanes, as AirPeace says no plans to cancel order yet ... Boeing’s shares fall by 13% IFEOMA OKEKE

igerians are demanding that AirPeace and Green Airways cancel their order for Boeing’s 737-800 MAX aircraft following the crash of Ethiopian Airlines’ flight on Sunday, which killed all 157 people Continues on page 38

Inside FMO arranges $162.5m syndicated loan for P. 2 Access Bank

L-R: Roosevelt Ogbonna, deputy group managing director, Access Bank plc; Peter Van Mierlo, CEO, Netherlands Development Finance Company (FMO), and Herbert Wigwe, group managing director/CEO, Access Bank plc, at the signing ceremony of $162.5m Subordinated Syndicated Loan to Access Bank at the Hague, Netherlands.

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Tuesday 12 March 2019

Major powers’ trade wars, messy Brexit could hit oil demand – IEA DIPO OLADEHINDE

or the first time since the referendum of June 2016, Paris-based autonomous International Energy Agency (IEA) has warned that the UK’s exit from the European Union and trade disputes between major powers could hit global energy demand. Essentially, consumption of oil depends on the strength of the world economy and IEA said uncertainty stemming from trade rows as well as concerns about a mismanaged Brexit were major factors that might alter consumption patterns. “Ongoing trade disputes between major powers and a disorderly Brexit could lead to a reduction in the rate of growth of international trade and oil demand,” the Paris-based intergovernmental organisation said on Monday. Although IEA admitted that the economic mood was not encouraging, it, however, expects “oil demand to grow in our forecast, although at a more measured pace”. IEA noted that a key factor underpinning demand growth is that leading developing economies will continue to expand as China and India are expected to account for 44 percent of 7.1 mb/d growth in global demand expected by 2024. Also, IEA said the US will export more oil than Russia, reaching 9 mbd which will also unseat Saudi Arabia as the world’s top exporter by 2024. “The transformation of the United States into a major exporter is another consequence of its shale revolution,” IEA said. The forecast from IEA comes just weeks after the US exported a record 3.6 million barrels per day of crude oil. The country also exports about 5 million bpd of petroleum products, including refined fuels like gasoline. The US topped the Saudis and Russians to become the world’s biggest oil producerin2018.Pullingaheadofthem in the export market would further erode their influence in the oil market. Saudi Arabia and Russia have

formed an alliance in recent years, coordinating oil production among OPEC and other oil producing countries. The so-called OPEC+ alliance has capped output for much of the last two years, helping to boost oil prices after a punishing downturn. IEA in its report released on Monday said buyers of crude oil, particularly in Asia, where demand is growing fastest, have a wider choice of suppliers which will also give them more operational and trading flexibility, reducing their reliance on traditional, long-term supply contracts. IEA noted that global trade is not simply a story for the US, acknowledging that the second-largest increase in crude exports comes from Brazil, which will ship an extra 0.8 mb/d of oil by 2024. “Following Brazil, Norway is enjoying a renaissance and will overtake Kazakhstan and Kuwait in the next five years, a remarkable achievement,” it said. Around the world, more consumer demand means more plastic, which in turn means more petrochemicals. IEA said despite efforts to curb plastics use and encourage recycling, demand for plastics and petrochemicals is growing strongly led by the United States and China. It identified more than 50 major projects due to come on-stream through 2024 which are expected to add 2.2 mbd in oil consumption over the forecast period, accounting for 30 percent of global growth. “While the lack of complete visibility on new projects causes our estimate to fall towards the end of the forecast period, it is highly possible that more projects will be announced and that demand could be higher than currently anticipated,” IEA said. The other major growth sector is aviation. IEA said demand will continue to grow strongly, supported by rising incomes in developing countries, more airports being built and growing airline fleets with Asia expected to accounts for 75 percent of this increase over the forecast period.

GTBank expects sluggish profit growth in 2019 OLUWASEGUN OLAKOYENIKAN

igeria’s highest capitalised lender, Guaranty Trust Bank plc, has forecast sluggish profit growth and increased loan book this year compared to 2018. The tier-one lender grew pretax profit by 9 percent to N198 billion in 2018 but expects a 2 percent surge in its earnings in 2019 to N220 billion, according to the 2018 full-year investors presentation on its website. Guaranty Trust Bank also anticipates its loan growth to grow by 10 percent in 2019, after sliding 13 percent in the previous year and 9 percent in 2017. Customer deposits are projected to rise by 12 percent, more than 10 percent deposits growth achieved in 2018. The lender proj-

ects its net interest margin to hit 9 percent, lower than a record of 9.2 percent in 2018 and 10.4 percent a year earlier. Return on average equity is put at “above 25 percent” in 2019 as against 30.9 percent recorded last year, while return on average assets is expected to grow beyond 5 percent after recording 5.6 percent and 5.2 percent in 2018 and 2017, respectively. The bank released its 2018 financial results last week which saw gross earnings rising 3.69 percent to N434.69 billion and after-tax profit 9.96 percent to N184.63 billion. The tier-one lender proposed a final dividend of N2.45 per ordinary share held as of April 8. But in spite of these, the bank’s stock dropped 1.71 percent to N37.3 as at the close of business on Monday.

L-R: Magnus Nnoka, president, Risk Management Association of Nigeria’s (RIMAN)/chief risk officer, Coronation Merchant Bank; Kaodi Ugoji, associate executive director, corporate development, FMDQ; Allan Ralph Thompson, managing director/chief executive officer, Dreadnought Capital, and Jumoke Olaniyan, vice president, market architecture, FMDQ, at the RIMAN Q1, 2019 risk roundtable in Lagos.

New Minimum Wage, MTEF/FSP, 2019 budget top agenda as Senate resumes today OWEDE AGBAJILEKE, Abuja

arring any unforeseen circumstances, the Senate will resume plenary today, March 12, 2019, with the approval of the new National Minimum Wage Bill, 2019-2021 Medium Term Expenditure Framework/Fiscal Strategy Paper (MTEF/ FSP), N8.83 trillion 2019 Budget and other critical bills on top of its agenda. The Senate will also be reconsidering some critical bills earlier rejected by President Muhammadu Buhari. These include the Petroleum Industry Governance Bill (PIGB), Stamp Duties (Amendment) Bill, Industrial Development (Income Tax Relief)

(Amendment) Bill, National Research and Innovation Council (Est.) Bill, National Institute of Hospitality and Tourism (Est.) Bill, National Agricultural Seeds Council Bill, Chartered Institute of Entrepreneurship (Est.) Bill, among others, as well as five constitution amendment bills. The lawmakers’ resumption was earlier billed for February 19, 2019, but had to be postponed to February 26 after the Independent National Electoral Commission (INEC) moved date for the Presidential and National Assembly elections by one week. On February 26, however, lawmakers adjourned plenary by two weeks due to the absence of the constitutionally required one-third

of senators (37 lawmakers) needed for the session to hold. Prior to the adjournment, Senate President Bukola Saraki had assured that the Minimum Wage Bill would receive speedy consideration upon resumption. “By the time we resume (on March 12), the new National Minimum Wage Bill will be the first item for consideration. And I am sure that because of the importance of it, and the feedback I have received from a lot of our colleagues is that they also want to contribute personally to the debate,” Saraki had said. However, in line with parliamen-

Continues on page 38

FMO arranges $162.5m syndicated loan for Access Bank HOPE MOSES-ASHIKE

ccess Bank plc on Monday announced that it has signed a subordinated syndicated loan agreement totalling $162.5 million with FMO, the Dutch development bank. The facility will qualify as Tier-II capital, which will enable Access Bank to roll out its five-year strategy of becoming Africa’s gateway to the world. Part of that strategy is also to deepen the footprint in the retail segment as well as increasingly support local Micro, Small, and Medium-size Enterprises, thereby supporting job creation in the Nigerian economy. According to a statement made available to BusinessDay, the facility has been arranged by FMO and is provided together with BIO (Belgian Investment Company for Developing Countries SA/NV), Blue Orchard Microfinance Fund, CDC Group plc, DEG (Deutsche Investitions-und Entwicklungsgesellschaft mbH), Finnfund (Finnish Fund for Industrial Cooperation Ltd), Oikocredit (Ecumenical Development Cooperative Society U.A.) and European Financing Partners S.A, funded by the European Investment Bank acting on behalf of the European Community and Norfund (Norwegian Investment Fund for Developing Countries). FMO acted as the Mandated Lead Arranger and will be the

Facility Agent. “We are pleased to have worked with a world-class group of lenders on this transaction. The deal further reinforces the fact that our institution remains globally respected and reputable,” Herbert Wigwe, group managing director and chief executive officer, Access Bank plc, said regarding the transaction. “The syndicated facility is geared towards supporting the bank’s efforts to promote the growth and job creation potential of the private sector through improved access to financing. Additionally, specific attention will also be paid to strengthening Micro, Small and Medium-size enterprises as many have been held back due to a lack of access to finance. We believe this relationship will be the beginning of many more international partnerships with such entities,” Wigwe said. Linda Broekhuizen, chief investment officer at FMO, said the Dutch development bank was proud to be the Mandated Lead Arranger for the landmark transaction. “Through this transaction, FMO strengthens its long-standing relationship and commitment to our well-reputed client Access Bank. All lenders are pleased to be significant contributors to fostering the Nigerian economy and supporting job creation,” Broekhuizen said. Access Bank plc is a full-service

commercial bank operating through a network of 380 branches and service outlets located in major centers across Nigeria, sub-Saharan Africa, and the United Kingdom with representative offices in China, Lebanon, India and the UAE. Listed on the Nigerian Stock Exchange in 1998, the bank serves its various markets through four business segments: Personal, Business, Commercial, and Corporate & Investment Banking. The bank has over 830,000 shareholders including several Nigerian and international institutional investors and has enjoyed what is arguably Africa’s most successful banking growth trajectory in the last 12 years ranking amongst Africa’s top banks by total assets and capital. As part of its continued growth strategy, Access Bank is focused on mainstreaming sustainable business practices into its operations. FMO is the Dutch development bank and has invested in the private sector in developing countries and emerging markets for more than 45 years. Its mission is to empower entrepreneurs to build a better world. FMO invest in sectors where it believes its contribution has the highest longterm impact: financial institutions, energy, and agribusiness. With an investment portfolio of EUR 9.2 billion spanning over 85 countries, FMO is one of the larger bilateral private sector development banks globally.

Tuesday 12 March 2019

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Tuesday 12 March 2019

March 9 elections marred by irregularities, intimidation, violence - EU EOM ... calls for reforms in electoral process INNOCENT ODOH, Abuja

uropean Union Elections Observation Mission (EUEOM) to 2019 Nigerian elections has decried the irregularities, intimidation, violence and low turnout that characterised the March 9, 2019 governorship and state houses of assembly elections. The EU chief observer, Maria Arena, made this known while presenting the preliminary report of the EU Observation Mission on the March 9 polls. She said the environment had been difficult, with cases of violence and intimidation, including attacks on election administration officials. Arena said on election day in five states, journalists from respected media houses were obstructed from reporting in areas with history of electoral problems, including parts of Rivers, or were attacked while trying to report on electoral malpractices. “Such incidents limit scrutiny and therefore transparency of the process,” she said. The EU Mission, which regretted the loss of lives in election-related violence, lamented that far too many Nigerians had died, stressing, “it is troubling and those responsible must be held to account.” The EU noted that although the election operations improved, its observers were obstructed by the military and security agents, adding that the EU and other observers were also denied access to collation centres in Rivers State apparently by military personnel. “This lack of access for Observers compromises transparency and trust in the process. In Rivers, INEC yesterday suspended until further notice the elections due to violence in polling units and collation centres, staff being taken hostage and election materials, including results sheets, seized or destroyed by unauthorised persons. There is no doubts that the electoral process there was severely compromised,” the EU said. The Mission also decried what it observed as indications of vote buying at eight polling units, adding that it also observed eight cases of obvious underage voting. It however, said that counting of ballots was transparent overall.

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Passenger with ‘terminal disease’ dies on-board Delta flight to Lagos IFEOMA OKEKE

n unidentified passenger passed on Monday three hours to landing aboard Delta Airline flight to Lagos from Atlanta, US. A source close to the airline who craved anonymity told BusinessDay that the deceased had a terminal disease and wished to come back to Nigeria, his home land, to spend the rest of his life. According to the source, “The deceased had a certificate from a hospital in the

United States of a serious terminal disease, indicating that he may soon pass on. So, the deceased decided to come back to his home land to spend the rest of his life, knowing the complexities and costs it will take bringing back his corpse, in case he doesn’t survive the illness.” The source explained further that Delta Airlines did the man a favour by bringing him home, adding that it was just to help him. However, Rose Moses, an acquaintance to one of the passengers onboard complained on Facebook

that she had waited for two hours at the car park of the Murtala Mohammed International Airport in Lagos, wondering why passengers aboard Delta Airlines flight from Atlanta to Lagos, which touched down over two hours ago were yet to be out of the airport. Moses said after placing calls to the person she was waiting for, she was told one of the passengers died three hours to landing aboard the flight and therefore, all passengers were asked to remain seated until the body was evacuated.

“I also learnt of another Nigeria on a flight from the US to Nigeria last week that also died in another flight while also returning from US to Nigeria,” she said. She recounted an experience of a friend couple years back while waiting for the daughter got message afterwards that their flight made a return, as a matter of policy, after several hours of flying because a passenger died on during the flight. However, the Federal Airports Authority of Nigeria (FAAN) said no report of such had come to them as at

the time of filing this report. Nonetheless, Henrietta Yakubu, general manager, public affairs, FAAN, said the authority would investigate the issue as soon as possible. Delta Airlines in a statement said, “A passenger on Delta Flight DL54 travelling from Atlanta to Lagos today (11 March), was found unresponsive before landing. Local medical professionals met the plane upon arrival and confirmed the passenger had sadly passed away. Delta extends its deepest condolences to the family at this sad time.”

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Of emperors and their empires STRATEGY & POLICY

MA JOHNSON

nly state governors in Nigeria can be emperors. Or who else can be an emperor in Nigeria? Our state governors irrespective of religion and tribe are the ordained emperors at state level where they play God. Since 1999, many Nigerians have focused their attention on the presidency, who occupies it, what are his policies and strategies for implementation, without watching closely what happens at states and local governments. And because “we the citizens” fail to challenge status quo, almost all the states are below acceptable standards in terms of governance and development. Most times, columnists, political analysts and commentators including journalists have erroneously concentrated on the government at the center, forgetting that all politics is local. If indeed, all politics is local, Nigerians would have monitored closely what happens in their states and local governments. If there was no development in all the 774 local governments, there cannot be progress in all the states. I have travelled to more than twenty states in the country, some of them are glorified villages. Most states capitals are without adequate electricity supply and good

roads, while our rural areas are really backward. It is for these reasons and many more, that one expects our professional politicians who serve as governors to pay attention to everyday issues affecting their people and proffer workable solutions to problems. How can we have a breakdown of meningitis requiring immediate medical attention in Zamfara State, and what the governor had to say is: “God sent meningitis to punish Nigerians for their sins.” I thought the governor was being ridiculed by the media until he was reported as saying he is not the chief security officer of his state because of incessant killings of the people he governs. He simply let go his responsibility as chief security officer because he could not articulate strategies to protect the state, its people, and implement same. Yet, he did not resign as the state governor. This is only one of many examples. We cannot continue to ignore what happens in most of the 36 states of Nigeria where there is hardly transparency and accountability. To further compound the problem, many of the governors exercise their powers with total violation of the rule of law. Who will blame them? They have no one superintending over their constitutional responsibilities. State houses of assembly are extensions of their empires with the legislators caged, local government chairmen and their councillors have been rendered impotent. Yet, some powerful politicians say there is no need for restructuring. They have made up their minds that what the nation needs is to fight corruption. Once elected, the people cannot hold them accountable anymore. In fact, they exercise their powers “without any form of restraint- either by law or social conscience.” You need to see some state governors the way

they swagger in their empires. They sack their deputies at will. Report has it that since 1999, no fewer than 23 deputy governors have lost their jobs once they have independent views on any state matter. Many governors turn their deputies and other senior officials to glorified errand boys who have no rights to dissenting views on any matter. Most state governors are immersed in only self-serving matters either at the state or national levels respectively. But all you hear is: “My people! My people! My people,” when the people they govern are suffering and smiling. When one visits many of our states, one would see what a scholar of techno-economic development refers to as “development myopia.” Most of our governors use flawed theories and archaic ideas to stimulate economic growth in their states. People need food, housing, transport, electricity, jobs, healthcare and security, but they are provided with airports and stadiums in billions of Naira. This is akin to the case of medical myopia where a patient suffering from malaria is not properly diagnosed and treated, but suddenly death is the outcome for such a display of ineptitude. In such states, continued decline of their economies is inevitable. That is the tragedy in most states of the country where dire poverty has replaced affluence. Most roads in the country are in a state of disrepair. Health facilities are in a state of decay. About 13.5 million of the children residing in all the 36 states are out of school roaming the streetseither begging for money or selling cheap commodities from other countries. The nation has a youth bulge which is currently a liability as more than 55 percent of our youths (18-35yrs) are either unemployed or underemployed, according

‘

Many governors turn their deputies and other senior officials to glorified errand boys who have no rights to dissenting views on any matter

to statistics. One can only imagine what Nigeria will look like if states can boast of jobs, good roads, electricity, pipe-borne water, healthcare facilities, and sufficient food. But only very few governors come up with brilliant responses to the needs of the people. To worsen the matter, many Nigerians are passive to an extent that often, our emperors find themselves spending recklessly the meagre allocation they get from the monthly Federation Accounts Allocation Committee meetings. Nigeria wants it this way and that is why the states have adopted the begging bowl approach to survival. At the end of each month, state officials go cap in handto Abuja to share money. It’s very disturbing to see owners of resources go to someone else to beg for a little of what belongs to them. That is the way our 1999Constitution says it should be. The newly elected governors and state legislators are congratulated. They must be innovative and be close to the people as they govern their states by adopting the bottom-up approach to leadership. Nigerians deserve a better deal from democracy. We need to transform our states, and this requires a deliberate action on the part of all the state governors and the citizens of Nigeria. Most importantly, our state governors should demonstrate capacity to create, renew and increase wealth of the people who voted them into office on a continuous basis. The coast of poverty across 36 states is expanding at an alarming rate. This calls for meaningful economic reforms throughout all the states of Nigeria. Johnson is an eclectic researcher, writer and columnist whose articles cover maritime, defence, technology and public policy issues and other areas of human interests. He is a member of the BusinessDay Editorial Advisory Board)

Contemporary public relations: The place of big data

Stanley Olisa

ust like every other human enterprise, the field of Public Relations (PR) has continued to evolve, with new technologies, trends, and practices. Some of these inevitable innovations are disruptive, altering the traditional model of professional public relations practice. While some practitioners have embraced these changes, others, especially the conservative, have been averse to these novelties, probably because they have become so accustomed to the stereotypes of conventional PR, to the extent that they are now psychologically wired to oppose any deviation from the status quo. But no one can bridle the wave of technological innovation? Contemporary public relations has gravitated from a ‘business of relationships to a business of terabytes.’ It is within this context that we situate the practice of ‘Big Data.’ Big Data has permeated public relations. This is apparently understandable because the PR profession is predominantly data-driven. For PR efforts to be strategic, the practitioner must painstakingly research to

obtain data which will inform his strategy development process. In traditional PR, there are standard tools deployed to achieve this, both before the campaign and after the campaign. The post-campaign ‘research’ takes the form of evaluation and measurement. Big Data has come to stay in PR. No one can controvert this assertion. However, are its benefits being fully harnessed in Nigeria’s PR space? Also, do our practitioners now have a comprehensive grasp of its complexities and application? The answer is ‘no.’ This is consequent upon factors such as digital illiteracy, lack of access to digital technology; professional conservatism; low investment in digital, etc. Big Data can be applied in several ways when running PR campaigns and, in fact, every other form of marketing communications project. It helps professionals effectively analyze an organisation’s internal cum external environments, with the corresponding interplay, and develops approaches for setting more apt objectives, more strategic positioning, and appropriate audience targeting. Big Data applications produce a broader impact- they create more opportunities to measure and accentuate the value which PR is adding to an organization. With Big Data, the PR professional can cogently show the contribution of PR to the overall business, not just reputational capital. Landscape analysis is an essential function of public relations. This is often called ‘environmental scanning.’ Normally, the landscape analysis informs the PR practitioner of the interacting variables in the operating business environment such as media trends, marketplace

dynamics, and competitive PR activities. This knowledge arms the practitioner when making communication decisions and defining tactics. However, Big Data takes it further by expanding the scope of this analysis to reveal general economic pointers, regulators’ activities, client and competitors’ business results, investment opportunities, societal trends, and other factors which may bear upon the existence of the organization. As a corollary, Big Data enables the PR practitioner to better analyse the opinions, attitudes, needs, preferences, and behaviour of his organisation’s stakeholders. Big Data has made PR more analytical. For instance, with Big Data, the practitioner can comfortably analyse variables like his company’s digital news mentions, share-of-voice, social media metrics, all of which provide helpful insights for subsequent communication efforts. Every PR campaign is driven by objectives reflecting what the organization seeks to achieve through the instrumentality of communication. We all know the regular objectives of increasing brand awareness, raising corporate profile, achieving positive publicity, etc. These lines have become so commonplace that they no longer sound real. In my years of practicing strategic communications, almost every PR proposal has those lines or a couple of them. But Big Data encompasses goals which directly impact the fortunes of the organization such as beefing up operational efficiency, generating interest from key stakeholders, reducing costs, attracting and retaining the right talent, etc. Thus, with Big Data, the PR professional can

accomplish more and add more value to the organization. Such value becomes very visible, and he will not have to grapple with the hurdle of always having to prove the worth of PR in the organization. Over the years, proving the worth or showing the results of PR has been a subject of professional and academic discourses. In fact, many believe that measuring the impact of PR is impossible, a mirage of some sort. It’s a challenge. This explains why several company owners do not pay serious attention to PR. They only do reactive stop-gap campaigns. But with Big Data, you can see the tangible results produced by public relations efforts. This way, it becomes clear how PR is adding to the bottom line. Similarly, people tend to evaluate the success of PR campaigns based on positive coverage by target media, raising awareness, influencing attitudes, and the like. But in Big Data PR, the practitioner is able to show how PR is positively shaping other variables that impact the organisation’s bottom line. With Big Data, the impact of PR on other agents of business is more visible. In Nigeria, there are very few reputation management companies that have understood the science of Big Data. Few have started leveraging Big Data in servicing their clients. Caritas is one of such PR companies. Caritas is a specialist strategic communications firm providing bespoke communications services to companies across different sectors including- oil and gas, FMCG, health, and ICT. In the 21 Century communications practice is incomplete without adequate analytics. Stanley Olisa is a Media and Communications Strategist with Caritas Communications

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Rethinking housing finance Wole Olabanji

ater pass garri is a very apt way to describe the housing finance situation in Nigeria. The Managing Director of the Federal Mortgage Bank at a recent industry event mentioned that since inception in 1973the FMBN has funded 18,935 mortgages at a total cost of N193.4 billion. To put things in context, Nigeria has a mortgage to GDP ratio of circa 0.6%, which is puny, compared to our regional nephew; Ghana

which stands at 2%, and very abysmal when viewed against south Africa with a 31% ratio. Clearly, while the mortgage industry has been around for nearly half a century, it has not shed its nascence. The obvious question then is; if the mortgage industry is so underdeveloped, how have Nigerians been acquiring homes? Available data suggests that over 90% of homes in Nigeria are acquired by incremental building. This is analogous to buying a car in parts; one tire today, a carburetor in six months and a pair of seat belts a while later. However, as grossly inefficient as this method of home acquisition is, given the very high interest rates for mortgages, it is by far the more practical, and affordable option open to most Nigerians. In light of the pittance that the FMBN brings into the housing finance pool, the effective mortgage interest rates in Nigeria which ranges from 15% - 22% will make even soulless loan sharks in more

advanced economies drool with longing. So, why isn’t capital flowing, as it should in the direction of the greatest return? Why isn’t the Nigerian mortgage sector awash with patient international capital in pursuit of the clearly higher returns that can be made? There is a long list of reasons but these three are perhaps most critical. Firstly, the significant foreign exchange risk associated with volatile frontier markets; secondly, the fact that capital is mostly sector agnostic, and so even if it comes into Nigeria, it would probably go into sectors with less risk, and greater asset liquidity; and thirdly, the often ignored fact that in spite of the touted housing deficit figures, the high poverty rate in the country means that there is actually very little effective demand for housing. Since pulling oneself up by the bootstraps is in reality a rare miracle or a freak accident, how else might we succeed at the more practical matter of attracting

‘

…the effective mortgage interest rates in Nigeria which ranges from 15% - 22% will make even soulless loan sharks in more advanced economies drool with longing

capital into the mortgage sector? Apparently, our current macroeconomic and policy environment makes it difficult to pull in patient institutional capital. Consequently, it will be useful to explore other avenues for attracting capital that are relatively cheap, and somewhat patient. One such vein of capital can be diaspora remittances. Most recent data indicates that annual remittances through formal channels amounts to about $25billion. A useful backdrop against which to view this figure is the total mortgage loans generated by FMBN in its nearly half a century of operation; N193billion i.e$0.5billion. Clearly, given the right policy, and legislative framework, and a conscientious marketing programme, the Nigerian Diaspora can with a tiny fraction (2%) of their annual remittances, equal FMBN’s 50year performance. Wole Olabanji is Chief Executive Officer of CoBuildIT.com He writes from Abuja

Translating Nigeria’s agricultural potential into food security

Oluwadara Alegbeleye

espite Nigeria’s widely acknowledged agricultural potential, the country is a net importer of food. Demand far outstrips local production, so that our major food staples;- cereals, whole grains, milk and dairy, roots, animal products, sugar and sugar crops, vegetable oil and pulses are sourced from different parts of the globe. Of our myriad problems, threats to food security and or safety is arguably the most significant,seeing as food is basic for human survival and socio-economic development. Apart from agro-related challenges such as the continued adoption of obsolete planting and harvesting techniques, inadequate provisions of agricultural input, bad post-harvest/post-production practices, other defective practices along the food production and supply chain, land availability and appropriation, experts have over time identified other threats to food security. Some of these include incessant conflicts in many regions especially agro-ecological zones, insurgency and other versions of insecurity, climate change and attitudinal factors. Despite

government efforts and several locally and internationally sponsored agricultural transformation schemes, Nigerian agriculture is still largely unsustainable. Up till now, except for a few rich, modernized farms, most farms do not have access to agri-tech know-howthat can sustainably and effectively improve seed and soil quality, water management and application,waste management, microbiological quality of produce to minimize spoilage and waste and so on. Poor postharvest handling (storage and preservation) is particularly relevant for highly perishable commodities such as fruits and vegetables. Nutrition and medical research have associated consumption of fruits and vegetables with improved wellbeing, spurring global governmental effort to encourage consumption. Certain research output however, indicate that most Nigerians’ consume much less than the recommended portions. While this could be attributed to attitudinal factors, it could also be due to post-harvest losses, which reduces the proportion that makes it to retail, hiking prices and reducing availability for consumers. More effort to improve post-harvest handling to reduce losses both at the industrial and household level is therefore, desirable. The simplest first line of action in this regard is to improve electricity supply for storage.Transportation that ensures proper packaging and temperature management during transit is imperative. It is also important to invest in local research to inform best preservation/processing technologies to reduce decay and maintain overall quality of indigenous fruits and vegetables. Good

techniques are those that can prevent deterioration and improveshelf-life without altering the nutritive or functional profile of produce items. Land availability is another important threat to food production in Nigeria. Apart from systemic problems, such as unlawful land grabbing and disputes, land misappropriation and misuse is a growing, bothersome pattern. In some parts of the country, designated agricultural areas are rapidly being converted to residential or other commercial purposes. In some other African countries, when you travel along the countryside, you see plantations, vineyards, animal farms and other agricultural or manufacturing activity. Along expressways connecting Nigerian cities, you mostly see buildings; all kinds of buildings, occupying cultivable and otherwise useful land. Such reckless anthropogenic land degradation and misuse reflects our collective disregard for agricultural innovation and productivity. Little wonder why in many parts, subsistence and all types of self-production is diminishing at an alarming rate, reducing yields, weakening smallholder livelihoods and affecting the quality of many peoples’ diets.Although conflicts pose major risks to livestock and crop production, insecurity already affects a large proportion of Nigerians’ daily life and has great potential to reduce the quality of life of several others in subsequent years. It is therefore needless to emphasize the need to tackle insecurity at all levels. Considering Nigeria’s legion of woes, there is virtually nothing we can do about climate change. We should however, de-

velop strategies to minimize the impacts on farming and overall agricultural productivity. It is also important to note that agricultural activities may in fact contribute to/exaggerate climate change, which is why the importance of adopting environment friendly production and mitigation strategies cannot be overemphasized. Despite multiple, complex challenges in addressing this balance, the aim must be to achieve food security without hampering ecological and human health. Addressing the above identified issues is very likely to boost food supply. Food could however, be available but not accessible, which is why an overhaul of the distribution and marketing steps of the supply chain is necessary. All factors that influence accessibility, affordability and suitability of supply at the national, community and household level need to be optimized to ensure adequate food provisions for Nigerians. We need useful private-public partnerships that will develop a broad agricultural agenda that can suitably address agricultural production, post-production preservation or processing and distribution. We need meaningful financial schemes, sound institutions, effective trade, better extension and efficient transfer of innovative technologies. Noteworthy is the fact that revamping these steps along the food production to distribution continuum is bound to create desired jobs and continued professional training for many Nigerians. It will also fortify our agricultural sector and boost rural and peri-urban development. Oluwadara is a writer as well as an academic researcher. She is currently a PhD student at the Department of Food Science, University of Campinas

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Chibok girls: Five years after

ater this month we will celebrate the fifth anniversary of the abduction of the Chibok girls and still over 115 of the girls still remain in captivity with hopes of getting them out alive fast fading especially with the revelation, last year by Ahmed Salkida, a journalist who has covered the insurgent group for a long time, that only 15 of the 113 girls are still alive and that even these were no longer in the control of the Boko Haram leader but have been married off probably to Boko Haram fighters. Although the government has flatly denied Salkida’s account, the inability to bring back the girls even after the government claimed to have successfully negotiated the release of the kidnapped Dapchi girls does not inspire confidence and hope. Here we are, five years into the abduction saga and government has not been able to fulfil the promise it made to Nigerians and their parents to bring back the girls alive. We are left to wonder whether if these were the daughters of

high ranking politicians and government officials, they would have remained in captivity this long! But alas, these are daughters of poor Nigerian men and women, struggling daily to make a living and to provide their children a better slate in life, amidst the hardships and economic challenges worsened by the impunity with which our leaders have run this nation for years, and they are yet to be found. Perhaps, the Defence Minister, Brig. Gen Munir Dan-Ali was speaking the mind of the government sometime back when he said it will take years to rescue the remaining of the Chibok girls. “It was an 8-10 year struggle by the U.S. intelligence and special operatives to get Osama bin Laden,” he claims. Herein lies the anguish of the parents of the missing girls and Nigerians in general who have been appalled by the manner in which this issue has been handled since 2014. Why will it take years to rescue our daughters and sisters snatched in the prime of their youth by these depraved men leaving chaos and pain in their wake? There is very little to show

that the past or present government has taken up a very personal struggle to find these girls. And only a very personal struggle will do in this instance. In May 2014, shortly after the incident, Amnesty International accused the Nigerian Army of not acting on advance warning that the kidnapping would happen. Then information minister, Labaran Maku dismissed the statement as outrageous and promised it was going ‘to be investigated’. Buhari had, during his inauguration declared his unflinching desire to find these girls saying the defeat of the sect would only be complete when they were found. In December of 2015, Buhari declared that the sect had been defeated. Over a hundred of these girls are yet to be found. It is compelling to see that five years down the line, the hope of these parents and the outcry from some of the initial campaigners that sought the immediate release of the girls have not dimmed. Who can blame them? We cannot imagine the anguish and indescribable pain and loss that they have had to carry for four long years. We

cannot imagine the sense of loneliness that they have been thrown into given that the government whose duty it is to protect and preserve the lives of its citizens have not done enough to ensure they come back. We cannot imagine the vacuum that their disappearance has caused their family, friends, teachers and all who knew them. We cannot imagine the renewed sense of loss they must have felt with each girl who returned. The government has shown over the period that the lives of its citizens can be toyed with and treated with levity. The Chibok girls are not the only victims of the insurgency and mayhem in the northeast and it only goes to show how many more children and women will be forcefully taken and never be accounted or fought for. It is time to seek for all the international help that is necessary to finally solve the conundrum of the Chibok girls. The family of these girls deserve to have their daughters back or at worse know what has happened to their daughters. The government must be able to rescue them or provide explanations as to what happened to them.

