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news you can trust I **WEDNESDAY 12 SEPTEMBER 2018 I vol. 15, no 138 I N300

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Foreign Exchange

$-N 357.00 360.50 Market Spot ($/N) £-N 460.50 468.50 I&E FX Window 363.07 €-N 409.50 417.50 CBN Official Rate 306.25

3M 6M 0.14 0.00 12.94 12.46

Currency Futures ($/N)

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Treasury Bills 0.18

10 Y 0.00

20 Y 0.00

15.27

15.24

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

0.00 363.50

0.00 364.40

Stock market fall wipes away investors’ wealth MTN lawsuits seek IHEANYI NWACHUKWU, Emeka Ucheaga, SOBECHUKWU EZE & OGHOGHO EDOSOMWAN

uture spending power of Nigerian stock investors is on the high end of the risk curve as their wealth is being eroded by the market rout. The wealth effect from the stock market — that is, the extent to which equity price appreciation juices consumer spending, has largely turned negative in 2018. “We expect a choppy theme to guide proceedings amid reports that the CBN has debited the accounts of the four banks

Equities down N3trn from January peak declaration that 2018 pre-election selloff now worst ever AGF actions illegal, unconstitutional

…says AGF ursups FIRS, Customs …CBN lacks powers to penalise Telcos Odunayo oyasiji

he two law suits filed by MTN Nigeria against the Attorney General of the Federation (AGF) and Central

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Inside Apapa gridlock: Firms close offices as businesses count losses P. 4

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L-R: Ken Opara, national treasurer, CIBN; Tokunbo Martins, director, other financial institutions, CBN; Peter Amangbo, MD, Zenith Bank; Uche Olowu, president/chairman, CIBN; Joseph Nnanna, deputy governor, economic policies and representative of Godwin Emefiele, CBN governor; Emeka Emuwa, MD, Union Bank; Yvonne Isichei, member, governing council, CIBN, and Deji Olanrewaju, national treasurer, CIBN, at the 11th Banking and Finance Conference in Abuja, yesterday.

Road to 2019: Ambode’s political future hangs in balance Tony Ailemen, KEHINDE AKINTOLA, Abuja & Iniobong Iwok, Lagos

he political future of Akinwunmi Ambode, the governor of Lagos state is currently in the balance after rumours yester-

... PDP woos Otedola, Dogara unsure of platform … Buhari receives nomination form day that the national leader of the All Progressives Congress (APC), Bola Ahmed Tinubu is

withdrawing his support for his second term bid. This is despite the fact that the

governor had on Monday picked his nomination form to contest Continues on page 37

Stop treating staff loans as payroll, CBN tells lenders, merchant, non-interest banks ... Need National, State Assembly approval for loan guarantees HOPE MOSES-ASHIKE

he Central Bank of Nigeria (CBN) on Tuesday directed all deposit money banks, merchant banks and noninterest banks to cease treating all categories of staff loans as Continues on page 37

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Ladol sues Samsung Heavy Industries, declines to renew license DIPO OLADEHINDE

adol, a Nigerian logistics company that operates a hub for the offshore oil industry, has started a court action against Samsung Heavy Industries Co. Ltd. and said it’s ending ties with the South Korean ship-builder, Bloomberg reported. “Samsung’s contract expired and due to the failure to meet the minimum standards required to qualify for an operating license, it has not been renewed,” a spokesman for Ladol told Bloomberg. Ladol has filed a suit against the company at the Federal High Court in Lagos, Nigeria’s commercial capital, he said. Samsung completed the con-

struction of one of the world’s largest floating oil platforms for Total SA at Ladol’s base in Lagos last month. It built the $4 billion Egina vessel, designed to hold 2.3 million barrels of oil, in South Korea and Nigeria, before it set sail for a deep-water field off the Niger River delta coastline. The project was seen as a test of the Nigerian government’s drive to build an oil-services industry and get more international energy companies to use local firms. Amy Jadesimi, a former Goldman Sachs Group Inc. banker who is Ladol’s managing director, said in a May interview that she would probably bid for similar upcoming work from the likes of Royal Dutch Shell Plc and Eni SpA once Egina was finished.

Alpha Beta accuser, Apara, wants EFCC to investigate claims Endurance Okafor

apo Apara, former managing director of Lagos based tax consulting firm, has said that he is not ready to go to prison. “I do not want to go to prison. I am a whistle blower, and want my petition investigated,” Apara responded to a question from BusinessDay on twitter. In a series of tweets, Apara has disclosed details of what he says are allegations of tax evasion and money laundering in Alpha Beta, a firm he claims to have 30 percent stakes in. His revelations have given insight into one of the most controversial companies in Lagos state, in charge of collecting the state’s revenues for which it allegedly earns 10 percent of revenues collected. But Apara clarified that Alpha Beta does not really keep 10 percent of all revenues it collects but 10 percent of revenues above a set benchmark by Lagos state. He claims that Alpha Beta, which he managed was culpable in bribing government officials, money laundering and tax evasion. Apara admits culpability in the ‘crimes’ and claims to have sent a petition to the Economic and Financial Crimes Commission (EFFC) which they have acknowledged. “Alpha Beta LLP has been IGR consultants to Lagos state since 2002, earning about 10 percent commission and has generated IGR of about N1.5 trillion excluding FAAC and loans. From this, Alpha Beta LLP has earned about N150 billion in fees. My petition alleges that the bulk of this amount has been laundered to evade taxes and to bribegovernmentofficials.Fortunately, all is documented through the banking system including the fake loans,” Apara wrote through on twitter handle. The former Managing Director of Alpha Beta LLP, Apara also disclosed through the same medium that his responsibility was to blow the whistle on the alleged rampant and blatant corruption, and ask for the support of Nigerians to prevail on the EFCC to investigate his petition. “As a 30 percent shareholder, my share of profits (about N45 billion) has beenstolenandlaundered,”Aparasaid. In the petition which was written by his lawyer, Adetunji Shoyoye and Associates, the ex-CEO claimed that the fraud had been covered by powerful politicians in the state. The petition signed by Adetunji

Adegboyega on behalf of the law firm, read in a part, “over the years the companyhasbeenprotectedandshieldedby somepowerfulpoliticiansandpeoplein the society which made them to always boast of being untouchable, but our client, feeling the need not to keep quiet again and strengthened by his belief in thefactthatthegovernmentofPresident MuhammaduBuhariiskeenonfighting corruption, which has been the bane of our country, is of the firm belief that it’s time to expose and open the can of worms called Alpha Beta Consulting.” When Apara was asked via his twitter thread why it took him so long to speak out he said “I became substantive MD in 2014, which is when I started investigating the financials and when I confronted them internally, the response I got was “Dapo, no one will believe you. We control everything the press, the courts, EFCC. You will only be endangering your life.” When BusinessDay however checked on Alpha Beta’s website, Apara’s name was not found as a member of the management board instead Doherty Akin had the title of MD/CEO of the tax consulting firm. Meanwhile, the company in a statementreleasedyesterday, 11 September 2018 denied the allegation by Apara and said it was up for any investigation “our attention has been drawn to the publication of false allegations made recently in the social media against our company and its Managing Director, Akin Doherty, by Dapo Apara. In making these claims, Apara has engaged in the worst form of libel.” Itfurtherexplainedbysaying“theallegationsarefalseandwilfullycontrived to tarnish our hard-earned reputation and track record as the pioneer developerofthetechnology-basedElectronic Banking and Internal Controlled Revenue Enhancing System, which was designed to promote good governance and accountability. He does so in a desperate attempt to conceal and distract attentionfromhisownwrongdoingand misconduct that led to his termination from Alpha Beta.” “A company such as ours that specialises in tax collection would never of all things fall short in paying the taxes it owes. As a responsible private organisation working with Lagos State, we can assure you that we are law abiding and fully tax compliant. Our company records are open and available for audit, investigation and all compliancy checks by designated statutory authorities. Our records are in order because we have done nothing wrong,” it concluded in a statement.

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L-R: Anuradha Gupta, deputy CEO, Gavi, The Vaccine Alliance; Clemens Adams, director, division of administration, United Nations; Tedros Adhanom Ghebreyesus, director-general, World Health Organisation (WHO); Awele Elumelu, GAVI Champion for Africa/founder, Avon Medical, and Seth Berkley, CEO, GAVI, The Vaccine Alliance, at a conference to champion increased vaccine coverage, targeting under-immunised nations, in Geneva, yesterday.

FG explains Paris club refund but silent on Osun state fiasco ... Aregbesola releases N19.8bn for workers’ four months salary arrears DIPO OLADEHINDE

he Federal Ministry of Finance on Tuesday provided some clarifications on the Paris Club Refund approved for the 36 States of the Federation although it was still silent on the reason why Federal Government secretly released the sum of N16.6 billion Paris Club refund to Osun State. This comes as Governor Rauf Aregbesola released N19.8 billion for workers’ four month salary arrears less than eleven day to election. “As an interim measure to alleviate the financial challenges of the States during the 2016 recession, the President had approved that 50 percent of the amounts claimed by States be paid to enable the States clear salary and pension arrears,” Federal Ministry of Finance explained on Tuesday. The Federal Ministry of Finance noted that the refund was part of the government’s fiscal stimulus to ensure the financial health of Sub-National Governments which was scheduled for released between 1st December 2016 and 29th September 2017. “The payment of the approved amount is to be made in phased tranches to the States,” Federal Ministry of Finance said.

However less than eleven days to the Osun state governorship election, Governor Rauf Aregbesola approved payment of four months’ salary of workers as well as pensioners, Commissioner for Finance, Bola Oyebamiji said on Tuesday. The governor approved the release of N19.8 billion and also directed “going forward workers in the state should be paid their full salary as at when due to demonstrate his commitment to his earlier promises.” However, workers in the state have reacted to the sudden disbursement, saying it has everything to do with coming election. “How can a governor be paying four month salaries few days to election, it does add up,” a civil servant told Business Day by Phone. The Federal Ministry of Finance remained silent on why the Federal government secretly released a Paris club refund of N16.6 billion which has continued to generate controversy following the resignation of the Accountant General of Osun State, Alaba Kolawole. Also, Peoples Democratic Party (PDP) last weekend accused the federal government of releasing N16.6 billion Paris Club refund to Osun state ahead of the September 22 gubernatorial election.

In a statement issued last Saturday by PDP national publicity secretary, Kola Ologbondiyan, “the party said the purported illegal diversion of public funds is tantamount to corruption on the part of President Muhammadu Buhari.” The party alleged that part of the fund was meant to “bribe” leaders of the All Progressives Congress (APC) to support Buhari’s re-election bid. “Further investigation reveals that bulk of the money has already been pencilled for sharing to APC leaders, especially at the national level, as bribe, to short-circuit the system to favour Buhari’s reelection bid, while the people of Osun continue to suffer deprivation,” the statement said. “The PDP has been further made aware of how part of the fund will be moved to private company accounts as well as various hidden locations for the compromised INEC officials and APC leaders.” Paris Club refund is a partial settlement of long-standing claims by state governments relating to over-deductions from their Federation Account Allocation Committee (FAAC) allocations for external debt service between 1995 and 2002.

•Continues online at www.businessdayonline.com

Apapa gridlock: Firms close offices as businesses count losses Sobechukwu Eze & Oghogho Edosomwan

s Apapa, Nigeria’s premier port city, gets messier with continued siege on roads/bridges by trailers and tankers coupled with worsening port congestion and crippling gridlock, the few banks still operating in the traumatised city are closing shop while other businesses count their losses on daily basis. An otherwise flourishing port city with limitless marine activities, Apapa is gradually but steadily degenerating into a wasteland where all the routes have become ‘highways to hell’ and the only thriving industry is ‘okada riding’ with its attendant risk. Wharf Road and Commercial Road used to be the ‘Central Business Districts’ of this port city where high net worth firms and banks had their offices and branches respectively. A walk through these ‘districts’ shows that most of the banks have

either relocated or have reduced the number of their branches. On Wharf Road alone, more than 10 banks and two eateries have shut down their branches due to the pain and difficulty in accessing these branches, leading to loss of substantial customers in the area. Unity Bank, for instance, which used to have four branches, now has two, Ecobank with eight branches has reduced to four and Access Bank with seven branches also cut down to four. “You can’t compare the situation now and how it was before. No one has been to hell and heaven but from this experience, we can liken the situation to hell. Apapa used to be a place for good businesses,” said Ruwase Babatunde, President of Lagos Chamber of Commerce and Industry (LCCI). “People used to come from all over Lagos to do business in Apapa due to the opportunities it offered. The problem has been the same over the

years and it is an issue of bad roads as well as corruption,”Babatunde added. Eateries like Tetrazini has shut down, Tantalizer with three outlets has reduced to one and the only Mr Biggs eatery in Apapa on Creek Road is now out of the market. Film House Cinema inside Apapa Mall has also shut down. Even the famous Apapa Amusement Park which used to be a source of joy for the kids has closed down due to low patronage. Major hotels like Rockview, Excelsior and many others are groaning for lack of patronage as most of their rooms are empty, and social events that require renting their halls are no longer frequent. The popular Eleganza complex that used to house over 1000 offices is virtually empty because the tenants have relocated or are out of business.

•Continues online at www.businessdayonline.com

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

he Jones Erue -led All Progressives Congress (APC) in Delta State has opted to use indirect primaries for the selection of the various candidates that would fly the party’s flag during the 2019 general elections. A major reason behind the adoption of the indirect primaries option is for the party to avoid a repeat of ugly experiences encountered during past congresses held by the party in the state. The fear that there may not be adequate

security for members and voters during the exercise is another reason. Third and top reason is the inconsistency in data-base of registered members considered would hinder most of the voters from exercising their franchise. All these and more were revealed in Asaba, weekend, during the State Working Committee (SWC) meeting that was attended by the State Executive Committee (SEC) of the APC, the ward chairmen and secretaries as well as other stakeholder of the party. They deliberated and made decision following a

letter from the APC national office to the chairman, requesting that the SEC members decide on the mode of the primary elections for the party in the state. The letter which was read by the state’s assistant secretary, Ese Agiri, was a product of the 6th regular NEC meeting of the party, directing chairmen of the political party to choose the mode of primaries according to the peculiarities and needs of their different states. They were expected to choose either direct, indirect or consensus primaries for the various political positions apart from that

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

congresses”, he noted. “Today, I want to let you know that the mode of primaries here, which you call indirect today is what we called direct because the people who are going to be delegates to that election are elected representatives. They are not appointed”, he declared. “In trying to choose the mode of primaries we want to use, we must take into cognizance the difficulties we would face as a party so that we don’t drift into a further disunity and confusion in our party”, he said. Those who attended the meeting spoke in favour of

indirect primaries except Pat Utomi who was a lone voice. Utomi, a professor of economics and guber aspirant, preferred direct primaries for some reasons. “There are many people outside this house who prefer direct primaries. There might be those who prefer something else. Until we can get everybody to speak and fashion something that works for everybody, we are not ready for progress”, Utomi noted. “My position is that we ought to find out from the broad group of people; …whatever you chose to call it, I prefer direct primaries”, he stated.

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COMMENT SMALL BUSINESS HANDBOOK

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

omebody needs to help Africa and wake us up from this perennial daydreaming into which we have fallen. From time to time, and as we intermittently arise from the dream, we act like we got reassured that the solution to our problems will come from lands so far from Africa. This way, we diminish the importance of innovation and deep thinking. Africa is in need of some elixir for self-esteem and pride. Unfortunately, it does appear that those who are economically poor are far away from pride. They have no shame because they are clothed in it. Truly, when one man stands cap-in-hand before another, begging for alms, pride takes a flight and shame loses its power. That seems to be the condition of most African leaders today, as they scramble for Chinese help. The current fad among African leaders, most of whom are not only too old to stand erect, unsupported by aids and props, but also mentally incapable of understanding the

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Poverty and the absence of shame nature and process of economic development information, is to go to China for a share of that country’s surplus capital, accumulated by leaders like them. Over the past several decades, China has grown at rates averaging roughly ten per cent per annum. It has used this surplus capital accumulated from its consistently high growth rate to build investment capital. This capital has become China’s key carrot for dislodging America, and the rest of the West, in Africa. A piece of it has become the big target of African leaders or more appropriately, misleaders. While African leaders, running governments that are mostly a deliberate fraud against their people, and with their eyes fixed on self-interest and eagerness to cheat their counties, scramble to be in China’s good books, in order to access the huge capital accumulated over the last three decades, wiser people, even in Asia, are calling for caution. Wiser nations are repelled, wandering what could be the “bag of goodies” African leaders see in Chinese loans and projects, which drain future generations of their livelihood because of projects we cannot maintain. They wonder why we have so soon forgotten the Russians and the fraud of iron and steel plants in Nigeria. Last week in this column, I shared part of my experience in South East Asia, and more specifically, Malaysia and Indonesia. We highlighted the achievements and unexpected re-entry of Mahathir Mohamad, as Prime Minister of Malaysia, albeit for an agreed pe-

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Every leader that emerges reduces his country to the small tribe or clan that he comes from, as if to reflect the littleness of his mind. And with this, the promotion of one ethnic group and the deprivation of another sets sailing

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riod of two years, in order to clean up the mess created by his successors. In that piece, which was a bit satirical, I advised those whose only problem is the obviously very old age of our president to seek other reasons for asking him out. Mahathir Mohamad is undoubtedly Mohammadu Buhari’s big uncle, by age and if he can do so well to be returned due to popular demand, then age may well be only a little part of the problem. Undoubtedly age is a problem and Mahathir Mohamad acknowledged that much in a recent CNN interview. Listen to Mahathir Mohamad. “China comes with a lot of money and says you can borrow this money.

But you must think. How do I repay? Some countries see only the project and not the payment part of it. That’s how they lose chunks of their country. We don’t want that”. This can only be the voice of someone without vested interest. Africa is in bondage because of vested interest in very high places. Vested interest robs men of their intellect. Some of the African leaders you call clueless and daft are actually smart. They appear daft to us because we cannot fathom the rationale behind their decisions, which are driven by factors not in the public domain – vested interest. This is why it is dangerous to allow such men to define for us what constitutes national interest of African countries. For most of them, the nation is yet to be built and is currently limited to their kit and kin whose interest is national interest. Many of the mostly failed states in Africa cannot be described as nations because their people lack the commonality of destinies that defines nations. Every leader that emerges reduces his country to the small tribe or clan that he comes from, as if to reflect the littleness of his mind. And with this, the promotion of one ethnic group and the deprivation of another sets sailing. It is hard to find African leaders who have not redefined their countries and equated them to theirs mall tribes or ethnic groups. This guarantees that nepotism and rancour, and the dismantling of one leaders’ achievements by his successor prevail. It also delays the emergence of the cohesive force of a united nation. Most likely, the reaction of many

African leaders to the statement of the Malaysian Prime Minister quoted above would be like this: Mahathir may say whatever he likes but we want to be part of the $60 billion, which the Chinese said is available for lending to Africa. We too want to develop like Malaysia, and then we can also reject Chinese loans. From where did Malaysia borrow to develop? They invested in education that enabled them to copy, adapt and adopt other peoples’ inventions. Nigerians were much richer per capita than the Chinese in the late 70’s. Chinese GDP was about one third of the average of those of countries in Sub-Saharan Africa at $155 in 1978. Nigeria’s was about $500 or about three times China’s. China’s GDP per capita is now about five times ours. While lining up for Chinese hand outs that are surely not without metallic strings, it is time for us in Africa to find out what China did to grow her economy consistently for over 30 years. Even the need for merit, which is at the base of everything in China, is not recognized in Africa. If knowledge is despised and disregarded; whence comet innovation. Some may say it is the Chinese dictatorship that brought them this far, but we had so much of that in Africa. In Nigeria its best dividend was the greatest all time treasury looting in the world by Sanni Abacha. Chinese dictators do not loot the treasury. My take: “Honour and shame on no condition rise; act well thy part, there all the honour lies”.

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U-Turn or perfect storm? Globalization a decade after the crisis

DAN STEINBOCK Dr. Dan Steinbock is an internationally recognized strategist of the multipolar world. He is the founder of Difference Group. He has served as Research Director of International Business at India China and America Institute (USA) and Visiting Fellow at Shanghai Institutes for International Studies (China) and the EU Center (Singapore). For more, see www.differencegroup.net

n Friday September 7, President Donald Trump threatened to impose tariffs on $267 billion in Chinese goods, on top of the additional $200 billion that he said will likely be hit with import taxes in a matter of days. If the tariff stakes would increase close to $500 billion, it could penalize Chinese GDP by 1.0%, but the US GDP, which is relatively more vulnerable, would suffer a net impact of 2.0% of GDP. Worse, a full trade war would penalize global confidence, which could unsettle key stock indexes. The consequent uncertainty would lead to further downgrades of countries’ economic outlook. Global growth would suffer collateral damage. And as credit would take a hit, financial conditions in the West could deteriorate, and so would trade in the East.

If Trump remains loyal to his trade pledges, following China he would target other major economies that have a significant trade surplus with the U.S., including Germany, Italy and the EU, Japan and South Korea, Mexico and Canada and, over time, Vietnam and India. If the Trump administration would expand its trade war as it has promised, it would achieve a perfect reversal of decades of post-war globalization in just months – and it would pave way to a perfect storm in the global economy. Globalization at crossroads At the peak of globalization, the Baltic Dry Index (BDI) was often used as a barometer for international commodity trade. The index soared to a record high in May 2008 reaching 11,793 points. But as the financial crisis spread in the advanced West, the BDI plunged by 94% to 663 points. Even today, the BDI remains only around 1,500, some 90% below its peak, despite soaring financial markets. While the BDI can serve as a short hand for international trade, broader measures of global economic engagement offer equally dire visions. Global economic integration is usually measured by world trade, investment, and migration. By the 1870s, capital and trade flows rapidly increased, driven by falling transport costs. But the first wave of globalization in the modern era was reversed by the retreat of the

U.S. and Europe into protectionism between 1914 and 1945. After World War II, trade barriers came down, and transport costs continued to fall. As foreign direct investment (FDI) and international trade returned to the pre-1914 levels, globalization was fueled by Western Europe and the rise of Japan. This second wave of globalization benefited mainly the advanced economies. Following 1980 many developing countries broke into world markets for manufactured goods and services, while they were also able to attract foreign capital, thanks to offshoring in the West. This era of globalization peaked between China’s accession to the World Trade Organization (WTO) in 2001 and the global financial crisis in 2008. After the global crisis, China and large emerging economies fueled the international economy, which was thus spared from a global depression. But as G20 cooperation has dimmed, so have global growth prospects. Falling world investment Before the global crisis, world investment soared to almost $2 trillion. A year or two ago, the UN predicted that global FDI flows were projected to resume growth in 2017 and to surpass $1.8 trillion in 2018. In contrast, I predicted that the improvement was unlikely and that world investment would either continue to stagnate or worse. So what actually happened? Well, according to the most recent UN data, global flows of foreign direct investment fell by a whopping 23%

in 2017. Cross-border investment in developed and transition economies dropped sharply, while growth was near zero in developing economies. In effect, global FDI flows fell to $1.43 trillion – that is almost 20% below the pre-crisis peak around 20078. In turn, FDI flows to developing economies remained stable at $671 billion, seeing no recovery following the 10% drop in 2016. This negative trend is not just a long-term concern for policymakers worldwide; it should be an alarm bell, especially as US rate hikes are likely to dampen the projections of many emerging economies and the collateral damage associated with US trade wars is likely to spread in global economy. Undermined world trade recovery In 2017, world merchandise trade recorded its strongest growth in six years. According to the World Trade Organization (WTO), the ratio of trade growth to GDP growth returned to its historic average of 1.5, far above the 1.0 ratio recorded in the years following the 2008 financial crisis. “Trade growth in 2017 was the strongest since 2011,” said WTO Director-General Roberto Azevêdo in his opening message. “If we are to avoid this strong performance being compromised by a further escalation in tensions, we must seek to further enhance global cooperation.” Yet, that is precisely what is unlikely to happen in 2018. Azevêdo wrote his message before Trump’s tariff warnings took effect. Historically, it may be useful to

recall that, about a decade ago in July 2008 WTO then-Director-General Pascal Lamy declared that there was “unqualified public support for globalization.” Yet by that fall, trade depression halted most containers worldwide. It does not follow that history will repeat itself, but it does rhyme. Trump’s tariff wars are penalizing a trade recovery that took a decade to materialize. The slump of global finance The soaring stock equity markets in the United States reflect less the strong fundamentals of the U.S. economy (America’s sovereign debt exceeds 106% of its GDP) than wishful thinking about U.S. leadership in the 21st century. Following the global financial crisis, there has been a dramatic fall in global finance as well. Global debt has continued to swell since the crisis but has remained stable relative to world GDP since 2014; that is, at 169% of global GDP. Indeed, gross cross-border capital flows-annual flows of FDI, purchases of bonds and equities, lending and other investment-have shrunk by -53% in absolute terms, returning to the level of global flows as a share of GDP last seen in the early 2000s. Note: The rest of this article continues in the online edition of Business Day @ https://businessdayonline.com

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CHARACTER MATTERS WITH DAPS

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

ife can be described as an assortment of contrasts where two acknowledged opposites walk side by side. Good and evil, bitter-sweet and for the foodies amongst us, sweet and sour, to name just a few. The emotions evoked in me when I read some of the plethora of banners erected by political aspirants as elections approach, only brings this home to me the more. As I read some of these banners and see to my amazement how prospective local government councillors appropriate for themselves the yet to be earned sobriquet of “Honourable”, I find myself at a total loss. Should I laugh or should I cry? A classic case of self aggrandizement if there ever was one. Is it a wonder many of such appropriate more than just sobriquets when they eventually assume these highly coveted positions? I will have you know that Nigerians were this year, 2018, rated amongst the hardest working foreigners in

the United States. This tells me our problem is not an innate inability to work hard. In fact, I can with absolute confidence say we are generally, extremely diligent people, which is why religious institutions may need to deemphasize overnight breakthroughs in their ministrations and instead emphasize a little more, the need to work hard for what we want. To buttress this, the Bible itself says in Proverbs 21:5 that, “good planning and hard work leads to prosperity and hasty shortcuts lead to poverty”. Unfortunately, such ministrations as of late and the shameless flaunting of wealth by politicians who everyone knew was as broke as hell just yesterday have led our youths to look for the easiest way to “blow”. The less resistance, the less taxing, the better. I find myself at times wondering why the countries with so little in terms of resources do so well? Well, for one, their people have learned to cooperate with each other. Like my Pastor often says, “you’ll hear of law firms with over five hundred partners in the US thriving but you try to get ten partners to work together here, na fight go spoil everything finish!” Why do we find it so difficult to cooperate for the sake of all? Why do we have this rabid obsession to always be the big honcho? The biggest man of the big men, even when it would benefit us more to subsume our ego and join in the collective effort to succeed as one cohesive, formidable team. Why may I ask, should it take a genocide like the world helplessly witnessed in Rwanda during the 1990s, where tribe mercilessly decimated tribe, before that country could begin to prosper? Rwanda, with its increasingly flourishing economy

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first” or even “me only” attitude, unwillingness to cooperate with others for a common good and apparent impotency when it comes to uprooting a parasitic political class as a result of collectively learned defencelessness cannot produce a better Nigeria than what we currently have

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and enviable new found unity has since become the pride of Africa. The miraculous turnaround in that country only goes to confirm the indispensability of having sincere leaders. This can never be over emphasized. Yes, it is an incontrovertible fact that Nigeria is a contrived entity and we certainly cannot discount the untold damage done to us as a people, by the horrors of the slave trade and subsequent colonization but it is about time we move on from that. It has served as a convenient excuse for bad leadership for long enough even though, in my opinion, the Nigerian problem is as much a problem with the governed as it is a problem with the leaders. The combination of “me first” or even “me only” attitude, unwillingness to cooperate

with others for a common good and apparent impotency when it comes to uprooting a parasitic political class as a result of collectively learned defencelessness cannot produce a better Nigeria than what we currently have. Saudi Arabia lacks fresh water and is forced to continually desalinate sea water, just to provide its people with decent water to drink. Japan, as hugely prosperous as it possesses next to nothing in terms of natural resources, resulting in their almost maniacal quest to advance technology. To “worsen” this short straw which nature so severely dealt them, they also have very limited land space to accommodate one of the world’s largest populations of over one hundred million people. It is not for nothing that they have such a high concentration of skyscrapers. The land deficit compels them to build upwards rather than outwards. Interestingly however, by merely adopting the right attitude, they have successfully converted what others might term a curse into a blessing. Let us now juxtapose this to the suffocatingly wrong attitude besetting so many sub Saharan African countries and their governments. An attitude of perpetually taking and adding precious little value imminently brings us to where we find ourselves today. Governments will extract crude oil, add no value and export to our customers; only for them to add value to it and sell it back to us at their own price thereby forcing the government to spend most of the foreign exchange it earns. Governments will take foreign aid purportedly to better the lives of their people but the hapless citizens will seldom derive any value from it. What does the future really hold for a teeming young

population to whom you add no value, courtesy of a financially crippled educational system? Need I go on? Just to randomly pick a country out of the hat, The Republic of Congo, in terms of natural endowment should probably be the wealthiest nation on earth but instead is one of the poorest. Why? A self destructing, almost masochistic inability to cooperate for the good of all. Another thing my pastor, Wole, rightly observed is that most of Europe perennially battle with relatively poor weather, barely enjoying two months of sun a year and yet most of these countries are doing very well. We read of increasing life expectancy, ever improving standard of living and progress in most meaningful departments of life. Back here in Africa, Nigeria to be precise, the average youth is naturally athletic, blessed with bulging muscles without ever entering a gym. I remember my days in secondary school, when in the UK, I was quite the athlete representing my school and county in the sprint races and long jump. I recall how I felt when summoned to line up for a race and I discovered there was at least one white boy in the line-up. “Thank God! At least I won’t come last”, I would say to myself with utmost relief. Does it not tell us something that the French team that won the 2018 football world cup comprised predominantly of African players? And yet, not one African team made it past the first round. Hmm...! Note: The rest of this article continues in the online edition of Business Day @ https://businessdayonline.com

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The effective director: Personal attributes BISI ADEYEMI Bisi Adeyemi is the Managing Director of DCSL Corporate Services Limited. For comments and reactions, kindly contact badeyemi@dcsl.com.ng.

t is acknowledged that the office of a Director is a “high calling”. It is oftentimes challenging and requires of the individual certain attributes to achieve effectiveness. Whilst each Board has its own peculiarities, being possessed of those attributes will contribute to the effectiveness of a Director and by extension the effectiveness of the Board. These include the following: Strong interpersonal and communications skills: This key attribute is relevant in and out of the boardroom. An effective director should be able to relate well with his/her peers, be approachable and communicate clearly. Striking an appropriate balance between talking too much and too little at board meetings is also critical to achieving effectiveness. An effective director will be able to clearly articulate the key issues and provide critical insight. He/she will speak to the

issues before the board rather than attack the persons involved. Furthermore, whilst executive directors are required to engage with third parties as part of their day job, nonexecutive directors will occasionally have to represent the company at meetings and in discussions with third parties including the media. Thus the ability to clearly articulate the company’s position even at short notice is desirable. Indep endent judgement : Managers are expected to be “team-players” and sometimes get knocked when they criticize a decision made by their peers or superiors. However, the director’s role (whether as an executive or non-executive) is to take a step back and critically assess the motivation and consequences of a decision, and where necessary, put forward a reasoned view – even if it is unpopular. A director is expected to apply independent judgement to all issues before the board. This requires the director putting the overall interest of the company at the forefront. Directors for the most part, find themselves being swayed by narrow or short term considerations when faced with certain decisions. An independent mindset will enable the director take a stand when he/she is of the view that the company’s long term future is not being prioritized, no

matter the consequences. Analytical: Directors are often presented with problems that have a number of potential solutions, and the ability to analyze, sift through data and make sense of it to find the appropriate solution is an invaluable personality trait. Not sweating the small things: Directors are expected to be strategic thinkers and not waste time and effort on the small stuff. Sometimes in a bid to demonstrate their competence and area of expertise (show off) they tend to distract the board’s attention from less critical issues. Everyone can identify the culprit on their board! The ability to stay focused on those matters strictly within the Board’s purview is a desirable attribute. For non-executive directors, this also means respecting the professional and technical competencies of the executive directors and not seeking to micro-manage. This does not take away from the board’s responsibility to drill down into proposals before the board. Staying power: Companies are bound to face pressure from regulators, short-term focused shareholders, the media and competition, particularly during periods of perceived poor performance, or significant structural changes. An effective director should have the strength of character to stay calm in the face of pressure to provide the

much needed stability to the board and the company. Some directors are quick to look for the door at the mere whiff of crisis. Respect for alternative viewpoints: There are “many ways to skin a cat” or execute a given strategy. At the height of board effectiveness is diversity of skill set, experience and perspectives. A director should recognize that the overall interest of the organization will be better served if multiple perspectives are considered before arriving at a decision on any issue before the board. The director should not attempt to force his/her viewpoint on the board on the oft wrong assumption that it is the way to go. This also requires appropriate listening skills – a sincere attempt to actually “hear” what another director has to say as opposed to waiting to counter that position. The Board should benefit from the diversity of its composition and not take decisions from the narrow prism of its most vocal members. Integrity: A significant attribute of an effective director is integrity. Integrity connotes sound ethical values, transparency, accountability, commitment and courage. Ethical values to set an appropriate “tone at the top”. Transparency and accountability that ensure all actions pass the test of public scrutiny. Enough time and attention committed to making a good job of it and

courage to ask the right questions – or to walk away if that becomes necessary. In addition to personal attributes, certain experiential factors also contribute to the effectiveness of a director. These include: International exposure: Companies have embraced regional and global expansion which come with unique challenges. A director that brings to the board an international perspective and exposure to global benchmarks is an asset to the board. An effective director is one who keeps abreast of global issues that would have direct or remote implications for the business. Industry expertise: The board is enriched by a director that can contribute knowledge of the particular industry when evaluating issues and decisions before the board. Financial knowledge: Whilst not required to be a financial expert or an accountant, the ability to interpret financial reports and evaluate the financial implications of an action or decision is definitely an advantage. Directors should not shy away from seeking help in this regard. Send comments and reactions to: badeyemi@dcsl.com.ng

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EDITORIAL PUBLISHER/CEO

Frank Aigbogun EDITOR Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya

EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure ADVERT MANAGER Adeola Ajewole FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

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

Edo State’s development moves with China

harvest of agreements has followed the trip of Edo State Governor Godwin Obaseki to China as part of the Nigerian delegation to the Forum on China-Africa Cooperation (FOCAC). They include investment pacts with Chinese companies to develop a seaport, refinery, industrial park as well as road infrastructure. Edo is commendably one of the states with a favourable report from the trip that served mainly as a junket for others. Nigeria is one of the significant beneficiaries of the $60billion the Chinese are willing to invest in Africa as development loans “with no strings attached”. The Chinese offer comes against the backdrop of increasing reports of China taking over principal assets in some countries in Africa and elsewhere for defaulting on repayment of their loans. Such statements should inform the need for careful vetting of the loan agreements and, more particularly, strict implementation and delivery of the projects. With Peiyang Chemical Equipment Company Limited, Edo State would build a modular refinery with capacity for production of 1,000 barrels per day of crude petroleum. Work would commence immediately for completion in April 2019. The Edo State Government approved N700million for

the project ahead of Obaseki’s trip to China, indicating commitment and willingness to commence work. A related component is the training of Nigerian students through an exchange programme with Tianjin University. According to information released by the Edo State Government, Tianjin University owns 51 percentequity in Peiyang Chemical Equipment Company. They would grant technical training scholarships to students from Edo state for the study of engineering courses in China. Obaseki signed the agreement in Tianjin with representatives of Peiyang and Tianjin University. Said Obaseki: “We emphasise on technical education for our young people. Anything we are doing today must have a job creation component. So, investment in modular refinery and oil and gas technology must have a technical training capacity. We have the largest onshore gas reserve. We want to see how we can leverage on some of the natural resources we have to ensure that we build an industry that is local and sustainable”. Edo State would also collaborate with the Chinese to develop the Benin River Port and link it to the Lekki Deep Seaport. The objective is to tap into traffic envisaged for the Lekki Deep Seaport by serving as an alternative to the ships berthing there. The contract would include dredging of the river and construction of a link road to the Benin bye-pass.

For the Benin River Port, Edo State would partner with an investor in the Lekki Deep Seaport. “The company we are working with is the largest investor in the Lekki Deep Seaport. The Benin River Port is going to be a sister port to the Lekki Deep Seaport. We expect that up to 30 per cent cargo going to the Lekki Deep Seaport would be for Benin port”, according to Governor Obaseki. “We are investing massively on agriculture particularly in areas like oil palm, rubber, cassava, fruits and all range of agricultural produce which need to be processed and exported outside the country. Companies operating in the state are seeking to export their products. The port will provide an opportunity not only to export agricultural produce but also some of the products manufactured in our area. “Another advantage is that once you create the infrastructure, there is the possibility that other industries would spring up in the state. This opportunity is going to rapidly help in diversifying the economy of Nigeria.” Another project is the Benin Industrial Park that would expectedly create 170, 000 direct and indirect jobs. Edo State projects that the Industrial Park would house “over 1, 000 companies” and generate more than $billion annually. The Edo projects bespeak ambition. There is a missionary zeal to the pursuit of the dreams by Gover-

nor Obaseki. He is pushing for the development of the state in other areas including education, security architecture and industrialisation. The initiatives of Obaseki two years into his governance of Edo State are the sort of programmes, plans and actions citizens expect from technocrats in office. Underlining Obaseki’s pursuit of investments in equity and loans for developing Edo State are years of experience in financial management and investments. The governor is a professional fund manager, stockbroker and investment adviser. Obaseki was integral to several projects in Edo State under the leadership of his predecessor, Governor Adams Oshiomhole. As chairman in a voluntary capacity of the Edo State Economic and Strategy Team, he oversaw the outlining of several plans for the State now taking shape as projects under his leadership. He also served as Chairman of the Tax Assessment Review Committee for Edo State Internal Revenue Service and the Committee on Micro, Small and Medium Enterprises. Given this rich background, citizens of Edo State, analysts and all Nigerians expect that Edo State would deliver on the projects admirably outlined. More importantly, we hope that Edo State would depart from the story of excuses, delays and non-performance on the various loans that have become burdens to the future. Onward to progress in Edo State.

