BusinessDay 12 Sep 2019 by BusinessDay

Nigeria’s FMDQ seeks to kick-start mortgages to boost trading

igeria’s FMDQ Securities Exchange plc is working on a groundbreaking plan to kickstart mortgages to boost trading on the nation’s capital markets and fire the hope of Nigerians for homes of their own.

Bola “Koko” Onadele, chief executive officer, FMDQ Securities Exchange plc, said in an interview that “the lack of housing finance is one of the reasons why our capital market has not grown as it should”. “We should be talking of 30year mortgages for Nigerians. If

you want 70 percent of the people to own their own houses, they can’t borrow at 20 percent,” Onadele said. Most people save all their working lives to be able to buy or build a home, leaving them with little savings to invest in financial markets.

formalised title-deeds registry has led to a shortage of at least 17 million houses. Rapid urbanisation is also causing a proliferation of slums and shanty towns, while most

On the other side of the spectrum, lenders in the country rely on short-term deposits when mortgages require long-term financing. There are only about 50,000 homeloans in Africa’s most populous country of 200 million where poverty and the lack of a

Continues on page 2

businessday market monitor

Biggest Gainer

Biggest Loser

DANGFLOUR GUINNESS N1120.00 3.70%pc N37.00 -0.80pc 27,153.53

Foreign Reserve - $42.95bn Cross Rates - GBP-$:1.23 YUANY-N 51.01 Commodities Gold

Cocoa

US$2,309.00

$1,501.10

news you can trust I **THURSDAY 12 SEPTEMBER 2019 I vol. 19, no 392

Victory for Buhari, APC as tribunal dismisses Atiku’s petition …We have been vindicated, says Buhari …CUPP kicks as PDP heads to Supreme Court FELIX OMOHOMHION, SOLOMON AYADO, Abuja, & INIOBONG IWOK, Lagos

he Presidential Election Petition Tribunal on Wednesday dismissed the petition filed by the People’s Democratic Party and

Continues on page 39

Inside New 7.2% VAT rate takes off next year P. 2 - Ahmed

₦3,627,373.21 -0.29pc

$60.76

N300

Foreign Exchange

Buy

Sell

$-N 357.00 360.00 £-N 439.00 451.00 €-N 390.00 400.00

Crude Oil

FMDQ Close

Everdon Bureau De Change

Bitcoin

NSE

www.

Market

Spot ($/N)

I&E FX Window CBN Official Rate Currency Futures

($/N)

fgn bonds

Treasury bills

361.99 306.85

3M 0.49 11.59

NGUS NOV 27 2019 363.97

0.32

-0.16

12.54

14.30

NGUS FEB 26 2020 364.42

10 Y 0.02

20 Y 0.05

14.37

14.54

NGUS SEP 30 2020 365.47

Concerns as FIRS shifts Abba Kyari’s pressure to companies Alleged tax debtors raise question on FIRS audit competence Small Businesses may choose to keep money outside banks

A crosssection of lawyers at the 2019 Presidential Election Petitions Tribunal’s judgment in Abuja, yesterday. NAN

Iheanyi Nwachukwu & Lolade Akinmurele

igeria’s taxman may have found solace in aggressively going after small businesses in a renewed move to improve tax receipts following an August 8 query issued to its executive chairman Babatunde Fowler, by Abba Kyari, Chief of Staff to President Muhammadu Buhari, bordering on unmet revenue targets. The newest moves by the Fowler-led Federal Inland Revenue Service (FIRS) are unsettling many small businesses and creating an unhealthy relationship between firms and their bankers. Hit by lower revenues, the

Continues on page 39

Thursday 12 September 2019

BUSINESS DAY

news Insurers’ low returns push investors to safe haven assets BALA AUGIE

Walter Peviani (l), MD, Saipem Contracting Nigeria Ltd, with Tony Attah, NLNG MD, at the signing of the Letter of Intent for NLNG Train 7 EPC Contract with SCD JV in Abuja.

New 7.2% VAT rate takes off next year - Ahmed Tony Ailemen, Abuja

he Federal Executive Council (FEC) on Wednesday approved the 2020 budget of N10.07 trillion and the Medium-Term Expen-

diture Framework (MTEF) and Fiscal Strategy Paper (FSP) for presentation to the National Assembly Minister of Finance, Budget and National Planning, Zainab Ahmed, who disclosed this while briefing the State House Cor-

respondents after the first Federal Executive Council meeting presided over by President Muhammmadu Buhari, said that the Federal Government would begin consultations on the Value Added Tax (VAT) with a view to increasing it from the cur-

rent 5 percent to 7.2 percent. The government, she said, has started working on the amendment of the VAT Act to enable the new VAT take effect from the year 2020, while consultations will commence as soon as possible.

Xenophobia: South African authorities frustrate early evacuation of Nigerians ....Air Peace flight delayed for 7 hours, says evacuation cost airline N300m IFEOMA OKEKE

outh African authorities on Wednesday frustrated the early evacuation of Nigerians who had been readied for the first batch of airlift from that country, a source told BusinessDay. Air Peace flight, which left Nigeria 11:30pm Tuesday, arrived OR Tambo International Airport, Johannesburg about 4:00am yesterday and Nigerians turned up for the airlift for 9am. However, the flight did not take off till 4pm. The flight which was billed to evacuate 320 Nigerians was only able to evacuate about 185 Nigerians because the South African authorities barred the rest from making the trip. Investigations show that the aircraft was taxiing to

leave the airport in the morning when they were stopped by the South African authorities. Informed Nigerians at the High Commission in Johannesburg said that after the Commission had prepared the first 320 Nigerians for the first evacuation, the South Africa Immigration started causing problem by arresting Nigerians due to travel, demanding papers and accused them of travelling without the right document. The Nigerian High Commission had prepared travel documents for the Nigerians but Immigration wanted to know how the Nigerians came into the country and began to arrest them, the official disclosed. Informed sources also revealed that the South African authorities told

some of the returnees to sign undertaking that they won’t come back to South Africa again, which was a difficult decision to make and this further delayed the process. “South Africa is frustrating Nigeria. The Air Peace aircraft has been there since 4:00am. Their Immigration started giving our High Commission problems. They said some Nigerians didn’t have papers. Immigration is arresting them, asking them to explain how they came to South Africa,” the official said. “A s a t 2 p m t o d a y (Wednesday), only 182 Nigerians were allowed to board the flight; the rest were being barred by South Africa Immigration. They are frustrating the Nigerian High Commission, taking the passengers away.

“They want to frustrate the airline and the Nigerian government. The aircraft has been on, burning fuel since 4:00am. They are not happy that Nigeria is evacuating its citizens. They don’t want the world to know that a Nigerian airline and Nigerian government are evacuating them. “Our high Commission is having tough time with South African government. They are stopping and arresting Nigerians, saying they should explain how they came into the country,” the official further said. Air Peace said the evacuation of Nigerians from South Africa would cost the airline about N300 million, which include the payment of passenger service charge, aeronautical and other charges in addition to the cost of operation.

Nigeria’s FMDQ seeks to kick-start mortgages to... Continued from page 1

homes consist of informal structures on land passed down through generations.

FMDQ, Onadale said, is now working on a blueprint it is developing with the support of other financial institutions, including International Finance Corp., Central Bank of Nigeria, Nigeria’s Securities and Exchange Commission and the National Pension Commission, that the entities will present to President Muhammadu Buhari within the next year.

The proposals will identify policy measures through which the government can “provide an enabling environment and facilitate single-digit interest rates,” he said. He added that the right policies would trigger the inflow of private capital from foreign and local investors into the country. For instance, rather than subsidise gasoline, FMDQ’s CEO wants the government to channel the fund into cheap housing loans. Separately, the Lagos-based FMDQ is also planning to attract more foreign capital into the country by playing the role of a central counterparty clearing house to www.businessday.ng

reduce risk for investors, Onadele said. Its FMDQ Clear unit is expected to employ at least 20 people within three months of operating, he said, and is just waiting for legislation to be signed into effect by the president. “When we go on international road shows, foreign investors tell us they can bring significant amount of capital to Nigeria but only if there is a CCP to guarantee transactions,” Onadele said. “A CCP puts in place a default fund to ensure that any settlement failures in the market are covered accordingly,” he said.

https://www.facebook.com/businessdayng

igerian insurers are barely covering their cost of capital let alone providing returns above or matching the risk free rate as the tough business landscape continues to pressure firms’ profit. As insurers return on equity (ROE)-a measure of profitability- has continued to slide, their ability to meet cost of capital is shrinking, according to a recent report by Coronation Merchant Bank. In the finance parlance, superior stocks generate results (ROE) that in the long term exceed their equity borrowing costs, while the poor ones do not meet their cost of capital. That means a rational investor will prefer to park his money in risk free assets like Treasury bills that is backed by government than wait for an investment that yields lower returns. Therefore, it is better for companies to upgrade their ROE (profit) above yields on short term government securities so as to benefit from re-rating by investors. Analysts suggest insurers create economies of scale, and tap into the retail space of the market so as to magnify

profit and deliver superior returns to shareholders in form of bumper dividend and share price appreciation. The simple average Composite Insurance ROE was 14.10 percent in 2018, this compares with the year’s average Treasury-bill (T-bill) rate of 12.8 percent, while the simple average Non-Life RoE in 2018 was 6.9 percent,

MARKETS according to Coronation Merchant Bank. “It is not surprising that the Nigerian insurance industry lacks profitability,” said Guy Czartoryski, Head of Research Coronation Merchant. “We have already seen how, over the past 10 years, the industry has barely grown in real terms. One effect of lack of growth is that companies are unable to create economies of scale for their front and back office operations,” said Czartoryski. Insurers profit has been strained by major claims that resulted in huge underwriting losses, while weak premium income makes it practically difficult for them to absorb such losses.