Bashir Ibrahim Hassan

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Africa’s largest drug maker falls to 7- year low as divestment plan drags

Pg. 15

C O M PA N Y N E W S A N A LY S I S A N D I N S I G H T

Apis Partners targets fresh Nigeria deals before year-end (2) With presidential elections now behind Nigeria and the economy recovering from 2016’s contraction, UDAYAN GOYAL, co-Managing Partner at Private Equity firm, Apis Partners LLP, in this interview with Business Day’s LOLADE AKINMURELE, spoke of the firm’s investment plans for Africa’s most populous nation in 2019. Excerpts:

hen did you get the license The unit license was received in 2011 and the national

license in 2016. The second company is Transfast which is one of the largest money transfer companies in the world and Nigeria is a very important corridor that accounts for a good chunk of payments, particularly from the USA. The company is one of the biggest facilitators of remittance payments which are very important for economic growth. The third company is Direct Pay Online (DPO). It is now the largest online payment platform in Africa and it is currently entering West Africa, Nigeria and in Ghana. DPO has applied for a PSSP license with the Central Bank and is going through the process. We expect the Central Bank to meet the company’s local subsidiary, One Payment Limited, within the next few weeks. Finally, we have Green Light Planet (GLP) which is the largest off-grid solar financing company in the world and it has a big operation in Nigeria. This is a very important financial inclusion tool. People often ask us why is solar an important financial inclusion tool. The reason is that in many parts of Africa, people often have limited access to grid power so traditionally people have used kerosene lamps which are dangerous and relatively expensive given the cost of kerosene. So, what GLP does is it provides solar devices with battery packs that can power three or four lights. That’s the only basic product and there many other products. The basic product can be bought outright or GLP can give it to the user in exchange for a deposit, then the user makes daily payments under a leasing arrangement. Many people in rural communities have never enjoyed access to affordable financial services but they are now doing that by leasing a piece of equipment that helps light up their house and the battery pack also allows them to charge their phones; which are also important tools for financial inclusion. For most of the beneficiaries, it is the first time they’re effectively receiving a loan to buy a piece of equipment they use in their house and by repaying the loan, which is within 180 days, they create a credit history which provides for further loan opportunities. Also, once they’ve paid in full for the equipment, they can use that same piece of equipment as collateral to take out another loan, if required. This is deals with access to credit and is a very important part of financial inclusion. One big issue we face in Nigeria is the lack of good mobile money infrastructure. It has meant that we’ve had to use the agents who install the equipment to collect lease payments. As a result, rather than collect daily payments, they have to collect seven days’ worth in advance. For comparison, in East Africa, people pay with mobile money on their phones every day. Can you shed light on some of your products at GLP? We have an entry level product which is a solar lantern and it has an MP3 player, radio as well as a USB phone charger. And we plan to expand further and introduce more products. What people need, from a productivity perspective, is to have light at night. I have been to many provinces in Kenya where shopkeepers cannot stay open at night due

Udayan Goyal to lack of electricity. There are communities in Lagos that lack electricity people have to have to go to their nearest town and pay to charge their phones. The GLP’s entry product is relatively affordable at around $40. What is the feedback you have received regarding the products and what have been your biggest challenges? We have had a lot of success in Nigeria so far, although as I mentioned earlier, the main issue is the lack of requisite infrastructure,. That is the one big issue. We are hoping that once the infrastructure gets built, that will bring less friction around the instalment collection process. The second challenge, which we are going to ask the government to support us on, is the tariffs on importing the solar devices into the country. Because our products and payment method can be deemed as a tool for financial inclusion, the government should seriously consider granting exemption on the customs duties and tariffs on imported solar devices. That is something we are pursuing with the relevant people over the coming months because we believe the more of these devices we can deploy, the better off people will be as it solves two problems for them. The First is the issue of getting electricity into homes and businesses while the second is that our payment plan solves the financial inclusion problem which is a significant developmental objective. I keep bringing up financial inclusion because it has a significant impact on economic growth. About a year ago, BCG conducted a study that showed that for every one percent increase in financial inclusion there is a corresponding 3.6 percent increase in GDP growth. The multiplier effect of financial inclusion is very important, and it is a very important part of our investment thesis at Apis. We call this “Contextual Financial Services.” People don’t wake up in the morning and think, “I would like to have a loan today.” They wake up and say, “I would like to buy a car” and then when they are ready to buy the car, they want financing for that car and insurance. So, the way we consume financial services is very different from how we consume FMCG products. We see financial services embedded within products like these and we bring these rural customers into a form of financial economy because then they build a credit history with it and then can borrow. After

that they find the need for a deposit account to store their money in. In many countries, what we find is that people don’t have a place to deposit their money from a perspective. It is very important for people to be able to put their money in a deposit account and build a credit history. The reason is because one of the things we need as people is access to finance. An unexpected event could use up all a person’s funds. After that, their cash-flow becomes tight. If they have a credit history and they could deposit what you can to either pay for the unexpected event directly or allow their insurer deal with it. As such, being financially included not only allows them to have a bank account, it also helps them have access to an insurance scheme and other financial products at an affordable cost. Even if they don’t have insurance, they can pay bills and have access to credit and smooth out their consumption. This kind of smoothing out can only happen when they are within the formal financial services ecosystem and products like these allow them to do that. Why did APIS suddenly pull out of the Bankers Warehouse deal? Before I respond, I’ll like to provide some context. As a private equity fund, the trajectory of our deal begins with a discussion, after which we decide whether we are interested in the company. Then we spend a lot of time getting to know the business; the company, the management, the business plan. In the absence of a business that we actually help them build a business plan and mapping out

If Nigerians, abroad keep sending money back to Nigeria, then this market will keep growing

a value creation plan in which we think about how can we help them expand. One of the things we did with GLP was to develop a value creation plan in Nigeria which we are now executing. If we do all of that and everything goes well, we sign a transaction document which contains some conditions that need to be fulfilled before we can invest. These conditions can be regulatory approval or in some cases, approval to send funds into that particular country. In the case of Bankers Warehouse, we had some conditions that needed to be fulfilled before we completed the deal and those conditions were not fulfilled within the timeline that we had envisaged. That timeline elapsed and so we couldn’t consummate the deal. The most important thing in all of this is discipline. This is our investors’ money and we have a lot of responsibility to safeguard it. So, if we think everything is not a 100 percent, we don’t do the transaction. As you know, we make these investments all the time and we put a lot of effort to make sure we maintain the discipline to walk away from a transaction however difficult that can be. Our judgement making process has to be clear so that if something hasn’t been fulfilled we walk away and look for alternative transactions. We have moved on from Bankers Warehouse and we are looking at a lot of really amazing and interesting things in Nigeria and I am very confident that we will make some investments here in the near future. So, when did you make the decision to walk away? When we reached what’s called the stop date on the contract, which is the date when the conditions had to be fulfilled and they were not. When was that date? It was 90 days from when we started the process. Was it last year? It was last year. Which financial sub-sectors have caught your eye? Fintech for sure. The fintech ecosystem here continues to develop nicely and I think one of the good things is that currency volatility has abated which makes investment in Nigeria much easier because you now have some exchange rate stability and we hope it continues. We are seeing a lot of interesting companies right across the spectrum from credit to payments and leasing. We have started to do significant work to grow our pipeline of companies. Within the course of the year, we are hoping one or two become investable. That said, we are not in any rush to do deals. We always try to find the right thing to do, at the right valuation, with the right management team and with the right market opportunity. What is your budget for Nigeria this year? We don’t have a specific budget. However, our investments tend to range from $15 million to $50m dollars and perhaps a bit higher. While I can’t the exact figure Apis will invest in Nigeria this year, I can say that as fund our mandate is Africa and Asia. Our investors are looking to make returns and so for us it’s a question of how we help them make the best return irrespective of where the opportunity lies. We can to invest in Nigeria, Ghana, Kenya, Uganda, South Africa, India, Malaysia, Indonesia or any other country within our mandate if the right opportunity presents itself.

Allow me to rephrase that question. Are you finding more deals in Nigeria now compared to say 2014 and how well has Nigeria competed against other countries in Africa and South Asia? It’s getting better now. We are seeing companies maturing into our investment range. Remember, we do not do early stage, we do growth stage investment and we have a lot more companies at that stage of maturity today than in 2014. There has been a lot more development outside of natural resources in areas such as financial services. A lot of companies that were founded five years ago are now getting to the size that interests us. So, there is a lot more quality and the valuations have been becoming more reasonable, so everything seems to be aligning. Would you say the challenge of not being able to find the right deal size is still there? The size needs to be there, and the valuation needs to be at the right level for it to make sense for us. The market opportunity must be glaring, and we need to be convinced of the management team will execute on the market opportunities. How has your portfolio performed overtime? I believe our portfolio has done well. In every portfolio you will have the stars, the investments somewhere in the middle of the pack and so on. We are invested in a company called Star Health in India which has done exceptionally well and has earned over 40 percent in dollar terms year-on-year. GLP has also grown even faster in revenue terms and we see Nigeria contributing more to that growth. When did you launch GLP in Nigeria? We launched a year ago in Nigeria and it’s doing very well. GLP is actually, both an African and an Asian company. It started out in India and Kenya and a lot of its operations are based in Nairobi. Another company in our portfolio that has performed well is Baobab. It has grown tremendously especially since it got a national license in Nigeria in 2016. We also have Transfast, a money transfer operator, which has grown very fast and Nigeria happens to be one of its fastest growing markets. If Nigerians, abroad keep sending money back to Nigeria, then this market will keep growing. We some had challenges initially caused by Central Bank capital controls. However, that has abated now. I am sure you heard about TPG’s Investment in $42.5 million, Cellulant. Do you think it was a good deal? We know Cellulant well, having we spent time with the company. There are aspects of Cellulant that we really like and there are aspects we were not sure of, but we did spent time looking at it. However, at that time the deal size was a little too big for us. Secondly, there one was part of the our investment thesis in payments that Cellulant didn’t fully fit into so in the end we decided not to take the opportunity. I think Ken and the team have done a very good job and I believe the company will do well.

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MANUFACTURING

Africa’s largest drug maker falls to 7- year low as divestment plan drags ISRAEL ODUBOLA

hares of Aspen Pharmacare Limited, Africa’s largest drug producer, fell to a seven-year low as plans to divest its infantformula business delays. Aspen was trading at 10,020 South African rand in the early hours of Friday on the Johannesburg bourse, March 8, the lowest since 2011, as the stock declined by 29.01 percent compared to the previous trading day. Since the start of the year, Aspen has lost 4.5 percent. Last year, the drug producer said it had agreed to divest its nutritional (or infantformula) business segment to Lactalis Group, a leading multinational diary corporation based in Laval, France, for fully funded cash consideration of 740 million euros. The deal is yet to be completed over regulatory issues; however the drug maker stated that the agreement would be finalized before the first half of the year as it seeks the approval of New-Zealand Oversees Investment Office. The divestment is to enable the company concentrate on its major drug operations. Africa’s largest drug maker disclosed, March 7, that it has signed agreement with a partner that would distribute its women health products in the United States.

The drug maker’s net debt notched up to 53.5 billion rand for twelve months ended December 31, 2018. This is attributable to the fact that the company expended so much on anaesthetics. However, its Chief Executive Officer, Stephen Said is reported to have said that the company is keen to reduce the firm’s debt burden at a faster pace. Aspen Pharmacare Holding Limited operates as a holding company. The Company, through its subsidiaries manufactures and supplies capsules, liquids, sterile, semisolid, biological and pharmaceutical ingredients among others. The company serve patients in more than 125 countries. According to its 2018 annual financial reports, the drug maker grew revenue marginally by 3.36 percent to 42.6 billion rand, up from 41.2 billion rand in 2017. 52 percent of its aggre-

gate 2018 revenue came from Developed Europe and SubSaharan Africa. Latin America contributed 10 percent to revenue, developing Europe accounted for 6 percent and 1 percent came from USA and Canada. Out of its three business segments, the drug maker recorded decline in two segments - manufacturing and nutritionals. Revenue from manufacturing segment decline 4.6 percent to 6.2 billion rand, while nutritionals was down by 3.1 percent to 3.0 billion rand in 2018. More than 75 percent of its earnings came from commercial pharmaceuticals segment. The company began operations in 1850, and got enlisted on the Johannesburg Exchange in 1997. It has 456 million shares outstanding and market capitalization of 45.7 billion rand.

L-R: Olusola Owonikoko, programs associate, HACEY Health Initiative; Rhoda Robison, executive director; Ogbonne Mecha, programme officer, Nigerian Business Coalition Against AIDS (NiBUCAA); Isaiah Owolabi, project director, HACEY Health Initiative; Mary Iyanuoluwa Adeoye, program lead (Safe Space/SRHR), HACEY Health Initiative, at the Zero discrimination event organised by NiBUCAA, and HACEY Health Initiative, sponsored by Access Bank Plc in Lagos. Picture by Olawale Amoo

L-R: John Henry, librarian, Greensprings School, Lagos; Damilare Elulade, library prefect; Helen Brocklesby, head of school/director of education; Akinsola Williams, Globacom state manager, Lagos 2; Erika Aneke, head girl, and Ireayooluwa Odeyemi, head boy, at the presentation of Glo educational materials and other gifts to Greensprings School, Lagos, in commemoration of 2019 World Book Day.

INSURANCE

Leadway Assurance canvasses work-life integration among women IFEOMA OKEKE

eadway Assurance Company Limited has called for an increase in work-life integration amongst women in order to ensure organizational growth and personal development. They noted that integrating a woman’s healthy routines and happy spots into the workday can increase your productivity and boost the confidence needed for growth. According to Titilola Bashorun, the Head, Human Resources, Leadway Pensure, work-life integration allows the control of different components of life in a way that fit needs and provides control over managing the boundaries of work and personal life. Speaking at a special seminar to mark the International women’s day in Lagos, she reiterated the need for every woman to effective strike a balance between her work life and personal life, so as to remain an invaluable asset to her family, community and the country. She said, “For us at Leadway, we recognize the environment in which we operate because we have women in our workforce and we understand the pressures that they face economically and

culturally” “Also, we need to make these women understand how they can navigate in such a way that they balance their lives. We can be productive in the home front and in the workplace simultaneously. It’s no longer about worklife balance, but how to integrate in between the job and other aspects of life, because we are aware that the work itself is revolving, it’s no longer restricted to one location of being in the office” The month of March is set aside globally and observed as the Women’s Month. The observance peaks on 8th March, the day that is celebrated worldwide as International Women’s Day. This date is significant in many ways, it is a time to reflect on progress made on women’s rights as well as celebrate acts of courage and determination by ordinary women around the world. The theme for the 2019 International Women’s Day is ‘Balance for better’ and is focused on empowering women for gender parity through innovation, particularly in social protection systems, public service access and sustainable infrastructure. Also, Thistle Praxis, the guest speaker and Managing Consultant, Consulting, Ini Abimbola, noted that the country has gone beyond just the conversation

of giving opportunities to the women. “Now women are standing up to take those opportunities, hence the number of women that came out during the elections to vote and be voted for. Like other countries of the world, we need to go beyond presenting those opportunities and ensure that they are available” “We can look at this year’s theme in two different ways: How to have a gender balance where we have fifty per cent of our country’s population which are men to become our strong partners in pushing the gender conversation; and in terms of our lives as women, mothers and wives as well as career women, and the need to talk about how to get better” “We have a country that is growing, we are talking of having more women in the Parliament, represented in government and across the boards of private organizations, so when we talk of balance for better, we looking at balance across board. Hence, we are not just looking at work-life balance but work-life integration, how to integrate every aspect of our lives so that at the end, we become better persons, better employees and better citizens of the country,” Praxis added.

L-R: Ajay Awasthi, CEO, Spectranet 4GLTE, presenting ACE MiFi to Tina Mba, nollywood star, during the commemoration of 2019 International Women’s Day at Spectranet’s head office in Lagos.

L–R: Angela Adebayo, former first lady of Ekiti State and national council member, The Nigerian Stock Exchange (NSE); Tinuade Awe, executive director, regulation, NSE; Eme Essien, country director, International Finance Corporation (IFC); Lansana Wonneh, deputy country representative, United Nation Women, during the Closing Gong Ceremony in commemoration of the International Women’s Day (IWD) celebration at The NSE in Lagos.

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: David Ogar

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Tips & Talking Points

Harvard Business Review

When you make a mistake, be quick to admit it

The Marriot Hack 25 million: The Marriott data breach exposed at least 25 million passport numbers, and affected about 383 million customer records. + Counting Up Sick Days 1: For every 30 hours worked, Starbucks hourly employees in all U.S. states will accrue one hour of paid sick leave. +

Minutes to Spare 4 minutes: People spend more than four minutes per day on average reading email marketing campaigns such as newsletters. + Not-So-Great Expectations Half: According to a survey from Accenture, more than half of executives around the world don’t expect 5G mobile network technology to allow them to do more than they can already do with 4G.

dmitting that you’ve made a mistake can be a hit to your ego. But arguing with or blaming others (or trying to dodge by saying something vague like “Mistakes were made ... “) will only make things worse. It’s much better to take responsibility for the situation so that you can clear the air and move on. Swallow your pride and simply say “I was wrong,” offering a brief explanation without making excuses. If your error had a negative effect on others, acknowledge it. Really listen to their reactions — don’t get defensive or interrupt. Then explain what you’re

Managers, how do you open up to your team without oversharing?

doing to remedy the mistake, including its substantive impacts (money, time, processes) and relational impacts (feelings, reputation, trust). Be open to feedback about what you’re doing. And tell those affected by your error what you’ve learned about yourself (“I realize I sometimes ignore people I don’t see eye to eye with”) and what you’re going to do differently in the future.

(Adapted from “What to Do When You Realize You’ve Made a Mistake,” by Deborah Grayson Riegel.)

telling employees you’re in a bad mood because you’re having a lousy day is probably fine; telling them you’re in a bad mood because you disagree with a decision by senior management probably isn’t. Opening up is also useful when it helps your team feel less isolated: If you sense people are anxious about a project, acknowledge that you’re feeling the same stress, and thank them for their hard work.

(Adapted from “How Leaders Can Open Up to Their Teams Without Oversharing,” by Liz Fosslien and Mollie West Duffy.)

aving friends at work can make you happier and more productive. But those friendships can become draining if they take up too much of your time and energy. What do you do if that happens? Don’t abruptly cut the person off — instead, make small changes to shift the relationship’s dynamic. Try to tone down the intensity of your interactions and spend less time together. If you usually talk in person, switch to phone calls; if you chat on the phone, switch to email. And emphasize

Expertise It’s in our DNA FirstBankofNigeria

your professional relationship by keeping the conversation focused on work whenever possible. If you can’t draw such a hard line, set some boundaries while thinking about which aspects of the friendship you’d like to preserve. For example, if you regularly give your friend advice, pick one or two issues you’re willing to help with, and let them handle the rest on their own. It will take time to find a balance. Stay strong and stick to your boundaries.

(Adapted from “What to Do When a Work Friendship Becomes Emotionally Draining ,” by Amy Gallo.)

ot all professionals want to be promoted. Maybe you’re a caregiver who wants to focus more energy at home, or maybe you prefer the freedom of being an individual contributor. But how do you tell this to your boss without seeming lazy or unmotivated? First, think about why you aren’t interested. Perhaps the timing isn’t right, or you love what you do now. Once you’ve identified your reasons, have a transparent conversation with your boss. Show appreciation that your manager believes you deserve to be promoted, and explain why your current job is

In an ever changing economy, with 125 years of serving YOU, we remain strong, trustworthy, dependable, safe and consistent. You can be conﬁdent that we will continue to deliver innovative banking products and services which seamlessly and conveniently suit your lifestyle needs.

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hen you’ve been offered a job at another company, should you consider a counteroffer from your current employer? It depends why you’re thinking about leaving. If the change is purely about compensation, consider whether taking the counteroffer could hurt your reputation. It could lead executives to question your loyalty, or colleagues to resent you for what they perceive as special treatment. On the other hand, if leaving would be a strategic move for your career, staying might not be the best choice. A higher salary won’t change a job you are dissatisfied with or have outgrown, after all. But if the counteroffer includes a new role that excites you and would let you keep growing, weigh the pros and cons. And think about the long term: If you accept the counteroffer, how likely is it that you’ll want to leave in a year or two? If you’re still unsure what to do, discuss it with a mentor or trusted colleague.

(Adapted from “If You’re About to Take a New Job, Should You Consider Your Boss’s Counteroffer?,” by Kelly O. Kay and Michael Cullen.)

It’s oK to turn down a promotion

If a work friendship becomes draining, protect your time and energy

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

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Should You Consider Your Boss’ Counteroffer?

Wine Takes the Cake $60 billion: The U.S. wine market is a biggest in the world with an estimated retail value of $60 billion. +

t’s generally a good thing when employees feel a personal connection to their boss. But when leaders share too much of their thoughts and feelings, they can undermine their authority. (Imagine a manager saying, “I’m scared, and don’t know what to do.”) A good rule of thumb is to open up when you think it will be helpful to others. Evaluate a personal comment by considering how you’d feel if your boss said it to you. If you would be thankful to hear it, chances are your team will feel the same. If not, err on the side of caution. For example,

Tuesday 12 March 2019

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an excellent fit for your strengths, skills and goals. Then tell your boss that you still want to keep growing, and offer some suggestions for how you can do it without the promotion. Are there new projects you could take on? Specific ways to develop your skills? Be careful not to say anything that could undermine your future prospects; this promotion isn’t right for you, but the next one could be.

(Adapted from “How to Tell Your Boss You Don’t Want a Promotion,” by Patricia Thompson.)

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Market research key to unlocking Africa’s potentials …As Africa forum discusses transformative power of research Stories by Daniel Obi Media Business Editor

ntil African governments and organisations deeply leverage the use of market research to create new markets in order to offer more jobs, the needed economic growth and development will continue to elude the continent. Market research which is an important component of business strategy provides necessary information for innovation and guides governments and organisations on expenditure and areas of focus to maintain competitiveness. It was this understanding and the need to turn away from the historical lethargy of market research in Africa that African Market Research Association (AMRA), a pan-African association of associations that have interest in marketing and social research in Africa, is organising a conference mid next month in Lagos to underscore the importance of market research to economic development. The forum which is the third in Africa will bring to the fore market research that is transformative and

unola Foods Ltd, manufacturer of Sunola Oil and a market operator in food processing has unveiled new extensions of the Sunola brand in the seasoning, grains and sugar class of consumer foods to consolidate its portfolio of food brands as a one-stop choice by mothers for virtually all their food consumables. The new extensions launched recently at the company’s premises in Lagos include Mom’s Curry Powder, Sunola Rice, and Sunola Sugar. The Mom’s Curry Powder which was the flagship product comes in a 100g sachet of 200 pcs packed in a carton. While the Sunola Rice comes in a pack of 1kg and 2kg as introductory stock keeping units, the Sunola brand of granulated sugar comes in

has the capacity to unlock potentials to make Africa lead in different categories of the economy, Joy Uyanwune, chairperson of local organising committee and President of Nigerian Marketing Research Association, NIMRA told BusinessDay in Lagos. Uyanwune further said that the theme of the Africa Forum, ‘Building Tomorrow – Africa Leading’ has the objective of promoting the African market through marketing, social and opinion research activities to the rest of the world. Stating that one of the unique values of market researcher for Af-

rica is in its use for development, she therefore said that Africa provides great opportunities for products and brands seeking relevance and more shelf spaces. “Therefore, researchers in the local market guide and shape the entry, sustenance and growth of the myriads of brands/products and services that typically impact on peoples’ comfort, convenience and general lifestyles”. According to her while some countries in Africa are recording increase in government impact with improved businesses, she regrets that many African nationals are leaving their countries in droves

Sunola unveils new products, set to flag off consumer engagement campaign a 500g pack. Executive Director of the Company, Satish Nair said that the new extension of the Sunola brand were products of extensive research process that took cognizance of the different Nigerian recipes, cultural culinary methods and consumer taste across the diverse ethnic groups and regions of the country. “Mom’s Curry Powder is a product of extensive research formulated to deliver that distinctive taste in foods that everyone looks forward to in the meals prepared by their mothers. It consists of garlic, ginger, turmeric and

its production process include drying technology. The parboiled rice which comes in very portable sizes of 1kg and 2kg would meet the purchasing power of everyone and best fit for storage in kitchen cabinets.” Nair explained. Corroborating the claims asserted by Nair during the unveiling ceremony of the products, ace Nollywood actress notable in Yoruba movies, Mide Funmi Martins who vetted Mom’s Curry Powder during a meal sampling session attested that the aroma of Mom’s Curry Powder is distinctively unique and has become the choice of her family.

in search of a better life in Western countries. To turn things around, Uyanwune hinted that industry practitioners must recognise that marketing and social research has the capacity to transform the economies of African countries. “If Africa is to lead in building our tomorrow, the market research industry would need to rise up to exploit its posture as a change agent”, she said. The 2-day program would afford fresh knowledge to those who work as data suppliers through a rethinking of market, social and opinion polling practices ahead of the client plus considering Africa in a techcentric world. Attendees would include CEOs, COOs, CMOs, Brand Managers, Insights and Innovation Managers, Data Analysts, Marketing Research specialists, representatives of organizations in various sectors of the economy, market research tools and software providers, and literally anyone with keen interest to understand and access quality research in the African market. “The Forum is an opportunity to share and learn from specialized, practical evidences of how insights and statistics help brands and organizations through innovation and growth”.

Hollandia Evap “Pere” pack excites consumers

hi Limited has said that Hollandia Evap Milk is now available in a 120g pack for only N100 lovingly referred to as “Pere”. The term “Pere” which translates as “no more, no less” is intended to symbolize the product’s high quality, satisfactory quantity and affordability, thereby resonating with consumers across the country. With offer of the same premium quality, which is tasty, creamy and nourishing, and at an affordable price, the new Hollandia Evap Milk 120g pack comes in a convenient portion size and a brand new pack format in the evaporated milk category that will make it irresistible to consumers. The company said in a statement that the new Hollandia Evap Milk 120g pack is a statement of industry leading packaging innovation, product quality, quantity, convenience, affordability and satisfaction. “Pere” is an interesting way to also simultaneously represent the product’s value and disruptive approach in the evaporated milk category. According to Chi Limited’s Marketing Director, Probal Bhattacharya, in the statement, the decision to provide consumers with the creamy, great tasting, highly nutritious Hollandia Evaporated Milk in a 120g pack was driven by the brand’s desire to consistently deliver novel solution to consumer needs.

So Fresh Neighbourhood Market strategises for fast-food retail market share … Opens 8th outlet in Marina SEYI JOHN SALAU

n a strategic move to position its brand for the fast-food retail market share in Lagos, So Fresh Neighborhood Market, a fast-growing indigenous brand that provides healthy meal options for consumers recently opened its 8th outlet on Broad Street, Marina, Lagos. So Fresh operates a premium healthy food chain outlets for a wide range of fresh, delicious, nutrient-rich and healthy meals. The indigenous brand which started 11 years ago has grown geometrically, building a standard of consistency, as it positions itself as an international brand out of Nigeria, providing support for small-scale holders farmers. Olagoke Balogun, the managing

director/CEO of So Fresh Neighbourhood Market, said the Marina outlet will join the other seven outlets in making healthy food accessible, thereby ensuring good health and wellbeing for Nigerians. “So Fresh will continue to play its part in the Millennium Development Goals by expanding our reach and opening more outlets which serves the dual purpose of job creation and building a healthy nation” said Olagoke Balogun, the CEO, So Fresh Neighborhood Market Abimbola Balogun, the chief operating officer (COO) said So Fresh strategic move in opening an outlet on Broad Street is a step to take healthy living close to consumers in Marina. According to Abimbola, the growth trajectory is to reach small holder farmers, as So Fresh expands its supply chain locally.

CSR: MTN spearheads intervention on substance abuse

L-R: Adarsh Bhaskaran, national sales Mgr., Sunola Foods Ltd.; Satish Nair, executive director, Sunola Foods Ltd; Mide Martins, Nollywood Actress; and Siva Subramaian, group managing director, Kelwaram Chanrai Group during the launch of Mom’s Curry Powder in Lagos recently.

n furtherance of the drive to curb the increasing rate of substance abuse in Nigeria, MTN Nigeria, under the Anti Substance Abuse Programme (ASAP) led a multi sectoral roundtable on the substance abuse ecosystem in Nigeria and the need for intensified collaborative action. The forum, which held on Victoria Island, Lagos, recently, was part of the Lagos state activations of the ASAP aimed at reducing the incidence of

substance abuse among youth in Nigeria. Speaking at the forum, Prince Julius Adelusi-Adeluyi, Chairman, MTN Foundation, explained: “The purpose of this campaign is to stimulate discourse among thought leaders, policy makers and leaders from different walks of life, to bring us much closer towards our goal of freeing our future leaders from the evil attraction of drugs and possible addiction to opioids.”

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Tuesday 12 March 2019

BRANDING Nigeria’s soft drink market to grow by about 15% this year, says La Casera Company CEO Chinedum Okereke is the Managing Director of The La Casera Company Plc, maker of La Casera Apple. Okereke, who has over 28 years’ experience in the drink industry spanning 28 countries of the world, joined The La Casera Company in 2018. In this interview, the management expert takes a look at the Nigerian soft drink market and the place of offering of the La Casera Apple brand, explaining that every drop of La Casera Apple soft drink is built on trust for consumers’ best experience. Excerpts How will you assess soft drink market in Nigeria? he soft drink market in Nigeria has been an interesting one. The Nigerian soft drink market has big players and the market has witnessed quite some growths. In 2016 and 2017, there was a decline in its growth. But last year, there was a 9 per cent growth in the market. Another interesting dynamic to the soft drink market is that we have begun to see a very strong shift from traditional returnable glass bottles (RGBs) to PET bottles. You will recall in the last 60 years, RGBs have been in Nigeria. But we have seen a very significant shift in Nigeria where people have moved away from RGBs to PET bottles. So, PET bottles today drive a big chunk of the market. With what you have seen on ground in the soft drink market, is Nigeria likely to witness a double digit market growth this year? Projections are showing a low double digit growth, which will be slightly higher than what we had last year. We are looking at about 15 per cent growth. We should also take into cognisance the sociopolitical environment in the country. Invariably, there are a couple of variables we need to consider, such as the elections. We also need to consider government policies in terms of devaluation. But all other things being equal and if there is no significant impact from these sociopolitical indices, agencies have projected a low double digit growth, which is quite good for players in the industry. Let us come to your brand, La Casera Apple. How is it doing in the soft drink market? La Casera is actually on a journey. The good news for La Casera Apple is that in 2018, we saw a slow but steady monthly improvement in our market share. We have La Casera Apple as our flagship brand. We have also seen our second brand, Smoov Chapman, equally becoming a household name. We ended last year with a decent market share. We have very aggressive plans for this year. We believe that consumers should feel the strong presence of La Casera Apple in the market. Our growth is improving and we are very happy about it, because our improvement has been above our expectations. Please confirm that every bottle of La Casera Apple has 5 per

Chinedum Okereke

cent real apple content in it. How important is that in the soft drink market? The Nigerian soft drink market

‘

We have put plans in place to ensure that we have a much more positive outing this year. This plan includes a very robust end-to-end business outlook, which includes forecasting our demand plans, looking at our capacity and material planning, ensuring that we have very strong logistic partners to ensure that our products get to all 36 states of the federation

is very clustered. We have about four players in the apple category and people are making all kinds of claims. La Casera Apple is a brand that wants to establish a point in the area of differentiation. So, we are not just offering concentrates or extracts, but we are offering real apple content. Obviously, that can be detected from the taste of La Casera Apple when consumers consume it. We want to continue to maintain our leadership position in that category. For us, being consistent with our commitment in terms of liquid chemistry and liquid premium value to consumers is very important to us. So, we are at that point of leadership and differentiation where a taste of La Casera Apple will convince any consumer that we offer real apple drink. To the best of our knowledge, no other brand offers close to 5 per cent in the apple soft drink market. Our brand health checks and information we receive from different sources show that La Casera Apple still remains the drink to beat when consumers are looking for the real taste of apple satisfaction in a soft drink. La Casera Apple is a premium brand, which is built on trust and commitment. What plans do you have for the La Casera brand in 2019, taking into consideration the interest of

the consumer and socio-political issues you earlier mentioned? Our business plan is very close to our heart. One thing is very sure: we will continue to give our consumers and trade partners the desired attention and experience they deserve from a premium brand like La Casera Apple. We are ready to excite the market and take what belongs to us. In 2019, we want to ensure that we drive commercial aggressiveness, by ensuring that we have La Casera Apple and other brands from the house of La Casera acceptable, available, affordable and accessible to all our consumers. We can only urge our trade partners and consumers to just enjoy the brand as we take them through the 2019 experience. We have a lot of plans as a business, and will deploy them in the course of the year. Some research indicates that two of your SKUs (35cl and 50cl) La Casera Apple are not readily available in some parts of Lagos, as against the 60cl. Is this part of the business strategy for the brand? Of course, when a brand is experiencing growth, one needs to ensure that the brand is available at the right place, at the right price and time. One of our strategic levers is to ensure the availability of La Casera Apple everywhere. We have strong indicators to track that. We are mindful where we are in terms of availability. We are equally mindful of how we ended last year and also how we intend to end 2019. We have put plans in place to ensure that we have a much more positive outing this year. This plan includes a very robust end-to-end business outlook, which includes forecasting our demand plans, looking at our capacity and material planning, ensuring that we have very strong logistic partners to ensure that our products get to all 36 states of the federation. As a matter of fact, we have footprint in the 36 states of the federation, ensuring that we are able to overcome the challenges of road networks in the country. In The La Casera Company, we have several brands, such as La Casera Apple, Smoov Chapman, Bold Bitter Lemon, Nirvana Tonic Water, Nirvana Soda Water and Nirvana Table Water, which is one of the top in the country. Again, we focus on regions. In our entire portfolio in The La Casera Company, we ensure that our brands are available in all the regions at the right time, right

price and conditions. Talking about those SKUs, we are mindful of availabilities. However, what is important for us is strategic direction. We are actually pushing some of our SKUs more in some regions. We intentionally play with certain SKUs in certain regions of the country. So, you may not actually be seeing a particular pack size, let us say 35 cl, in Lagos region. But when you begin to get to certain areas of the country, it tends to be the preferred pack size. What processes have you put in place to ensure that your brands sustain international standards? As someone with strong background in supply chain and manufacturing, I have had the privilege of visiting top class manufacturing sites across the globe in Europe, North America and Asia. I must say that when I compared the practices in those manufacturing sites with what I met in La Casera when I resumed as MD, I was very impressed. I am talking about hygiene standards and key best practice processes, good manufacturing practice, quality standards, asset care management, maintenance programme, safety standards among others. I must say that what I met on ground, which I am building upon, is quite encouraging. We are a reference site of what excellent manufacturing practice is all about. The La Casera Company has entered competitions on best kept sites, which we have won on several occasions. We have our processes well documented. The La Casera Company has routine visits from regulatory agencies, such as NAFDAC and SON for certifications and endorsements. We have ISO Certifications on quality, Food safety amongst others. For us as a company, we hold the trust of our consumers and are assuring our consumers that every bottle of La Casera Apple they open, they are opening a trust. La Casera apple soft drink is one consumers can also consume with the assurance that it is well endorsed. For us, quality and safety come first before productivity and cost. We have put processes in place and we are continually improving the process to ensure that those standards are maintained and surpassed. Our equipment are procured from the best equipment manufacturers you can think of and we have a policy as a business to ensure that our equipment are maintained by only the original equipment manufacturers (OEMs).

‘

Tuesday 12 March 2019

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BUSINESS DAY

Marketing&Pr How Lafarge is supporting global Sustainable Development Goals through innovative ideas

afarge Africa Plc, a member of LafargeHolcim, the world foremost player in building materials manufacturing, has once again reaffirmed its commitment to sustainable development, with special focus on the United Nation’s Sustainable Development Goals, SDG which is entrenched in its 2030 Sustainability Ambitions. The international company is underscoring this statement as it turns 60 in its business operations. It would be recalled that more than 190 world leaders signed The SDG agreement in 2015, committing to help end extreme poverty, fight inequality & injustice, and fix climate change among others. Lafarge’s sustainability strategy is built on four key pillars of – Climate, Circular Economy, Water and Nature, and People and Communities. This guides its operations in communities in over 90 countries. In a recent sustainability report for the Nigerian operations, the Country Chief Executive Officer, Michel Puchercos said Lafarge is taking significant steps to continue leading in sustainability in Nigeria including promoting environmentally friendly processes across all its plants. Sustainability is at the heart of Lafarge Africa’s operations; the company also regards sustainability as an important way of contributing to the development of countries and communities. In Egypt, Lafarge is said to have just invested EG £200 million in projects to convert household waste to energy. In Ewekoro and Sagamu where Lafarge’s operations began in Nigeria 60 years ago, Lafarge has pioneered similar alternative energy projects. Lafarge Africa is one of the few manufacturing companies in Nigeria where alternative fuel, especially biomass is used significantly to fire the kiln in a major manufacturing process. It started in 1995 when many other manufacturing companies had not even considered it as a possibility. A young engineer at the company was saddled with the task of experimenting with alternative and clean fuel. It took three tedious months to come up with enough rubber chips to fire the kiln for half an hour. The result was a 75% decrease in gas consumption and it was perhaps the first time alternative fuel was used in any cement plant in Nigeria. The company has not relented since then. By the third quarter of 2017, Lafarge Africa reported 44 percent alternative fuel substitution rate at the Ewekoro I plant. In the south western region

of Nigeria where oil palm plantations are not hard to find, Lafarge now uses palm kernel shell (PKS) as a substitute to fossil fuel in its manufacturing process. This means employment for the locals who help in sourcing the product. Apart from supporting the local economy, using this alternative also helps create a final destination for the biomass which was becoming a waste disposal challenge. The abundance of palm kernel shell as a waste product goes back to the 1990s and early 2000. Then it was used by a few companies as solid fuels for steam boilers. Meanwhile, in a typical palm oil plantation, almost 70 percent of the fresh fruit bunches is waste in the form of empty fruit bunches, fibres and shells, as well as effluent. Lafarge is cleaning up the environment, providing jobs in the local community, empowering members of its host communities and contributing significantly to developing the economy by creating a new business and stream of income from waste. Lafarge is also committed to improving livelihoods and social amenities in its host communi-

“

ties. As part of the People and Communities pillar of the 2030 LafargeHolcim Sustainability plan, the company recently inaugurated Laboratory equipment at the Health Centre it built for Egbado Ajegunle in Ogun State to offer essential healthcare to the people in the community, making it easier for them to access medical care within their vicinity. The health centre is fully equipped, and the indigenes continue to receive primary health access at the facility at no cost. While attention is paid to the health of people, the company is also seeking other ways to improve the overall quality of lives of the people which also prompted the installation of a substation and electrification of Oke Oko Egbado community also in Ogun State. These different community projects are executed in all Lafarge’s host communities across Nigeria based on the needs of each community. In recognition of its consistent commitment to sustainability, the company emerged as the Best Company for Clean & Affordable Energy and Best Company for Ed-

Lafarge has touched my life in a very large way, especially through financial support. Because they actually pay my school fees and other payments that I need [for] school, in that way Lafarge has really helped me

ucation at the 2018 edition of the Sustainability Enterprise and Responsibility Awards (SERAS) CSR Africa Awards. This is following its emergence as the Best Company in Stakeholder Engagement and the Most Outstanding Company of the Decade at the 10th edition of the same Awards. In the year 2017, the company invested heavily in diverse social investment programs and initiatives throughout the country and directly impacted more than 450,000 beneficiaries across its host communities and Nigeria. Hundreds of the youth who benefited from such interventions in terms of scholarship, according to reports say they would always be grateful to the company for supporting them as they work towards their dreams. For example, final year student of accountancy at the Moshood Abiola Polytechnic, Abeokuta, Gbemisola Tolulope from Papalanto community has been on the company’s scholarship program all through her tertiary education. She could not imagine her life without the scholarship. The scholarship funds come through for her every time business is slow for her father who is a contractor and her fashion designer mother. “Lafarge has touched my life in a very large way, especially through financial support. Because they actually pay my school fees and other payments that I need [for] school, in that way Lafarge has really helped me. They have been a lot of help to me,” Tolulope said. Hassan Elizabeth Adeola from Akinbo community recounts the role played by Lafarge in her education at the Ibarapa Polytechnic, Eruwa. She said the bursary she received from Lafarge was not

only enough to pay her school fees but some of the funds were given to her parents to support their businesses. “Lafarge has been so good to me, they help me pay my school fees. And I use the remaining change to support my parents when they don’t have much,” the 22-year-old Civil Engineering student said. The story is slightly different for Fagbenro Oluwadamilare Oluwaseyifunmi who would have joined the more than 50 million out-ofschool children in the world when he was only 14 years old. He had just completed his basic education and was about starting senior secondary school when his father died. Fortunately, he learnt about Lafarge Africa’s scholarship program for people of his community, Egbado Ajegunle. “Lafarge has helped me to stay in school,” the 25-year-old accountancy student at Moshood Abiola Polytechnic, Abeokuta, Ogun State said. “The company has even helped me to set up a little business. After paying my school fees and other necessary payments with my scholarship, I still have a little left which I used to do business. And ever since then, I have been making progress.” The three are only a few of the hundreds who have benefitted from Lafarge’s scholarship program set up especially for students in the communities where Lafarge Africa operates in Nigeria. Apart from investing in the development of the people, the company is also working hard to develop a thriving economy in its host communities through programs like the Cement Professionals Training Program (CPTP), a program aimed at helping youths with entrepreneurial spirit to achieve their goals in the fields of technology, engineering, cement manufacturing, instrumentation and automation among many others. With the high rate of unemployment in the country and the dearth of social amenities in many rural areas, such social impact efforts by corporate organizations are highly needed in communities. Lafarge Africa continues to seek ways to ensure that they maintain a cordial and mutually beneficial relationship with their host communities and it is committed to strengthening the existing relationships with communities by creating confidence and building trust. The level of CSR interventions by Lafarge in its host communities which focus on Health and Safety, Environment, Education and Infrastructure is worth emulating by other corporate organizations.”