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Wednesday 12 September 2018

BUSINESS

COMPANIES & MARKETS

DAY

Georgia Atlanta’s RC Cola debuts in Nigerian market

Pg. 14

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

FBNInsurance utilizes shareholders’ resources in generating higher profit …ROE up 17.64% in H1 BALA AUGIE

BNInsurance Limited has used the resources of shareholders in generating higher profit as return on equity (ROE) improved, validating board of directors’ focus and market penetration strategies. The company said in notes to the account that the stellar performance was driven largely by the retail segment of the Life insurance business, Annuity income as well as the corporate segment of the General insurance business. For the first six month through June 2018, FBN Insurance’s ROE increased to 46 percent in the period under review from 39.10 percent the previous year; thanks to resilient earnings generating capacity. This means that the company generated N0.50 of profit for every N1 of shareholders’ equity in the period under review. Expectedly, net income spiked by 56.40 percent to N2.84 billion in June 2018 from N1.81 billion the previ-

ous year even amid a tough and volatile macroeconomic environment. Insurers in Africa’s largest economy are struggling with lower rates, weak consumer spending, volatile currency, and rising expenses, but analysts are upbeat that the combination of economic growth and benign regulator environment could strengthen firm’s earnings. Nigeria’s insurance industry is still in its embryonic stage as penetration rate is o.4 percent, this compares with Kenya’s rate of 2.90 percent and South Africa’s 14 percent. Despite the humongous challenges undermining the growth of insurance business, FBN Insurance’s gross premium written grew by 48.20 percent to N16.46 billion in June 2018 from N11.10 billion the previous year. What’s more, the company’s premium income has been growing at a 4 year average compound annual growth rate (CAGR) of 31.30 percent even at the height of a severe dollar shortage brought on by lower crude oil price that saw the country slip into its first recession in the last quarter of 2016. FBN Insurance has an ef-

L-R: Tony Yaw Oppong, chairman, Alliance of African Institutes of Bankers, Registrar /CEO, Ghana Institute of Bankers; Gabriel Okenwa, governing council member/leader of delegation; Tei Kitcher. Director Multilateral surveillance and Trade Dept of WAMI; Ado Dankwa Akufo- Addo, Ghana President; Ngozi Egbuna, Director General, West African Monetary Institute, based in Ghana and Seye Awojobi, Regisrar/CEO, CIBN, during the presentation of the presenting the CIBN corporate crest to the President of Ghana Akufo- Addo in Ghana

ficient underwriting capacity as evidenced in improvement combined ratio. Combined ratio fell to 41.89 percent in June 2018 from 55.75 percent as at June 2017. A ratio below 100 percent means more was earned in premiums than paid out in claims. It also means that an entity has made money

Airtel partners Infinix, Tecno to offer double data on smartphone packages Jumoke Akiyode-Lawanson

n a strategic partnership with three original equipment manufacturers (OEMs), Infinix, Tecno mobile and itel, Airtel, telecommunications service provider will allow customers who purchase new smartphone devices to enjoy its exclusive ‘Double Data Offer’ for six months. As the name implies, the Airtel ‘Double Data Offer’ allows customers to enjoy twice the value of any data plan they purchase on their newly acquired smartphones. For instance, if a customer buys the one-thousand-naira monthly data plan on any of the aforementioned newly acquired smartphones, he/ she gets 3GB instead of 1.5GB of data. To enjoy the offer, which

is available to both new and existing Airtel customers, consumers are required to send the key word, “GET” to SMS short code 141. Upon sending the SMS, a confirmation is sent to the customer for the ‘Double Data’ six months offer. Commenting on the new partnership, Dinesh Balsingh, Ag chief commercial officer, Airtel Nigeria said the new offer will help deepen data penetration in line with Airtel’s positioning as the mobile internet operator of first choice for telecoms consumers in Nigeria. “This partnership will empower more Nigerians to fulfill their personal and professional endeavors and also help connect more telecoms consumers to their dreams. Airtel is committed to delivering innovative and affordable mobile Internet value propositions that will make life richer, better and more meaningful

for Nigerians,” he said. Also commenting on the partnership, Eason Duan, general manager, Transsion Holdings, Nigeria, reiterated the Group’s promise in delivering the best-in-class mobile experience to every Nigerian: “A smart and connected world today is possible when everyone has access to mobile devices and good connectivity. With our goal of ensuring every Nigerian owns a smartphone, we are confident that our partnership with telecoms giant Airtel will be beneficial for all our consumers as they continue to stay connected with whatever they love to do, for longer.” After the six month offer period, customers can thereafter subscribe to their desired data plans and enjoy the double data benefit. The bonus and regular data have same validity.

before investment income. Operating expense ratio fell to 29.29 percent in June 2018 from 37.65 percent as at June 2017. In other words, the insurer has spent less on expenses in generating each unit of revenue. FBN Insurance’s claims ratio fell to 12.60 percent in the period under review,

from 18.10 percent as June 2017. In other words, the company has spent less to generating revenue. The company has total shareholders’ fund of N13.81 billion, which represents 26.30 percent increase from the N10.93 billion recorded as at December 2017. Total assets were up 25.10

percent to N63.90 billion in the period under review from N51.10 percent as at December 2017. FBNInsurance Insurance’s sold capital base means it has the capacity to take on more risk and grow revenue amid a tough and unpredictable macroeconomic environment.

Vantage Capital exits New GX Capital

frica’s largest mezzanine debt fund manager, announced that it has fully exited its investment in New GX Capital , a leading 100 percent black family owned investment holding company in South Africa. This exit achieves returns for Vantage’s Fund III investors of more than 35 percent. Vantage provided $20m to New GX in 2016 to finance follow-on investments in telecommunications infrastructure, waste management and information technology. Mokgome Mogoba, associate partner at Vantage Capital, said “We provided $20m of growth capital to New GX which enabled the group to more than double its net asset value aftter the two-year tenor of our investment. New GX invested in South Africa’s fast-growing fibre and telecoms infrastructure sectors through investee companies Dartcom and DFA. New GX Enviro built a first of its kind R200m multi-

purpose waste recycling plant in Atteridgeville township in Tshwane providing employment to township residents and boosting the township economy. Our partnership bolstered local manufacturing capacity by constructing a R100m fibre manufacturing plant 1km from Mamelodi township in Tshwane. New GX invested in a state of the art information technology platform with partners from India that employs over 200 people. We plan to support more talented black industrialists like Khudu Pitje, the founder and CEO of New GX, as we seek to transform the South African economy and uplift the township economy.” Luc Albinski, managing partner at Vantage Capital, added “Fund III investors have had a bumper ride with strong returns being generated from investments such as Vumatel, Servest and New GX. These results support our view that well-selected and structured

mezzanine debt deals can generate returns that rival traditional private equity returns with less downside risk.” Khudu Pitje, CEO and founder of New GX said “Our Partnership with Vantage should be considered as a template for addressing the elusive equity gap in the development of black industrialists. Vantage bridged the gap to develop our family business into a much more meaningful industrial group that will play a significant role in creating jobs for the youth of our country. We will in due course announce the next phase of our development.” Graham McGregor, CFO of New GX added “Vantage encouraged us to improve our reporting and risk management capabilities. The Vantage team worked through two challenging cases that we faced and never wavered in their support and understanding for our vision of building a leading black owned investment company.”

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Wednesday 12 September 2018

COMPANIES & MARKETS

Georgia Atlanta’s RC Cola debuts in Nigerian market GBEMI FAMINU

oyal Crown Cola otherwise known as RC Cola has made its way into the Nigerian market from Georgia Atlanta, with the vision to help their customers with their business, while ensuring good quality and consistency. The cola-flavored soft drink developed in 1905 by Claud A. Hatcher, a pharmacist in Columbus, Georgia, United States of America has returned, storming the industry with full force and a variety of flavors which includes the sugar free cola, Q-orange and lemon-lime. RC Cola has being able to get a favorable and encouraging response from the Nigerian market which has given them the courage to pool in more resources and fully es-

tablish themselves in Nigeria. “Our vision is to support customers in every way possible, follow quality procedures that will provide them with a well-known standard and to remain consistent in all their activities and since they came, they have spread their products to a wide coverage in Nigeria”, Moshy Cohen, managing director said. The company’s factory situated along Agbara road in Ogun state Nigeria, is setup with state of the art machines to ensure consistent output and high quality of products. The plant/factory has testing room, training room, laboratory, meeting halls, laboratory extension, staff canteen, changing room, safety room, conveniences and accommodation for their staffs. The company has come with a variety of support materials to give away ranging from glass door merchandise

Food & Beverage Manufacturers demonstrate commitment to cleaner environment

he Food and Beverage Recycling Alliance (FBRA), the Producer Responsibility Organisation (PRO) for the food and beverage sector, has affirmed its commitment to cleaner environment with plans to embark on a clean-up exercise on used post-consumer waste at the Arena market in Oshodi, Lagos along with its collection partner Recycle Points. The activity, which will takes place on September 14, is in commemoration of the annual World Clean-up Day, which falls on September 15. During the exercise, which is also aimed at intensifying awareness on environmental pollution, volunteered staff from members of the Alliance will be engaged in cleaning of refuse sites, walkways and drainages filled with post-consumer waste at the market. This is another demonstration of its commitment to a cleaner environment after the recently signed memorandum of understanding with Ministry of Transport and Environment, Lagos State to rid the waterways of plastic waste. The Alliance consists of Nigerian Bottling Company Limited, The Coca-Cola Company Nigeria, Nigerian Breweries Plc,

Seven-Up Bottling Company Limited and Nestle Nigeria Plc. The not-for-profit organisation has been adhering to the Extended Producer Responsibility (EPR) policy of the Federal Government, which transfers significant responsibility to producers for the entire life-cycle of their products, especially at the post-consumer stages. The clean-up programme would be used to canvass crucial issues relating to proper disposal and recycling, healthy lifestyle and other measures aimed at curbing environmental pollution. FBRA is calling for sectoral action under the platform of a PRO to ensure that companies collectively engage in the recycling of their packaging wastes to demonstrate its shared concern for a cleaner and healthier society. It pointed out that through PRO, companies can pool resources together to develop and fund a robust buyback scheme that could attract investors in recycling infrastructure. FBRA believes that this strategy will attract investment in research and development of new packaging process with little or no effect on the environment, as well as alternative uses for their packaging wastes.

(GDM) freezers, ice coolers, branded umbrellas, mini tables ,face-caps, T-shirts, hawking jackets, aprons, jotters, pens, openers, among others. Responding to questions on plans set in place to remain consistent with the supply especially during the peak period, Cohen said, the lines provided has the capacity of the highest speed the industry can offer, the lines being used presently produce 35,000 bottles per hour and 40,000 cans per hour giving a total of 75,000 drinks per hour, but plans are being made to put in 2 new lines that will increase production with a total of 90,000 drinks per hour from one line ,which leaves total output at 255,000 per hour, as stated earlier our vision here is to meet demands, be consistent , support customers in every possible way, also to follow quality procedures.

L-R: Blessing Oladeji, CEO/ co-founder, Octave Analytics; Shamsideen Fashola, group head, retail liability products, First City Monument Bank (FCMB); Idiare Atimomo, chief operating officer, Upinthesky, and Michael Nwoseh, head, youths segment, FCMB, during a youth Entrepreneurship Masterclass programme organised by the Bank for students of University of Ibadan at the school campus in Oyo State.

Premium Pension gets industry recognition for innovations

ension Fund Administrator, Premium Pension Limited has won the ‘Most Innovative Pension Company of the year 2017 Awards, following the efforts of the company in devising strategies to increase enrolment of contributors into the Contributory Pension Scheme. ’There is need for increased public awareness of the benefits and workings of the Contributory Pension Scheme (CPS) especially as CPS is a clear departure from the Defined Benefit scheme that proved

unworkable and brought untold hardship to retirees in the country” said Umar Mairami, managing director/CEO of Premium Pension Limited while reacting to the award won by the company recently. Mairami commended the organizers and seized the opportunity to recognize the immense contributions of The National Pension Commission (PenCom) and other stakeholders in the industry in sustaining the integrity of the Contributory Pension Scheme. He also recognized and appre-

ciated the support of the Board of Directors, Management and staff of Premium Pension Limited for making the award possible. The award ceremony which took place at the Sheraton Hotel, Ikeja, Lagos saw the company winning the award for the second time. The Company was represented Kemi Oluwashina, by its executive director, Business Development South & Strategy, who described the award as the reward for commitment, dedication and tenacity of purpose.

She said that the award also underlines the solid and fecund relationship between the company and the media in the area of awareness generation on the workings and benefits of the pension industry. The organisers said Premium Pension Limited won the 2017 awards following its efficient services to Nigerian retirees and their families, adding that the company provides impressive range of Pension products and services to its client base across the length and breadth of the country.

Tush begins 10 years anniversary celebration of business empowerment

s part of the lined up activities to celebrate the decade edition of the annual Tush Awards, the organizers has staged a youth conference in Lagos ahead of the event slated for December. The conference with theme ‘Youths in Business: Fund, Run and Grow your business and Ideas’ offered

a sum of one million naira as business grant to young entrepreneurs. One of the important reasons for staging this conference is to provide an avenue for the youths in business to interact with the key players in the business world and also learn several ways to access funds to grow their businesses even in the face of peculiar

situations. Basically, it was an event organized as a bridge to the knowledge gap for youths that are in business on how to grow, fund and run their businesses. The SME Business Pitch Competition was held at the Conference and 10 businesses were selected from the total of over 70 entries gotten over the

period of two weeks after they pitched to the team of Board of Judges. h The Tush Awards grand finale which doubles as the decade edition of the annual event would hold in December, 2018 and the organizers hereby call for more corporate support towards upping the standards and also, reaching out to more people.

Wednesday 12 September 2018

BUSINESS

DAY

COMPANIES & MARKETS The economics of the AMVCA red carpet

he AMVCAs is Nigeria’s equivalent to the Oscars. It’s a time to celebrate the talented people of the African movie industry. Every year, Nigerian celebrities bring all of the glam to the red carpet. It’s basically one of the few times you are allowed to do the absolute most and not be considered over dressed. If you are in the movie industry or movie industry adjacent, this is a chance to shine, so many would argue that whatever you spend on the slayage is worth it. The argument is usually that you need to spend money to make money; so looking the part and slaying on the red carpet is an ‘investment’ in your brand. Typically, an investment is an allocation of resources with the expectation of future benefits. For instance, money put in real estate, stocks, bonds or education, which will yield returns such as rental income, capital gains and dividends. To a certain extent I agree with the concept of ‘investing’ in your brand, because how your brand is perceived, can determine the quality of the opportunities you attract and whether or not you can command premium pricing. However, I think there is also a tendency to justify extravagant spending habits on wardrobe and lifestyle by terming them loosely as ‘investments’. The above referenced tweet was fascinating and created a discussion around what people were really spending or ‘investing’ to ‘slay on the red carpet’. It brought to light a topic Nigerians love to debate: Are Nigerian celebrities living above their means? And do they have assets to back up their spending? The answer is probably yes and no. There might be celebrities who are living above their means but there are also celebrities who understand how to play the game and are profitably playing it. But the real koko of the matter is what is the ROI (return on investment) both in the long run and the short run?And how much money is too much money to invest in the slay? The economics of the slay Most A-list celebrities have teams that provide hair, makeup and styling on a monthly retainerbecause of the frequency of the events they have to go to for work. In terms of the business of their brand, these expenses can be seen as a part of their cost structure. This means the going rates for these goods and services are most likely significantly cheaper for them. For example, if your fashion stylist is on a 60k a month retainer and you go to 6 events per month that is 10k per look. Also, most A-list celebrities don’t actually pay for the clothes they wear to these events, because they are walking billboards. I know there are quite a few people that get very salty about celebrities or influencers getting things for FREE, so let me explain. If you calculate am well! Nothing is free, because there’s an exchange of value for

both parties. The world has changed! Ten years ago, if you had a product or service your ultimate goal in terms of marketing was to get your product or service on TV, in magazines or on billboards. Those mediums garner a lot of eyeballs and the reach is in the millions. However, these days those mediums don’t have the same power as social media, because basically most of the content we consume is on our phones and our attention is on the Internet. I don’t know about you, but I don’t really watch traditional TV anymore. I mostly watch Netflix. I hardly ever look up at billboards when I’m in traffic; I’m on my phone. I hardly ever watch the news on TV; I get instant news from Twitter links and Instagram headlines. (Don’t judge me.) Americans don’t wait to see a break down of what celebrities wore to the Oscars in next month’s issue of Glamour magazine anymore because at that point it will be stale; they’ve already seen it on Instagram. In a similar fashion most of us watched the AMVCAs on Instagram through posts and insta stories and got to see the event unfold blow by blow, in real time and with instant access to the highlights. To illustrate my points, I’ll use a fictional character, Belema. She is a celebrity, a red carpet regular and a Bellastyista, which means the odds of her getting a ton of press for what she’s wearing on the red carpet, are pretty high. If you are a designer, stylist or makeup artist, it’s probably a good idea to work with her for the AMVCAs because – visibility. Let’s say Belema has an Instagram following of 250,000, a history of consistent slayage on the red carpet it is likely that her dress, hair and makeup for the AMVCAS will show up on the Instagram pages of BellaNaija online, BellaNaija Style and Genevieve magazine (944k, 425k, 313k followers respectively) with a combine reach of almost two million viewsthis is a conservative estimate because it doesn’t factor other instagram blogs and websites, and the traffic they generate during the AMVCAs. As a designer, makeup artist or photographer, if you do work pro bono or at a heavily discounted rate you shouldn’t see it as FREE or a favor, it should reflect in your Profit and Loss statement as a marketing cost. Think about it this way: how many newspapers or magazines in Nigeria have an instant 2

million views? And even with substantially less reach, showcasing your product or service in a newspaper or on a billboard runs in the hundreds of thousands and even millions of naira, which your small business can probably not afford. This is why influencer marketing is more effective because influencers are your walking, talking, in real time billboards - with higher conversion rates from audience to customers. With magazines and newspapers or billboards the audience is mostly static. There is no real or measurable engagement because there’s no real call to action. You look at a billboard, then what next? But you look at an Instagram post on BellaNaija, the designer, makeup artist or photographer is tagged. Even if you’ve never heard of them before, if they killed it, you follow them, so you can keep up with past or future work and probably buy in the future. The ROI on the Slay Like any real investment it is important to consider the short term and long term returns on the investment. This could be done in several ways, you could evaluate the net profit divided by the total investment and express that as a percentage or you could look at the present value of future cash flows from said investment. For example, if you considered buying a property in Yaba, which was being offered off-plan for N20 million with an expected market value on completion of N30 million, the ROI on your investment if you sold it on completion for N30 million would be N10 million divided by N20 million which means your ROI would be 50%. Also, if you were keeping the property long term with the prospect of collecting rental income of N2 million per annum, using Nigeria’s estimated inflation rate of 14% in 2018 as the discount rate, the present value of a N2 million rental income for five years would be approximatelyN6.9million. This excludes the market value of the property in five years. If you decided to sell the property in year five and property prices in the area were projected to grow by 6.6% per annum. The value of the property would be N41.3 million which means you would selling at a profit N21.3 million. So how do we evaluate the ROI on the slay at the AMVCAs? In the short run, believe it or not there were celebrities who were slaying, living their best lives at the awards and making money doing what they love, while their work looked like play to others. For example, some of the celebrities who were presenting on the red carpet for the awards and the after party were paid by brands. A gig that commands revenue of between Five Hundred Thousand Naira and One Million Naira. Lets assume that Belema was an award nominee and was also paid N500k by a brand to create content on the red carpet.

Business Event

L-R: Aggrey Maposa, Kantar Insights managing director; Ashiwaju Temitope, group public relations and event manager, Dufil Prima Foods Plc; Apoova Mishra, product manager Indomie, and Manpreet Singh, Indomie head of marketing, at the 2018 award ceremony held in Lagos Nigeria

R-L: Kayode Pitan, MD/CEO, Bank of Industry, and Gao Ning of The Export-Import Bank of China, after both banks signed the MoU for a $500m credit line to support the establishment of modular refineries and Flare Gas Recovery Programme in Nigeria held in China.

Back row L-R: Najib Dahiru, BDO Sigma Pensions Adamawa; ASP Lydia Secondee, PDO NPS Adamawa state Command; Aliyu H Modibbo, BDM Sigma Pensions Adamawa Hub; Umar Audu, Controller of Prisons Adamawa state Command; Abubakar Mai, RM Sigma Pensions Adamawa Hub,and Dan iya Hamidu, CSP Operation.Front row: L-R: Mum to Shehu Usman Adamu, Suleiman Zakariya NOK, Zulei Adamu guardian to Suleiman Zakariya and Shehu Baba Adamu NOK, all are Beneficiaries, at the donation of reliefs item to the Beneficiaries as part of Sigma Pensions CSR at the Nigerian Prisons Service in Adamawa.

L-R: Vishnu Murthy, store manager, SPAR Lekki outlet; Tomi Salami, ex Miss tourism Nigeria and founder, Aurora Foundation; Ziphozakhe Zokufa, Miss Universe South Africa, and John Goldsmith, marketing head, SPAR Nigeria, at the visit of the beauty queens to SPAR Lekki outlet in Lagos.

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2019: Salis-Fakumoju emerges Lagos AD guber candidate INNOCENT ODOH, Abuja

e mb e r s o f t h e Lagos State chapter of the Alliance for Democracy (AD) have picked a United States of America (USA) based accountant, Owolabi SalisFakumoku as their governorship candidate for the 2019 general elections. Apart from Salis-Fakumoju who emerged by consensus through a voice vote at the party’s primaries in Lagos on Friday, members also elected candidates for both the Lagos and national assemblies. At the event, which was witnessed by officials of the Independent National Electoral Commission (INEC) the trio of Idara Ayoride Ekanem, Ajao Ademola Alao and Ayokunde Awoleye emerged as candidates for the senate, to vie for the East, West and Central districts at the forthcoming elections scheduled for February, 2019. The governorship candidate would thus be making his third bid having contested the seat in 2003 and 2007 on the platform of the People’s Democratic Party (PDP). Addressing delegates of the party shortly after his election,

Owolabi Salis-Fakumoku

Salis-Fakumoju stated that his desire for the office of the governor was borne out of the desire to redistribute the resources of the state to ensure that the poor and vulnerable feel the existence of government. Lamenting the state of the aver-

2019: USAID to improve state and local officials, CSOs INNOCENT ODOH, Abuja

he United States Agency for International Development (USAID) has concluded a nine-year activity to improve the performance of state and local governments in Nigeria and increase involvement of civil society in the democratic process for the good of their communities ahead of the 2019 elections. A statement issued by the Public Affairs Division of the United States Embassy in Abuja at the weekend said that since 2009, the Leadership, Empowerment, Advocacy and Development (LEAD) activity, in partnership with government ministers, departments and agencies, state legislatures, and civil society organizations (CSOs), has built the capacity of state and local government institutions to assume greater responsibilities in delivering the basic services demanded by their constituents through training on leadership skills, and enhancing transparency and public accountability. “LEAD has demonstrated that if engaged, ministries, departments and agencies of government charged with service delivery can

work together with their civil society constituents for the good of their communities and their states,” USAID Mission Director Stephen M. Haykin said at the ceremony. He added that LEAD “has made a significant contribution toward the US and Nigerian governments’ shared objective of improving subnational governance.” In Sokoto and Bauchi states, later expanding to Kano and Rivers, LEAD has helped local governments decentralize decisionmaking processes and promote citizen participation in government decision-making in order to ensure improved service delivery in critical social sectors such as health, education, and water and sanitation. “LEAD provided technical support, mentoring, and coaching to enhance the technical capacity of more than 6,000 government officials at the state and local government area (LGA) levels in the four targeted states. This empowered LGA officials to better utilize strong institutional systems and processes for governance and service delivery, strategic policy development, project planning and implementation, personnel development, and financial management.

age residents of the state, he stated that the current political order has left them in the margins of prosperity, saying when elected the trend would be reversed adding that the people of the state would begin to benefit from government through mass oriented programmes.

“My cardinal goal is to ensure that the resources of the state which are concentrated in the hands of some special interests are given back to the people of the state,” he stated. Appraising the current Akinwunmi Ambode led government; Salis-Fakunmoju accused it of failing in three critical areas that would make life more meaningful to the welfare and wellbeing of the people. He listed the three critical areas to include, healthcare delivery, housing and education, saying when elected, the trend would be reversed in a way that would make governance more impactful. “A government is measured by the way it bridges the gaps between the rich and the poor, so if we want to use the three broad critical yardsticks in measuring the current government, then we can say that the government has not done much to bridge the gaps,” he said. In his remark, the Chairman of the AD in the state, Kola Ajayi, commended members for their orderly conduct, adding that the peaceful primaries showed AD was a true democratic party. Ajayi praised the sportsmanship displayed by all members, especially those who sacrificed

their ambitions for consensus candidates to emerge. He urged members to continue to show loyalty and dedication to the party, as that was needed to realise its goals in the state. “I commend you all for the way you have conducted yourselves so far, and I commend the sacrifice made by some of our candidates who had to give way for others to emerge. “This is an important step for our party to provide an alternative to the present government in the state. “To provide the kind of leadership that would take care of the needs of the people and take the state to the next level. “I want you all to do your best to ensure that the AD wins in the election so that we can provide the impactful governance that will uplift the generality of the masses,” he said. Ajayi said the AD had formed an alliance — Star Alliance — with some parties in the state. He said the alliance was putting everything in place to present a credible consensus candidate to defeat the All Progressives Congress in the state. The chairman described Salis as a distinguished indigene of Lagos who has the credentials to move the state forward.

I’m in Kaduna guber race on a rescue mission - Hunkuyi OWEDE AGBAJILEKE, Abuja

governorship aspirant on the platform of the People’s Democratic Party (PDP) in Kaduna State, Suleiman Hunkuyi has declared that he is in the race on a rescue mission. The serving senator who represents Kaduna North in the National Assembly, lamented that for over three years, the administration of Governor Nasir el-Rufai has subjected the state to bad governance. The development comes as PDP stakeholders across the 11 local government areas in Kaduna South Senatorial District, threw their weights behind Hunkuyi’s governorship ambition. It would be recalled that Hunkuyi was among the 14 All Progressives Congress (APC) senators that defected to the People’s Democratic Party (PDP) on July 24, 2018. Addressing party supporters in Angwa Wakili in Zango- Kataf Local Government Area of the State, the lawmaker said Kaduna State under El-rufai is not only groaning under heavy debts but also retrogressing across various sectors. According to him, one of the debts suffocating the state government is the N34 billion owed pensioners in terms of their unpaid

entitlements like gratuities and monthly pensions. This, he said, was responsible for why senators kicked against the approval of $350 million foreign loan request the state government forwarded to the Senate through the Presidency early in the year. He said: “I have no regret whatsoever as a senator from Kaduna State for kicking against the $350 million foreign loan request of the state government because the intendment of the request was not for the interest of the people or the state. “The three senators from the state and the Senate, after critically looking into the said loan, saw that there was no need for it and there

Hunkuyi

was no iota of sincerity of purpose in the loan request by the governor. “Within the last three and half years El-Rufai has been in office, billions and billions of monies in terms of monthly allocations, bailouts from the Federal Government, remittance from Paris Club have been received by him with little or nothing to show for them. “Most of the roads within the state are bad, state-owned hospitals are not functional and well equipped, morale of civil servants very low and so on and so forth”. He therefore appealed to PDP faithful in the zone to support his aspiration of clinching the party’s governorship ticket in the coming primary election, to serve as needed political weapon of slugging it out with El-rufai in the March 2, 2019 gubernatorial election. He assured them that if elected, all the 800 districts heads across the state relieved of their positions would be reinstated within a week after his swearing-in as governor. He also promised to review the cases of 25,000 sacked teachers. On their part, PDP chairmen and secretaries from the zone as well as other statutory delegates from the 11 local government councils including Danjuma Lah (PDP, Kaduna South) assured him of their support.

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APC may lose 2019 on the backdrop of direct primaries JAMES KWEN, Abuja

here are strong indications that the ruling All Progressives Congress, APC may lose the 2019 general elections on the backdrop of the insistence of the Adams Oshiomhole led National Working Committee of the party that direct primaries be adopted to nominate candidates. Recall that APC NEC at its last meeting in Abuja resolved that the party use direct, indirect and consensus primaries as against the usual use of indirect primaries. However, the indirect primaries option was reserved for the presidential nomination. A copy of the resolutions read in parts, “primary elections into all elective offices shall be by the Direct and Indirect Election or by Consensus. The use of the Direct and Indirect Primaries shall however depend on the peculiarity and need of a given State”. But barely 24 hours after the NEC meeting, APC NWC in what it termed clarifications on the NEC resolutions announced that direct primaries will be conducted to nominate candidates for all offices including the presidency. First exper imented in the Osun Governorship Primaries, under direct primaries, all registered members of the party are legible to participate in the nomination process. According to its proponents, “direct primaries will among others create a level playing ground for contestants; eliminate corrupt tendencies usually associated with the delegates system and ultimately ensure full participation of party members at all levels”. The insistence of APC NWC on the use of direct primaries as against the traditional use of indirect primaries has thrown the party into unprecedented turn oil with permutations that its top echelons such as governors, Senators, Ministers among others would dump the party if not favoured by this arrangement. Particularly, governors who want second term or intend to transit to the National Assembly and other party stalwarts who have put in place a structure(delegates) that will do their biddings with ease consider direct primaries suicidal to their

Oshiomhole

ambitions. Consequently APC controlled States are said to have adopted indirect primaries in a radical departure from the NWC foisted direct primaries, thereby making the primaries a battlefield before the conduct of the exercise. Reports have shown that almost all the 14 APC controlled states in the North have rejected direct primaries and adopted indirect primaries as they consider the move as ploy by their counterparts in the South West geopolitical Zone except Lagos to satisfy the selfish interest of a particular political icon. A popular APC Governor from the North who do not want his name in print upon the NWC position said his colleagues prefer indirect primaries to direct primaries because of security issues in the region and cost implications as well as convenience. He said, “ it is not correct to say that the National Working Committee of the party has decided to hold direct primaries for all elective posts”. “All the 14 APC governors in the North indicated that they would prefer indirect primaries. They gave two reasons. One is the cost, because we believe it would be as costly as the general election. Two is the security situation. “Most of our states have one form of insecurity or another

and trying to hold direct primaries involving all party members will be an invitation to chaos. Besides, our opponents will try to infiltrate our primaries and cause confusion. “Apart from the governors, APC leaders in non-APC controlled Northern states namely Chief Akume in Benue, Senator Mohammed Danjuma Goje in Gombe and Information Minister Alhaji Lai Mohammed of Kwara also indicated a preference for indirect primaries. “Besides, the governors of Ondo, Oyo and Ekiti have indicated support for indirect primaries while the Governor of Ogun said he does not mind whether the primaries are direct or indirect”, he said. The governor alleged that, “Asiwaju Bola Tinubu is the prime mover of the idea of direct primaries. President Buhari also supports it, at least with respect to presidential primaries. “I don’t think it matters much to the President what type of primaries are conducted because he is so far the only candidate, except perhaps for the propaganda value of saying so many millions of people voted for him. “But for the other elections the choice is very important because it could make the difference between primaries and chaos”, the governor argued. Also, in furtherance of their

opposition to direct primaries, governors allegedly convoked a meeting of state chairmen of APC in Abuja recently and direct primaries mode was loudly rejected. The APC state Chairmen anonymously said, “we are party members who want the best for our party. We will take this matter ( mode of primaries ) up with the NWC because the decision of the National Executive Committee was what governors Simon Lalong ( Plateau ) and Yahaya Bello ( Kogi ) told journalists”. Apart from governors, most national officers of APC are not in favour of direct primaries. For instance, APC National Vice -Chairman North -East , Mustapha Salihu , had dismissed reports that the party’s NWC agreed to recommend direct primary method to the party’ s caucus and NEC . Salihu noted that the each state /geopolitical zone had its peculiarities , noting that the direct primary was an idea being pushed by the South -West geopolitical zone of the APC . He noted that there is nothing wrong for any zone to push for what best suits states within its control but that it will be wrong to foist such on others . “If one geopolitical zone feels that ( direct primary) was what is best for them, I think they can canvass that at the regional level and they now give us reason why they need that. I want to believe that in a democracy , the majority will have their way and the minority will also have their say . “So, they have the right to wish and if we decide to make it flexible , definitely what they want will be given to them at their own various states , but one thing I want to assure you is that we will not succumb to regional imperialism so long that we are acting within the constitution”, he stated. Specifically, APC in Kaduna state is sitting on a timed bomb as the party leadership under Governor el Rufai has adopted indirect primaries while other party kingpins including aspirants led by the eloquent Senator Shehu Sani are clamouring for direct primaries. That el Rufai group decision reached irrevocable stage is dangerous for APC because feelers are that what stopped Shehu Sani from defecting with other Senators was the conviction that direct primaries would be conducted,

and as such he would be favoured but with indirect primaries using el Rufai controlled delegates his ambition is doomed. Sani has lamentated that, “delegate System, other wise called Indirect Primaries will rely on the whims and caprices of the few that control the party after emerging from ward, local government and state congresses that have been widely rejected by party members as a sham. “Hundreds of party mem bers who bought forms with a view to vying for various wards, local governments and state party executive positions were deliberately excluded from the process and in some instances even intentionally blocked from submitting their forms nor were they even consulted ahead of the so-called processes of affirmation of officials of the party. “Instead the names of all party executives were single handedly written by the Governor. That alienate d many of our party members and caused mass exodus from the party. These selected party executives under the tyrannical hold of the Governor have been complying with his (the Governor’s) biddings, limiting access, communication and association to only those candidates in the favoured book of the Governor. “A great many of members of the party executives have been appointed to serve as campaign coordinators of the Governor’s preferred candidates at various levels while those deemed to be sympathetic to the cause of the people other than the Governor have been shown the way out” he maintained. Also worrisome is the situation in Imo state where Governor Richas Okorocha is also vehement against direct primaries and opted for indirect primaries. Analysts are of the view that Okorocha who has anointed his son in law, Uche Nwosu as his successor can not hand him the party ticket if direct primaries are adopted. They said, Okorocha himself may risk getting the Senatorial ticket he is rooting for as the scenario that played out in the Congresses where the carpet was pulled off his legs will be repeated if indirect primaries are used. It is feared that should that happened and he leaves APC, it means the party will record total failure in the entire South East Zone.

Committee (NWC) of the PDP for consideration”. Ji b r i n , w h o s e t e n u re h a s been renewed for another five years, urged members of the BoT to always maintain their honour and inte gr it y by re maining neutral in all the processes leading to the emergence of the candidate. Those in the race for the presidential ticket of the PDP are former Vice President, Atiku Abubakar; Sokoto State Governor, Aminu Tambuwal; Gombe State Governor,

Ibrahim Dankwabo; President of the Senate, Dr. Bukola Saraki; former Governor of Jigawa State, Sule Lamido; former Governor of Kaduna State, Ahmed Makarfi; and a former Special Duties Minister, Tanimu Turaki. Others are a former President of the Senate, David Mark; a former Governor of Kano State, Rabiu Musa Kwankwaso; a former Governor of Sokoto State, Attahiru Bafarawa; a former Plateau State Governor, Jonah Jang; and a former lawmaker, Baba Datti Ahmed.

PDP BoT sets up c’ttee to pick consensus presidential candidate OWEDE AGBAJILEKE, Abuja

he Board of Trustees (BoT) of the People’s Democratic Party (PDP) has set up a 12-member committee to discuss with the party’s 12 presidential aspirants, with the view to picking one of them as consensus candidate. Chairman of the BoT, Walid Jibrin who disclosed this to our correspondent in a text message on Monday, said the committee would impress it on the aspirants the dan-

gers inherent in having such a large number of them in the race. Describing the present number of aspirants as unwieldy, Jibrin said there were fears that could be disagreement among the contestants that could lead to major divisions after the primaries. The BoT chair, however said the committee would not compel any of the aspirants to withdraw from the race; adding that, “rather, they would be persuaded to put the interest of the party above their personal interests and ambitions”.

Jibrin continued, “A committee has been set up to discuss with all the aspirants to come up with one of them as a consensus candidate. We have 12 of them in the race. “We have also advised the leadership of the party to regulate the processes and draw a code of conduct to guide the conduct and behaviour of the aspirants and officials to be engaged in the selection process. “Consequently, the BoT has forwarded its full recommendations to the National Working

Wednesday 12 September 2018

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Politics & Policy

It’s painful INEC budget is not ready 5 months to election- PPA chair National Chairman of the Progressive Peoples Alliance (PPA), Peter Ameh frowns at the delay in the passage of the budget of the Independent National Electoral Commission (INEC) and the delay of assent to the Electoral Act amendment Bill by the President, less than six months to election even as he urges for urgent action by stakeholders to resolve the matter. In this interview with Innocent Odoh, the newly elected chairman of Inter-Party Advisory Council (IPAC) also shares his vision for the council and preparedness of is party the PPA for the 2019 elections. Excerpts: We want to know the kind of transformation you wish to bring in IPAC? eople have misunderstood what IPAC stands for. The real essence for which IPAC was established is for us to be able to sit down together as political parties, share opinion on how to moderate the political temperature and look at ways to ensure successful conduct of elections in Nigeria and then look at the shortcomings that we had experienced in past elections in Nigeria and how to address them. You will agree with me that the 1999, 2003, 2007, and 2011 elections are not the same as what we have been seeing now. There is a radical shift in the way we see elections now because then there was ballot box snatching, ballot box stuffing and a lot of other things. We are slow but our election is improving by the day. So that is the function of IPAC to work at interparty level to be able to discus with parties to ensure that people coming to office are determined by the actions of the general populace by their will in elections. IPAC is also to ensure that our elections are violent –free, credible, free and fair. For us one of our cardinal objectives is to partner with other stakeholders, the media, donor agencies, INEC and all political parties to push our democracy forward.

The budget of INEC is still generating some controversy and even the Bill to amend the Electoral Act passed by the National Assembly the president has refused assent to the bill. What is your reaction

Ameh

to this? It is very painful that at this time we are still talking about INEC budget about five month to the election and it is very painful that at this time we are still talking about Electoral Act. At first it was returned by the President saying that there are some things that he did not like such as the sequence of election and the National Assembly took that out. So I am wondering why the legal advisers to the President and the AGF did not see that there was the need to also look at what was there. But I believe that the Presidency will be able to work with the National Assembly to see how they can address the issue within the shortest possible time. We should be able to look this

issue without partisanship because the law stipulates that we should have Electoral Act six months to election but right now we are already shot of that. There is also a problem that INEC by now does not have a budget of about 84 billion naira in place because we don’t want to experience logistics problem. So I urge the executive, the legislature and the INEC to all sit on the table including the political parties to see how this matter can be resolved within this month so that there won’t be logistics, political and legal lacuna to the election. The issue of vote buying has become an ugly streak in the nation’s electoral process which is pervading everywhere. What is your reac-

tion to this? This vote buying is very bad development in our electoral process because vote buying is inducement to the extent of making people vote against their conscience may be because of the poverty in the country. Because if not poverty, I do not see why anybody will give somebody N1,000 to vote against their conscience. So we must wake up as political parties, the Election Management body and civil society group. We must do what is called advocacy overdrive to be able to enlighten our people that when someone gives you money to come into office that person is planning to recoup his finances. In the IPAC we are going to call a general assembly meeting and sit down with all the members of the council and see how we can put our ideas together to make sure that this current style of inducing voters to vote against their conscience we find a very permanent solution to it. We cannot do it alone; we must also see how we can involve the police in charge of these duties. We must ensure that the people have the mandate to elect who they want and not be induced because of the poverty in the country. What is the level of preparedness of the PPA for the 2019 elections in terms of ideas and response to the issues of governance especially economy, security, corruption and other issues troubling Nigeria? Our politics is people -driven, our interest is to deliver good service. We have experienced a lot of things and people are coming to become aware that governance has become

like a telemondo thing where people go to launch boreholes and all that. I can assure you that the PPA has been a party that has been winning election; we won election in 2007, 2011 and even in 2015. But what we have done is to try as much as possible to mobilise the people at the grassroots. We have decided that we will jointly produce a presidential candidate for the Coalition of United Political Parties (CUPP) to which we belong. So for us in the PPA we are prepared for this election. Are you confident that this election will actually hold judging by the way the budget of INEC is being delayed and the imbroglio between the executive and the legislature with the President of the Senate Bukola Saraki being threatened with impeachment by members of the ruling party the APC and to some extent the Presidency? Since 1999 we don’t have interruption in election despite the struggle and I know that the President is a man of integrity he will ensure that there no interruption. For the one of Saraki, I hope the people moving against him also know what they are doing. If they want to remove Saraki, then they have to get the constitutionally required 2/3 majority of the members of the 109 Senators. But I don’t think this is feasible, so we watch as things unfold because politics is dynamic. At the end of the day people will cross sides, people will change their interests whether in favour of Saraki or against him, but as a grassroots politician I know Saraki will do everything possible to remain there.

2019: Kwara APC aspirant warns against imposition of candidates ...calls for synergy among aspirants SIKIRAT SHEHU, Ilorin

ew days to primary elections, a governorship aspirant on the platform of the All Progressives Congress (APC) in Kwara State, Saliu Mustapha on Monday cautioned the party against imposition of candidates on the electorate. He stated that foisting flagbearers on the people would be counterproductive for the party that planned to unseat the opposition Peoples Democratic Party (PDP) in the State. The warning came amidst speculations in some quarters that certain forces within the APC had perfected plots to sponsor an aspirant running on the platform of the party against the interest of others and impose him during the governorship primary of the party. Mustapha, an ally of President

Muhammadu Buhari, who had obtained the APC expression of interest and nomination forms for the governorship race, spoke to Journalists in Ilorin, the state capital. He said it was a common belief that the APC was poised to emerge victorious during the forthcoming elections in the state and it would be in the party’s interest to toe the right path and allow emergence of popular governorship candidate. Mustapha, a former Deputy National Chairman of the defunct Congress for Progressive Change (CPC), however expressed optimism that the party would be just and fair to all aspirants vying for its ticket. “We want to believe that APC as a party wants to come out victorious in the next general elections not just in other states but Kwara is one of the states they would like to clinch. Anybody that wants to win an elec-

tion and with the past experience, would definitely toe the right path and allow the popular candidate to emerge because any self -imposition on the people would be counterproductive. Then, you are only assisting those you want to push out to remain in office. “Sometimes, you hear a lot of rumours and speculations. One of the problems this country has gone through is that we live in speculations. Even leaders, sometimes, you find them to be speculative. Where people are supposed to be decisive and exhibit leadership, they live on speculations. For me, I’m in it. People outside might not feel the way I feel or know what I know. I know there is nothing like anybody would be imposed on us. “Some weak aspirants have been name-dropping. Of course, we have leaders that wish us well in Kwara. But these leaders are also very

careful and conscious of whatever is happening so they wouldn’t also do that mistake to want to impose unpopular candidate. Then what is their gain if they are also pushing hard to see that we win this election, especially in Kwara here? Why would they want to take a wrong step? “For me in APC, we must be more strategic and more focused and look at what would make us win the election, not to always give room to some of these speculations, where some people would even go as far as raising a lot of allegations against each other. Be rest assured, there is nothing like that”, Mustapha said. Fielding questions on the allegation that he was a mole of the President of the Senate, Bukola Saraki, in the APC, the governorship aspirant said he has always shared the political ideology of President

Muhammadu Buhari and would not renege now. “On a good day I wouldn’t want to even answer this question because the more we flog issue like this. It is just unfortunate. People should try and look at my antecedents and where I am coming from before you make any allegation on my person. “I have always shared the ideological conviction of the President (Muhammadu Buhari) and I have always believed in his political ideology. We started from the way back APP that later became ANPP. We got to a stage where we formed our own party, CPC, which I became the Deputy National Chairman. I was part and parcel of what we called APC today, how the merger came about and after the merger, we had people who migrated to the party from the new PDP and today they have left and I still remain in APC.