•Continues online at www.businessday.ng

Saipem, Chiyoda, Daewoo emerge in contracting consortium for $10bn NLNG Train-7 …10,000 jobs likely at construction stage …output to rise to 30m tonnes per annum OLUSOLA BELLO & IGNATIUS CHUKWU, Port Harcourt

hree top construction corporations, Saipem, Chiyoda and Daewoo, have emerged in a consortium to handle the Nigeria Liquefied Natural Gas (NLNG) Train 7 project estimated at $10 billion. The three corporations have been involved in the construction of the NLNG right from the outset, but the company said the bidding was competitive and followed global best practices. According to a statement from Eyono Fatai-Williams, general manager, external relations of NLNG, a letter of intent has already been issued to the consortium. This is said to be a significant step towards the final investment decision (FID) for Train 7 project. The issuance of the letter of intent for the engineering, procurement and construction (EPC) contract of the project to the consortium made up of Saipem of Italy, Chiyoda of Japan and Daewoo of South Korea, is said to be coming on the heels of the Nigeria Content (NC) plan signed with Nigerian Content Development Monitoring Board (NCDMB) and the recent milestone of the 3 September, 2019, when NLNG submitted @Businessdayng

the summary outcome of the commercial bids evaluation for the Train 7 Project to NCDMB in line with the project certification and authorisation procedure. According to NLNG, the letter of intent is one of the key milestones to be achieved on the road to FID by its shareholders. This expresses the intention to award the main EPC contract for the Train 7 project to the preferred bidder, saying that it marks another significant step towards the realisation of Train 7 and its attendant value to NLNG’s shareholders and for the benefit of the Nigerian economy. The company also assured that the contracting process was transparent in full compliance with all applicable laws and good industry practices, stating that it will continue to operate its business in an open manner consistent with its core values of integrity and excellence. The Train 7 project is expected to ramp up NLNG’s production capacity by 35 percent from 22 million tonnes per annum (MTPA) to around 30 million (TPA). The project will form part of the investment of over US$10bn including the upstream scope of the LNG value chain, thereby boosting the muchneeded Foreign Direct Investment (FDI) profile of Nigeria.

•Continues online at www.businessday.ng

Thursday 12 September 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 12 September 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 12 September 2019

BUSINESS DAY

news BusinessDay Grow targets to get 10,000 businesses online

n Nigeria there are over 37 million small and medium-sized enterprises (SMEs), many of whom have no online presence. On the other hand, their prospective customers are searching for the best solution to their problems online. SMEs need to be where their customers are. To address this gap, BusinessDay, West Africa’s number one business daily, has launched BusinessDay Grow for SMEs in Nigeria. Business Grow is a platform designed to simplify business growth in Nigeria. It allows SMEs to manage their entire online identity in one space. Time and able people are precious resources for SMEs. With BusinessDay Grow, SMEs can build and manage their website, optimise it for search, update Google My Business, identify potential new customers, and so much more – all from one place. Alongside technology partners, Omnibiz, BusinessDay Grow pledges to reach 10,000 businesses. “This kind of ambition underscores our belief in SMEs, our confidence in the fact that they are pillars of the Nigerian economy, and our desire to help them realise their full growth potential,” said Frank Aigbogun, publisher/CEO, BusinessDay Media. Deepankar Rustagi, cofounder of Omnibiz, while demonstrating the user interface, said, “One of my favorite tools allows any business owner to better capture their customer and transaction data. This can make them more viable candidates to receive loans which can further help their business.” BusinessDay Grow is available at grow.businessday.ng. Small business owners with one or multiple branches can sign up immediately. BusinessDay is committed to being an active growth catalyst within the SME community in Nigeria. BusinessDay is West Africa’s leading provider of business intelligence and information on diversified media platforms. Businessday.ng provides access to opportunity, publishing across social media, App, and mobile and desktop sites. The traditional newspaper is published every week-day, the newspaper is based in Lagos and Accra, with exclusive West Africa syndication of the Financial Times, The Economist and Harvard Business Review. Omnibiz is a one-stop business hub for SMEs across

sub-Saharan Africa. The platform empowers businesses with tools that they can use to enhance their reliability, visibility and financial capability. Omnibiz aims to facilitate the growth journey of SMEs on the continent by preparing them for the funding processes of various investment institutions. Data have shown that the lack of visibility and credibility have been crucial factors for companies in Africa in the case of accessing funding. This has led to millions of SMEs going out of business within a few months after beginning operations, as highlighted by the London Stock Exchange Africa advisory group. Speaking on the benefits of the ISO certifications for Flutterwave’s growth, Olugbenga Agboola said, “Our focus is to grow businesses within and outside of Africa. These certifications will further increase the faith of our current clients in the services we provide and help potential clients see that our payment infrastructure is equipped to handle their payment needs. We are one step closer in our journey to connect the world to Africa through payments.” In respect of the partnership between Digital Jewels and Flutterwave, Adedoyin Odunfa, MD/CEO of Digital Jewels, said, “Building cyber resilience has become a competitive imperative to address the downside risk associated with the adoption of technology especially for organisations built on technology such as Flutterwave.” After guiding Flutterwave through the end-to-end accreditation journey to the PCIDSS [Payment Card Industry Data Security Standard], Digital Jewels urged this dynamic and ambitious company to further secure its information assets beyond the Cardholder Data scope of PCIDSS alongside building resilience into its processes. This they achieved by developing an Integrated Management System comprising an Information Security Management System based on the ISO27001 Standard and a Business Continuity Management System based on the ISO22301 Standard. “We are excited to have driven the implementation of these significant standards at Flutterwave and by so doing building a Cyber Resilient system,” Odunfa said. The certificate presentation ceremony was held at Flutterwave’s office in Lagos, Nigeria.

L-R: Deepankar Rustagi, co-founder, Omnibiz, and Frank Aigbogun, publisher/CEO, BusinessDay Media.

R-L: Dakuku Peterside, director-general, Nigerian Maritime Administration ans Safety Agency (NIMASA); Kitac Lim, IMO secretarygeneral; Sabiu Zakari, permanent secretary, FMOT; George Oguntade, Nigerian High Commissioner to the UK; Linda Ikpeazu, House committee chairperson, and Dilkko Balla, Nigeria APR-IMO, at the IMO/NIMASA dinner at the IMO headquarters, London.

DisCos improve collections, trouble is getting them to remit more …billed customers for 80% of power received, remitted 28% to market ISAAC ANYAOGU & HARRISON EDEH, Abuja

igeria’s electricity distribution companies (DisCos) recorded a significant increase in billing efficiency during the first three months in 2019 but continues to remit poorly says the Nigerian Electricity Regulatory Commission (NERC) in its latest sector report. “Out of the 7,193GWh total energy received by all DisCos in the first quarter, 5,762GWh (80 percent) was billed to the end-users, implying technical and commercial losses of 20 percent and 4 percentage points increase in billing efficiency,” said the NERC, in its first quarterly report for 2019. The regulator said the level of DisCos’ billing efficiency shows that, for every 10kWh of energy received by DisCos from the Transmission System Provider (TSP), approximately 2kWh is lost due to technical constraint and energy theft. “In other words, for every N10 worth of electricity received

by DisCos during the first quarter of 2019, N2.00 is lost due to energy theft and poor distribution infrastructure. However, the regulator also said that during the quarter under review, DisCos were issued a total invoice of N190.1billion for energy received from NBET and for the administrative services by MO, but only a total of N52.8billion or around 28 percent of the invoice was settled, creating a total deficit of N137.3billion. “A comparative analysis of market invoice performance by DisCos in the first quarter represented indicates an average settlement rate per DisCo of only 28 percent of the market invoice,” the regulator said. None of the DisCos exceeded a settlement of 50 percent of its market invoices during the first quarter of 2019. Jos DisCo recorded the worst remittance performance of 10 percent followed by Kaduna DisCos at 13 percent. The total revenue collected by eleven (11) DisCos from customers in the first quarter

of 2019 stood at N116.9billion out of the total billing of N182.8billion Ikeja DisCo had the highest billing efficiency of 96 percent in the first quarter while Yola DisCo recorded the lowest efficiency of 61 percent NERC expressed concerned about the high technical losses at the distribution network, as 20 percent technical and commercial losses are much above the global standard. The regulator also reported a decline in the stability of the grid network, which has seen recorded a five incidences of a total grid collapse, resulting in total blackout nationwide. “To improve the grid stability and prevent a total collapse in subsequent quarters and beyond, the commission, in collaboration with Transmission Company of Nigeria shall continue to intensify its monitoring and supervision efforts to ensure strict compliance with the system operators’ directives to generators on free governor and frequency control mode in line with the

provisions of the extant operating codes in the industry.” NERC stated further in the publication that it had approved the request by the TCN to competitively procure spinning reserves for the industry. “This is to guarantee adequate spinning reserves for proper management of the grid by the system operator.” The report notes further that the total electric energy generated was 8,951,869mwh -0.8 percent more than the level of the generation during the fourth quarter of 2018. During the quarter, the industry recorded the peak generation of 5,375mw. The report notes further that, “Despite the decline in the available generation units in the first quarter, the total energy generation rose by 08 percent with 8.9 percentage points increase in generation capacity utilisation arising from the reduction in the constraints of insufficient gas supply, transmission and distribution networks, and water management at the hydropower stations.”