BUSINESS DAY

C002D5556

CEO INTERVIEW

Tuesday 12 March 2019

C002D5556

BUSINESS DAY

ROB SHUTER

President and CEO of MTN Group

Interview with Private Sector Leaders

No pain, no gain: ‘MTN’s dream financial performance owes much to hard work and relentless investments’

BusinessDay’s publisher, FRANK AIGBOGUN, had the chance of speaking with ROB SHUTER, President and CEO of MTN Group, moments after the Telecommunication giant published what was a stellar financial result for 2018. Shuter gave insights into the performance, spoke of the need to better tell the story of the company’s impact in Nigeria, as well as shared his expectations for 2019.

FRANK (F): ongratulations on what was easily a brilliant performance last year. MTN Nigeria posted revenues of N1.04 trillion, the largest of any listed Nigerian company. How would you rate your performance? SHUTER (S): I think we had a good year despite the difficulty in being successful in our industry. We had good subscriber growth as well as good revenue growth. We also have our costs within control and I think we have a very good platform for years to come. But of course, we must never be complacent. We must keep on working. F: Revenue from data services performed very well, rising some 40.1 percent. I was wondering how you made that happen in a very competitive environment. S: As you know, the data revenue is now about 20 percent of the Group’s revenue and it’s becoming quite significant and I think what we have tried to do is make sure that we roll out better data coverage. I’ll say that is absolutely an important part of it. We also made sure to get the right price points for customers. However, we know there is a lot of untapped demand for data services if you can just get network for the customers. We had a revenue growth of around 20 percent, yet data adoption is still low in most markets we operate including Nigeria. The average across all of the markets we operate is around a third, which is pretty much the case in Nigeria as well. When we look at our data customers versus potential customers, we are excited because data will be a growth area for years to come. F: Recently, each time you hear about MTN, It’s about one case here or another case there, so when the results were announced, it was a pleasant breather. Looking back, do you think you have overcome your peculiar challenges in some of your markets whether it is Nigeria or Uganda and what lessons have you learnt? S: That is a tough question. The Group is complex, and we have 21 markets which would soon be 20 with the disposal we announced. What you often see in our markets is that we face challenges

revenues collected in the market because ours is a very expensive business to run. Despite that, I feel very comfortable that pretty much across the portfolio, we are doing a lot in job creation, wealth creation, in paying our taxes, we have been investing in infrastructure. But I don’t believe we have impactfully told that story and it’s one of the challenges we have. What we must do as we move towards the listing is to find a way to really tighten up on our core narrative so people see us as partners in the Nigerian society for progress, rather than perhaps another bunch of South Africans taking a whole lot of money out of Nigeria. I think that is not helpful for us and I don’t think it’s real. You know one of the things that was really interesting in Nigeria in the last few months of last year was that many people weren’t aware that MTN Group is 60 percent owned by UK and American investors. That means people that are investing in MTN are often the people that Nigeria is talking to, for example, to raise offshore debt during Eurobond roadshows. So we are actually owned by international investors and so our fortunes are often tied to the fortunes of the country.

Ahead of a coveted listing on the Nigerian Stock Exchange before June 2019, MTN Nigeria became the first Nigerian company to post revenues in excess of a trillion naira in 2018. Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) margin was a healthy 43.5 percent, data and fintech revenue surged a combined 72 percent to 6.5 billion rand and subscriber base grew 11.3 percent to 58.2 million as at December 2018 from 52.28 in 2017 (Now 66.7million as at February 2019, according to NCC data). particularly around the time of a license renewal which tends to come say every 10 or 15 years, or when an election is around the corner. Generally if I look at the issues we faced, they tended to be around license renewal time or election time. Of course, we also need to take on ourselves the responsibility to invest in stakeholder management so as to have the right connections all the way through. We are working on that and I feel that in the future we shouldn’t be surprised by anything. That is one thing I would really like to change- to have the right kind of relationships that we discover early on if they are issues or concerns, and we have time to deal with them in a controlled fashion. Some of our troubles in Nigeria last year, with the Central bank, spiralled into a public event and it became very complex to work towards a solution. It was a very difficult period for our people and our investors. While I think there will always be situations to resolve, bearing in mind the complexities of the Group, the whole lesson would be to ensure we build the right kind of relationship and structures, so that it never again is as difficult as it has been in the last one year. F: Before we return to relationship management and having the right structures in place, can you give assurances that the planned listing by introduction of the Nigerian unit will go on as you have planned? Or will there be a reason to foresee a delay? S: I cannot see why there will be any significant delay. We have complied with the regulatory requirements for listing on

the premium board. We already have the 20 percent minority in the company. We needed to do a capital restructuring because we have a complex structure which links preference shares with ordinary shares, but we will rather list the ordinary shares which will be much simpler for everybody. I think the team on ground have made good progress in getting us ready for listing and the only thing I forsee could slow us down is something administrative and considering how far we are into the process, I think that is unlikely. A listing in May will be a good outcome. F: If everything goes well, can you put a definite timeline on the listing? S: I’m always trying to give myself a little bit of wiggle room so that is why we say we want to get the listing behind us by the end of the first half of 2019. The first half ends 30th of June, so ideally May time would be a good outcome and that is not too far away. F: You personally announced some months ago in South Africa that MTN will be seeking a license to become a Payment Service Bank (PSB), where are you in that process? S: We did apply for the Payment Service Banking license late last year around when the time the Central bank started accepting applications. I don’t recall the exact date but I can remember it was towards the end of October and we put out our application in November. I think the CBN has been very responsive. We got comments back in short order that required us to go back with further submissions, which we did. In all, we feel the new licensing regime is faithful

Rob Shuter for what it was set up to achieve. The next step is to get an approval in principle. Then we can register the company, return to the CBN with proof we have put all our affairs in order and then start trading. We hope also to get through with this in the first half of the year. F: How do you propose to go forward once in operation as a PSB? Will you be collaborating with an existing bank or would MTN go it alone? S: The PSB framework allows us to basically issue e-money and have mobile wallets on our systems. It allows us connect directly into the national payment system, which is a very important part. It means we can hold deposits from customers, but we have to deposit the aggregate money in Treasury Bills. So, because the PSB is actually a bank regulated by the Central bank, it is not going to require a partnership to be successful. But our mobile money business across Africa are normally done on what we call “open platform basis”. That

way, there is interconnectivity with other players in the industry, as we are believers in interoperability. We will be open to interconnecting with other players as we do in other markets where we brought other financial service providers on the platform, whether its people wanting to do small loans, deposits or insurance. However, while we will have partners in the ecosystem, we will do somethings on our own because we are also a bank. F: Drawing inferences from what has happened in markets like Ghana, how do you think this will impact your Nigerian business going forward? S: It is important to say that the Payment Service Bank really is a separate business. It will need to be set up as a separate company with a separate board and separate regulatory framework. So we obviously need to respect that. But there are, of course, major synergies with the core mobile business. We are already leveraging the customer base, distribution and the agent network. From the core mobile business, once we have customers that do their mobile business with us as well as

carry out their mobile financial services with us, I think those customers will be much stickier. By combining the core mobile business with financial services, what will be very helpful for customers is that once they are active with the mobile money account, they can use that account to buy airtime. It makes it easier for the customers and is good for the telco because it opens up a new channel. F: MTN is probably trending at the very top now that the Nigerian unit has become a one trillion naira business, what lessons have you learnt in the past that would help you as you enter this new era and how do you ensure you come out of it better than you have in the past? S: You know, I’ve only been in the Group for two years, so I’m also one to be humbled by our achievements but I still need to learn about the markets. The time I have been in Nigeria, I have always loved doing my business and visiting the country. I like the vibe and the hustle and I think we have been successful in Nigeria but importantly, we have also been successful for the people

and the country as a whole. We have built a fantastic infrastructure under difficult circumstances. When we go back far enough to the time that MTN decided to come and buy license, there were many others that did not. I think one of our challenges going forward is to reinforce that we are a part of the country and part of the national agenda, as well as being a partner for progress. We need to do a better job explaining the underlining economics of the business. We need to do that explaining because, every N100 that we get from the customers, the first N60 goes into running the business in Nigeria. That’s why we have a 40 odd percent EBITDA margin, and even after that, we have to pay interest and taxes. After those, we are then left with N20 or N30, most of which goes into the network. From our numbers, you can see that investment in the network in Nigeria is around 8-9 billion South African Rand in a year. At the end of the day, the dividend we pay is only a fraction of the

F: It is truly a challenge when despite employing thousands of Nigerians and paying taxes and other fees to the Nigerian government, that MTN is perceived as just another South African company that has little or no positive impact in Nigeria. However, why is it then, Rob, that you do not have a Nigerian on the group board? S: Again I can only plead my 23 months on the job and the fact that the board composition is really a task for the chairman and the nomination committee. I don’t sit on the nomination committee. I get asked this question often and I do believe that MTN Group would be better served to have more representation from its large markets, particularly West Africa and East Africa and I’m hopeful that the board looks at this in the shorter term. I think it is important and a really valid question which I think I could help a lot. F: What’s your hope for your Nigerian unit, the figures we

have seen today are indeed very inspiring, and the payment service bank is one way to go, what else would be happening in the Nigerian space from the MTN Group? S: For me, the one thing that was important for the good year we had in 2018, was that we invested all the way through 2015, 2016, 2017 and I think it’s a really important point that during the tough times that Nigeria went through, we were probably the only operator that continued to invest in scale.

For me, the one thing that was important for the good year we had in 2018, was that we invested all the way through 2015, 2016, 2017 and I think it’s a really important point that during the tough times that Nigeria went through, we were probably the only operator that continued to invest in scale You know it was a difficult situation we were in, with the depreciation of the naira and the effect on capital expenditure. But you there is no reward without hard work and investment. I think that principle is very much what we see for the future as well. This is a very capital intensive industry. We are going to see huge load on this network, as more Nigerians adopt internet services. If you jus think that 30 percent of the subscribers today are using the internet and using say a gig or a gig and half per a month and in two years or three years’ time, it’s 60 percent, using 2 or 3 gig per month, you can see that the pure math of it shows it’s going to be exponential on the network. So my first dream for the country is that we continue to invest

to the cycle so we can offer great service to customers and we can be part of what the country needs to be successful. This is super important for me. I think the second thing is a complete focus on the experience of the customers. I do believe we are a group that has done so much good in the market which we are in, but we don’t yet have the trust of the consumer and to win the trust of the consumer, we have to prove that we are on their side. We have to give them good service at a fair price. We also need to ensure that they see us involved in their social lives and their communities. We have to feel different, but we have to be viewed as a company that is pro-customer and I don’t believe we are looked at in that way today as an industry, so that is one big shift we will like to see. The third big shift is that we have such a unique opportunity to participate in the services that customers use their internet connection for. Most of what happens around the world is that the telcos ended up providing the data, distributing smart phones but then most of the things that you did on your phone was using other services, like Facebook, WhatsApp, Google etc. We believe that there is a real opportunity for operators like ourselves to also build very locallyrelevant services that are going to appeal to customers as part of our co-offering. As part of our services, we can talk about building a digital operator. A digital operator is one that is both operating the network and participates in the digital services. Mobile money is a key example of a digital service. So is music streaming, instant messaging, mobile advertising and others. I think if we would continue to invest and be relevant, with the customers on our side, and doing things they are looking forward to and dreaming about then I think we would be successful going forward. F: Apart from the difficult meetings you have had with Nigerian government officials or other stakeholders when you come to Lagos and other parts of Nigeria, which Nigerian food do you enjoy the most? S: I have become fond of the “Jollof” I must say and I quite like the snails although the last portion I had was very spicy and I was still regretting it the next day.

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Market

South Africa’s oil discovery signals decline for future Nigerian supply ISAAC ANYAOGU

he discovery of crude oil by French oil and gas major Total in offshore South African could soon herald a gradual decline in demand from Nigeria and could constrain about N340bn worth of crude oil bought from Nigeria in the last three months of 2018. According to latest International trade figures released by the National Bureau of Statistics (NBS), export to South Africa from Nigeria amounted to N340.05 billion and crude oil accounted for nearly 98% of the trade value. Depending on how fast the field is developed and how many news are have reserves, Nigeria could be preparing to see South Africa stop sending orders for crude oil cargoes to supply feedstock for its six refineries. In February, Total announced an offshore discovery that could contain 1 billion barrels of oil equivalent of gas and condensate resources, after drilling its Brulpadda prospects on Block 11B/12B in the Outeniqua Basin “It is gas condensate and light oil. Mainly gas. There are four other prospects on the licence that we have to drill; it could be around 1 billion barrels of total resources of gas and condensate,” Patrick Pouyanne, Total Chief Executive said. The Brulpadda well encountered 57 metres of net gas condensate in

Lower Cretaceous reservoirs. The well was extended to a final depth of 3,633 metres and has also been successful. “With this discovery Total has opened a new world-class gas and oil play and is well positioned to test several follow-on prospects on the same block,” Total’s senior vice president for exploration, Kevin McLachlan, said in a statement.

Gwede Manthashe, South Africa’s mineral resources minister said the discovery is a potential major boost for the economy. Africa’s most industrialised economy, which imports most of its refined petroleum products and crude oil, will see imports fall as soon as the fields start producing. After the confirmation of Brulpadda’s potential, Total and its

partners plan to acquire 3D seismic data this year, followed by up to four exploration wells on the licence, the company said. South Africa also want to build its gas network and has previously mentioned the possibility of importing LNG from Mozambique, where a gas pipeline already supplies most of the gas South Africa uses to power its industrial heartland in the north.

The proximity of the find to Mossel Bay’s gas-to-liquid plant is also a boon, said national oil and gas company PetroSA. The African Energy Chamber (AEC) said this is a great first step for the country in cutting imports of oil and gas and the discovery could change the course of South Africa’s economy. This discovery is driving a new wave of majors drilling in the area, hoping to find the next billionbarrel discovery. South Africa is currently working on new legislation that would separate the conditions for exploring and exploiting oil and gas resources from those for traditional minerals. This could complicate Nigeria’s current problem of finding buyers for its crude cargoes which are often stranded at sea. Worse still, competition is emerging from other sources. Libya’s 180,000 bpd el- Sharara fields is back to production after being shut by instability in the region. Egypt has achieved its highest production of crude oil and natural gas in its history last month, producing 1.8 million bpd. This development could further worsen Nigeria’s crude oil market as South Africa is Nigeria’s fourth largest oil market after India, Spain and France. The United States which used to be the highest buyer of Nigerian crude now buy the least ordering only N187bn worth of oil in the last three months ending December 2018.

Explainer

Libya’s biggest oil field is back, Nigeria and OPEC should be worried DIPO OLADEHINDE

ibya’s Sharara oil field, the country’s largest, operated by Libya’s National Oil Corporation (NOC) in partnership with Spain based Repsol, French multinational Total, Austria’s OMV and Norway’s Equinor, has resumed production and is expected to reach 180,000 bpd. Libya’s National Oil Corporation (NOC) said in a statement that regular output will be fully restored in the coming days, now that the site has been resecured after a three-month occupation at the site. The field in southern Libya has a capacity of 300,000 barrels of crude a day which was shut down in December after guards and armed residents seized it over financial demands and was then taken over last month by forces loyal to eastern Libya’s militia leader Khalifa Haftar. Libya’s NOC Chairman Mustafa Sanalla in a statement seen by Bloomberg said the corporation had received assurances that site security has been restored which was verified by the corporation own inspection team, enabling staff to return to work. According to NOC’s statement, the company officially lifted its declaration

of force majeure, a legal status protecting the NOC from liability if it can’t fulfill a contract for reasons beyond its control. Plans are also in place to repair 20,000 barrels per day of production capacity destroyed by looting and vandalism during the blockade. OPEC’s concern Brent the benchmark for Nigeria crude oil has risen by 20 percent this year due to supply curbs led by OPEC and other large producer’s agreement to reduce output by 1.2-million barrels a day in the first half of 2019 to avert a supply glut as US sanctions on OPEC members Venezuela and Iran restricted supplies further. The news from Libya’s Sharara will be huge concern for OPEC and its allies who now faces a dilemma on either to include or exclude Libya which was previously exempted from production cuts because of its internal turmoil which affected oil production The producers’ group will meet again in April to discuss whether to continue the supply reductions in the second half. OPEC pumps about a third of the world’s crude, and the biggest of its 15 members is Saudi Arabia, one of

America’s closest friends in the Middle East. While the group doesn’t target a specific oil price, it adds or removes supplies in the market and therefore can affect the cost of crude. Since January 2017, the group and allies including Russia have cut production by about 1.2million, helping to lift international prices and prop up weak oil prices.

Nigeria’s concern More than any other country, Africa’s biggest oil producing country needs the oil price to rise and in the worst case, remain steady at any price above the $60 benchmark of the 2019 budget. To achieve this, the country needs to avoid disruptions in crude production and also hope that the alliance under OPEC achieves its objective, even though

many are yet to comply with the output cut, including Nigeria. Contrary to a production benchmark of 2.3 million barrels per day (mbpd) used for the 2019 budget estimates by the Federal Government, Nigeria needs to cut production down by 53,000 barrels to arrive at a new quota of 1.685 million bpd down from the reference production figure of 1.797m bpd recorded in January.

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Seplat revises oil reserves using updated 3D seismic data technology DIPO OLADEHINDE

eplat Petroleum Development Company Plc, a leading Nigerian indigenous oil and gas company listed on both the Nigeria Stock Exchange and London Stock Exchange said the use of latest 3D seismic survey helped it revise upwards it oil reserves. According to its full year 2018 report, Seplat’s Working interest 2P reserves as assessed independently by one of the largest, oldest and most respected reservoir-evaluation consulting firms Ryder Scott Company at 1 January 2019 stood at 481 MMboe, comprising 227 MMbbls of oil and condensate and 1,473 Bscf(254 MMboe)of natural gas which represents an increase in overall 2P reserves of 1 percent year-on-year. “The main driver of the upward revision year-on-year is due to the incorporation of updated 3D seismic data into field reservoir models (in the case of oil) and the anticipated compression benefits resulting from upgrades to the Sapele gas plant,” Seplat said in its full 2018 financial report. In 2018, Seplat’s working interest production of 49,867 boepd (comprising 25,669 bopd liquids and 145 MMscfd gas) was 35 percent higher than 2017’s working in-

terest production of 36,923 boepd. Investors would be happy to know that working interest owners also fully participate in the profits of any successful wells which stands in contrast to royalty interests, were an investor’s cost is usually limited to the initial investment, also resulting in a lower potential for large profits. This is the first time Seplat is exploring seismic surveys however other International Oil Company (IOCs) have also started exploring the use of seismic surveys such as United Kingdom based Europa who announced earlier in March 2018 it had completed Pre-Stack Depth Migration (‘PSDM’) reprocessing of 770km2 of 3D seismic data over the Inishkea prospect, including the area of the Corrib gas field. “In addition, Europa has purchased 1,544 km2 of released 3D seismic data shot over, and immediately adjacent to, the LO area, 5,000 km of regional 2D and 13 wells,” Europa said in a statement on its website. Also, French energy giant Total said it planned on acquiring 3D seismic for Brulpadda well which is three to five times bigger than all the gas discoveries so far in South Africa which Consultancy Wood Mackenzie has said the prospect

could hold up to 1 billion barrels of oil equivalent. “After the confirmation of Brulpadda’s potential, Total and its partners plan to acquire 3D seismic data this year, followed by up to four exploration wells on the license,” the company said. In the past, wells were drilled into the Earth where people had a ‘feeling’ that there could be oilperhaps where oil seeps had been found nearby. Often, large folds of rocks, called ‘anticlines’, seen at the earth’s surface, were drilled in the

hope that oil or gas may be trapped in the folds down below. Now there are more scientific approaches, such as using a combination of the geology of an area, gravity and magnetic surveys, seismic surveys and remote sensing techniques like aerial photography and satellite imagery from outer space which help in pointing areas where oil and gas may be found. However, seismic surveys are the most important modern technique for locating new oil and gas deposits. A seismic survey uses

sound waves which are created just beneath the land surface or near the surface of the sea. The waves travel down through layers of rocks and bounce back like echoes. By using computers, geologists and geophysicists can build up an accurate picture of what is under the ground or seabed, and then figure out where oil and gas might be found. Seismic pictures can be in 2D (a vertical slice through the layered earth), or in 3D (a whole cube of information about the layers inside of the earth).

Analysis

Review of Nigeria’s PSCs requires renewed commitment from FG, IOCs STEPHEN ONYEKWELU

igeria loses large chunks of revenue to the delayed review of its Production Sharing Contracts, despite the Supreme Court’s October 17, 2018 judgment and experts have said it will take series of negotiation between IOCs and the Federal Government to fix. According to the provisions in Section 16 of the law governing the PSCs, the contracts ought to have been reviewed first, in 2004 (when real oil prices exceeded $20 per barrel); and secondly on 1st January 2008 (15 years from 1st January 1993). In its judgment, the Apex court mandated the Attorney General of the Federation to recover all lost revenue from failure to review the terms of these PSCs. It is also critical because production from PSCs has outstripped production from Joint Ventures (JVs), and production from PSCs constitutes now the largest component of oil production in Nigeria, according to the latest Policy Brief from the Nigeria Extractive Industries Transparency Initiative (NEITI). “You cannot change the rules of a game in the middle of play. The International Oil Companies have made investment projections based on existing fiscal regime. To change this requires

negotiations between the government and concerned parties” Henry Ademola, team leader at Facility for Oil Sector Transformation (FOSTER). To calculate the losses Nigeria has incurred, NEITI made use of financial modelling analysis, the standard methodology in the industry, applied it to data on production, oil prices and the applicable fiscal regimes to arrive

at comparative revenue figures for the period 2008 - 2017. The results show that if the PSC contracts had been reviewed in 2008, and the fiscal regime from the 2005 PSC licensing round had been applied, additional revenue to the Federation between 2008 and 2017 would have been higher by between $16.03 billion and $28.61 billion.

Section 16 (1) of the Deep Offshore and Inland Basin Production Sharing Contracts specifies that: “the provisions of the Act shall be subject to review to ensure that if the price of crude oil at any time exceeds $ 20 per barrel, real terms, the share of the Government of the Federation in the additional revenue shall be adjusted under the Production Sharing Contracts

to such extent that the Production Sharing Contracts shall be economically beneficial to the Government of the Federation.” Section 16 (2) states that: “Notwithstanding the provisions of subsection (1) of this section, the provisions of this Decree shall be liable to review after a period of 15 years from the date of commencement and every five years thereafter.” NEITI made the following recommendation at the end of its March Policy Brief: The Federal Government through its appropriate agencies should commence urgent process to review the PSC agreement with oil companies now not later. That the FG should note that the affected contractors have expressed willingness to negotiate these terms and therefore they and the state governments should be carried along in the review process. The National Nigerian Petroleum Company (NNPC) should follow international best practices and make the contracts with oil companies’ public in other to ensure transparency and maximum government take, as Nigerians can properly scrutinise such contracts and draw attention to areas of improvement.

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Tuesday 12 March 2019

Why oil majors are strategizing into renewable energy DIPO OLADEHINDE

paradigm shift seems to be moving in renewable energy space as oil majors who once dismissed electric cars decades ago are now muscling into driver’s seat of the “new fuels” industry. In order to meet up with infrastructure demand from electricvehicle, International Oil Companies (IOC) like Royal Dutch Shell’s, France’s Total, Chevron and ExxonMobil are making big moves to share from what seems to be an emerging market cake. According to Bloomberg New Energy Finance (BNEF), Royal Dutch Shell’s recently purchase Greenlots, a startup offering software and services for electric-vehicle charging networks. Shell plan on using Greenlot’s technology, which combines software to optimize battery charging and grid balancing services in one charging platform, to build the foundation of its electric-vehicle business in North America. BNEF noted that Shell is pouring about $1 billion a year into such deals, including the acquisition of 30,000 charging stations in Western Europe, as well as a $31 million investment into electric-vehicle charging startup Ample in 2018. France’s Total closed a deal for G2mobility, which offers EV charging solutions, as well as a $1.7 billion deal for Direct Energie last year, making it

a major electricity retailer in France as well. Reuters reported, Total wants to grow its “low-carbon energy assets” from 5percent of the total today to 20percent by 2035. Chevron and ExxonMobil are also beginning to edge into utilities’ traditional territory. Last year, Chevron participated in a $240 million round for ChargePoint, a network of independently owned charging spots, valued at $1.5 billion, according to U.S based data, research and private equity firm Pitchbook. BNEF said public charging infrastructure is ramping up almost eve-

rywhere, and each region has its own unique mix of players. For example in Europe, 79percent of the public charging infrastructure is operated by utilities and oil companies. In the US, 62percent of the market is managed by pure-play EV operators. In China, equipment manufacturers control the majority. An Energy research and consultancy firm Wood Mackenzie counted more than 350 new electric vehicle (EV) models debuting by 2025, which is one of the conditions for mass-market adoption. Also, Global demand for gasoline is set to peak around 2021

thanks to electric vehicles and fuel efficiency gains. Mackenzie estimated that total charging-energy demand for the EV vehicle population across China, Europe, and the United States could grow dramatically from 2020 to 2030, increasing from roughly 20 billion kilowatt-hours to about 280 billion kilowatt-hours. “This estimate reflects assumed EV adoption, total miles driven per year, and the average kilowatt-hours required per mile (a miles-per-gallon equivalent). While 280 billion kilowatt-hours sounds like a big number,

it represents less than 10 percent of current US energy demand while reflecting the requirements of all four markets,” Mackenzie said in its electric vehicle survey. Most of Europe’s biggest oil firms are not only moving into electric-vehicle charging space but also into power trading, energy storage, retail electricity sales, and grid management. A report by UK based data analytics company GlobalData said oil and gas companies are also diversifying into power generation and battery manufacturing, two areas where demand is set to increase with the growing adoption of electric vehicles. “Electric vehicles consume more power than a typical household; hence the addition of each EV would drive the power demand significantly. This has prompted oil and gas companies to partner with or acquire utility companies to expand their electricity generation capabilities beyond captive power,” GlobalData said. Last year, Norwegian oil company Statoil dropped ‘oil’ in its name and rebranded itself as ‘Equinor’ in an effort to diversify beyond the oil and gas business and mainly into renewable energy projects, to reduce its carbon footprint and appear more relevant in these evolving energy dynamics. GlobalData’s thematic research identifies Royal Dutch Shell, BP, Total, and Repsol as some of the key companies at the forefront of the deployment of electric vehicle technology over the next two to five years.

Ikea’s innovation lab unveils a plan to help people cash in on solar energy Ikea’s innovation lab debuts SolarVille, a blockchain-powered solar microgrid, which points toward the furniture giant’s sustainability ambitions.

t’s undeniable that humanity’s dependence on fossil fuels needs to change if we are going to mitigate the disastrous impact of climate change. One of the best alternative energy sources is solar power because it is so plentiful–to meet the Earth’s current energy needs, we would only need .025% of the energy the sun emits every year. It’s also cheap: If you can put the infrastructure in place to collect and store it, the solar energy itself is free. But incentivizing people to build that infrastructure remains a challenge. Ikea’s innovation lab Space10 is envisioning a new prototype for how solar energy could be installed in local communities and then shared on a small microgrid. The microgrid would enable people to sell their excess energy to others on a blockchain-powered platform. Called SolarVille, the idea came about because Space10 decided to do research into how solar energy might change people’s lives in the future. But it’s hard not to see the lab’s research in the context of Ikea’s larger sustainability goals and initiatives. For instance, one segment of Ikea’s business, a franchise called

Ingka that runs Ikea stores in 30 countries, has pledged to bring affordable solar technology to homes in all of these markets by 2025. Ikea has also been selling solar panels in the U.K. since 2013 and launched a battery and solar panel kit in 2017, also in the U.K. Right now, SolarVille is a 1:50 scale model village, where the homes are decked out with mini solar panels that harvest energy from the sun. All the buildings are hardwired together, creating a microgrid that enables everyone to share their energy. In the concept, some people will generate excess energy either by using less energy themselves or by installing more solar panels. A blockchain technology platform will enable them to sell that extra energy to their neighbors without any intermediary–instead, the transactions between neighbors are logged in a secure and transparent ledger. Space10 says that the design is meant to be easy to use and install, and all the software that runs the blockchain is free. Part of the project is meant to lower the cost of energy, since the blockchain platform wouldn’t

require a company in the middle. “Centralized energy systems are often too slow and economically inadequate to reach the billion people who remain locked in energy poverty,” Bas Van De Poel, creative director at Space10, tells Fast Company in an email, referring to the higher costs of traditional electricity and the infrastructure that would be required to bring it to under-powered areas. “SolarVille showcases that, when working in tandem, technologies such as solar panels, microgrids, and blockchain open new opportunities: off-grid systems allowing people to leapfrog

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

traditional grid electricity.” The working prototype, consisting of a tiny village of wooden houses that were designed by the Danish architecture firm SachsNottveit, currently lives at Space10’s new gallery and will soon go on a global tour, where the public can play around with it. To demonstrate the flow of energy, the designers embedded tiny LED lights that glow when energy is moving from one place to another. You will also be able to look under the hood to see how the energy transactions between neighbors are being recorded through a visualization of the blockchain tech-

nology that underlies the system. There are currently real-world projects that operate using these same principles as SolarVille: the Brooklyn Microgrid, for instance, is an experimental local grid that harvests solar energy that’s distributed to and traded between neighbors using the blockchain. Similarly, a startup in Bangladesh is trying to create a similar peer-to-peer system, both using solar energy and more traditional energy sources. But questions remain about how to replicate these models across many communities. With the support of a mega corporation like Ikea, which is known for its ability to produce inexpensive but well-designed products, solar energy could become more accessible. And with the company’s innovation lab putting forward ideas around solar microgrids, it’s not too much of a stretch to think that Ikea itself might one day adopt a similar idea. After all, for more people to embrace this emerging technology, solar panels and the infrastructure necessary to set up a peer-to-peer system should be as simple to build as assembling a flatpack bookshelf.

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Housing

What Total staff move to Kuramo Beach Residences means to Banana Island property market …as exit throws back 70 luxury flats into the narrow, expensive market CHUKA UROKO & ENDURANCE OKAFOR

he Banana Island property market was badly bruised recently when the staff of Total Nigeria left the highbrow settlement for their newly completed residential building, Kuramo Beach Residences also called Total Residences in Victoria Island. Total, a subsidiary of the Total Group, is an industry leader in petroleum marketing and services in Nigeria. The exit of its staff has thrown back 70 luxury flats into Banana Island’s narrow but very expensive market, raising concerns on the likely impact on both landlords and the market. An upper class settlement in Lagos, Banana Island with curved shape of a real banana, is adjudged the most exclusive and expensive location in Nigeria today where property value is not only stupendously high, but also denominated in dollars, though could be paid in naira equivalent. “This island has the best security, facilities and services; it has become a brand on its own. Everybody who

has got some money wants to live on the island. Nobody is now thinking of living in old Ikoyi. People are now ready to pay extra to live on this island”, Chudi Ubosi, an estate surveyor and valuer, told BusinessDay. Here is an island where a standard plot of land measuring 1,000 square metres sells for between N300 million and N400 million; a threebedroom apartment typically sells for between N150 million and N250 million and about N500 million for a five-bedroom stand-alone house, depending however on location, build-quality and finishing. Renting does not come cheap either in Banana Island. BusinessDay checks revealed that rent for a three bedroom apartment here ranges from N20 to N30 million per annum which is way ahead of N5 million to N15 million for same size apartment in Victoria Island. However, for commercial real estate, one square metre space goes for between N200,000 and N300,000 while in Victoria Island and Ikoyi, it goes for between N270,000 and N400,000 per square metre. This is because Banana

Island is mostly residential. Again, its exclusivity and high level security does not support high volume commercial activities. It is against this backdrop that concerns are mounting over the 70 flats that are now vacant on this island plus others that may not have been reported. “This is a hard hit on the real estate market in Banana Island, but a plus for the Victoria Island market”, noted Yemi Stephen, a partner at Estate Links, a firm of estate surveyors and valuers in Lagos. “How many companies in Nigeria today can take up flats accommodation in excess of 10? And here we are talking about 70 flats where rents are paid in dollars; it will take a while to fill,” Stephen observed. Though Godwin Asuelimen, Head, Core Product, at Propertypro.ng shares Stephen’s views, he pointed out in an interview that the exit of the Total staff might not have a major effect on the real estate market as it is not a macro factor. “It will only have effect on the two companies that are involved in the transaction, but it would shake the market,”

he insisted, hinting that “the agent(s) handling the Banana Island property will probably target corporate clients”, but they should be ready to do reasonable pricing, not the price they want.”