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Wednesday 12 September 2018

LegalPerspectives

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BUSINESS DAY

Case Review: When silence is not golden! SIR GERALD ONUCHUKWU v FIDELITY BANK PLC CA/L/149/2014 What to note: This is a review of an already concluded matter before the Court of Appeal. It’s a matter that bothers oni. Bank loan and customer’s default. ii. When a customer can establish false imprisonment against a bank. iii. Implications of not replying a business letter (especially one that requires response).

F Facts

idelity Bank gave the appellant (Sir Gerald Onuchukwu) a loan facility for the purpose of purchasing a car with the agreed repayment period of twenty-four months. The appellant issued twenty-four post-dated cheques in favour of the bank to cover the monthly deductions for the agreed twenty-four months. The bank got value for 18 months cheque while the remaining 6 months was not paid. The appellant’s position was that the bank deliberately refused to present the cheques for payment in order to claim interest and penalty. The bank however denied the allegation. The appellant further alleged that he was detained (prevented from leaving the bank premises) by the security men in the bank when he visited the bank for reconciliation of his loan account. The appellant filed an action at the high court seeking a declaration that the bank is only entitled to the amount outstanding on the loan facility and also claiming damages for false imprisonment. The bank filed its defence and counterclaimed for a higher amount as the outstanding debt and the interest based on the appellant’s default. At the High Court, the appellant’s claim was dismissed while the bank’s counterclaim was granted. The appellant being dissatisfied with the judgement of the High Court proceeded to file an appeal before the Court of Appeal. Issues for determination Three issues were submitted by the appellant’s lawyer for determination while the respondent’s counsel submitted two issues. The issues submitted by the appellant’s lawyer are“1. Whether the appellant established by credible evidence that the total sum outstanding on the vehicle purchase credit facility granted to him by the respondent is the sum of N604,902.00 representing the total sum of the six cheques he alleged were mis-

placed by the respondent which were not presented for payment and not the sum of N1,500,011.98 in the counter claim of the respondent which is made up of the N604,902.00 and default charges claimed by the respondent as the outstanding amount which the learned trial judge entered as judgment in favour of the respondent on the speculative reasoning the “the six cheques were not misplaced by the respondent but that the respondent was only exercising caution in presenting them to the bank due to the fact that other cheques have been returned” thereby occasioning a miscarriage of justice on the appellant? 2. Whether the learned trial judge improperly evaluated the evidence and erred when she held that the appellant did not prove false imprisonment on the ground that the evidence on false imprisonment was contradictory and the fact (exhibit D13) showed appellant driving out of respondent’s premises unmolested. 3. Whether from the totality of the evidence adduced by the parties, judgment ought to have been given to the appellant.” The issues submitted by the respondent’s counsel are“3.1 Whether in the circumstances of the case, the Honourable judge at lower court was right in dismissing the claim of the appellant. 3.2 Whether the respondent has in his case proved that it is entitled to judgment on its counterclaim at the lower court as to justify this Honourable court to refuse to interfere with the decision of the trial Judge.” The Court of Appeal on the examination of the issues for determination submitted by the two parties before it decided to rely on the issues submitted by the respondent’s counsel as they are more precise and they repre-

sent the actual grievance of the appellant. Submissions Issue 1 Whether in the circumstances of the case, the Honourable judge at lower court was right in dismissing the claim of the appellant. The appellant argued that it abided by the terms of the facility granted to him and that eighteen of the twenty-four cheques given to the bank were honoured. It was further argued that the remaining six cheques were not honoured due to the fact that they were not presented when due. Also, because of the bank’s failure to present the cheques he wrote a letter to the bank stating that he will not be liable for any penalty or interest due to the failure of the bank to present the cheques when due. The said letter was not replied. He further submitted to the court that by the terms of the loan facility he is to pay interest or penalty in a situation whereby the cheque was presented and not honoured when due. The respondent argued that the appellant defaulted in the repayment of the loan facility and as such is under the obligation to pay the default charges. The bank argued that the appellant admitted under cross-examination that the six cheques were not honoured but that it was because they were presented at once and not monthly. The bank’s position was that the main issue is that the appellant never took steps to repay the loan after the cheques were not honoured. The respondent submitted on the issue of false imprisonment that the evidence of the appellant was contradictory as he claimed he was detained in the banking hall and later claimed that it was at the point when he wanted to

leave the bank’s premises. It was the respondent’s case that the evidence presented showed that the appellant left the premises of the bank two hours before the time he claimed- the respondent’s counsel stated that being documentary is better than oral evidence. Issue 2 Whether the respondent has in his case proved that it is entitled to judgment on its counterclaim at the lower court as to justify this Honourable court to refuse to interfere with the decision of the trial Judge. The applicant argued that based on the loan agreement he is not liable to pay any default charge as he did not default. Rather, the bank chose not to present the cheques when due and that when they eventually presented it they presented the six cheques at once and not monthly as agreed. Therefore, the respondent’s counterclaim should have failed. The respondent on the other hand argued that since the appellant took no steps to pay the loan facility after the cheques were returned then he has defaulted and thereby liable to pay default charges. Decision of the Court of Appeal 1. The effect of customer’s default in fulfilling the terms of a loan facilityThe court held that it is an established principle of law that a bank’s customer who breaches the terms of a loan agreement is bound to pay the penalties associated with the breach. The appellant has however been able to establish that he did not breach the loan agreement as the cheques were not presented when due. Therefore, this principle will not apply and as such the appellant is not liable to pay

default charges imposed by the bank. 2. When Tort of False Imprisonment can be established by a customer against a bank- The court stated that the appellant claimed that he was invited for meeting to reconcile his loan account and that he left the meeting when he was requested to pay extra charges. However, the bank’s officials instructed the bank security not to open the gate for him to leave. Hence, he was compelled to issue cheques covering the amount he was told to pay so as to secure his release. The court held that the evidence presented by the bank only showed when the appellant was leaving the premises and did not establish whether he was restrained or not. The court further held that the letters written by the appellant to his bank not to honour the cheques issued shows that he must have issued them unwillingly. The court noted that although the bank denied the allegation in its averment but no evidence was given. On the position of law on Tort of False Imprisonment, the court stated that “even though there is no fixed period of restraint that may constitute the tort of false imprisonment, even a short period within which a person was actually prevented from freely exercising his right of physical movement from a particular area would suffice.” The court therefore held that the appellant was falsely imprisoned. 3. Implication of not rebutting/countering the content of a business letter- The court stated that the bank did not reply the appellant’s letter accusing them of not presenting the cheques when due and that he will not be liable for default charges. The court held that it is an established principle/law that when a party refuses to reply a business letter which requires a response (be it denial or acceptance), such a party will be considered to have accepted the content of the said letter. The position of law is that where there is oral and documentary evidence, the documentary evidence will be used to assess the oral evidence. This is because genuine documentary evidence does not lie while oral evidence may lie. Conclusion From the foregoing, it is clear that the bank’s counterclaim failed mainly because of the failure to reply the appellant’s letter. The court relied heavily on the content of the letter. As stated, the position of the law is that failure to reply a business letter that requires a response is tantamount to the acceptance of its content. Silence is therefore not golden in business correspondences!

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IFAD commits $1.3bn to drive Africa’s agriculture Stories by JOSEPHINE OKOJIE

he International Fund for Agricultural Development (IFAD) has earmarked $1.3 billion to support agriculture in Africa and reduce post-harvest losses over the next three years, Gilbert Houngbo, president of IFAD said. Houngbo made this know while speaking to journalists at the just concluded African Green Revolution Forum in Kigali, Rwanda. “IFAD will spend 50 per cent of the $3.5 billion budgeted for agriculture in Africa and expected to increase by 10 per cent from 2019 to 2020. Our goal is to reduce Africa’s food post-harvest losses by 20 per cent,” Houngo said. “ The situation of Afr ica’s agriculture is improving and we need to move from subsistent agriculture to agribusiness and that is is in line with what IFAD is doing. Seventy per cent of IFAD financing has been on the value chain and not

Gerardine Mukeshimana, minister of Agriculture and Animal Resource, Republic of Rwanda Gilbert Houngbo, president of IFAD; Agnes Kalibata, president, AGRA and Audu Ogbeh, minister of Agriculture and Rural Development, Nigeria during the just concluded Africa Green Revolution Forum (AGRF)

only on production,” he said. He estimated Africa’s food postharvest loss to cost about $4billion

annually and stated that the target of the institution is to reduce it by 20 per cent.

Agric research receives boost as IITA wins 2018 Africa food price award

Expert tells FG, States to commence tree planting as buffer to climate change

….gets $100,000 JOSEPHINE OKOJIE

e s e a r c h i n Ni g e r i a’s agriculture has received a boost, as the International In s t i t u t e o f T ro p i ca l Agriculture (IITA), based in Ibadan won the 2018 Africa Food Prize award for its innovation in finding solutions to some of the challenges limiting Africa’s agricultural productivity. The award was given to the institution at the just concluded African Green Revolution Forum (AGRF) in Kigali, Rwanda. This made IITA becomes the first institution to receive the distinguished Africa Food Prize award that consists of a $100,000 c a s h p r i z e a n d a t ro p hy o f recognition. The independent Africa Food Prize committee, chaired

According to him, the investment covers the entire value chain, from production, farmers training on

AKINREMI FEYISIPO, Ibadan by Olusegun Obasanjo, former President of Nigeria, selected the agric research institute for its deep commitment over many decades to producing a steady stream of innovations that have boosted the nutrition and incomes of millions of people across Africa. “IITA stood out to us for its steadfast and inspiring commitment to a research agenda that aligns with both our African traditions as well as the evolving needs of African farmers and consumers for the latest advances food production,” Obasanjo said during the presentation of the award. “From the cassava we are still eating today, to the valuable and nutritious soybeans we now grow in our fields, to maize varieties that can withstand drought and deadly toxins—our diets and our agriculture businesses would be much poorer today without IITA’s

Strive Masiyiwa, chairman, Econet and chariman, AGRF chairs group; Olusegun Obasanjo, former President of Nigeria and Nteranya Sanginga, director general of IITA during the Africa Food Price award in Kigali, Rwanda

good agricultural practices and processing, as well as market linkages. IFAD has its presence all across Africa and is investing in rural people by empowering them to increase their food security, improve the nutrition of their families and increase their incomes, the international financial institution said on its website. In Africa, IFAD has partnered with various governments for an alliance to drive the development of agriculture on the continent and improve the livelihood of smallholder farmers. In Nigeria, the institution focused on the maize and rice and is working with cooperatives across the entire value chain of the two crops. Since the establishment of the IFAD projects, it has help increase the productivity of thousands of maize and rice smallholder farmers in the country and improve their livelihood as well as rural economies.

leadership, and its willingness to forge powerful bonds with African farmers and African communities,” the former president added. IITA has been at the forefront of agricultural research in Nigeria and all cross Africa and has included a critical focus on connecting crop science to creating employment for Africa’s youth, and ensuring African farmers can adapt to the stresses of climate change and the growing threat for an array of crop pests and plant diseases. IITA has also led efforts to breed new varieties of banana, cowpea, maize, soybean and yam that are suited to Nigeria and to the region at large wide diversity of growing conditions and dietary preferences. Nteranya Sanginga, director general, IITA, while receiving the award stated that a great deal of IITA’s success rests on its ability to develop relationships and collaborations that allow the fruits of its research to be scaled up and made available to millions of farmers. “I am extremely honoured to be receiving this prize on behalf of IITA and proud to be part of a group of researchers dedicated to building lasting and relevant solutions for the continent,” Sanginga said. “But it would be remiss of me if I did not acknowledge the important role of our various partners, from other research centres to governments to the private sector, without whom our research might never have seen the light of day,” he further said.

imoh Saka, coordinator of environmental protection and natural resources, Centre for Sustainable Development, University of Ibadan, has advised Nigerians to start planting trees in order to ameliorate the impending effects of climate change in the country. Saka, forest expert gave the advice at a lecture organised to sensitise Nigerians on the dangers of the climate change entitled “Rise for climate event” held in Ibadan. While warning against what he called ‘political tree planting’ among Federal, State and corporate organisations said “it is a waste of money, time and resources to see that government officials, Federal and States, individuals, corporate organisations and institutions in Nigeria embark on tree planting in September and October when the rain season is almost over.” “What I mean by political tree planting is when you plant trees, you make noise on television and radio, you announce that we want to plant trees, it is good to plant trees, it is good to create awareness but is the process right? It is a waste of money when you plant trees in September or October. He however enjoined youths to embrace tree planting with a focus to reduce the effects of climate change in the nearest future, adding that “tree planting that is common in September among Nigerians can only he described as “political tree planting”, because “they will budget another money for tree planting the following year, they don’t know the appropriate time to plant trees”.

According to him, the youth, let us engage in massive tree planting because you are the owner of the future. Those who are above 50 years today, in the next 30 years, they will be all gone. So if you plant trees now, the future will be good for you, but of you did not, there will be serious calamities. In order to avoid calamities, all hands must be on the deck”. “Like I said, tree planting in Nigeria, the best time to do it is between May and July because this is the period when rain stabilises, so you plant your trees during rain season. You don’t have to wet it with water again because by October or November, when the rain will stop the tree is already stable. You don’t need to wet the trees again. “But, if you delay it till September or October, that is common in Nigeria when government plan trees in September, it will have one month of rain, during dry season, you start to wet it, then the tree will die. So, you budget another money for tree planting the next year. This is political tree planting. “Trees are known to ameliorate the impact of climate change. They help to mitigate the effect of climate change. Trees are known to absorb. A tree may lock up carbon dioxide in its system in its lifetime if it is not fell. So, trees play significant role in climate change amelioration. They also play a role in micro climatic amelioration. That is why you will see people in hot climate; they will go and sit under a tree that is cooler than outside. That is what we called micro climate.” The organiser of the event, Tosin Afeniforo while speaking with our correspondent described the event as a global event aimed to reduce the effects of climate among the people.

Wednesday 12 September 2018

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BUSINESS DAY

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Science ministry releases 19 hybrid seeds, chicken breed AKINREMI FEYISIPO, Ibadan

n its bid to boost agricultural production in the country, the Federal Ministr y of Science and Technology has released 19 new hybrid seed varieties and an indigenous chicken breed. The National Variety Release Committee (NVRC) which approved the release at its 26th meeting held at the National Centre for Genetic Resources and Biotechnology (NACGRAB) secretariat, Ibadan recently, said the chicken breed submitted by the Federal University of Agriculture, Abeokuta (FUNAAB) was a dual purpose (egg and meat) livestock breed called FUNAAB alpha chicken. Sunday Aladele, registrar and chief executive of NACGRAB, who disclosed this after the meeting, said the breed of chicken had performance characteristics such as body weight, egg weight, and survivability, surpassing those of

existing Nigerian local chickens. Oladosu Awoyemi, chairman of NVRC, announced the release of 19 crops out of 21 varieties submitted for consideration; and the livestock

Kogi Assembly to increase budgetary allocation to agric in 2019 VICTORIA NNAKIAIKE, Lokoja

ogi House of Assembly has pledged to improve the percentage budgetary allocation to the Agriculture sector of the state come 2019 towards attainment of the 2003 Maputo Declaration which stipulates a minimum of 10 per cent. The chairman, House committee on Agriculture, Abdulkareem KekereSani (APC-Okehi) disclosed this during the parliamentary briefing and presentation of the 2018 Kogi Agriculture sector budget analysis on Monday in Lokoja. The programme was organised by the state Public Financing of Agriculture (PFA) Budget Committee supported by ActionAid Nigeria in collaboration with Participation Initiative for Behavioural Change in Development (PIBCID). Kekere-Sani stated that the House would ensure tremendous improvement on the current percentage of 6.56 to enhanced agricultural production, diversification of the economy and selfsufficiency in food come 2019 budget. He also said Gov. Yahaya Bello led administration was committed to the overall improvement in the agriculture sector especially smallholder farmers and women participation in agricultural activities. Kekere-Sani equally stressed that the parliamentary briefing and presentation of the analysis will afford the members the opportunity to ascertain need areas and called on all stakeholders to come together and right the wrongs in the sector before 2019. Hamza Aliyu , executive director, Initiative for Grassroots Advancement (INGRA), while presenting the 2018 Agriculture sector budget analysis and recommendations for 2019 disclosed that Nigeria had over 80 million hectares of arable land out of which only 40

per cent was being utilised, adding that the nation’s population of over 180 million people made her Africa’s largest agricultural market but lamented that little effort was being made by government at all levels to fully exploit the naturally endowed agricultural potentials. Aliyu also stressed that the country was yet to implement the 2003 Maputo Declaration to which it remained a signatory with a commitment to allocate at least 10 per cent of its annual Budget to Agriculture. He said “Other sectors that drive the socio-economic development of the State such as Education with 11.93 per cent, Health with 8.78 per cent, Government House with 17.47 per cent, Works and Housing with 13.55 per cent were placed above Agriculture.” Although there was a consistent increase from 2.7 per cent in 2016 to 4.53 per cent in 2017 and 6.56 per cent in 2018, it was still less than the Maputo declaration of the accepted International benchmark set for African Nations”. In his contribution, Edoko MosesOdodo (APC-Dekina-Biraidu), a member of the House committee on Agriculture called for timely presentation of the budgets to enable it undergo proper legislative processes and early passage. Also contributing, Victor Omofaiye (APC-Ijumu) stated that there ought to be a tripartite arrangement between the Executive, Legislature and the NGOs as stakeholders, to identify the challenges and address them appropriately. Also in speaking, Gift Omoniwa, project manager, ActionAid and executive director, PIBCID stated that the meeting was imperative to enable annual budgets to the sector make better impacts on agricultural practices farmers in the state.

breed, during the meeting at NACGRAB. According to Aladele, the 19 crop varieties included one soybean (SCSL01), five maize hybrids (P4226,

P3966, P4063, WE3205and DKB350) and two maize varieties (AMANA-1 and AMANA - 2). Others were, one sweet potato variety (Solo Gold); three groundnut

varieties (SAMNUT 27, SAMNUT 28 and SAMNUT 29); and three sorghum varieties (SAMSORG 47, SAMSORG 48 and SAMSORG 49). Aladele therefore said two cowpea varieties (SAMPEA 18 and SAMPEA 19) and two transgenic hybrid cotton (MAYCO C567 BGII and MAYCO C570 BGII) were approved for release too. The NACGRAB chief executive said criteria used by the committee for release of the crops included characteristics such as, high yield potential, good pod clearance and resistance to potato virus. He said other characteristics where, good standability, resistance to lodging, early maturity, tolerance to drought, excellent husk cover, high grain yield and tolerance to insect pests. He said scientists, seed companies, research institutes, universities, and breeders from Nigeria, India and Kenya attended the meeting, as some of them developed the newly released varieties.

ODDA: Kwara acquires 2,550 hectares, approves N1bn to boost agriculture SIKIRAT SHEHU, Ilorin

h e Kw a ra St at e Government under its Offtakers Demand Driven Agriculture (ODDA) scheme has acquired about 2,550 hectares of land and approved N1 billion to boost farming activities in the state. Bamidele Adegoke, Kwara State commissioner for Agriculture, who disclosed this in Ilorin, expressed delight that more youths are showing interest in agriculture, adding that people need to consider it as a business. Adegoke also clarified that the state government is not acquiring land from communities for the estate farm development, but collaborating with communities that are willing to provide land for

farming activities. He listed the communities where the government had secured land for the estate farms to include Okeoyi, Ejidongari, Esie, Agbamu, Reke, Malete, Alateko, Ekan, Ballah, Isin, Share, Shonga, Bode-Saadu and Owode-Ofaro. The commissioner said that over 1,000 farmers are targeted to be empowered and settled on the estate farms, adding that women and unemployed youths would be given priority. According to him, the ‘Estate Farm initiative’ is unique because it ensures ease of administration, monitoring and allows the government to ensure adequate security for the farmers and their farm produce. He added that the farmers enjoy subsidies on land clearing and land preparation, which eventually

brings down the cost of production. In a related development, Anu Ibiwoye, special adviser to the Governor on Agriculture and Rural Water Support Services, dis clos e d that the N1b loan facility has been approved by the State House of Assembly and will be disbursed to peasant farmers across the 16 local governments across the state. He explained that the loan facility is to be obtained from the Central Bank of Nigeria (CBN) under its Anchor Borrowers programme, stressing that the State government is standing as guarantor for the farmers to enable them access the fund. Ibiwoye further stated that the facility will enhance agricultural activities at the local level, and ensure food security, job creation and poverty reduction.

CHI Farms partners Zoetis to improve livestock health

hi Farms Limited, an agro-allied organisation is partnering with ZOETIS, a global animal health care company and representative of Bill and Melinda Gates Foundation in Africa to establish an ultra-modern animal care veterinary centre in Ibadan, Oyo state, Nigeria, called City Laboratory. The world class veterinary centre will execute scientific research programmes, deliver quality diagnostic products, medicines and vaccines as well as carry out genetic tests, bio-devices and a range of other animal care services. Supported by the ZOETIS and ALPHA Initiative, CHI Farm’s City Laboratory is being established with

the purpose of improving livestock health in Nigeria through quality medical supplies and veterinary consultations to local farmers. According to Tunji Olaitan, general manager of CHI Farms Limited, the laboratory will provide world class veterinary services, diagnosis and medicines for Nigerian farmers at affordable rates. Olaitan further revealed that its partner ZOETIS, will further support local farmers with all technical expertise as well as materials and equipment needed for education and training to help increase productivity. “Access to the right medicines, diagnostics laboratory facilities and education nationwide will help farmers raise healthier animals and

secure more sustainable revenues, which is critical to the health and economic development of the country. Only healthy animals can produce healthy food and that is what City Laboratory is all about” Olaitan said. Also, Joshua Olorungbemi, country lead for Zoetis and ALPHA Initiative stated that the initiative will continue to deliver on its three objectives; making available quality veterinary medicines, supporting veterinary diagnostics services network and providing training support for farmers, veterinarians and all stakeholder in the Nigeria livestock industry. The commissioning of the facility is scheduled to take place on Wednesday, September 12, 2018.

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Leadership

Wednesday 12 September 2018

SHAPING PEOPLE INTO A TEAM

Life’s Work: Trevor Noah ALISON BEARD

HE LATE-NIGHT COMEDIAN ON ASSEMBLING A TEAM AND WORKING TO DEADLINE. As a biracial kid growing up in apartheid-era South Africa, Trevor Noah learned to confront political injustice by poking fun at it. Now, at age 34, he brings that same sensibility to a world-touring stand-up act and a gig hosting “The Daily Show” — a role he took over from Jon Stewart and quickly made his own. Why did you become a comedian? I always felt an innate joy making people laugh. I always loved performing. And then somebody paid me to do it — as a profession. But I loved it before I earned any money, so I think it was always going to be my natural course. How did your upbringing affect the way you approached your career? For any comedian, your life informs your point of view, the way you see the world. My comedy comes through the prism of race or class, because those are two worlds that collided for me growing up. And I guess that’s served me well, because those themes cross over countries and continents. We’re all still dealing with those issues today. You achieved fame in your home country relatively quickly. What prompted you to leave that behind and move to the United States? South Africa is a wonderful place to begin a comedy career, but it’s a small country. At the time we’re talking about — though it’s changed dramatically in the years since — there was only so much you could do, only so many spaces to perform. My goal was to do as much comedy as I could, and I’d always dreamed of performing elsewhere in the world. So I went to Australia, the U.K., Europe. But the one place that has a truly sustainable stand-up comedy market is the United States. It’s where you can do comedy full time, as your job and as your life. Was that jump to a much bigger, more competitive market scary? Scary in a good way. Like any great challenge in life, there was the right

combination of fear and excitement. I knew that it might not work, but why try something that will definitely work? And then you landed at “The Daily Show.” How did that happen? Jon Stewart and the show’s executives had watched my comedy and liked what they’d seen. Jon reached out and told me to keep in touch, and that’s what I did. I was doing shows in New York, which gave me ample opportunity to hang out with the team and get that relationship kicked off; over time I created a few pieces and we worked on making me part of the show. Then, when Jon left and they needed a new host, my name got thrown into the hat. When Comedy Central was making that big succession decision, did you advocate for yourself? Not at all. Because I knew I was a dark horse, there was no feeling of stress attached to the decision. I never believed the job was mine or that I deserved it, and I didn’t anticipate getting it, which helps with any position in life. If you don’t think it’s yours, you just put your best foot forward and prepare for the next opportunity that might come. Luckily, in this case I didn’t have to wait. “The Daily Show” was it. Did you have any hesitation about taking the job? You had big shoes to fill. If you don’t have doubts about a challenge like that, you’re extremely arrogant or extremely stupid, I would think. But if I’d let my doubts stop me from exploring the best opportunities, I wouldn’t have gotten to where I have in my life. So I just had to buckle down and give it my best shot. Having Jon Stewart’s endorsement and support was all I could hope for, and with him in my corner, I was ready to see what would happen.

tion? The first step was to learn as much as possible. I was lucky in that I inherited many experienced writers and creators and directors who could infuse my head with decades of knowledge in a short space of time. I never thought that I knew anything coming into the show. I knew that I had a point of view that was unique in the late-night space. But I didn’t take for granted that I was surrounded by people who’d been making a highly successful show for a long time. So all I did was learn and listen and grow with the team. I was the head of the show but in no way trying to be the boss. Over time, as I’ve become more comfortable, I’ve taken more of the reins, and now we all guide the show together. How does that collaboration work? And how does it differ from your own individual creative process? When creating stand-up, I have as much time as I need. I’m not rushing. I can work completely within the confines of my own mind. When you’re making a daily show, there’s a deadline. Your content — the news — is before you, and you have to figure out how to create something that’s both entertaining and informative by the time you record the show for that evening. We all enjoy comedy and commenting on the news and sharing that process. And then we try to translate those conversations to a TV show. What’s a typical day like? We meet in the morning, but we’ve already spoken before then, because the news cycle is nonstop. We’re chatting the night before, chatting first thing, so when we get in, we already have a sense of what we think the day’s news is going to be. Then we watch news together in a room. We all make jokes about it. We figure out what angles and takes we might approach from. We try to solidify our point of view. From there, it’s about me putting my stamp on it and getting it to a place where it’s as original as it can be — because there are now five or six shows dealing with similar material. Then we write together, and people bolster the scripts. Then we rehearse, and finish up with some rewriting touches, and then we record.

How did you manage the transi-

The pace of production must be grueling. How do you prevent burnout, both for yourself and for your team? First, by creating an environment where it feels less like you’re working and more like you’re having fun with a purpose. Second, by building up your resilience, getting used to the rhythm and intensity of the news, figuring out processes that maximize your outputs through the day and also give you time to relax. You need to know when and how to focus on the work and when and how to breathe. It must be tough to make a show in such a tight time frame. Yes, but it’s also liberating. It has taught me to focus on letting things go as much as on making them perfect. Think of the greatest painters. Even they had to stop at some point, you know? When the Catholic Church told Michelangelo, “We need it by this day,” he had to put down his brushes. And that’s really something: to understand that you can create only within the time you have. Some days you will think it’s perfect. Some days you won’t. It’s difficult initially, but you just try, over and over, to make it as good as you can every single day and aim for consistency more than anything else. That becomes the ultimate goal, as opposed to moments of brilliance. The team has changed since you took over. What do you look for in new hires? I’m trying to find people who will give us a competitive advantage in some way, shape or form — people with a unique point of view who are hungry and creative. I don’t need people to think exactly as I do politically, but it’s nice if they at least share my sense of comedy and vision about how to make a good television show. I want to create a room that’s diverse in its thoughts, backgrounds and skill sets so that we protect ourselves from making a show that’s homogenous and one-dimensional and instead connect with as many different audiences as possible. Given the demands of the show, why have you continued to also do stand-up? I look at my routine as something I create over time to complement what I’m doing on “The Daily Show.” In one aspect of my life, I have an im-

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mediate release, and then in another, I have a more long-term project that I’m always working on with a more measured approach. Stand-up is also different because I have only that one hour with that audience on that day. Those people don’t have an opportunity to come back and see me the way the TV audience does. Do you do any special prep before taking the stage or taping a show? I try to keep it casual. I’ll kick a soccer ball around with my crew. I’ll talk about the day and make jokes with my friends. I’m trying to maintain the same level of authenticity offstage and onstage. I don’t want to switch into a character or a caricature of myself. I want to perform, yes, but also to maintain who I am and who I’m trying to be. I keep it as chill as possible so that when I come out, people are getting as authentic a Trevor as I can give them. What’s the secret to quickly building rapport with an audience? I think the most important thing is to instantly give them a sense of who you are and how you feel in that moment. If a speaker is nervous and tells the audience that, people immediately contextualize it and respond accordingly. If a performer is in a good mood or feeling wild and crazy and says so, I’ve found, the crowd will be good at matching that energy. So for me, the rapport is built by a genuineness conveyed as quickly as possible. As someone who’s had so much success so young, how are you thinking about the rest of your career? I don’t think too hard about that, because it can become a bit overwhelming. I try not to live too far into the future or get too stressed about today. I have long-term projects, but for the most part, to the best of my ability, I focus on what I’m doing right now. In sports they always say, “Keep your eye on the ball until it’s in your hands or at your feet, and from there, make your next move.” So I’d say I spend 90% of my time trying to perfect what I’m supposed to be doing today or tomorrow, and 10% of my time thinking about what the next move is. Alison Beard is a senior editor at Harvard Business Review.

Wednesday 12 September 2018

C002D5556

Financial Inclusion

BUSINESS DAY

& INNOVATION Why Nigeria’s financial inclusion is low Supported by:

istered bank account is that they do not have enough money to make transactions with the service and lack knowledge about the service. While according to the World Bank report, titled Global Findex database, mobile money was seen as the model that led to the increase of financial inclusion in SubSaharan Africa, as only eight countries in Africa which included Burkina Faso, Côte d’Ivoire, Gabon, Kenya, Senegal, Tanzania, Uganda, and Zimbabwe recorded 20 percent or more adult using only a mobile money account. “Financial inclusion is on the rise globally, accelerated by mobile phones and the internet, but gains have been uneven across countries,” the World Bank said in a statement. According to the report, Nigerian adults who are 25 years and above with bank accounts declined by 5 basis points from 49 percent in 2014 to 44 percent in 2017. This was not different with account holders over 15 years, as their numbers fell 4 percentage points from 44 percent in 2014 to 40 percent in 2017, as compiled from the

latest World Bank’s Global Findex Database. The data shows that 51 percent of Nigerian males had a bank account in 2017 compared to the 27 percent recorded for females; this brings the gap between the male and female to 24 percentage points. This is however a bigger than the 20 percentage points gap that was recorded in 2014 when the total male with an account was at 54 percent with females at 34 percent. “Nigeria stands a better opportunity in exploring telecoms to help spur financial inclusion and as such there is need for accelerated regulatory framework between National Communication Commission (NCC) and Central Bank of Nigeria (CBN), as the world is moving on very fast with regards to mobile money,” Tajudeen Ibrahim, Head of Research at Chapel Hill Denham Securities Limited said. Meanwhile, the Nigerian mobile operators under the Association of Licensed Telecommunications Operators of Nigeria, ALTON, appear to be in an ambitious move to expand financial inclusion to 90 million Nigerians by the year 2020. The same year CBN plans to included 80 percent of the country’s citizens. The commitment was made by the Nigeria’s largest GSM operators including Glo, 9Mobile, Airtel and MTN Nigeria when they met last recently at the Lagos Business School where they clearly articulated their move to deepening financial inclusion and providing Nigerians with access to a range of affordable financial services. This is even as the mobile operators called for level playing field for mobile network operators to be allowed to participate fully in the Mobile Money Industry.

percent in 2013 to only 17.40 percent in 2016. Banks in Africa’s largest economy are using mobile money transfer to make financial services easy for customer, as electronic banking continues to underpin interest income. Drilling the figure of banks shows Zenith Bank’s income from electronic product spiked by 87.30 percent to N10.0 billion from N5.38 billion the previous year. A further breakdown of the figure shows Zenith Mobile (Value of Electronic Value Transaction) surged by 136.64 percent to N1.08 billion in June 2018 from

N456.70 million the previous year. Income from internet banking increased by 29.11 percent to N263.90 million in the period under review from N206.10 billion as at June 2017. First Bank Nigeria Plc’s income from electronic products grew by 40.80 percent to N14.92 billion in June 2018 from N10.59 billion as at June 2017. Access Bank Nigeria Plc’s income from electronic products increased by 36.01 percent to N3.68 billion in the period under review from N2.71 billion the previous year.

UDOKA MOKWUNYE

ccording to the Fi na n c i a l In clusion Insight data, the numb er of adults who are financially included has not improved in Nigeria since 2014. This is despite the efforts by the Central bank of Nigeria (CBN) and other stakeholders to include more Nigerians into the financial cycle. Inclusion Insights data points to several factors that have contributed to the slowdown in bank accounts use and ownership. In 2014 the government started to require bank account holders to get their bank verification numbers (BVNs) this led to some accounts closing due to noncompliance to do so. According to CBN’s 2016 financial inclusion figures, which was researched by EFInA, just 58.4 percent of Nigerian adults were financially included with only 48.6 percent using formal financial services. The Financial Inclusion Insights data of 2016 showed that any formal financial service remained constant at only 42 percent as at 2015. Even when Nigerians can access financial services, they are faced with infrastructure issues. Most registered bank users complain of nonworking ATMs as a challenge. As Nigerians have the access to increasing the financial inclusion rate, many of them lack the basic resources and key skills that facilitate financial inclusion. “Financial literacy and the necessary requirements for opening a full service account (such as holding a valid identification and owning a sim card) which are key factors in enabling the ease of account registration are low,” a financial analyst who pleaded

anonymity said. Survey compiled by BusinessDay revealed that only 79 percent of Nigerian adults have the necessary identification documents for registering a mobile money or bank account. Meanwhile, the federal government of Nigeria increased transaction costs associated with bank based financial services in March 2016. Also, Nigeria had slipped into recession as a result of deepening economic challenges related to drop in global oil prices and security problems caused by Boko Haram insurgency in Nigeria’s northeast and Delta regions. The inflation caused Nigerians to spend more on their daily needs and save less. Also in 2011, just 30 percent of Nigerian’s who are 15 years and above had an account with a financial institution; however, there was an improvement with 44 percent in 2014, while in 2017 it falls to 40 percent. The Central Bank of Nigeria (CBN), in its refreshed exposure draft on Financial Inclusion asserts that the 80 percent financial inclusion target may not be feasible as stated in the National

Financial Inclusion Strategy (NFIS) of 2012. The economic recession in the country as well as the insecurity in northern Nigeria is said to have hampered the progress of financial inclusion in the country, as they were never anticipated in the course of drafting the NFIS in 2012. “Nigeria is not on track to meet the 2020 targets set out in the National Financial Inclusion Strategy (NFIS) of 2012,” the apex bank disclosed in its website on Friday, 6 July 2018. The impediments to achieving this target have been ascribed to economic constraints, insecurity issues in the northern part of Nigeria, obsolete strategies, among others. Although, the Nigeria apex bank later went back on its words about the set 80 percent financial inclusion target, claiming the 2020 goal is now possible. This was disclosed in its Financial Inclusion Newsletter, Volume 3, Issue 2 published on Tuesday, July 31, 2018. This is contrary to the statement published in the Apex bank’s Exposure Draft of the Financial Inclusion Strategy

Refresh as seen on Friday, July 06, 2018, on the CBN website. “Despite the challenges, achieving the set financial Inclusion target is possible and requires a strong will, sustained commitment and active collaboration of all stakeholders towards the removal of bottlenecks militating against financial inclusion in the country,” Aishah Ahmad, Deputy Governor, Financial System Stability (DG, FSS) said in a statement published on CBN website. This among other attention directed at financial inclusion in Nigeria seem to have rekindled hope to the sector, although financial analysts still have their doubts as to whether the set target is attainable for the targeted period. Although in Africa’s largest economy, the population continues to work in the cash based informal sector. According to the financial inclusion insights 47 percent of Nigerians generated income solely through irregular informal sector employment in 2016. FII 2016 data showed that the main reason why most Nigerians do not have a reg-

Banks’ income from e-payment products up 39.23% BALA AUGIE

anks’ income from electronic payment (e-payment) businesses rose by 39.23 percent in the half year period of 2018; as more Nigerians are initiating banking transaction vie electronic device without visiting brick and mortal institution. For the first six months through June 2018, electronic banking income of 1o largest banks that have released half year results increased by 39.13 percent to N61.30 billion from N44.03 billion as at June 2017.

The lenders are: Zenith Bank Nigeria Plc, Access Bank Nigeria Plc, Diamond Bank Nigeria Plc, First City Monument Bank (FCMB) Plc, Guaranty Trust Bank (GTBank Plc), Stanbic IBTC Holdings Plc, First Bank Holdings Plc, United Bank for Africa Plc, Sterling Bank Plc, and Union Bank of Nigeria Plc. The number of people going to banks has reduced and there is a lot shift in the payment methods within the society and there has been a reduction in the value of clearing instrument, according to Johnson Chukwu, managing director and CEO of Cowry Asset Management

Ltd. According to National Bureaus of Statistics (NBS), a total volume of 457,226,406 transactions valued at N32.48 trillion was recorded in the quarter (Q1) of 2018. The report which was sourced from data on Electronic Payment Channels in the Nigeria Banking Sector revealed that ATM transactions dominated the volume of transactions recorded with 212,370,853 volume of ATM transactions valued at N1,568 billion were recorded in Q1 2018. The proliferation of mobile banking application such as e-wallet, debit cards, and

the use of ATMs, Point of Sale (POS) means more people are included in the country’s financial architecture. Experts are of the view that the establishment of a solid payment and settlement framework can add impetus to financial inclusion, as policy holders are working assiduously to ensure that more Nigerians have a bank account. According to a recent World Bank report, only 40 percent of Nigerian adults have bank accounts, this compares to Kenyan where the total number people not using any form of financial service declined from 25.10

BUSINESS DAY

Wednesday 12 September 2018

In Association with

Banks key into CBN’s RSSF to finance real sector … Fidelity Bank sets stage Stories by Hope Moses-Ashike

eposit Money Banks are beginning to shift interest in real sector financing, taking advantage of the Central Bank of Nigeria (CBN)’s Real Sector Support Fund (RSSF) launched recently. In order to consolidate and sustain economic recovery, the CBN last month established the guidelines for accessing the RSSF through Cash Reserve Requirements (CRR) and Corporate Bonds (CBs), which tends to achieve the flow of credit to the real sector of the economy. Consequently, Fidelity Bank Plc, has restated its readiness to take full advantage of the new credit policy guideline to support the growth of the agriculture and manufacturing sectors of the economy. Nnamdi Okonkwo, chief executive officer made this known in Lagos Saturday while speaking as a special guest on ARISE TV’s ‘The

Morning Show’. Okonkwo applauded the regulator for its foresight in creating the credit guidelines, noting that the policy will go a long way in moderating interest rates downwards. “The issue had long been about interest rates. Now, CBN has come up with this very ingenious way to address this challenge,” he said. The Fidelity Bank boss explained that the credit policy allows banks to get back some of their liquidity on the condition that they extend affordable and long-term credit to the real sector. With a minimum tenor of seven years and a two-year moratorium, Okonkwo stated that the facilities would be administered at an interest rate of 9 percent. He however, debunked assertions by previous guests on the programme that Nigerian financial institution’s lacked requisite capacity to implement the credit policy. Okonkwo, who emphasised the importance of the

real sector in diversifying Nigeria’s monolithic economy, spoke on the subject of Bank’s inability to process credit for these sectors from three perspectives including liquidity and capital adequacy, human capital as well as financial intermediation. He said, “In the Nigerian Banking industry today, the Capital Adequacy Ratio (CAR) averages show that

banks have the capacity to lend to these sectors. There might be one or two players that might have challenges but the regulator at every point keeps an eye on them and makes policies that protect them.” Besides, Okonkwo pointed out that the 2005 banking consolidation exercise and banking sector reforms of 2008 not only created more

diversified and reliable banks but also improved their liquidity position and capacity to assume risks. Whist pointing out that there were bigger macroeconomic factors hindering Bank’s from lending to the real sector, he stated that Nigerian banks have sufficient human capital to carry out their financial intermediation function.