Private-sector players, using data and technology, lead market opportunities creation Jumoke Akiyode-Lawanson

rivate software technology companies and private entities like the Nigerian Stock Exchange (NSE), are breaking through barriers and dominating markets by collecting, processing, analysing and distributing data in digital form to help organisations and governments make more informed decisions. Technology experts say that businesses and governments need to take full advantage of the opportunities created by digital transformation to grow the economy. Speaking at Market Data Workshop 2019, organised by the NSE on Wednesday September 11, Deremi Atanda, executive director, corporate strategy, SystemSpecs, said that technology such as artificial intelligence, data

www.businessday.ng

warehousing and analytics will position both private and government organisations to make better informed decisions using the same set of data they’ve always had. Atanda, who spoke on ‘Data Insights and Market Opportunities’ said that apart from the Nigerian Bureau of Statistics (NBS) which is reliable in terms of gathering, processing, analysing and distributing data, private entities have leveraged employee data to significantly transform the credit market in Nigeria in less than two years. “Data like records of employee earnings, records of their savings, and records of where they have worked can now be converted to advantage because technology has made it less of a struggle to make that data available. We just need to have a digital

https://www.facebook.com/businessdayng

authentication and approval to make credit available to as many people as possible, and these same set of people are those who have always had funds but didn’t know who to go to,” Atanda told BusinessDay. “Similarly, the telcos are also using data to extend credit to customers. All they need to do is to profile your telco usage, and they are able to extend credit to you based on the pattern they’ve seen from your usage,” he noted. Stakeholders say that the private entities are working with data sets and leveraging technology to grow Nigeria’s economy. The NSE, a private entity and financial market to trade equity, derivatives and others, is using data to drive economic growth. Anita Gopaldas, market data specialist at the NSE, @Businessdayng

said that the bourse had developed several market data products to enhance customer engagement, help listed companies optimise their share price and strengthen the end to end value chain. The NSE data portal is an online-based application that serves as a repository for realtime, delayed, end –of-day and historical data for all financial instruments listed on the Nigerian Stock Exchange. It serves as a consolidated, streamlined platform for market participants to access quality and timely data at an affordable rate. During her presentation, Gopladas explained that the data portal products are divided into two major suites and some of its features include multiple sign on options, acting as a payment gateways and corporate action highlights.

Thursday 12 September 2019

BUSINESS DAY

news

Stakeholders welcome Lagos-Ogun PPP on road construction with caution JOSHUA BASSEY & MICHAeL ANI

ue diligence, t ra n s p a re n c y and sanctity of agreement must be given priority if the proposed Public-Private-Partnership (PPP) in the construction of some federal roads linking Ogun and Lagos States, is to realise the desired objective, stakeholders have posited. The roads to be reconstructed and tolled include Ikorodu-Ogijo-Sagamu, EpeIjebu- Ode and the LagosOta-Abeokuta roads. The organised private sector (OPS) and experts, who spoke with BusinessDay, described it as positive development, but emphasised respect for PPP agreement, which they argued is a veritable option in bridging Nigeria’s huge infrastructure gap. Kunle Awobudu, president of the Nigerian Institute of Builders, said while this could

be a game changer in addressing the country’s infrastructure need, partnership with governments in some areas have proven problematic, as “we have seen in the power sector and in the case of Visionscape in Lagos,” where the waste management contract ran into hitches and eventually terminated. Such flaws, he said, are making investors to tread with caution. According to Awobudu, government and the wouldbe partners must be clear about the agreement in introducing private funds into the projects because it is basically profit- oriented and not for social services. “We are in a country where we move back and forth and it is very unfortunate. The Lagos- Ibadan Expressway was initially tolled. The Abeokuta Expressway was initially tolled but after sometime, those tollgates were dismantled because of the traffic it was causing. The same challenge

is being faced in the Lekki-Epe Expressway,” he said. Awobudu noted that policy inconsistency and the lack of continuity in government remain a challenge to PPP deal in Nigeria. “When another party comes into government, such projects suffer setbacks,” said Awobudu. Also providing a perspective, Timothy Olawale, the Director-General of Nigeria Employers’ Consultative Association (NECA), argued that PPP and tolling of road are not a bad idea, but being transparent about the processes and procedures that threw up the partners, as well as utilising the tolling proceeds in truly maintaining. Olawale cautioned against what he “called political patronage”. According to him, there have been cases where governments handed over roads and other public infrastructure to political cronies who bankrolled their elections in the name of PPP.

Banks’ patronage of CBN’s lending window rises by 65.46% in one month Hope Moses-Ashike

he patronage by deposit money banks of the lending window of the Central Bank of Nigeria (CBN), known as Standing Lending Facility (SLF) rose by 65.46 percent to N1.4 trillion in July compared with N829.79 billion in the month of May 2019. “It simply means that the financial industry was liquidity stressed during that period in the sense that the banks had to borrow so much from the Central Bank to meet short term liquidity gaps within that period,” Johnson Chukwu, managing director/CEO, Cowry Asset Management Limited told BusinessDay. The CBN’s economic report for the month of July released on its website shows that the total SLF granted during the review period was N1.4 trillion, inclusive of Intra-day Lending Facility (ILF) converted to overnight repo. Daily average was N68.65

billion in 20 transaction days in July 2019 as against N46.10 billion in 18 transaction days in May of the same year. The total interest earned was N94.80 billion in July compared with N52 billion in May 2019. Chukwu said the other thing to look at is FAAC allocation in terms of the amount that went to the states. “It could be indicative of the fact that liquidity was not coming into the system or could be that CBN had engaged in massive mop up earlier that stressed the banks, it’s not because the banks are aggressively lending. It is because of the liquidity management of the CBN where the banks at any point in time do not have liquidity that they will have to resort to the CBN. But it’s a seasonal issue.” “I am sure with the maturing treasury bills that will come into the system shortly that will reverse,” Johnson said further. A total of N549.4 billion from maturing Treasury Bills and Open Market Operation (OMO) is expected to hit the

market on Wednesday and Thursday this week. However, the Standing Deposit Facility (SDF) declined by 35.73 percent to N1.2 trillion in July 2019 from N1.8 trillion in the preceding month. The report revealed that the total SDF granted during the review period was N1.2 trillion with a daily average of N130 billion in 19 transaction days.Cost incurred on SDF in the month of July stood at N0.35 billion as against N0.59 billion incurred in May 2019. According to the report, total assets and liabilities of the banks amounted to N39. 62 trillion at end-June 2019, showing a 0.2 per cent increase, compared with the level at the end of the preceding month. Funds were sourced, mainly, from foreign liabilities, mobilisation of time, savings and foreign currency deposits and reduction in claims on central bank. The funds were used mainly, to acquire foreign assets, shore up capital accounts and pay off demand deposits.

Nigeria seeks return to council of International Maritime Organisation SEGUN ADAMS

igerian High Commissioner to the United Kingdom, George Oguntade, has assured the international maritime community of the commitment of the Federal Government to enhanced security on Nigerian waters. This was as the director general of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dakuku Peterside, announced Nigeria’s quest to return to Category C of the International Maritime Organisation (IMO) Council at an election scheduled to take place later this year. He stated this at the dinner hosted in honor of a delegation from Nigeria at the headquarters of the IMO with Secretary

General Kitac Lim leading other permanent and alternate representatives to the dinner which also had Linda Ikpeazu, chairman of the House Committee on Maritime Safety Education and Administration, in attendance. Oguntade, who also doubles as Nigerian permanent representative at the IMO, said the government is committed to providing conducive environment for business in the Nigerian maritime sector to thrive. He noted that the Global Maritime Security Conference Nigeria has committed to host from 7th-9th October this year is another show of commitment to tackling issues that may hinder business in the Nigerian maritime sector. Peterside, while announcing Nigeria’s quest to seek election back to Council, www.businessday.ng

noted that Nigeria has done enough to merit a return to council at the IMO. “Nigeria is willing and prepared to play more regional and international roles to the global maritime community but that would only be possible with your support. Let Nigeria contribute from within Council to the growth of the maritime sector globally. Let’s contribute significantly to the work of the IMO,” he said.

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 12 September 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 12 September 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 12 September 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 05 September 2019

BUSINESS DAY

comment is free

COMMENT

Send 800word comments to comment@businessday.ng

Taking the credit: Can universities tackle academic fraud?

ANTONIA CUNDY

ith supervisors pressed to publish more research, one result has been a rise in exploitation of the work of

postgraduates. In July 2017, Allison Harbin, an art history PhD graduate from New Jersey’s Rutgers University, uploaded several posts to her blog, titled “Why I left Academia.” In them, Harbin claimed that an academic supervisor had used parts of her work, without acknowledgment, in their own paper. Harbin raised the case with the university, which rejected her claims, calling them “unfounded” and defending the supervisor, who was not identified in the blog. But in her posts, Harbin said the response was “Orwellian”, claiming that some professors urged her not to say anything, and when she did, clubbed together to cover up what she said was academic fraud. While the dispute continued, Harbin’s blogs went viral. Within hours she was inundated with hundreds of emails from people sharing allegations about academic exploitation by their superiors, the institutional structures which make this behaviour permissible and a lack of support for those subjected to it. To date, Harbin has received over 400 testimonies from current and former graduate students at 300 different universities around the world, revealing what she calls a “systemic crisis in academia” which “can best be

described as an abuse of power.” Over the past two decades, many universities have adopted a more commercial business model, where employment is offered to academics on a temporary basis and where the pressure to raise new funds leads to a “publish or perish” research culture. Some observers believe that this way of running universities will lead to even more exploitation of graduate students. “There is a pressure on the secure academic to publish or be damned, because of the level of performance management and the focus on research money,” says Jane Thompson, an official at the UK’s university and college union. In the UK critics highlight the Research Excellence Framework introduced in 2014, whereby academics are ranked by and awarded funding according to their published output. “There is also the inability of people on insecure contracts, whether PhD or early career researchers, to actually challenge inappropriate or unethical behaviour because of the precariousness of their employment,” Ms Thompson says. “When people at the top are being squeezed it’s the people at the bottom who get the dregs of that.” Harbin says the situation is the same in the US, where universities and departments are also ranked by their published research. Institutions have also cut back on tenured positions and the jobs available for younger academics tend to have much weaker employment protections. “There’s fewer professorships, there’s less money; those left have an incredible pressure to publish,” she says. “Even in the best of circumstances, even if you’re a decent person, you’re incentivised to steal from your graduate students.” One of the most common forms of exploitation occurs in the “co-authoring” of research papers, says Joshua Krook, a visiting law researcher at Oxford university. “The best professors in the academic system have too many publications (under their name) to have feasibly written them themselves,”