Stephen argued that “if the Banana Island agents are looking for corporate clients like that of Total, then it may take them eternity to get the flats filled up; if they are creative and lease per unit, they

may be able to fill it up in the next four months or thereabout.” What happened in Banana Island is not totally new Continues on page 26

Title Documentation

Legal issues buyers can’t ignore when in property acquisition ENDURANCE OKAFOR & TEMITAYO AYETOTO

hether for personal or commercial investment purposes, there are legal issues buyers must give adequate considerations to enable a seamless acquisition and avoid bundles of litigation. Checks by BusinessDay revealed that most Nigerians do not take into consideration some legal requirements on a property before purchasing, hanging their fate on the neck of agents. The trust on the property realtor to carry out all due diligence on a property, sometimes as a means of reducing cost, make people fall prey to dubious and fraudulent property dealers. Analysts polled by BusinessDay reeled out the stepby-step legal requirements that should be ascertained by a potential property owner before making payments for a property. Yemi Opemuti, chief ex-

ecutive officer at BAM & GAD Solicitors, a commercial, corporate and business law firm, explained to BusinessDay that initial considerations must include all title documents such as a purchase receipt, survey, title documents, that is, certificate of occupancy or approved building plan of the owner in the case of a landed property with an existing building. “Ask for survey, go and chart the survey at surveyor general’s office to determine whether the land falls under government acquisition,” he advised. This is imperative as

many developed areas in Lagos fall under acquisition without buyers knowing. “A property might be on Adeyemi Street in Lekki Phase 1, but unscrupulous sellers can present you the survey of a property on another street where the land is free from acquisition,” Opemuti explained further. Breaking down the due diligence requirements, he said that since the certificate of occupancy is issued only once by a state governor, buying a property with an existing C-of-O will require application for governor’s consent. The consent acknowledges the transfer of

ownership to the new buyer. Corroborating him, Florence Alao, a real estate legal adviser, said a buyer must first ascertain if the property has been registered. “That is if it has a titled document in the name of whoever you are buying from, not from a roadside agent (Omoniles) who issued the person a land purchase receipt and also the registration of the property should not be ongoing as at the time of the purchase,” Alao told BusinessDay. Secondly, a legal research has to be conducted to ensure the property is not in combat or pledged for a credit facility because, in that case, the bank will register their interest on the title, Alao explained. But legal issues vary from place to place and case to case. In Lagos State, for instance, there are federal lands in some parts of Ikoyi, Festac Town and Abeokuta Expressway and likewise other locations. In these

locations, buyers have to apply to the federal ministry of works for either C-of-O or consent which will be signed by the minister of Power, Works and Housing on behalf of the federal government before acquisition happens. There are also areas in Lagos where excision—land acquired by the state government but later released to the customary or native land owner – is necessary. “This is common within the Lekki area down to Epe. The excision is covered by gazette including the title of the customary owners, Opemuti noted. “In that situation, a buyer needs to ask for the excision.” Based on that, the buyer can make enquiry at the land registry as regards whether the excision given is genuinely issued by the Lagos state government to avert fraud. However, there are also other issues buyers must be sensitive to.

If a property is to be sold by a company, a minimum of two directors must sign the Deed of Assignment, that is, the contract between the buyer and the seller. Opemuti advised that soliciting lawyers in such case could conduct a search on the company to determine whether the signatories are current directors of the company. If not, it may result into a bad sale. In the event of purchasing a property tagged Mr and Mrs, the husband and the wife must also sign. Where the owner is late, a buyer needs to seek granted probate will or ask for letter of administration in the event that the owner died intestate. Granted probate will is the will by the former owner registered with the court while ‘letter of administration’ is for someone that died without a will. Either the wife of the Continues on page 26

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Legal issues for land buyers... Continued from page 25

Lake Point Towers: Breaking the norm in prime office location CHUKA UROKO

n this part of the world, high street location is, increasingly, becoming synonymous with prime or grade A office developments. Almost always, developers and investors would want to locate their office buildings on high streets for reasons of immediate attention and, perhaps, easy marketing. But there are other developers and investors with other considerations. For this class of people, serenity, exclusivity and class weigh. And this is where Lekki Point Towers and its promoters belong. Lake Point Towers is an exclusive office development comprising two towers of Grade A luxury offices and support facilities located close to the waterfront of Banana Island, Ikoyi. Each Tower comprises approximately 7,370 square metres open plan lettable

Tuesday 12 March 2019

space across 9 floors . According to the promoters, its Banana Island location is a break away from the norm. Banana Island’s exclusive, expensive, serene and classy attributes have, unequivocally, given this development a special status, making it a niche product that should be sought after by lovers of exclusivity and security. A recent report by researchers on Nigeria’s prime office market shows that Nigerian economy improved slightly within the last quarter of 2018 when compared to the previous year. This improvement was also seen in the real estate sector as there was a momentous improvement in the level of enquires received for Grade A office buildings. According to the report, most of the enquires were specifically tailored towards an exclusive Grade A office buildings which Lake Point Towers offers. Though some would stick to the tradition

that A grade property would typically be on a high street as is the case in most places, others differ. “Nestled in the serene Banana Island, Lake Point Towers is poised to change this norm by providing exclusivity for corporates that want to be far away from the maddening crowd”, said Gbenga Olaniyan, Principal Partner at Gbenga Olaniyan & Associates, a firm of estate surveyors and valuers. Gbenga Olaniyan & Associates are the marketing consultants for the property. The company explains that Lake Point Towers is an iconic building with stateof-the-art finishes that exceed expected offerings in a finished serviced Grade A office space in most exclusive of environments. This is reflected in the striking features of the building which include raised floors, central cooling system, general reception area, breath-taking city

and water views, sufficient parking spaces, two passenger lifts per tower, one good’s lift per tower, driver’s lounge, CCTV, accessible toilets, access control and water. Interest in this office complex has been quite encouraging at 30 percent and, according to Olaniyan, the building is fully operational as some of the spaces have been let to top organisations while there are ongoing discussions with a few other companies who are bent on securing a space there. “The rent is pegged at a very competitive price when compared to the going rate in the market”, he revealed. The leasing agents informed, while encouraging discerning firms and businesses in the market who are seeking exclusivity and class, that offers are handled strictly on ‘first come, first served basis as interest continues to grow in this oasis by the lagoon.

deceased or the children or family member could be appointed as the administrator of a property. If not, a buyer should decline until that is done in the court. In the case of a family land, buyers must seek principal members of the family or accredited members capable of being signatories. If a party is selling on behalf of the other, a buyer must seek the registered power of attorney to sell. The process of buying land in Nigeria could be challenging and poses a great risk without being properly guided. Explaining his horrible experience to BusinessDay resulting from a property he acquired around Fadeyi in the Lagos, a buyer, who did not want to disclose his name, said “till today the property I bought through the help of an agent my brother recommended to me is still in court.” He explained that after “I bought the four flat apartment with all necessary documents given to me, another man came to the house six months later and had same documents as the ones that were presented to me claiming ownership of the property.” He admitted that he did not carry out any form of legal investigation as he was told that the agents knew how to go about getting everything and considering “my brother recommended him, I didn’t have any reason to waste money, but now I regret not doing all that.” Responding to why most people do not like to involve a legal professionals when acquiring a property, Yemi Stephens of Estate Links said people do not recognize the place of a professional in

a real estate transaction because they want to save cost. “People don’t like paying professional fees and it is penny wise pound foolish,” Stephens said. He explained that even being a professional in the real estate industry does not stop him from consulting a Lawyer to help with his paper work when he wants to acquire a property. “I can conduct due diligence search on a property but still what the trained eyes of a lawyer will see I might not be able to see. The case is the same for an engineer or a lawyer who is asked to come and do valuation of a property; they might not be able to see what I will get out from a property,” he noted. On other areas where the expertise of a legal professional is required during the acquisition of property is confirming the originality of the property documents. “There is also need to do verification to know if it is the original title you are holding, because sometimes title documents are cloned and this can be verified with the land registrar because they usually keep an original copy of a property document they issue,” Alao cited. BusinessDay checks have shown that getting registration for land and real estate properties is one of the many issues that drags Nigeria’s property market which is deficient by more than 17 million units. “The land registry process, as I was told you, takes two weeks, but in the last two months I have b e e n hav i ng a n i ssu e, and I have been advised by friends who have had similar issues to get a solicitor to help push on it,” a developer in Lagos told BusinessDay on condition of anonymity.

Total staff move to Kuramo Beach Residences... Continued from page 25

in the property market. It had happened before when Mobil vacated its former office for Black Diamond just opposite the Mobil Building along Lekki-Epe Expressway. But that was not of the same magnitude as that of Banana Island. It was a block of 49 apartments and it took two years to fill it up. Despite the negative impact of the exit of Total staff on Banana Island market, there are also some positive sides to that movement. It is a huge plus for commercial ac-

tivities in Victoria Island and its environs, particularly The Palms Mall which is not far away from the new residence. “The shops around the Adetokunbo Ademola and environs will, in the nearest future, expand. Those shops were servicing Eko Hotel and a few others, but now a building of over 100 apartments is being filled up; it will have a huge influence on the retail and other commercial outlets”, Stephen assured. Kuramo Beach or Total Residences is an iconic residential development located strategically at the intersection

of Ahmedu Bello Way and Adetokunbo Ademola streets in Victoria Island Lagos. It is an imposing edifice standing 89 metres high and overlooking the Atlantic Ocean just a few metres away. “This is a twin tower building, sitting on a total land area of 40,000 square metres, offering 140 residential apartments, a clubhouse, two podium-parking levels, a mini football pitch, multi-functional hall and recreational sport facilities”, Ramzi Chidiac, managing director, ITB Nigeria Limited, explained to BusinessDay in a telephone

interview. ITB Nigeria, a subsidiary of the Chagoury Group, is the designer and contractor on this project which was awarded to it in August 2015. The construction company has built an enduring reputation as an innovative company providing full and advanced integrated engineering and construction solutions to both private and public sectors. “With up to 1000 employees, world-class projects like the Azuri Peninsula, Eko Tower 1&2, The Heritage Place, Kingsway Towers, Eko Signature Hotel, the Trinity Towers

and The National Assembly Complex, ITB has become the growing face of African development”, Chidiac enthused. He disclosed that Kuramo Beach was constructed from carefully chosen materials and with strict adherence to quality and safety standards. The building comes with power efficient HVAC system, highly controlled sewage plant for effective environmental management, standard compliant fire integrity system, efficient and standard water supply and distribution facilities and state of the art architectural design guided by a world class quality

management system. Abbas Haidar, Kuramo’s project manager , assures prospective buyers, “we have committed a lot of time, resources, expertise, digitalized equipment and utmost competence to ensure the successful completion of this project”. Continuing, he said, “this is, no doubt, one of the best high-rise residential buildings in Lagos state. Not only will this futuristic building provide utmost comfort for its owners, it will also successfully answer the demand for more accommodation for Lagos amid the growing population” .

Tuesday 12 March 2019

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Weekly insight on current and future trends in education

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EDUCATION

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Human Capital

How investment in coding education helps students leverage local, global opportunities KELECHI EWUZIE

ducation course that entails Computer programming which is also referred to as coding is now regarded as an essential ability for 21st century learners and is becoming a key component of various levels in education curriculum. Basic coding courses in schools provide students with the know-how to develop their own websites, apps and computer software. Learning how to code is learning to tell machines what to do. But this requires the mastery of a problem-solving skill known as computational thinking, which involves breaking larger tasks into a logical sequence of smaller steps, diagnosing errors and coming up with new approaches when necessary. This education trend is what is shaping the next level approach of learning globally. With an increase in importance of coding skills to their national economies, policymakers in many countries are considering national coding education efforts of various sorts and a few education systems have already begun to implement related

Cresta Durujaiye (l), Author 40 Pearls of Wisdom; Sola Oguche-Agudah (right) Author, Zara in a group photograph with students from Vivian Fowler Memorial School, Ikeja after a book reading session hosted by Laterna ventures limited to commemorate World book day in Lagos.

initiatives. While the world is attempting to keep pace with technology, the same can hardly be said of Nigeria as a growing number of school leavers in the country lack the prerequisite computer programming knowledge required to function effectively in the 21st century. There is also the huge burden that a high percentage of Nigeria youths stand little competitive chance of securing high-paying jobs globally

because they are ill-equipped to provide the needed solution that huge global workforce demands. The latest report from the Nigerian Bureau of Statistics put unemployment rate at 23.1 percent as of Q3 2018, an increase of 23 percent from 18.8 percent in Q3 2017. Under-employment rate was 20.1 percent while youth unemployment and/or under-employment stood at 43.3percent. It goes without

World book Day: Laterna host reading session to inspire students to read KELECHI EWUZIE

aterna ventures limited, leading book sales and distribution company as part of its contribution to inspire younger generation to embrace the culture of reading early organised a reading session for students of Vivian Fowler Memorial School and Yeshua High School both at Ikeja, Lagos . The event which was held in commemoration of the 2019 World book day represents the company’s own response to foster an endearing love for books among young people in order to mould a generation of leaders who are readers. Cecilia Adegbolagun, head of Retail, Laterna Ventures Limited while speaking about the involvement of the company on the world book day says the event as a global event presents an opportunity to encourage the culture of

book reading among students. According to her, “We thought it wise to commemorate a major day like this by letting students know the importance of reading. By letting them know that reading goes a long way in changing their mind set and transforming them to a better” Adegbolagun opines that Books are treasures and information is usually hidden in books. The whole essence of reading is so we as a people and a nation can come out better. The development we have seen around the world today revolves around reading. Cresta Durujaiye, Author 40 Pearls of Wisdom and the guest author of the day observes that Reading is important but the problem we usually have is that people don’t know why. She said celebrating world book day is an important occasion to explain to students why reading is so crucial

because there is wealth of information that is available in books. She observed that most of the information needed to succeed in life is usually embedded in books saying the whole idea of the programme is just to ensure that children are exposed to books at early age. On her part, Sola Oguche-Agudah, Author, Zara opines that reading sparks up vision, imagination, and increases student’s knowledge base, which in turn will help them speak more informatively. Agudah opines that reading gives student’s better grasp of the issues when they speak adding that to grow your mind and be worth anything of repute, then reading is a must. “As you know, readers are leaders. If children imbibe the habit of reading from childhood, it becomes a habit and a lifestyle for them even as they grow older”, she said.

saying that any country serious about preparing its future generation to be competitive in the global job market will ensure her children are actively engaged with technology from a very early age. While most schools in the country boast of having Computer Science classes where they teach the children how to use the computer, serious efforts need to be channelled to getting the best knowing that computer programming is

the most important skill of the 21st Century, and the earlier a kid starts, the better. It has also become imperative that children be provided access to coding know-how, to ensure that Nigeria and Nigerians are not left behind in the global competitiveness today. It is no longer news that coding is now the new buzz word or to a large extent a life skill, so children from every segment of society deserve the opportunity to acquire coding skills, to be prepared for the future and to keep abreast with change in the society. Those who know in the field of education and Information, Communication and Technology (ICT) opine that with the right coding facility in place, Nigerian youths would be exposed to modern technology so as to be globally competitive. Coding education advocates observe that Coding is the future which must begin now saying that Coding education will help students acquire vocational skills that are immediately relevant to today’s job market as exemplified by numerous ITrelated jobs available in the world today. To them, coding is the new literacy, learning new and more relevant digital skills are

vital if todays will survive and thrive in a world increasingly dominated by technology. Obafela Bank-Olemoh, the special adviser to the Lagos State Governor on Education, said that coding skills aims at optimising the benefits of technology to drive economic and infrastructure development. “Coding positions students to harness, create, and leverage on local and global opportunities, meet the growing demand for technology skills and approach the world of work as problem solvers by learning to code which involve variety of other capabilities, including, logical reasoning, problem solving, design thinking creativity among others”, Bank-Olemoh said in the long term, entrenching the culture of coding in Nigerian youths will increase employment and business opportunities in the technology sector and promote best practices. Microsoft survey released at BETT Middle East recently showed that the majority of teachers see virtual collaboration as a key skill required by students, followed by problem solving and knowledge construction. A further 39 percent believe students will be limited in terms of career options due to a lack of digital literacy.

Omenugha hails appointment of first female to head Oko Poly Emmanuel Ndukuba

nambra State Commissioner for Basic Education, Kate Omenugha has hailed the appointment of Francisca Nwafulugo as substantive first female Rector of the Federal Polytechnic, Oko. The Institution is located in Orumba North Local Government Area of Anambra state. The Institution’s Public Relations Officer (PRO), Obini Onuchukwu had announced the appointment in a statement released to newsmen. According to him, Nwafulugo, former Chief Lecturer in Chemical Engineering, Kaduna Polytechnic would succeed, Izuchukwu Onu, who had been on acting capacity in the past 12 months. Nwafulugo’s letter of appointment took effect from Feb. 4. Omenugha said “to say the truth, I am excited that two major federal Government institutions are headed by women the Federal College of Education (Technical), Umunze and now the polytechnic, all in Anambra.

“Even the Anambra State College of Education, Nsugbe and the polytechnic at Mgbakwu are also headed by women. “They women folks are doing well. That is why the Anambra state government has been providing opportunities to women,” she said. The commissioner noted that the women were equally as good as the men and if given a fair chance, the women easily get to the top. Nwafulugo had emerged in the top spot out of the 17 other candidates who participated in the Rectorship interview which was conducted at the council chambers of the institution between Oct. 23 and Oct. 24, 2018. Her name and two others Christian Ezeudu and Chika Eni, Chief lecturers at Federal Polytechnic, Oko, who emerged 2nd and 3rd were shortlisted and forwarded to the presidency for final the selection. She would be the first female to emerge as Rector since the founding of the institution. Nwafulugo attended the Institute of Management and Technology (IMT), Enugu, where she obtained a Higher National Diploma (HND) in

1991. She proceeded to obtain a Post Graduate Diploma (PGD) in Education (Technical) from Kaduna Polytechnic in 2010. She later obtained a PGD certificate in engineering in 1999 and also, Master’s Degree in Chemical Engineering (Process Analysis and Development Option) in 2002 both from Federal University of Technology, Minna, Niger State. Nwafulugo proceeded to Ahmadu Bello University, Zaria where she obtained her Doctor of Philosophy (PhD) in Chemical Engineering in 2014. Nwafulugo is a member of six professional bodies and associations including Council of Registered Engineers of Nigeria (COREN), Nigerian Society of Engineers (NSE) and Nigerian Society of Chemical Engineers (NSCHE). She also belongs to the Association of Professional Women Engineers (APWEN), Waste Management Society of Nigeria (WAMSON) and Women in Technical Education and Employment (WITED), Kaduna Polytechnic.

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Tuesday 12 March 2019

EDUCATION ‘Technology in education should be a resource tool to compliment teachers’ effort’ RONALD CILLIERS as the Principal of Greenwood House School has among other responsibilities, the role of driving the process of grooming 21st century students. In this interview with KELECHI EWUZIE, he shares insights into the Nigerian education industry and the role of technology in teaching and learning. Excerpts: Tell us about yourself and what inspired you to go into education? ’ve always loved to learn, I am so enthusiastic about discovering and unveiling the possibilities of life and learning. This attitude led me to studying both Mechanical and Electrical Engineering, and after completing both, I went on to lecture in colleges. I was offered a position in a secondary school and then embarked upon a PGDE. I managed to do a BSc in Information Technology as well. With my 27 years of academic and teaching experience, I am more than ecstatic to proclaim that I made an absolutely appropriate decision to tread on a career path in education. What are the basics of setting up a school such as Greenwood House School? Starting and managing a school such as Greenwood House School requires vision, intense planning and execution to be able to create good quality standard of education that will prepare each student to be thoughtful individuals. The most important factor is to possess a deep understanding of the environment you have chosen to operatein and ensure any facility you wish to establish, meets the legal requirements recommended for an educational institution. Once this has been successfully achieved, there is the process of determining the appropriate curriculum which will drive

the resource needs and lastly location. What would you say is an ideal school environment, and how have you fostered that kind of culture here at Greenwood House School? Within every learning environment is a prevailing culture that will influence some if not all of the other components in a school environment. My ideal environment is one where the child does not get lost in the masses. Every child must feel that the school is a family away from home where every person must feel safe and secure. We have a strong family bond with children, staff and parents where every child matters. There are arguments that technology is disruptive to the education process of children, what is your take on this? I have to state that technology is disruptive if it is allowed to be, and if there are no checks and balances regarding it. If children are exposed to technology in the school, it must be regulated, monitored and used as an educationalresource tool only. Parental involvement with regards to usage at home is of cardinal importance, and the school to the best of its ability does what is needed from our side. How are students adapting to the use of technology, some people think it distracts students from learning, what trends have you seen in this regard?

Ronald Cilliers

We have used technology in Greenwood House School for a while now and we have the attitude that technology is not there to replace a teacher but should merely be a resource tool to compliment the teacher teaching. All our classes, from Playgroup to our Primary 6, are equipped with interactive whiteboards, which all pupils are comfortable with and is used to enhance the learning experience, opposed to enhancing the teaching experience. At no stage is technology to be a substitute or replacement for the human element within a class. In the light of this technological awareness, what

has been some of the technological advancements employed by Greenwood House School over the years? Greenwood House School is an establishment who adapts to the changes that will benefit the learning process of its students. We are constantly researching and seeking ways we can make learning enjoyable to our pupils. So far, we have purchased tablets to be used in our library and we constantly use the internet and other forms of technology in the class. The children are exposed to Computer Based Testing (CBT) and homework can be done through electronic means when children are unable to be in the

class for numerous possible reasons. Has technology had any impact on the interaction between teachers and parents and vice versa? As teachers, it is extremely vital to be in constant communication with our parents to keep them well informed of their children’s progress. Apart from Parent-Teacher Day where we meet with the parents physically, our staff also regularly communicate with parents via electronic means such as whatsapp, email and the in-house communication method called Classdojo.Classdojo is a teacher/parent communicator we use to directly communicate on the pupil’s academic and behavioral progress. How has technology affected communication and collaboration in the classroom? Technology has impacted classroom operations in so many ways. For instance, teachers limit the use of papers in the classroom; our staff have also adopted this policy of limiting the unnecessary use of paper when it comes to inter-office communication. Memos, letters and other documents within the school are done via email and this enables staff to be able to access needed documents electronically whenever required to. Classroom activities are sometimes done in groups with the use of technology; we believe this

will build on their abilities to work together. What efforts do you think need to be made so that students can have the right technological knowledge early on to be able to compete on an international level? A Cyber Policy needs to be formulated and all involved needs to be aware of it. Parents need to monitor all technology at home and also make themselves technology adept as well. Staff need to instill the positive aspects of technology and use it as a tool. This is what the international standards are, and we are no different. Our parents are technology aware and we are privileged to have open dialogue with parents on a regular basis where any of these aspects can be discussed. What trends or changes do you project in the education system ten years from now? Globalisation has allowed technology to takeover many things, the education system inclusive. It is changing fast as we see innovations such as edu-tech, digital learning and online education. There will definitely be a leaning of reliance on technology in the education system. Fewer books are going to be published and more titles will only be available in E-form. I however do not see technology replacing the teacher as we cannot replicate the emotions, tenderness and love a teacher gives a child.

University education scholarship for grabs as Interswitch STEM competition kicks off KELECHI EWUZIE

nterswitch Group is once again set to reward excellence in STEM subjects among secondary school students in the second edition of the InterswitchSPAK National Science competition. The competition, which is targeted at SS 2 students aged between 14 and 17 years, is a CSR initiative of the company. The competition which is focused on driving increased interest in the study of Science, Technology, Engineering, and Mathematics (STEM) subjects among Senior Secondary School students across Nigeria will kick off with a national qualifying examination from which 81 finalists will emerge to compete at the

InterswitchSPAK TV quiz competition. The InterswitchSPAK programme includes a Masterclass, an Innovation Challenge and a TV quiz competition around STEM subjects. Cherry Eromosele, Group Chief Product and Marketing Officer, Interswitch while making the announcement at a press briefing in Lagos said the aim of InterswitchSPAK is to encourage and guide the students along career paths that will help them achieve full optimisation of their potentials and dreams to become inventors or entrepreneurs. Eromosele encouraged all eligible students to participate and register in this second edition. She noted that the importance of STEM education cannot be over-emphasized in our society; especially considering our current societal

challenges. She said: “At Interswitch we understand that technology is key to solving most of our challenges in Africa. Promoting and rewarding excellence in STEM subjects among sec-

ondary school students is our way of preparing the younger generation to take up this challenge”. Speaking on the registration process, Enyioma Anaba, Group Head, Brands, at Inter-

switch Group, explained that the competition is open to girls and boys in public and private secondary schools in Nigeria, aged between 14 and 17 years. She further explained that new schools are required to first

register on the InterswitchSPAK platform before registering their students, while returning schools can directly register their students. Each such school is expected to register six students each, at least two of which must be girls. Registration is done online at www.interswitchspak.com The overall winner will be awarded a five-year scholarship in any tertiary institution, a laptop, a gold trophy and monthly stipends throughout the duration of the scholarship, all totaling N7.5million. The second-place winner will be awarded a three-year scholarship, a laptop, a silver trophy and monthly stipends for the three years totaling N4million; while the third place winner will receive a year-long scholarship worth N1 million, a laptop, and a bronze trophy.

BDTECH Tuesday 12 March 2019

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Why data is important for technological innovations, economic development Jumoke Akiyode-Lawanson

echnology and big data have been identified as key drivers of the fourth industrial revolution, and if well harnessed, has the maximum potential to revolutionise Africa’s Economy. This was the general consensus of technology and data experts at the Big Data Business Analytics (DAB) Conference 2019 held in Lagos from March 5 to March 7 2019. Speaking at the two-day maiden edition of the DAB conference 2019 organised by the Information & Data Analytics Foundation (iDAF) in partnership with Manifold, DigitialPRWire, and TechEconomy.ng, special guest, Yemi Kale, the statistician general of the Federation, who was represented by Lola Talabi-Oni in a presentation discussed how capital accumulation, labour productivity and technological innovation, according to economists, are the three main sources of growth in an economy like Nigeria. Kale said, in the long-run, technological innovation wins – the fourth industrial revolution. “Technological innovation has been driven largely by data. Technology has been driven by rapid innovation, and in the current fourth industrial revolution, technology has been largely driven by rapidly increasing volumes of data produced and consumed at a significant pace. “Why has data grown so important? Data plays key role in shaping almost every aspect of human life by providing us with clear, objective, numerical evidence about the population, economic performance, health and wellbeing, environment and aids the decision-making process to establish numerical benchmarks, monitor

L-R: Theophilus Babatunde Mederios; founder of iDAF and Lead Convener of the Big Data and Business Analytics (DAB) conference, Yemi Keri; CEO of Heckerbella Limited, Toyosi Akerele-Ogunsiji; CEO of Rise Networks, Prince Ogwuru; guest participant and Co-convener, at the DAB 2019 conference held in Lagos on Tuesday 5 March 2019.

and evaluate the progress of policies or programmes and ensuring that our policy interventions are well designed,” Kale said. Speaking about the future of work and the importance of generating and analyzing Africa specific data, Shingai Manjengwa, CEO, Fireside Analytics, said; “Automation forms one of the most critical part of the future of work because it has the potential to replace 51% of jobs across multiple sectors that Africa is dependent on. “Africa’s future of work story will be different from developed markets. With much of the workforce of tomorrow, we can program the requisite skills today by embracing Data Science “The big data market is worth an estimated USD$42 billion and Africans are well positioned to contribute significantly to this

economy due to three factors, namely, favorable demographics; high and increasing internet penetration and changing education trends,” Manjenwa said. Heinz Riehl, chair professor of business, New York University Stern School of Business, who delivered a paper on using artificial intelligence and blockchain to monetize the mobile economy, said that data source, data mining tools and data quality are linked to cause major economic changes across the world today. According to him, industries such as advertising leverage technological indices to understand shift in consumer mindset about data exchange. “This is what I call ‘Using AI to mine 9 Forces’ which include context, location, time, saliency, crowdedness, weather, trajectory,

social, and omni-channel. These are what will influence the ways ads are deployed and how technology is being used in that ecosystem”. “Countries like China and United States are leading the world in IP and other data related skills. Thus, Nigeria as a country should not relax, rather move up to lead the region, because there are enormous opportunities,” he said. Ndubuisi Ekekwe, co-chairman of JPL Financial Group, a California-based financial advisory firm and blogs at Harvard Business Review, speaking on abundance in the data of nations said:data analytics knowledge in Nigeria is at infancy stage but opportunities abound as there are many aspects of our economy and culture that foreign ideas won’t

solve the problems; they require local talents.” Ekekwe said that start-ups and young entrepreneurs are going to tap into it. “For instance, Kobo360 is doing very great in their areas. Our education should reflect the 21st Century which does not depend on paper qualifications. Africa needs to build processes; not to prepare the young people for certificates but a life time growth trajectory. “Broadband affordability is key. It amazes me that Facebook can be free in Nigeria but most online courses and materials are not free. I believe that satellite broadband will bring down the cost of connectivity and most African youths can have access to the internet to learn new courses and improve on their skills,” he said. The DAB conference 2019 was organised to bring awareness to educators, private businesses, public sector and government about the importance of making data driven decisions as opposed to making decisions based solely on intuition. According to Theophilus Mederios, Lead convener and founder iDaf, making decisions based on data will help virtually all sectors of the economy including the banking and agricultural sectors of Nigeria. “The primary objective of bringing tech experts, educators and big data analytics solution companies together is to discuss ways businesses and policy and decision makers can take advantages of their data as intellectual property to make informed strategic business decisions,” Mederios said. The organizers also partnered with Aelex, a top law firm in Nigeria to have legal backing on data privacy and technology regulatory issues.

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Tuesday 12 March 2019

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Microsoft deepens Africa investment, as launch of in-continent data centres feature Azure Jumoke AkiyodeLawanson

icrosoft’s massive investments in the opening of its first data centres in South Africa, with general availability of Azure – the comprehensive suite of cloud products, will see Microsoft become the only global provider to deliver cloud services from data centres on the continent. The company recently made the announcement of the opening of its first data centres with general availability of Azure from the new cloud regions in Cape Town and Johannesburg, South Africa. The in-continent data centres will help companies securely and reliably move their business to the cloud while meeting compliance needs. “Microsoft Azure is now available from our new cloud regions in Cape Town and Johannesburg. The combination of Microsoft’s global cloud infrastructure with the new regions in Africa will create greater economic opportunity for organisations in Africa, accelerate new global investment, and improve access to cloud and internet services,” said Yousef Khalidi, corporate vice president, Azure Networking, Microsoft. Ibrahim Youssry, general manager, North, West,

East, Central Africa, Levant & Pakistan, Microsoft said, “This is a milestone moment in bringing the global cloud closer to home for African citizens and businesses. Enterprises across Africa can now take full advantage of the many benefits of Microsoft Azure, using cloud services to maintain security and meet compliance standards.” According to the Cloud Africa 2018 report, the use of cloud among medium to large organizations in Africa has more than doubled between 2013 and 2018. Due to the benefits of cloud in offering efficiency and scalability, more than 90

percent of surveyed companies in South Africa, Kenya and Nigeria have plans to increase their spending on cloud computing in the next year. However, a secure offering remains important in maintaining this momentum, with many African CEOs being concerned about cyber threats. “Microsoft has deep expertise in protecting data and empowering customers around the globe to meet extensive security and privacy requirements, including offering the broadest set of compliance certifications and attestations in the industry.”

“We look forward to supporting more African enterprises in their cloud journeys and offering a trusted path to digital transformation,” Khalidi added. According to Youssry, “Microsoft is working with partners to accelerate cloud readiness and adoption in Africa, ensuring enterprises can deliver services to market faster, businesses can make more data-driven decisions, and governments can better connect with citizens.” “As we connect more businesses to Azure, we’re seeing heightened innovation in the cloud and startups expanding their ser-

vices to new markets. The combination of Microsoft’s global cloud infrastructure with the new regions in Africa will now connect businesses with even more opportunity and customers across the globe,” he said. Azure is the first of Microsoft’s intelligent cloud services to be delivered from the new datacentres in South Africa. Office 365, Microsoft’s cloud-based productivity solution, is anticipated to be available by the third quarter of calendar year 2019, while Dynamics 365, the next generation of intelligent business applications, is anticipated in the fourth quarter.

Africa offering colocation, interconnect and Cloud services. “It is the most connected Tier III certified facility in Africa with connection to over 30 of the major carriers and Internet Service Providers (ISPs) in Nigeria and direct connection to all 5 undersea cables serving the South Atlantic Coast of Africa; every country on the Atlantic coast of Africa is directly connected to Rack Centre,” the company says. In 2018, Rack Centre had a remarkable year of achievements at global in-

ternational awards, being runners up in two categories of the Data Centre Solutions Awards in the UK, winner of the Geographical Location, representing Nigeria at the Datacloud Awards in Monaco having been finalist in two categories, and winner of the Data Centre Innovation Category at the Global Carrier Awards in London, having been finalist in Best Data Centre Award at the same event. Rack Centre continues to set the bar for quality in the data centre and cloud services industry in Africa.

Rack Centre MD makes Data Economy Power List of individuals transforming the global data industry

ata Economy, a prestigious publication devoted to the global data industry has selected Ayotunde Coker, the managing director of Rack Centre as one of its 200 “Power List” individuals transforming the world of data. The United Kingdom based publication, showcased the personalities and executives around the world who are leading the global data economy through charting new innovations, technological breakthroughs and ex-

ceptional entrepreneurial skills sets and leadership. Coker who is the secretary general of the Africa Data Association was also identified in the Global Top 50 executives by the respected publication in 2017. The choice of Coker among the 200 as one of the most powerful drivers of data centres transformers demonstrates vividly that data centres based in Africa and the executives running them have not only come of age but are contributing immensely to the world’s digital transformation. According to a recent

study by Xalam Analytics, a research firm, the recent demand for data centre colocation services in Africa has been strong; driven by improving connectivity levels and rising data traffic volumes. As African digitisation has quickened, said Xalam Analytics, drivers of demand have been plentiful and going digital at a frenetic pace. Rack Centre which Coker has steered its affairs in the last four years is the first and only truly carrier neutral state-of-the-art Tier III Constructed Facility Certified data centre in

Voting opens for Beacon of ICT Awards 2019

he board and management of CommunicationsWeek Media Limited, a certified global ICT company with over two million online subscribers, has opened its portal to the general public to vote for nominees of this year’s Beacon of ICT (BoICT) Awards. The Beacon of Information and Communication Technology awards series are widely regarded as the most prestigious annual event available in the ICT industry in Nigeria. The awards ceremony rewards best practices and recognises outstanding contributions to the growth of the sector. Announcing the commencement of the voting process, Ken Nwogbo, chief executive officer and editor in chief, CommunicationsWeek Media Limited, the organisers of the event, said the BoICT Awards winners had always emerged through a transparent voting process that involves business leaders and readers, with independent quality experts. Business leaders and readers can cast their votes via http://boict.nigeriacommunicationsweek. com.ng Nwogbo said, adding that the theme for this year’s lecture is “Telco and Bank Partnership to Drive Financial Inclusion” Now in its tenth year, this year award will start with the distinguished lecture series. The lecture and award are slated for Saturday, April 27, 2019, at the Eko Hotels and Suites, Lagos. The Beacon of ICT Distinguished Lecture is designed to explore efforts to put Nigeria on the global Information and Communications Technologies map. The lecture series is reserved for distinguished achievers. Past Keynote lecturers include: Ernest Ndukwe; the former executive vice chairman of the Nigerian Communications Commission (NCC), Yomi Bolarinwa; former director-general of National Broadcasting Commission (NBC), Jean Luc Fort; CEO, OR System France and specialist in Counterpart Risk and Chris Nwagboso; chairman, Knowledge Factory International, United Kingdom, among others.

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INTERVIEW Expansion of key infrastructure is vital for manufacturing sector and economic growth– MAN President On the side lines of his visit to the British American Tobacco (BAT) factory in Ibadan, the President of the Manufacturers Association of Nigeria (MAN), Mansur Ahmed, spoke with DANIEL OBI on the need for government to expand the capacity of critical infrastructure to meet the increasing demand for it by the manufacturing sector while also commending government for resourcefully creating windows for the sector to thrive. Excerpts: At what percentage will you put the capacity utilisation of Nigeria’s manufacturing sector currently? t the moment, it is 50 to 60 percent. If we can increase the capacity utilisation by 30 per cent, the amount of the new jobs you can create almost immediately will be enormous and if you want to create same number of jobs by bringing in new investors, it will take up to three years. There is a huge advantage in assisting the existing investors and manufacturers. That immediately translates into products as well as more goods and services. It may even have some impact on inflation.

try is and where it is going and what are the things we as an association and a platform for coordinating and pushing the interest of the industry should be doing over the next three or four years.