Most of us running Banks today started banking in the 80s and 90s when merchant banking was the in-thing. Merchant Banks at the time lent to the real sector,” he explained. “The traditional banks in those days especially the big four were heavy on agriculture. They had the competence, track record and history of lending to those segments. Most banks have grown with the recapitalisation exercise. The industry is in a better position to lend now.” Okonkwo provided valuable insights into the Bank’s unique approach to banking Micro Small Medium Enterprises (MSMEs), adding that the Bank, seven years ago set up a dedicated division to manage SMEs. “We handhold MSMEs, give them access to market and help prepare them for qualification to borrow,” he said. “Over the years, we have seen massive growth in our SME numbers and our SME loan default rate has been very low because of this approach.”

Stanbic IBTC eliminates deposit slips for cheque, cash lodgements

n a move that enhances customers’ experience and control of their financial transactions, Stanbic IBTC Bank PLC, a member of Stanbic IBTC Holdings PLC, has deployed some changes on its Cash Deposit Process and Cheque Truncation System (CTS) portal, which includes the elimination of cash and cheque deposit slips in branches. Among other key features of the new offering are proper customer data collection, reduction in the presentation of stale and post-dated cheques and activation of cheque deposit receipt functionality on the CTS portal. However, deposits for accounts such as elec-

tricity bills, Federal Inland Revenue Service, Customs, and Lagos Inland Revenue Service, among others, still maintain the use of customized deposit slips. The initiative, tagged “Speak Your Transactions,” became operational for cash deposits on August 13, 2018 and August 20, 2018 for cheque deposits. The purpose of the initiative is to further embed the Stanbic IBTC Group’s “Go-Green” culture as it continues on the paperless journey and empower its customers to speak their transactions. Demola Sogunle, chief executive, Stanbic IBTC Bank PLC, said the new initiative is in fulfilment of the bank’s commitment to improving

customer experience, work efficiency, data quality and ensure all improvement opportunities are maximized to the customers’ benefit. “This is another initiative that speaks to our determination to consistently reinvigorate our systems and procedures in order to provide bespoke financial

solutions to our clients. As a service business, we recognize that customer satisfaction is a cardinal operating principle and there is no better way of showcasing this than empowering our customers and enhancing their banking experience,” Sogunle said. He added that as a mem-

ber of the Standard Bank Group, Africa’s largest bank by assets, Stanbic IBTC will continue to leverage on the 155-year experience, expertise and strong financial clout of the mother brand to deliver superior sustainable shareholder value by meeting the needs of its clientele. “Our ultimate goal is to continue to render best-in-class service to our customers and also play a leading role in driving their growth”. Regarding cash deposits, the process entails some simple steps in which the bank teller receives the customer’s account name and number, and subsequently validates the details provided by the customer and then receives cash to be lodged

in. Thereafter, the teller processes the request and prints duplicate receipts that are handed over to the customer. After endorsement of both copies by the customer, the teller appends his/her signature and stamps the receipts; then hands over a copy to the customer while the duplicate is kept as evidence of processed transaction. For outward clearing cheques, only one receipt is printed, stamped and given to the customer. At the point of truncating the cheque on CTS, the teller is required to input the cheque issuance date and present the posted cheque on CTS to the authorizer and prints a copy for the customer.

Wednesday 12 September 2018

C002D5556

Pension Today

BUSINESS DAY

In Association with

PenCom recovers N14.01b pension liabilities from defaulting employers Modestus Anaesoronye

he National Pension Commission (PenCom) through its appointed recovery agents has recovered unremitted pensions from defaulting employers to the tune of N14.01 billion as at first quarter ending 31st March 2018. PenCom as part of efforts towards recovery of outstanding contributions and interest penalty from defaulting employers, during the quarter under review, approved the re-engagement of fourteen (14) Recovery Agents (RAs). Therefore, following the issuance of demand notices to defaulting employers whose liabilities had been established by the RAs, some employers had remitted the outstanding pension contributions and penalty totaling N309.38 million. This represented principal contribution of N209.32 million and penalty of N99.56 million, which brought the total recoveries made to date to N14.01 billion, comprising principal contribution of N7.16 billion and penalty of N6. 85 billion. The Commission continued to apply various strategies to ensure compliance with the provisions of the Pension Reform Act (PRA) 2014. This included the application of sanctions and collaboration with key stakeholders on public enlightenment campaigns. The continuation of the work of Pension Recovery Agents earlier engaged to recover unremitted pension contributions from defaulting employers was a significant compliance and enforcement activity carried out during the period.

Also during the quarter under review, the Commission received 5,828 applications for issuance of compliance certificates. Out of these applications, compliance certificates were issued to 4,634 organisations while applications from 1,194 were declined due to non-remittance of pension contributions for the appropriate period and/ or non- provision of Group Life Insurance Policy for the employees. The sum of N48.94 billion was remitted into the Retirement Savings Accounts (RSAs) of 10,020 employees by the 4,634 organisations that were issued the certificates. During the quarter under review, the pension industry recorded a 1.93 percent growth in the scheme membership, moving from 7.89 million contributors at the end of the preceding quarter to 8.04 million. The growth in the industry membership according to the Commis-

sion was driven by the Retirement Savings Account (RSA) Scheme, which had an increase of 152,065 contributors representing 1.94 percent. However, membership of the Closed Pension Fund Administration Scheme (CPFA) declined by 41 members (23,656) while the Approved Existing Scheme (AES) membership remained unchanged at 40,951. A breakdown of the RSA registrations indicates a 1.09 percent (38,006) increase in RSA membership from the public sector during the first quarter of 2018 to stand at 3,516,873. This figure represents 44.09 percent of the total RSA registration as at the first quarter of 2018, Membership from the private sector increased by 2.63 percent (114,059) in the quarter under review, which brought total registrations from the private sector to 55.91 percent (4,459,103) of the total RSA registration as at the reporting period,

RC634453

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

moving from 4,345,044 in the fourth quarter of 2018. This can be attributed to the increased level of compliance by the private sector as a result of the various steps taken by the Commission to improve compliance and coverage, as well as marketing strategies of the PFAs.

Meanwhile, the total monthly pension contribution made by contributors from both the public and private sectors into their RSAs was N4.63 trillion as at the end of first quarter, 2018. This shows an increase of N 139.70 billion representing 3.11 percent over the total contributions as at the

The objectives of the Pension Reformsare to ensure that every person who worked in either the Public Service of the Federation, Federal Capital Territory or Private Sector receives his retirement benefits as and when due

end of March 2017. A review of the aggregate total contribution shows that the public sector contributed 51.11 percent of the total contributions, while the private sector contributed the remaining 48.89 percent. However, during the quarter under review, the public sector contributed 48.24 percent of the total contributions received while the private sector contributed 51.76 percent. The aggregate total pension contributions of the Private sector increased from N2.19 trillion as at fourth quarter of 2017 to N2.26 trillion as at the end of the reporting period representing a growth of 3.30 percent. Whereas, the aggregate total pension contribution of the public sector grew by 2.93 percent from N2.30 trillion to N2.36 trillion over the same period. The objectives of the Pension Reformsare to ensure that every person who worked in either the Public Service of the Federation, Federal Capital Territory or Private Sector receives his retirement benefits as and when due. It is also to assist individuals by ensuring that they save in order to cater for their livelihood during old age and thereby reducing old age poverty; and also, to ensure that pensioners are not subjected to untold suffering due to inefficient and cumbersome process of pension payment. It also aims at establishing a uniform set of rules, regulations and standards for the administration and payments of retirement benefits for the public service of the federation, federal capital territory and the private sector and stem growth of outstanding pension liabilities.

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

BUSINESS DAY

C002D5556

Wednesday 12 September 2018

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

Insurance and you…why compulsory?

Mohammed Kari, Commissioner for Insurance

Tope Smart, chairman NIA

Eddie Efekoha, president CHIIN

What Tope Smart will want to change in insurance industry? Stories by Modestus Anaesoronye

oday, Tope Smart, the managing director/ CEO of NEM Insurance Plc will be decorated as the new chairman of the Nigerian Insurers Association (NIA), the underwriting arm of the industry. Topmost concern of the erudite scholar and professional insurer is the way insurance profession is perceived in Nigeria. He told BusinessDay that insurance is not well positioned in Nigeria, accounting for why many of the young generation of Nigerians and students are not proud to identify with the profession as a career. “I did not come into insurance industry by accident, I sought for it and I got it, so I will not be satisfied with whatever achievement that will be attributed to me until I make insurance become what everyone will be proud of and happy to associate with in Nigeria, he said. Tope Smart said “I made it a personal commitment to change the image of the industry and how it is perceived. I believe the insurance industry is evolving and with the support of all stakeholders, we

will turnaround the industry”. “We must do something to make the insurance industry attractive than the way we met it, such that everyone will like to be part of it.” Every profession has its own share of the challenges, and I think the insurance industry has had its own share of it, but now is time to reposition for greater value, Smart stated. Known with ‘FIRST’ since his young age, Smart born 14th April 1964 had his Secondary Education at Community Grammar School, Omuo Ekiti where he completed his O’ level examination and emerged as the overall best graduating student in 1981. In 1987, he graduated with a Second Class Upper degree in Insurance at the University of Lagos, and also won the University’s prize for the overall best graduating student in Insurance department; as well as the Unity Life and Fire Insurance Company Limited prize for the best graduating student in Insurance in the same year. Smart proceeded immediately after graduation for the National Youth Service Corps program at Everyman Insurance Brokers, Abuja where he was involved in the overall operations of the branch office, and was later offered employment as a Branch

Manager with the same firm. He however left Abuja to join Nigerian-French Insurance Company Limited as one of the pioneer staff in 1989. In 1991, Smart completed his professional examination with the award of CII London where he equally won the prize for Distinction in Property and Pecuniary Insurance. He served Nigerian French in various capacities and became an outstanding staff in the company. No wonder, he was rewarded with a double promotion and was made to head the Marine Unit of the company, a position he held till he left the company. In 1991 he left Nigerian French and joined hands with two other people to pioneer Perpetual Assurance Company Limited as Assistant Controller. He later rose to the position of a Controller, barely a year after the company commenced operations in 1992. In 1994, due to his continuous impressive results he was again promoted to the position of Assistant General Manager (Operations) of the company. In the year 1995, Tope Smart joined Vigilant Insurance Company Limited as the General Manager/Chief Executive Officer. In view of the outstanding results posted in two years,

the Board in 1997 approved his elevation to the position of Managing Director/Chief Executive Officer with shareholding in the company. Smart transformed the company from N6 million annual premium income in 1995 to an industry leader with a recorded premium income of about N1 billion in 2005. The company was acknowledged and adjudged as one of the fastest growing insurance companies in Nigeria then. The company was not only making profit but consistently paid dividends to its shareholders throughout the period. In 2007, Smart successfully spearheaded the merger arrangement between Vigilant Insurance Company Limited and NEM Insurance Plc, and was appointed the Managing Director of the merged entity. The company has since become the delight of shareholders and brokers alike. He has properly positioned NEM to be one of the industry leaders today. The company has won several awards. A visionary leader, Tope Smart, a very passionate Insurance Executive initiated the construction of a befitting edifice for NEM Insurance Plc. The building, now a pride to the Industry has contributed to the promotion of the image of the Nigeria Insurance Industry.

ll over the world, government recognises the need to protect its citizens and their properties through effective mechanism that ensures there is compensation for damage or loss incurred, either as a result of their activities or the third parties. This is to prevent economic shock and give peace of mind to enable individual and groups pursue their goals without much distraction. Based on this, government strives to ensure that its insurance industry is properly positioned with the requisite capacity to absorb large risks; and as professional risk bearers, take the responsibility to give succor by paying compensation which is also called claims to victims or third parties after a loss. To secure this binding, the citizens’ part-with some money called premiums to the insurance companies, which by virtue of their technical expertise pull these monies into a pool, from where it meets claims obligations when they arise. The essence of this is to assist victims to bounce back after losses and at least, return to the position they were before the incident. This explains why experts define insurance as a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss. It is also defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy. The amount to be charged for a certain amount of insurance coverage is called the premium. The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer, in exchange for the insurer’s promise to compensate (indemnify) the insured in the case of a financial (personal) loss. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated.

Wednesday 12 September 2018

C002D5556

BUSINESS DAY

E-mail: insurancetoday@businessdayonline.com

PwC report shows huge potential for insurance growth in Africa Stories by Modestus Anaesoronye

he opportunities for growth in Africa’s insurance industry are huge despite recent economic and political uncertainty. The insurance industry has done well to adapt to continuous disruption, with technological advances now considered the most important global trend disrupting the industry. Despite the additional pressures of unrelenting regulatory and insurance accounting changes, and the huge costs associated with the changes, there are also some positive developments and opportunities for growth. These are some of the key highlights from a report issued by PwC on Africa’s insurance industry. PwC’s report – ‘Ready and Willing: African insurance industry poised for growth’ – comes at a time when economies on the African continent are starting to show signs of real growth on the back of recovering global commodity prices. Victor Muguto, long-term Insurance Leader for PwC Africa says: “The insurance industry across Africa continues to be one of the most disrupted, but at the same time the industry continues to innovate and adapt to take advantage of the many opportunities for growth that are also emerging. “In the years following the global financial crisis, economic and political uncertainty across the continent slowed down economic and insurance sector growth. Despite this, Africa’s insurance market remains one of

the least penetrated in the world and the opportunities for growth are tremendous.” Africa’s insurance industry is facing more disruption than any other industry, posing challenges for some while opening up business opportunities for others. The pace of change in the insurance industry has taken place more rapidly than originally anticipated and will accelerate further. “Leading insurers are already implementing key strategies to focus on new customer behaviours and demographic shifts. The need to be agile in the face of a rapidly changing technological environment has never been more vital,” says Pieter Crafford, financial services advisory leader for PwC South Africa. The survey identifies four main themes that are transforming the African insurance industry: Technology and data ‘revolution’; Regulatory and accounting changes; Convergence, the new “Scramble” for Africa’s customers and Talent shortages – workforce of the future.

While the African insurance industry is going through significant change and client expectations are changing the rise of the new middle class and digital natives offers new opportunities for insurers, using technology, to better understand their customers and use customer data for more relevant product design and better pricing for risk. Insurers need to ensure that they can do so while navigating increasing regulatory compliance issues, overhauling legacy IT systems, and investing in a workforce of the future. Operational procedures and business structures will also need to be updated to become more efficient. “Insurers across Africa face exciting new opportunities for growth on the back of a rising middle class and increased demand for new and innovative solutions. Most insurers know what to do - the winners will be those that are best at execution,” Crafford says.

R-L: Funmi Babington-Ashaye, managing director/CEO, Risk Analysts Insurance Brokers and Stella Awoh, during the presentation of Awoh’s Art work made with pulverized ginger starch titled ‘New Dawn’ at Didi Museum, Victoria Island Lagos.

Insurers look at sector beyond limit at 2018 Professionals Forum

ll is set for the largest gathering of Insurance Professionals as the city of Abeokuta gets set to play host the 2018 Insurance Professional’s Forum, an event organized by the Chartered Insurance Institute of Nigeria, CIIN. The forum, scheduled for Wednesday 19th to Saturday, September 22nd will involve deliberations anchored around a robust theme, “The Insurance Industry: Beyond Limits. In an outline released by the organizing committee, the theme aptly captures the prevalent issues in the Nigeria and global insurance Industry. At this year’s forum seasoned professionals will be doing justice to topics which include ‘Market Development and Expectations from Insurance Stakeholders; The Insurance Industry Vision, Barriers and Innovation for Resurgence; Insurance Industry code of ethics – A review and The Role of Ethics in Professional Development. Special focus will also be given to work life balance and workforce mental health in an event which offers immense opportunities for robust delibera-

tions on the issues pertinent to the growth and development of the Insurance Industry, the profession and practice. Eddie Efekoha, president of CIIN has enjoined Insurance professionals to see the Forum as a unique opportunity for continuous professional education and personal growth. Efekoha opined that attending the Forum should be instinctive action for all professionals. He charged professionals to attend in their multitude in order to ensure that this year’s edition, the 27th edition witnesses a record attendance. Richard Borokini, director general of the Institute lent his voice to the call for maximum attendance, stating that thorough planning had been put into this year’s event to provide a worthwhile experience for participants. Social side attractions at the forum will include a tour of the Olumo Rock and the famous Adire market in addition to the Professional Insurance Ladies Association celebration. There will also be sporting activities such as a Golf tournament, Table Tennis, Dart games, amongst others

Continental Re opens Pan African re/insurance journalism awards

eading Pan African reinsurance firm, Continental Reinsurance Plc has announced the opening of its fourth edition of the Pan African Re/Insurance Journalism Awards. The 2019 awards are open to all business journalists from Anglophone and Francophone countries in Africa. Submissions will be received from September 4th to November 30th 2018. “This year’s awards will give opportunity to both traditional and online journalists to participate and compete with their print counterparts who have been entering the highest number of entries over the past 3 editions,’’ noted Femi Oyetunji, group managing director, Continental Reinsurance Plc. The categories in the 2019 awards are: Pan-African Re/Insurance Journalist of the Year; Best Re/Insurance Print Article; Best Re/Insurance Broadcast (TV/Radio) Article; and Best Re/Insurance Online Article “The new category (online) will accommodate articles and blogs written exclusively for internet audiences. These categories were

recommended by the 2018 judging panel,” he added. An independent panel of judges will assess the entries and select winners of the Pan African Re/Insurance Journalism Awards 2019 who will be announced during the Continental Re’s annual CEO Summit to be held in April 2019 in Mauritius. The journalism awards were initiated in 2015 by Continental Reinsurance was to recognise and acknowledge the good work of media on the continent, which expects Journalists to demonstrate how their articles raised awareness and understanding of the re/insurance sector in Africa. Continental Reinsurance is a composite reinsurer, writing business in more than 50 countries across the African continent. Established in 1985, and listed on the Nigerian Stock Exchange (NSE) in 2007, Continental Reinsurance provides support to over 200 insurance companies in Africa with its main offices in Nigeria, Cameroon, Kenya, Côte d’Ivoire, Tunisia and Botswana. It also has a specialist subsidiary – Continental Property and Engineering Risk Services (CPERS) – registered in South Africa.

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InnoTrans 2018 draws global rail industry to Berlin Page 32

Bridging digital tourism opportunity gap in Africa

Armani Hotel Dubai seeks to eliminate food waste

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African rail industry urged to adopt concepts of Fourth Industrial Revolution Page 32

Mercedes exceeds 1.5m units sales in eight months Stories by MIKE OCHONMA

ith four months to the end of the year, Me rc e d e s- B e n z have so far delivered 1,512,268 vehicles to customers worldwide in the first eight months of this year, thus setting a new record (+1.1%). Never before in the company’s history were sales of 1.5 million vehicles achieved earlier in the year. In the month of August, Mercedes-Benz sold 155,918, (representing a drop of 8.5 percent) vehicles worldwide in August, and the 30th consecutive month with global sales of more than 150,000 units due to the ongoing strong demand for cars with the three-pointed star. As expected, however, there was an impact on unit sales in August from challenges relating to vehicle availability, including model changes and delays in vehicle certification in some markets. Nevertheless, Mercedes-Benz defended in the first eight months of the year its position as the best-selling premium brand worldwide. “I am delighted that MercedesBenz reached the mark of 1.5 million cars delivered earlier than ever in the year. As a strong team, we will continue to work on meeting the ongoing high demand for our vehicles, also again in terms of delivery,” stated Britta Seeger, member of the board of management of Daimler AG responsible for Mercedes-Benz cars marketing and sales. “And with the EQC, we have presented the first fully-electric SUV of our EQ product and technology brand to the world public in Stockholm. We will set additional markers and impulses in the market with the EQC,” Seeger continued.

In terms of sales by region and market, in Europe, Mercedes-Benz sold 54,989 vehicles in August (-10.7%) and in the first eight months of the year, sales totalled 597,347 units (-3.9%). In Germany’s domestic market, 21,442 vehicles was delivered in August (-14.8%) with a total of 195,163 cars handed over to customers in Germany in the first eight months of this year, showing (-4.2%) drop. For France, Spain, Sweden, Poland and Denmark, more cars were sold in the first eight months than ever before in that period, whereas in the Asia-Pacific region, demand for models in the first eight months of the year led to a new record of 639,184 units sold (+9.8%). Last month, the brand delivered 72,342 vehicles in that region, which is just slightly below the

prior-year level (-1.3%). In China, the biggest market, a new high for an August was achieved with sales of 53,295 cars (+5.5%). S o far this year, 446,075 vehicles have been handed over to customers more than ever before in the first eight months of a year (+13.9%). The brand achieved additional sales records for the first eight months also in Japan, India, Thailand and Malaysia. With respect to unit sales by model, the E-Class Saloon and Estate set a new record with sales of 25,367 units last month (+0.4%). Since the market launch of the current models, more than 700,000 customers worldwide have been delighted to receive their new EClass Saloon or Estate. Mercedes-Benz increased its sales of the S-Class saloon in Au-

gust by 30.3% to 5,254 units. From January to August, more than 53,000 units of the S-Class Saloon were sold (+26.6%). Thanks to a double-digit growth rate worldwide, the Mercedes-Maybach SClass Saloon achieved its highest unit sales so far in the first eight months of a year. A new record was set by the SUVs in the first eight months of this year: Worldwide, a total of 541,120 SUVs with the star were delivered, an increase of 5.4%. An important driver of this growth was the global popularity of the GLC and GLC Coupés. The sales success of the midsize SUVs from Mercedes-Benz will be continued with the EQC, which had its world premiere in Stockholm as the first fully electric SUV from the EQ product and technology brand.

gearbox. In some African markets, the Pajero Sport’s pricing undercuts key rivals, both in terms of the 4x2 and the 4x4 versions.

Depending on the region, the Mitsubishis are backed up by a three-year/100 000km warranty and five-year/90,000 kilometers whichever comes first.

Mitsubishi Pajero Sport gets extra kit …Tackles Fortuner and Everest.

itsubishi’s Pajero Sport has been given some extra equipment to help sweeten the already well-priced deal it offers in the face of stiff competition from the Fortuner and Everest. Most of these are safety upgrades, including a seventh airbag that protects the driver’s knees and this comes in addition to the front, side and curtain airbags already fitted as standard. An even more logical spec addition, given its positioning as a family vehicle, is the long-

overdue fitment of ISO-FIX child seat anchors. On the convenience front, a 120 watt power plug has been added, allowing occupants to charge their laptops and other electronic devices. Finally, the braked towing capacity has been increased to 2700kg in the case of 4x2 models and 2790kg for 4x4 versions. The engine and other mechanicals remain unchanged however, with the Pajero Sport powered by Mitsubishi’s relatively new 2.4-litre Mivec turbodiesel that produces 133kW and 430Nm, which is mated to an eight-speed automatic

Elantra’s major facelift brings minor price increase …Sports model sees biggest price jump

he 2019 Hyundai Elantra has been completely redesigned for the new model year, and it is a pretty substantial overhaul from a visual standpoint. The front and rear fascias are all new with sharp, angular styling. Besides the styling, most Elantras get minor equipment tweaks. For instance, the SEL version and higher trims pick up additional forward collision prevention and lanekeeping assist. The base SE trim and top level Limited trims also get a few minor equipment additions. With the redesign comes a slight price increase across the board. The base trim sees the smallest increase and goes up $150 for both the manual and automatic varieties. The turbocharged Sport model has the largest increase of $600. The other trims go up by $400 to $600, even though nothing changes with the powertrains, either. The Eco gets a turbocharged 1.4-liter four-cylinder making 128 horsepower, the Sport has a turbocharged 1.6-liter engine making 201 horsepower, and the rest have a naturally aspirated 2.0-liter engine making 147 horsepower. You can see the full price breakdown below for both the new 2019 model and the outgoing 2018 version. The new car is on sale now.

Tips on how to address driving mistakes (1) Not adjusting mirrors correctly Side view and rear-view mirrors help you to make split second decisions. Ensure that they are adjusted for maximum visibility of vehicles behind you or next to you, reducing the size of your blind spot as much as possible. Invest in blind spot mirrors if your vehicle does not come equipped with them or a blind spot warning system. (2) Driving slowly in the fast lane This causes frustration for vehicles behind you and could see other motorists resorting to passing you in the slower, inside lane, increasing the risk of an accident. Choose the lane most appropriate for your speed and be considerate by allowing other motorists to pass. (3) Not using indicators Indicators provide a very simple, yet very valuable way for others to predict and plan around your movements. It is best to get into the habit of signalling even when there are no other motorists around, and making sure that you cancel the indicator after using it. (4) Stopping without warning If you suddenly spot an available parking bay, street where you need to turn or person that you need to pick up, avoid slamming on the brakes. First make sure that your move allows ample warning time for the vehicle behind you. If it does not, be prepared to go around the block, even if it costs you valuable time or that prime parking spot.

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Bridging digital tourism opportunity gap in Africa … Africa attracts over 2 million visitors yearly Stories by MIKE OCHONMA

ll is now set for the upcoming three-day Africa Travel Summit (ATS) that is designed to discuss digital tourism in great depth which started yesterday and will end tomorrow in Langa, Cape Town from September 11-13. It is been organised by homesharing platform Airbnb to further the dialogue around inclusive and sustainable tourism in Africa in addition to the role that digital and technology plays in this. The summit is part of the $1 million through 2020 commitment that Airbnb made to promote and support communityled tourism projects in Africa aiming to break down the digital tourism opportunity for Africa. For instance, the sector contributed almost 3 percent to the South African GDP in 2016 and providing jobs to more than 686,000 people, tourism is big business. Africa as a whole attracts more than 62 million tourists annually, with an average growth rate of five percent per year. Digital platforms and services are only serving to bolster the sector, with their role set to become even more important in the future. Such are the opportunities for digital and technology in Africa that Airbnb last year announced it will invest $1 million through 2020 to promote and support community-led tourism projects here. The continent has long been regarded as a mobile-first (if not only) environment. However, recent years have solidified its position on the global map when it comes to mobility, thanks to more affordable devices, faster internet speeds, and increasingly accessible wireless hotspots. Whether you are in downtown areas or a bustling market in the metropolis, mobile access

has become essential. This is especially relevant on a continent where it is not always costeffective or physically possible to roll out landline infrastructure. And while challenges such as reliable electricity and problematic water supplies are well-documented, the dynamic nature of residents has seen aspiring entrepreneurs embrace digital as an effective means of driving the potential that tourism offers. In a move that is seeking to break traditions, already, technology is doing its bit to make the sector more accessible for women where the gender in some countries on the continent already account for nearly 70 percent of the tourism workforce. Digital platforms like Airbnb have made it even easier for women to access the market and profit from an increase in tourism overall. For example, 65

percent of Airbnb hosts in South Africa are women. The company’s initiative dubbed the Africa Academy aimed at up-skilling especially women in underserved communities, can further help to empower those who previously would have found it hard to profit from the tourism economy. What used to be stumbling blocks for these individuals are now springboards to create new revenue streams. In December 2016, there were 277 million registered mobile money accounts in the Sub-Saharan Africa region, more than the total number of bank accounts there. Thanks to this digital innovation, entrepreneurs can forego traditional banks and credit unions and use their mobile device to empower themselves. In terms of building entrepreneurs, building the microentrepreneur is challenging the

status quo when it comes to perceptions around how business should be done. Combining the gig economy with tourism, micro-businesses and digital transformation have resulted in the development of a thriving environment where African entrepreneurs are using the likes of Airbnb and other platforms to generate income. Even though tourism operators, airlines, hotels, and other role players in the sector are starting to wake up to the opportunities offered by improved data analysis, the agility of SMEs and start-ups cater more quickly to fickle customer expectations. On market expansion, if digital technology has shown organisations anything, then it is that people have come to expect more tailored services. In an industry that is focused on such a personal experience as tourism, the benefits digital provides smaller companies and entrepreneurs become a significant competitive advantage. They use social media platforms and other freely available tools to market themselves, their products, and their countries. The days of going to a travel agent, browsing through a brochure, and getting them to make a booking are quickly becoming a thing of the past. In a digital environment, it is about using mobile applications, social media, instant messaging platforms and other digital channels to deliver a more engaging online experience that takes out the middleman. Those living in rural areas can now market themselves and their communities through these digital platforms. And tourists are noticing, judging by the increase in visitors to the continent. The digital world provides an easier way to meet the needs of every type of tourist, whether you are looking for a luxury hotel or to backpack on a budget.

Armani Hotel Dubai seeks to eliminate food waste

rmani Hotel Dubai is advancing its sustainability initiatives and has partnered with leading tech-firm Winnow to avoid wastage of food resources. The property considered the World’s Leading Design Hotel by the World Travel Awards -has already achieved its target of reducing food wastage by 80 per cent through a wellstructured programme and is heading towards zero food waste to the landfill. Armani Hotel Dubai is now equipped with Winnow’s smart scales to help the chefs in tracking food waste quickly and accurately. The scale automatically records the weight, and the kitchen staff choose the reason and identify the

item/dish using the tablet attached to the scale. Other measures implemented by Armani Hotel Dubai earlier include

training chefs and the stewarding department not to mix the food waste with general waste at the cooking stations.

The hotel team segregates the waste at source in addition to composting food waste which reduces the amount sent to the landfills. To achieve set goals, a food waste recycling machine has been installed in the kitchen to successfully achieve the zero-food waste goal. The machine is capable of drying leftover food from buffets and the staff canteen, and converts 70-80 kilograms waste food per load to a 14-15 kilograms food powder form compost soil. It eliminates food disposal costs, reduces the hotel’s carbon footprint and converts food waste into soil nutrients for use on farms and landscaped areas.

British Airways investigating website data breach

ritish Airways authorities said, they are investigating the theft of customer data from its website, ba.com, as well as the airline’s mobile app. However, the stolen data did not include travel or passport details, British Airways said in a statement, but an estimated 380,000 transactions are thought to be affected. From August 21 at 22:58 pm until September 5 at 21:45 pm, the personal and financial details of customers making bookings on ba.com and the airline’s app were compromised. The breach has been resolved and the website is working normally, BA said. “British Airways is communicating with affected customers and we advise any customers who believe they may have been affected by this incident to contact their banks or credit card providers and follow their

recommended advice,” the statement explained. BA said it had notified the police and relevant authorities. Alex Cruz, British Airways chief executive, said “We are deeply sorry for the disruption that this criminal activity has caused. We take the protection of our customers’ data very seriously. British Airways said it would provide further updates “when appropriate”. Responding to the incident, Alex Neill, managing director of home products and services, said: “British Airways customers will be concerned to hear about this data breach. “It is now vital that the company moves quickly to ensure those affected get clear information about what has happened and what steps they should take to protect themselves. “Anyone concerned they could be at risk of fraud should consider changing their online passwords, monitor bank and other online accounts and be wary of emails regarding the breach as scammers may try and take advantage of it.” The airline concluded.

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Local and global rail news as it breaks

Mombasa-Nairobi rail service to break even by 2020

African rail industry urged to adopt concepts of Fourth Industrial Revolution MIKE OCHONMA

o facilitate, and realise the industrialisation aspirations of the continent, the African rail industry must adopt the concepts and develop the technologies of the Fourth Industrial Revolution. This piece of advice was extended to the delegates that attended a technical workshop. The three-day workshop, held at the Birchwood Hotel and Conference Centre from last week with the theme ‘Embracing the Fourth Industrial Revolution in Heavy Haul Railways – paving the way, attracted various speakers repeatedly emphasised on the importance of intra-African trade, multilateral collaboration and Africa-based technological research, development and innovation to achieve widespread industrialisation, and therefore, growth. Transnet COO Mlamuli Buthelezi commented that the workshop would seek to deepen and advance regional

collaboration as a means of enhancing existing railway systems, “in a way that improves network capitalisation, as well as logistics costs.” He stressed the importance of rail networks in successful economies, pointing to the United Kingdom, the United States, Australia and New Zealand, where rail formed the backbone of industrialisation in the nineteenth century, acting as a catalyst for rapid economic growth and development. “One can look at the development path and their leveraging of rail to build cities, infrastructure and industrial hubs.” Buthelezi added that African economies must grow through greater intracontinental trade, and that the railway industry should “broaden its view to encompass the entire supply chain, create fit-for-purpose rail solutions and leverage historical and technological successes,” in its attempt to ride out the Fourth Industrial Revolution. Meanwhile, Lynette Chen, African Leadership Initiative

fellow and former Nepad Business Foundation CEO, noted that some of the railspecific benefits of the Fourth Industrial Revolution would be: innovative maintenance to proactively detect defects in rolling stock, new technologies to improve efficiencies of existing infrastructure and rolling stock, advances in signalling and telecommunications which could result in automated and faster train authorisation, rolling stock tracking and control, collision avoidance systems and cockpit innovation to improve safety. However, she cautioned that while the industrialisation of the Southern African Development Community (SADC) would increase business opportunities, “we have to be aware that it could be jobless growth”, as many existing job functions will be automated. Chen stressed that business models would transform, and that Africa would be most impacted, “because African governments have not set aside sufficient funding for research and develop-

ment or the establishment of start-ups that can create the technologies relevant to African needs”. She also touched on regional collaboration, presenting a video on the NorthSouth Rail Corridor project, a regional integration and trade initiative that aligns with the SADC Infrastructure Masterplan and the SADC Industrialisation Strategy. The 4000 km rail network will run from Kolwezi, in the Democratic Republic of Congo, to the ports in Richards Bay and Durban, in South Africa. The six national rail and freight companies have already signed on to the initiative and a feasibility study was completed earlier this year. Brazil, Russia, India, China and South Africa (Brics) Financial Services Working Group secretariat Jerry Mashamba noted that the recently established and launched New Development Bank was conceived as an infrastructure bank, to try and alleviate the financial pressures within the Brics economies.

InnoTrans 2018 draws global rail industry to Berlin

nnoTrans, the bi-annual showcase of the global railway supply sector, is set to return to Messe, Berlin, Germany this month and already the organisers of this mammoth event are predicting that records will fall. More than 3000 exhibitors have signed up, an increase from the 2955 companies that were in attendance at the 2016 edition, with more than 60% of these suppliers hailing from outside of Germany. They will take their places in 41 halls, filling more than 200,000m2 of exhibition space.

Outside, 140 new railway vehicles will line up on the 3.5km track area, including the latest passenger trains, metro and light rail vehicles for rail-

ways and transit companies from across Europe as well as locomotives, track and maintenance vehicles, road-rail vehicles and freight wagons.

Recall that over 137,000 visitors from 119 countries visited the 2016 edition of the show, and the signs are that attendance will continue to grow in 2018.

$3.8 billion railway project linking Kenya’s largest port Mombasa and the capital Nairobi is doing well, and the railway will reach the break-even point by 2020, an employee of Stateowned China Communication Construction Corp (CCCC) has said recently. The comment came after some foreign media suggested the debt for the line, the country’s first standard-gauge railway, might be too burdensome for the East African country. The railway was built by China Road and Bridge Corp (CBRC), a subsidiary of CCCC. Tracks were laid for a 120-kilometer extension of the railway along the

amounted to about 6 per cent of Kenya’s GDP, a BBC report in June said. Passenger business aside, the report suggested that the project needs to attract 20 million to 55 million tons of cargo annually, citing a consultancy report. According to a China Media Group report in June, the railway’s cargo volume will reach 14 million tonnes annually by the end of 2019, citing James Wainaina Macharia, the Kenyan minister of transport, infrastructure, housing and urban development. In its first year, cargo amounted to 608,000 tons. The railway line cost about $3.8 billion, and the Export-Import Bank of

Nairobi-Naivasha line toward the Kenya-Uganda border. “From construction to operation, CBRC has kept the overall cost of the railway at a reasonable level, bearing in mind economic feasibility, and kept the operating profit margin low. The railway will reach the break-even point by 2020, when the loans for the project are due,” an employee at CCCC said. The 480-kilometer railway, also known as the Madaraka Express, marked the first anniversary of passenger services in June. In its first year, the railway carried more than 1.4 million passengers with a utilisation rate of more than 90 per cent. It also reduced the travel time between the port city and Nairobi to about five hours from more than 10 hours. The project is believed to have boosted Kenya’s GDP growth by 1.5 percent. There are doubts over whether the railway is a worthy investment, as the loans for the project

China reportedly funded 90 percent of the total. The State-owned policy bank was not available for comment as of press time on Thursday. CRBC said cargo transport demand between the two cities will rise to 5.61 million tons by 2020 and 11.94 million tons by 2025 and the railway is expected to carry 60 per cent of the volume. The railway will be the first section of a broader plan of a 2,700-kilometer regional rail network to connect countries from South Sudan to Tanzania in East Africa. “The debt issue is important, but the successful operation and sustainable development of the railway is more important. If this railway can be successfully operated, it will serve as an example for future projects involving East African rail networks,” said Li Zhibiao, a research fellow at the Institute of West Asian and African Studies of the Chinese Academy of Social Sciences in Beijing.

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Abiola – Are appointed into Enelemah confirms $2bn investment by Chinese firm in Cotton sector, economic zones board of ITEX Integrated Services HARRISON EDEH, Abuja

ederal government is already harvesting the benefits of the just concluded meeting on the Forum for African Cooperation (FOCAC) in China with Okechukwu Enelemah,Nigeria’s Minister of Industry Trade and Investment, revealing $2 billion investment commitments into Nigeria’s cotton, exile and garment sector by Rui Group who are Chinese investors. Enelemah gave the information while briefing newsmen on Tuesday, even as he revealed that the federal government targets 18 months to ensure a definite final agreement is reached

with extensive due diligence performed by all stakeholders, since the federal government has been signed by the President with the concerned firm. The investment, he explained, would go along the value chain from growing cotton, textiles and the garments that we wear, as he noted that the investors also extended their investment commitments to Nigeria’s special economic zones. “For a country of 200 million, we need more industrial parks to aid more trade facilitation,to integrate economies, and inter-link various market chains and values,” he said. According to Enelemah, “our goal is to ensure that

within one year, we would have succeeded with the first phase of the investments in this area in feasibility planning, with other financial commitment following accordingly” He noted further that the government has shown more commitments to these special economic zones,that is why there is commitments from the Afrexim Bank,and other Development financiers to create a trade facilitation ground that would stimulate the growth of the economy. The beneficiary economic zones include: Enyimba City in Aba,Lekki Model Industrial Park in the Lekki Free Trade Zone,and the Kano Free Trade Zone. Enelemah also noted

that the federal government is working closely with the Afrexim Bank with on the Special Economic Zones and the Industrial Parks,which he revealed one is to be sited in Nnewi and others in Kano state and in Lagos. “The Nnewi automotive Industrial parts,the master plan has been designed,and we are looking forward towards engaging investors for the committments”Enelemah noted. Further on the benefits of industrial park,the Minister pointed out that the focus of the National Industrial Park is to have an industrial park that would be a converging point for both foreign and local investors,having a meeting point to transact businesses.