he says. “When you talk to them in private, or their students, you find that what’s going on is the students they supervise are actually writing the articles, and then the professor will put their name on it as if they’ve contributed.” The problem is so endemic, Krook says, that “the entire system of academia” is built on taking advantage of students. Krook, who has investigated the topic at 15 universities across the UK and Australia, says he has “not yet come across a university that doesn’t have the problem”. One student at a London university pointed to his supervisor’s staff webpage as an illustration of this. The academic, who works in the sciences, has more than 450 papers listed there; the supervisor’s name appears as lead author on less than 70. Another student from Sydney recalls how her supervisor demanded she “hand over” a 10,000-word paper she had written. He would put his by-line on it first, and hers could come second. When she refused, the supervisor resorted to threats. The student, who asked to remain anonymous and left academia because of her experience, described the exploitation of graduates as “another form of abuse in society”. Claiming credit for another person’s work is clearly seen as unethical and in violation of universities’ policies. But some believe that by-lines reflect more than just authorship and research. “There are those that uphold the idea that someone deserves to be a co-author simply because they brought in money or are high status,” says Brian Martin, a social scientist and emeritus professor at the University of Wollongong, Australia. Others see co-authoring as a deferential sign of respect to the supervisor. “But,” Prof Martin says, “that clashes with scientific journals’ ideas, that only people who have contributed to the research should be named.” The differing views and lack of clear guidelines is exacerbated, Krook says, by the nature of supervisor-student relationships. One-to-one relationships with little oversight or accountability

‘

Claiming credit for another person’s work is clearly seen as unethical and in violation of universities’ policies

can result in inspirational mentoring. But they can also create large power and information imbalances that are easy to exploit. “The professor is an authority figure, they introduce you to what’s normal in the field,” Krook says. “They can say what’s normal and what happens all the time, and because it’s coming from an authority figure you believe them.” On occasions, the issue of who really owns the intellectual property associated with academic research can have profound financial consequences. Sunil Purushothaman, a PhD graduate from Imperial College London, says he was a victim of exploitation while studying under the supervision of Christofer Toumazou in the early 2000s. DNA Electronics, a company he co-founded with Toumazou at Imperial, was first registered in 2003 under the name of Suniseq — a play on Purushothaman’s first name, Sunil, and “sequencing”. In 2016, DNAe was awarded a contract worth up to $51.9 million by a US government agency, and Toumazou won a European Inventors Award in 2014. DNAe is now a key player in a global market worth about $4 billion in 2018 and growing by 15 to 20 percent annually. However, Purushothaman is unknown and penniless. He claims Toumazou pressured him to commercialise his work on next-generation gene sequencing and misled him into applying for patents based on his research for Toumazou’s company as a requirement for a PhD. Purushothaman also claimed he was later bullied through emails and phone calls into ending his involvement with DNAe. In one email from September 2008, seen by the Financial Times, Toumazou says “with your permission I’d like to proceed without your signature, if I do not hear from you by Friday will assume this is OK.” Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng

RUGA, monkey business, diverse reactions and the ultimate solution

here have been diverse reactions to the RUGA-business, revealing Nigeria’s lapses in fighting for the interest of the people. Of course, this started with the farmersherders clash. Some Nigerian saw nothing wrong with the Foreign Fulani Herdsmen (FFH) deliberately invading communities, destroying farms and houses, killing, inflicting pain, raping and occupying territories. The less brutal ones among the FFH would convert people’s farms into grazing areas for their cattle, while the helpless and hapless owners watched. In the same manner, some of us saw nothing wrong parcelling our land and modernising these parcels for the exclusive occupation of these FFH. Those who argue that the programme is for all farmers are too clever by half. At the core of ‘rugarisation’ was the desire to stop the FFH from invading and destroying both farmers and their farms. And we know that beyond the bandits, it is only the FFH that undertake such wicked adventures. So RUGA was meant for them, to appease them or to reward them for the effective conquest of various communities in Nigeria. Other individuals, sub-national governments and organisations reacted differently. Bauchi state declared they had no problem with RUGA because the state was largely a fulani state (I hope these are local variants);

Nasarawa government agreed to the programme, which made the indigenes wonder how the FFH could be handsomely rewarded and pacified for slaughtering and dispossessing people of the state. The states in the South jointly stated that they had no land for RUGA while the South eastern states offered a grass-exchange contractual relationship and started the formation of forest guards. Wike, governor of Rivers state offered to support the programme with water which his state has in abundance. Also, it would be easy for the RUGA authorities to transport, after all, they siphon fuel from Rivers to Kaduna refinery. Anambra state started the Ehi-Igbo (Igbo-cow) programme while Akwa-Ibom state government imported 2000 Brazilian cattle. Abdullahi Umar Ganduje, governor of Kano state asked the government to stop the movement of cattle to the South while the Northern elders’ forum asked to stop the stigmatisation of Fulani. The tone changed when the brash northern youths gave president Muhammadu Buhari 30 days to implement RUGA while Miyeti Allah threatened to establish a vigilante group in the South East. The news spread that they already had vigilante services in Ondo state. That was when Ohaneze asked Ndi-Igbo to defend themselves while Wole

www.businessday.ng

Soyinka and the Ooni of Ife, asked the Yorubas to defend their ancestral lands. Meanwhile, Yusuf Ardo, a Miyeti-Allah chieftain argued that 99 percent of the fulanis’ are peaceful, “the attacks were political and the Fulani were more affected by the crises,” he claimed. The issue is that treating the fulani (foreign or local) as special citizens is antithetical to the unity, peace and continued existence of this country. The collaborative and communal climate is fouled when people who have been allowed start seeking allowance, when those given a meter seek one kilometre and when some, like Abel, are taking blessings through the back door. In order words, some people are brazenly taking an unfair share of communal resources. In any case, the fear of the fulani is now the cornerstone of wisdom in Nigeria and that was why Uguwanyi, governor of Enugu state hastily called a world press conference to announce that no community in Enugu state had chased the FFH away! Surely, this handshake has gone beyond the elbow. There are two simple and practical solutions to the FFH invasion, despoliation, and intimidation of our communities and the nation as a whole. This is the RUGA monkeybusiness. Firstly, people who attack, kill, rape and maim, should be treated as criminals,

https://www.facebook.com/businessdayng

ROBIN HARDING

which is what they are. This is irrespective of whether they are foreign or local fulani, bandits, kidnappers etc. Secondly, spending communal wealth on private business is against economic and political common-sense. Namapreneurship (cattle-based entrepreneurship) is a private business. Those who are in this business (of which herdsmen are just marginalised employees) should acquire and develop the type and quantity of land they want for their cattle. If the CBN or Ministry of Agriculture has any programme for farmers, the Fulani herdsmen should apply based on interest. Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye

@Businessdayng

Thursday 12 September 2019

BUSINESS DAY

COMMENT

comment is free

Send 800word comments to comment@businessday.ng

What do we do to strengthen peace, security and the Nigerian economy? MAYOWA AMOO

n 1999, the vision 20:2020 goals included, Nigeria among the top 20 economies of the world by 2020, and high upper-middleincome country status with a per capita income of $9,000 (it is only about $2,000 per capita as at today) among others. Fiscal indiscipline, recurring violent conflict, and economic recession inhibits the chances of this reality. At current rate of demographic explosion and an optimistic annual growth rate of 7 percent, it will take another 20 years to achieve a per capita income of $9,000. This piece focuses on the linkages between poverty, insecurity, economic growth (decline) and (under)development. Firstly, we discuss issues in the North eastern part of Nigeria, then propose strategies for creating or preserving wealth, preventing conflict and entrenching the rule of law to achieve sustained economic growth in Nigeria. Nigeria faces security, humanitarian and developmental challenges. The Boko Haram insurgency is now about a decade old and continues to deeply affect the North-East economy, the Nigerian population and the economy at large. Borno, Adamawa, and Yobe (the BAY states) have been negatively impacted the most by the group Boko Haram, especially in the rural areas since government forces are dominant in major urban centres. Bauchi, Gombe, and Taraba have to cope with the indirect effects. Dwellers displaced from the BAY states migrate into these states, hence, mounting more pressure on the insufficient

infrastructure and social services in these states. Due to the conflict, the BAY states, in particular, have suffered agriculture-related losses to the tune of $3.7 billion. The World Bank estimated that between 2011 and 2015, losses in the BAY states accounted for 75 percent of total loss in the economy of $8.3 billion. This excludes $9.2 billion worth of damages to infrastructure and services. Research by US-based Atlantic Council lends credence to the belief that financial incentives are the main motivation for youth joining Boko Haram or other violent groups. Creating wealth is, therefore, a smart way to ensure national security. The Lagos state government with support from UNDP has achieved relative success with the Lagos State Employment Trust Fund (LSETF), which amongst other things is a “train-to-work” agency for low and semi-skilled individuals in the state. The federal government should promote LSETF or a tailored version in other states of our country. There are ample opportunities for the new ministers to create wealth by opening up the multi-billion-dollar marine, maritime and mining sectors to micro, small and medium enterprises (thus breaking the illegal, shadow economies in those sectors, including forestry and wood logging). The more diffuse wealth is, the more secure Nigeria will be. In terms of domestic and regional trade, the North East Development Commission (NEDC), as part of the process of the region’s economic recovery should facilitate the restoration of trade with the rest of the states and neighbouring countries of Niger, Chad, and Cameroon. At the policy level and to strength-

en ties, our leaders need to break the language barrier by selecting a cohort of no less than 5,000 new or existing public servants across junior, mid and senior cadres to learn mandarin in its totality with a view to undergird economic, cultural, social, educational, diplomatic and political relations between us and China. For instance, traders from Nigeria are constrained by high travel costs, difficult China visa policies and an obstructive air service agreement. Research by the US institute for peace suggests that there is a potential $650 million economic gain to Nigerian consumers if restrictions on air service were lifted. Private businesses and nongovernment organisations are the best agents for rapid, and sustainable reconstruction post-conflict. NEDC should collaborate strongly with the private sector. There is also a possibility wealthy citizen with vested family or business interests in the area, will be involved in conflict prevention and mediation as well as investment in the post-conflict areas of Northern Nigeria. According to Chatham House, in the decade ending 2014, Nigeria lost $182 billion through illicit financial flows. Al Jazeera Centre for Studies has also in the past estimated that Nigeria accounts for 68 percent of $60 billion siphoned illegally from Africa every year. Nigeria must block holes in its public finance sources by clamping down on transfer pricing, circumvention of capital controls and tax evasion, especially by large domestic and global corporate organisations. Despite being officially a secular state, we suffer from unhealthy identity politics through religion, ethnicity and the infamous indigene-settler