What are the other hindrances that have slowed down MAN from reaching its optimum? First of all, the operating environment has to continue to be conducive and supportive for improved performance of the sector. We are all aware of the issue that power infrastructure is causing. The fact that it is making it more difficult for companies like BAT to compete with their peers outside, largely because they have to literally build their own infrastructure; that is power supply, water supply, road network, among others. Secondly, there are other major infrastructural issues like the ports, which seriously impede economic activities, particularly companies that engage in

Mansur Ahmed

import and export who are worse hit by it. So, working together to ensure that government remains focused on the development, expansion and improvement of infrastructure service is one of the critical areas that our association will continue to pursue. What is your advice for the new government? I hope that it is a continuation of the same administration where over the last three years we have managed to get some policy positions and some strategies that appear to be working, remain focused on the development of infrastructure. We have to continue to be innovative, because the demand for infrastructure in this country far exceeds the capacity the government provides. So it’s important for us to start looking for new approaches to providing better infrastructure and services including the partnership with private sector entities which we started. The overall effort to continue to improve the business environment needs to be sustained. One of such is the Presidential Enabling Business Environment Council, which was set up two years ago. We have already seen some improvements in the position of the country in terms of the ranking

in the ease of doing business. I think we are not yet where we should be. If indeed Africa is contemplating to open up to trade, in terms of the African operating agreement, Nigeria has tremendous opportunity if it can improve its competitiveness and its investment planning, and create incentives for great investment and expansion of the manufacturing sector. What informed your visit to the British American Tobacco factory in Ibadan? As you may know, it is not quite long I assumed office as president

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of Manufacturers Association of Nigeria (MAN). Shortly after assuming office, the first thing of course is to get acquainted with our members, interact and get to know them. It is important to understand what their needs, concerns and plans are going forward, so that MAN can represent their interests and make sure through our advocacy efforts we do as much as we can to promote those interests. Since British American Tobacco Nigeria (BATN) is a key member of our association, this is part of series of visits we are making to our members in order to ascertain where the indus-

I’m happy that it’s making the kind of contribution that industries should be making, and I think that one of the goals of MAN and of course, the Nigerian government, is to grow the industry through expanding the manufacturing business

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One of the challenges your members face is the sourcing of forex to enhance their jobs/production. How has it been and what is MAN proposing to the government especially with regards to manufacturing? MAN had been engaging government and CBN on forex for a long time before this administration came in. And to be honest, we are making some progress. There are windows created for manufacturers which have been helpful, but not all that adequate. However, I think the key thing one can say is that at least for some time now there has been some level of stability in the forex rate. Clearly, more needs to be done because the demand is increasing but obviously in excess of supply. The CBN has tried to identify various limits to the availability of forex in the system. The system is improving but we expect that it will continue to improve with regards to access to forex and the stability of the rate. In that area we must continue to work with the government to ensure that we sustain the operations of our members.

What is your assessment of British American Tobacco Nigeria? First and foremost, I’m extremely impressed by the company and its operations especially its relation with its staff, understanding of its position in the industry and in the economy and its long history over the several years it has been in Nigeria. “I’m happy that it’s making the kind of contribution that industries should be making, and I think that one of the goals of MAN and of course, the Nigerian government, is to grow the industry through expanding the manufacturing business, strengthening the manufacturing business and therefore creating the quality jobs that we see that are taking place here. What new are you bringing to consolidate the efforts of MAN? Well, it is not particularly about what new we are doing, but about how we can build on what has already been achieved. I think that anyone who has followed the MAN history will try to carry forward and improve on what has already been achieved. Of course, MAN has made tremendous progress in creating a platform to support government’s policies with regards to the manufacturing sector of our economy. Our key goal is to continue to grow the sector. As you are aware, the current level of contribution of the sector to the economy is nine to 10 percent of the GDP. I think given the resources of this economy the manufacturing sector should be doing a lot more than that. I think this is one of the key concerns that the association will continue to pursue. We have about five ports in Nigeria, and only two are functional in Lagos. Do you advocate that other ports should come on stream to help your members outside Lagos? For a country of our size, one port is obviously inefficient. It’s just not enough. We need to improve the current facility – the Apapa Ports, and also begin to improve the alternative ports outside Lagos and create new ports. Obviously, this economy is growing albeit at a low rate of about 2.3. At the current level we ought to have at least two or more ports already existing to support the level of development. So, there is need for improvement in existing facilities, improvement of existing ports but also creating new port facilities.

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INTERVIEW

Why stability has returned to forex market, by FMDA boss, Ocheho The Swaps and Derivatives WorkGroup of the Financial Market Dealers Association of Nigeria (FMDA) will be organizing market-development seminar titled: “Legal Documentation as a driver to introducing New Products and a Healthier Financial Market in Nigeria”. The event scheduled for March 19, 2019 at the Lagos Continental Hotel Victoria Island, Lagos will attract financial markets participants, bank treasurers, treasury operations, risk and legal teams, investors, and other players in the financial market. Chairman, Swaps & Derivatives WorkGroup and FMDA President, Samuel Ocheho speaks on the forthcoming event, the state of the financial market, the derivatives market and prospects for the equities market.

boosting the integrity of our markets. How does introduction of Derivatives market trading solve Nigeria’s exchange rate challenges? In the absence of a Derivatives trading market, the bulk of Forex supply falls into the Spot market thereby creating a lot of uncertainties. An introduction of Derivatives markets trading can help provide more Forex liquidity and help reduce front-loading of obligations in the spot market. What is your view on the state of the mutual funds market and what opportunities do you see in that market? There has been significant growth in the Collective Investment Scheme (CIS) industry in recent years; Assets under Management (AuM) have grown from N116 billion in 2013 to N655 billion in 2018, representing a growth of 465 per cent during the period. The numbers of Asset Managers and CIS offerings have also increased in the same period, as there are over 80 Mutual Funds available to the public in Nigeria. In addition to the traditional Equity and Fixed Income biased Funds, retail and Institutional investors can now access Dollar Based Funds, Exchange Traded Funds (ETFs) and Specialist Fund although there remains a strong preference for Fixed income biased funds. Consequently, 83 per cent of the total AuM

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We see likely increase in energy prices as upside risk to our assumption. We expect moderate recovery in the financial sector in 2019, as we expect a growth in private sector credit vs the decline in 2018

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What is your take on the Nigerian forex market and what in your view is responsible for the level of stability witnessed in the market in the last one year. What impact will the introduction of Derivatives Market have on the market? he Nigerian Forex Market has managed fairly well, especially with the introduction of the Investors & Exporters Foreign Exchange (I&E Forex) window by the Central Bank of Nigeria (CBN) in 2017. This restored some level of confidence, especially from foreign investors at the height of the Forex scarcity which began at the advent of collapse of oil prices about four years ago. The willing buyer-willing seller arrangement gave bearing to the structure of the market along with the CBN’s participation as an active buyer and seller of Forex creating a stabilizing force. The CBN being a player (buyer or seller) of last resort, their high level of responsiveness and closeness to the market have been key factors responsible for the relative stability over the last two years. The recent introduction of the FMDQ OTC Forex Futures, which can pass as a derivative, has positively contributed to the attraction of foreign flows in Nigeria. However, for a proper Derivative market to flourish, the underlying asset markets (Interest Rates, Foreign Exchange, Equities among others) need to be vibrant, deep and market driven to enable good price discovery. The impact of an active derivative market is that customers would be able to manage their interest rate cost and exchange rate risk. This will spur confidence in the market and act as a good planning tool for Chief Financial Officers of businesses instead of being left open to market volatilities. The Swaps and Derivatives WorkGroup of the Financial Market Dealers Association of Nigeria (FMDA) will be organising a market-development seminar on March 19, at the Lagos Continental Hotel, Victoria Island, Lagos. What is the theme of the seminar? The theme of this workshop is “Legal Documentation as a driver to introducing New Products and a Healthier Financial Market in Nigeria”. Who are the stakeholders expected to attend this programme and what will be their takeaways? We expect financial markets participants, Bank Treasurers, Treasury Operations, Risk and Legal Teams, Corporate Treasurers, Regulators, Investors, and other stakeholders to attend this seminar. The event is to discuss standardization of documentation in our market especially as it relates to derivatives and other vanilla transactions, with the view of

of CIS in 2018 was concentrated in fixed income biased funds. Given the low penetration rate (less than two per cent of the total population) of subscribers to CIS, there is increased collaboration amongst Asset Managers through the Fund Managers Association of Nigeria (FMAN) to increase awareness of investment products. Asset Managers are also deploying various digital initiatives to reach out to the

Samuel Ocheho

public. What are the opportunities available to Asset Managers and other players in the Collective Investment Scheme Industry? Some of the available opportunities include establishing a backoffice company with the required infrastructure and technology to handle back-office operations for multiple Asset Managers. In other climes, a number of Asset Managers outsource this responsibility to other players. Also, the development of specialist funds (Real Estate, Infrastructure, and Private Debt etc.) targeted at Institutional Investors and High Net worth individuals (“HNIs”). There is a dearth of these funds in Nigeria and deployment of lifestyle, ramified digital investment solutions targeted at millennials. They can also partner with foreign asset managers to offer investment products issued in Nigeria but linked to foreign assets like Depository receipts, Structured Notes. The Securities and Exchange Commission of Nigeria (“SEC”) prohibits CIS from investing in assets not issued or incorporated in Nigeria. However, segregated portfolios of HNIs or Institutional Investors can invest directly in foreign markets. Can you explain standardization of documentations to a common man in the financial market? What does it entail? In the financial markets, standardizing documents relate to creation of minimum requirements to be fulfilled by the trading counterparties, a product, process, service, or system. The document will state out the obligations, rights and entitlement of the parties in the trade. The terms stated therein become binding on all parties and it also

helps in the event of litigation. What level of development is the derivatives market in Nigeria and how can the financial system and stakeholders benefit from it? The Nigerian derivative market can be deemed shallow when compared to the international derivatives market in terms of volumes dealt and the bouquet of structures created/traded. Nevertheless, the current products being traded provide an adequate platform for stakeholders to hedge trade obligations. The market I must confess is still largely plain vanilla and we have a dream of raising its level in Nigeria to a state where it can be compared to the international financial markets. Can you explain to us what is meant by transaction netting and what it means to financial market operators and impact it could have on the economy? Netting involves offsetting the value of multiple positions or payments due to be exchanged between two or more parties. It can be used to determine which party is owed remuneration in a multiparty agreement. For financial market operators, this implies that the need to exchange principal amounts at the maturity of the derivatives transactions is eliminated, especially in cases which involve multiple trades with the same counter-party. Costs and time are saved and settlement risk is reduced as well. What is the stage of derivatives market in Nigeria and how can it be improved for the benefit of the economy? Derivatives trades in Nigeria are currently more bilateral between financial institutions and their respective customers. The more developed the derivatives market, the more banks are able to provide

cheap hedging solutions to their respective clients; this ranges from interest rate cost reduction solutions for corporates, which allow them to borrow more and expand their various businesses. Forex derivatives also provide hedges for corporates and foreign portfolio investors. Case in point is the OTC Forex futures market which provides stability and spurs confidence as investors can hedge exchange Risk. Many foreign companies now play in the mutual fund market. Do you think that local players have what it takes to compete favourably with these foreign operators? The local players have a sound understanding of the local market in terms of drivers of the performance of the capital market, the taste and preference of various segments of the market and regulatory requirements. As such, local players continue to dominate market share of retail and institutional investors despite the continuous foray of foreign companies. Foreign operators tend to partner with the local players to offer their products or buy into existing local players to gain access to the Nigerian market. What is your 2019 forecast on Nigeria’s economic growth and performance of financial institutions? We expect GDP growth of 2.5 per cent in 2019, driven by the non-oil sector, as we foresee further recovery from Q4:18. We expect further recovery in trade, agriculture, manufacturing and telecoms sectors. A stronger recovery in consumer sentiments and purchasing power should spur the economy further. We also expect a slight decline in inflation in 2019-year end to 11%, from current levels of 11.44 per cent. Nevertheless, we see likely increase in energy prices as upside risk to our assumption. We expect moderate recovery in the financial sector in 2019, as we expect a growth in private sector credit vs. the decline in 2018. We also expect moderate improvement in asset quality which was weak at 14 per cent in 2018; we also expect a slight increase in capital adequacy ratio for the sector. Nevertheless, we foresee interest from investment securities driving interest income growth for the sector in 2019. Given the fact that there is volatility in the market, what will be your advice to investors on the best way to play in the equities market this year? The winners this year will be the investors trading contrary to general market sentiments; this has been evident so far since the start of the year. It is best to stick with quality names and with companies that have strong corporate governance, paying high yielding dividend. We also recommend tier 1 banks, which we believe will thrive in a high interest rate environment.

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‘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.’

Mirror, mirror, mirror on the wall, tell investors Seplats’ profit surged 500% BALA AUGIE

eplat Development Corporation Company (“Seplat”) problem isn’t cash but how to spend it, as the company has a strong free cash flow, thanks to diligent management of liquidity. Investors pay more attention to the cash flow position of upstream stream oil and gas firms because without a solid liquidity position, a firm will find it practically difficult to drill more oil and magnify earnings, pay debt, absorb operating costs, and pay dividend to the owners of the business. The 2018 audited financial statement of Seplat- the upstream oil and gas giant- showed there were improvements in key financial ratios while revenue and profit grew has been growing at a fast since 2016. Looking through the flames of wisdom shows Seplat is in a position of financial strength and is well funded to capitalise on growth opportunities Higher Oil production underpins revenue For the year ended December 2018, Seplat’s revenue was up 65.18 percent to N228.39 billion from N138.28 billion as at December 2017; eclisping the N63.38 billion recorded in the corresponding period of 2016.

Sales from crude oil increased by 61.32 percent to N180.75 billion in December 2018 as against N112.75 billion as at December 2017. The chart below shows revenue from crude oil has been in an upward trajectory since 2016 when it last touched down at N34.57 billion. 2016 was horrendous for Seplat as Royal Shell declared force majeure on crude oil lifting from the Forcados oil terminal after Niger Delta militants blew up a major trunk of the Forcados oil pipeline system. The company reverted to growth after relative calm returned to the Niger Delta region while a rebound in crude price added impetus to earnings. What’s more, sales from gas were up 25.67 percent to N47.64 billion in the period under review from N37.91 billion the previous year.Revenue from gas has been increasing since 2014. Operating efficiency adds impetus to margins Seplat has turned each Naira invested sales into higher profit as pretax margins increased to 35.30 percent in December 2018 compared to 9.79 percent while earnings before interest and tax margin otherwise known as operating profit margin moved to 42.13 percent in 2018 from 25.12 percent

as at December 2017. Gross profit margin increased to 52.43 percent in December 2018 from 49.60 percent as at December 2017. Seplat’s pretax profit surged by 500 precent to N80.61 billion in the period under review from N13.61 billion as at December 2017. Operating profit surged 176.06 percent to N94.87 billion in December 2018 from N34.37 billion as at December 2017 as the company continues to manage direct costs attributable to projects as evidenced in a 45.85 percent jump in gross profit to N119.75 billion in December 2018 from N64.86 billion the previous year. “Seplat has delivered an excellent operational and financial performance resulting in robust profitability and cash flow generation providing us with an extremely solid foundation for growth in the coming years,’’ saidsaid Austin Avuru, Seplat’s Chief Executive Officer. “At our core assets in the West, OMLs 4, 38 and 41, the extension of the license to 2038 means that we can confidently plan and invest long into the future to realise the full potential of those blocks,” said Avuru. Significant deleveraging while preserving a liquidity buffer A disciplined approach to capital allocation has seen a substantial deleveraging of Seplat’s balance sheet as debt to equity ratio fell to 27.87 percent December 2018 from 37.85 percent the previous year. Also, the company’s operating income can cover its interest expense as times coverage ratio improved to 5.48 times in December 2018, from 1.58 times the previous year. Seplat successfully refinanced its balance sheet in the first quarter of 2018 as follows: Debut $350 million bond issuance diversifies long term capital base.Issued at 9.25 percent and currently trading at ca. 8.4 percent. previous $300 million RCF refinanced with a new $300 million RCF due 2022 at LIBOR +6 percent (will reduce to LIBOR +5 percent when AEP is completed) -Bond US$350 million drawn -RCF initially drawn to US$200 million but reduced in November 2018 and February 2019. Current balance zero Strong free cash flow generation and diligent management of

group liquidity Sepat has enough cash to finance future expansion plans, pay dividend and reduce debt as cash flow from operation increased by 12.33 percent to N153.56 billion in December 2018 from N136.70 billion the previous year. “The Group has continued to receive the proceeds of gas sales

BD MARKETS + FINANCE Analysts: BALA AUGIE

from its partner NPDC in lieu of cash calls for ongoing operations. Tolling fees arising from NPDC’s share of processed gas from the Oben Gas Expansion Project, which was financed on a sole risk basis by Seplat, are yet to be settled by NPDC and Seplat is currently in discussions with NPDC to finalise terms,” said the company.

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Politics & Policy

Tuesday 12 March 2019

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Know your governors

Babajide Sanwo-Olu, Lagos

APC

Abubakar Sani Bello, Niger

Dapo Abiodun, Ogun

AbdulRahman Abdulrazaq,

Emmanuel Udom, Akwa Ibom

PDP

Okezie Ikpeazu, Abia

Muhammadu Badaru, Jigawa

Dave Umahi, Ebonyi

APC

PDP

APC

Ben Ayade, Cross River

Ifeanyi Okowa, Delta

Inuwa Yahaya, Gombe

APC

PDP

Abubakar Atiku Bagudu, Kebbi

Abdullahi Sule, Nasarawa

APC

Makinde Seyi, Oyo

APC

PDP

Kwara, APC

PDP

Aminu Bello Masari, Katsina

APC

? Nasir El-Rufai, Kaduna

APC

Mai Mala Buni, Yobe

APC

Muktar Idris, Zamfara

APC

Ifeanyi Ugwuanyi, Enugu

PDP

Why I reject Ugwuanyi’s re-election, by APC guber candidate OWEDE AGBAJILEKE, Abuja

he governorship candidate of the All Progressives Congress (APC) in last Saturday election in Enugu State, Ayogu Eze, has rejected the re-election of Governor Ifeanyi Ugwuanyi. The APC governorship candi-

date insisted that the election was manipulated and failed to reflect the wishes of the people. The Independent National Electoral Commission (INEC) had declared Ugwuanyi winner of the Enugu State gubernatorial contest, having polled 449,935 votes to defeat his closest rival and candidate of the All Progressives Congress (APC), Ayogu Eze, who scored

10,423 votes. Eze had announced a boycott of the election after requesting a postponement that INEC rejected. In his reaction on Monday, Okey Ezirigwe Director, Media Ayogu Eze Campaign Organisation, described the figures as ‘oven-baked’. He said Eze’s name was not on the final list of governorship

candidates published on the commission’s website after the Appeal Court cleared him to contest the poll on the eve of the exercise. “Our supporters observed that while the card reader was supposed to have been programmed to stop functioning at 2pm, many polling centers remained open, up to as late as 5pm with massive thumb-printing going on, using

multiple fingers and objects to mark the ballot papers. “We are therefore calling on the people of Enugu State, all institutions and people of Nigeria not to only reject these forged figures described as governorship election results from an election that never took place in Enugu State, but to denounce the said election as a farce,” he said.

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Saudi Arabia seeks to re-balance oil market as Nigeria loses customers STEPHEN ONYEKWELU

ith eyes on shoring up prices, Saudi Arabia is committing to more cuts in both production and export of its crude oil by April while Nigeria faces loss of big customers for its crude grades. Saudi Arabia plans to cut its crude oil exports to below 7 million barrels per day (mbpd) and keep its output “well below” 10mbpd, to drain a supply glut and support oil prices, a Saudi official said on Monday. Experts say Nigeria faces a different set of challenges because it might not necessarily benefit from rallying oil prices as much as Saudi Arabia. Vessel-tracking data compiled from the Bloomberg terminal observed that crude exports from Nigeria fell for a second month in January, led by a drop in shipments of grades

including Bonny Light, Brass and Bonga. “As sweet as Nigeria’s crudes are renowned to be globally, we have recently lost our most-valued customers and our gas buyers are themselves now competing with us in the same market space as suppliers,” Luqman Agboola, head of infrastructure at Sofidam Capital Limited, told BusinessDay. State-owned Saudi Aramco’s oil allocations for April are 635,000bpd below customers’ nominations requests made by refiners and clients for Saudi crude, the Saudi official said. “In spite of very strong demand from international waterborne customers at more than 7.6mbpd, customers were allocated less than 7mbpd,” the official said. March’s oil exports will also be below 7mbpd, the official said. Saudi Arabia faces a budget imbalance that will require

oil prices to hold at 30 percent above current price levels to redress and other oil exporting countries, such as Nigeria also face varying degrees of exposure. An International Monetary Fund official recently said the world’s top oil exporter would need oil priced at $80-$85 a barrel to fix its budget imbalance. Nigeria’s benchmark mark oil price for the 2019 budget was $60 per barrel. Africa’s largest crude oil producer may not have much to worry about at the moment. International Benchmark Brent crude traded at $66.63 as of 2:52pm local time. And the West Texas Intermediate was trading at $56.88 as of 2:52pm local time. But if you take Saudi Arabia’s 2019 “budget as presented with everything remaining equal, a breakeven point would be around $80-$85,” Jihad Azour, director of the IMF’s Middle East and Central Asia department, told

Reuters. The April allocations by Aramco show “a deep cut of 635,000bpd from customer requests for its crude oil. This will keep production well below 10mbpd in April,’’ the official said. The official added that this was also below the 10.311mbpd that the Kingdom had agreed as its production target under an OPECled supply cut agreement. The Organisation of the Petroleum Exporting Countries (OPEC) and other producers such as Russia, colloquially known as OPEC+, agreed in December to reduce supply by 1.2mbpd from January 1 for six months. “Saudi Arabia is demonstrating extraordinary commitment to accelerating market rebalancing,” the Saudi official said, adding that the Kingdom expects all other OPEC+ countries to show similar levels of contributions and high conformity.

L-R: Yakubu Gowon, former head of state; Chris Ogunbanjo, foremost industrialist; Subomi Balogun, founder, FCMB Group, his wife Abimbola Balogun, and Ladi Balogun, group chief executive, FCMB Group, during the 85th birthday celebration of Otunba Balogun in Lagos.

StateCraft extends winning streak into Francophone Africa with Senegal presidential win INIOBONG IWOK

tateCraft Inc, the elections and governance consulting company under the media group, RED, extended its winning streak into Francophone Africa with the re-election of President Macky Sall of Senegal. The candidate, who oversaw seven years of rapid economic growth and infrastructural transformation, beat his two main rivals, exPrime Minister Idrissa Seck and Ousmane Sonko, to win the keenly contested race. He won re-election by polling 58 percent of total votes as announced by the National Vote Counting Commission.

“It was an immense privilege to work with the party coalition, Benno Bokk Yakkar, which has been at the forefront of political reform in Senegal, including other talented teams and individuals all working to tell amazing stories of President Sall’s sterling achievements over the course of two years via our campaign, #UnSénégalPourTous,” StateCraft’s co-founder, Adebola Williams, said. “As a partner of democracy in Africa, having a front row view of his dedication to excellence and development for all of Senegal leaves us in no doubt that the president-elect is supremely qualified and dedicated to leading the fast-ris-

ing West African nation to greatness for the good of all Senegalese,” Williams said. He congratulated the people of Senegal who went out en masse to vote for a brighter future for themselves and for the country, stating, “We are fully in the business of nation-building, and we are indeed pleased to enjoy the political sophistication of a people determined to continue to forge a democratic path ahead.” StateCraft Inc.’s work in Senegal builds on its recent victories in Nigeria with President Muhammadu Buhari in 2015, and in Ghana with the 2016 election of President Nana Akufo-Addo.

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Loose Media, AAF announce grant to support aspiring writers

tory telling has been a cherished cultural heritage in Nigeria, and before the advent of Western civilisation, one of the effective ways of entertainment back then was by telling a story. Of course, there are concomitants teaching values associated with telling and retelling story. To bring back these memories, Loose Media in partnership with African Artists’ Foundation (AAF) have announced a fivemonth grants initiative to support the launch of a platform for aspiring writers known as Loose Conversations The Loose Conversation initiative is designed to challenge one’s mindset; a storytelling-based strategy to give a voice to conversations society has been afraid to have, challenging the status quo and allowing for new standards of thinking. Speaking at a press conference, Valentine Ohu, managing director/CEO, Loose Media Limited, said: “The ‘everyone has a story’ literary commission is a meaningful reflection of our unique relationships and experiences through the art of storytelling. The grant provides important funding to support aspiring writers, further important conversations and invest in online communities through writing.” Ohu noted that from March 2019, the organisation would grant one lucky winner $1,000 for five exceptional stories and $1,000 to one writer every month until July 2019. The initiative is dedicated to empower writers from all backgrounds to express themselves in unorthodox ways.

Tech reforms: Innovator at Edo Innovation Hub shines with MyPaddi App in WHO health challenge

yPaddi App developed by innovator and medical doctor, Charles Akhimen, who operates from Edo State government-backed Edo Innovation Hub, has been selected as one of the top 30 finalists in the World Health Organisation Health Innovation Challenge. The innovative application was picked from a pool of over 2,400 entries from 77 countries, and was selected for the “potential for making impact as well as the ability to be scaled up in a sustainable way.” The innovators will be formally recognised on the opening day of the second WHO Africa Health Forum in Praia, Cape Verde, on March 26, 2019. Akhimen and his team develop solutions for society’s pressing health-related problems, most notably sexual and reproductive health, and maternal and child health. Akhimen is hosted at the Edo Innovation Hub, a cluster for innovators and inventors set up by the Governor Godwin Obaseki-led administration to develop the capacity of youths for the state’s emerging innovation technology ecosystem. According to Akhimen, “MyPaddi app provides young people with access to accurate, unbiased and youthfriendly sexual and reproductive health information, while ensuring they remain totally anonymous. The app also connects these young people to health professionals in a real-time chat.” Matshidiso Moeti, WHO regional director for Africa, said, “The extent of response from the Innovation Challenge affirms the enthusiasm, especially among young people, to make a difference and contribute to the health care system on the continent. Health innovators have found a new home at WHO, where their innovative ideas will be supported in partnership with our network of stakeholders.”

AfDB, Sophia University sign MoU to build capacity, expand knowledge base ISRAEL ODUBOLA

frican Development Bank (AfDB) and Sophia University, a private research university based in Tokyo, Japan, have signed a memorandum of understanding (MoU) to promote capacity development between the two institutions for their mutual gain and the entire African continent. The agreement was signed last weekend at the bank’s headquarters in Abidjan, the Ivory Coast capital. “We strongly hope our coming together is not for mere signing of agreement, but a steps towards building the future,” Yoshiaki Teru-

michi, president of Sophia University, who signed for his institution, said. According to Terumichi, the bank’s Group office in Japan and the Human Capital Development Department will continue to work closely with his university to support the bank’s partnership with Japanese academic institutions and to broaden the university’s knowledge base about Africa. While giving his remarks, Charles Boamah, senior vice president of the regional multilateral development finance institution, acknowledged the importance of the collaboration with the university and commended Terumichi’s

kind gesture to sign the agreement in person. “The MoU also supports Sophia University’s capacity to educate Japanese young people to be ready to work for the bank,” Boamah said, adding that the agreement would be a win-win strategy to improve both organisations’ activities. The agreement will foster the Light up and Power Africa initiative, one of the bank’s key strategies to achieve sustainable development in Africa, he said. Cooperation between the two institution dates back to 2015, when Sophia University and the bank’s Asia External Representation Office signed an education partnership agreement.

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Pilots’ training: Caverton acquires Reality H full-flight simulator Stories by IFEOMA OKEKE

averton Helicopters has acquired a Thales Reality H full-flight simulator (FFS), which will contribute to improving the overall safety of helicopter flights in the Nigerian and regional aviation sector. It will be installed within the brand new Caverton Flight Training Academy, built at the Murtala Muhammed International Airport, Lagos, Nigeria. The training centre will be next door to the future Maintenance, Repair and Overhaul facility, currently under development by Caverton. This will be the first helicopter FFS EASA Level D to be installed in Africa. Caverton, a key aviation and marine logistics player

for the Nigerian oil and gas industry sector, aims to deliver AW139 Simulator training to pilots. This move is a key step forward in Caverton’s strategic move into flight simulation training services. They have chosen to rely on Thales’s AW139-configured Reality H Full-Flight Simulator to accomplish this ambition. The simulator will be installed at Caverton’s new training centre, designed to meet the increased demand for helicopter pilot training and, in particular, to eliminate the challenges experienced by many pilots aiming to obtain initial and recurrent training. The training centre’s ultimate aim is to improve the overall safety of helicopter flights in the Nigerian and regional aviation sector. The centre is being set up on the same site as Caverton’s brand new

International Women’s Day: Dana Air supports entrepreneurs, women in

n celebration of the International Women’s Day 2019, Dana Air has supported the Women in Media Development initiative 2019 and Women Entrepreneur Fair, scheduled to hold on the 29th and 30th of March at the Justice Idris Kutigi Conference Centre in Minna Niger State. The Women Entrepreneur Fair (WEF), an initiative of the Airmingle Media ltd is aimed at training, empowering and showcasing female entrepreneurs, women in business and encouraging them to come together and share their experiences in order to shape the thought of young women in business. Hajarah Alhassan, the founder of WEF, speaking on the airline’s support for the event said, ‘’ we have chosen Dana Air to fly our participants and we thank the airline for always showing

commitment to the anything and everything that concerns women, particularly women entrepreneurs. “We are grateful to the airline because we initiated this program to enlighten, empower and showcase women entrepreneurs so that they can be funded by individuals, corporate organisations or government.’’ Similarly, the airline has supported the Women in Media Development Initiative held earlier in the year as part of its commitment to the theme of this year’s International Women’s Day celebration tagged ‘Balanceforbetter’s. The WIMDI which held in partnership with Women FM, is designed to Assist, motivate, promote and reward excellence among members through consistent and effective training locally and internationally.

purpose-built Maintenance, Repair and Overhaul (MRO) facility at the Murtala Muhammed International Airport in Ikeja, Lagos State, Nigeria. The Thales Reality H Full Flight Simulator is the world’s most advanced commercial helicopter simulator, and will

be used to provide realistic scenario-based flight and mission training to AW139 helicopter operators in the region as well as Caverton’s own pilots and crews. The simulator will support a large range of training needs, including Type Rating, Recurrent Training and Proficiency Checks for both Visual Flight Rules (VFR) and Instrument Flight Rules (IFR), including offshore missions and VIP operations to unprepared landing sites. It will be qualified to meet EASA Level D standard, the highest level of qualification for a simulator. The simulator being delivered to Caverton will enable pilots that fly AW139 twin-engine helicopters – one of the most popular helicopter platforms in Nigeria and the region– to be fully immersed in a realistic virtual environment repre-

senting Nigerian operational areas, and learn to handle a multitude of system failures and overcome very complex malfunctions should they arise in the real world. Pilots can thus train safely in high-risk mission scenarios in a range of weather conditions. “We are delighted to add Thales to our growing list of partners and we are confident in providing the best helicopter training with this Full Flight Level D Simulator. “Safety is our priority at Caverton and we are committed to improving flight safety across our industry and the region through simulatorbased training. The new training center being the first of its kind in Africa and will advance safety for the dedicated men and women who fly every day,” Aderemi Makanjuola,

chairman, Caverton Offshore Support Group said. “Thales is very excited to be part of this initiative with Caverton in Nigeria. We believe that Caverton is the best partner to develop helicopter flight training services, and we are confident that pilots will be keen to train with Caverton on the Thales AW139 Reality H simulator,” Makanjuola added Benoît Plantier, VP Thales, Training & Simulation said “The people we all rely on to make the world go round – they rely on Thales. Our customers come to us with big ambitions: to make life better, to keep us safer. Combining a unique diversity of expertise, talents and cultures, our architects design and deliver extraordinary high technology solutions. Solutions that make tomorrow possible, today.”

Aero Contractors unveils new uniform accessories, opens more routes

ero Contractors, one of Nigeria’s top airlines has unveiled new uniform accessories ands opened new routes in a bid to provide better service to its customers. Speaking during the unveiling at the Murtala Muhammed Airport terminal 2, Lagos, Kudirat Bello, the cabin service executive, Aero Contractors, she said the event was to promote and elevate Aero brand for a better service and seamless safe service delivery to its passengers. “We are using this medium to tell the public that we are back and we are back for good. We are in business. We changed the uniform accessories such as the tie and scarf just to enhance the beauty of our uniform. We are telling our passengers to expect us in a big way. We have increased our fleet. Our service delivery will be impeccable this time around; we are going to improve on it,” Bello added. Also speaking during the event, Ado Sanusi, the manag-

L-R: Ado Sanusi chief executive officer of Aero Contractors; Kola Roberts, official of the airline, and passenger who won Aero free ticket, during the unveiling of the airline’s new uniform accessories at the Murtala Muhammed Airport domestic terminal (MMA2), Lagos at the weekend.

ing director, Aero Contractors, said the airline is starting new routes and reinstating those routes that it suspended. Sanusi said, “When I joined, we were doing eight flights a day, we were servicing only Abuja and Port Harcourt.

In the past 24 months, we have increased to more than 30 flights daily. We were carrying close to 8,000 passengers a month, now we are doing almost 33,000 passengers every month. “We have included Kano

to our routes. We introduced more frequencies into Abuja. We now operate Abuja-Asaba, Warri, Uyo and we are in the process of introducing Yola. We will operate Lagos-Yola, Abuja-Yola, Yola-Abuja and Yola-Lagos.

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‘Every Nigerian deserves to be connected to internet’

Symbol Mining to unleash Nige mining potentials to the world

In 2018, MainOne entered into partnership with Facebook, in this interview with Jumoke Akiyode-Lawanson, MainOne’s CEO, FUNKE OPEKE, sheds light on the partnership and her company’s efforts to improve broadband outcomes for Nigerians starting with Edo and Ogun states. Excerpt:

Funke Opeke tribution infrastructure to get the abundant internet capacity available in submarine cables on the Nigerian shoreline in Lagos to the hinterland. The benefits this provide are legion: broadband service made available to more young people and the ability to replicate the successes we have enabled in Yaba with the Innovation Technology ecosystem in Ogun and Edo states. Why the two states? MainOne has been an advocate of the National Broadband plan since its creation. As a service provider delivering services in all states of the Federation, we know how difficult and expensive that is today and how in most parts of the country, the service quality is poor and inconsistent. Our work brings our team in contact with the leadership in many of the states. These particular states have leadership promoting the development of technology ecosystems and job creation in their states. When we had the opportunity to engage and shared with them our capabilities and accomplishments on previous projects in places such as the deployment of fibre infrastructure for Silicon Yaba with CCHub, the deployment of Express Wi-Fi with Tizeti in Lagos, as well as our aspirations for pervasive broadband everywhere in Nigeria, they welcomed us to build infrastructure in their states. The Edo government has prioritised technology as one of the cardinal pillars of the ongoing reform agenda in the state, introducing ICTcompliant pedagogy in primary schools; building the Edo Innovation Hub, where school leavers and graduates undergo beginner and advanced training in technology, as well as revamping technical education to increase productivity. Ogun has emerged one of the states with fastest growing IGR in Nigeria due to the enabling environment created by the government for business, validated by 75% of National FDI attracted in 2018 (accord-

ing to the Manufacturers’ Association of Nigeria). The duo of Governors Godwin Obaseki and Ibikunle Amosun have identified ICT as critical themes for the transformation of their states and have been supportive of our fibre expansions. What are the longer-term implications of these projects? These projects bridge existing gaps in telecoms infrastructure deployment in Ogun and Edo, and could ultimately impact up to 5 million people. As a pilot project, it demonstrates what can be done when we have the cooperation of the local authorities. The projects succeeded based on the cooperation we received in these states from government and citizens who enabled access to the areas where we needed to deploy infrastructure. If we are able to replicate projects like this across Nigeria, our broadband limitations will be a thing of the past. After Edo, Ogun - what next? Broadband hurdles in Nigeria still seem to largely come from the government; either by way of prohibitive Right-of-Way (ROW) charges by local and state governments for the laying of optic fibre networks and building out of base stations; or multiple regulations and regulators (with attendant taxes and levies) with oversight impact on the technology ecosystem. We can talk about successful deployment in Ogun and Edo today only because of the cooperation we received from those governors and their teams. This shows how readily operators can bring the benefits of digital transformation to states that are true enablers. For example, a consortium led by MainOne called InfraCo Nigeria Limited, won the licence issued by the NCC for the Lagos Fibre Infrastructure deployment in 2015. We are optimistic that given the successes in other states on a smaller scale, the state government will grant the necessary permits to allow us continue the work we have done building infrastructure in Yaba and other parts of Lagos. Our vision as an indigenous company is focused on improved broadband access across Nigeria, which will increase the utilisation of our submarine cable system and bring the benefits of digital transformation to our youthful and largely unemployed population. We have repeatedly shown our ability to attract Foreign Direct Investment (FDI) to achieve that.