L-R: Olu Akanmu, executive director, retail banking, First City Monument Bank (FCMB); Olamide Olawaiye, winner of the modelling category of the FCMB sponsored Dare2Dream youth empowerment programme, and Felicia Obozuwa, divisional head, corporate services, FCMB, during the grand finale of the competition in Lagos.

he former Sole Administrator of Lagos Island Local Government; Bashir AbiolaAre has been appointed into the board of ITEX Integrated Services Limited as Non-Executive Director. ITEX is one of the Central Bank of Nigeria (CBN) licensed Payment Terminal Services Provider (PTSP) company to successfully deploy and manage Pointof-Sale (POS) Terminals in Nigeria. Its customized software applications and machine learning features ease the electronic payment and revenue collections for public and private clients, ITEX currently has impressive client portfolio in 19 Africa countries with more than 67,000 POS terminal deployment to commercial banks, transnational corporations and governments across Africa. Bashir brings vast experience in digital payments and financial-inclusion offerings to ITEX board. He once owned and operated MoneyMart in Maryland-USA 24 years ago, which was later sold to a franchise chain. MoneyMart provided payday loans, bill payments, Maryland Lottery, Western Union Money Transfers, Global Express Money Order, Secured Credit Cards, and Check Cashing services to mostly underbanked and unbanked customers. He was the first Nigerian-born authorized Western Union agent in the

Baltimore–Washington metropolitan area (Maryland, Virginia, Pennsylvania and Washington, D.C). Adducing his vast information technology management experience and fintech product offerings, he got hired as Chief Operating Officer in year 2013 at Funds & Electronic Transfer Solutions (fets) Limited, a premiere CBN licensed Mobile Money Operator in Lagos, Nigeria. At fets; he oversaw company-wide operations, agent network management, patented mobile-money application development and deployment, and revenue collections for diverse clientele in excess of N11 billion monthly. Bashir was at various times a Senior Consultant with Lockheed Martin Corporation, Northrop Grumman, U.S. Department of Treasury, U.S. Patent & Trade Mark Office (USPTO), U.S. Pension Benefit Guarantee Corporation (PBGC), and worked as Director of IT Infrastructures with Large Scale Proteomics Corporation in Maryland, USA. He obtained Bachelor’s Degree in Computer Information Technology from the University of Maryland, Master of Business Administration (MBA) from Salem University, West Virginia and attended George Washington University for graduate certificate program in Management of Technology & Innovation.

creasing dependence on resources sensitive to changes in climate. In the rural areas, major activities that contribute to climate change include bush burning and illegal felling of trees, a means of livelihood for the production of fuel wood and charcoal. This has reduced the country’s forest cover, which serves as a big buffer against climate change, from about 45 percent in the 1960s to less than 5 percent today. Majekodunmi said that we are putting far too much carbon dioxide into the atmosphere and part of earth’s perfect nature of absorbing the carbon dioxide is the green vegetation, particularly the forest that can sequel carbon in multi layers. This is leading to a decline of forests which are put in place to help absorb the carbon dioxide released into the atmosphere and also the essential giver of oxygen. While some quantities of these gases are a naturally occurring and critical part of earth’s temperature control system, the atmospheric concentration of CO2 did not rise above 300 parts per

million between the advent of human civilization roughly 10,000 years ago and 1900. But today, it is at about 400 parts per million (ppm), a level not reached in more than 400,000 years. How it impacts food security Agricultural activities are hard hit by irregular climate patterns, which hurt farming activities. When severe floods occur, farmers incur huge losses, as their crops get submerged beyond a level they could thrive. Similarly, fungal diseases usually become more rampant when extensive flooding overtakes farmlands. AfricanFarmer Mogaji, chief executive officer, X-ray Farms Limited said farmers usually lose their crops when they are submerged in flood because flooded soils are deficient of oxygen as the soil air spaces are displaced by water. With this most of the crops die since the oxygen for their growth and development is lacking in the soil. During flood there is a lot of fungi development, which leads to a lot of fungal diseases in crop production.

Explainer:

How climate change affects Nigeria’s food security JOSEPHINE OKOJIE

he recent report on torrential rainfall in Ogun and Katsina, which claimed lives and destroyed properties, is capable of affecting Nigeria’s food security quest. Aggravated flooding remains a recurring phenomenon in Nigeria and it is usually caused by climate change. According to experts, rainfall patterns in Nigeria are getting more intense with fewer rainy days. This implies that more rains are falling on the days there are rainfall, and storms are also getting more intense, increasing the threat of flooding in the country. Newton Jibunoh, an environmentalist and migration expert said that climate change is a major threat to food security in Nigeria and across the globe and it’s now glaring for everybody to see. If you look around the world, you

will see various phenomena such as mudslides and hurricane, among others. What is Climate Change? Climate change, also called global warming, refers to the rise in average surface temperatures on earth. An overwhelming scientific consensus maintains that climate change is due primarily to the human use of fossil fu-

els, which releases carbon dioxide and other greenhouse gases into the air. Desmond Majekodunmi, an environmentalist, farmer and chief executive officer of Lufasi Nature Park, says climate change is now recognised and acknowledged as the most pressing and serious issue mankind has ever faced and this climate change is brought about by man’s activities causing

global warming. What are the causes of climate change? The major cause of climate change is the burning of fossil fuels, such as oil and coal, which emits greenhouse gases into the atmosphere—pr imar ily carbon dioxide. Nigeria’s vulnerability to climate change is closely linked to the country’s low adaptive capacity and in-

BUSINESS DAY

Wednesday 12 September 2018

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35 NEWS

BUSINESS DAY

Economy, anti-corruption top agenda as Buhari leads Nigeria to UNGA INNOCENT ODOH, Abuja

L-R: Abubakar Suleiman, chief executive officer, Sterling Bank Plc; Kadaria Ahmed, managing director, Daria Media, and Muhammad Yahaya Sani, commissioner for budget and planning, Kaduna State, at the closing ceremony of Kaduna Book and Art Festival (KABAFEST) in Kaduna powered by Sterling Bank, yesterday

DMO douses fears on China loans, says no reason to panic ONYINYE NWACHUKWU

igeria’s Public debt remains sustainable and there is also no risk of default due to the sound management of the country’s borrowing practices, the Debt Management Office (DMO) said on Tuesday. The assurances for the umpteenth time follow heightening fears in recent times about borrowing by developing countries from China. The concerns became heightened following the recent summit of the Forum on China-Africa Cooperation and claims of potential seizure of national assets by Chinese lenders in some African countries even though the claims have not been validated. Clarifying the government’s borrowing from China in a statement, the debt office said based on need and subject to the receipt of requisite approvals, the government

may raise capital from several domestic and external sources to finance capital projects, in order to promote economic growth and development, as well as, job creation. Regarding external borrowing, the Nigerian government accesses capital from several sources – Multilaterals, such as the World Bank and the African Development Bank, as well as, Bilateral loans from various countries such as France (through the Agence Francaise de Development -AFD), Germany (KfW), Japan (Japan International Cooperation Agency – JICA), India (India Development Bank) and China (China Export-Import Bank – EXIM). It said that these loans from multilateral and bilateral lenders are typically used to finance specific capital projects across the country, and that the International Capital Market remains another source of capital. It further clarified that one of the reasons why Nigeria would raise capital from multilateral

and bilateral sources is because they are Concessional, “which means that they are cheaper in terms of costs, and more convenient to service because they are usually of long tenors with grace periods.” “Borrowing from China should not be seen from a negative perspective as they are being used to finance Nigeria’s infrastructural development at concessional terms. It noted moreover, that China Exim Loans are only one of the sources of multilateral and bilateral loans accessed by Nigeria and represented only about 8.5% of Nigeria’s External Debt as at June 30, 2018. “Nigeria’s Public Debt remains sustainable and there is also no risk of default because of Nigeria’s sound Debt Management practices,” the DMO stated, adding that “prudent management of the public debt implies that, the government should avail itself of the opportunity to access concessional loans which deliver twin benefits of being more cost ef-

Oil prices may hit $100 as US sanctions on Iran loom STEPHEN ONYEKWELU

ran will in November come under the burden of United States of America’s sanctions on its financial, energy and automotive industries and this could push oil prices up. Specifically, US sanctions on Iran’s energy industry, when they come into effect, could drive oil prices above $100 per barrel, according to an industry expert. “If US sanctions end up cutting off Iranian oil supply completely, oil prices will likely hit $100 per barrel”, Fereidun Fesharaki, founder and chairman of consultancy FACTS Global Energy told CNBC. “What’s currently holding back oil

prices from moving higher is the on-going trade friction between the US and China,” he added. U.S. President Donald Trump’s decision to withdraw from an international agreement to curb Iran’s nuclear programme has resulted in a round of sanctions being re-imposed on the country’s financial, automotive, aviation and metals sectors. The U.S. State Department has set Nov. 4 as a deadline for Iranian oil buyers to completely cut their purchases to avoid American sanctions. “If there was not that set of sanctions, I think prices would go to $70 or even a little bit lower. But now the sanctions threat is real and

less than two months in front of us, that will transform the market into much higher prices,” Fereidun Fesharaki, founder and chairman of consultancy FACTS Global Energy, told CNBC’s Akiko Fujita at the CLSA Investors’ Forum in Hong Kong. Iran is currently one of the largest oil exporters in the world. Cutting off Iranian supplies entirely would push oil prices above $100 per barrel because other major producers could not easily fill the void. The timing for oil prices to hit $100 per barrel, a level not seen since 2014, depends on how quickly the U.S. and China resolve their differences on the trade front, Fesharaki noted.

ficient and supporting infrastructural development.” Explaining further, the DMO noted that loans from concessional lenders have limits in terms of the amounts that they can provide to each country, arguing that this makes it necessary for Nigeria to have several sources for accessing concessional capital to increase the total amount available and also, to avoid undue dependence on only a few sources of concessional funds. It said that borrowing from China Exim is one of such means of ensuring that Nigeria has access to more long term concessional loans. “Given the country’s infrastructure deficit, which needs to be urgently addressed, the loans from China Exim, which provide financing for critical infrastructure in Road and Rail Transport, Aviation, Water, Agriculture and Power at concessional terms, are appropriate for Nigeria’s financing needs and align properly with the country’s Debt Management Strategy.”

he development in the Nigerian economy, the fight against corruption, irregular migration are some of the issues that will top agenda as President Muhammadu Buhari prepares to lead a strong Nigerian delegation to the 73rd session of the United Nations General Assembly (UNGA) in New York. This was disclosed by the Minister of Foreign Affairs, Geoffrey Onyeama, while briefing reporters on Nigeria’s preparedness to participate in the session, which commences from September 18, adding that it is a real opportunity for Nigeria to further entrench its strategic national interests. “We must let the international community know what we do in our priority areas. Countries that fight with us in the war against Boko Haram

will be waiting to hear from us how the war is going and what needs to be done,” he noted. On the fight against corruption he said that the focus of the federal government is on asset recovery with the repatriation of the stolen money where Nigeria needs the support of a lot of the major countries to help facilitate the repatriation of these funds. He added that key to all is the Economic Recovery Growth Plan and letting the world know that Nigeria is ready for business, saying “we are doing a lot to make Nigeria a more business friendly country and so we will be taking part in some of the meetings on economic and trade issues.” The minister noted that the theme for this year is making the “United Nations relevant to all people, global leadership and shared responsibility, peaceful, equitable and sustainable development.”

Edo govt shuts 10 illegal burrow pits in Benin

do State Government has begun enforcement of the order on illegal burrows, by shutting operations of not less than 10 burrow pits in Benin City, the state capital, in a renewed drive to safeguard the state’s environmental integrity. The enforcement team was led by the Permanent Secretary, Ministry of Environment and Sustainability, Bright Emeodume and the Ministry’s Director of Enforcement, Ero Isaac. The affected burrow pits are located in Ofumwegbe after Iguogboe community as well as those in Iguoshodin Ccommunity, among others. Recall that the Ministry of Environment and Sustainability ordered the closure of burrow pits by operators with immediate effect, citing health and environmental concerns. In a statement signed by the Commissioner for Envi-

ronment and Sustainability, Dame Omoua Alonge OniOkpaku the state government suspended operations on all burrow pits. The order, which took effect from August 2, warned owners and operators of burrow pits, haulage operators, tipper drivers and other stakeholders, that operation of a burrow pit without the appropriate approval is a criminal offence punishable by law. Oni-Okpaku explained that the shutting down of burrow pit operations was to enable the state government “re-evaluate and re-certify the sites.” According to the Commissioner, “Towards this end, all such owners and operators are required to report to the Ministry of Environment and Sustainability for recertification and subsequent inspection of their sites. For the avoidance of doubts, the following documents will be required for the exercise.

US ambassador urges Nigeria to invest in building resilient health systems ANTHONIA OBOKOH

tuart Symington, the United States Ambassador to Nigeria, has urged the country to invest in building resilient health systems as this will safeguard citizens and act as a strategy to bolster economic transformation in the country. Symington made this call during a courtesy visit to the Nigeria Centre for Disease Control (NCDC) office in Abuja. “The correlation between health security and economic stability for nations cannot be overemphasised as Nigeria contends with various economic and social priorities,”

Symington said in a statement obtained from NCDC. According to the statement, the visit which was meant to reinforce the role NCDC plays as Nigeria’s national public health institute, demonstrates a strong confidence in the longstanding relationship with the Nigerian government. The visit also highlights the progress made in the prevention, detection and response to infectious disease outbreaks. “The experience that I have had during my visit to the NCDC headquarters has shown me how things can be done efficiently in a publicsector organisation. I commend the NCDC for being a model for other national

public health institutes on the continent,” Symington said. The statement disclosed that, over the years, the U.S. Government has provided support to Nigeria for the prevention, detection, response and control of infectious diseases. The statement also added that through the support of the U.S. Government, the NCDC has strengthened its capacity to contribute to global health security. However, Symington reinforced the United States government’s leadership and commitment to the Global Health Security Agenda (GHSA) whose goal is to support countries to strengthen their ability to prevent and respond to epidemics.

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INTERVIEW

Wednesday 12 September 2018

Proper land use planning panacea to deforestation – Proforest, Africa regional director ABRAHAM BAFFOE, is the Africa Regional Director of Proforest. Recently, Tropical Forest Alliance 2020 Africa Palm Oil Initiative (TFA2020 APOI), initiative of Proforest in partnership with the Edo State Government organized a stakeholder workshop on sustainable palm oil development in the state. He spoke with IDRIS UMAR MOMOH, excerpt. growing and increasing very fast. That growing population needs to be fed, which is going to affect the forest resources that are available. So, there has to be proper land use planning not only for Edo state but for almost every part of Nigeria especially the forest belt states of the country like AkwaIbom, Delta, Cross River, Rivers, Ondo, Ekiti state among others. They need to key into this process to understand how to plan their land use and agricultural development without depleting the remaining forests of these states. I am happy to say that Edo state government is committed to this course. It is a very good course, and I am sure once the benefits begin to unfold other states will follow.

hat is Proforest? Proforest is a group of natural resource companies and organizations that work to support people to produce natural resource sustainably. What I mean is that we work with governments, private sector and the civil society organizations to manage forest resources and also produce agricultural commodity sustainably.

How will Proforest help the Nigerian government and Edo State government in managing or addressing challenges of deforestation occasioned by investment in oil palm, cocoa plantations and other agricultural ventures? That is a challenge most countries have been battling with, but that doesn’t means it cannot be resolved. It is possible to resolve if you plan your development and faithfully implement the plans. It is also possible to have development and at the same time protect your forests. In land use, it is crucial to have a better understanding of what your land resources are, where the forests are, which areas should be for agriculture and permanent forestry. That is why we are working with the Edo State government to identify areas that are forests and should be managed as permanent forestry and also areas that have so badly degraded that is almost impossible to bring back to forest. Those areas are what the Edo State Government will use for agricultural development, and that is the kind of work we are doing with the state government to help it identify areas that should be used for agriculture, industrial and development purposes and for permanent forest. There is also the need to have what we call land use planning. It is heartening that the Edo state government is very dedicated and committed to having a comprehensive land use planning. Before you can do that you need to do what we call a land use analysis to understand where the rainforest areas are, where the good forests are that should be protected for biodiversity purposes and for productivity purposes like timber and others. We are at the stage of identifying that by working with the state government. We have, in fact, now completed the land physical analysis.

Abraham Baffoe

So we know the much degraded forest areas, areas that are somehow degraded but can be brought back to full forests, and areas that are in good state and can be managed for permanent forestry. What are the challenges Proforest face in identifying these areas that are degraded, somehow degraded and those in good state that can be managed for permanent forestry? The challenges are many. It is generally a very difficult task. The reason is that the state’s institutions have not been working effectively to the extent that most of the lands that have been given out to companies and other corporations have not been properly mapped. At the moment on paper, you might have maybe about 200, 000 hectares of lands that have been given out, but when you ask for the information to be able to map those areas, they are not available. That means those lands were not properly mapped, and that is difficult for us in order to identify which area has already been given out. That is the challenge we are going through. But, what we have planned to do is a sort of land verification to identify which area has been given out. If there has been proper mapping it wouldn’t have been necessary going to the field; you could just get all those

information from the computer to know which land areas have been given out and which have not. But that hasn’t happened. It is all part of the challenges we faced. We are working on that to bring back a proper Geographic Information System in the state to address future challenges. This is important because you can never have a proper management of land resource without really understanding what is on the land at the moment. You mentioned that some Africa countries have keyed into the Proforest project, and Nigeria was among the countries that have not embraced the initiative. Of what benefit will the project be to Nigeria agricultural development? Nigeria, as we all know is the biggest economy in Africa, and also the country is generally an agrarian economy, even though it is one of the leading producers of oil on the continent. You know agriculture drives the economy. We also know that significant portion of Nigeria lies in the tropical forest zone, but unfortunately, most of the forest resources are gone at the moment. We have very little forest left. What that means is that we need to protect the remaining forests and at the same time we need to produce more food for the Nigeria population because the population is

How many African countries have keyed into the programme and how many have not? With this initiative we are working with 10 countries in Africa: Sierra Leone, Liberia, Ghana, Côte d’ voire, now Nigeria (Edo State), Cameroun, Gabon, Central Africa Republic and the Democratic Republic of Congo. All these countries are partners of TFA 2020. Other countries have also indicated interest because they see the importance of being partners of this great initiative to address deforestation. Deforestation is a global issue as well as an Africa one except for those in the Sahel or the desert. Everywhere including East Africa, South East Africa and Central Africa, these are major issues. These countries have seen the need and want to be a part of this process. What has been the monetary, environmental and social cost of deforestation to Africa countries? If you want to quantify the monetary cost of deforestation in Africa, that would run into hundreds of billions of dollars. I can’t give the exact figure lost to deforestation in the whole of Africa but in a country like Ghana for example, the estimated lose is about $4 billion annually. That is small if you compare the small size of Ghana to Nigeria’s and the whole of Africa. Also there are aspects of it that you cannot put monetary value on because they are intangible benefits. It is also difficult to quantify the benefits or monetary value of the clean air that we breath. The monetary value is

only put on the effects of deforestation on agricultural production; say the production of cocoa, several cash and food crops. That is what was computed for Ghana alone that is running into $4 billion dollars every year. Your message to TFA 2020, Africa governments towards addressing the challenges of deforestation in the continent? The message is that climate change is real, and it has been established that deforestation is a major cause of this climate change. Deforestation is something that is caused by human beings. The message now is that we have realized the negative implications of deforestation and all of us should begin to address it because when the last tree dies, the last man will die. Trees are the backbone of human life. So, there is the need for us to protect them if we really want to have a better life on earth. Edo state government has keyed into the stakeholders working document on deforestation. How will it help the government to revitalize forestation in the state? The state governor, Godwin Obaseki, is so happy with what the stakeholders have done so far. He’s so happy and is ready to endorse the final report when we send it. Giving it legal backing will make it to become the norm for all agricultural development or forestry operation companies thinking of operating in the state. That, for me, is very importance and significant because it will create a sort of level playing field for all operators in the state. It will also help to put in place measures that will enable all companies to do the right thing, to comply with the best practice requirement to protect the forest, conserve biodiversity within the agricultural landscape they operate. This is going to be part of the regulatory framework that will govern agricultural and forest operations in the state. For me this is a game charger for development in Edo state because you cannot have economic development without looking at the environment; that will be short lived. If you want sustainable economic development that will be long lasting, you will have to look at the environment.

Wednesday 12 September 2018

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NEWS Stock market fall wipes away investors... Continued from page 1

involved in the MTN saga,” said United Capital Plc analysts, adding

that “bullish triggers remain scarce.” The Nigerian Stock Exchange (NSE) All Share Index closed at 33,449.17 points on Tuesday’s close of trading, indicating a year-to-date (ytd) negative return of minus 12.54 percent. FBNQuest research analysts in their September 11 note to investors said, “Some offshore institutional investors may wince at the news headlines surrounding the largest non-oil company in Nigeria. They may also voice their concerns over the forthcoming elections although we would argue that precedent suggests such concerns are overdone.” Indeed prior till yesterday, the worst market performance in a preelection year was 1998 when the market declined by 11.98 percent according to data compiled from Bloomberg. Nigeria’s market rout begun in January 20. The MSCI frontier market index has lost almost $81 billion with Nigeria alone accounting for 11.59 percent or $9.38 billion (N3.3trn) of

the total frontier market losses. Nigeria stock market is now down 25.82percentsinceitspeaklevelinJanuary as the country delves further deeper inbearishterritory.Amarketentersbear mode if it declines more than 20 percent from its peak level during the year. The losses investors have suffered this year in the stock market since January 19 is now one third of the 2018 budget. To put this better into context, it is like losing an average of N16.56 billion every day in the stock market since the January 19. With real wages stagnating in the country, the stock market decline may lead to further tightening in consumer spending which dropped last year by around 0.99 percent. Since the first quarter of 2018, Nigeria’s market has been hit by large capital outflows as foreign investors have been selling down on Nigerian equities due to political and regulatory uncertainty in the country. According to NSE Q2 Factsheet, Foreign investors accounted for 49.47 percent of total stock market holdings in Nigeria.

The selloff by foreign investors has put the Nigerian external reserves under renewed pressure this year, however, the rally in crude oil prices has provided enough foreign exchange earnings to ensure that reserves have not been depleted by large capital outflows. The oil buffer provided the Central Bank of Nigeria enough ammunition to defend the national currency through the emerging and frontier market currencies selloff which have hit the Turkish lira, Chinese Remnibi, South African Rand, Brazil’s Real and Argentine Peso. Naira has remained stable all through the selloff season but it’s uncertain how long the Central Bank can continue to support the currency which has depreciated for 9 consecutive years since 2008. Signs of financial strains are already showing up on the reserves as the external reserves fell by around $1.72 billion between July and August according to data sourced from CBN. Analysts say the selloffs in the Nigerian market are unlikely to stop until 2019 elections are conducted next February.

L-R: Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry (LCCI); InTeak Kim, consul general embassy of the republic of Korea, Lagos Office; Babatunde Paul Ruwase, president, LCCI, and Knut Ulvmoen, deputy president, LCCI, during a courtesy visit of the New Consul General to LCCI recently in Lagos.

the primaries of the party. But news emerged yesterday that the 57 Local Council Development Areas (LCDAs) in the state have endorsed another governorship aspi-

rant Jide Sanwonolu as the consensus candidate of the state. There were also unconfirmed claims that Sanwonolu has the backing of Tinubu who is considered the ultimate tie-breaker on who gets the state’s governorship ticket. A third candidate in the race on the APC platform, Obafemi Hamzat is said to have the backing of the party stalwarts in Abuja. If Ambode is denied the party’s ticket for a second term, it would be the first timesince1999thatasittinggovernorin Lagos state is not given an opportunity to complete an 8-year tenure. But speaking in an interview with Business day, a chieftain of the APC in the State who is also a member the state APC executive, who spoke on the condition of anonymity, said that the party had always maintained that the Lagos APC governorship ticket was open to interested members of the party who feel they had the capacity to lead the state, describing the current rumoured disagreement between Ambode and Tinubu as the handiwork of detractors bent on destroying the party. “It is not true that Tinubu has withdrawn his support for Ambode, or the Governor is dumping the party for PDP, just like you have said, there could be issues, but it is a family issue that would be sorted out. “You saw that three aspirants bought the governorship nomina-

0.57xs and Guaranty Trust at 1.93xs. This compares to a valuation of 1.96xs book value that investors are paying for Kenya’s largest bank, the Equity bank Group. Year to date analysis for the tier one banks showed that Zenith Bank is down 23.25 percent, UBA (-28.43 %), GTB (-19.85%), FBN (-0.11%) and Access (-22.17%). The share price of the tier one banks closed at N8.80 for FBN, N32.50 for GTB, N19.90 for Zenith, Access bank and UBA closed at N9.00 and N7.45 respectively. Nigeria is the largest economy in Africa having a GDP of $375.77 billion as at 2017 while Kenya had a GDP of $74.94 billion in 2017. The market cap declined to N12.211trillion on Tuesday September 11, 2018, placing the market at a record 14-month low. Worst hit stocks after Tuesday’s trading are some of the large cap counters like Nigerian Breweries Plc, GTBank Plc, Dangote Sugar Refinery Plc, Forte Oil Plc and UAC of Nigeria Plc. Whilethereisstillnonewsthatcould attract buy sentiment, foreign investors who are major buyers of the nation’s listed stocks are still pulling out of its Bourse. The NSE data show 64.68percent decline in foreign transactions for the month of July as against the June level, from N102.41 billion as at June to N36.17billion at the end of July 2018. As at January, it was N166.39billion.

Stop treating staff loans as payroll CBN tells... Continued from page 1

payroll/human resources (HR) issues.

Road to 2019: Ambode’s political future hangs... Continued from page 1

“The sell-off in May has since developed a second and third leg. The three leading stock markets in sub-Saharan Africa have followed the trend. The Lagos all-share index (NSEASI) has lost 12.1percent year-to-date (ytd), Nairobi (NSE 20) 17.3percent and the Johannesburg all-share 4.1percent in local currency terms. In this environment there is no hiding place for Lagos and Nairobi, and seemingly a little protection for Jo’burg,” FBNQuest added. The rout is however widening the valuation gap that existed between Nigerian Banks and other lenders in Africa’s major economies. The market capitalisation of Nigeria’s 15 listed banks is now $10.5 billion (N3.8 trillion) compared to $6.9 billion (KES 695.63 billion) for listed Kenyan Banks, according to data compiled by BusinessDay. The NSE Banking index slumped 3.1 percent at the close of trading yesterday, the biggest drop since March 28. “Foreign portfolio investors are selling as a result of heightened election tensions and the impact of looming U.S. interest-rate increases,” said Olukayode Olayemi, equity trader for CSL Stockbrokers. Nigerian top tier lenders are all trading below tangible book value per share except Guaranty Trust Bank. FBN Holdings now trades at a low 0.48xsbookvalue,AccessBankat0.55xs, Zenith Bank at 0.52xs, UBA trades at

tion forms, and we have decided to adopt the direct primary, let the party members decide their fate in the primary.” Sources have told BusinessDay that both Ambode and Sanwonolu have the blessing of Tinubu for the state governorship election and no final decision has yet been made on who ultimately gets the backing of Tinubu. However, the uncertainty over whether the APC will be fielding Ambode has suddenly thrown the possibility that oil magnate, Femi Otedola will throw his hat into the Lagos state governorship race. Already, the PDP has reportedly invited him to join the party and fight for governorship ticket in Lagos State ahead of the 2019 governorship election. A chieftain of the PDP in the State, Muri Okunola, confirmed in an interview with BusinessDay, that the Lagos chapter of the PDP was in discussion with Otedola for him to pick the party’s gubernatorial nomination form. Okunola stressed that the party would not shut its doors against other aspirants who wish to contest for the gubernatorial ticket, adding that he was confident the PDP would win the State in the 2019 general elections. “Yes it is true we are in discussion with Otedola for him to pick our nomination form and contest for the governorship ticket. We had a meeting in London and we are still talking. We would not shut the door against other aspirants for the governorship race, but I can tell you we are strategizing.” “PDP won the state in 2015 but we were rigged out by the APC, but I can tell you this time around it would

not be easy for them,” Okunola said. Otedola had initially indicated his intention to join the Lagos state governorship race but later said he would wait until 2023 because he did not want tostandagainst Ambode. BothOtedola and Ambode are reportedly from the Epe axis of Lagos state. However, the uncertainty hanging over Ambode’s secondtermbid,hasthrowninthepossibilityofOtedolajumpingintotherace. Otedola, like his father, could cash in on the sharp divisions within the APC. The uncertainty in the APC is also reigning at the national level in the party as Yakubu Dogara, incumbent SpeakeroftheHouseofRepresentatives formally declared intention to return to the Parliament without naming the platform he would be contesting on. Dogara who represents Bogoro/ Dass/Tafawa Balewa Federal Constituency seat in the House of Representatives, declared his intention while addressing hundreds of his constituents who thronged his MaitamaAbuja home on Tuesday afternoon. Political observers believe the Speaker who failed to declare the political platform on which he will be seeking re-election in the 2019 general elections, may opt for the People’s Democratic Party (PDP). Perhaps, the only person sure of getting a ticket in the APC is President Muhammmadu Buhari who on Tuesday berated those who recently defected from the All Progressive Congress APC, saying that they were driven by their selfish interests. The President stated this when he formally received his Expression of Interest Form for the 2019 Presidential election, from the National Consolidation Ambassadors’ Network (NCAN).

Instead, all staff loans are to have credit files which are expected to have duly executed loan/credit offer letters clearly stating the approved terms. This was contained in the additional regulatory guidelines for the operation of the redesigned Credit Risk Management System (CRMS) for commercial, merchant and noninterest banks, released yesterday by Hassan Mahmud, for director, financial policy and regulation department of the CBN. The additional guidelines state that all lending institutions are to ensure that National or State Assembly approvals are in place as a precondition to accept Federal, State or Local Government guarantee for exposure to a company legally registered in Nigeria. For purpose of accountability, the CBN has directed all directors of a bor-

rowing entity who are Non-Nigerian Non-Resident Directors (NNNRDs), to avail themselves to a transparent and documented process of validating their international passport details (data page) with the Embassy/ High Commission of the issuing country, through a participating bank. Where there is only one Nigerian Director and one or more NNNRD(s), the sole Nigerian Director is expected to provide his/her BVN to the lending bank. The regulatory guidelines for the redesigned CRMS for theses financial institutions was released on February 27, 2017, via CBN circular FPR/DIR/GEN/CRM/06/012. However, the additional guidelines are to address some grey areas in the rendition requirements and to ensure full compliance with the operations of the CRMS.

•Continues online at www.businessdayonline.com

MTN lawsuits seek declaration that AGF actions... Continued from page 1

Bank of Nigeria (CBN), shows the telecommunications firm seek-

ing an order from the court declaring actions of the AGF as illegal and unconstitutional ,according to court documents seen by BusinessDay. The matters boil down to the alleged illegal repatriation of $8.13 billion by MTN and the demand from the office of the Attorney General of the federation for the sums of N242, 244,452,215.97 and $ 1,283,610,357.86 representing import duty, withholding tax and value added tax that should have been remitted to the purse of the Federal Government . In the first matter, MTN stated that the demand and actions of the Attorney General is illegal and unconstitutional. The details of the said actions are stated in paragraph 6 sub (a) to (f) of its statement of claim. The said paragraph readsThe AGF’s usurpation of the powers and duties of the Federal Inland Revenue Service (FIRS), Nigeria Customs Service (NCS) and the Minister of Finance, by purporting to conduct an exercise aimed at reviewing, assessing and clearing

MTNN for payment/remittance of import duties, withholding tax and value added tax. The AGF’s purported substitution of a “self-assessment procedure” created and instituted by himself, for the statutorily prescribed processes and procedures for assessment, payment/remittance, audit and dispute resolution in respect of import duties, withholding tax and value added tax. The AGF’s purported review of MTNN’s liability in respect of lapsed fiscal claims. The AGF’s purported conduct of a “ revenue assets recovery exercise” on MTNN on the basis of a purported “Report of Revenue assets recovery exercise for the period 2010-2017” which was prepared without hearing MTNN. The AGF’s conduct in reaching a predetermined conclusion in respect of the purported “revenue assets recovery exercise”, and the AGF’s demand of N242,244,452,215.97 and $1,283,610,357.86 from MTNN on entirely incorrect factual and legal basis”.

•Continues online at www.businessdayonline.com

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Wednesday 11 September 2018

FEATURE MTN Saga: Beyond reparations and fines BY OUR ANALYST

hat you don’t resist has a right to remain, goes a popular saying. And that seems to sum up the MTN saga that has unfolded in the last two weeks involving some of our banks and the nation’s financial regulators. It is clear from what has been reported in this saga that our financial regulatory bodies have not engaged scrupulously enough with MTN to curtail the communication giant’s propensity to perpetuate its flouting of our financial regulations. It is worthy to understand that, all sentiments must be jettisoned on this issue; any business entity, foreign or local must respect the regulatory provisions and policies of this country as backed by the country’s supreme book, the Constitution. All the developed nations of the world we so admire are nations of laws; where laws are made and also be made to be respected and followed by all, irrespective of who you are and what connections you have. Now back to the issue. The quick succession with which the infractions of the MTN in its financial operations in Nigeria are being exposed now smacks of an attempt to preempt outcome of a potential forensic investigation in the wake of the saga to deflect the blame from the regulators and heap it squarely on MTN. But that should not prevent the need for deep forensic investigation of all the financial transactions of MTN, vis-à-vis the state and its institutions. The revelations that the MTN has been under investigation for 30 months itself needs investigating. A special Presidential Committee needs to be established for this purpose; for there seems to be a lot than meets the eyes. Why has it taken this long to investigate the infringements? How much criminal infractions have been uncovered? How much do the various financial regu-

lations know about these infractions? When did they know about them? What did they recommended and what actions did take or fail to take? The only way out is to find answers to these questions and take actions against all culprits devoid of any form of sentiments. In Nigeria, we succumb to all sorts of sentiments when “our people” are under investigation or are arraigned. It is time we discarded this stand and move along the path of developed nations. All nations that developed today were successful, foremost, because they upheld the rule of law. And the law is applied to all without any form of sentiments. Because of the many unanswered questions this saga has generated, the CBN Governor has to, from far away China, offer official explanations of the saga in these words: “The investigation was in two parts, the first allegation started about two and a half years ago, when examiners began to investigate: The method of payment for shares by local shareholders in MTN International, which is the sole owner of MTN Nigeria. Whether the banks breached the extant regulations requiring banks to issue CCIs within 24 hours of receipt of funds inflowed into Nigeria. On the 1st charge regarding investment by local shareholders, the CBN examiners discovered that the local investors, purchased fx from the

Nigerian foreign exchange market, repatriated the funds and these funds formed part of the total funds inflowed by MTN totaling $402m between 2001 and 2003. By the extant regulation, only funds inflowed into Nigeria qualify for the issuance of CCI. However, examiners observed that the extant FX regulations at the time of investment allowed Nigerians to purchase shares with foreign currency. So, whereas you would say that the investment of the local shareholders should be voided because the funds came from within Nigeria and were round tripped, you can also say that it is allowed because Nigerians were allowed to invest in foreign currency assets. So we reasoned that since this transaction happened over 10 years ago and the company was doing well, we should grant them a waiver. On the Second offence regarding the CCIs, the regulation provides that banks must issue CCIs for inflowed funds within 24 hours. The examiners reported that the banks failed to issue some of the CCIs within 24 hours; which is sanctionable. Again, the CBN decided to overlook this offence given that these transactions took place over 10 years ago. It was based on these facts that the CBN wrote the letter dated February 22, 2017 granting MTN the permission to continue paying dividends on the CCIs. Now the third offence, which is the crux of

the matter in dispute now relates to the unauthorized conversion of a loan of $399 million to preference shares by the MTN and the banks and thereafter repatriated the sum of $8.1 billion without CBN final approval. The facts from the last examination which commenced in March 2018 is that, at the inception of the company, the shareholders inflowed the sum of $402million and reported that $343million was equity and $59 million as loan. The examiners later discovered that in its 2007 audited accounts MTN’s auditors reported that the investment of $402million was stated as $2.99million in equity and $399m as loan, a statement that conflicts with their earlier disclosure and on the basis of which CCIs had long been issued to the company. Soon after, the company, through its bankers approached the CBN for the conversion of the loan of $399million to Preference shares. The CBN thereafter gave an Approval in Principle subject to fulfilling certain conditions. Notwithstanding, the Company and the bank went ahead and concluded the conversion to Preference shares without CBN’s final approval and based on this, repatriated the sum of $8.1billion outside the country. The CBN felt this was too grievous and that this couldn’t be ignored. However, as it stands, letters of sanctions have been sent to all parties.”

Nigerians and indeed our friends abroad are watching this drama. The fact that MTN shares were down to the lowest level in 10 years period shows the degree to which investing public regards this development. And that should tell us that all eyes are now on the Presidency that prides itself on mission to fight corruption to see how it will re-act. Certainly, this is not something to be left in the hands of the financial regulators to handle. Many Nigerians believe somewhere somehow there have been some compromises for such huge scam to go undetected, unreported and unsanctioned till now. This is not to say completely this has not been detected. Nigeria Deposit Insurance Corporation (NDIC), in its routine banking examinations of banks along with other regulators, was the first to stumble on these breaches as far back as 2009. But, not having the powers to apply sanctions. passed the information forward. Whether this information has been acted on as it should is for the Presidential investigative committee on the MTN saga to ascertain. But we need to commend those regulatory bodies that did their jobs judiciously well. The regulatory bodies have asked MTN to refund the sum of $8.1 billion and banks that played along with MTN to pay fines. But, beyond these, there is need for sober reflection as a nation. Failed states are measured by the level of breakdown in law and order. Conversely, states that uphold the rule of law and maintain order stand the better chance of achieving development. If we are committed to development, we have no alternative to upholding the rule of law in every aspect of our national life. This seems to be a big test on the part of the President’s anti corruption crusade. All eyes are watching, local and foreign. We are, once again, presented with the opportunity to act in the national interest. We must resist the temptation to pander to the whims of selfserving interests. A stitch in time saves nine.

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NEWS NERC expresses concern over discretionary remittances by Discos HARRISON EDEH, Abuja

he Nigerian Electricity Regulatory Commission (NERC) has expressed deep concern over what they described as ‘discretionary’ remittances by the Distribution Companies of Nigeria (Discos). NERC made this position in a communique issued on Monday at the end of the commission’s meeting with the Discos in Abuja. The communique noted that “there is need to remove discretionary payments by Electricity Distribution Companies was identified as unsustainable in order to encourage investor-confidence in the industry.” Also, the communique acknowledged discrepancies in the cut off dates for payments made to the Nigerian Bulk Electricity Trader (NBET) by the Electricity Distribution Companies and need to implement a settlement system

visible to all parties. The meeting of stakeholders, the communique said, reemphasized need to upheld customer service standards especially as it relates to refund of monies collected from customers for meters under the scrapped CAPMI Scheme. The meeting also noted the receipt of the report that some Maximum Demand customers’ are still unmetered in spite of NERC’s Order and further directed that Discos should report on the current status especially as it relates on Energy Theft and compliance. “The Electricity Distribution Companies are to pay attention to MD Meters within their franchise being bypassed/compromised. Smart technologies should be deployed in appropriate areas going forward” The meeting raised concern with non compliance of the Discos with the Estimated Billing Methodology, disregard for safety standards

and the poor state of the Forum Offices as well as their large backlog or unresolved cases. The meeting resolved that Electricity Distribution Companies should ensure that estimated bills are kept within reasonable levels according to the Methodology even before the MAP regulation and capping regulation come into full effect. The meeting agreed that the Commission will get more information on the proposal by the Federal Ministry of Power to act as an Aggregator. The original concept for an automated central system was agreed to be adopted. The meeting agreed that the Uniform System of Accounts (USoA) reporting form should be on the Commission’s website by Friday August 31, 2018. The Electricity Distribution Companies were advised to make submission Energising Economic Clusters for the Commission’s consideration.

ICAN canvasses robust 2018 Nigerian Corporate Governance Code to boost FDI KELECHI EWUZIE

nstitute of Chartered Accountants of Nigeria (ICAN) has canvassed a robust 2018 Nigerian Code of Corporate Governance in order to gain investors confidence and boost foreign direct investment. ICAN observed that code of corporate governance has serious implication for investment, adding that the importance of a code in achieving sustainable and inclusive growth and development in an economy is vital. Razak Jaiyeola, president of the Institute says Corporate Governance Code is a national advertorial to the whole world that indicates how companies are to be managed and governed in a country or an economic entity. It is therefore not a document that should be so weak as to easily enable the compromise of investors’ capital and erode their confidence. In his address at a press conference in Lagos, Jaiyeola said there were very salient points the institute noted

CHANGE OF NAME

I, formerly known and addressed as Miss Olajumoke Funmilola Akiyode now wish to be known and addressed as Mrs. Olajumoke Funmilola Lawanson. All former documents remain valid. General Public please take note.

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I, formerly known and addressed as Odekwo Ruth now wish to be known and addressed as Odeku Ruth. All former documents remain valid. GTB and General Public please take note.

that needed to be addressed if the code was to achieve the national desire for an enabling business environment. He observed that the 2018 Code targeted companies of varying sizes and complexities, without any specific focus on listed companies where ownership has or ought to have separated from control. According to him, “the institute observed that the main approach explained and implemented in the Code is not in consonance with the “Apply and Explain” approach. “As implied in the 2018 Code, a principles-based Code does not mean a voluntary Code, but rather voluntary application of the provisions of the Code. We are of the opinion that the expression “voluntary” on page xiii of the 2018 Code should be

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I, formerly known and addressed as Miss Titilayo Olanike Ajayi now wish to be known and addressed as Mrs Titilayo Olanike Ogunniyi. All former documents remain valid. General Public please take note.