‘

There are ample opportunities for the new ministers to create wealth by opening up the multibillion-dollar marine, maritime and mining sectors to micro, small and medium enterprises. The more diffuse wealth is, the more secure Nigeria will be

dichotomy. The rivalries that the preceding matters generate threaten our common security and it is high time we used our laws for a start, make it illegal to demand information on religion and state of origin in official public or private sector documents. The indigene-settler differentiation divides us. It must be possible to live as Nigerians without such base cleavages. We also urgently need a robust law against hate speech, which can be either stand-alone or be embedded in the law that abolishes differentiation and division along ethnic and religious lines. It is important to adopt debating, negotiation and mediation to forestall and resolve conflicts. On the farmer-herder crisis, from all indications, what is in contention is grazing routes and how they overlap with crop farms. To preserve the security of food, dairy and animal assets but most importantly human life, Abuja in collaboration with leaders in affected states must negotiate with the relevant associations to achieve peaceful relations that are underpinned in law and no longer ancient, informal traditions. To conclude, going forward, we must do all to prevent conflict and preserve the peace because conflict kills children and women, it displaces people and creates refugees, triggers drug and weapons trafficking, cripple infrastructure and the economy. For maximum effect, any government intervention must be accompanied by investment promotion and humanitarian relief in water, food, health, and educational services. Nigeria needs us and we need Nigeria. All hands-on deck...there’s so much work to be done! Amoo is an investment banker based in Lagos

Uncle Bob and the failure of leadership in Africa

ith the death, last Friday, of former Zimbabwean strongman, Robert Mugabe, all but one of Africa’s independence leaders have passed away. There is a feeling by many contemporary African thinkers that either due to inexperience, naivety or inordinate desire to inherit the powers and privileges of the departing colonial officers, they failed to advance the independence they won beyond mere “flag” independence. In many African countries, socioeconomic conditions actually deteriorated after independence. No one single leader embodies this disappointment more than Bob Mugabe. Being a latecomer to the game of independence, Mugabe was expected to have learnt from the many mistakes of African leaders, who either due to struggle for power or bad governance, have ran their countries aground. Indeed, he started quite well. He led the country through a golden period of economic growth, infrastructure and educational development that was the envy of the rest of the continent. He prioritised the building of schools and hospitals turning Zimbabwe into one of the countries with the highest literacy rate in Africa. Zimbabwean agriculture was booming. With some of the richest farmland in Africa, it was known as the breadbasket of Africa and is a net exporter of maize, cotton, beef, tobacco, roses, and sugarcane. Knowing that the productive base of the country was still firmly in white hands, he even became very reconciliatory at independence, preaching reconciliation and unity of all races, assuring white farmers many of whom moved to Zimbabwe after 1980. But his handling of the land in question was

to be his greatest undoing. In the 1979, Lancaster House agreement that ended white rule and granted Zimbabwe independence, Mugabe and his group of freedom fighters were prevailed upon to wait ten years (1980 – 1990) before redistributing land to black majority forced out of their land (the land question was central to the bush war and demand for independence). Mugabe who once promised “none of the white exploiters will be allowed to keep an acre”, gave in after Britain and the US promised to provide $1 billion and $750 million respectively to fund the land reforms programme. But it was only a verbal promise as the only thing on paper was that Zimbabwe’s first democratically elected government would not force white farmers off their land. Regardless, riding on the wave of electoral victory and independence, Mugabe promised to resettle 160,000 black families on white-owned farms within three years – a promise he had no means of keeping even on a willing-seller willingbuyer basis. Yet after 20 years, not much has changed. Only about 10 percent of the arable land moved legally from the white to black hands and about 6,000 white farmers still occupied over half of Zimbabwe’s of arable land and over 850,000 black farmers were crammed into the rest. Also, his base of war veterans was getting impatient. The year 1990 came and passed, the promised money for land reforms didn’t come. There’s been a change of guard at 10 Downing Street and the labour government of Tony Blair was not willing to fulfil the promise made by Margaret Thatcher’s conservative government.

www.businessday.ng

Clare Short, Blair’s minister for International Development, in 1997, informed the Zimbabwean government that the election of a Labour government “without links to former colonial interests” meant the UK no longer had “special responsibility to meet the cost of land purchases”. The African Union and others managed to stay Mugabe’s hand until 2000 when the economically ruinous “fast-track land reforms” began. But real economic decline started in 1997 when the Mugabe was pressured into making huge payments as pension to war veterans of the Bush war that won the country independence. Inflation went up by almost 50 percent. But after losing a constitutional referendum, in 2000, seeking to grant him more powers, he abandoned any gradualist approach to land reforms and set the war veterans on white farmers. “If white settlers just took the land from us without paying for it...we can, in a similar way, just take it from them without paying for it,” Mugabe declared. In return, the Blair government-engineered Western sanctions against the regime and began a policy of demonization against Mugabe and his regime –a policy that persisted until Mugabe was deposed in 2017. The results were ruinous. The economy quickly unravelled. Hyperinflation ran riot, supermarket shelves were empty and the Mugabe’s famed school and health systems began to crumble. The country that was once a net importer of agricultural products now began exporting its professionals when unemployment became rife –some estimates have it that nine out of ten of the active population were out of work while

https://www.facebook.com/businessdayng

CHRISTOPHER AKOR

in 2017, unemployment was estimated to be around 85 percent. So bad was the situation that by 2009 inflation had reached 500 billion percent and the government was forced to dump the Zimbabwean dollar for the US dollar and South African rand. No doubt, the principle of land reforms was a good one, but it was badly managed and meant to reward party loyalists rather than genuine farmers. Party officials and war veterans, who neither had the expertise nor interest in farming were the real beneficiaries of the seized land and it was no wonder agriculture collapsed after the seizure. Mugabe failed to learn from the failure of African leaders before him and prioritised consolidation and retention of power over the economic emancipation of his people. Even as the economic crisis deepened, Mugabe resisted calls to stand down, telling whoever cared to listen that he was going to rule until his last day on earth. According to him, he had two goals in life: to reach 100 years and to govern until he dies. He therefore resorted to repression, massacred his own people, rigged elections and destroyed the economy just to achieve those goals. Sadly, the economic emancipation of his people was not one of his goals. That is the story of most African independence leaders.

@Businessdayng

BUSINESS DAY

Thursday 12 September 2019

EDITORIAL PUBLISHER/CEO

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

Bashir Ibrahim Hassan

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

Xenophobia: End the slide to mobocracy

bdication of responsibilities by leaders in both Nigeria and SA in the first week of September led to the street driving the narratives of their relationships. Mobs took over the major cities of SA in xenophobic attacks on fellow Africans. In Lagos, Ibadan and other places, mobs similarly engaged in an orgy of destruction of South African malls and businesses in Nigeria. Political and community leaders egged on the mobs of SA as they attacked their fellow Africans arousing outrage across the continent. In a reprise of previous incidents, the assailants accused their fellow Africans of either taking up their jobs or responsibility for crimes. They implied that their police and security systems had caved to the vendors of drugs on the streets of Johannesburg, Cape Town, Durban and Pretoria. The police in SA stood aside as mobs attacked black non-citizens from countries such as Z imbabwe, Zambia, Kenya, Rwanda, Ghana, and Nigeria. It soon became clear that they were following

an official script as Bongani Michael Mkongi, the Deputy Minister of Police Affairs argued the imperative of foreigners leaving SASA for its indigenes. Wors e, video evidence shows Cyril Ramaphosa, president of SA making similar statements during a campaign rally. Xenophobia has been recurrent in post-apartheid SA. Studies by the Human Sciences Research Council identified at least four broad causes. They are the relative deprivation due to intense competition for jobs, commodities, and housing; group processes including conditioning of citizens to think of the other as an enemy; SA’s exceptionalism or a feeling of superiority in relation to other Africans; and nationalism that excludes other Africans. Poor service delivery and an increase in the number of foreigners from two million to four million over a ten-year period also contributed. A report from the International Organisation for Migration stated that, “Local leadership could be illegitimate and often violent when emerging from either a political vacuum or fierce competition.” It also added

that, “such leaders enhanced their authority by reinforcing resentment towards foreigners.” Geoffrey Onyeama, minister for foreign affairs had to counter vigorously the verbal assault of a South African minister who pointedly accused Nigerians of contributing to the crime situation in their country. The real challenge in all these is the failure of leadership in setting agenda, drive and manage the narrative, and redirect it from violence. In Nigeria, tardiness in responding to the reports from SA by the federal government created a gap that allowed the street to take over. Citizen anger kept rising for days as reports of the violence came over on social media. The federal government did nothing. The sequence of events also points to the failure of security intelligence. Weeks before the vandalisation of Shoprite stores, a team claiming to represent the National Association of Nigerian Students had blocked a Shoprite store in Ota, Ogun State. They prevented entry and exit. They came to register the displeasure and annoyance of Nigerians over the attacks on fellow citizens out in SA. This was a clear signal,

but was ignored. Worse off, there was inadequate response when the reprisal happened. More significantly, the violence on the streets illuminates the dangers of mobocracy. The tenor of public discourse lately has promoted mob action as both deterrent and punishment for failures of public officials. It is a wrong and dangerous prescription. B u s i n e s s D ay c a u t i o n s against the advocacy for mobocracy even by members of the elite. The reference to the Nuremberg treatment as a typical jocular shorthand Nigerian-style must stop. No s o ciety pro gre ss e s with rule by the street. Evident in the Lekki area of Lagos, the mob attacked some citizens for the offence of driving SUVs. They assumed they must be public officials or one of those who have enriched themselves from the public till. L eaders in the private and public sectors must rise and take concerted action to change the tenor and direction of discourse against mobocracy. Mobocracy is a clear and present danger to our democracy. Cut it off now.