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Can you shed some light on your partnership with Facebook? e established a partnership with Facebook in 2018 to build and operate metro fibre infrastructure in Edo and Ogun states, two states with fast growing economies in Nigeria. MainOne has built approximately 750kms of fibre network in major metropolitan areas in the states, including Benin City, Abeokuta, Sagamu, and some smaller cities with co-investment by Facebook. These metro fibre networks will provide connectivity for MainOne enterprise customers as well as Mobile Network Operators (MNOs), Internet Service Providers (ISPs) and government and public locations including state secretariats, MDAs, schools and hospitals. Why is Facebook investing in fibre projects in Nigeria? Facebook is a company that has stated its mission as connecting people around the world via the Internet. The company realises that almost 3 billion people in the world do not have access to the internet and it has committed to making the internet more affordable and accessible where it can. Under its connectivity division (Facebook Connectivity), Facebook announced an array of projects and partnerships at the recently concluded Mobile World Congress in Barcelona, Spain, for bringing more people online, ranging from new devices and fibre networks to software. Some of these new projects include new openaccess networks in Peru (with Telefonica, IDB Invest and the Development Bank of Latin America); 750km open-access fibre infrastructure in Nigeria (with MainOne); the launch of Magma, an open-source platform that makes mobile network deployments easier for carriers (with Telefonica and BRCK) and extension of its Express Wi-Fi service (with Cell C, Vodafone and Globe) in South Africa, Ghana and the Philippines. The overarching focus for Facebook is improving internet connectivity and empowering partner operators such as MainOne with the tools to build out networks to connect more people. Our partnership with Facebook has invested in building new infrastructure in states like Ogun and Edo that is openaccess and can be used by all operators. You may recall that the major challenge impeding broadband proliferation in Nigeria is the limited access to dis-

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drilling,” according to Wither, its technical skille “Our vision is who added that “our maiden ymbol Mining, an Aus- resource demonstrated a min- pabilities in-hous tralian company op- eralisation zone of high-grade and educating peo local community. erating in Nigeria, is zinc and lead.” Looking forward, the com- port our aggressiv posed to showcase the success stories of the country’s pany integrates the develop- and growth strate mining industry to the world ment of its hosting communi- expand the minin through its own achievements ties into its plans, with which Nigeria,” he said. “Ideally, we w it enjoys good collaboration. in the industry. “Central to our future suc- be the employer Symbol Mining is currently operating in Bauchi State cess is the support of the local the mining indust through its subsidiary com- community and development of Wither said. One major leg a skilled workforce. Our core valpany, Imperial Joint Venture. “Symbol is building a repu- ues include respect and accept- pany plans to est table, safe and trusted mining ance from the local communities geria is to demon company in Nigeria, and hopes in which we operate, and this is whole world of to raise awareness of Nigeria’s only achieved by open and hon- mining business in Nigeria, thereby potential as a mineral resource est conversations,” Wither said. While the company started other investors to producer,” said Tim Wither, mining activities in June CEO, Symbol Mining. company says.2018, industry in Nigeri added. JOSEPH MAURICE OGU in turn it has nonetheless made tre-have Apart fromInImperial Joint ANRML may ven-benefit the addition, the steel plant mining communi impactinto in the Mining has mendous steelin-production will boost the economy as it tured igeria, Venture, which Symbol “Symbol want dustry. Although its another subsidiary company becausemost of theofvacuum creatwill minimise the importahas struggled strate Nigeria’s p technically skilled workforce in Nasarawa State, Tawny Joint ed by the state-owned Ajaotion of materials that could but failed to mineral resourc is still being sourced abroad Limited partners kuta Steel Company nowitbe locally with sourced. produce Venture, steel which success will h to the(Ajaokuta infant stage of the Nigeria Ltd. to bedue Steel Mill) Our which promises a malocally forAdudu about Farms This awareness of Nig company, however plans operation to live up toto the purshift in in theNigequest to meet itfailed 40 years, may be inchingStarting its jor sector and will als train of local pose people to haveitthe ria in 2012,up Symbol hasdemand at which was created. with Mining the local way closer to realising this ditional skillsSteel from was in the last six years Ajaokuta pri- supportin iron in “completed the country, necessary as it is technical dream, as a local company Wither where will source to over to 12,000m of exploration marily established takeassured. intended that steel from thethe company has announced its plans plant will supply local manu- care of the steel requireinvest into the industry. ments of the economy so that African Natural Resourc- facturers. Efforts to establish the Nigeria would no longer dees and Mines Limited (ANRML), has to invest $600m level of work done by the pendent on the importation (N183.6bn, official CBN rate) company yielded no rea- of iron steel. Recently, Abubakar into a unified iron ore min- sons. An official of ANRML ing, processing and steel who spoke with Business- Bwari, Minister of State, production project, which Day at the company’s Apa- Mines and Steel Developincludes the capacity to di- pa, Lagos office, declined to ment, announced that elevrectly convert iron into di- give any details. The com- en companies have shown rect steel for manufacturing, pany was on course with its interested in buying the minister of finance, Zainab programmes, he said, and steel mill. But the minister Ahmed, announced in De- requested our correspond- explained that the governent to wait for two months ment is not ready to give out cember 2018. ANRML will be taking when the person author- the company because the advantage of the shortfalls in ised to speak on behalf of necessary infrastructure for the steel industry in Nigeria the company would be smooth take off are lacking. These, according the minto position itself as the next back. Until recently when its ister, included rail network, generation steel company in Nigeria. Incorporated in operation was cut shot due dredging of Lokoja and Warri 2014 as part of African Indus- to vandalism of gas pipe- ports which are yet to be tries Group, ANRML plans to line, Ajaokuta Steel Mill completed. “The policy of the governembark on the integration of used to supply electricity to the national grid, thereby ment is that it will not release steel production. Its planned investment improving the electricity Ajaokuta steel just like that; what we are planning to do was described at the time as usage of the locality. On its part, ANRML, ac- is to regulate and create ena“the first major investment in the mining sector in more cording the minister, will bling environment for the than two decades,” according generate up to 36 megawatts company to strive,” Bwari of electricity to the national said. to Ahmed. riod,” said Stephen Lagos, panning approximately is found in Ondo, With this Ogun, question, a proSince its inception in grid, thereby improving the engineer, Quarry and Edo States, and occurs in 120km, Nigeria’s bitmen 1979, Ajaokuta Steel Mill, local consumption of the im- ject which stood at $4.6bn Company, Abeoku both forms. deposit is the the secondas at 1980 when President Kogi State, has not produced mediate environment. The deposit o One of the usesShagari of bitumen largest in the“About world, waiting Shehu laid the foun36 megawatts of a single beam of steel. But Ondo State is hu is in road construction. It is also to be turned into economic what Ajaokuta Steel Mill electricity is to be generated dation stone, nicknamed the non-exploration used in waterproofing prodprosperity. “bedrock of Nigerian induscould not accomplish, AN- from the waste heat which environmental d ucts. to Constructions areatheavy The estimated probable trialisation” the time, now will increase power supply RML is positioning itself on the farmland projects constantly on going in reserves of bitumen in Ondo achieve and meet the na- Kagarko Local Government exists only in our minds. Exploration of t that indusis 16 billion while In what has been deto helpbarrels, develop otherNigeria. indus- This means tion’s steel challenge State in the can reduce the en tries in bitumen enterprise will that of tar sands and heavy oil tries and urbanise the local scribed as wasted generation manufacturing industry. hazard. Investing have both local (Nigeria) and is estimated at 42 billion barof engineers, it has been said area. The surplus will also be Situated in Kagarko, Kaexploration in On their markets, rels, almostadded twice the amount thatasmost of the engineers to the nationalforeign grid,”targets garko Local Government not only as bitumen is high in demand of existing reserves of crude the minister said. that were trained in Russia to be friend Area of Kaduna State, the ronment, it will als for both road constructions andequipment according “There to willdata be a captive operate different “project will have a petroleum, capacfor havNigerians, enri other construction uses. this year, fromper the Federal Ministry power plant fromofwaste heat will be retiring ity of 5.4 metric tonnes bitumen in through Steel Development. in the process“Investing to ing in their skills retiring with tax, and annum and will createMines 3,500and generated local Nigeria high return Bitumen, whichall occurs both units the process in promises them awithout puttingprominent them direct jobs and thousands of power tional investors. for investors in the shortest peon the surface and sub-surface, the plant and township, ” the to use even for one day. indirect jobs,” the minister Stories by JOSEPH MAURICE OGU

Nigeria’s hope to produce steel brightens as ANRML set to invest $600m in local plant

Bitumen, untapped mineral awaits investors

38 BUSINESS DAY NEWS

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Nigeria fails to consolidate past electoral... Continued from page 1 are sufficient to cause a change

in the outcome of the election, according to INEC guidelines. So far elections in Benue, Osun, Bauchi, Adamawa, Sokoto, Plateau, and Nasarawa have been declared inconclusive. The result of Rivers was suspended. The opposition People’s Democratic Party (PDP) now accuses INEC of colluding with the ruling All Progressives Congress (APC) to declare areas it had electoral advantage inconclusive. “The PDP has full intelligence of how INEC is acting on instructions from the Buhari Presidency and the APC in orchestrating unwholesome situations and declaring already concluded governorship elections in Sokoto, Adamawa, Bauchi, Plateau as well as other states as inconclusive, immediately it becomes obvious that the PDP was set to win,” Kola Ologbondiyan, PDP national publicity secretary, said in a press conference. There were 61 incidences of election violence in 22 states with 58 people killed during the 2015 polls, according to the National Human Rights Commission. While all the body bags are not in, the Nigeria Civil Society Situation Room reports that 58 people have been killed with incidences of violence recorded in several states, especially Rivers, in the 2019 elections. Based on its observation, the Nigeria Civil Society Situation Room

reported militarisation of the electoral process and prevalence of votebuying in many states. Clement Nwankwo, convener of the organization, said excessive involvement of the military and security officials in elections is a worrying trend. Citing provisions of Section 29 (3) of the Electoral Act, Nwankwo said the “deployment of Nigerian Armed forces for elections shall be at the request of INEC and only for the purpose of distribution and delivery of election materials and protection of election officials”. The Army said it had a constitutional duty to support the police in providing peace. However, videos surfaced online purportedly depicting soldiers disrupting the electoral process in Rivers State and the Army claimed politicians were fitting troublemakers with military uniforms to foment trouble. As early as September 2018, an explosive device blew up near the Port Harcourt headquarters of the APC. Incidents of violent crimes, including kidnappings for ransom and armed robbery, have earned Rivers State the title of ‘Rivers of Blood’. In Lagos, thugs burnt ballot boxes. The 2019 elections were always going to be important. The economy was crawling out of a bruising recession, rising waves of violence in the north, over 23 million people without jobs and growing frustration from a

country with world’s highest number of poor people. But the election morphed from being a contest of ideas to a puerile debate about which candidate was the least corrupt. From there, it went downhill. INEC announced a postponement five hours to when polls were due to open causing the economy losses of over $10 billion, according to economists. INEC adhoc staff reported unprecedented neglect, election materials were sent to wrong locations, and even the INEC chairman appeared overwhelmed in a press conference hours after postponing the election. The postponement fuelled apathy but it worsened when President Buhari was returned winner and many voters said their votes did not count. “As a governance person, I am saddened that we seem to have reversed the trajectory of progressively-better general elections that started in 2007,” wrote Joe Abah, a former directorgeneral, Bureau of Public Service Reforms, in a social media post. Unlike in previous polls, where voters were accredited and returned to vote, INEC guidelines stated that accreditation and voting would proceed simultaneously, yet the commission returned results in some cases, where voter numbers differed from the number of those accredited to vote. Fights broke out at collation centres and a returning officer in Imo State said he announced results under duress. In many polling units, card readers failed. Haleemat Busari, deputy governorship candidate of the PDP in Lagos State, and her husband

L-R: Abiodun Ajayi, general manager, data and devices, MTN Nigeria; Adekunle Adebiyi, sales and distribution executive; Lynda Saint-Nwafor, chief enterprise business officer; Rahul De, chief marketing officer, and Richard Iweanoge, GM, brand & communications, at the launch of the MTN Smart feature phone in Lagos. Pic Pius Okeosisi

Nigerians demand airlines’ cancel... Continued from page 1 on board. The Ethiopian Airlines’ B737800 MAX flight crashed six min-

utes after takeoff from Addis Ababa en route to Nairobi, ploughing into a field near Tulu Fara village outside the town of Bishoftu, 40 miles southeast of the Ethiopian capital. The aircraft was delivered to the airline in November, had its last maintenance on February 4, having flown just 1,200 hours. The Ethiopian Airlines’ plane crash makes it the second time in five months that the same aircraft type has been involved in an air mishap. Indonesian Lion Air’s Boeing 737800 MAX plane crashed on 29 October, 13 minutes after take-off from Jakarta, killing all 189 people on board. Nigeria’s largest domestic carrier,

Air Peace, ordered 10 of the B737-800 MAX aircraft brand, which are yet to be delivered, while Green Airways Africa, a prospective domestic carrier, also claimed it ordered 100 of the same aircraft from the manufacturer. But following the crash on Sunday, Nigerians have taken to Twitter to demand that AirPeace cancel its order for the B737-800 MAX aircraft. “AirPeace should keep a close eye of on-going investigations of the aircraft type,” tweeted Ugo Obi-Chukwu via his Twitter handle @ugodre. Ucher Demola, with Twitter handle @OmoGbejaBiamila, said AirPeace had better cancel its order for the Boeing 737 Max with immediate effect. Around the world, passenger confidence in Boeing’s 737 Max has taken a hit as travellers took to social media to express fears about the plane’s safety. Some flyers said they were now too fearful to board one of those planes.

China and Ethiopia have already grounded all Boeing 737 MAX 8 aircraft; Indonesia said it would also halt flights, while a number of airlines across the world are carrying out safety measures on the jets. On Monday, China ordered its domesticairlinestosuspendthecommercial operation of nearly 100 of the jets in question. Ethiopian Airlines followed China’s announcement by grounding allofitsBoeing737Max8aircraftaswell, according to a spokesperson. Noting the “similarities” between the Lion Air flight and Ethiopian Airline flight, China’s Civil Aviation Administration said domestic airlines had until 6pm local time on Monday (10:00 GMT) to ground all 737 MAX 8 aircraft. It said in a statement operation of the model would only resume after “confirming the relevant measures to effectively ensure flight safety”. Experts have also raised concerns as to whether something was wrong with the fuel-efficient B737 MAX 800, fashioned after the Airbus A320 aircraft.

voted manually as card readers failed. Hundreds of these incidents were reported all across the country. The figures announced by INEC confounded the nation as regions beset with violence often reported larger voter turnout than those areas with relative peace leading to accusations of voter suppression. “One obvious red flag is the statistical impossibility of states ravaged by the war on terror generating much higher voter turnouts than peaceful states,” said Atiku Abubakar, presidential candidate of the PDP in the February 23 election. “Thesuppressedvotesinmystrongholds are so apparent and amateurish that I am ashamed as a Nigerian that such could be allowed to happen. How can total votes in Akwa Ibom State, for instance, be 50 percent less than what they were in 2015?” he asked. In the 2015 presidential polls, less than 850,000 votes were voided, but in 2019 presidential elections,

Tuesday 12 March 2019

1,084,358 were cancelled even when less number of voters turned out than they did in 2015. Buhari won in 2015 with 15.4 million votes against Goodluck Jonathan’s 12.8 million. In 2019, INEC announced that Buhari polled 15,191,874 votes to defeat Atiku, who got 11,262,978 votes. “We have recorded 1,084,358 cancelled votes across 1,175 polling units in 18 states. The pattern of this cancellation requires some close interrogation to show fairness and objectivity. The reasons provided for the cancelled votes include over-voting, card reader malfunction and violence,” said Nwankwo of Situation Room. “Situation Room demands that INEC provide clarification on rationale and compliance with its guidelines regarding the cancellation of polls. Accusations that these cancellations may have been contrived to suppress votes need to be taken seriously and addressed before the close of tabulation,” he said.

New Minimum Wage, MTEF/FSP, 2019... Continued from page 2

tary practice, the Senate will again adjourn plenary till Wednesday following the demise of Temitope Olaoye ‘Sugar’, a serving member of the House of Representatives. The lawmaker who represented Lagelu/Akinyele Federal Constituency of Oyo State was reportedly shot in the eye by unknown gunmen in Ibadan during the March 9 governorship and state assembly elections. It would be recalled that on January 29, the House of Representatives passed and raised the Minimum Wage from N18,000 to N30,000. The bill has since been transmitted to the Senate for concurrence, even as all eyes are now on the Senate Adhoc Committee on the New National Minimum Wage Bill, chaired by Senate Majority Whip Sola Adeyeye (APC, Osun), to submit its report. However, it remains to be seen if the committee would submit its report upon resumption as members of the panel are yet to meet as of the time of filing this report on Monday. “Our chairman is out of the country to attend to his health. As I speak to you, the committee is yet to meet. We could notmeetonthreeoccasions priortothe general elections because we could not form quorum as our members were still battling with their reelection. At the moment, most of our members are still intheirconstituencies,”amemberofthe committee who pleaded anonymity told our correspondent. Another issue that will take centre stage is the legislative approval of the 2019 to 2021 MTEF/FSP as well as the 2019 budget. But Chris Iwarah, corporate communications manager, AirPeace Limited, told BusinessDay on Monday that the airline had no plan yet to cancel the orders and it was premature to take any decision at the moment. “It is premature to begin to talk about an event that is still being investigated. No one can say what caused the crash for now. We have made orders for 10 Boeing 737-Max 8 aircraft. Premature as it is, we are monitoring developments of the events,” Iwarah said. “As an airline that is safety-conscious, we are following developments of the matter. Whatever decision we will make will be in the interest of safety of our passengers. We haven’t received the aircraft yet, so there is no need to be afraid or panic,” he said. Ethiopian Airlines said on Monday that the cockpit voice recorder and the digital flight data recorder had both been recovered from the wreckage of flight ET302, meaning the cause of the crash could be soon determined. However, less than 24 hours after

The MTEF/FSP, which provides the framework for the budget, was transmitted to both chambers of the National Assembly by President Muhammadu Buhari on November 6, 2018 for consideration and approval. In the same token, he presented the 2019 budget to both legislative chambers on December 19, 2018. Now that the elections are over, analysts expect that lawmakers will immediately get back to work and approve the proposals already pending beforethembeforetheendoftheEighth National Assembly in June this year. Clement Nwankwo, executive director, Policy and Legal Advocacy Centre, called on lawmakers to also revisit the Electoral Act (Amendment) Bill. Although the President had rejected the proposal passed by the National Assembly on four occasions, Nwankwo told BusinessDay in an interview that lawmakers could still pass and transmit the bill to the President within the remaining period of the Eighth National Assembly. “The amendments to the Electoral Act (Amendment) Bill was dropped off by the President on the excuse that it was too late in the day. I think it would be important at this stage if the National Assembly can revisit it and pass it back to the President for assent while we do the post-mortem on the elections and come up with decisions on how to go forward,” said Nwankwo, who doubles asconveneroftheCivilSocietySituation Room, a coalition of over 70 civil society organisations in Nigeria.

•Continues online at www.businessday.ng the event, Boeing’s shares fell 13 percent. More than 300 Boeing 737 Max planes are in operation and more than 5,000 have been ordered worldwide since 2017. The US carriers that operate the aircraft, including Southwest and American Airlines, tweeted to reassure customers worried by the fatal crash. Boeing Airplanes said via its Twitter handle that it was aware of the reports about Sunday’s accident and was “closely monitoring the situation”. Speaking to Al Jazeera from Malaga, Spain, Alex Macheras, aviation analyst, explained that the 737 MAX is the brand new updated version of the Boeing 737. “The MAX is in service all around the world. Airlines such as the Ethiopian Airlines are using this aircraft, as it is the latest, the most fuel-efficient, short-range Boeing aircraft on the market,” Macheras said.

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FPSO running Nigeria’s Aje field up for sale Coronation Merchant Bank Group records 46% DIPO OLADEHINDE

loating Production, Storage and Offloading (FPSO) working at Aje field offshore Lagos, the first oilfield outside the Niger Delta to produce commercial volumes of hydrocarbons, is up for sale, with its current charter contract set to expire in July. No asking price was cited for the FPSO, however, according to marketing materials seen by Dutch-based media firm, Upstream, Aje’s operator and partners are negotiating an extension to the charter, even though the unit is being actively marketed without a specific asking price on a potential “where-is, as-is” basis by marine services provider L&R Midland and Braemar ACM Shipbroking. Dutch-based Upstream understands that is the sale of the Rubicon Offshore-owned FPSO is seen as a firm goal, not just a test of the market waters. According to an executive with one of Aje’s partners, the proposed sale has nothing to do with problems at the field or financial difficulties among the partners. “It’s just a negotiation, against a very positive backdrop of strengthening gas pric-

es,” he said. The asset partners are considering incremental development based on additional upside crude resources as part of a phase-two scheme. Yinka Folawiyo Petroleum Company Limited, a whollyowned indigenous firm, is the operator of the Oil Mining Lease 113, where the field is located. Other partners are Pan Petroleum Aje Limited (a subsidiary of Panoro Energy), New Age Exploration Nigeria Limited, EER (Colobus) Nigeria Limited, and PR Oil & Gas Nigeria Limited (the holder of MX Oil’s investment in the field). Also, recent field modelling has confirmed the case for new oil wells in Aje’s Turonian and Cenomanian formations and, based on global professional services firm RPS Group findings while partners will decide later this year on further drilling. Drilling one new well in the Cenomanian and one horizontal sidetrack in the Turonian could increase peak oil production rates to between 8000 and 12,000 bpd. The full development drilling scenario could boost output to 20,000 bpd of crude and 100 MMcfd of gas. The 1990-built Marshall Islands-flagged vessel was converted to a dynamically-

positioned shuttle tanker in 1994 and then to an FPSO in 2007.It has processing capacity of 40,000 barrels per day of oil, as well as gas flaring capacity of 16 million cubic feet per day and a gas-lift compression capacity of 6 MMcfd. After spending over two decades exploring for hydrocarbon resources off the coast of Lagos, Yinka Folawiyo Petroleum, in partnership with Panoro Energy ASA and First Hydrocarbon Nigeria (FHN) Limited, among others, had on May 3, 2016 achieved first oil on Aje field, catapulting Lagos State into the league of oil and gas producing states in the country. The Aje field was discovered in 1996 and is 24 kilometres offshore Nigeria located on oil mining lease (OML) 113 in water depths of about 1,476 ft. Pending ongoing exploration and appraisal work at oil prospecting lease (OPL) 310, the field is estimated to be one of the largest oil fields in Nigeria outside the Niger Delta basin. Aje field is reputed as the first and only oilfield in Nigeria where exploration and appraisal activities have been undertaken solely by indigenous Nigerian companies without the direct involvement of an international oil company (IOC).

growth in non-interest earnings for 2018 FY SEGUN ADAMS

… declares N5.3bn PBT, maintains 0% NPL

oronation Merchant Bank Limited has released its 2018 full-year results to stakeholders in which the bank posted a profit before tax (PBT) of N5.3 billion. Commenting on the results, Abu Jimoh, group managing director/CEO of Coronation Merchant Bank Limited, said despite a difficult operating environment, our company stayed the course, recording modest growth across most financial indices. “The growth we recorded in our profitability and capital position is a testament to the strength of our business model and the commitment of our people. When we look at where we stand today, our company is stronger, simpler, and better positioned to deliver longterm value to our stakeholders, thanks to the straightforward way in which we serve our customers and clients. “As a platform for improving lives, our aim is to assist our customers to identify growth opportunities, harness these opportunities and in the process, enable businesses thrive, economies grow, and ultimately, help organisations ful-

fil their hopes and realise their ambitions,” Jimoh said. The Group maximised opportunities in its core business to deliver stable and sustainable revenue, growing the top-line revenue by 10 percent compared with 2017. PBT increased from N5.1 billion in 2017 to N5.3 billion while Total Assets grew by 63 percent from N136 billion in 2017 to N223 billion Earning assets grew significantly by 70 percent y/y to cushion the huge gap from reduced market-driven decline in yield. This resulted to a slight decline in net interest income by 5 percent to achieve N7.6 billion (2017: N8.0bn). There was increase in foreign exchange and fixed income trading volumes, loan disbursement, e-channel transactions, which saw the bank’s noninterest income increase by 46 percent y/y to achieve N4.1 billion (2017: N2.8bn). The impact of the adoption of IFRS 9 increased the bank’s cost of risk marginally from 0 percent to 0.03 percent with all its risk assets in the stage 1 classification according to IFRS 9 classification. Commenting further on

the results, Jimoh stated “As a Group, we have continued to expand our sector reach and meet our customers’ financing needs by offering products tailor made to their varied needs. In 2018, we deliberately increased our exposures to high quality obligors in Agriculture, Manufacturing and Oil and Gas sectors who fall within our risk acceptance criteria. “The quality and efficacy of our growth strategy is evidenced by our zero NPL ratios, which we have maintained for the third year running. In addition to this, our dollar asset base grew by over 100% driven largely by self-liquidating trade finance transactions that are well managed, in line with our risk management framework.” Furthermore, the bank’s commercial paper product launched in the year helped to provide a relatively stable funding base to support its growth. Customer deposit grew by over 65% from N76 billon in 2017 to N126 billion in 2018. The positive results recorded by the commercial paper is an attestation of bank’s strength in the capital market and a reflection of its growing level of investor confidence.

CCT chair orders day-to-day trial of suspended CJN FELIX OMOHOMHION, Abuja

C L-R: Obafemi Hamzat, Lagos State deputy governor-elect; Babajide Olusola Sanwo-Olu, APC governor elect; Tunde Balogun, Lagos State APC chairman, and Musiliu Obanikoro, APC chieftain, during the APC governorship candidate elect acceptance speech held at APC Secretariat, Acme Road, Ikeja, in Lagos. Pic by Olawale Amoo

Why Nigeria’s internet users rose 14% in Q4 2018 BUNMI BAILEY

vailability of low-cost phones, affordable data packages, increasing use of social media for business purposes, and government intervention in the provision of infrastructure in Nigeria, are some of the factors that raised the number of internet users in the last quarter of 2018, analysts say. The number of people using the internet in Africa’s most populous country year-on-year rose by 14 percent, according to the latest telecoms report by the National Bureau of Statistics (NBS). The number of Nigerians who were active on internet increased year-on-year by 13.6 percent to 112.1 million in the fourth quarter (Q4) of 2018 com-

pared to 98.7 million in Q4 2017. On a quarter-on-quarter basis, it rose marginally by 5.3 percent from 106.5 million in Q3 2018, according to the report. Ayodeji Ebo, MD, Afrinvest Securities Limited, said awareness had increased significantly even as more affordable phones with internet access were becoming available. “Also, the increasing use by business owners for transactions especially via social media has also bolstered the adoption of internet and this shows that the revenue mix of the telecommunication companies will change from voice to data as most international calls are routed via Whatsapp or other social platforms than direct voice calls,” Ebo said. A survey by Alliance for Affordable Internet (A4AI), a global coalition of private

sector, public sector, and notfor-profit organisations which analysed 60 Low and Middle income countries (LMIC) in the world, showed that at the end of 2017, only four African countries (Tunisia, Nigeria, Mauritius, and Egypt) had continuous improvements in affordable mobile broadband plans (i.e., 1GB plans available for less than 2 percent of average monthly income) Gbolahan Ologunro, an equity research analyst at Lagosbased CSL Stockbrokers, said the telecoms sector was one of the non-oil sectors that experienced a strong growth in 2018. “We are beginning to see that a lot of people are shifting to digital services. Last year, the Nigerian Communications Commission (NCC) granted licenses to seven infrastructure companies to deploy the

needed infrastructure to facilitate penetration across the 774 LGAs in Nigeria and this was a move that impacted positively on the industry, particularly in deepening broadband penetration,” Ologunro elaborated. From the 2018 GDP report by the NBS, the sector recorded a growth rate of 13.2 percent in Q4, representing an increase of 14.7 percent points relative to Q4 2017 and on a quarteron-quarter basis; it showed a growth rate of 23.8 percent. The government had a fiveyear National Broadband Plan (NBP 2013-2018) target that the country should be able to attain a minimum of 30 percent from the five per cent it had in 2013 in five years. And in January 2019, NCC confirmed that the country had indeed attained 31 percent broadband penetration.

hairman of Code of Conduct Tribunal (CCT), Danladi Umar, on Monday unilaterally ordered the day-to-day trial of the suspended Chief Justice of Nigeria (CJN), Walter Onnoghen. He consequently fixed Tuesday for continuation of the trial even without consulting the prosecution and defence lawyers. Besides, Umar ordered that proceedings against Onnoghen be conducted on a day-to-day so as to ensure speedy trial of the charges. This was after he reserved rulings in the two motions of Justice Onnoghen. Umar, in a short ruling, invoked Section 296(2) of the Administration of Criminal Justice Act to arrive at his conclusion, adding that in line with the provisions of the law, ruling in all motions shall not be delivered until the final judgment of the main matter. One of the motions is challenging the jurisdiction of the tribunal to hear the criminal charges brought against him by the Federal Government. Also deferred is ruling in another motion in which Onnoghen prayed for the disqualification of the Umar from participating in the trial on account of demonstrated bias. The CCT chairman announced that rulings had been reserved and shall be delivered along with the substantive suit. This followed the submissions on motions by Adegboyega Awomolo, counsel to Onnoghen. Earlier, the suspended CJN insisted that the CCT had no jurisdiction to proceed with

the six-count charge brought against him by the Federal Government. Onnoghen told the tribunal that as a serving judicial officer, it was the National Judicial Council (NJC) that was vested with powers to entertain any misconduct against him. In a motion dated January 14, 2019, Onnoghen through his counsel prayed the tribunal to strike out or dismiss the entire charges against him for want of jurisdiction. Awomolo cited sections 34 and 292 of the 3rd scheduled of the 1999 Constitution as grounds that the CCT had no requisite power to deal with erring judicial officer without first resorting to the NJC. He said the powers of the NJC were superior to that of the Code Conduct Bureau, when it comes to the issue of judicial officer, adding that in line with Section 292, the NJC must first indict a judicial officer before any Judiciary measure could be taken. In the second application dated January 31, 2019, and predicated on Section 36 of the 1999 Constitution, Onnoghen demanded that the chairman of the tribunal recuse or disqualify himself from further participating in the trial on the grounds of likelihood of bias. The defendant claimed that Umar had demonstrated sufficient bias against him in the conduct of proceedings and that it would be in the best interest of Justice for the CCT boss to step aside from the proceedings. Onnoghen stated that in the instant case, the executive arm of government, where Umar belongs, was the complainant, investigator, prosecution and the judge contrary to the provisions of the law.

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Concern grows over incidences of medication error ANTHONIA OOBOKOH

espite some progress made, there is considerable neglect on medication error in Nigeria’s healthcare delivery. Experts say the rising incidence of medication errors is holding back progress on improving health and leading to cause of patients deaths in hospitals. Acknowledging the alarming growth trend in the incidence of medical errors, World Health Organisation (WHO) rolled out stringent regulations and a comprehensive set of guidelines for ensuring patient safety and treatment efficiency. “Medication errors are very common, it becoming alarming and it have not been controlled to the expected level in Nigeria,” Tunde Ogunsanya, a Lagos-based medical practitioner, said. Ogunsanya said the growing patient population, increasing healthcare expenditure, and rising prevalence of chronic diseases were some of the major factors fuelling the demand for medication in the country.

“Medication errors are increasing in hospitals, pharmacies, and retail drug stores. Hospitals are expected to hold the largest share mainly on account of the improving healthcare and proper medication and diagnosis but such error is increasing in prevalence in Nigeria. “It is necessary for the physicians in complicated medical procedures such as diagnosis, surgery, and monitoring, among others to be assisted,” he said. WHO report also states that inaccurate diagnosis, medication errors, inappropriate or unnecessary treatment, inadequate or unsafe clinical facilities or practices, or providers who lack adequate training and expertise prevail in all countries, Nigeria inclusive. However, Femi Ogunremi, CEO, Monitor Healthcare Limited (MHL), an international medical technology company, said growing incidence of medication errors was a global problem that contributed to patient’s harm. Ogunremi said the magnitude of these problems in Africa remained unclear, saying, “However, recent re-

search has shown that the medication errors are common in Nigeria and healthcare practitioners show negative attitude toward it.” According to a study by Iloh, G et al 2017, medication error makes 95.2 percent of all medical errors in a crosssectional study across Abia in 2017. “It appears to be a major issue in Nigeria, but it is not projected as such; incidentally, if you ask around, most families will have one story or the other of their bad experience relating to this. The impact of medication errors cuts across the individual, family and the society,” he said. The expert identified the negative attitude of health practitioners toward medication errors as a major challenge to tackling the issue. He said a study by experts confirmed in a national survey that the prevalence of medication errors was high among healthcare professionals in Nigeria. Ogunremi urged the three tiers of government to invest in effective training of health practitioners on how to prevent and deal with medication errors in clinical settings.

Nigeria is winning war against Lassa fever - FG ANTHONIA OOBOKOH

he Federal Government on Monday says Nigeria is winning the war against Lassa fever, as there is a decline in number of new cases in the country. Chikwe Ihekweazu, CEO, Nigeria Centre for Disease Control (NCDC), disclosed this at a news conference in Abuja that the country had witnessed a reduction in the number of people who have died from the disease compared with 2018. “An outbreak of Lassa fever was declared in Nigeria on January 21, 2019. Since then, 420 confirmed cases and 93 deaths have been reported in 21 states,” he said. He revealed that the NCDC and partners had con-

tinued to sustain response activities in states across the country, despite progress made so far, adding that the national response was being coordinated by the national, multi-sectoral, multi-partner Emergency Operations Centre (EOC) led by the NCDC. Lassa fever is an acute viral haemorrhagic illness, transmitted to humans through contact with food or household items contaminated by infected rodents. Person-toperson transmission can also occur, particularly in hospital environment in the absence of adequate infection control measures. Ihekweazu said this year, early sequencing result showed similar findings, saying, “The preliminary results of 42 Lassa fever virus sequences indicate that rodent to human transmission, as

observed in 2018, is still the dominant route of transmission. “Therefore, there is a strong need to improve prevention measures, especially around environmental sanitation. “The progress recorded in the response to the 2019 Lassa fever outbreak including an early decline in the number of new cases and reduced case fatality has been attributed to various factors.” In January 2019, NCDC hosted the first Lassa fever International Conference. This brought together the largest gathering of researchers and professionals to discuss progress on Lassa fever. Importantly, Nigeria introduced her national Lassa fever research plan and had been recognised as one of the leading stakeholders in global Lassa fever research.

2020 National Sports Festival: Edo explores more centres to host games, as National Council of Sports meets

do State governor, Godwin Obaseki, says the state government will explore more sporting centres across the state as venues for sporting activities during the 2020 National Sports Festival that will be hosted by the state. Obaseki disclosed this while on inspection of re-modelling work at the Government Science and Technical College (GSTC), formerly known as Benin Technical Col-

lege, in Benin City. He said, “I am going to inspect what the school has in its sporting arena. We are hosting the National Sports Festival in 2020 and we need venues for the events, so we want to see if we can rebuild the swimming pool here, the lawn tennis court and even the race tracks.” Meanwhile, the National Council on Sports is holding a week-long extraordinary meeting in Benin City, the first since Edo State was given the

hosting right for the 2020 National Sports Festival. Checks revealed that top on the agenda of the meeting is the review of the 19th National Sports Festival hosted in Abuja, status of Beach Volleyball, zonal eliminations for team sports, sports for the next festival and medical guidelines. Other issues expected to be discussed include the proposed date for the 20th National Sports Festival and inspection of facilities.