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I, formerly known and addressed as Fakoya Rasak now wish to be known and addressed as Fakoya Rasak Abimbola. All former documents remain valid. General Public please take note.

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I, formerly known and addressed as Okwuma Nwaogu Ijeoma Anna now wish to be known and addressed as Okanrende Ijeoma Anna. All former documents remain valid. General Public please take note.

removed from the Code”. The ICAN president said the institute recommended that INED should be added to Para. 4.1 in the 2018 Code to read “The Board should ensure that Directors, especially Independent NonExecutive Directors (INEDs) and Non-Executive Directors (NEDs), have access to independent professional advice as Directors”. INEDs occupy a pre-eminent position in Corporate Governance oversight, hence they chair oversight committees and form a majority. Their purpose is to sustain board independence, give protection to widely dispersed minorities and nonequity stakeholders, and protect the independence and objectivity of the audit process.

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I, formerly known and addressed as Ejovwoke Bridget Alele now wish to be known and addressed as Ejovwoke Bridget Osubele. All former documents remain valid. General Public please take note.

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I, formerly known and addressed as Gbadero Oluwayemisi Hossanah now wish to be known and addressed as Awodiji Oluwayemisi Hossanah. All former documents remain valid. General Public please take note.

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I, formerly known and addressed as Mrs Imoniche-benson Olaide Fatima now wish to be known and addressed as Miss Akinyemi Olaide Fatima. All former documents remain valid. General Public please take note.

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Wednesday 12 September 2018

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Auditors express ‘adverse opinion’ on RT Briscoe’s going concern status BALA AUGIE

he recent verdict by external auditors of R.T. Briscoe Nigeria Plc is that the firm is technically insolvent. The beleaguered firm has been struggling, due to uncertainty bothering on its inability to settle obligations, deteriorating working capital, receding revenue, and recurring losses. The car dealer’s external auditors- KPMG professionals- expressed an “adverse opinion” on the consolidated 2017 financial statements. “In our opinion, the Company requires capital injection to enable it continue as a going concern, and as it the date of our report, the Company is yet to secure the required funding to enable it settle its outstanding obligation and to finance its working capital requirement,” said auditors at KPMG. “We believe these events

or conditions, individually or collectively cast significant doubt on the Group or Company’s ability to realize its assets and settle its obligation in the ordinary course of business,” said the auditors. The basis of the adverse opinion was when the auditors said the preparation of the consolidation and financial statement on a going concern basis was inappropriate. “In our opinion, the consolidated separate financial statement should reflect adjustment to reduce the value of assets to their recoverable amount and to provide for any further liabilities that may arise,” added the auditors. According to the 2017 audited financial statement of RT Briscoe, total liabilities of N13.65 billion, exceeded total assets of N7.61 billion. This resulted in a negative shareholders fund of N 6.04 billion in the period under review. Negative shareholder

equity on a company’s balance sheet is a red flag that should prompt potential investors to take a closer look before committing their money. RT Briscoe has negative retained earnings of N9.90 billion, which means it has recorded more losses than profit for a period of time. With a 55.40 drop in sales, 37.35 percent decline in gross profit, and a N2.67 billion finance cost, a loss after tax of N3.16 billion was unavoidable. It will be recalled that in 2016, a Federal High Court sitting in Abuja had frozen the account of RT Briscoecomprising of Briscoe Foods, Briscoe Motors, Briscoe Properties, over indebted of N2.50 billion to Diamond Bank. Diamond Bank had extended the credit facility to the firm to help solve working capital problems, but the loans didn’t seem to salvage the local distributor’s worsening financial health.

In 2016, Ford Motor Company ended its association with RT Briscoe, while reinforcing its partnership with rival Coscharis Motors Limited as the country’s sole official Ford distributor. R.T Briscoe and other car dealers like Leventis, and UAC enjoyed high patronage as automobile sales surged following the period after independence in 1960. Assembling of cars only commenced in the 1970s when Federal Government entered partnership with French company Peugeot to set up Peugeot Automobile of Nigeria (PAN) in Kaduna. But the economy slumped in the early 1980s as sectors such as manufacturing, automobile and textile industries recorded huge loss. Moreover, the severe dollar shortage brought by a precipitous drop in crude oil price that saw the country slip into its first recession in 25 years dealing a great blow to car dealers.

Paga to accelerate growth with $10M Series B2 Investment

aga, the leading mobile money company in Nigeria has just announced that it has closed a $10 million growth financing led by the Global Innovation Fund. Also participating in the round were existing investors Goodwell (managed by Alitheia Capital), Adlevo Capital, Omidyar Network and Unreasonable Capital. This new financing brings the total Paga has raised since inception in 2009 to $35 million. The company commenced commercial operations in August 2012, and recently revealed that since then it has served 9 million customers and created over 10,000 jobs through its 17,000 agents who hire staff to run their stores. “GIF is proud to lead Paga’s Series B2 round,” said Alix Peterson Zwane, GIF’s CEO. “Paga’s mission of helping people ‘make life possible” aligns with our core mission of supporting entrepreneurs and innovators that

seek to improve the lives of those living on less than $5 per day. I am pleased that GIF will help enable Paga’s next phase.” Nigeria is one of the fastest growing emerging markets in the world, and the biggest economy in Africa with $405 billion GDP. Nigeria currently has a population of 186 million but is expected to become the 3rd largest country in the world (behind India and China) by 2050 with 411 million people. In Nigeria today, over 100 million adults find it difficult to transfer or leverage money for basic human needs. This problem is one that exists even for those that are banked, and is something Paga’s team is passionate about solving. The growth financing announced today will enable Paga further scale its business in Nigeria to drive growth of Paga’s mobile wallet and agent network, and explore expansion opportunities in other markets where similar problems exist.

Akinkugbe, Danjuma to bag awards at Nigeria Academy of Pharmacy

L-R: Soromfe Uzomah, head, strategic partnership, Microsoft Africa Initiative; Comfort Anorue, beneficiary, MTN – Microsoft Training; Bridget Enuma, SME segment management; Michael Olafusi, facilitator, MTN – Microsoft Training, and Yinka Shittu, beneficiary, MTN – Microsoft Training, at the MTN-Microsoft Training for SME held in Lagos.

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he Nigeria Academy of Pharmacy will today (Wednesday) in Lagos hold its Annual General Meeting and honour two distinguished Nigerians with Lifetime Achievement award and Honorary Fellowship respectively in a special ceremony which will also feature a lecture by a distinguished scientist. In recognition of his pioneering and entrepreneurial trailblazing efforts in the nation’s pharmaceutical manufacturing sector, Oludolapo Ibukun Akinkugbe, the pioneer general secretary of the defunct Nigerian Union of Pharmacists (NUP) and fourth president of the Pharmaceutical Society of Nigeria (PSN) will receive the Academy’s Life-

time Achievement award while founder of the TY Danjuma Foundation and chairman of May & Baker Nigeria Plc, Theophilus Danjuma will receive an Honorary Fellowship in recognition of his philanthropic contributions. This year’s investiture event will feature a lecture which will be delivered by immediate past Vice Chancellor, Benson Idahosa University, Benin-City, Ernest Izevbigie who will be speaking on the theme: From Plant to Patient: Driving Research & Innovation for Industry. Izevbigie, a professor is an accomplished researcher and world-renowned authority recognized for his ground breaking focus on the use of bitter leaf in cancer and diabetes management.

NAMA decries lack of spares to maintain TRACON for Nigerian airports Nigeria presents robust trade delegation to SPACE 2018 in France IFEOMA OKEKE

arely eight years after installing the controversial Total Radar Coverage (TRACON) equipment in the nation’s airports, the facility may have broken down. TRACON project, which commenced during the time of Kema Chikwe in 2003, was eventually completed in 2010 at a huge sum of 66,500,870 million euros paid by the federal government. But, four years after the project was completed, 2014 to be precise, the Nigerian Airspace Management Agency (NAMA) says it could not access spare

parts from the manufacturer, Thales of France, as stipulated in the contractual agreement. Speaking Tuesday in his presentation at the Stakeholders Interactive Forum organised by the agency, Farouk Umar, director of safety electronics and engineering services, NAMA, said that all efforts to source spare parts for the replacement of some of the bad equipment from the manufacturer had proved abortive. Umar lamented that the situation had been like that since 2014, which was four years after the project came on stream. He disclosed that the agency had been operating the equipment without

spares from the manufacturers, adding that the facility was also due for upgrade to the state-of-the-art. He however urged the federal government to prevail on Thales of France to adhere strictly to the terms of contract as entered into with Nigeria, stressing that it was extensive to procure navigational equipment for operations by the agency. Earlier, Fola Akinkuotu, managing director of NAMA, in his welcome address said that in a bid to enhance air safety and radio communications between pilots and control towers within the country’s airspace, NAMA, has installed Very High Frequency (VHF) radios across 17 airports in Nigeria.

...amazed by new approaches to animal husbandry OSA VICTOR OBAYAGBONA, Rennes, France

he incessant clash between farmers and herdsmen has become a driving force among agro and livestock’s stakeholders in the Nigerian economy in seeking a better way to carry out agribusiness. Challenges have made Nigerian agriculture stakeholders explore places where practical solutions that could be replicated in checking the problems can be found. This has brought Nigerian agriculture stakeholders to Bretagne Commerce International, And Promosalons Nigeria, the official representative of

Bretagne Commerce International France in Nigeria, has organised a mission of Nigerian firms to this year’s SPACE 2018 for animal and feeds production trade show in Rennes, France, from September 11 to 14 (ongoing). BusinessDay is the only media house from Nigeria, West and Central Africa. According to Akin Akinbola, CEO, Promosalons Nigeria, Cameroon and Gabon, who took some Nigerian public institutions and firms to this year’s show, SPACE is ranked as the world’s second largest Livestock Expo. “With its unique and diverse offering, participants

are able to build relationships and contacts with a view to increasing their international trade productivity. SPACE is also an excellent avenue through which developmental strides in the agricultural sector can be achieved,” Akinbola said, at the ongoing show. “Every part of the agricultural sector is represented here. In Nigeria, we do poultry in a conservative way. For instance, we still keep our birds on the floor. The implication of this is that they get in contact with their faces, and this leads to unnecessary diseases and reduce the birds to low productive levels.

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People & Perspectives COMPANIES & MARKETS

How investing in mezzanine funds can help diversify and enhance portfolio returns

Why South African hotel wants to exit Nigeria DIPO OLADEHINDE

here are compelling reasons why investors should consider investing in mezzanine debt funds. Over the last decade, the local stock market has experienced poor returns and a great deal of investor uncertainty. And the uncertainty remains. Investing in mezzanine debt can not only provide valid diversification to a portfolio but can also enhance yield while reducing volatility. What is mezzanine debt? Mezzanine debt sits between equity and senior debt in the capital structure. In the event of default, the mezzanine funder ranks behind the lenders of senior debt but ahead of the equity providers. A mezzanine investment has two parts to it: • A debt component, generally a subordinated loan, which has an interest rate set somewhere in the mid-teens. This instrument has an interest component and provides the investor with regular cashflows in the form of interest payments; and • An equity component which provides the investor with longer term capital gains in the form of equity related upside should the equity in the investee company rise in value Mezzanine debt fund managers will generally target gross returns of around a 20% per annum.

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Ashley Benatar, Alternatives fund manager at Ashburton Investments.

classes and hence adding these other assets to a portfolio created diversification. However, because the correlations have increased, investment grade bonds are currently the only true diversifier to equities. In addition to bonds, investors seeking additional yield which can invest into mezzanine funds which offer cash yields of around 15% and potential total yields (including the return from equity kickers) of 20% and higher. Additionally,mezzanine funds perform relatively well when rates rise, unlike bond investments.

Increased volatility in the markets There have been two severe stock market declines over the last ten years and it has been a period of substantially more volatility. Because the core of a mezzanine investment is a loan instrument which generates around 60% 70% of the total return, even if the equity does not perform, the mezzanine investor should still achieve a 15% p.a return from the contractual interest coupons. Mezzanine investments are therefore less volatile and can outperform equity in a low growth environment.

Poor growth forecastsSouth African equity returns in the future may be constrained by slow economic growth. Growth forecasts in South Africa to 2020 are less than 2% p.a. Equities are projected to return 12% and bonds 9% per anum over the next 3 years. A portfolio consisting of a combined 60/40 equity/bond portfolio 10.8% over the same period. This leaves little headroom in terms of what pension funds require to cover their liabilities. Adding an investment into mezzanine debt, which targets 20% returns, to one’s portfolio will not only increase the returns of the portfolio but also add the comfort of diversification.

Portfolio diversification Diversification of investors’ local equity portfolio can be achieved by adding investments in offshore equities, high yield bonds, investment grade bonds, REITs and commodities. Previously equities had a low correlation to the other asset

Access to mid-market companies not traditionally available to investors Mezzanine investments are generally made in mid-market companies. These investments are originated by the team managing the fund from their proprietary

PRIVATE EQUITY WORD FOR THE WEEK Annexe fund A separate fund formed by the Limited Partner of a fund to provide a pool of top-up capital when the reserves of the fund have proved inadequate, with the aim of avoiding the issues raised by cross-fund investing.

networks and the team is heavily involved in an active analysis and diligence of the company prior to making the investment. The investment is also tailor made to suit the company and the mezzanine lender’s requirements, with the fund manager actively managing the investment. Premium for lack of liquidity Traditional investments into equities and bonds are liquid and can be accessed very easily at low fees. An Investment into a mezzanine fund by comparison is illiquid, has higher fees and can be hard to access by investors seeking to invest less than R50 million. The lack of liquidity and higher fees are however compensated for with higher returns. Mezzanine fund managers are additionally less constrained and are very active in their approach to originating transactions that are inaccessible to the ordinary investor. The longer-term horizon of a mezzanine fund is also well suited to pension funds, endowments and sovereign wealth funds who have longer investment horizons. Conclusion While investors should keep a portfolio of traditional assets, which are liquid, it is important to add an alternative asset such as a mezzanine fund. A mezzanine investment offers investors regular cash flows in the form of interest and longerterm capital gains in the form of equity upside. Because around 2/3rds of the return is generated from the interest component, in a low growth environment in which equities could struggle, mezzanine could outperform equity. Additionally, increasing interest rates will reduce the value of bonds but increase the return on a mezzanine investment highlighting the low correlation between mezzanine and traditional assets.

outh African-based resort hotel and casino company, Sun International Hotels Ltd, has hinted on an impending exit from Nigeria by selling off its shares at Federal Palace Hotel which is hinged on the completion of an ‘investigation into a shareholder dispute’ handled by global auditing firm, Deloitte. Sun International Hotels Ltd revealed that continued setbacks in Nigeria, coupled with the ongoing shareholder dispute, have frustrated all attempts to develop and improve the property which would undoubtedly made the company’s exit from Nigeria inevitable. “Deloitte is expected to complete its investigation of the shareholder dispute shortly. Once the Deloitte investigation has been completed, it will pave the way for Sun International to exit its investment in Nigeria,” Sun International said in a statement. The company’s operation at Federal Palace Hotel is strategically planted at the heart of Lagos Island and has been the venue of many international and local events in the country; however the company had been subjected to probe by the Economic and Financial Crimes Commission (EFCC) over issues surrounding its initial investment in the Tourist Company of Nigeria (TCN). “The property is sought after given its location so there are potential buyers but Nigeria has been volatile for a while. It starts becoming difficult for investors to have confidence,” Reuters quoted Sun International Chief Executive Officer, Anthony Leeming, to have said. In 2006, Sun International Ltd became the largest shareholder in the company after acquiring a 49 percent stake in Federal Palace Hotel from the Tourist Company of Nigeria (TCN). Trouble started when that deal was disputed by some of Nigeria’s Ibru family members, a fellow shareholder in TCN, which prompted various parties including Sun International and Nigeria’s Securities Exchange Commission (SEC) to appoint Deloitte to investigate the matter. It would be recalled that in 2016, the company announced plans to exit Nigeria but claimed it would take two years as top officials complained that dwindling oil prices, terrorist attacks, weakening of the Naira and a sagging

economy culminated in losses for the company. “The Board has decided to exit Nigeria and steps will be taken to achieve this in a manner that does not erode further value. Continued setbacks in Nigeria as well as the on-going shareholder dispute have frustrated all attempts to develop and improve the property,” Sun International said in 2016. But in spite of its recent travails, Sun International Ltd which is headquartered in South Africa, recorded an income growth of 4 percent, and an increase of 6 percent in EBITDA as business remains resilient, cash generative after the release of its financial report yesterday. According to Reuters, the company said the board of the TCN, which owns and operates the 5-star Federal Palace Hotel in Lagos, had been reconstituted, with Nigeria’s SEC appointing two directors. Earlier in March, the company announced the closure of lossmaking operations in Sun Nao and the Fish River Sun casino in South Africa, as well as its International VIP Businesses in both South Africa and Panama. This year, the company has shut down some of its operations in South Africa and Panama, eyeing expansion in Latin America where casinos enjoy wider patronage. Sun International’s planned exit is coming amid operational challenges faced by another company, MTN as the Nigerian government apex bank yesterday slapped MTN Group with a $2 billion tax bill after last week orders to repatriate $8.1 billion that was illegally sent abroad. The hefty punishment comes two years after MTN, Africa’s biggest telecoms company, agreed to pay more than $1 billion to end a dispute in Nigeria over unregistered SIM cards. Sadly, many of the businesses that have been consumed by this seismic wave are South African businesses, raising concerns over the business climate in Nigeria. Although companies like Multichoice, Shoprite and MTN have had their fair share of similar troubles, they have continued their operations in the Africa’s largest economy. Find Deals tracker and more stories on our website www.businessdayonline.com

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MARITIME e-COMMERCE

ENL Consortium, Chinese firm partner to move cargo from Apapa by barges Stories by UZOAMAKA ANAGOR-EWUZIE

s part of its plan to find lasting solution to the persistent Apapa gridlock, ENL Consortium, operator of Terminals C and D of Lagos Port Complex, Apapa has entered into partnership with Sinoma Cargo International, a big Chinese logistics firm to evacuate cargo from the port using barges. The partnership also incorporates Josephdam Port Services and Lianyungang Port of China, which is among the ten largest ports in China and the 30 largest in the world, and it handles annual cargo throughput of 210 million tons and container throughput of five million 20-foot Equivalent Units (TEUs) per annum. Speaking at the ChinaNigeria Core Liner Conference held in Lagos on Friday, Vicky Hasstrup, executive vice chairman/CEO of ENL Consortium, said the poor existing transport infrastructure in Nigeria affects the

Mark Walsh (r), managing director of ENL Consortium and Gonglu Peter (l), general manager, Sinoma Cargo International signing the partnership agreement between both companies for the evacuation of cargo from the Lagos Port Complex, Apapa by barges as Vicky Haastrup (standing 3rd l), executive vice chairman/CEO of ENL Consortium and other officials watch in Lagos on Friday.

economic performance and competitiveness of the port. She said the partnership became imperative, given the persistent gridlock on the port access roads in Apapa, which has made cargo evacuation from the port difficult. Hasstrup said the initia-

tive, which would be implemented in conjunction with Lianyungang Port of China, would facilitate the evacuation of cargo from the terminals through barges and also help promote mutual cooperation and exchange between Liayungang and the Lagos port.

NPA seeks solution to port cargo movement hiccups

…As Buhari declares IAPH African Regional Conference open next Monday

etermined to ensure ease of cargo movement from ports in Africa, especially Nigeria, the Nigerian Ports Authority (NPA) has concluded arrangements to host global port industry experts in the upcoming International Association of Ports and Harbours (IAPH) Africa Regional Conference billed for Abuja next Monday. The three-day conference scheduled to begin on Monday 17 September and end on Wednesday 19, is themed ‘African Ports and Hinterland Connectivity,’ and would be declared open by President Muhammadu Buhari and chaired by Abdulsalmi Abubakar, a former Nigerian head of state. Speaking in Lagos at the weekend during a media unveiling of the programmes for the first regional conference, Hadiza Bala Usman, managing director of the NPA, said the conference was prompted by the need for maritime stakeholders on the African continent to come together and chart a new course towards development of African ports.

According to her, the need to deploy multimodal means of transportation (road, rail and water) which ensures cargoes are moved without delay and with less cost for the shipper, if ports in the region must attain their potential. Usman said it is also expected that at the end of the conference, a document that can form the basis for policies that would guide governments in the task of improving service delivery at African ports, would be produced. Usman, who was elected the Vice President of IAPH (Africa Region) in July 2017, said that the conference will provide Nigeria with clear experiences from other climes on interconnectivity and intermodal strategies that will help for the decongestion of port access roads, especially in Lagos. “It is expected that African countries would be afforded the opportunity to be best informed on practical ways to prioritise hinterland connections to improve cargo evacuation within their territories. This is one way to ensure efficiency in port operations,”

she said. The theme of the conference will be discussed under four categories namely: port and hinterland connectivity: components, modal options; funding options for hinterland connectivity - hard and soft infrastructure; Africa’s ports landscape: infrastructure, governance models, and landlocked transit corridors, as well as sustainability and facilitation of the logistics and transport supply chain. Participants are expected from Nigeria’s maritime and trade sectors, and international participants from the World Trade Organisation (WTO); the International Mar itime Organisation (IMO); UNCTAD; the African Development Bank (AfDB); the Lagos-Abidjan trade corridor and the Walvis Bay Corridor Group; Antwerp Port Authority; Guangzhou Port Authority and Port of Miami (Florida). Others are Port Authorities from South Africa; Kenya; Cameroon; Benin Republic; Cote d’Ivoire; Senegal; Morocco; Egypt and Nigeria, which is the host country.

“We have been to Lianyungang Port at the invitation of Sinoma, and there, we signed agreement in July. They also expressed their willingness to come to Nigerian ports to see what ENL and others look like,” Haastrup said. She further said: “This

conference was organised to brainstorm on how to have a better operational logistics, which is Sinoma’s core duty. We know that getting in and out of Apapa to discharge cargo has become difficult due to the present traffic situation. This afforded us the opportunity to brainstorm on what else can be done under a Public Private Partnership (PPP) arrangement other than road. According to her, Sinoma would bring barges that can take several hundreds of tons of cargo at once, and can evacuate cargo at the seaside in large volume. “Deploying intermodal means of transportation at the port is important because continuous reliance on the road is no longer feasible and should be discouraged. “The roads are undergoing a lot of pressure because they are not built to withstand the kind of pressure, which they are subjected to. This is why we need investment in other modes of transportation,” she said. Expressing apprecia-

tion to the leadership of the firm and officials of the Lianyungang Port for the confidence reposed in ENL and Josephdam; Hasstrup assured that terminal operators in the country would continue to provide efficient port services that conform to global standards. She added that efforts to develop the port will achieve greater effect, if strategic alliances are grown, not just between private and public entities alone, but between businesses. Li Zhanzhu, general manager, Sinoma Cargo, said the firm has established good relationship with ENL Consortium and Josephdam Port Services that handle several consignments shipped into Nigeria from China. “From January 2018 till date, the firm has operated 12 batches of LianyungangLagos logistics line, organised and transported more than 410,000 dead weight of general cargo and 2,000 TEUs of containers of steel and templates, engineering equipment and tools,” he said.

Multimix Academy, ARC signs MoU to deepen supply chain capacity

ultimix Academy, a capacity building firm with specialisation in Global Trade, Logistics and Supply chain, has signed a Memorandum of Understanding (MOU) with Africa Resource Centre (ARC), a private sector health initiative supported by Bill and Melinda Gate Foundation, to deepen supply chain capabilities in Nigeria and improve deliverables in the health sector across Africa. Under the partnership, Multimix Academy will serve as a consultant and will be directly involved with assisting five pilot universities under the scheme to develop curriculum and train faculty members to effectively deliver on the project. In Nigeria, the Bill and

Melinda Gate Foundation works in collaboration with government, private sector, and civil society organisations (CSOs) to lift people out of poverty through intervention programmes in HIV/AIDS and other diseases. Speaking after the MoU signing ceremony, Obiora Madu, CEO of Multimix Academy, said the MoU was signed to help improve logistics and supply chain that will in the long-run bring effective deliverables to curb health challenges and make medicines and other health products available to the end users. According to Madu, there are two dimensions to supply chain challenge in Africa including the physical logistics infrastructure challenge and the soft infrastructure challenge, which have to do with

L-R: Rahman Ola Kelani, DHC SC Consultant, African Resource Centre; Stephanie Fowler, partnership lead, ARC and Obiora Madu, CEO Multimix Academy at the MoU signing in Lagos.

having the right professionals for the job. “Investigation by Bill and Melinda Gate revealed that inadequacy of physical and soft infrastructure in the supply chain explains why vaccines keep coming into Nigeria and other African countries without getting to the people in dire need of it. As a result, after years of huge investment, Bill and Melinda discovered that mortality rates have been on the rise against it’s vision and aim,” Madu said. The MoU, Madu added, will proffer solution that is why ARC decided to work with Universities through Multimix in building capacity. Multimix Academy is a capacity building firm that provides high quality international business and logistics education and intervention. The academy’s vision is to partner with clients in creating and delivering quality and most innovative workforce solutions and services that enable them to keep abreast with changing business needs. As a consulting firm, it dedicates itself to assisting organisations translate their best ideas into tangible results for growth and development.

BUSINESS DAY

Wednesday 12 September 2018

A11

Live @ the Stock exchange Prices for Securities Traded as of Tuesday 11 September 2018 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 260,351.74 9.00 1.12 177 11,875,674 254,785.69 7.45 -4.49 229 15,563,435 UNITED BANK FOR AFRICA PLC 624,790.23 19.90 -2.93 379 11,689,826 ZENITH BANK PLC 785 39,128,935 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 315,878.58 8.80 -2.76 212 7,271,075 212 7,271,075 997 46,400,010 BUILDING MATERIALS DANGOTE CEMENT PLC 3,800,033.15 223.00 - 72 129,859 LAFARGE AFRICA PLC. 199,488.85 23.00 - 26 46,511 98 176,370 98 176,370 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 354,832.07 603.00 - 3 405 3 405 3 405 1,098 46,576,785 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 76,217.41 79.90 - 16 71,902 OKOMU OIL PALM PLC. PRESCO PLC 60,050.00 60.05 - 6 31,835 22 103,737 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,800.00 0.60 -4.76 15 715,245 15 715,245 37 818,982 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 1,164.81 0.44 - 5 23,805 225.71 0.58 - 1 1,620 JOHN HOLT PLC. S C O A NIG. PLC. 2,111.93 3.25 - 1 13 47,964.63 1.18 -0.84 86 6,004,617 TRANSNATIONAL CORPORATION OF NIGERIA PLC U A C N PLC. 29,389.23 10.20 -7.27 43 239,089 136 6,269,144 136 6,269,144 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 33,000.00 25.00 - 7 20,195 165.00 6.60 - 0 0 ROADS NIG PLC. 7 20,195 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,079.48 1.57 - 4 25,031 4 25,031 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,900.00 95.00 - 1 15 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 11,300.89 45.20 - 0 0 24,014.43 9.00 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 1 15 12 45,241 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 1 25,000 1 25,000 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 14,093.09 1.80 - 3 719 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 192,753.69 88.00 - 22 24,659 INTERNATIONAL BREWERIES PLC. 275,067.58 32.00 - 5 8,560 NIGERIAN BREW. PLC. 703,727.38 88.00 -4.86 102 323,748 132 357,686 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 42,000.00 8.40 7.01 48 669,093 DANGOTE SUGAR REFINERY PLC 172,800.00 14.40 -10.00 45 574,674 FLOUR MILLS NIG. PLC. 88,158.16 21.50 -2.27 52 425,591 HONEYWELL FLOUR MILL PLC 12,053.90 1.52 - 33 428,720 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 1,158.30 6.50 - 2 106 NASCON ALLIED INDUSTRIES PLC 52,988.77 20.00 - 10 24,904 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 190 2,123,088 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,875.93 10.05 - 17 65,988 NESTLE NIGERIA PLC. 1,177,094.53 1,485.00 9.59 70 182,301 87 248,289 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 3,377.28 3.24 - 17 336,252 17 336,252 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 53,601.44 13.50 - 22 139,150 UNILEVER NIGERIA PLC. 268,866.25 46.80 - 28 98,695 50 237,845 477 3,328,160 BANKING DIAMOND BANK PLC 31,266.53 1.35 1.50 62 13,827,876 ECOBANK TRANSNATIONAL INCORPORATED 357,816.25 19.50 - 30 242,171 FIDELITY BANK PLC 48,387.91 1.67 -1.76 77 8,055,429 GUARANTY TRUST BANK PLC. 956,513.32 32.50 -5.80 359 17,473,814 JAIZ BANK PLC 14,732.12 0.50 -3.85 7 365,576 SKYE BANK PLC 7,772.97 0.56 -5.08 49 3,561,939 STERLING BANK PLC. 41,746.11 1.45 - 169 6,145,723 UNION BANK NIG.PLC. 154,339.99 5.30 - 32 114,890 UNITY BANK PLC 9,234.58 0.79 - 3 48,247 WEMA BANK PLC. 21,987.45 0.57 3.64 21 735,822 809 50,571,487 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 6,237.18 0.90 3.45 55 3,841,571 AXAMANSARD INSURANCE PLC 24,150.00 2.30 - 10 202,988 CONSOLIDATED HALLMARK INSURANCE PLC 2,450.00 0.35 -7.89 4 141,000 CONTINENTAL REINSURANCE PLC 14,833.02 1.43 -4.67 4 309,202 CORNERSTONE INSURANCE PLC 3,682.38 0.25 -7.41 7 411,404 GOLDLINK INSURANCE PLC 2,411.47 0.53 - 0 0 GREAT NIGERIAN INSURANCE PLC 1,913.74 0.50 - 0 0 GUINEA INSURANCE PLC. 1,964.80 0.32 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 1 100 LASACO ASSURANCE PLC. 2,416.73 0.33 3.13 17 1,388,233 LAW UNION AND ROCK INS. PLC. 2,362.98 0.55 10.00 16 1,837,528 LINKAGE ASSURANCE PLC 5,600.00 0.70 - 1 3,533 MUTUAL BENEFITS ASSURANCE PLC. 2,240.00 0.28 - 14 686,300 NEM INSURANCE PLC 16,369.56 3.10 0.65 40 2,210,675 NIGER INSURANCE PLC 2,786.21 0.36 -7.69 15 1,149,657 PRESTIGE ASSURANCE PLC 1,832.36 0.48 - 0 0 REGENCY ASSURANCE PLC 1,533.81 0.23 9.52 6 928,000 SOVEREIGN TRUST INSURANCE PLC 2,001.80 0.24 -4.17 10 3,311,315 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 3,485.98 0.27 -6.90 2 1,000,500 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 -9.09 10 412,781 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 1 108 UNIVERSAL INSURANCE PLC 4,800.00 0.30 -9.09 4 644,000 VERITAS KAPITAL ASSURANCE PLC 3,882.67 0.28 - 1 10,000 WAPIC INSURANCE PLC 5,486.92 0.41 5.13 54 2,321,546 272 20,810,441 MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,772.95 1.65 - 6 153,169

6 153,169 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,914.00 1.17 - 0 0 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 0 0 RESORT SAVINGS & LOANS PLC 5,664.87 0.50 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,540.00 3.77 -3.58 47 691,885 CUSTODIAN INVESTMENT PLC 32,350.25 5.50 - 5 57,759 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 34,060.66 1.72 -2.82 50 1,325,380 411.91 552.20 - 0 0 NIGERIA ENERYGY SECTOR FUND 1,337.80 0.26 - 7 13,615 ROYAL EXCHANGE PLC. STANBIC IBTC HOLDINGS PLC 455,115.35 45.00 - 44 344,057 16,440.00 2.74 -7.12 104 3,137,905 UNITED CAPITAL PLC VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 257 5,570,601 1,344 77,105,698 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 1,065.94 0.30 3.45 12 1,238,824 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 12 1,238,824 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 1 1,051 1 1,051 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 9,000.00 6.00 - 0 0 17,101.03 14.30 - 53 424,422 GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. 2,303.00 2.35 -4.08 11 559,800 1,243.08 0.72 9.09 10 702,531 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 411.96 1.90 - 0 0 74 1,686,753 87 2,926,628 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 0 0 0 0 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 680.40 6.30 - 1 700 381.11 0.77 - 0 0 TRIPPLE GEE AND COMPANY PLC. 1 700 PROCESSING SYSTEMS CHAMS PLC 1,314.90 0.28 - 0 0 E-TRANZACT INTERNATIONAL PLC 16,590.00 3.95 - 0 0 0 0 1 700 BUILDING MATERIALS BERGER PAINTS PLC 1,898.34 6.55 - 11 28,721 19,845.00 28.35 - 26 153,365 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 38,831.34 30.90 - 1 300 FIRST ALUMINIUM NIGERIA PLC 696.42 0.33 - 3 40,000 361.24 0.68 - 0 0 MEYER PLC. PORTLAND PAINTS & PRODUCTS NIGERIA PLC 2,364.38 2.98 - 0 0 PREMIER PAINTS PLC. 1,279.20 10.40 - 0 0 41 222,386 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 3,478.61 3.95 -1.25 31 693,561 31 693,561 PACKAGING/CONTAINERS BETA GLASS PLC. 38,997.82 78.00 - 5 16,215 GREIF NIGERIA PLC 388.02 9.10 - 0 0 5 16,215 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 3 4,000 3 4,000 80 936,162 CHEMICALS B.O.C. GASES PLC. 1,752.39 4.21 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 55.00 0.25 - 0 0 0 0 0 0 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,377.79 0.22 -8.33 50 4,901,146 50 4,901,146 INTEGRATED OIL AND GAS SERVICES OANDO PLC 62,778.63 5.05 -3.81 99 2,671,546 99 2,671,546 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 64,907.15 180.00 - 23 9,333 CONOIL PLC 16,863.04 24.30 - 11 16,115 ETERNA PLC. 7,890.08 6.05 -3.20 26 471,361 FORTE OIL PLC. 23,574.91 18.10 -4.99 97 727,453 MRS OIL NIGERIA PLC. 8,701.65 28.55 - 0 0 TOTAL NIGERIA PLC. 64,407.29 189.70 - 10 1,310 167 1,225,572 316 8,798,264 ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 18,818.75 1.93 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 541.12 0.46 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,212.76 5.45 - 1 100 TRANS-NATIONWIDE EXPRESS PLC. 365.70 0.78 - 1 15,000 2 15,100 HOSPITALITY TANTALIZERS PLC 674.44 0.21 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 0 0 IKEJA HOTEL PLC 4,718.87 2.27 - 4 92,820 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 51,302.73 6.75 - 1 5,973 5 98,793 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 5,280.00 0.44 - 2 40,000 2 40,000 PRINTING/PUBLISHING ACADEMY PRESS PLC. 302.40 0.50 - 0 0 LEARN AFRICA PLC 848.60 1.10 8.91 7 1,809,250

A12

BUSINESS DAY

Wednesday 12 September 2018

Live @ The Exchanges Top Gainers/Losers as at Tuesday 11 September 2018 GAINERS Company

Market Statistics as at Tuesday 11 September 2018

LOSERS Opening

Closing

Change

Opening

Closing

Change

NESTLE

N1355

N1485

130

N92.5

N88

-4.5

DANGFLOUR

N7.85

N8.4

0.55

GUARANTY

N34.5

N32.5

-2

N8.9

0.1

DANGSUGAR

N16

N14.4

-1.6

LEARNAFRCA

N1.01

N1.1

0.09

N19.05

N18.1

-0.95

NEIMETH

N0.66

N0.72

0.06

UACN

N11

N10.2

-0.8

ACCESS

Company

ASI (Points)

33,449.17

DEALS (Numbers)

3,678.00

VOLUME (Numbers)

150,671,120.00

VALUE (N billion)

1.596

MARKET CAP (N Trn

12.211

Nigerian Breweries, GTB, Dangote Sugar, Forte, UAC stocks witness sell-off …as market books additional N60bn loss Stories by Iheanyi Nwachukwu

he stocks of Nigerian Breweries Plc, GTBank Plc, Dangote Sugar Refinery Plc, Forte Oil Plc, and UAC of Nigeria Plc witnessed remarkable sell-off which thereafter impacted their prices after Tuesday’s trading on the Nigerian Bourse. Only 14 stocks advanced in price as against 29 losers. Nigerian Breweries lost N4.5 or 4.86percent on Tuesday September 11, 2018, from a trade open level of N92.5 to N88. Likewise, GTBank Plc declined from N34.5 to N32.5, down by N2 or 5.80percent; and Dangote Sugar declined from N16 to N14.4, down by N1.6 or 10percent. Also, Forte Oil Plc was

L-R: Kazeem Gift, I.S.I International School, Ibadan; Kazeem Shalom, United Missionary Comprehensive College, Ibadan; Kola Akinola Tanitoluwa, Command Secondary School, Lagos; Oscar N. Onyema, OON, chief executive officer, The Nigerian Stock Exchange (NSE); Kola Akinola Wonder, Deeper life High School, Abeokuta; Olumide Orojimi Jnr, Pampers Private School; Alabi Reuben, Babcock University High School; Iwenekhai Omoghena, Maryland Comprehensive Secondary School and Abimbola Babalola, head, Market Surveillance, NSE during the Closing Gong Ceremony held in commemoration of ‘A Day at The Exchange’, a visit by NSE employees and floor based dealing members’ children to the Trading Floor.

Stanbic IBTC Bank PMI shows private sector maintains steady growth in August

he Nigerian private sector maintained strong growth in August 2018 as business conditions across the sector continued to improve at a marked pace, according to the Stanbic IBTC Bank Purchasing Managers’ Index (PMI), which has just been released. This performance represents a further extension of the current phase of growth recorded since 2017, as the rates of expansion in output, new orders and employment all remained strong and broadly unchanged from July. The headline PMI broadly remained unchanged at 56.1. Readings above 50.0 signal an improvement in business conditions, while readings below 50.0 indicate deterioration. In terms of

inflation, the survey stated that input cost pressures faced by firms eased to a six-month low in August. Meanwhile, firms capitalised on strong demand by increasing selling prices at a solid pace. At 56.1 in August, broadly unchanged from 56.0 in July, the report stated that the latest figure signaled strong overall expansion, albeit below the average seen in the year-to-date. Business conditions have improved continuously on a monthby-month basis since Jan-

uary 2017. Commenting on the August survey findings, Gbolahan Taiwo, Economist at Stanbic IBTC Bank said: “The August reading of the Stanbic IBTC PMI, broadly unchanged at 56.1, firmly suggests that the PMI has peaked at the 59.1 reading recorded in May. That notwithstanding, we continue to see a moderate level of growth in business conditions for the private sector. We note the improvement in the Staff costs index which showed a reading of 52.3 versus 50.9 in July. As the recently released Q2 economic growth numbers showed, overall aggregate demand remains weak evidenced by the contraction in the wholesale and retail sector. Hence, we reiterate our position that a broader wage recalibration and

improved private sector credit would be key in further unlocking growth in the economy.” The survey also reported that the average cost burdens increased at a softer pace in August, adding that the latest rate of input price inflation was the weakest since February this year. Nonetheless, higher raw material and staff costs kept inflation above the survey’s long-run average. In response to higher output requirements, Nigerian private sector businesses increased their purchasing activity at a sharp rate in August. However, the rate of growth was the lowest since November last year, following a string of record-breaking expansions. Pre-production inventories also built-up at a strong pace, it added.

also down from N19.05 to N18.1, losing 95kobo or 4.99percent; while UAC of Nigeria Plc was down from N11 to N10.2, representing 80kobo decline or 7.27percent. The Nigerian Stock Exchange (NE) All Share Index (ASI) decreased further by 0.48percent fueling earlier feelings of continuing selloff. The Year-to-Date (ytd) return stood further negative at 12.54percent. The All Share Index closed at 33,449.17 points against the preceding day close of 33,611.69 points, while Market Capitalisation closed at N12.212 trillion as against preceding day close of N12.271trillion, down by N59billion. The volume of stocks traded increased by 9.48percent, from 137.6million to 150.6million, while the total value of stocks traded

increased by 17.74percent, from N1.35billion to N1.597 billion in 3,678 deals. GTBank Plc, UBA Plc, Diamond Bank Plc, Access Bank Plc and Zenith Bank Plc were actively traded stocks on the Nigerian Stock Exchange on Tuesday September 11, 2018. The Financial Services sector led the activity chart with 123.50 million shares exchanged for N1.177 billion; followed by Oil And Gas with 8.79million shares traded for N34million. Investors raised bets on the stocks of Nestle Nigeria Plc which pushed the price higher, from N1355 to N1485, up by N130 or 9.59percent; while Dangote Flour Mills Plc advanced from N7.85 to N8.4, up by 55kobo or 7.01 percent; while Access Bank Plc increased from N8.9 to N9, up by 10kobo or 1.12percent.