EDITORIAL ADVISORY BOARD Imo Itsueli Mohammed Hayatudeen Afolabi Oladele Vincent Maduka Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Mezuo Nwuneli Charles Anudu Tunji Adegbesan Eyo Ekpo Wiebe Boer Paul Arinze Boye Olusanya Ayo Gbeleyi

ENQUIRIES NEWS ROOM 08169609331 08116759816 08033160837

} Lagos Abuja

ADVERTISING 01-2799108 08033225506 SUBSCRIPTIONS 01-2799101 07032496069 07054563299 DIGITAL SERVICES 08026011296 www.businessday.ng The Brook, 6 Point Road, GRA, Apapa, Lagos, Nigeria. 01-2799100 LEGAL ADVISERS The Law Union

MISSION STATEMENT To be a diversified provider of superior business, financial and management intelligence across platforms accessible to our customers anywhere in the world.

OUR CORE VALUES

BusinessDay avidly thrives on the mainstay of our core values of being The Fourth Estate, Credible, Independent, Entrepreneurial and Purpose-Driven. • The Fourth Estate: We take pride in being guarantors of liberal economic thought • Credible: We believe in the principle of being objective, fair and fact-based • Independent: Our quest for liberal economic thought means that we are independent of private and public interests. • Entrepreneurial: We constantly search for new opportunities, maintaining the highest ethical standards in all we do • Purpose-Driven: We are committed to assembling a team of highly talented and motivated people that share our vision, while treating them with respect and fairness. www.businessday.ng

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

Thursday 12 September 2019

comment is free

COMMENT

Send 800word comments to comment@businessday.ng

Deploying the neighbour principle post-xenophobia attacks THE PUBLIC SPHERE

CHIDO NWAKANMA

major takeaway from the reprisal attacks on SA owned businesses in Nigeria is the need for more collaboration and engagement between the Nigerian police force and citizens in affected communities to track and contain the looters. The police would have to drive the engagement for optimal returns to all stakeholders. The opportunity is the application of the “neighbour principle”. It is a principle of English law which states, “a person should take reasonable care to avoid acts or omissions that are foreseeable as likely to cause injury to a neighbour.”. It is a significant pillar of insurance practice. Those who took advantage of the reprisal attacks, looting shops in malls with Shoprite stores as anchor tenants are a threat not only to the affected shop owners but to consumers. More people are at risk than is apparent. Make no mistake about it. Thieves used the op-

portunity of the mob to rob. They will attempt to sell off those items in the market. The police have rendered the first public service by warning potential customers against patronising items offered at ridiculously low prices. They need to do more. The police should open a register in the stations or district offices closest to each of the affected shops. Shop owners should collaborate with the police. They would offer a detailed inventory of their stolen stocks such as they would do to their insurance companies. The inventory should include tracking identifiers such as registration or license numbers, product and device IDs for laptops, certificate numbers for iPhones and things like IMEI numbers for every other type of phone. Watches, electronics, and such other items have serial numbers. Blow the whistle communally if someone suddenly has an unexplained device purchase. Look closely and check with the police if you buy an item at prices that are not congruent with existing market rates. The Shoprite heist happened at a time Nigeria is going through what we could term a moral crisis. Recently, the FBI drew up a list of 77 persons wanted for fraud in the US. Some of those already identified are persons who often made a show of their “new” money to the applause of many. No one could

account for their cash or its source. Moreover, major allegation laid by the South Africans against Nigerians is the claim that the latter is at the vanguard of criminality in illicit drug trades and others. Nigerians reacted against the claim saying, “while there may be some criminals, they do not describe our country. “Our country has communal values against theft, unexplained wealth and inventory in homes and on persons.” Societies work through collaboration. As an old radio jingle stated, “armed robber no be spirit.” They live in the community. In a shop at the Sangotedo neighbourhood during the heist period, the shop attendant, his friends, and his madam were discussing the incidence. Their consensus was that those who got the items were “lucky”. I rebuked them, pointing out that it was thievery. No! they claimed, stating that security personnel including soldiers, allegedly encouraged and permitted the crowd to move in. I said it was untrue and impossible. Even if it were so, the security personnel do not own the shops. We all know what is right and wrong. Suddenly, the shop owner agreed. She said her husband took offense at the move to participate in the act. “He condemned the notion,” she said. Citizens are confused as to what

‘

Reclaiming the moral virtues of Nigeria would be central and contributory to any effort aimed at repositioning our reputation. No amount of news releases or press conferences would make a dent

moral values to uphold. We must collectively proclaim and defend the right norms to eliminate that confusion for the average Nigerian. Reclaiming the moral virtues of Nigeria would be central and contributory to any effort aimed at repositioning our reputation. No amount of news releases or press conferences would make a dent. Actions provide the basis for narratives and repeated narratives establishes a reputation. Once the activities of Nigerians change, the stories would change. The law enforcement agents must work with citizens to uphold the laws of the country. Laws, draw on the moral codes of a society. Ultimately, the police can only do so much as citizens empower them, based on shared values. The professional team of the Nigeria police communications division needs to drive this effort through public service messages that link the public interest with the role of the police. Do the right thing. Do it right

Nwakanma is a Visiting Member of the BusinessDay Editorial Board and serves on the Adjunct Faculty at the School of Media and Communication, Pan Atlantic University, Lagos. Email chidonwakanma@ gmail.com.

The leadership perspective of Robert Mugabe

ne of the famous quotes of Mother Teresa is, “At the end of life we will not be judged by how many diplomas we have received, how much money we have made, how many great things we have done. We will be judged by ‘I was hungry, and you gave me something to eat, I was naked, and you clothed me. I was homeless, and you took me in’.” The demise of Robert Mugabe on September 6, 2019, at the age of 95 years validates the above quote. The essence of life and leadership is the same. It is how well you advance others and humanity with the opportunities you grab in life. Robert Gabriel Mugabe grabbed the leadership opportunity as one of the revolutionary fighters that liberated Zimbabwe from the British white minority rule. He became the prime minister in 1980 and became the President in 1987 until he was forced out in a bloodless coup in 2017. Robert’s rise to power is not an exception but what he did with the power is a case study for students of leadership. His route to power was like that of Nelson Mandela of SA, Lee Kuan Yew of Singapore and other nationalists. However, opinions of the outcome of the Mugabe 37-year leadership among the Zimbabweans is that he left behind bad relationships and results., This is evident in the country’s current economic state, coupled with scars in victims of his brutality. If the two significant elements of leadership –results and relationships –that create legacies are not right, the person leading is not a leader but someone occupying a leadership position. In my journey as a leadership coach and trainer, I had been teaching leadership through a model I developed in

2014. Your leadership efficiency is a product of your views, capabilities, and influence. Your leadership view is how you perceive your title, assignment, and role as a leader. Is it to serve or be served? The leadership view, also known as perspective or attitude to leadership determines the capability of the leader to create a vision and influence others to achieve it. Whenever you see a leader that is not doing things to advance people, process or society, check his or her leadership perspective. Alternatively, your views about leadership are the foundation upon which your actions and behaviours are built. Unfortunately, most of the leaders in the political space have a faulty perspective of their roles as leaders. Lee Kuan Yew’s view of leadership helped him serve his people within his capacity as the prime minister of Singapore. He turned a third world country without water into a first-class industrial and tourist centre. His vision for the country was above his ambition and reflected in the average standard of living and the strength of the economy of Singapore. Nelson Mandela’s view about leadership helped him know when to quit and not to seek a second term in office, unlike most of his African contemporaries. He left politics when the ovation was loudest. Contrarily, the late Gabriel Mugabe’s platform was used to liberate his people and subsequently incarcerate them because of his views about leadership. No one was qualified to be the president of Zimbabwe except him. His vision was to remain in power for life and kill as many political opposition members and

www.businessday.ng

tribes to remain there. The economy is not a different narrative. Although he gained rhetoric popularity for sending the white farmers away and reclaiming the land for the people, the decision, in the long run, did not create any economic impact but impoverished his people. His reign as a leader was marked with violence, financial mismanagement, and corruption which created no opportunities nor legacies for his people. He is thus, one of the leaders who scored poorly in both relationships and results given the jubilations in the streets of Harare when he was disposed of in 2017. A leader is the one who is unbiased in his decision and acts in the best interest of the people. Robert used his party, the ZANU-PF and the government machinery to advance himself in all fronts and at the detriments of the people he once defended. The trio – Nelson Mandela, Robert Mugabe, and Lee Kuan Yew – had one thing in common. They all had the platforms to lead and influence others. However, it is not the platforms that make genuine leaders, but what is done with the platforms that defined them as leaders or rulers. The fitness test for leadership is, therefore, the ability of the leaders to subjugate their ambition, greed, ego and self-seeking decisions for actions that are in the long-term of interest to the people and the society. Leaders eat last, according to Simon Sinek, hence, a leader must put his country first. For Africa to advance, we need leaders who are selfless in all spheres of life, be it in corporations and politics. We need leaders who can kill their desire to remain in office forever but breed successors

https://www.facebook.com/businessdayng

POSITIVE GROWTH WITH BABS

BABS OLUGBEMI

who will bring new thinking and ideology to governance. We need business leaders who will adequately reward employees before showing off their wealth. We need those who will understand that the only essence of power and position is to advance others and to put others ahead. We need leaders who can make bold decisions in the interest of our society. We need leaders! Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, the Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.