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Groups task Sanwo-Olu on infrastructure, Symbol Mining deepens Nigeria’s education ahead May inauguration mining sector with JOSHUA BASSEY

head of his inauguration in May 2019, interest groups have advised governorelect of Lagos State, Babajide Sanwo-Olu, to focus on development of education and infrastructure upon assumption of office. The groups in separate statements on Monday in which they congratulated Sanwo-Olu and his deputy, Obafemi Hamzat, said the incoming governor would also need to learn from the mistakes of the outgoing Governor Akinwunmi Ambode. Saheed Oseni, chairman, Senior Staff Association of Nigerian Universities, Lagos State University (LASU) chapter, wants the governor-elect to develop education and infrastructure in the state. “Look at the state of the Lagos-Badagry Expressway, which links Nigeria to neighbouring West Africa countries. It is the route through which Nigeria generates the largest internal generated revenue. “It is worrisome that roads in Apapa where Nigeria generates billions of naira are in a dilapidated state,’’ he said. According to Oseni, the dilapidated state of some roads was hindering free flow of traffic and had become a cause for concern to commuters. Also, the Committee for the Defence of Human

Rights (CDHR) calls on governor-elect to correct some of the mistakes of the outgoing governor. According to Alex Omotehinse, Lagos State chairman of the rights group, Sanwo-Olu must especially visit the issue of the new Land Use Charge (LUC) and other anti-people policies. To him, the primary purpose of government is for the protection of lives and welfare of the citizens. “I congratulate him (Sanwo-Olu) for the victory well deserved; he won a landslide victory, unlike the presidential election. The election that produced him was peaceful, free and fair. “We want to counsel him to obey the rule of law and to ensure the mistakes of the outgoing administration are corrected, especially the increment in land use charge and others,” he said. The Muslim Students’ Society of Nigeria (MSSN), Lagos area unit, while also congratulating the governor-elect, urged the incoming governor to ensure equity and justice for all residents and sectors. Saheed Ashafa, president of MSSN, in a statement, reminded Sanwo-Olu and his deputy to shun elitist governance, saying, “We have noted their campaign promises with special attention so as to assess their loyalty as the race takes effect.

second export

… appoints Tim Wither as MD JOSEPH MAURICE OGU

ymbol Mining has finalised arrangements for its second export since it stated operation at its Macy Mine in Nigeria, the company says. “Four shipments (1,720 dry metric tons) have been loaded and are on route to Lagos port for ongoing shipment to China,” Tim Wither, managing director, Symbol Mining said in an emailed statement dated March 7 to BusinessDay. This shipment follows the first announced by the company in its December 2018 quarterly report, which involved three shipments totalling 870dmt dry metric tons. Symbol mines zinc, lead and silver at its Macy Mine. The Australian company operates in Bauchi State, in the area known as the Benue Trough, through its local subsidiary company, Imperial Joint Venture. The Board of the company has appointed Tim Wither as the company’s managing director, a statement from the company says. Accepting the offer, Wither said he was prepared to work for the progress of the company in all areas.

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World Business Newspaper

China and Indonesia ground Boeing 737 Max 8 jets after latest crash Regulators suspend use of aircraft after Ethiopian Airlines crash kills 157 people DON WEINLAND, ALICE WOODHOUSE AND STEFANIA PALMA

hina and Indonesia have suspended all flights of Boeing 737 Max 8 planes after a second deadly crash involving the aircraft in less than five months, with both countries saying they were taking the unprecedented step to ensure passenger safety. The grounding in two of the biggest Asian markets for the aircraft comes a day after Ethiopian Airlines flight ET302 crashed soon after take-off, killing all 157 people on board. Shares in Boeing opened more than 12 per cent lower in New York, putting the stock on course for the biggest drop since the aftermath of September 11 terrorist attacks in 2001. The Civil Aviation Administration of China was the first to order domestic airlines to suspend operations of the aircraft on Monday morning, noting similarities between Sunday’s crash and an October crash also involving a Boeing 737 Max 8, when 189 people died after a plane owned by Indonesia’s Lion Air plunged into the sea. Indonesia issued a similar order for a temporarily grounding of the Boeing planes for inspec-

tions on Monday evening, saying it had to ensure the “aircraft is airworthy”. “Both [crashes] occurred during take-off and have certain similarities,” the Chinese regulator said on its website, adding the suspension was “in accordance with management principles of zero tolerance for security risks and to ensure flight safety for civil aviation in China”. Ethiopian Airlines has already grounded its fleet of Boeing 737 Max 8 aircraft following the crash. “Although we don’t yet know the cause of the accident, we had to decide to ground the particular fleet as [an] extra safety precaution,” the airline said on Monday. Aviation industry experts say it is too soon to say if there is a connection between the two crashes. Western operators of the new jet have so far stuck with industry practice of continuing operations until the national safety regulator from the country that certified the aircraft, in this case the US Federal Aviation Authority, ruled otherwise. The FAA said it was “closely monitoring developments”. The two biggest operators of the Max 8 — Southwest Airlines and American Airlines of the US with 31 and 24 jets, respectively — said they had full confidence in the aircraft. United Airlines also said there would be “no change to

Turkey falls into recession as currency crisis takes toll Economy contracts sharply in final three months of 2018 LAURA PITEL

urkey entered its first recession in a decade at the end of 2018 as a collapse in the lira and a sharp hike in interest rates brought economic growth to a halt. The economy contracted by 3 per cent per cent year-on-year in the fourth quarter of 2018, according to official data released on Monday. Seasonally and calendar adjusted gross domestic product decreased by 2.4 per cent on a quarterly basis. The timing of the news is deeply uncomfortable for Recep Tayyip Erdogan, the Turkish president, who is battling to retain control of Istanbul and Ankara in nationwide local elections at the end of March. The depth of the fourth quarter contraction was slightly worse than expected. In a Reuters poll economists had forecast a 2.7 percent year-on-year slump. Coming after a quarterly contraction in the third quarter of 2018, Monday’s fourth quarter data means that Turkey officially entered a recession, defined as two consecutive quarters of negative growth. Mr Erdogan’s ruling party swept to power in 2002 on the back of a severe financial crisis. He has built 16 years of successive election victories on the back of rising prosperity for the country of 82m people. Opposition parties, who have made the country’s 20 per cent inflation rate and rising unemploy-

ment the centrepiece of their local election campaign, can now add recession to their list of gripes with the government. The figures also showed that Turkey’s full-year GDP growth was 2.6 per cent in 2018 — down sharply from the previous year’s stimulusfuelled 7.4 per cent growth. Economic indicators have for months suggested that growth had slowed sharply in the aftermath of last summer’s dramatic currency crisis, which was triggered by a bitter row with between Turkey and US President Donald Trump. The crisis in relations between Ankara and Washington caused a rapid depreciation in the lira, sending the currency to a series of all-time lows against the dollar and causing fears of contagion across emerging markets. But the depth of the fourth quarter contraction was worse than expected by economists. A Reuters poll prior to Monday’s data had forecast a 2.7 percent year-on-year slump. The extreme volatility eventually forced the country’s central bank to steeply hike its benchmark interest rate to 24 per cent in September. The move helped to belatedly reassure investors and stabilise the currency. But it also sent shockwaves through the wider economy, triggering a plunge in lending by the banks and a sharp fall in business confidence and consumer spending. Industrial production, car sales and housing sales have all plummeted in recent months.

our operations.” Chinese airlines have ordered more than 100 aircraft from the 737 Max range and account for 17 per cent of the 350 deliveries made up until January, according to Boeing. Indonesia’s Lion Air is one of the aircraft’s largest customers, with 201 on order and 14 in service. The flag carrier Garuda Indonesia has also ordered 50. Garuda declined to comment on

whether it was putting its order on hold in light of the crash. Two-thirds of the fleet of Boeing 737 Max 8 aircraft flown in Asia Pacific are based in China, and the aircraft represents about 3 per cent of China’s commercial fleet in use, according to Eric Lin, head of Asia transport research at UBS in Hong Kong. “It’s quite rare,” said Mr Lin. “We have never seen a key market that could ground nearly 100

aircraft at once.” Grounding the jet could potentially delay flights and lead to an increase in ticket prices, he added. A spokesperson for Boeing in China said: “We have engaged our customers and regulators on concerns they may have . . . The investigation is in its early stages, but at this point, based on the information available, we do not have any basis to issue new guidance to operators.”

Women bankers criticise UBS over maternity leave cuts to bonuses Swiss bank does not restore full bonuses after female staff return from having children STEPHEN MORRIS

op women bankers at UBS have criticised Switzerland’s biggest lender over its practice of using their maternity leave as a reason for imposing long-term cuts to their bonuses, raising questions over its commitment to gender equality. Some have resigned in frustration — forgoing promotions in at least two cases — while others having begrudgingly continued working for less pay than before they became mothers, according to several current and former UBS employees. One woman had her bonus reduced and re-based four times after having had four children. Another was informed that being a working mother was a “lifestyle choice” by means of explanation for her lower bonus, while someone else was told to “focus on her baby” when she challenged the policy. “Basically once pregnant, one will never catch-up again with male colleagues in the career one has built up prior to going on maternity,” said one of the women, who still works for the bank. Despite multiple complaints, “the practice still continues, women still live through it exactly the same, nothing has changed in times where [UBS] is very proud of promoting what a great bank this is for women to work in”. More than a dozen women in

the Swiss wealth management unit have complained about the treatment they received when they took time off to have children, which in many cases resulted in their bonuses being cut 30 per cent or more. Despite the bank pledging to address the issue more than a year ago, some women continue to be affected. The practice in question meant UBS applied a reduction to the annual bonuses of those women who took the seven months of leave offered to new mothers, the people said. However, when the bankers returned their incentive pay was not restored to its former level, but rather re-based at the lowered amount. In many cases, three years or more later it had still not recovered. The women affected span the higher ranks of the core wealth management unit in the lender’s home country. Executive directors, directors and associate directors have all formally complained about their treatment to their line managers, human resources and the head of diversity and inclusion, the people said. They have also formed a private group to share their experiences and lobby for change. After being made aware of the problem last year, UBS’s global head of diversity and inclusion, Carolanne Minashi, promised a formal review of the bank’s post-maternity leave bonus policy and raised the issue with those in charge of the “global reward” team, according to

documents seen by the FT. While a bank spokesman said Ms Minashi took the issue seriously and had installed new safeguards since then, some women were still being affected, the people said. “It is extremely important to us that employees with similar roles, performance and experience are rewarded equally and fairly,” UBS said. “We approach the issue of parental leave proactively and systematically during the reward process to determine whether there are gaps and to close those gaps if we find any.” Stefan Seiler, its global head of HR, said any women who felt their pay had been inappropriately affected should get in touch with him directly to correct any mistakes. The spokesman added that the comments made by some managers about motherhood “were archaic and have no place anywhere in UBS culture”. In Switzerland, UBS offers women six months maternity leave at full salary, with an optional seventh month of unpaid time off. That is more generous than the 14 weeks guaranteed under Swiss law, among the lowest of any country on the continent. By contrast, new fathers are given two weeks off by UBS — with the option to take another four unpaid — and their bonuses are not reduced “pro-rata” to reflect this, according to two male staff who took paternity leave and still received their full bonus.

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FT Downing Street admits Brexit talks deadlocked

Barrick Gold drops $18bn hostile bid for Newmont

Theresa May faces heavy defeat in Tuesday’s parliamentary vote GEORGE PARKER , ALEX BARKER, MEHREEN KHAN AND ARTHUR BEESLEY

Gold producers agree to launch joint venture consisting of duo’s Nevada mines HENRY SANDERSON, NEIL HUME AND ARASH MASSOUDI

owning Street admitted on Monday that Brexit talks in Brussels were deadlocked, leaving Theresa May facing a heavy defeat if she presents her largely unchanged deal to MPs for parliamentary approval on Tuesday. The UK prime minister spoke to Jean-Claude Juncker, European Commission president, on Sunday night but made no headway in her efforts to amend the treaty to ensure that Britain could not be “trapped” indefinitely in a customs union. Downing Street insisted that the House of Commons’ apparently doomed “meaningful vote” on Mrs May’s deal would take place on Tuesday and that Mrs May had not given up all hope of last-minute progress in talks in Brussels. “Talks are ongoing and we continue to focus on making progress so we can win parliament’s support for the deal,” Mrs May’s spokesman said. However, the idea of an eleventh-hour breakthrough was flatly discounted in Brussels. Margaritis Schinas, European Commission spokesman, said on Monday that it was now up to Westminster whether or not to endorse the Brexit deal. He added that no further meetings between Mr Juncker and Mrs May were scheduled, although both sides would “remain in close contact this week”. Mr Schinas said: “We remain open and willing to meet with UK negotiators at any time. We are committed to ratifying this deal before the 29th of March [when Britain is scheduled to leave the EU]. It is now for the House of Commons to take the decisions.” Stephen Barclay, the UK’s Brexit secretary, was expected to make a statement to MPs on Monday afternoon to set out how the government intended to proceed in the face of the stalemate in Brussels and Westminster. M r s Ma y i s c o n s i d e r i n g whether to give MPs a “conditional” vote on Monday on the deal that she would like to agree in Brussels — rather than the one on the table — although such a move would be fraught with danger. There would be a risk that MPs would reject what one minister described as the “fantasy deal”, while one EU diplomat said: “If they vote for something which we cannot accept, then it is a vote for a no-deal exit.” Leo Varadkar, Ireland’s prime minister, was scathing of the idea. “It’s far too late for the UK to tell us what they want,” he said. “The withdrawal agreement requires a compromise and this withdrawal agreement is already a compromise.” He added: “I think if there is going to be an extension [to delay the date of Brexit past March 29], it has to be an extension with a purpose. Nobody across the EU wants to see a rolling cliff-edge where tough decisions just get put off until the end of April and then to the end of May and then maybe until the end of July.”

Tuesday 12 March 2019

C Donald Trump has already declared a national emergency to bypass Congress and obtain money for an expansion of barriers at the US border with Mexico © Reuters

Trump to request $8.6bn for border wall in US budget President sets the stage for new battle with Congress over immigration DEMETRI SEVASTOPULO

onald Trump will ask Congress to provide $8.6bn for his US-Mexico border wall when he presents his 2020 budget on Monday, setting the stage for another battle with Democrats over what they dismiss as a “vanity” project. The request comes as Democrats and some Republicans try to block the president’s recent declaration of a national emergency, which was an effort to bypass Congress and obtain money for the wall. Mr Trump took the contentious measure after Congress provided just $1.4bn for the wall for fiscal 2019. Larry Kudlow, the top White House economic adviser, on Sunday told Fox News that Mr Trump would request additional money for the wall, which was one of the core planks of his 2016 presidential campaign. A senior US administration official said the request would be $8.6bn. “The whole issue of the wall, of border security, is of paramount importance,” Mr Kudlow said. We have a crisis down there. I think the president has made that case very effectively.” The fight over the wall is expected to intensify this year as a large field of Democrats attack Mr Trump as part of their campaign to become the Democratic nominee for the 2020 presidential election. Speaking in

South Carolina over the weekend, Kamala Harris, the California senator, slammed Mr Trump for his push for border wall money. “Here is part of the failing of the guy who is currently in the White House. He kept saying he was going to put resources into infrastructure, but he is too busy focused on that vanity project called the wall,” Ms Harris, one of the 14 Democrats so far running for president, told voters in rural South Carolina. Mr Trump is pushing hard for funding so that he can tell voters in 2020 that he fulfilled one of his biggest pledges from the last election. While he has taken many of the actions he vowed during the 2016 race — including withdrawing from the Trans-Pacific Partnership trade deal and Iran nuclear deal — he has failed to make progress on his priorities: building the wall and cutting the US trade deficit. Some previously vocal backers of Mr Trump have turned on the president for not being aggressive enough over the wall. Ann Coulter, an ultra-hardliner on immigration, recently said he was “digging his own grave” and that “the only national emergency is that our president is an idiot”. Mr Trump on Saturday hit back at Ms Coulter, who represents a strain of his base, saying he was “stopping an invasion” at the US border. “Wacky Nut Job @AnnCoulter, who still hasn’t figured out that, despite all odds and an entire

Democrat Party of Far Left Radicals against me (not to mention certain Republicans who are sadly unwilling to fight), I am winning on the Border,” Mr Trump tweeted. While Mr Trump will signal his priorities with his funding request, the budget has become less relevant in recent years as Congress determines how much will be spent — and often misses the deadline to fund the government. “The president’s budget is often informative, but irrelevant. This year it is neither,” said Doug Holtz-Eakin, a former top White House budget official who now runs the American Action Forum think-tank. He added that the budget “will have no impact on what Congress does”. The White House said the budget, which will be released on Monday morning in Washington, would include a record $2.7tn in spending cuts. It said an analysis of the request showed it would balance the budget by 2034. “This is a clear road map for a more fiscally responsible future if Congress chooses to follow it,” the White House said. Russ Vought, acting head of the White House Office of Management and Budget, said the budget “shows that we can return to fiscal sanity without halting our economic resurgence while continuing to invest in critical priorities” and would “end runaway spending, and secure prosperity for future generations”.

Nigeria FG urged to pay more attention to education sector

gozi Jideonwo, a retired director of education, Lagos State Ministry of Education and former principal of Community Senior Grammar School Surulere, has urged the government to pay more attention to the needs of the education sector. Jideonwo said this in an exclusive interview with BusinessDay in Lagos. She said government needs to provide basic amenities such as standard laboratory, updated library, and digital means of learning, among others, adding that with the growth rate of population in the state, there is a need for more teachers in schools. She also commended the government for its efforts so far, stating that prompt payment of salaries, training for teachers and accessible free education have all been instrumental in churning out responsible citizens for the society.

Jideonwo is celebrating her retirement as director of education after 35 years in service. A seasoned teacher and mother of Chude Jideonwo, the managing partner of Red Media Africa said she started her career as an educator with the Lagos State government on the 6th of March 1984 and has spent 35 years in service. She is described as a grounded administrator who knows her onions in the educational space. She has bachelor’s degree and two master’s degrees in Education and Public Administration. She has taught in various government schools before she became a vice principal in 2011. In 2016 she became a principal and eventually director for education and principal of Community Senior Grammar School Surulere. Describing memorable feats she achieved in the academic space, she stated that “I was able to initiate lots

of infrastructural developments lacking in the schools.” “Furthermore, I was able to influence positively the lives of the students academically, morally, emotionally, physically and spiritually.” Speaking on how she is able to juggle her time as a pastor, mother, and teacher, she states that she relies greatly on the grace of God. On life after retirement she says, “I have various plans but I am still waiting on God to perfect them.” “I can also help as a consultant in the educational space using the knowledge and wisdom I have acquired from service in the past 35 years.” She advised teachers to be more dedicated to their work as their job is based on conscience and shapes the destinies of children. She advised parents to understand their children and be their friends with them so they do not lose them.

anada’s Barrick Gold has dropped an $18bn hostile bid for Newmont Mining, after agreeing a deal to combine operations in the US state of Nevada. Under the deal, Barrick will take a 61.5 per cent stake in a new joint venture company, with Newmont holding the remainder. As a standalone business, it will be the world’s biggest producer of gold with 4.1m ounces of production a year. The deal marks the end of a fierce bid battle that descended into each side attacking the other’s management record. On Monday, both companies rushed to claim victory for the creation of the JV, which was originally proposed by Newmont. Mark Bristow, Barrick’s South African chief executive, said the two sides had come to an agreement after a dinner with Newmont’s chief executive Gary Goldberg at the Four Seasons in New York on Tuesday. That progressed to talks in Toronto on Thursday and an agreement that was signed in Elko, Nevada, on Sunday night, he said. “I’ve managed to convince Gary that this was a do-able thing and he got to the same point very quickly,” Mr Bristow told the Financial Times. “It’s a completely deliverable transaction.” Mr Bristow said it would create value for Barrick shareholders without “issuing a single share”. Last week Newmont formally rejected Barrick’s all share bid, with Mr Goldberg calling it “egocentric”. It countered with a proposal for a JV with a 55 per cent share for Barrick, which Mr Bristow also quickly dismissed. But the mood changed after some of Newmont and Barrick’s largest shareholders indicated their preference for a JV over a takeover of Newmont. Barrick has only just completed its $6bn acquisition of Randgold, and some shareholders worried that another deal would be taking on too much too quickly. Tom Palmer, Newmont’s incoming chief executive who will take over from Mr Goldberg later this year, said the deal came about due to the encouragement of the company’s shareholders. “I think it was the combination of us putting out a constructive proposal to realise the synergies that everyone knew were there in Nevada, and listening to shareholders,” he said. The two sides agreed on the ownership split based on the valuation ascribed to the assets by analysts, he added. While Barrick will be the operator of the JV, Newmont will maintain its influence through a seat on the board, Mr Palmer said. Barrick and Newmont said the JV would generate an estimated $500m in annual pre-tax synergies in its first five full years. The terms of the deal, which were fiercely criticised by Mr Bristow just a week ago, have not materially changed. Barrick will be the operator of the JV and will nominate a general manager to run operations.

Tuesday 12 March 2019

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Shibata resigns as head of Nikko Asset Management after lawsuit

The Japanese group is embroiled in a case by former US executives over incentives LEO LEWIS

akumi Shibata is stepping down as president and chief executive of Japan’s Nikko Asset Management after becoming embroiled in a US lawsuit alleging he fiddled an incentive scheme and made lucrative stock options worthless. The resignation, which was announced by the Tokyo-based firm on Monday, follows fresh claims in a US civil case that has been brought by seven former employees who are collectively seeking more than $100m in damages. The claimants — all US citizens — say that Mr Shibata and his co-defendants not only misappropriated huge sums earmarked for incentive schemes, but diverted those funds into new schemes that benefited him personally. A brief statement from Nikko announcing the resignation made no reference to the US lawsuit but quoted Mr Shibata as saying that, after six years at the Japanese fund manager, this was “the right time to transition the company to those who have helped me shape it”. Neither Nikko nor Mr Shibata would comment on the allegations facing the company in the US lawsuit, or on internal speculation that there was a link between the lawsuit and the 66-year-old’s decision to step down. The departure marks Mr Shibata’s second high-profile resignation. In 2008, as chief operating officer of Nomura Holdings, he led the brokerage into its acquisition of parts of the collapsed Lehman Brothers — a move that was widely regarded as a disaster for Nomura. Mr Shibata remained at Nomura for four more years, but left in 2012 in the wake of an insider dealing scandal. He was not personally implicated in the insider trading affair and went on to become chief executive of Nikko in 2014. The US lawsuit against him and Nikko was filed in 2017 and centres on a series of schemes

that were extended to hundreds of Nikko employees after the 2009 acquisition of the company from Citigroup by Sumitomo Mitsui Trust Bank. The programme granted employees instruments called stock acquisition rights (SARs) — a type of share option that would allow the holders to benefit financially from an increase in the value of Nikko if it did not carry out an initial public offering over the next 10 years. But the former executives allege that Mr Shibata concocted a scheme that first valued Nikko at less than the strike price and then offered the holders of the SARs a non-choice in which they either sold the options back to the company for almost nothing or forfeited them completely. The claimants, who have all left the Japanese group, say the low valuation ascribed to Nikko was achieved by having the process carried out by three institutions — one of them Nikko’s auditor and another its house bank — that they believe were not independent. The claimants include Tim McCarthy, the former chairman and CEO of Nikko, and Billy Wilder, former president and chief investment officer. Nikko, Mr Shibata and the codefendants initially attempted to have the suit dismissed on jurisdictional grounds, but failed. They have since made a second attempt deploying what the plaintiffs describe as a “laundry list of pleading grounds”. In a rebuttal to that, the former executives filed documents with the New York district court late last month. In the documents they revealed that one of them — Nikko’s former chief financial officer, Frederick Reidenbach — had recorded conversations during which Mr Shibata had allegedly threatened to fire him for attempting to blow the whistle on the alleged fraud.

Banks underpin rebound for European stocks EDWARD WHITE AND MICHAEL HUNTER

uropean banks bounced higher as merger speculation returned to the sector, which helped the region’s equities move up off last week’s 12-session closing low for the Stoxx 600. The Europe-wide benchmark rebounded by 0.5 per cent, with the index tracking its banks outperforming with a 1.3 per cent advance. It came after fresh speculation of a merger between German lenders Deutsche Bank and Commerzbank. Their shares rose 4.5 per cent and 6.6 per cent respectively, while Frankfurt’s Xetra Dax 30 gained 0.3 per cent. Wall Street stocks followed, with the S&P 500 up 0.7 per cent

in early US trade. The pound recovered from a three-week low as investors continued to watch the UK’s fraught Brexit politics. Sterling’s ability to hold the $1.30 level remained associated with a managed departure from the EU. In afternoon trade, it added 0.5 per cent over the session to $1.3080, having been as low as $1.2949 in early trade. The FTSE 100, which outperformed as the pound fell, lost momentum as the currency bounced higher, trading up 0.2 per cent in afternoon trade. Chinese stock markets swung back into positive territory after tumbling late last week on global growth worries, with the CSI 300 closing up 2 per cent. Tokyo and Hong Kong posted milder gains.

Takumi Shibata announced on Monday that he was resigning as president and chief executive of Nikko Asset Management © Bloomberg

HKEX and MSCI to launch futures for China stock market Would be first channel for investors using stock connect links to hedge A-share risk HUDSON LOCKETT

ong Kong’s stock exchange and MSCI have agreed to launch futures contracts on the A-share portion of the global index provider’s flagship Emerging Markets index, laying the groundwork to allow international investors to hedge risk from their exposure to Chinese equities. The announcement comes just over a week after MSCI decided to fast-track an increase in China’s weighting in its EM index — an influential benchmark tracked by $1.9tn of funds — bringing forward to November the move originally planned for May next year. “This new agreement with MSCI will facilitate the development of a key risk management tool for international investors who need to manage their A-share equity exposure,” said Charles Li, Hong Kong Exchanges and Clearing chief executive, in a statement on Monday. The MSCI China A Index, for which futures are to be made available, will comprise 421 large and

mid-cap stocks listed in Shanghai and Shenzhen and accessible via the stock connect programmes between the two mainland exchanges and the Hong Kong exchange. The Hong Kong exchange said the China A Index would represent the A-share portion of the MSCI EM index. Th e futures co nt ract s an nounced by HKEX on Monday would represent the first channel for investors using the stock connect links to hedge risk in the Ashare market. They are set to be introduced, subject to regulatory approval, in November, when MSCI is slated to complete the inclusion of 168 midcap A share stocks in its EM index. Thomas Gatley, China corporate analyst with Gavekal Dragonomics, a Beijing-based macroeconomic research group, said the move would address one of the few remaining issues for MSCI, which noted the absence of a broader use of equities futures contracts in its inclusion announcement earlier this month. “If there is a freely available liquid futures contract then that really

helps,” Mr Gatley said. As a result of the impending inclusion, China’s weighting in MSCI’s flagship emerging markets index will rise to 3.3 per cent by November from 0.71 per cent now. Analysts estimate that the reweighting could result in as much as $125bn of offshore money flowing into mainland Chinese stock markets. Although there are stock index futures available domestically in China for major benchmarks such as the CSI 300 index of large-cap Shanghai- and Shenzhen-listed stocks, international access to these is limited to approved foreign institutional investors. But while the new futures contracts would provide international investors with a tool to mitigate risk from exposure to A shares via MSCI’s EM index, they would stop short of allowing investors to take long or short positions on an individual stock. HKEX said it would provide further details on the contracts and announce their launch date once the latter was determined.

US financial transaction tax would put unfair burden on savers Democrats’ latest proposal is misguided and should be scrapped KIRSTEN WEGNER

s Democrats start positioning themselves for the 2020 US presidential campaign, it is clear that Wall Street is firmly in their sights. Along with touting proposals for wealth and income taxes aimed at the affluent, some Democrats on Capitol Hill last week unveiled a bill to impose a financial transaction tax. This particular revenue raiser, beloved by leftists in Europe, would levy a 0.1 per cent tax every time a share, bond or derivative changes hands. Supporters ranging from senators Bernie Sanders and Brian Schatz to congresswoman Alexandria OcasioCortez argue that the tax would raise much-needed revenue and force brokers, high-frequency traders and asset managers to pay their “fair share” after a decade-long bull market. Unfortunately, the average investor could end up being collateral damage. Claims that the tax will only affect the wealthiest Americans and financial institutions are misguided. The FTT is also a tax on retirement. While those that trade frequently appear to be hit hardest, studies show the tax would also significantly depress returns in the average investment portfolio and harm

many ordinary people. More than half of Americans invest in the equities market, a 2017 Gallup poll found. And roughly 20 per cent of the investors polled belong to households with less than $30,000 in annual income. The 300 largest pension funds collectively manage more than $18tn in assets, for workers, according to Willis Towers Watson. But that doesn’t mean they should be a cash register for policymakers to stick their hands in for pet projects. We must not forget that pension capital is invested in the markets to meet the needs of current and future retirees, who will need to pay for basic life necessities. If the US imposed an FTT — which is also known as a Tobin tax after the economist who first proposed a version — it would hit every transaction made by pension funds, mutual funds and other financial products favoured by ordinary people. The additional cost would almost certainly be passed on through market intermediaries and reduce returns for individual investors. It is no different to the way an import tax on fruits and vegetables would be passed on by wholesalers and supermarkets to the average grocery shopper.

My organisation, Modern Markets Initiative, has studied how an FTT could affect some of the biggest US pension funds. We used the varied tax rates from an earlier proposal, rather than the flat 0.1 per cent levy now being put forward, so the predictions are not exact. But the results underscore the potential damage. We concluded that the combined New York City employee pension funds and Calpers, the California state fund, would have to pay more than $1bn and $500m, respectively, every year. Investors in mutual funds and exchange traded funds would also incur the taxes. MMI analysts concluded that the taxes would deter at least some trading, leading to higher fees and more volatile markets as a result of reduced liquidity. Previous experiments with the FTT have failed badly elsewhere. India enacted a 0.01 per cent commodity transaction tax in 2013. By the end of 2014, the cost of futures transactions increased by 300 per cent and trading volume dropped by more than 40 per cent, according to the CME Group. Sweden also suffered volume drops when it imposed financial transaction taxes in the 1980s, so it phased them out.

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Tuesday 12 March 2019

ANALYSIS How Tencent is going from gaming to investing Portfolio of Chinese tech company is approaching value of Softbank’s Vision Fund LOUISE LUCAS

India: Narendra Modi faces a rural backlash as election looms

A prime minister who appealed to the urban middle class must now confront discontent among farmers

AMY KAZMIN

tanding amid mounds of dried soyabeans and chickpeas at Ujjain’s agricultural market, Rahul Chauhan, a 27-year-old farmers’ son, sheepishly recalls his optimism back in 2014, when Narendra Modi, whom he ardently supported, was elected prime minister of India. A graduate, Mr Chauhan was eager to escape the arduous, uncertain life of a farmer and find salaried employment. With the ascent of Mr Modi, who promised to create millions of jobs, the young villager from the central state of Madhya Pradesh felt sure his dreams would be realised. Yet today, Mr Chauhan remains dependent on his parents’ 2.7 hectares of unirrigated land to survive, having failed to secure a job in government or the private sector. Meanwhile, prices paid to his family for their annual crop of chickpeas, lentils and other legumes — all staples of the Indian diet — have sunk, as two years of bumper crops in India have coincided with a rising tide of imports. With his family now struggling financially, Mr Chauhan’s ardour for Mr Modi has turned to bitterness. “He never focused on farmers,” Mr Chauhan says, waiting for traders to bid on soyabeans harvested from his land. “He is worried only for the corporate lobby, not for us. India is an agricultural society, and a leader should work for the farmers. After this kind of performance, we will never support Modi again.” Balu Choudhury, 32, nods vigorously in agreement. In 2014, Mr Choudhury — who supports 11 family members with his 2.2-hectare farm — had encouraged his friends and relatives to vote for Mr Modi. But he, too, is disillusioned. “I thought he would make our country strong, but he has not made the farmers strong,” Mr Choudhury says. “There is zero profit for us. We are under a lot of tension.” The gloomy mood of farmers at the Ujjain agricultural market — and the low prices they receive for their pulses — reflects one of the biggest challenges now confronting Mr Modi, as he seeks a second term for himself and his Hindu nationalist Bharatiya Janata party in the upcoming general election, starting April 11. During his last campaign, Mr Modi won over both India’s expanding urban middle-class and many rural voters with compelling promises of economic modernisa-

tion, faster growth and new jobs for youth. But as he bids for re-election, the BJP — traditionally a more urban party — is facing a wave of deep discontent among farmers and other rural dwellers who account for around two-thirds of the electorate. Far from improving farmers’ lives, Mr Modi’s policies have squeezed a sector wrestling with tiny, fragmented landholdings, low yields and environmental challenges, such as water scarcity. Frustration has been compounded by the lack of jobs for youth trying to escape unprofitable farming, or at least supplement their families’ agricultural earnings. “What was given to farmers five years ago was the promise of profound transformation, which hasn’t been followed up with concrete results,” says Gilles Verniers, a political science professor at Ashoka University near New Delhi. “They raised expectations a lot and now they are likely to be punished for it.” When Mr Modi took office in May 2014, his top priority was to combat the persistent high food price inflation that had fuelled urban anger towards the previous Congress-led government. Within weeks of taking power, his government had raided traders and warehouses suspected of hoarding fruit and vegetables. New Delhi moved swiftly to curb exports of crops such as onions and potatoes. It also significantly increased imports of other products such as pulses, which continued even after record Indian pulse harvests in 2016 and 2017. While these measures succeeded in damping food prices, economists and farmer activists say this has come at a huge cost to India’s farmers, who are now getting paid less for their crops than they did a few years ago, even as their production costs, including labour, fertilisers and pesticides, have surged. “The whole effort of this government was to bring down food prices in the name of the poor, and so you have made the farmers poor,” says Ashok Gulati, an agricultural economist at the Indian Council for Research on International Economic Relations. Mr Modi’s draconian November 2016 cash ban and subsequent digital payments drive — a bid to limit tax evasion — has added to farmers’ woes. Previously, farmers received full cash payment immediately on selling their crops. But now state banks have been instructed to restrict traders’ access to cash, forcing farmers to wait days or even weeks to be paid

through the banking system. The restrictions on cash use appear to have damped wholesale commodity prices. “Rural agriculture was very cash-intensive,” says Arvind Subramanian, the government’s former chief economic adviser. “Now with all these limits on how much cash you can hold and deposit, liquidity is not as available as it used to be. Buyers don’t have access to cash, and they don’t have the power to grease the system.” The BJP’s disruption of north India’s once-thriving livestock trade — by restrictions on the interstate trade of cows, revered as sacred by devout Hindus — have also hit rural incomes. Stray cows have become a major threat to crops, requiring farmers to invest in fencing and guards. Their inability to sell aged livestock has also upended the economics of dairy farming, compounding hardships from a sharp drop in milk prices, due to a boom in domestic production — and a global glut. The erosion of farmers’ income has come amid sharply rising socio-economic expectations, fuelled by Mr Modi’s ambitious promise to double farmers’ incomes by 2022. The proliferation of satellite television and low-cost smartphones has also brought images of affluence and consumerism to once isolated rural villages. “Aspirations of farmers have increased very much and the growth in income is not keeping pace,” says Ramesh Chand, an agricultural expert with Niti Aayog, a government think-tank. “Income of farmers is rising, but it’s not keeping pace with the rate of growth of income of non-farmers.” Kedar Sirohi, a 36-year-old who owns a large farm in Madhya Pradesh and who started a farmers’ lobby group, says farmers today feel left behind if they cannot have “branded jeans”, a mobile phone for every family member and other markers of social status. “Everyone is watching TV — and they see the standard in the US and big Indian cities,” he says. “They see the screen and feel, ‘why can’t we live like that?’.” Over the past two years, a series of large farmers’ protests have ended in lethal violence. In 2016, six farmers in Madhya Pradesh were killed when police opened fire on a huge crowd agitating for higher crop prices. Agrarian discontent has also eroded the BJP’s popularity, leading to election setbacks in its stronghold of the Hindi heartland states.

encent’s $150m investment into Reddit was a big deal for the San Francisco-based online message board. But for the Chinese technology company, it was just one of more than 700 investments across the world. The Chinese company has board seats on more than 400 of those companies, according to one person close to Tencent, with 30 per cent to 40 per cent of its investments outside China. Its investment portfolio is roughly twice as big as its main Chinese rival Alibaba and dwarfs those of US peers such as Facebook and Google and Tencent has no intention of slowing down, even after a record deal spree in 2018. “Many people asked us if we

percell, the Indian ride-sharing app Ola, and Epic Games, the developer of Fortnite. One person close to Tencent said the company wants to learn from co-investors such as Google and Walmart. It also wants to stay on top of any emerging trends, and its investment team is looking at everything from UK fintech companies to South Korean games developers, the person added. “How is the internet developing? How do we develop knowledge of users? What is driving users’ use? What are the common traits?” said the person. “Basically, Tencent doesn’t want to miss the clues. It’s so easy to do that and be surprised by something new and radical. TikTok [the Chinese short video app] was a bit of a [wake-up

Tencent has invested in companies which work well with its WeChat ecosystem, including Riot Games, Supercell and Epic, as well as Reddit, Snap, Ola and delivery service Meituan Dianping © FT montage

are going to reduce our level of investments this year,” said Martin Lau, Tencent’s president, at a recent investor day. “I tell everyone right now. We will not do this.” Tencent’s investment drive is underpinned by a number of factors, said analysts and people close to the company, from building out the company’s social media and payment platforms, to global expansion. Deals are also in the DNA of its executives. Before joining Tencent, Mr Lau was an M&A banker at Goldman Sachs and James Mitchell, his chief strategy officer, worked as an equity analyst at the US bank. “When you put a basketball player in the room, you know what they’re going to do,” shrugged one venture capital investor. “If you hire Goldman Sachs bankers, you know what they are going to do.” Rather than wholesale acquisitions, Tencent prefers to buy minority stakes in companies whose products can bolt on to its WeChat and WeChat Pay platforms. One tech lawyer described the process as “feeding the empire”. Targets are often receptive: Tencent offers them the chance to reach more than a billion users. To achieve scale, they need either the Shenzhen-based company or its eastern Chinese rival Alibaba, especially in areas such as ecommerce. “It’s almost impossible to succeed in China retail without Alibaba or Tencent,” said James Root, Hong Kong-based partner at Bain & Co. Overseas, Tencent has taken high-profile stakes in Tesla, the social media app Snap, the Finnish mobile games maker Su-

call].” While investing in the US is conventionally seen as difficult for Chinese companies, because of scrutiny from the Committee on Foreign Investment in the US, Europe is more fragmented, has tougher data privacy regulations and fewer large tech targets. Tencent’s hunting grounds in south-east Asia and India are also becoming more tightly regulated, a worrying development for a company that is looking beyond China because of the cooling support for tech in its home country. Mr Lau gave a hint of the extent to which investments are powering the $420bn giant when he revealed that the total market capitalisation of companies in which it holds stakes in excess of 5 per cent now exceeds $500bn. Given its 17-20 per cent stakes in some of its biggest investees, such as food delivery group Meituan Dianping and ecommerce group Pinduoduo, that implies a portfolio value of more than $70bn, according to Bernstein Research — approaching the size of Softbank’s far higher profile Vision Fund. That has not escaped the notice of critics who view investments as an admission of defeat and proof that Tencent no longer has ambitious dreams. In ecommerce, for example, Tencent acquired stakes in JD.com and other players after failing to launch its own standalone player. It is a view that was dismissed by Mr Lau: “I personally think that if we want to control everything and want to do everything ourselves, this is not a dream,” he told delegates. “This is a delusion.”