Wall Street rises as tech, energy gains dull trade war jitters

.S. stocks rose on Tuesday, boosted by energy companies and technology stocks, including Apple, although there were lingering concerns about the U.S. trade war with China. The markets shook off a weak start to the session and by mid-morning seven of the 11 major S&P sectors were trading higher. While the telecommunications sector’s 1.06 percent jump was the biggest, the technology sector’s 0.43 percent rise was giving the biggest push to the S&P 500. At 11:39 a.m. ET the Dow Jones Industrial Average was up 69.95 points, or 0.27 percent, at 25,927.02, the S&P 500 was up 5.86 points, or 0.20 percent, at 2,882.99 and the Nasdaq Composite was up 22.66 points, or

0.29 percent, at 7,946.82. Apple rose 1.5 percent, a day ahead of an highly anticipated event at which the company is expected to unveil new iPhone models. UBS forecast Apple’s service revenue would grow 20 percent over the next two years. “Technology stocks are rallying with some positive catalysts like the Apple event coming up,” said Cliff Hodge, director of investments at Cornerstone Wealth in Charlotte North Carolina. “The sectors which have been the natural leaders, like tech, are catching a bid this morning, with some lift from energy stocks that will help buoy the markets.” The energy index was up 0.70 percent, boosted by a jump in oil prices as U.S. sanctions squeezed Iranian crude exports, tightening global supply.

Wednesday 12 September 2018

C002D5556

Filing tax returns: CITN emphasises use of stamp, seal by members …sets January 2, 2019 as effective date IHEANYI NWACHUKWU

he Chartered Institute of Taxation of Nigeria (CITN) has informe d the general public particularly tax practitioners and administrators that come January 2, 2019, all tax returns without the CITN stamp and seal prepared and submitted to Fe deral Inland Revenue Servic e (FIRS) on b ehalf of taxpayers will no longer be accepted by the FIRS. The CITN also requires all its members to take necessary steps to be in good standing with the Institute by obtaining their stamps and affixing same thereto on tax returns from the effective date of January 2, 2019. The notification becomes timely as the CITN is the only Institute statutorily empowered to regulate tax practice and administration in Nigeria. In tandem with the Act establishing the CITN (Chartered Institute of Taxation of Nigeria Act, CAP C10, Vol. 2, Laws of the Federation of Nigeria, 2004), “it is mandatory for professionals filing tax returns on behalf of their clients to affix the CITN stamp and seal

L-R: Bashir Ademuyiwa Braimah, Permanent Secretary, Lagos State; Folashade Adesoye, Head of Service (HOS), Lagos State; Elemanya Ebilah, Chairman, Professional Women Accountants in ANAN (PROWAN) and Olutoyin Aro, PROWAN coordinator, Ikeja Branch during PROWAN’s courtesy call to the Head of Service recently.

in all returns submitted to the FIRS,” CITN said in a recent statement signed by Adefisayo Awogbade, the Registrar/Chief Executive, Chartered Institute of Taxation of Nigeria. “Other professionals who are yet to obtain the practicing licence of the Institute should do so without further delay. They may visit the CITN website at www.citn.org on neces-

sary steps to follow. Provided however that taxpayers who do not need the service of tax practitioners and who decide to file their tax returns directly would not be under obligation to c omply with affixing of CITN stamp and seal on their tax returns filed with FIRS,” CITN noted in the statement made available to BusinessDay’s Tax Issues.

Transfer Pricing and Quasi Equity Loans – Considerations for the imputation of interest BENITA NGOZI ONYEBEZIE & GALI AKA

he Nigerian Income Tax (Transfer Pricing) Regulations, 2012 lists the lending and borrowing of money as one of the transactions that should be conducted in a manner consistent with the arm’s length principle. Inter-company financial transactions are quite common especially among Multinational Enterprises (MNEs). These kind of transactions include debt, guarantees, and quasi-equity loans. The focus of this article is imputation of interest on loans - taxing the lender on the arm’s length rate of interest - where the actual reward is less than arm’s length. Shareholders’ loan otherwise referred to as quasiequity loans fall in this category. This article also reviews quasi-equity loan arrangements from a Nigerian perspective. Shareholders’ loan: Debt or quasi - equity? It has often been a subject of debate between taxpayers and the revenue authorities whether shareholders’ loan should attract interest at market rates in circumstances where the shareholders’ loan was advanced to provide funding to an offshore company. More often than not, such shareholders loan is used to fund the start-up operations of the offshore entity and it is not expected that the loan will be serviced in the foreseeable future.

Taxpayers often present the argument that shareholder loans function as additional share capital i.e. equity and that the purpose is to provide a more flexible use of capital. As such, it is permissible for such loans to be interest free. Tax authorities in the jurisdiction of the borrower usually align to the borrower’s argument especially in circumstances where there is capital yet to be paid-up. On the other hand, taxing authorities in the jurisdiction of the lender argue that an arm’s length interest should apply on such loan as is expected in a transaction between two unrelated parties. It could be argued that the equity function argument is invalid in the transfer pricing context as transfer pricing treats the parties to a transaction as if they were independent, negating equity participation. Transfer pricing puts aside such connections to arrive at an arm’s length answer. However, the reasoning for the equity function argument is that if debt is non-arm’s length, then it is, in effect, equity. Going by these basic arguments, one can take a leaning on either side. However, considering the impact of a loan given at less than arm’s length reward (interest-free) on the tax revenues of the lender’s country, particular focus is placed on quasi equity loans provided to offshore affiliates. We will now examine the practice in other jurisdictions as well as rulings that underscore bigger considerations

in determining the status of a shareholders’ loan to an offshore related party as either debt or equity. International Practice in selected jurisdictions Australia Australia has developed perhaps one of the most comprehensive set of guidelines regarding equity loans. These are set out in the Taxation Ruling (TR) 92/11 of the Australian Tax Office (ATO). According to this ruling, the principal factors that will be taken into account in determining whether a particular loan agreement should be treated as equivalent to a contribution to equity are summarized below: •The legal effect of the transaction – Does the lender have rights and obligations usually attached to ownership? •Repayment of principal – Is the payment of the principal of a duration consistent with equity investment and subordinated to claims of other creditors? •Purpose of the contribution – Does the borrower invest the funds in fixed/core assets of a long term nature?

Benita Ngozi Onyebezie and Gali Aka are Senior Advisers in KPMG Advisory Services, Lagos and may be contacted via e-mail at ngozi.onyebezie@ng.kpmg. com and gali.aka@ng.kpmg. com.

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BUSINESS DAY

Tax Issues

PROWAN seminar to explore ways of achieving economic self-sufficiency, poverty reduction

articipants at the forthcoming seminar being organised by the Professional Women Accountants in ANAN (PROWAN) will be exploring better ways to achieve economic selfsufficiency as well as reduce poverty. Folasade Adesoye, Head of Service, Lagos State will be the keynote speaker at the seminar with the theme “Economic Independence: A Catalyst for Financial Ballooning –Nigeria Women on the Front Burner”. The seminar holds on September 18, 2018 at the Lagos Chamber of Commerce and Industry (LCCI) building in Alausa Ikeja. The theme is quite apt in today’s world because recent years have seen the involvement of greater number of women in paid employment, professions which were traditionally the preserve of men and entrepreneurial activities resulting in increased economic independence for more women. Speaking recently to BusinessDay, Elemanya Ebilah, chairperson, Professional Women Accountants in ANAN said the seminar is in line with PROWAN’s contribution to the economy. The global Entrepreneurship Monitor (GEM) 2016/2017 Women’s Report released in September, 2017 found 10percent increase in Women Entrepreneurs’ activities globally, closing the gender gap by 5percent since 2014. Though they are not achieving their highest potentials, but the report shows how important women are in business. Many analysts believe that for economic independence to be regarded as a catalyst for financial ballooning, these individuals (women) and their businesses, irrespective of their income levels should have easy access to affordable and useful financial services and products which are beneficial to them and the economy at large.

Folasade Adesoye, Head of Service, Lagos State

The global economic crises increased the urgency for countries to identify new sources of growth and develop a sustainable path to economic success because traditional reliance on natural resources is insufficient to support longterm growth. Other sub-topics to be discussed at the seminar include: entrepreneurship and innovation: a growth path to economic independence, self-sustainability and the inward-looking finance strategy; and economic independence and worklife balance. Economic independence implies individuals having access to the full range of economic opportunities and resources to help shape their lives in order to meet their needs and that of their dependants. So, experts believe that economic independence for women recognises that they are economic players who contribute to economic activity and should be able to benefit from it.

Deloitte Tax Advisory

Federal Inland Revenue Service provides clarification on recent tax developments

he Federal Inland Revenue Service (FIRS) convened a stakeholders meeting on 6 September 2018, with key participants from different sectors of the economy in attendance. The Executive Chairman of FIRS was present to enlighten stakeholders, as well as answer questions and address comments from the audience. The key issues discussed include: Withholding tax credit: FIRS recently circularised taxpayers, inviting them to reconcile their WHT position by 30 August 2018. Companies that were unable to complete the reconciliation by the set date, stood the risk of losing any unutilised WHT credit. Please see link to our initial alert on this. The Executive Chairman gave the audience the comfort that taxpayers will not necessarily lose their unutilised WHT credit if they were unable to complete the reconciliation process within the short period allowed. He however encouraged taxpayers to commence the reconciliation process as quickly as possible for ease of administration. Letters substitution: FIRS recently circularised some banks to recover unpaid taxes from taxpayers that maintain bank accounts with such banks. Following the circularisation, there have been reported cases of some banks freezing the bank accounts of taxpayers. Please see link to our initial alert on this issue. In response to the queries raised by stakeholders, the Executive Chairman clarified that FIRS directed the order at only defaulting and unregistered taxpayers (after conducting a thorough review of banks’ records to identify

erring or seemingly erring taxpayers). FIRS considered the banking turnover of such companies their “deemed income” and levied tax thereon. In addition, the Executive Chairman mentioned FIRS intends to increase the drive in its quest to capture more taxpayers and collect unremitted taxes. One of the major ways FIRS hopes to achieve this is by assessing companies to income tax based on deemed profits, which is determined by reference to the value of property(ies) owned by such companies. Improved efficiency: the Executive Chairman assured stakeholders of the commitment of FIRS and its counterparts in various states, towards improved efficiencies especially with regard to issuance of Tax Clearance Certificate (TCC). In this regard, the Executive Chairman advised taxpayers to reach out to the ‘Efficiency Desk’ of FIRS to make complaints in the event that relevant tax offices failed to issue TCCs in accordance with the provision of the tax law within the requisite period. This also applies to other complaints on perceived inefficiencies in the agency’s operations. All complaints can be directed to helpdesk@firs.gov.ng. Annual tax bills: The Executive Chairman confirmed the willingness of the Federal Government of Nigeria to pass amendments to tax laws on annual basis. The intent is to merge the amendments/revisions with the relevant Appropriation Bill for the relevant fiscal year. Deloitte will continue to monitor developments in this space and keep you updated as they become available.

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FINANCIAL TIMES French environment minister raises prospect of EDF shake-up

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

Page A3

World Business Newspaper

Xi Jinping and Vladimir Putin vow to fight protectionism Russian and Chinese leaders make thinly veiled criticism of Trump at summit HENRY FOY

ussia and China have vowed to stand together and fight Donald Trump’s attacks on their economies as Xi Jinping and Vladimir Putin sought to deepen their newfound strategic friendship. The US president’s escalating tariff attacks and anti-trade rhetoric has damaged ties with Beijing while threats of crippling new sanctions has angered Moscow, helping to push the previously fractious neighbours closer together. At a high-level summit on Tuesday the Chinese and Russian leaders discussed military co-operation, boosting economic ties as well as initiatives to use their local currencies for cross-border trade. The two countries’ strategic alliance has strengthened as Russia’s ties with western partners have soured and the trade war between Beijing and Washington has intensified. “In China, we say that friends are revealed in misfortune. In Russia, too, there is a saying: ‘A friend is not who walks to a feast, but one who helps in a disaster’,” Mr Xi said after talks with Mr Putin. “Together with our Russian colleagues, we will increase fruitful cooperation in international affairs and intensify co-ordination . . . to oppose the policy of unilateral actions and trade protectionism.” The talks at an economic conference in Russia’s far eastern port city of Vladivostok took place as more than 300,000 soldiers from both countries began a week-long joint military exercise, the largest war games in Russia since 1981.

China is the first country from outside the former Soviet Union to be invited to take part in a big Russian military exercise. Beijing’s participation comes less than a decade after both countries used previous drills to simulate a conflict with each other. Mr Putin said that “military-technical co-operation” between the two countries was discussed in his talks with “my great friend Chairman Xi Jinping”. Recent US sanctions passed by Mr Trump’s administration have cut off some Russian groups from using US dollars, while US senators have threatened to extend those measures to other parts of the country’s economy. Without mentioning the US currency, Mr Putin said the bilateral talks had discussed measures to combat that threat by using Russian and Chinese currencies for cross-border trade. “Russia and China have reaffirmed their interest in broadening the use of national currencies in mutual payments. That will strengthen the stability of bank servicing of export-import operations against the backdrop of global market risks,” he said. Mr Putin also said that the two presidents’ views on “the political and diplomatic settlement of the situation on the Korean peninsula” were aligned, and that they urged Washington to continue steps to normalise relations with Pyongyang. “You just noted that out of all the guests [at the conference], China has the largest delegation,” Mr Xi said. “This, on the one hand, speaks of the great attractiveness of the forum itself, and on the other hand of the comprehensive co-operation between China and Russia in the development of the Far East [region].”

The devil’s workshop: Bob Woodward on Trump’s chaotic White House Two books by Woodward and Omarosa Newman reveal a president epically unsuited to the job

EDWARD LUCE

f the US public were shocked by tales of Donald Trump’s dishonesty, self-love and general ignorance, it was not enough to stop it from electing him. We knew who Trump was before he became the Republican nominee. Since he became president, we have learnt more. With each fresh account — the most sensational coming from Michael Wolff’s Fire and Fury earlier this year — our capacity for outrage drops. At some point we hit a nadir of impotent titillation. Trump is epically unsuited to be president but there is nothing apparently that anyone can do about it. It is a misfortune of Bob Woodward’s timing that his book is packed

with shocking material that by this point fails to shock. Woodward’s advantage is his brand. He has written numerous books since he made his name as the Washington Post’s investigative reporter who with his colleague Carl Bernstein uncovered Watergate. Some of them, such as State of Denial, Bush at War, enriched our view of a presidency. Others, such as Maestro, his paean to Alan Greenspan, do not stand the test of time. Woodward’s other advantage is his method. He persuades insiders to talk to him out of fear that other insiders will shape the narrative to their disadvantage. It is a tried and tested method. Those who refuse to co-operate tend to come off worse. In the case of Fear, Trump himself Continues on page A15

China’s president Xi Jinping, left, and his Russian counterpart Vladimir Putin in Vladivostok on Tuesday. Washington’s policies have helped push the two countries closer together © AFP

Seoul pushes for ‘bold’ action at high-stakes Trump-Kim summit Plan for second meeting raises hopes US and N Korea can reboot stalled nuclear talks DEMETRI SEVASTOPULO AND BRYAN HARRIS

outh Korea has called on the US and North Korea to make “bold decisions” towards scrapping North Korea’s nuclear programme at a highstakes summit to break a diplomatic deadlock between the three nations. The comments from President Moon Jae-in came shortly after the White House announced that Donald Trump, his US counterpart, was preparing for a second meeting with Kim Jong Un, the North Korean leader, despite lack of progress on denuclearisation since their groundbreaking first meeting in Singapore in June. “If we are to move up to a higher level, where we will dismantle North Korea’s nuclear arsenal, we once again need bold ideas and decisions by the two leaders of North Korea and the United States,” Mr Moon said on Tuesday. The White House said it had begun planning for another summit after Mr Trump received a “very warm, positive letter” from Mr Kim.

The US announcement has again raised Seoul’s hopes that a leader-toleader summit could achieve what months of lower level negotiations have so far failed to do: provide a clear roadmap showing how Pyongyang could abandon its nuclear weapons. “Mr Moon is sending a message to the US and North Korea that they should yield to each other to move things forward,” said Lee Seong-hyon, a researcher at the Sejong Institute. “As the diplomatic momentum stalls, this message is more geared towards Mr Trump. By bold decisions, Mr Moon seems to mean that the US should declare an end to the Korean war in return for North Korea accepting the presence of US troops in South Korea,” added Mr Lee. The three nations are caught in a diplomatic stalemate. North Korea believes it has already offered enough concessions to the US and wants something in return — namely, a declaration ending the officially unfinished Korean war. The US is no closer to its original goal

of disarming North Korea and has been rebuffed for seeking basic concessions, such as an inventory of the regime’s nuclear materials. South Korea has found itself caught in the middle, eager to pursue economic integration with the North but scared to fall foul of the US-led international sanctions regime. But in recent days, Mr Trump has repeatedly complimented Mr Kim, saying there is “nothing like good dialogue from two people that like each other”. Trump prepares for second summit with Kim The rhetoric contrasts with lack of progress in negotiations. Mike Pompeo, US secretary of state, has not returned for talks in Pyongyang since the regime accused him of making “gangster-like” demands in July. “At the second summit we can expect the two leaders to announce more specific and practical measures compared with the June meeting,” said Yang Moojin, a South Korean government adviser on inter-Korean relations.

ING’s CFO quits over money laundering scandal Resignation comes amid concern about criminal cross-border money flows MARTIN ARNOLD

utch bank ING said its chief financial officer had resigned after being singled out as responsible for the compliance failings that allowed companies to launder hundreds of millions of euros and pay bribes. Koos Timmermans, a 22-year veteran of ING, is the most senior executive to leave the bank over the money laundering affair, for which it has agreed to pay a record €775m in penalties to the Dutch public prosecutor. His resignation comes amid growing concern about a string of highprofile scandals that have exposed weaknesses in Europe’s defences against criminal cross-border money flows and prompted the EU to promise tougher regulatory powers in the area. Earlier this month an investigation

into Danske Bank found that as much as $30bn of Russian and ex-Soviet money flowed through its Estonian branch in a single year. The ING settlement, which was announced last week, has prompted widespread public criticism of the bank’s failings, including from Dutch prime minister Mark Rutte. Finance minister Wopke Hoekstra said the affair had “shaken public faith in the banking sector yet again” and promised to grill bank executives and supervisors about how it happened. Mr Timmermans was made chief risk officer in 2007 and vice-chairman of the management board banking in 2011. ING said that during the 20102016 period in which it was found to have breached anti-money laundering rules, Mr Timmermans was “end-responsible for ING Netherlands”, where most of the wrongdoing happened. A spokesman for the bank, which

was bailed out by the Dutch government after the financial crisis, said the supervisory and management boards decided Mr Timmermans should take responsibility for the money laundering failings after consultations with politicians, regulators, academics and lawyers. “In light of these circumstances and in consultation with the supervisory board, Koos Timmermans will step down,” the bank said, adding that he would stay in place until a replacement could be found. His payout is capped by Dutch law at one-time fixed pay. Shares in ING were down slightly at €11.15 in morning trade. Andrew Lowe, banks analyst at Berenberg, said the “well-regarded” Mr Timmermans would be “seen as a loss” for the bank, adding that “the timing is unhelpful, with ING midway through a significant restructuring in its Benelux markets”.

Wednesday 12 September 2018

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BUSINESS DAY

NATIONAL NEWS

FT The devil’s workshop: Bob Woodward...

Hong Kong enters bear territory amid emerging market

Continued from page A14 famously did not speak to the author, though he claimed he had wanted to. The president comes off badly from almost every anecdote Woodward relates. So does Robert Mueller, the special counsel who is investigating allegations of Russian interference in the presidential election. By contrast, John Dowd, the president’s former personal lawyer, emerges as a smart operator with a knack for playing both Trump and Mueller. Fear has more verbatim quotes from Dowd than all the remaining characters combined. Guess which one spoke for hours and hours to Woodward? Others who seemed to have co-operated extensively include Steve Bannon, Trump’s former chief strategist and self-appointed Lenin of the Alt-Right, Reince Priebus, Trump’s belittled first chief of staff, and Gary Cohn, his first chief economic adviser. Each comes off as savvy, articulate and at times even principled. Those who emerge badly include Ivanka Trump. When Bannon complained about her easy access to the Oval Office, he called her a “f—ing staffer”. She retorted: “I am not a staffer. I’ll never be a staffer. I’m the First Daughter!” That line is likely to be her epitaph. One can deduce that neither she nor her husband, Jared Kushner, talked to Woodward. In one of his few comments not attributed to someone else, Woodward writes: “They were like a posse of secondguessers, hovering, watching, interacting as family and senior advisors with the president.” Another who evidently did not speak to Woodward is Jeff Sessions, Trump’s hapless attorney-general. He is dealt a series of humiliating put-downs. In one exchange, Bannon convinced Sessions not to resign by saying that Trump’s election victory must have come by divine providence. “We know there’s no other way it could’ve happened than the hand of God,” says Bannon. Sessions agreed not to quit. The next page Trump is quoted as calling Sessions a “mentally retarded”, “dumb southerner”. Perhaps if Sessions had spoken to Woodward, he might have softened the blow. US President Donald Trump looks at his notes as he talks about his meeting with Russian President Vladimir Putin in the Cabinet Room of the White House, July 2018 © Mark Wilson/Getty Images That said, Fear does enrich our view of Trump, even if it does not change it. The sheer weight of anecdote depicts a man with no empathy and a pathological capacity to lie. Those who worked most closely with him, including Dowd, John Kelly, his second chief of staff, and Bannon, are quoted as calling him a “professional liar”, “a f—ing liar”, “a f—ing idiot”, and as presiding over “crazytown”. He loves to feel presidential, without actually doing the work of governing. Rob Porter, his former staff secretary, who resigned under a cloud having been accused of battering two former partners, and who seemingly spoke at length to Woodward (he comes off well), devised a scheme to keep Trump happy. He would draft between two and 10 “decision memos” every day to bring to the president. They would be no longer than a page. He would then sign them with his black Magic Marker pen. “Trump liked signing,” writes Woodward. “It meant he was doing things.”

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Hang Seng index closes down more than 20% from its January high EMMA DUNKLEY

African cities surge to top of global growth league Mali capital Bamako shows the strains created by rapid urban expansion DAVID PILLING

arim Kane is a carpenter, not a speculator. But the plot of land he bought a decade ago is worth nearly 25 times what he paid for it. In 2007, the village chief sold it to him for the equivalent of about $450. Mr Kane built a house for his wife and six children on land that today he reckons is worth nearly $11,000. The area where Mr Kane lives is little more than muddy hills with scattered plots of land given over to cows and goats. Pedlars lead donkey carts loaded with plastic jerry cans of potable water. But despite its semi-rural appearance Mr Kane has no doubt that he is now a resident of Mali’s capital. “I’m a Bamakois,” he says, using the French word for a citizen of Bamako. Almost unnoticed, Africa has become the world’s most rapidly urbanising continent. From 2018 to 2035, the UN predicts that the world’s 10 fastest growing cities will be African. It’s a trend that has already enveloped Mr Kane, whose land has been swallowed up by Yirimadio, the fastest-growing part of Bamako, which may itself be the fastest-growing city in Africa. Graphic show that Bamako in Mali is one of the fastest growing cities In parts of the neighbourhood, shacks built by people recently arrived from the countryside jostle with houses being constructed by Bamakois who are snapping up cheaper plots of land on the city edge. As Bamako has grown exponentially it poses huge logistical problems for the cash-starved authorities that are replicated across the continent. According to a World Bank study, 472m people in sub-Saharan Africa live in cities. High birth rates and migration from the countryside mean that by 2040 Africa’s urban population will more than double to 1bn, it says, a rate that far

outpaces urbanisation elsewhere in the world. Tann vom Hove, a senior fellow at City Mayors, which puts Mali’s capital at the top of the list with an annual expansion rate of 4.5 per cent, says the trend is more important than the precise ranking. Estimates from the UN say other cities, including Dar es Salaam, a city of nearly 5m in Tanzania, are growing even faster than Bamako. Some of Africa’s megacities, including Lagos, Nigeria’s commercial capital of 21m people, and Kinshasa, the chaotic capital of the Democratic Republic of Congo, are sucking in hundreds of thousands of new people each year. Smaller cities, such as Yaounde in Cameroon, are growing almost as fast. Urbanisation is what helped ignite the “ Africa rising” narrative promoted by the likes of McKinsey, a consultancy, whose 2016 Lions on the Move II report highlighted cities as an engine of productivity. From 2015 to 2045, McKinsey found, 24m more Africans would be living in cities each year, compared to 11m in India and 9m in China. “Urbanisation has a strong correlation with the rate of real GDP growth,” it said, adding that “productivity in cities is more than double that in the countryside”. The World Bank estimates Bamako’s population today at 3.5m, more than 10 times its size at independence in 1960. But managing urban growth, with its associated problems of service provision, housing, crime and congestion, has become one of the biggest policy challenges on the continent. “For me this is a catastrophe foretold,” says Issa N’Diaye, a professor of philosophy at the University of Bamako, of his city’s untrammelled growth. “Bamako is a time-bomb.” Bamako, he says, and by implication many other cities in Africa, lacks the resources and

institutional capacity to cope with explosive growth. There is not even a proper land registry, he says, meaning multiple claims on the same plot can be tied up in court for years. Skyrocketing land prices have led to rampant corruption, Mr N’Diaye says, alleging that land allocated for schools in his own neighbourhood has been sold off by unscrupulous officials. Rapid urban expansion has also left people bereft of services, he says. “There’s been no planning whatsoever of the road system, water drainage, electricity or urban transport. The city is becoming more and more unlivable.” Since 2005, Yirimadio’s population alone has risen from about 20,000 to 190,000, according to officials from Muso, a health organisation that serves the area. In parts of the neighbourhood Yirimadio, locals have campaigned for a standing water pipe; in others they have dug their own wells. Yuba Diakite left what he says was the tedium of farming to try his luck at accounting in Bamako. The women in his rented quarters, where whole families are squashed into a single room, get up before dawn as they would in the village, he says. “Our women exhaust themselves over this question of water.” Somik Lall, the World Bank’s lead economist for urban development in Africa, says the continent’s urbanisation is running ahead of its income. Africa, he says, is 40 per cent urban with a per capita gross domestic product of roughly $1,100. By the time Asia reached 40 per cent urbanisation, its GDP per capita was $3,500, he says. Bamako’s expansion has been especially rapid because of people fleeing north and central Mali, unstable since an al-Qaeda-linked group took control in 2012, before being expelled by a French-led military invasion.

Access Bank breaking new innovation boundaries

he days of brick and mortar banking are fast becoming a thing of the past as Nigeria’s leading financial institution, Access Bank keeps its tradition of breaking new boundaries of innovation with its latest offering, Access WhatsApp Banking. Through the platform customers can now perform transactions such as; Account Opening, Transfers between Access Bank accounts, Own account transfers, BVN display, Balance Enquiry and Payday loan requests. Designed to provide customers with easy and reliable banking transactions, the WhatsApp

banking service allows users to automate most parts of the banking experience, providing customers the ease of remote banking with the efficiency of the best personnel and the intimacy of a customised experience. “Access Bank continues to keep the pace as a leader in the digital banking revolution in Nigeria, with the launch of banking services on WhatsApp - one of the largest social media platforms. This is yet another innovative way to connect customers to the plethora of services and banking options available to them from the comfort of their mobile phones.” said Ade Bajomo,

Executive Director, IT & Retail Operations, Access Bank. “Now Access Bank is bringing banking closer to its growing customers by leveraging on the WhatsApp Application. We are excited to see the rate at which the service is being adopted and we can’t wait to see more of our customers enjoy the experience,” he added. Access WhatsApp banking is a non-intrusive service which does not require users to download a new application or use extra data to access the options available. It works with the existing WhatsApp application and can be used immediately.

ong Kong’s stock market has entered bear territory as the sell-off across developing economies and the intensifying trade war between the US and China unsettle investors. The Hang Seng index was down more than 20 per cent from its January high at Tuesday’s trading close, as the US prepared to announce its next round of tariffs on a proposed $200bn of Chinese goods. The index’s fall comes as Chinese stocks continue to be hit by mounting global trade tension and the sell-off in emerging markets, which has roiled Turkey and Argentina this year. Also playing a role are investor concerns over EM currencies and contagion risk, after the lira plummeted amid fears over Turkey’s economy, wiping 40 per cent off the lira’s value this year. Other emerging economies, such as those with current account deficits, have also suffered, with India’s rupee falling to its weakestever level on Tuesday, to Rs72.7375 against the US dollar. Mainland China has been the worst-performing big equity market globally this year, with the CSI index of companies listed on the Shanghai and Shenzhen stock exchanges down 27 per cent from its peak early in January. Analysts said the sell-off in technology stocks had been a big drag on Chinese markets. Hong Kong-listed technology group Tencent has seen its share price plummet from a high this year of HK$473 to HK$308 in just eight months, as a result of the trade war with the US and recent regulation in the Chinese gaming sector. As the largest stock in the MSCI Emerging Markets index, Tencent has also come under pressure from passive investors reducing their exposure to developing markets to shield themselves from the broader sell-off. “The big Chinese tech stocks are an important aspect of the recent performance,” said Rob Carnell, ING’s chief economist and head of research for Asia-Pacific. “Companies like Tencent, for example, have had restrictions put on gaming licences by government, while ZTE has been squeezed by the US.” The sharp sell-off in Chinese stocks sits in stark contrast with other parts of Asia and stock markets globally. India’s BSE Sensex index is up more than 10 per cent this year, despite the currency repeatedly hitting record lows over the past few weeks, marking it out as the best-performing main stock market in local currency terms. Mahesh Nandurkar, India strategist at investment bank CLSA, said one of the reasons why the Indian stock market had held up was because the country was largely sheltered from the trade war between China and the US. He added that the stock market had been supported by the relatively recent shift of domestic investors into the stock market as a result of systematic investment plans, which allowed them to dripfeed money into mutual funds.

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C002D5556 Wednesday 12 September 2018

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Alibaba to set up online retail service in Russia

Chinese ecommerce group signs joint venture with MegaFon, Mail.ru and Russian wealth fund MAX SEDDON

libaba, the Chinese ecommerce giant, will partner with Moscow’s sovereign wealth fund and Kremlinfriendly oligarch Alisher Usmanov to set up a Russian branch of its retail site AliExpress, the company said on Tuesday. Mobile operator MegaFon, internet company Mail.ru, and the state-run Russian Direct Investment Fund are to take minority stakes in AliExpress Russia, which will allow Russian users to buy Chinese-made goods. The deal, expected to close in the first quarter of 2019, is the first major joint venture between Russian and Chinese companies and intensifies Alibaba’s global rivalry with Amazon. “Russia has never had a major local ecommerce player. We’ll be the number one player from day one after the deal closes,” Boris Dobrodeev, chief executive of Mail.ru, told reporters. Alibaba’s stake in the joint venture will be 48 per cent, with MegaFon taking 24 per cent, Mail.ru 15 per cent and RDIF 13 per cent. MegaFon swapped its 10 per cent stake in Mail. ru for its share in the joint venture, which would value the deal at roughly $2bn total, though the companies did not provide a specific valuation. Alibaba will attempt to leverage Mail.ru’s dominance of Russian social media through its Facebook clone VK, which has 97m monthly active users, as well as MegaFon’s nearly 80m mobile subscribers. “We’re going to do a number of experiments to find the best point of contact with the goods for users,” Mr Dobrodeev said. “It might be video bloggers, might be groups, might be

native advertising, might be recommendations in the news feed, might be native apps on VK, and we’re going to personalise it for every user.” Russia, where more than half the 145m population uses the internet daily, is one of the largest markets Alibaba has yet to conquer. Political and logistics challenges have seen Amazon stay away. The ambitious plans were disclosed shortly after Monday’s announcement that Alibaba founder and chairman Jack Ma plans to retire next year. Mr Ma attended a group discussion with Russian president Vladimir Putin at an economic conference in Vladivostok on Tuesday, but did not appear at the deal’s signing. Alibaba has been eyeing Russia for some time. It attempted to set up a similar venture with state-run Sberbank, the country’s largest lender, before talks collapsed over squabbles who would run it. Sberbank then set up a rival venture with search company Yandex, Mail.ru’s biggest rival. Under the deal, Alibaba will combine its existing AliExpress business in Russia — which is already one of the most popular foreign destinations for its cross-border goods — and business-to-consumer website Tmall to build a platform intended to surpass both. One challenge is how the joint venture will tackle the logistics of Russia’s vast distances and poor infrastructure. “How do you take social and combine it with commerce? [That’s] never been done before anywhere in the world,” said Michael Evans, president of Alibaba Group. “How do you get a Chinese company and get them to integrate really well with a Russian company? That’s never been done either.”

Backdrop for the next financial crisis is brewing Markets will face a much tougher conditions as the global economy slows NOURIEL ROUBINI AND BRUNELLO ROSA

s we mark the tenth anniversary of the global financial crisis, there have been plenty of postmortems examining its causes, its consequences and whether the necessary lessons have been learnt. So it seems a pertinent moment to ask when the next recession and financial crisis will occur and why. The global expansion is likely to continue this year and next because the US is running large fiscal deficits, China is continuing stimulative policies and Europe remains on a recovery path. Yet by 2020, there are several reasons why conditions for a global recession and financial crisis may emerge. To start with not only will the current US economic stimulus have gone away by 2020, but a modest fiscal drag will push growth below 2 per cent. Given the US fiscal stimulus has been ill-timed, the Federal Reserve will have to continue to hike to a level of about 3.5 per cent by early 2020. In addition to the Fed, other central banks will probably start or continue to normalise their policy stances. Then there are trade frictions with China, Europe and Nafta countries, which will increase even if they fall

short of a full-scale trade war. These frictions are just symptoms of the much deeper rivalry to determine global leadership on the technologies of the future, but their effect will be to slow growth and increase inflation. And other US policies currently being pursued will ultimately lead to weaker expansion and higher inflation. Take, for example, curbs on foreign direct investment and technology transfers that disrupt supply chains, or restrictions to migration while the population is ageing. There are anti-environmental policies that will stymie the adoption of investments in green technology, and the absence of infrastructure policy that would reduce supply-side bottlenecks. If this is a set of policies that hurts the US, then expansion elsewhere will weaken for other reasons. China will be slow to deal with over-capacity and excessive leverage, while emerging markets — many of which are already fragile — will be further damaged by a higher dollar, weaker commodity prices and a less buoyant China. Although Europe has lost some momentum, rising trade tensions and the European Central Bank’s exit from its unconventional policies mean it will have lost more by 2020.

Alibaba chairman Jack Ma, left, and Russian Direct Investment Fund head Kirill Dmitriev in Vladivostok on Tuesday © Bloomberg

US stocks slip while Hong Kong enters bear market Pound retreats from one-month high versus dollar EDWARD WHITE AND AIME WILLIAMS

he pound jumped to its highest level against the dollar since the start of August in early trading on Tuesday before giving up its gains. It breached the $1.30 level on Monday after comments from EU chief negotiator Michel Barnier that a Brexit deal could be reached in six to eight weeks. Having risen as high as $1.3087 today, sterling slipped back towards the $1.30 level ahead of the Wall Street open. The pound’s strength so far this week has hit the UK’s blue-chip FTSE 100 index, which is largely comprised of companies with dollar earnings, making it one of the worst performers among European stock markets. The index was down 0.5 per cent. Equities

Wall Street opened lower with the S&P 500 falling 0.3 per cent, taking its drop for the month to 1 per cent. The Nasdaq, which is up about 15 per cent over the year, was down 0.5 per cent early on Tuesday. In Asian trading, Hong Kong’s stock exchange fell into bear market territory as investors braced for a decision from the Trump administration on its next proposed wave of tariffs on Chinese products. The Hang Seng index closed down 0.7 per cent at 26,422, leaving it down 20 per cent from the high for the year touched in late January. While macro economic fundamentals in Asia, including economic growth, remained “very robust”, fears about the potential fallout from the US-China trade dispute persisted, said Ayaz Ebrahim, a portfolio manager at JPMorgan Asset Management.

“If trade tensions continue to escalate, there is no doubt that there will be some impact on earnings,” Mr Ebrahim said, adding that recent US dollar strength was adding to pressure on Asian equities. Forex and fixed income The dollar index was steady at 95.15. In the sovereign debt markets, prices were lower across the board with the 10-year US Treasury yield rising 3 basis points to 2.96 per cent. The upward pressure on yields saw Italy’s 10-year bond reverse earlier gains, leaving the yield little changed at 2.9 per cent. Commodities Oil prices moved higher, with Brent crude rising 0.5 per cent to $77.77 a barrel and West Texas Intermediate adding 0.3 per cent to $67.70. The price of gold was down 0.1 per cent at $1,194.

Renesas strikes $7.2bn deal for US chip rival IDT Market message to Musk, rise of Viacom’s Shari Redstone KANA INAGAKI

T subscribers can click here to receive #techFT every day by email. It’s been a tough year for deals in the global semiconductor industry with the collapse of chipmaker Broadcom’s $142bn bid for rival Qualcomm and the latter’s $44bn pursuit of Netherlands-based NXP Semiconductors. But increasing government scrutiny has not stopped Japanese chipmaker Renesas Electronics from pursuing its US rival Integrated Device Technology for $7.2bn including debt. With the latest deal, coming on the heels of last year’s $3.2bn acquisition US chipmaker Intersil, the Japanese group will seek to cement its position in the growing $38bn market for chips used in cars. Renesas is already the world’s third-biggest supplier of automotive chips after NXP and Germany’s Infineon, but the opportunity is large with the chip market for connected vehicle car technology expected to grow 51 per cent from last year to $57.6bn by 2022, according to IHS Markit. Under the agreement, Renesas — the world’s third-biggest supplier of chips used in cars after NXP and Germany’s Infineon — will pay $49 a share, which represents a 16 per cent premium to IDT’s closing stock price

on Monday. The addition of IDT, which specialises in semiconductors for data centres and has a market value of $5.4bn, will create a group with combined sales of $7.9bn. The deal will also increase Renesas’ net debt to 3.2 times earnings before interest, tax, depreciation and amortisation but analysts say the two companies are a good fit and there was little overlap in their product portfolios. Investors are not so sure. Shares rose 4.4 per cent but that is still far from recouping their 15 per cent loss since the company first expressed its interest in IDT at the end of August. Flag as Important Markets send Tesla a message A month on from Elon Musk’s tweet suggesting that he had the “funding secured” to take Tesla private, Joe Rennison, Robert Smith and Richard Waters say the electric carmaker faces a sober reality as a public company with its stock and bond prices plunging. Rise of Viacom’s Shari Redstone The departure of Les Moonves as CBS chief executive, in the wake of serious allegations of sexual harassment and worse from numerous women, seals a victory for Shari Redstone in a power struggle at the top of the broadcast network. Five things to watch Apple watcher Tim Bradshaw lays out the five questions that chief executive Tim Cook

and his deputies will answer at the company’s big event on Wednesday. Forwarded The 5G Race The Wall Street Journal illustrates the battle between China and the US to control the world’s fastest wireless internet. Equipment makers and telecom operators in both countries are rushing to test and roll out the next generation of wireless networks, which will be as much as 100 times faster than the current 4G standard. Rising costs of US-China trade war The Nikkei Asian Review speaks to major Taiwan-based technology suppliers about the impact of the escalating US-China trade dispute on Apple devices. If companies need to move production out of China to the US, one supply chain executive estimates that assembling iPhones in the US would add $150 of costs to each smartphone. Tech tools you can use — Bose Sleepbuds Brian X. Chen, the lead consumer technology reporter at the New York Times, tries out Sleepbuds, a pair of $250 earbuds developed by audio brand Bose to mask noise and help people doze off. Overall, the product does a good job of helping you ignore annoying noises at night, but it may not necessarily make you sleep better. Before trying the device, the NYT suggests trying to determine what is preventing you from sleeping.