@Businessdayng

Thursday 12 September 2019

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

BANKING

Big banks’ FX trading income dips 29% as naira remains fairly stable ISRAEL ODUBOLA

he relative stability of the naira between 2018 and halfyear 2019 saw Nigerian top banks realize fewer cash from foreign exchange trading. Nigeria’s tier-1 lenders – Access, GTB, UBA, Zenith and First Bank collectively realized N22 billion in net gains from forex trading mid-year 2019, which is 29 percent less than N31 billion made a year earlier. “ This is expe cte d,” said Yinka Ademuwagun, research analyst at Lagos-based United Capital Plc. “The stability of naira has been counterproductive for banks because the only reason when they would gain or lose is when there is volatility. Once volatility is taken out, gain will be marginal,” He posited. Foreign exchange is computed as trading income on foreign currencies plus gains (losses) from revaluation of trading position. It occurs when a bank offers services in foreign curren-

cies. The value of the foreign currency, when converted to the local currency say the naira, depends on the prevailing exchange rate. If the value of the local currenc y appreciates after the conversion, banks will record foreign exchange gain, and viceversa. This is important for banks as they receive foreign currency payments from offshore cus-

tomers and also from domestic customers that sends payments in foreign currency. Analysts say the reduction in the number of foreign exchange windows over the past years has seen opportunity for arbitrage fizzle out, hence why lenders had smaller gain from forex trading. Nigeria currently operates a system of mul-

tiple exchange rates. The International Monetary Fund has warned that the absence of a single widow creates confusion and deters foreign investments. In late 2015, the bank pegged the local currency at roughly N200 against the dollar until June 2016 when tumbling oil prices pressured the naira, forcing the apex bank to devalue it to

about N305, and introduce measures to save it from weakening further. Some of the strategies include hiking monetar y polic y rate to a record hike 14 percent to curtail inflationar y pressure that may result from exchange rate pass-through to domestic prices, and restricting access to forex on 41 items, that could be produced locally.

Of recent, the Buhariled government ordered the apex bank to halt forex supply for food importation, saying forex should solely be used to diversify the economy. For half-year periods of 2018 and 2019, when naira traded around N360 per dollar on I&E window, most top lenders had declines in their net trading income. FX trading income of Zenith Bank, GTB and First Bank dipped some 17 percent, 70 percent and 64 percent respectively mid-year 2019. While UBA recorded 31 percent increase in FX gain, Access saw losses reduce to N19 billion in 2019 from N33 billion a year before. There are no signs if the fiscal & monetar y authorities will unify the windows in mid-term. It is generally believed that naira float would open up the economy to foreign capital to help stimulate economic growth. This is why people are calling for harmonised window. If we have just one window in Nigeria, it becomes harder for banks to exploit,” Ademuwagun added.

MARKET

Listed firms to contribute over N8bn of profits yearly to improve police welfare …companies struggle to remain profitable as economy grows sluggishly

OLUWASEGUN OLAKOYENIKAN

t least N8 billion would be contributed from the profits garnered by companies listed on the Nigerian Stock Exchange (NSE) every year to support police welfare following the newly signed Nigeria Police Force Trust Fund Act 2019. The estimated amount is based on the assumption that the companies would remain profitable and not underperform their net profit performance for the full-year 2018 going forward. The Nigeria Police Force Trust Fund Act 2019 provides the establishment of the Nigeria Police Trust Fund,

which compels companies operating business in Nigeria to contribute 0.005 percent of their net profits for a special intervention fund. Also, the trust fund would consist of an amount constituting 0.5 percent of the total revenue accruing to the Federal Account. Checks by BusinessDay on the financial results of 142 publicly-owned companies that reported their fullyear 2018 audited results at the Lagos bourse show an aggregate profit of N1.71 trillion was recorded by 100 companies. This compares with N1.36 trillion recorded in the previous financial year by 111 companies. With the introduction of the Nigeria Police Trust

Fund, this implies N8.55 billion will be contributed to the trust fund even as more companies continued to slump into losses and operate in an increasingly tough environment despite exiting economic recession since the second quarter of 2017. “The issue is not just the amount companies have to pay, it is the fact that this extra burden will not solve the police funding problem,” said Taiwo Oyedele, Head of Tax and Corporate Advisory Services at PwC Nigeria. “Education tax has not solved our education funding problem, IT tax has not revolutionized technology in Nigeria so why does anyone think a police fund levy will be different?”

In addition to the two sources, the fund would consist any take-off grant and special intervention fund as may be provided by the three tiers of government ; money as may be appropriated to meet the objectives of the Act by the National Assembly in the budget; as well as aids, grants and assistance from international bilateral and multilateral agencies, nongovernmental organisations and the private sector. The funds are expected “to among other things, provide funds for the training and retraining of the personnel of the Nigeria Police Force (NPF), provide state of the art security equipment and machineries to improve

the general welfare of the personnel of the force,” according to an explanatory memorandum of the Act seen by BusinessDay. The Nigeria Police Force Trust Fund Act 2019, which aimed at improving funding and training of personnel of the police force, was passed by the upper chamber of the National Assembly on April 9, 2019, and signed into law by President Muhammadu Buhari on July 2, 2019. Funds contributed to the trust fund are expected to be utilised for the procurement of operational vehicles; construction of police stations; provision of living facilities such as quarters or barracks for the NPF. Others include financing the procurement

of books, instructional materials, training equipment for use at Police Colleges and such other similar training institutions; meeting the cost of participation by the personnel of the NPF at seminars and conference relevant to, or connected with, policing or intelligence gathering. The accrued fund will be managed by Nigeria Police Trust Fund Board of Trustee including a retired Inspector-General of Police (IGP); the IGP or his representatives as an ex-officio member; a representative of federal ministry of interior, justice and finance; a representative of the civil society group and organised private sector, among others.

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: Samuel Iduh

Thursday 12 September 2019

COMPANIES&MARKETS

BUSINESS DAY

Business Event

AGRICULTURE

Unity Bank partners Binkabi to launch agro-trading platform SEGUN ADAMS

igerian lender, Unity Bank, has partnered with Binkabi to launch an agro commodities trading platform in a bid to boost the availability of credit in the agriculture sector whilst providing an opportunity for retail investors to diversify into agriculture. A trading platform, like Binkabi, enables buyers and sellers to place trade and monitor transactions electronically, bringing transparency to the process of exchange, as well as aiding price discovery and increasing liquidity in the market. The platform, Binkabi, would provide a fast and secure way to buy or sell agricultural commodities or to take out a loan whilst waiting for better prices to sell, Unity Bank said at a media launch Tuesday. According to the lender, the move to partner with Binkabi is in line with the bank’s focus on the agriculture sector where it

has a minimum exposure of 30 percent to 40 percent of its loan book. “Unity Bank has gone back to its roots; the agriculture sector which is the very reason it was founded in the first place,” said Usman Abdulqadir, Executive Director, Corporate Planning and Compliance, Unity Bank. In Nigeria, the majority of farmers fall in the low-income bracket and lack access to capital which impedes the growth of their venture. Also, the inability to secure modern storage facilities means a huge proportion of farm output gets spoilt between farm gates and the market. As a result, farmers are forced to sell their products during the harvest seasons where the price is usually depressed and therefore make little return with planters who have borrowed defaulting on loans. To solve the problem the Binkabi platform leverages Blockchain technology to tokenize warehouse receipts for farm products which it has

sorted and graded before storing in the best conditions to ensure that the commodities are of optimal quality. The resultant effect would be a tradable and bankable asset against which lenders can give loan to the farmers for expansion, and also allow short-term facilities which would allow cash-strapped planters to provide for themselves and their families. Asides promoting financial inclusion since users of Binkabi would open a Unity Bank account on the platform, the availability of credit to farmers would enable them to register their lands and use it as collateral, unlocking dead capital. Maurui Tang, Co-founder and Chief Operating Officer, Binkabi said price would be determined through survey across 15 major markets in Nigeria as well as in partnership with a commodity exchange in Nigeria. Retail investors would be allowed to invest in as little as 1kg of an Agric product, Tang added.