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understanding the economy of nigeria’s 36 states

he purpose of this series is to present evidencebased picture of Nigeria vis-a-vis the current presentations by politicians and various interest groups which are not backed by facts and figures. Such presumptuous speculations have driven the various national discourses or debates on the future of Nigeria, including such thorny issues as restructuring, whether fiscal, political, geographical or administrative. Facts are sacred, they say, and as such must be given priority in our search for national viability and survival.

‘Understanding the Economy of Nigeria’s 36 States’ series presents such an objective, dispassionate picture of the state of the economy and so viability and sustainability of the various component parts, sub-nationals or federating units of the country going forward. This series will serve to either buttress or discountenance some of the claims made on both sides of the restructuring argument. The series, written by Cambridge-trained economist, Dr. Ayo Teriba, looks at each state at a glance in the

context of its geopolitical zone and as it compares to other states. The data present irrefutable facts about each region and its component states and raise the question: are they viable as constituted today and going forward? Each series examines a state’s realities from the perspectives of economy, resource endowment, state of wellbeing of its populace, and its budget (revenue and expenditure profile). Today’s edition covers an overview of Nasarawa State and Plateau State in the North-Central region.

Nasarawa Nasarawa State Summary • Economy Nasarawa’s GSP was 1.1 percent of Nigeria’s GDP in 2017, 4th in the North-Central, 11th in North and 19th in the country. Agriculture made up 75 percent of the State’s GSP, Services was 24 percent and Non-Oil Industry was 1 percent. • Endowments Nasarawa’s Land Area is 3.15 percent of Nigeria’s land mass, the 4th in North-Central, 12th in the North and the country. Without a coastline or a boarder, Nasarawa is landlocked by five States; three from its own region (Benue, FCT, and Plateau) Taraba from the North-East and Kaduna from North-West.

* N299.9 billion Service output in the State was 0.5 percent of Nigeria’s Service output, the 7th in North-Central, 19th in the North and 36th in Nigeria. Inter-State Comparisons With a Gross State Product (GSP) of N1.2 trillion or 1.1 percent of Nigeria’s GDP in 2017, the 4th in the North-Central, 11th in North and 19th in Nigeria. The State’s 2.7million Population is 1.3 percent of national population, the 7th among the States in the North-Central, 19th in the North, and 35th in Nigeria. Nasarawa’s 28,700/km2 Land Area is 3.15 percent of Nigeria’s land mass, the 4th in North-Central, 12th in the North and the country. The State’s N42.6billion Revenue is 1.4 percent of all States’ total revenue, 7th in the North-Central, 20th in the North and 36th among the 36 States and the FCT.

• Wellbeing Nasarawa’s population is 1.6 percent of national population, the 6th most populated in the NorthCentral, 19th in the North, and 35th in Nigeria. The 33rd most densely populated State, 22nd in literacy and 23rd life expectancy of 49 years in the country. The State’s Per Capita GSP of N467 thousand is the 3rd in the North-Central, 6th in the North and 11th in the country. • Budget The State retained 1.4 percent of States’ revenue in 2017, 36th in the country, spent 1.5 percent of States’ outlays, 26th in the country, incurred an overall deficit, and held 2 percent of States’ total debt, 22nd in the country.

1. Economy

Structure Nasarawa’s estimated Gross State Product (GSP) in 2017 was N1.2 trillion or 1.1 percent of Nigeria’s GDP in 2017, the 4th in the North-Central, 11th in North and 19th in the country. Agriculture made up 75 percent of the State’s GSP, Services was 24 percent and Non-Oil Industry was 1 percent.

2. Endowments Nasarawa State was carved out of Plateau State in 1996. The State is without a boarder or a coastline but bounded by five States and the FCT: Kaduna to the North, Taraba and FCT to the West, Kogi and Benue to the South and Plateau to the Northeast. Nasarawa State’s 28,700/km2 land area is 3.15 percent of Nigeria’s land mass, the 4th in NorthCentral, 12th in the North and the country. Major towns and cities are; Lafia, Doma, Karu, Keffi, Kokona, Nasarawa, Toto, Wamba, Akwanga, Awe, Doma, Obi and Keana.

* N962.8 billion Agricultural output in the State was 3.87 percent of all agricultural output in the country, 3rd in the North-Central, 9th in the North and in Nigeria. • N917.7 billion in crops was 99 percent of the State’s agricultural output, • N8.7 billion in livestock was 1 percent and • N0.3 billion in fishery was 0 percent/negligible, • Forestry is Nil. * Nasarawa State’s N16.2 billion 2017 Non-Oil Industrial output was 0.1 percent of the gross Non-Oil Industrial output in Nigeria, the least in the North-Central, 19th the North and 36th in the Country. Manufacturing (majorly Food, Beverage and Tobacco) and Construction were 98 percent of the State’s non-oil output.

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understanding the economy of nigeria’s 36 states 3. Wellbeing

4.1.2.1 Revenue Nasarawa State’s 2017 Actual total revenue of N42.6 billion was 1.4 percent of all States’ actual total revenue, 6th in the North-Central, 20th in Northern Nigeria and 36th among the 36 States and FCT. The revenue components in 2017 were: • Statutory Allocations of N26.1 billion was 1.79 percent of the total allocations to all States and the FCT, 6th in the North-Central, 19th in the North and 23rd in the country. • Internally Generated Revenue of N4.4 billion was 0.58 percent of total, the least among the NorthCentral States, 16th in the North and 32nd in Nigeria. • Value Added Tax of N8.6 billion was 1.8 percent of States’ total, 7th in the North-Central, 20th in the North, and the 37th among the 36 States and FCT. 4.1.2.2 Spending Actual total expenditure of N56.2 billion in the State was 1.5 percent of actual total spending by all States, the 5th in the North-Central, 15th in the North and 26th in the country. The spending components in 2017 were: • Recurrent Spending of N47.8 billion, 1.8 percent of the recurrent outlays of all the States and the FCT, the 4th in the North-Central, 12th in the North, and 21st in the country. • Capital Spending of N8.5 billion in the State was 0.8 percent of States and FCT’s total capital outlays, the 6th in North-Central, 17th in the North and 32nd in Nigeria. 4.1.2.3 Deficits Nasarawa State is one of the 25 States and FCT that had deficits in 2017. The State made an overall deficit of N13.6 billion, the 4th among these States, 11th among the 17 State that had deficits in the North and 16th among the States that had deficits in the country. 4.1.2.4 Debt Total outstanding debt of N90.5 billion in the State was 2.0 percent of the States and FCT’s total debts, the 4th in the North-Central, the 12th in the North and 22nd in the country. • Domestic Debt of N71.4 billion in December 2017 was 2.1 percent of States and FCT’s domestic debts, the 5th in the North-Central, 8th in the North and 19th in the country. • Foreign Debt of N19.2 billion in December 2017 was 1.5 percent of the total foreign debts of the States and FCT, the highest in the North-Central, 6th in the North and 18th in the country. 4.1.3 2013-2017 Trends Total Revenue: Total Revenue declined from N55.7 billion in 2015 to N42.6 billion in 2017. The bulk of the slump in revenue came from gross statutory allocations (GSA) and internally generated revenue, while value added tax grew slightly.

Nasarawa State’s 2.7 million Population is 1.6 percent of national population, the 6th most populated in the North-Central, 19th in the North, and 35th in Nigeria. With a land area of 28,700 per km2, density in Nasarawa State is 93 people per km2 compared to the country average of 219/km2, the 6th in the North-Central, 16th in the North and 33rd among the 36 States and the FCT. Literacy in Nasarawa is the 5th in North-Central, 6th in the North and 22nd in the country. The State’s life expectancy of 49 years is 4th in the North-Central, 8th in Northern Nigeria, and 23rd in Nigeria. Nasarawa’s female life expectancy of 52 years is 4th in the North-Central, 7th in the North and 16th among the 36 States and FCT. Male life expectancy of 45 years is the 5th in the North-Central, 15th in the North and 31st in Nigeria. The State’s Per Capita GSP of N467 thousand is the 3rd in the North-Central, 6th in the North and 11th in the country.

Nasarawa’s Total Spending: Total spending rose slightly N53.5 billion in 2014 to N56.2 billion in 2017. Recurrent grew from N42.5 billion in 2014 to N47.8 billion in 2017, while capital spending dropped from N11 billion in 2014 to N8.5 billion in 2017.

4. Budget 4.1. Fiscal Realities of Nasarawa 4.1.1 2018 Aspirations Nasarawa State’s 2018 budget of N125.4 billion is 1.3 percent of all States’ and FCT’s 2018 budget, 6th in North-Central, 16th among the Northern States, and 31st among the 36 States and FCT. 4.1.2 2017 Realities

Revenue Use: Recurrent spending has been higher than total revenue since 2015 and deficits have been incurred to fund some recurrent items and the reduced capital outlays. Financing: • Revenue financing: overall surplus of 4.1 percent of total revenue in 2014 gave way to an overall deficit of 31.9 percent of total revenue in 2017. • Spending finance: overall surplus of 4.3 percent of total spending in 2014 gave way to an overall deficit of 24.2 percent of total spending in 2017. • Capital budget: overall surplus of 20.9 percent of capital budget in 2014 gave way to an overall deficit of 160 percent of capital budget in 2017. Nasarawa’s Debt • Domestic debt stock has more than doubled from N28.8 billion in 2013 to N71.4 billion in 2017; from 51 percent of revenue in 2013, to 167.5 percent in 2017. • Foreign debt stock rose from N7.4 billion in 2013 to N19.2 billion in 2017; from 13.4 percent of revenue in 2013 to 45.1 percent in 2017. • Total debt stock rose from 65.2 percent of revenue in 2013 to 212.6 percent in 2017.

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understanding the economy of nigeria’s 36 states

Plateau Plateau State Summary • Economy Plateau’s GDP was 0.6 percent of Nigeria’s GDP in 2017, 6th in the North-Central, 17th in North and 31st in the country. Services were 68 percent of GSP, Agriculture, 18 percent and Industry, 14 percent. • Endowments The State’s land area is 2.98 percent of Nigeria’s land mass, 6th in the North-Central, 15th in the North and the country. Without coastline or boarder, Plateau is landlocked among four States; Nasarawa from its region, Bauchi and Taraba from the North-East, and Kaduna from the North-West.

the North-Central States, 14th in the North and 26th in Nigeria. Inter-State Comparisons With a Gross State Product (GSP) of N704.1 billion or 0.6 percent of Nigeria’s GDP in 2017, the 6th in the North-Central, 17th in North and 31st in Nigeria. Plateau’s 4.5million Population is 2.27 percent of national population, the 4th most populated among the States in the North-Central, 13th in the North, and 25th in Nigeria. 27,100/km2 Land Area of the State is 2.98 percent of Nigeria’s land mass, the 6th in the North-Central, 15th in the North and the country. N50billion Revenue in the State is 1.6 percent of all States’ total revenue, the 6th in the North-Central, 17th in the North, and 31st in the country.

• Wellbeing The State’s population is 2.27 percent of national population, 5th in the North-Central, 13th in the North, and 25th in Nigeria. Plateau is 27th most densely populated in the country, 18th in literacy, and 33rd life expectancy of 46 years in Nigeria. Plateau has the least Per Capita GSP in the North-Central, 18th in the North and 32nd in the country. • Budget Plateau retained 1.6 percent of States’ revenue in 2017, 31st in the country, spent 2 percent of States’ outlays, 20th in the country, incurred a deficit, and held 2.9 percent of States’ total debt, 13th in the country.

1. Economy Structure Plateau’s estimated Gross State Product (GSP) in 2017 was N704.1 billion or 0.6 percent of Nigeria’s GDP, 6th in the North-Central, 17th in North and 31st in Nigeria. Services were 68 percent of the GSP, Agriculture, 18 percent and Non-Oil Industry, 14 percent.

2. Endowments Plateau State was created when Benue-Plateau State was divided into Benue and Plateau States in 1976. Plateau State was further divided into Plateau and Nasarawa States in 1996. Plateau has no coastline or a boarder but is bounded by four States, Bauchi to the North, Kaduna to the West, Taraba to the East, Nasarawa to the South. Plateau States 27,100/km2 land area is 2.98 percent of Nigeria’s land mass, the 6th in the NorthCentral, 15th in the North and the country. Major towns and cities are; Bassa, Jos, Kanam, Kanke, Wase. Mangu, Barkin Ladi, Bokkos, Shendam, Riyom, Mikang, Langtang,

* N124.6 billion Agricultural output in the State was 0.52 percent of all agricultural output in the country, the 5th in the North-Central, 17th in the North and 24th in Nigeria. • N64.8 billion in livestock was 52 percent of the State’s agricultural output, • N59.6 billion in crops was 48 percent and • N0.3 billion in fishery was 0 percent/negligible, • Forestry is Nil. * The State’s N102.7 billion 2017 Non-Oil Industrial output was 0.7 of all non-oil industrial output in the country, 5th in the North-Central, 8th in the North and 16th in Nigeria. Utilities (mainly Electricity and Water) was 66 percent of the State’s non-oil, manufacturing (majorly Food, Beverage and Tobacco and Textile, Apparel and Footwear) was 23 percent, and Construction was 11 percent. * N476.8 billion Service output in the State was 0.7 percent of Nigeria’s Service sector, 6th among

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understanding the economy of nigeria’s 36 states 3. Wellbeing

4.1.2.1 Revenue The State’s 2017 Actual total revenue of N50 billion was 1.67 percent of all States’ actual total revenue, 6th in the North-Central, 17th in the North and 31st among the 36 States and FCT. The revenue components in 2017 were: • Statutory Allocations of N29.6 billion was 2.02 percent of the total allocations to all States and the FCT, 5th in North-Central, 13th in the North, and the 23rd in the country. • Internally Generated Revenue of N6.5 billion was 0.85 percent of total, the 4th among the NorthCentral States, 9th in the North and 24th in Nigeria. • Value Added Tax of N10.0 billion was 2.1 percent of States’ total, the 3rd in North-Central, 10th in the North, and 22nd in the country. 4.1.2.2 Spending Actual total expenditure of N75.2 billion in the State was 2.04 percent of actual total spending by all States, the 3rd in the North-Central, 10th in the North and 20th in the country. The spending components in 2017 were: • Recurrent Spending of N56.0 billion was 2.1 percent of the recurrent outlays of all the States and the FCT, 3rd in the North-Central, 10th in the North, and 19th in the country. • Capital Spending of N19.2 billion in the State was 1.8 percent of States and FCT’s total capital outlays, the 4th in North-Central, 11th in the North and 19th in Nigeria. 4.1.2.3 Deficits Plateau State is one of the 25 States and FCT that had deficits in 2017. The State made an overall deficit of N25 billion, 3rd among the 5 States that had deficit in the North-Central, 10th among the 17 State that had deficits in the North and 14th among the States that had deficits in the country. 4.1.2.4 Debt Total outstanding debt of N131.9 billion in the State was 2.9 percent of the States and FCT’s total debts, the highest in the North-Central, 2nd in the North, and 13th in the country. • Domestic Debt of N122.3 billion in December 2017 was 3.7 percent of States and FCT’s domestic debts, the highest in the North-Central, and the North, 9th in Nigeria. • Foreign Debt of N9.17 billion in December 2017 was 0.7 percent of the total foreign debts of the States and FCT, 7th in North-Central, 17th in the North and 34th in the country.

Plateau State’s 4.5million Population is 2.27 percent of national population, 5th in the NorthCentral, 13th in the North, and 25th in Nigeria. With a land area of 27,100/km2, Plateau State’s density is 167 people per km2 compared to the country average of 219/km2, 4th most densely populated in the North-Central, 10th in the North and 27th in Nigeria. Literacy in the State is 3rd in the North-Central and the North, 18th in the country. The State’s life expectancy of 46 years is 6th in the North-Central, 16th in Northern Nigeria, and 33rd in Nigeria. Female life expectancy of 48 years is the least in the North-Central, 18th in the North and 35th in the country. Male life expectancy of 43 years is likewise the least in North-Central, 18th in the North and 35th in Nigeria. The State’s Per Capita GSP of N155 thousand is the least in the North-Central, 18th in the North and 32nd in the country.

4.1.3 2013-2017 Trends Plateau’s Total Revenue: Total Revenue declined from N68.7 billion in 2014 to N50 billion in 2017. The slump in revenue came from gross statutory allocations (GSA) and internally generated revenue while value added tax proved resilient in the face of global oil price slump and concomitant recession in the national economy.

Plateau’s Total Spending: In the face of falling revenue, total spending increased from N65 billion in 2014 to N75.2 billion in 2017: recurrent spending increased from N35.7 billion in 2014 to N56 billion in 2017 but capital spending declined from N29.4 billion in 2014 to N19.2 billion in 2017.

4. Budget 4.1. Fiscal Realities of Plateau State 4.1.1 2018 Aspirations Plateau State’s N146 billion 2018 budget is 1.57 percent of all States’ and the FCT’s 2018 budget, 4th in North-Central, 12th in the North, and 26th among the 36 States and FCT. 4.1.2 2017 Realities Revenue Use: Plateau State has posted current and overall deficits since 2016. Financing: • Revenue financing: overall surpluses of 5.3 percent of total revenue in 2014 and 13.9 percent in 2015 gave way to overall deficits of 50 percent of total revenue in 2017. • Spending finance: overall surpluses of 5.6 percent of total spending in 2014 and 14.4 percent in in 2015 gave way to an overall deficit of 33 percent of total spending in 2017. • Capital budget: overall surpluses of 12.5 percent of capital budget in 2014 and 151.3 percent in 2015 gave way to an overall deficit of 130.2 percent of capital budget in 2017. Plateau’s Debt • Domestic debt stock more than doubled from N52.4 billion in 2013 to N122.3 billion in 2017, from 66 percent of revenue in 2013, to 244.7 percent in 2017. • Foreign debt stock rose from N3.5 billion in 2013 to N9.1 billion in 2017, from 4.4 percent of revenue in 2013, to 18.4 percent in 2017. • Total debt stock rose from 70.5 percent of revenue in 2013 to 263.1 percent in 2017.

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Tuesday 12 March 2019

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Tuesday 12 March 2019

Live @ The Exchanges Market Statistics as at Monday 11 March

Top Gainers/Losers as at Monday 11 March 2019 LOSERS

GAINERS Company

Company

Opening

Closing

Change

NASCON

N20

N21.7

1.7

NESTLE

CADBURY

N11

N12.1

1.1

OKOMUOIL

N22.45

N22.75

0.3

WAPCO

ZENITHBANK FLOURMILL

N19

N19.25

0.25

ASI (Points)

Opening

Closing

Change

N1510

N1480

-30

N80

N79

-1

N12.95

N12.5

-0.45

N14

N13.7

-0.3

VALUE (N billion)

N27

N26.7

-0.3

MARKET CAP (N Trn

ETI INTBREW

DEALS (Numbers) VOLUME (Numbers)

31,636.66 2,752.00 128,374,226.00 2.386 11.797

Global market indicators FTSE 100 Index 7,127.09GBP +22.78+0.32% S&P 500 Index 2,775.61USD +32.54+1.19% Generic 1st ‘DM’ Future 25,545.00USD +17.00+0.07%

Investors lose N108bn as stock market opens week on negative note Stories by Iheanyi Nwachukwu

t the sound of closing gong on Monday, March 11 at the Nigerian Stock Exchange (NSE), the equities market indicator showed negative. The All Share Index (ASI) which is the benchmark performance indicator of the NSE depreciated by 0.90percent to 31,636.66points as against 31,924.51 points recorded the preceding trading day. The market’s Year-toDate (YtD) returns stood at +0.66percent. The value of listed equities decreased from N11.905trillion to N11.797trillion, losing ap-

proximately N108billion. No fewer than 14 stocks gained as against 19 losers.

Nestle Nigeria Plc recorded the highest decline after its share price dipped from

NOVA Merchant Bank declares N1.15bn in profit after tax …continues to focus on scaling its business

OVA Merchant Bank Limited has declared a profit after tax (PAT) of N1.15 billion for the year ended December 31, 2018, a significant increase from N510.6 million achieved in 2017, marking a 125percent increase. The result is achieved as it begins to reap the benefits of its investments in its operations, technology and people. The impressive result demonstrates the Bank’s growth trajectory which is expected to accelerate as it scales its business and grows its client base. NOVA achieved strong growth across all parameters. The Bank recorded a 54.10percent growth in gross earnings from N1.22billion in 2017 to N1.88billion. The bank further grew the total assets by 38.89percent from N18bn to N25billion between 2017 and 2018.

This impressive performance marks a very successful year for the newly licensed merchant bank which recently deployed a state of the art and fully digital core banking application. The Bank also recorded remarkable growth in customer acquisition and in line with its objective to be the employer of choice, promoted about a third of its workforce. Anya Duroha, the MD/ CEO, commented “Our stellar results are a culmination of the hardwork, commitment, resilience, discipline and resourcefulness of all our employees. We have been able to drive strong customer acquisi-

tion and deploy leading edge technology whilst optimising our costs. We will continue to focus on growing our business, providing solutions tailored to our clients’ needs, building a high performance culture, motivating our employees and creating sustainable value for our shareholders”. Remarking on the results, Phillips Oduoza, Chairman of NOVA Merchant Bank said “We have been able to build a strong foundation for the success of the Bank and approach the future with confidence and optimism in our business model, value proposition, clients and employees. We remain committed to the implementation of our over-arching philosophy of ‘New Thinking, New Opportunities’ to create value for all our stakeholders.” The Bank will continue to strive to deliver profitable, responsible and sustainable growth.

N1510 to N1480, down by N30 or 1.99percent. Okomuoil Plc was also

down from N80 to N79, losing N1 or 1.25percent; while Lafarge Africa Plc decreased from N12.95 to N12.5, down 45percent or 3.47percent. In 2,752 deals, stock traders exchanged 128,374,226 units valued at N2.386billion. FBN Holdings, Zenith Bank Plc, UBA Plc, Access Bank Plc and GTBank Plc were actively traded stocks on the NSE. Nascon Plc stock price increased from N20 to N21.7, adding N1.7 or 8.50percent; Cadbury Nigeria Plc increased from N11 to N12.1, adding N1.1 or 10percent; while Zenith Bank Plc moved up from N22.45 to N22.75, adding 30kobo or 1.34percent.

NSE releases statement on Lagos State Government’s N4.85bn Municipality Note

he Nigerian Stock Exchange (NSE) has responded to publications with respect to the Lagos State Government’s N4.85 Billion, 15.75% Series 1, Tranche B, Environmental Note (Municipality Note) and the alleged default in repayment of the coupon and principal on the Municipal Note due on Tuesday March 5, 2019. The Exchange recognizes that the publications if not addressed has the likelihood of dampening investors’ confidence in the Nigerian capital market. “Information garnered by The Exchange in the wake of the media publications reflects that the Municipality Note was issued under a N50billion Medium Term Note Programme by Municipality Waste Management Contractors Limited, a privately owned company promoted by Visionscape Sanitations Solutions Limited”, the NSE said. “We wish to inform the investing public and our stakeholders that the Municipality Note was not listed on The Nigerian

Stock Exchange. As part of its regulatory oversight to safeguard investors in the Nigerian capital market, “The Exchange takes steps to satisfy itself that the financial and other advisers have done due diligence on all financial instruments listed on The Exchange in order to ensure that the obligations attached to those instruments are met as and when due”, it noted. The NSE further stated, that “As part of the requirements for the issuance and the listing of similar debt instruments, The Exchange requires that a Guarantee on the revenue of the State Government is issued, in addition to an approval of the State House of Assembly to back the Notes.” “The established requirements are necessary to ensure that the risk of default on such instruments when listed on The Exchange is reduced to the barest minimum. Please be assured of The Exchange’s commitment to maintaining a fair, efficient and transparent market that guarantees the protection of investors’ rights,” the Exchange stated.

Deutsche Boerse AG German Stock Index DAX 11,545.48EUR +87.64+0.76% Nikkei 225 21,125.09JPY +99.53+0.47% Shanghai Stock Exchange 3,026.99CNY +57.13+1.92%

Lafarge Africa Rights Issue records 100% subscription

afarge Africa Plc has announced the results of its just concluded Rights Issue, which it said recorded 100percent subscription. Lafarge Africa issued to existing shareholders 7,434,367,256 ordinary shares of 50 kobo each on the basis of six (6) ordinary shares for every seven (7) ordinary shares held as at December 4, 2018 at N12per share. The Rights Issue which had opened on December 17, 2018 and closed on January 28, 2019, recorded a total of 1,826 acceptances for 7,434,367,256 units valued at N89.212billion were received in connection with the Rights Issue. 1,734 shareholders accepted their Rights in full totaling 5,931,501,457 ordinary shares, out of which 738,731,071 ordinary shares were traded on the floor of the Nigerian Stock Exchange. 92 shareholders with a provisional allotment of 395,875,060 ordinary shares partially accepted their Rights for 202,401,994 ordinary shares, thus the balance of 193,473,066 ordinary shares were renounced; 34 subscribers purchased Rights of 738,731,071 Ordinary Shares on the floor of the Nigerian Stock Exchange. Of the 1,734 shareholders who took up their Rights in full, 734 shareholders also applied for additional 1,300,463,805 ordinary shares and were allotted in full from the renounced Rights. A total of 1,106,990,739 ordinary shares were fully renounced bringing the total number of shares renounced to 1,300,463,805 ordinary shares.

Tuesday 12 March 2019

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INSIGHT/INNOVATION

It is the “government” that should live within its means

OGHO OKITI

midst the recent electioneering, a major national debate sprung up. It was the argument that Nigerians should live within their means. This is a common advice by every sound financial adviser. The reason is simple. Experience has shown over time that those that live beyond their means, especially if they consistently do, will tend towards poverty. Why? Because living beyond your means is tantamount to borrowing from the resources of others in order to fund your appetite for instant gratification. So, to live within your means is a very sound economic advice for the individual. The source of the advice can be found in the bible – see Philippians 4: 11; and 1 Timothy 6: 6 – 8. Both passages admonish us to be contented with what we have. In life, there is limitation to everything. In economics, the source of this advice can be traced to the notion that human wants are insatiable while the resources to meet those wants are limited (scarce). So, acknowledging that you cannot meet all your wants is a critical recognition that you need to live within your means. Because all human

wants has to be satisfied from a limited supply, it means there is not enough to satisfy all. At every point all that we want are much more than we can possibly achieve with existing means. Now, the President ignited this debate when he encouraged Nigerians to live within their means. But contexts matter. Unfortunately, the comment came in response to worsening poverty indices in the country, suggesting it was Nigerians’ fault that they were poor. Also coming within an electioneering period means that it became an extraordinary debate between strong adherents and opponents of Mr. President. The adherents see in the admonition the wisdom of the father of the nation, admonishing his children to live within their means. The opponents see a characteristic hypocrisy of the President and the generality of Nigerian politicians and public service holder preaching something else, but doing an entirely different thing in private. For instance, in a Chatham House speech in 2015, President Buhari said, “What is the difference between me and those who elected us to represent them? Absolutely nothing! Why should the Nigerian President not fly with other Nigerian public? Why do I need to go for foreign medical trips if we cannot make our hospital functional? Why do we need to send our children to school abroad if we cannot develop our universities to compete with the foreign ones?” Juxtaposed with the opulence and extravagance of public officers at the time, this statement resonated with Nigerians, and he was elected President. However, it has turned out that it is either the

President did not write the speech, nor convinced about it, or simply forgot it. He has not followed any of his admonitions. But these largely personal omissions mask even greater policy and government failure. Let me provide three contexts we see and or should expect to see. First, let me provide a caveat. Please note here that the context and the understanding of the statement is that it is static. This means that the President is not referring to a dynamic situation. As we all know, in a dynamic situation, all variables can change. So, without making a judgment of the policy today, living within your means should not motivate the government to pursue its social programmes such as N Power, Trader Moni etc (Yes, I have criticised trader moni as a pedestrian economic policy in the past). All these policies are motivated by the notion that the poor needs a helping hand. The second is my expectation for the coming four years. Our patience, both as a collective and as individuals will be tested like never before. Given the current trend in oil prices, there is no doubt in my mind that the government will not be able to borrow like it did in the last three years. Indeed, in 2016, the idea was for the government to borrow US $3.5 billion from development institutions at a rate of 1.5%, but this fell apart because the government could not meet the conditions of the International Monetary Fund (IMF) and the World Bank for critical economic reforms. Consequently, the government decided to approach the international capital markets, where

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Given the current trend in oil prices, there is no doubt in my mind that the government will not be able to borrow like it did in the last three years

the conditions are rather loose but the yields are higher. But in the coming four years, it will be relatively difficult to borrow extensively as we did in the last three years, so we will be asked to live within our means. Third, as the new minimum wage is expected to be in place in the coming weeks, I expect that the effect will be similar to that of 2011. The irony will also not be lost on the governors. Just as it was in 2011, the 2019 revision is coming at the back of a weak global oil prices. Indeed, the increase in minimum wage will be a culmination of the fiscal crisis that escalated in the states since the significant decline in oil prices in 2015. Between 2015 and 2018, the states have been preoccupied with servicing basic obligations such as salaries and pensions, with limited funds for infrastructure. During the period also, many states have become major debtors, with unsustainable debt stock and servicing. They have largely survived though bailouts from the federal government, restructured bank loans and budget support facility. They will also be expected to live within their means. However, in conclusion, experience have shown over time that when the government is asked to live within its means, it does not mean that they reduce nor cut the scale of their own privilege lifestyles. It is this realisation that Mr. President is no different that made the suggestion sound hollow. I thank you. Dr. Okiti is the president, Time Economics Ltd @ Dr_Okiti 081.7153.0058

Reforming the ease of doing business in Nigeria Ben Okpanachi

mall and Medium Scale Enterprises (SMEs) are the engine of the economy and contribute in no small measure to job creation, GDP growth and also ensure that there is a proper flow of money across the economy. That is why it is essential to create a robust regulatory environment as well as improve the ease with which businesses are conducted to enable private enterprises, especially SMEs, to flourish. This is even more important now with Nigeria battling high unemployment rate and a demographic time-tomb. For the country to be able to create jobs for its teeming youth population, SMEs and businesses must flourish and for SMEs to flourish, the ease of doing business must improve. To help countries in this important area, the World Bank Group produces a report, “Doing Business” which compares business regulation for domestic firms in 189 countries under seven rubrics: starting a business, dealing with construction permits, getting electricity, registering property, trading across borders, enforcing contracts, and resolving insolvency. Ease of Doing Business in Nigeria score averaged 145.09 from 2008 to 2018, reaching an all time high of 170

in 2014 and a record low of 120 in 2008. For instance, it takes 5 days to start a business in Rwanda while in Nigeria, the least is 28 days. Also, Nigeria’s cost to export is around $786 compared to Rwanda’s that is a mere $183. On coming to power in 2015, the government, as part of its determination to reduce the country’s reliance on oil and enable businesses to flourish, decided to reform the business environment by working on the rubrics to improve Nigeria’s ease of doing business. In July 2016, the government inaugurated the Presidential Enabling Business Environment Council (PEBEC) chaired by the Vice President, Yemi Osinbajo with Minister for industry, trade, and investment, Okey Enalema, serving as vice chair. To show its seriousness towards implementation, a secretariat – the Enabling Business Environment Secretariat (EBES) – domiciled in the office of the Vice President, was set up to drive implementation. A departure from the past was the decision of the PEBEC to adopt a global best practice model with performance tracking elements which is measured by the World Bank Ease of Doing Business Index (DBI). On February 21, 2017, the first 60day National Action Plan, which contained initiatives and actions to be implemented by ministries, department and agencies, the National Assembly, and some state governments and the private sector. Two other National Action Plans (NAPs) were launched

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In 2017, Nigeria was among the top 10 reforming economies in the world after years of decline

between 2017 and 2018. Some of the reforms targeted by the plans include eliminating the manual registration process at the Corporate Affairs Commission in some states, increased access to credit for SMEs by registering at least 300 micro-finance banks on the collateral registry, reduce challenges faced by SMEs when getting credit, paying taxes and the elimination of illegal roadblocks on major trading routes across the country. Others include clearance of all pending NAFDAC registration applications to improve efficiency; and creation of a strengthened single joint cargo examination interface in all airports & seaports for import and export to reduce the time spent at the ports. These plans, confirmed to have been largely implemented, have resulted in significant progress over the past three years. For instance, Nigeria moved up 24 places in the World Bank’s ease of doing business index 2018. It moved up from the 168th position in 2017 to 145th in 2018 scoring 52.03 out of 100. Encouraged by the successes, the PEBEC commenced the fourth 60-day National Action Plan (NAP 4.0) to run from March 1st to April 29th 2019. NAP 4. 0 is aimed at reducing “the challenges encountered by SMEs and businesses in identified areas of focus such as starting a business, getting credit, paying taxes, enforcing contracts or trading within and across borders, amongst others, by eliminating critical bottlenecks and constraints to doing business in Nigeria.”

NAP 4. 0 is expected to strengthen the ongoing reforms and drive institutionalization, which will ensure the sustainability of the reforms. Clearly, many challenges and bottlenecks remain: companies continue to grapple with high production costs and low demand, SMEs and critical businesses have been shedding jobs and many have been closing shop. They are yet to begin to feel the impact of Nigeria’s improvement in the ease of doing business ranking. However, the reforms and their timely implementation offer hope. In 2017, Nigeria was among the top 10 reforming economies in the world after years of decline. What is needed is a sustained effort at reforms to gradually dismantle the bottlenecks and improve Nigeria’s business climate. But make no mistake, Nigeria’s business climate needs to improve. The country faces a clear existential challenge with a record unemployment and youth-unemployment challenge. The government cannot create the jobs needed to take these youth out of the streets. Only the private sector, and mainly SMEs can. Therefore, everything must be done to improve the business environment to enable more of these businesses to spring up, survive and flourish. The PEBEC, its secretariat, MDAs, concerned private sector participants and all must work round to clock to deliver on the reforms targets. Okpanachi writes from Abuja

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