BUSINESS DAY

Opinion

FRANKLIN NGWU Dr Ngwu is a Senior Lecturer in Strategy, Corporate Governance and Risk Management, Lagos Business School, Pan- Atlantic University, Lagos.

n reaction to the demolition of Yinka Ayefele’s Radio Station, Governor Ajimobi of Oyo State cautioned that having a physical challenge should not be a license to disobey rules and regulations of the state. In the same vein, being a multinational should not be an excuse to flout the rules and regulations of a host country. With the latest round of sanctions and fines on MTN from both CBN and the Minister of Justice for capital repatriation and tax respectively, it might seem that MTN is such a multinational with a disposition to disobey laid down rules and regulations of a country. While no firm (either local or foreign) should be supported to flout the rules and regulations of a country, there are better ways of managing conflict situations. In deciding a country to invest in for good returns and to protect their investments, there are certain key macro variables that investors seriously consider. These include regulatory quality, rule of law and government effectiveness. Interestingly for the past 20 years (1996-2016), Nigeria has

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NEWS YOU CAN TRUST I WEDNESDAY 12 SEPTEMBER 2018

CBN, MTN & FDI: Who bewitched Nigeria?

performed woefully in all the variables. In a performance range from positive (+2.5) the highest to negative (-2.5) the lowest, Nigeria has consistently maintained an average of -0.88 for regulatory quality, -1.18 for rule of law and -1.02 for government effectiveness. Our lamentable poor performance even becomes more worrisome when compared to our peers (other developing and emerging economies) with an average for regulatory quality of +0.58, government effectiveness + 0.59 and rule of law + 0.47. Using World Bank definitions, regulatory quality reflects perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development. For government effectiveness, it reflects perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government’s commitment to such policies. Rule of law, which is the fulcrum of governance of a country, reflects perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence. Our poor performance in the relevant variables is further affirmed by

our 145th position in the Ease of Doing Business ranking that surveyed 190 countries in 2017. With such poor performance in the above key variables and their impact on Foreign Direct Investment decisions, Nigeria cannot be said to be a favorite and attractive FDI destination. It therefore suggests that there is need for prudence in our engagement, regulation and supervision of those foreign firms that decide to invest in Nigeria even with our inherent and pervasive challenges. A situation where we act as if Nigeria will have the right of first refusal for FDI coming to Sub-Saharan Africa seems like a delusion. With such illusion evident in the way the present MTN challenge is being handled, I am concerned that our efforts to attract the required FDI which we really and urgently need given our state of economy, skill development and lamentable unemployment level might not be achieved. This is a country described as the poverty capital of the world and where over 60 million of our youths remain unemployed and desperately looking for jobs. According to CBN, MTN and the four banks were investigated for “allegations of remittance of foreign exchange with irregular Certificates of Capital Importation (CCIs)” between 2007 and 2015, in flagrant violation of extant laws and regulations of Nigeria”. The main offence borders on the unauthorized conversion of a

loan of $399 million to preference shares by MTN and the banks, and the subsequent repatriation of $8.1 billion without CBN’s final approval. As a result, MTN has been asked to return the $8.134 billion back to CBN to get the Naira equivalent at the exchange rate of $1/ N150. The four banks involved were equally fined a combined fine of about N5.87billion with Standard Chartered Bank getting the highest share of N2.4 billion and followed by Stanbic IBTC with N1.8billion, Citibank Nigeria N1.2 billion and Diamond Bank N250 million. Interestingly and possibly to show seriousness, the accounts of the four banks have been debited by the CBN. As if to say that MTN has been specifically selected and that the CBN fine was not good enough, the Minister of Justice issued another letter demanding that MTN should pay a further tax of about $2billion. As they say, when it rains, it pours and it seems to be pouring for MTN. As earlier stated, while not holding brief for MTN, it is

With such illusion evident in the way the present MTN challenge is being handled, I am concerned that our efforts to attract the required FDI which we really and urgently need given our state of economy, skill development and lamentable unemployment level might not be achieved

difficult to agree that the way CBN and the federal government is handling the matter is the best way that protects the interest of Nigeria and even that of MTN and other firms in Nigeria. It is important to note that $8.134 billion is not small money. It is about 80% of MTN Group’s market capitalization. Adding the $2billion further demanded by the Minister of Justice and the $5.2 billion 2015 fine gives an impression of a determined government effort to chase MTN out of Nigeria. This might not be case but the timings and the level of penalty are very disturbing and disruptive not only to MTN but also to the economy and markets especially in our efforts to attract FDI to Nigeria. In deciding appropriate punishment, I think that judges sometimes consider previous and current behavior of the offender. If possible, it might be helpful to apply such approach on MTN. It should be recalled that it is a company that has from inception when it got the license in 2001 demonstrated unquestionable commitment and belief in the long term viability of Nigeria through unparalleled and bold investment in both telecommunication and related sectors. With a telecommunications market share of over 40%, it is a company that can and will invest over $1.5 billion on telco capital expenditure every year for the next five years. A review of its investments shows that it has the largest infrastructure investment on a

nationwide basis. These include Y’hello Bahn Microwave transition and optic fibre transmission rollout, 2G and 3G base station rollout, 14000 km- long fibre optic submarine cable and continuous rural infrastructure development to ensure nationwide penetration. Moreover, applying the concept of Regulatory Impact Assessment on the activities of CBN and especially on this matter will show significant regulatory and supervisory failures. For instance if CBN granted approval in principle, to what extent did it carry out its oversight functions to ascertain the state of the application. This offence we are told took place from 2007-2015, a period of almost 8 years. How come CBN did not stop the transfers all these years given the fact that all the banks in Nigeria are required to make monthly reports to CBN? And considering that the dollars repatriated might have been sourced and approved by CBN opens many unanswered questions. In a latter reaction and in a bid to better manage the outcry that followed the demolition of Ayefele’s Radio Station, His Excellency Governor Ajimobi described Ayefele as a good man and promised to help rebuild the radio station. We hope that CBN and the federal government will see something good in what MTN is doing in Nigeria and apply a more sustainable and beneficial approach in managing the present and subsequent situations.

Ethical drought: absence of a shared purpose

FRANCIS IYOHA

Professor Iyoha is of the Department of Accounting, Covenant University and Research Fellow, the Institute of Chartered Accountants of Nigeria (ICAN). He wrote viafoiyoha@ican.org.ng

he reason we are where we are today as a country is not much of religious, political or ethnic divide but ethical drought. There is no glory and happiness in being unethical; but being such has become the standard in Nigeria. The country is digging deeper into ethical drought and there is no serious dissention of opinion about it and today people are more shocked by honesty than by deceit. The situation is unfortunate and appears not worrisome enough to deserve serious discourse. It is a dangerous situation that all and sundry should be concerned. But this is not to be as we usually explain away all of the pres-

ence of ethical drought in the country in terms of “Pastors and Imams not preaching against ethical drought in society.” It is a sure sign of mediocrity to believe that pastors and imams should be the only ones to write and inscribe ethics in the heart of everyone. We cannot afford to wait any longer for pastors and imams. I am not holding brief for them because it would be dangerous to do so, not being privy to their callings. But in any case, should the locus of blame for ethical drought be at the door steps of pastors and imams alone? I guess not. Unethical practices are not accidental, though they cause the world’s greatest accidents. They are deliberate and conscious acts executed by men and women of noble birth, good education and sound mind but who have turned insane and mean, thus needing psychiatric attention. The men and women who daily feed on diets of unethical practices are adults who do not require admonitions in any Sunday school class. They can read and understand the Bible or the Koran. The only thing is, like the devil, they succinctly interpret what they read to buttress their sinis-

The men and women who daily feed on diets of unethical practices are adults who do not require admonitions in any Sunday school class. They can read and understand the Bible or the Koran. The only thing is, like the devil, they succinctly interpret what they read to buttress their sinisterly motivated behaviour terly motivated behaviour. Empirical evidence suggests that Nigeria is one of the most religious countries in the world and at the same time one of the most corrupt. What a paradox! Ethical

drought and religiosity ought to be inversely related. But now, there is a ‘fine’ linear relationship between them, suggesting that Nigeria is in ethical reverse gear. In a recent study of the importance of religion by country, 96% of those surveyed in Nigeria stated that religion is important in their daily lives and activities. The result of the same study showed that Sweden, Finland, Norway, Japan and Demark have 17, 28, 21, 24, 19 percentage points respectively. Yet with low percentage scores in religiosity, the above named countries are doing far much better than Nigeria in terms of control of unethical practices. The countries are not languishing in ethical doughtiness but lavishing in opulence. This means that we need something much more than religiosity and technical solutions upon which we had relied to reverse the ethical drought we are experiencing. Ethical problems have no technical solutions. Technical solutions require a change only in techniques of doing things without demanding anything in the way of change in human values or ideas of morality. Thus, pastors and

imams have a role to play but much more depend on us. An inside effort is required to make an outside difference in the way we act and react. Ethical issues are certainly matters of the heart. The ethical cancerous nature of Nigeria is such that we can’t cope with any much longer, no matter the level of our resilience. I guess it is enough of our cheeky behaviour and maverick reputation that have led us to the bottom of everything virtuous and atop all that is inglorious. The highest purpose of ethics is not to change our circumstances but to change us. Once we experience change, circumstances around us will as a matter of course, change also. Consequently, we need to begin to tap into a shared purpose as a nation. People can only be held together if there are shared values driven by common purpose. Shared values and purposes are what enable people to live above conflicts that regularly plague them. Shared values and purpose give people a tone and moral style. We need to begin to do away with the polarized politics in which politicians see themselves as enemies

and the masses the battle field. The time to disengage from ‘moral disengagement’ is now. If you are not tired of living in a country with neither principles nor rules, I am. A cursory scan of the newspapers daily reminds us that ethical drought is alive and well and visiting hurting and unaccustomed pain on innocent people. The type of context described above can be regarded as an ethically unfriendly environment. An environment is which ethics is not relevant as a social value given the impunity that often follows cases of corruption and other social vices including the behaviour of politicians and public officials in Nigeria. Even though inobservance of ethical behaviour is not fairly punished in Nigeria, ethical behaviour remains worthwhile and the time to let truth, principles and shared purpose be our watchwords is now. Ethical practices and shared purpose may not change all things for us especially in the short run, but will surely change us for all things in the long run. Let this be drummed into the ears of everyone.

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

WEST AFRICA

ENERGY intelligence oil

gas

power

Wednesday 12 September 2018

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BUSINESS DAY

POLICY

Novatek’s performance shows legroom for independents in global gas market Page 5 ANALYSIS L-R: Femi Elebiju, project manager; Dolapo Ogunjana, event manager; Oladeji Olawale , co-convener, and Kayode Olamoyega, project consultant, all of SubSahara Africa Oil ,Gas and Energy Infrastructure Summit (SSAOGES) during the press conference to announce the forth-coming Sub-Sahara Africa Oil , Gas and Energy Summit in Nairobi , Kenya in Lagos. Pic by Pius Okeosisi

Debrief

What NLNG can learn from PetroChina’s plans to grow natural gas Page 6 OPEC weekly basket price DAY

PRICE

7/9/18

75.19

31/8/18

74.96

24/8/18

72.09

17/8/18

70.36

10/8/18

71.88 Source: OPEC

Unusual bid from BP stirs up Nigerian crude grades FRANK UZUEGBUNAM

idding interest from oil major, BP, seeking for an unusually large number of cargoes, stirred up interest in Nigerian crude grades. BP bid for 9 cargoes of Forcados, Bonny Light, Qua Iboe and Bonga all loading at various times throughout October up to dated Brent plus $1.70 a barrel. The Nigerian differentials held near onemonth highs while spot trade were kept more muted.

Of the 56 cargoes in the broader Nigerian October loading programme, around 25 were said to be available for sale. According to traders, BP bided for 3 cargoes of Forcados and two cargoes of Bonny Light, Qua Iboe and Bonga each throughout October offering to pay dated Brent + $1.70 a barrel. BP bought a cargo of Qua Iboe from Vitol at dated Brent plus $1.63 a barrel loading October 12-13 on a fob basis. This follows on two deals in which BP bought cargoes of Bonny Light and Qua Iboe from Vitol at dated Brent plus $1.70 load-

ing in the first half of October. It was also gathered that Chevron offered two cargoes of Agbami in the second half of October at dated Brent plus 20 cents, and Shell was offering one cargo of Agbami. Qua Iboe was being offered at dated Brent + $2.00 a barrel. Sahara bid for a cargo of Brass River loading Oct. 20-25 at dated Brent +1.00 a barrel. Before the interest from BP, loading programmes for Nigeria’s largest streams show an overhang of some 30 cargoes persisted in the past few months at the time Nigerian dif-

ferentials fell enough to whittle down an overhang of unsold cargoes. Forcados and Bonny Light were offered at the same levels around $1.30 above dated Brent and $1.10 - 1.20 a barrel, In July this year, persistent overhang of Nigerian barrels kept spot trade sluggish on the West African market and traders said then that differentials were still far too high to entice much buying. Nigeria depends on revenues from crude oil export as a major source of its foreign exchange earnings in addition to financing government’s budget.

02 BUSINESS DAY WEST AFRICA Outlook Brief Libya: New clashes threaten oil infrastructure

lashes between rival Libyan militias in Tripoli have reignited despite UN-brokered ceasefire, threatening the supply of oil products in the capital, sources in the country said. The UN’s Support Mission in Libya announced a ceasefire deal, signed by the Government of National Accord, military leaders, security services and armed groups. However, not all of Tripoli’s warring parties at-

tended the meeting in Zawiya, an industrial city to the west of Tripoli. Two militias in the capital, the Seventh Brigade and Tripoli Revolutionaries Brigade, completely ignored the deal and continued fighting. The renewed fighting left many in Tripoli skeptical that the ceasefire can hold for the other partners. It also added to the general uncertainty over Libya’s political future, which continues to cast a long shadow over oil exports. National elections planned for December add another layer of unpredictability. So far there has been no impact on the OPEC member’s upstream production, after more than a week of deadly clashes. Crude production has recovered to over two-month highs of 1 million b/d in the past few weeks.

African energy ministers, investors, others to meet at DLO Africa Power Roundtable in London

frican energy ministers, project developers and investors will meet at the DLO Africa Power Roundtable in London, organised by DLO Energy Resources, a South African based power company. Linda Mabhena Olagunju, founder & CEO of DLO Energy disclosed this during a media chat recently in Lagos. According to her, Africa Power Roundtable was launched to unlocking the investment opportunities and resolving the major challenges hindering the power sector to grow. “I think it is very important to clarify that the Africa Power Roundtable is an industry event managed by investors and the idea is to bring together the private sectors as well as government to think about ways which we can unlock

Africa’s power sector as we are all affected by the power situation in the continent. “We will not be able to grow our economies if we continue in this trajectory where there is a slow output of power projects in different countries and where there is a stop program of some power projects. For example, like South Africa where there was a two and half year break. “The big thing there is how we work together as private sector and government to make sure that our people have access to power. One thing I think the Africa Power Roundtable does which other events don’t do is we bring tangible solutions because we are investors in the sector. The DLO Africa Power Roundtable is scheduled to hold on 30th-31st, October, 2018 at Norton Rose Fulbright in London.

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2018

oil

Equatorial Guinea: Equatorial Guinea may ban oil-service companies

il and gas services firms Schl u m b e r g e r, Subsea 7 and FMC face being banned from working in Equatorial Guinea if they do not commit by the end of this month they are not complying with localcontent rules over training and jobs. The move is part of crackdown by the country to enforce local content laws that have been in place since 2014 and which has already grounded CHC Helicopter. Major oil companies could be asked by the end of September to cancel their contracts with those service providers and issue new tenders, sources said. That would be similar to action taken against CHC Helicopter Corp. earlier this year. In July, the OPEC member and one of Af-

rica’s top oil producers ordered petroleum operators, including Exxon Mobil, to cancel contracts they held with Canadianbased CHC Helicopter for flouting local content laws meant to create jobs. “With regards to local content requirements in

Equatorial Guinea, Schlumberger is working with the Ministry of Mines and Hydrocarbons and we have submitted our plans to ensure full compliance in due time,” Schlumberger said in a statement. Subsea 7 “is aware of the increased focus on lo-

cal content” in Equatorial Guinea and continues “to work closely with authorities to ensure we meet all applicable local regulations,” it said in a statement. Under the West African country’s National Content Regulation of 2014, “all agreements must have local content clauses and provisions for capacity building, with preference given to local companies in the award of service contracts,” according to the ministry of mines and hydrocarbons. Equatorial Guinea pumped 199,000 bopd on average last year, according to data from BP Plc. That is down from a peak of 380,000 in 2005. The country, which joined OPEC in 2017, is keen to boost drilling and plans to offer about 12 blocks, including in deepwater areas, in a licensing round in January 2019.

Uganda: National oil firm, China’s CNOOC sign exploration deal

ganda said its national oil firm and Chinese offshore oil and gas company CNOOC Ltd had signed an agreement to jointly conduct exploration in a new block in the East African country. The deal was signed in Beijing on the margins of the China-Africa forum on cooperation, which was attended by Uganda’s President Yoweri Museveni. A statement issued by his office said CNOOC and Uganda National Oil Company signed a memorandum of understanding “to jointly explore a new oil and gas block in the Alber-

tine Graben, on the southern part of Lake Albert.” “The exploration aims to increase the amount of crude oil produced in

Uganda to support the operations of the refinery as well as the oil pipeline,” it said. Uganda is expected to

start crude production in 2021 in the Albertine rift basin near the border with Democratic Republic of Congo, where reserves estimated at 6.5 billion barrels were discovered more than a decade ago. CNOOC already operates in Uganda, jointly owning fields with France’s Total and London-listed Tullow Oil. The statement did not say which block would be jointly explored but authorities are keen to increase exploration activity in the wider, lower part of the Albertine rift after successful discoveries in the northern part.

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Wednesday 12 September 2018

gas

ENERGY intelligence

Egypt: Zohr field now producing 2Bcf per day

WEST AFRICA

Brief

ni SpA announced that the Zohr field offshore Egypt is now producing 2 billion cubic feet per day (Bcf/d), equivalent to approximately 365,000 barrels of oil equivalent per day. In a statement posted on social media site Twitter, the Italian oil and gas company labeled the de-

BUSINESS DAY

imports”. Earlier this year, Eni announced on Twitter that production at Zohr would be increased to 2 Bcf/d by September. The Zohr field, which is the largest gas discovery ever made in Egypt and the Mediterranean Sea, is located within the offshore Shorouk Block. In the block, Eni holds a 50 per-

Algeria: Algeria shortlists contractors for new Skikda LNG jetty expansion

l g e r i a ’ s Sonatrach will select a contractor by the end of September to build a new LNG jetty and expand the loading capacity of Skikda port, the state-owned company said. Sonatrach shortlisted four contractors for the project, which will allow LNG vessels of up to 220,000 cu m to dock at the 4.5 million mt/y LNG terminal, more than double its current capacity of 130,000 cu m, according to a statement. The contractors bidding for the Skikda expansion include South Korea’s Hyundai Engineering & Construction, China Harbour Engineering Co., and Egypt’s Orascom Construction Besix, as well as a Turkish-Netherlands consortium of Ronesans and Ballast-Nedam. The lack of space at Skikda has led to long delays in loading times. The expansion will help boost

Algeria’s ability to export to new customers and compete with increased competition from new LNG suppliers. Algeria was the first country in the world to export LNG, loading its first cargo from Arzew in 1964 and Skikda in 1972. Upgrades to Algeria’s two LNG terminals, Skikda and Arzew, were completed in 2014, but Sonatrach still considers the capacities

insufficient. Since last year, the company has been looking to renegotiate its long-term contracts with European buyers, many of which are due to expire by 2021. Sonatrach is also considering plans to increase natural gas production and LNG exports, targeting distant markets such as China. In the Sonatrach-2030 strategy plan, the company

has opted for the development of unconventional resources with a target of 20 Bcm of natural gas production by 2030 and 70 Bcm in 2040, with the establishment of an industrial base and the development of offshore resources in the Mediterranean. In terms of exploration and production, the project aims to increase output by 2 million mt of oil equivalent annually at existing fields and to double the annual volume of discoveries. Regarding downstream and marketing, Sonatrach plans to redeploy 50 percent of gas marketing to new markets, particularly through trading, as well as to strengthen its refining capabilities and establish a petrochemicals industry. Sonatrach’s total primary production increased 2 percent to 196.5 million mt of oil equivalent in 2017 and natural gas production increased by 5 percent to 135 Bcm in 2017.

Report: New report predicts gas will become dominant energy source by 2026 velopment as an “outstanding result”. The production start-up of Zohr was announced in December 2017, after being discovered in August 2015. The project is described by Eni as one of its seven “record-breaking” projects, which the company says is “playing a fundamental role in supporting Egypt’s independence from LNG

cent stake, Rosneft holds a 30 percent stake, BP a 10 percent stake and Mubadala Petroleum a 10 percent stake of the contractor’s share. Eni has been present in Egypt since 1954, where it operates through its subsidiary IEOC. The company is the country’s leading producer with an equity of around 340,000 barrels of oil equivalent per day.

as will overtake oil demand in 2026 to become the dominant energy source, according to a new report from global quality assurance and risk management company, DNV GL. DNV GL’s 2018 Energy Transition Outlook, predicts global upstream gas capital expenditure to grow to a peak of $1.13 trillion in 2025 and forecasts that global gas demand will peak in 2034.

The report predicts that oil and gas together will meet 40 percent of world energy demand in 2050,

compared with 53 percent today. Gas will meet 25 percent of world energy demand by mid-century, with

global oil demand peaking in 2023, according to DNV GL’s latest report. “Our outlook affirms that the switch in demand from oil to gas has already begun. Significant levels of investment will be needed in the coming decades to support the transition to the least carbon-intensive of the fossil fuels,” Liv Hovem, CEO of DNV GL – Oil & Gas, said in a company statement. “Gas will fuel the energy transition in the lead-up to mid-century.

04 BUSINESS DAY WEST AFRICA ENERGY intelligence Kenya: Kenya completes 428 km power line, to add 310 MW to grid

high voltage power line to carry electricity from a 310 megawatt (MW) wind power plant to central Kenya from the north is complete and supply to the national grid will stabilise by December, Charles Keter, energy minister said, replacing diesel generation. The 428km-400-kilovolt power line is critical for the Lake Turkana Wind Power project, to carry electricity from Loiyangalani in the

north to Suswa in the centre of Kenya. Danish wind turbine maker Vestas Wind Systems, supplier of the wind farm’s 365 turbines, said last year the wind farm was ready for launch but would be idle until the government installed the transmission line. “What is left now is the official commissioning for the power plant and the transmission line,” Keter said during a site tour of the transmission station that will receive the electricity. “This is a major project, 300 MW. Within the next one month, we will feel the difference once the line has run very well. For me, everything being constant, we are seeing by December we will be comfortable in terms of our generation, and in terms of evacuation (transmission).

Ghana: Ghana may lose $40m per month on power plant project

hana will lose $40million every month if the country fails to relocate the current station of the Karpower Plant from Tema to the Aboadze Power Enclave in the Western Region, John Peter Amewu, Energy Minis-

ter disclosed. The 470-megawatt capacity Karpower ship, was meant to augment the country’s energy supply but it is, however, being under utilised. “If you refuse, for instance, to relocate Karpower as quickly as possible, this government will be losing US $40million every single month,” Amewu said during a tour of some energy facilities. The relocation will also ensure availability and access to cheaper fuel supply to the plant to ensure continuous power supply. Meanwhile, the Minister has served notice to all Chief Executive Officers (CEOs) of state institutions under him that he will not hesitate to sack them if they fail to listen to him.

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power

PayGo transforms East Africans electricity access, Nigeria plays catch-up STEPHEN ONYEKWELU

ayGo, a solar home systems technology backed by an innovative financing mechanism to help customers self-finance their access to clear solar power has made significant inroads into East Africa but Nigeria still plays catch-up. Azuri Technologies owned PayGo solar homes systems is a commercial provider of electricity to rural off-grid communities, without having end-users pay high upfront fees, but instead pay small, regular amounts via mobile phone technology. With the widest reach of any provider in Sub Saharan Africa, Azuri is leveraging solar and mobile technology to allow users in 11 different countries to access power on a payas-you-go basis. The Nigerian Government has an ambitious Renewable Energy Policy which aims to increase energy production from renewable energy sources from 13 percent of total electricity generation in 2015 to 23 percent in 2025 and 36 percent in 2030. Part of this plan is the goal to increase the percentage contribution of solar energy to the total energy mix. “Nigeria needs to quicken adoption of offgrip solutions. To achieve that, we need to allow an effective distribution of solar equipment and solar home systems, SHS, like in East Africa, which facilitated complete adoption of the PayGo systems while in Nigeria adoption is still low” Ubah Benson, chief energising officer, CEO at Solarify said during August 06 Tweet Chat

under the aegis of #GridlessAfrica, an advocacy group. One of the challenges the industry faces in Nigeria is the question of warranty claims for SHS when the system goes bad from poor installation and improper usage, “the end-user usually denies voiding the warranty terms and condition” Benson added. Despite success stories in East Africa, renewable energy has yet to be widely adopted in Nigeria as an alternative power solution. Off-grid communities in Nigeria have relied on kerosene lanterns or candles for their energy needs, with many unable to purchase solar power systems outright owing to the high costs. Solar Home Systems offer an affordable and environmentally friendly option. According to the United Nations’ Climate Change (UNCC) agency, tens of thousands of units have been distributed in 11 countries across

Sub-Saharan Africa; in Tanzania, Kenya, Ethiopia, Uganda, Sierra Leone, Malawi, Zimbabwe, South Africa, Rwanda, Togo, and Ghana Hundreds of thousands of people have benefitted from the clean energy that Azuri solar home systems provide. Azuri calculates that 28.5 million hours of clean light and 9.5 million hours of mobile phone charging have been provided, resulting in 3,504 tonnes of carbon dioxide, CO2 emissions avoided to date. This is why Azuri’s entry into the Nigerian market in 2017 with its PayGo Solar Home Systems was cheery. Azuri’s PayGo Solar Home systems have the capacity to power four LED bulbs providing up to 8 hours of lighting, a radio and a USB port with charging cables for mobile phones. Customers pay the monthly top-up rate via mobile money for 36 months after which time

the unit can be unlocked and the customer owns the unit. In a move to upsell its services, Azuri then provides these customers with options to upgrade to a larger system. Solar projects in Africa are picking up momentum. Social impact investors, many of which are backed by United Statesbased or European funds, have focused on this area especially in trying to get electricity to remote rural areas which are unlikely to be connected to a traditional electricity grid anytime soon. San Francisco-based Off-Grid Electric, which serves about 150,000 people in Tanzania, Rwanda, Côte d’Ivoire, and recently expanded to Ghana, has secured $55 million funding which will be focused on research and development and further expansion of its services on the continent. The Series D funding was led by Helios Investment Partners, with support from GE Ventures.

Wednesday 12 September 2018

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POLICY

BUSINESS DAY

WEST AFRICA

ENERGY intelligence

Novatek’s performance shows legroom for independents in global gas market

STEPHEN ONYEKWELU

ovatek, Russia’s largest independent natural gas producer has surpassed staterun Gazprom PJSC, the world’s biggest natural gas producer in market capitalisation, which shows that Nigeria’s indigenous independent gas companies have legroom to create competition. Novatek, a privately held and run gas producer and Gazprom, a state-run gas producer present another instance, which suggests that government will do better playing regulatory roles, create enabling business environment and allow the invisible hand of demand and supply to govern market processes. In 2008, the difference in

Gazprom’s and Novatek’s market capitalisation exceeded $340 billion. Now, both are valued around $50 billion: Novatek was even worth slightly more as of August 06. If you look at the numbers, this makes little sense. Gazprom’s vast natural gas reserves are close in size to North and South America’s combined, eight times that of Novatek, according Bloomberg Intelligence. The reasons alluded were that Gazprom has not been run based on pure market principles. “Gazprom should be worth significantly more,” said Rollo Roscow, a London-based analyst at Schroders Plc who manages the 1.1-billion euro ($1.28 billion) International Selections Emerging Europe fund. “Unfortunately, that business is not run for minority shareholders. It is run for the government; it carries out political projects

with dubious returns.” There are instances of successful state-owned and run gas producers, such as Qataris’ Qatargas, the world’s largest liquefied natural gas company. Nigeria’s NLNG Limited may have achieved more. The company is owned by four shareholders, namely, the Federal Government of Nigeria, represented by Nigerian National Petroleum Corporation (49 percent); Shell (25.6 percent); Total Gaz Electricite Holdings France (15 percent) and Eni (10.4 percent). The delay in developing Train 7 has been subject to the vagaries of Nigeria’s political environment and policy flip flops. Tony Attah, the Managing Director of NLNG, has cautioned that the country was losing the competitive space in the LNG global industry due to non-implementation of final

investment decision, FID on additional trains, particularly Train 7. Attah who spoke at a Nigeria International Petroleum Summit, NIPS, held in Abuja, represented by Sadeeq Mai-Bornu, the Deputy Managing Director, said the project has been overdelayed. “Nigeria started 24 months after Qatar, Qatar now produces 77 million tonnes per annum (MTPA) and is the number one LNG supplier in the world, while Nigeria is still on 22 MTPA” Attah said. Other instances of progress include Australia that is flooding the market and will knock down Qatar to the third or fourth place. In Africa, significant gas finds in excess of 127 trillion cubic feet, TCF in Mozambique has created the potential for another African super player.

Mozambique is expected to become the second-largest exporter of Liquefied natural gas (LNG) by 2025, as the country steps up production from 10 million tonnes per annum (MTPA) in 2017 to an envisaged 50 MTPA. “The real investment opportunity was last year when prices were low; but it is not too late. That is why we need to take the decision on Train 7 now so we can stay within the Top 5 space. The future is gas and NLNG is ready to play. It is time for gas” Attah said. Novatek’s stock has been gaining as it expands its liquefied natural gas business. The gas producer and distributor is controlled by some notable Russian billionaires and coowned by France’s Total SA. Leonid Mikhelson is the company’s chief executive officer and owns a quarter of it.

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ANALYSIS

WEST AFRICA

ENERGY intelligence

What NLNG can learn from PetroChina’s plans to grow natural gas DIPO OLADEHINDE

espite Nigeria Liquefied Natural Gas (NLNG) g i a n t strides, there is still much to learn as China’s largest oil and gas producer, PetroChina who is aiming to grow its gas output at a much faster rate than oil over the next five years. PetroChina has set a target to lift domestic natural gas production by 4 to 5 percent annually, lagging behind the country’s demand growth for gas, an indication that the country would be dependent on imported gas and LNG in coming years. “We believe the central government will definitely have a series of policy measures to facilitate our efforts to increase proved reserve and production, which will be beneficial to us,” PetroChina vicechairman Zhang Jianhua told reporters. China’s natural gas consumption surged 17.5 percent year on year in first half of 2018 to 134.80 Bcm. PetroChina’s domestic gas production was at 46.71 Bcm, accounting for 60.3 percent of China’s total production. The company’s gas output grew at 2.5 percent year on year, falling behind the country’s growth level at 4.9 percent. “We are looking for sustainable production growth of 4 to 5 percent,” Zhang said. Petrochina’s vice president Ling Xiao said PetroChina imported 24 Bcm of natural gas from central Asia, 2.2 Bcm from Myanmar and 9.4

Bcm of LNG in H1 in order to meet domestic demand. This pushed up its total import volumes by 8.92 Bcm from H1 2017 to 35.6 Bcm. “To ensure supplies in the coming winter, which is the peak consumption season in China, PetroChina had signed

contracts with domestic buyers to supply 84 Bcm of gas, which would be sourced through a combination of domestic output and LNG imports,” Ling added. According to S&P Global Platts Analytics, LNG is playing an increasingly important role

in China’s energy security as China surpassed South Korea as the world’s second largest LNG importer in 2017, its LNG demand is on track to hit 47 million mt in 2018 and could exceed that of Japan by 2030 as Beijing seeks to raise the proportion of gas in the country’s energy

mix to 15 percent,” China’s spot requirements are also growing, as its contracted obligations rise at a much slower rate than its demand projections, meaning Chinese importers will play an increasing role in global LNG market fundamentals and prices.

“China’s crude oil output peaked in 2015 and has been going down since then despite demand for oil growing steadily over the years as oil demand was at 13.49 million bpd in H1, up 2.3percent from last year,” data from S&P Global Platts’ Analytics showed. PetroChina’s domestic proven and developed crude oil reserves fell below 9 billion barrels by the end of 2008, from 9.05 billion barrels in 2007. The downward trend has continued since then, hitting 5.18 billion barrels by the end of 2016, although it had recovered slightly to 5.59 billion barrels at the end of 2017, according to filings with the US Securities and Exchange. “The company’s domestic crude production fell 1.3 percent year on year to 2.01 million bpd in H1, accounting for 52.3 percent of China’s overall crude output,” PetroChina said. The decline was because of ageing of its flagship Daqing oil block as the downtrend is unlikely to be reversed despite new oil discoveries by the company. “Domestic oil and gas resources are not good enough for significant production increases,” vice chairman Zhang Jianhua said on the sidelines of the company’s interim briefing in Hong Kong on Thursday. Zhang added that PetroChina would lift crude oil production in response to the government’s calls to speed up exploration and development work in an effort to meet the country’s strong domestic demand for fuels.

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marketinsight

Oil up as US drilling stalls, Iranian sanctions bite

il prices rose as US drilling stalled and investors anticipated lower supply once new US sanctions against Iran’s crude exports kick in from November. Brent crude oil jumped $1.09 a barrel, or 1.4 percent, to a high of $77.92. US light crude was 40 cents higher at $68.15. “A higher oil price scenario is built on lower exports from Iran due to US sanctions, capped U.S. shale output growth, instability in production in countries like Libya and Venezuela and no material negative impact from a U.S./China trade war on oil demand in the next 6-9 months,” said Harry Tchilinguirian, oil strategist at French bank BNP Paribas. “We see Brent trading above $80 under that

scenario,” he told Reuters Global Oil Forum. US drillers cut two oil rigs last week, bringing the total count to 860, Baker Hughes said. The

number of rigs drilling for oil in the United States has stalled since May, reflecting increases in well productivity but also bottlenecks and infrastruc-

OPEC Flakes Barkindo: Oil demand to hit 100 mmbpd sooner than projected ture constraints. Outside the United States, Iranian crude oil exports are declining ahead of a November deadline for the implementation of new US sanctions. Although many importers of Iranian oil have said they oppose sanctions, few seem prepared to defy Washington. “Governments can talk tough,” said Energy consultancy FGE. “They can say they are going to stand up to Trump and/or push for waivers. But generally the companies we speak to ... say they won’t risk it,” FGE said. “US financial penalties and the loss of shipping insurance scare everyone.” While Washington exerts pressure on countries to cut imports from Iran, it is also urging other producers to raise output in order to hold down prices.

South Korea grants US wish for zero oil imports from Iran

outh Korea has become the first of Iran’s top-three oil customers to fulfill a hardline US demand that buyers cut imports to zero. The Asian nation did not import any crude from Iran last month, compared with 194,000 barrels a day in July, tanker-tracking and shipping data compiled by Bloomberg show. While

bigger consumers China and India have curbed buying from the OPEC producer, South Korea’s gone one step further by halting purchases before the US imposes sanctions on the Islamic republic on November 4. Donald Trump’s administration made the demand over Iranian oil after the US president in May

withdrew from a 2015 deal that lifted many sanctions on the Middle East nation in exchange for restrictions on the country’s nuclear program. South Korea heeding that call may signal America’s clout over the North Asian nation. Trapped in a decadeslong war in the Korean peninsula, the South’s government has relied on the US to pressure the North’s leader, Kim Jong Un, to abandon its nuclear program. Political ties to America mean it can’t ignore Trump’s order for allies to adopt a tough policy on Iran, according to the Korea Energy Economics Institute. “Maintaining relations with the US is of the utmost importance to South Korea,” Kim Jae-kyung, a

BUSINESS DAY

research fellow at the institute said. “South Korea’s national security depends on its military alliance with America, which is prompting it to proactively reduce imports before the governments have completed negotiations.” The South Korean government’s official stance over Iranian sanctions is that it is continuing talks with the US in a bid to seek a waiver. While the Trump administration has softened its stance slightly, going from zero tolerance on purchases to saying it will consider exemptions, they are yet to be granted and buyers still face the risk of being cut off from the American financial system after the November deadline.

orld oil consumption will reach 100 million barrels per day (MMbpd) later this year, hitting that level much sooner than previously forecast, Mohammad Barkindo, OPEC’s secretary-general said. Barkindo also told an energy conference in South Africa’s Cape Town that a stable environment

was needed to encourage oil industry investment to meet the rising demand. “The world will attain the 100 million barrels a day mark of consumption later this year, much sooner than we all earlier projected. Therefore, stabilising forces which create conditions conducive to attracting investments are essential,” he said. “The priority is on ensuring stability is sustainable, spreading confidence in the industry and encouraging an environment conducive to the return of investments,” he added. The Organization of the Petroleum Exporting Countries with Russia and other producers have implemented a deal since January 2017 on cutting 1.8 MMbpd from output to prop up prices that fell below $30 a barrel in 2016 from over $100 in 2014.

Oil market ‘expects’ OPEC to extend partnership with other producers

PEC is hoping to finalize a long-term c o o p e rat i o n pact to help manage the global oil market with Russia and other key oil producer allies at their next meeting in December, the producer group’s secretary general, Mohammed Barkindo, said. OPEC, Russia and nine other non-OPEC producers have for months been considering ways to institutionalize and make permanent their current alliance. The agreement, which began in late 2016 with the signing of an accord to cut 1.8 million b/d of oil output, has been credited for lifting oil prices from a twoyear slump. Consultations of the draft charter are ongoing

but the target is to sign the framework agreement in December, Barkindo said. “Every country is submitting their input because it’s a multilateral process until we get all their input, then we’ll sit down and synthetize,” Barkindo told S&P Global Platts on the sidelines of an oil conference in Cape Town. “We want to be able to get that out in December.”

08 BUSINESS DAY WEST AFRICA ENERGY intelligence

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2018

talking points

In association with

Will Mozambique become the next Nigeria? ISAAC ANYAOGU

nternational media organisations reported that at least 80 people have been killed in northern Mozambique since October in multiple attacks carried out by unknown assailants who target oil workers and local populace. This is raising a spectra of concern that the natural gas rich country could be replace Nigeria as the next hotbed for insurgency. Locals suspected the armed Islamist group as members of Al-Sunna wa Jama’a, but some also say the attackers are “Al-Shabab”, although there are no known links to the Somali group of the same name. They are operating in Cabo Delgado, a gas rich province in Mozambique. Some observers have linked the violence to poverty and the scramble for the region’s underground resources from gemstones and minerals to natural gas according to media reports. In June, US petroleum company Anadarko placed staff working on a liquefied natural gas (LNG) plant in northern Mozambique under “lock-down” due to the threat from suspected Islamist militants. Anadarko, which is looking to raise a record $14-$15 billion for the plant

Snapshot

$30bn

Attacks in Mozambique’s gasrich region could threaten a potential $30 billion in investment

only said it was monitoring the situation but the violence has continued. This situation has caused security concerns for companies including Exxon Mobil Corp. and Anadarko Petroleum Corp., which plan to develop multibillion dollar natural gas projects in the region. The group wants Sharia law introduced and comprises Mozambicans, Tanzanians and people from other countries in the region and in order to achieve their objective, they have been killing dozens of people, burning hundreds of houses, and forcing thousands to flee their villages. Ahlu Sunnah Wa-Jama is suspected to be getting financing from smuggling goods such as timber, ivory, drugs and rubies, according to findings by researchers.

The mode of operation of the group closely mirrors the threat of Boko haram in north eastern Nigeria where millions of people have been displaced and economic activities mostly farming have been disrupted. In the Niger Delta, there is an ongoing threat of militancy but the demands are largely about getting better value for the people who live in communities where crude oil is explored. Mozambique has no history of Islamist militancy but Nigeria has a long history of Islamists militancy. There is the jihad of the 14th century and in the 1970s there were threats from the Kala Kato and Izala Islamists movements in Nigeria. The Mozambique government has been reluctant to ascribe the attacks to Islamists since only about 18 percent

of the 30 million population are Muslims. Researchers also told Bloomberg that geography contributes to the problem. Mocimboa da Praia, where the attacks started, is 1,800 kilometers (1,118 miles) northeast of Maputo, and Palma, where the offshore gas reserves that Eni, ExxonMobil and Anadarko are developing, is about 80 kilometers north of that. The same way poverty fuels the conflicts in the Niger Delta and parts of North Eastern Nigeria, many jobless youths in Cabo Delgado where poverty turns deep in the rural areas. Access to benefits from natural resources fuels poverty which further cripples economic activities, this is the vicious cycle African governments with natural resources need to break out from.