L-R: Rudy McLean, MD, Symrise Nigeria; Sofiane Berrahmoune, Sub Regional Flavour, director, Africa & Middle East/MD, Symrise ME Flavor Division; Daniel Ibarra, vice president, EAME Cosmetic Ingredients Division; Alexander Lichter, vice president, Flavour Sales EAME, and Rene Hemeier, vice president,

TECHNOLOGY

Microsoft shows support as financial services industry faces digital transformation SEGUN ADAMS

icrosoft has reaffirmed its commitmenttostreamlining and enabling digital transformation in the financial servicesindustryastheglobaltechnology company hosted a roundtable in partnership with Harvard Business Review to educate and highlighthowadvancedtechnologies can disrupt the industry. The event was aimed at Chief Financial Officers (CFO) and Chief Operations Officers

(COO) and provided insight on how the top executives have now become an integral part of the decision making and rollout processes of new innovative and advanced technologies in their organizations. Mayowa Agboade, Director Industry Solutions - Financial Services at Microsoft noted that organisations must be highly aware of the ‘uncomfortable’ shift in roles that has presented itself in the face of digital change. “The role of today’s CFOs and finance executives needs

L-R: Rilwan Akiolu, Oba of Lagos; Omotunde Adenusi, portfolio manager, mainstream brands, Nigerian Breweries Plc; Kola Jamodu, chairman, board of directors, Nigerian Breweries Plc; Funso Ayeni, National trade marketing manager, and Adesoji Ajayi Bembe, Obanikoro of Lagos, at the Oba of Lagos’s Palace at a courtesy visit to present the new Goldberg bottles to the Oba

to be broader and requires an increased appreciation of technology.” He said. “The emergence of the digital age is fundamentally changing the priorities and roles of today’s finance executives with security at its core.” While traditional roles that involve cost reduction as well as sourcing new revenue streams remain at the core of the CFO and COO function – exploring new opportunities for growth has emerged to the fore. Continue online @www. businessday.ng

AGRICULTURE

SABEX unlocks export market for Nigerian farmers HOPE MOSES-ASHIKE

ABEX, the world’s first end-to-end blockchain commodities trading and financing platform, was formally unveiled to policy makers, agriculture value chain players, investors, international financiers and development agencies at the 2019 edition of Agriculture Summit Africa, organized by Sterling Bank Plc, at the weekend in Abuja. Powered by Sterling bank, BinkabiandAFEXCommodities Exchange, the digital commodities trading platform, provides real time credit finance for farmers, secure storage and a ready market for both farmers and buyers to transact thereby reducing post-harvest wastage of farm produce across the country. It is the future of agriculture. Unveiling SABEX, Abuba-

kar Suleiman, Chief Executive Officer, Sterling Bank, said the bank’s partnership with AFEX and Binkabi has created a viable and efficient agricultural blockchaincommoditiesmarketplace which will tackle challenges that include post-harvest loss, inadequate finance and poor market linkage,amongotherschallenges facing farmers. SABEX will furtherde-risktheagriculturesector making farmers more qualified for commercial lending. According to Abubakar, SABEX is an enabler that guarantees the average farmer improved access to finance for agricultural activities, movement of harvested crops to a storage facility without much loss, and the ability to sell and earn immediate value. The platform will decentralise commodities trading, and reduce inter-mediation in trade,

while distributing profit more widely across the value chain. Quan Le, CEO, Binkabi, noted that the vision was to ensure that the commodities trading network becomes fairer and more profitable through collaborative efforts which leverage blockchain technology. “We understand that if financial markets can fail ordinary people in the developed world then the agricultural markets are failing ordinary farmers in the developing world. The only difference is that these farmers don’t have a voice - it is a silent crisis. This has motivated us to work with like-minds to develop a marketplace of end-buyers and end-sellers of commodities to help reduce inter-mediation in trade, distributing profit more widely in the value chain. Continue online @www. businessday.ng

www.businessday.ng

L-R: Enyinna Nwigwe, Nollywood actor; Eti-Inyeme Godwin Akpan, an awardee of the 25 Under 25 Awards, and Ismail Olalekan, head, home and broadband, Airtel Nigeria, at an award presentation at the Airtel Sponsored 25 Under 25 SME 100 Awards, at Terra Lagos.

R-L: Folashade Adefisayo, commissioner for Education Lagos State, representing Babajide SanwoOlu, governor of Lagos state; Steve Babaeko, CEO, X3M Ideas Limited, and Ayodeji Ojo, principal, Agidingbi Junior Grammar School, at the Commissioning of the school’s renovated Block-4 Building housing the new state-of-the-art library facility, Counseling centre and the Sick Bay of Agidingbi Junior Grammar school Ikeja all projects sponsored By X3M Ideas Limited as the company’s 2019 Corporate Social Responsibility project in Lagos

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 12 Seprtember 2019

BUSINESS DAY

FEATURE Xenophobia: A short ride through Southern Johannesburg lived together. It acquired a cosmopolitan and politically progressive feel, and was one of the first identifiable gay and lesbian areas in urban South Africa. Today, from abandoned skyscrapers to closed shops whose verandas may not have seen a broom in years, Hilbrow has become a shadow of its former self. It is now the epicentre of the drug business, prostitution, and crime with high levels of population density, unemployment, and poverty.

FRANK ELEANYA

t was mid afternoon and the clouds in the northern region of Johannesburg - one of the most affluent places in the country - looked too bright. This city has not seen rain since April. The EuropCar driver who brought me from the airport to my hotel, Palazzo Montecasino, Fourways, on Monday was full of excitement because Spring was around the corner. I had tried to draw him into talking about the reports of attacks against foreigners happening in some parts of Johannesburg, he merely replied in a rich Swahili accent,“They are very ignorant people,” and moved the conversation to the weather and traffic. The wind on this particular day wasn’t high like it was on Monday, but it was cold enough to warrant a longsleeve shirt buttoned to the neck and worn under a thick cardigan. I was in the company of two other journalists from Nairobi and we were all pumped for our tour of Soweto. My first encounter with Soweto was as a child from the movie ‘Sarafina’, a 1992 South African musical whose plot focused on students involved in Soweto uprising. “Will you take us to her school?” I asked the tour guide who identified himself simply as Vuyo. It wasn’t the first time service providers here were identifying themselves by first names. South Africans probably are not big on offering surnames. I could still envision the songs and heavy stamp of feet of the students led by the female character as they marched on the streets to resist domination of the Afrikaans. “She was merely a character symbolising the resistance by students in Soweto,” Vuyo replied with a smile. Like many misconceptions, it was the first time I was hearing that as I had always thought Sarafina was real life. “Over 600 students died from wounds sustained from bullets fired by the police deployed by the apartheid government.” Apartheid means apartness. Our history class on xenophobia proper began in front of the house where Nelson Mandela lived as soon as he retired from politics, at upper Houghton - another affluent neighborhood. The prisoner-turnedpresident retired from party politics in 1999 and from public life in June 2004 at the age of 85. Our tour guide who had stopped by an express gas station at Fourways to fill his tank started by telling us how Mandela left the house to his third wife, Marcia who later donated the house to Mandela’s grandchild who wasn’t even her baby. There was no sign on the highfenced house because they didn’t want crowds camping around his house everyday to catch a glimpse of him. Those who arranged the house apparently wanted him to have some peace before his death. But there were

Hilbrow. Photo Credit: Kiruti

Black-only prison where Mahatma Gandhi was kept in South Africa during Apartheid. Photo Credit: Kiruti

St John’s College is arguably the most expensive college in Johannesburg mostly attended by affluent white families. Photo Credit: Kiruti

stones where people had written messages for him outside the house. Mandela had reportedly told journalists that he was “retiring from retirement” to spend more time with family and friends. He later died at the age of 95. “What we realised, too late, was that Mandela only brought us political and social freedom, but we needed to win our economic freedom,” Vuyo said. The vehicle was back on the road and making its way to a bridge. The Mandela Bridge When you get to the Mandela Bridge the contrast in living standards began to become clearer. Vuyo explained why the bridge was symbolic for many South Africans. After apartheid, two strong ideologies emerged. First was Nelson Mandela who spent almost the entire apartheid regime in prison but while there managed to hone his skills in negotiation. When he came out of prison he expressed belief that by cultivating white people and allowing them to coexist within the South African society with blacks, that black South Africans will eventually come to become like the

whites economically. Mandela led the ANC in negotiations with de Klerk to end apartheid and bring about a peaceful transition to nonracial democracy in South Africa. But one of his major ‘sins’ was asking the black nation nursing fresh scars from fighting for their freedom to do something they never imagined doing - forgive. Mandela established the Truth and Reconciliation Commission (TRC) in 1995, which investigated human rights violations under apartheid, and he introduced housing, education, and economic development initiatives designed to improve the living standards of the black population. But his support base had dwindled as a result of insistence on peaceful integration. The inequality between blacks and their former white overlords had grown so much that the black leaders opposing Mandela felt justified that a more radical - any means necessary - approach was needed. Mother of the Nation The second ideology was championed by Winnie Madikizela-Mandela, the second wife of Mandela who actually lived through the horrors of apartheid while Mandela was in prison. Apart from seeing little children, mothers and able bodied men murdered on the streets and in their homes, she too had shed her blood fighting the Afrikaans - the Dutch who were responsible for the segregation between whites and blacks. In doing so, she had become so popular that almost the entire black nation rallied behind her. “If you are free to yourselves you must break the chains of oppression yourselves,” she once said in 1976, “Only then can we express our dignity, only when we have liberated ourselves can we cooperate

with other groups. Any acceptance of humiliation, indignity or insult is acceptance of inferiority.” She is still referred to as “Mother of the Nation”. After her husband had been released and was elected the first black president, Winnie told him that the only way to address the economic situation in South Africa was by taking back the lands white supremacists have cornered and giving them back to blacks the real owners. Her approach also included taking the businesses built by the whites. She didn’t believe that peaceful coexistence with the whites would address the inequalities of apartheid. Her husband, Mandela vehemently refused. It ultimately led to a divorce. As radical and aggressive her approach was, it drew the support of many South African leaders many of whom quickly moved to adopt her approach. Against the advice of Mandela, many regions like Hilbrow which used to be the Hollywood of South Africa, and Orange City, black leaders seized lands and businesses forcing many whites to relocate or leave South Africa all together. Hilbrow is currently at the heart of the drug war raging in the country. In Soweto today, only one white family lives in the entire region. “A big part of the problem we have today is that while our brothers from other African countries were taught how to trade, the average South African was not. So once the whites left, our people who took over lacked the capabilities to run the businesses left behind. The businesses eventually died and the place has become a ghost town,” Vuyo said. In the 1970s Hilbrow was an apartheid-designated “whites only” area but soon became a “grey area”, where people of different ethnicities

The labour question The whites in Johannesburg migrated to the north of the city for fear of attacks. The north soon became so rich that poor blacks who couldn’t afford the quality of life there restricted themselves to the southern part of Johannesburg. From the south, many of them would come to work for white companies in the north. But while they made decent wages from working in the north, it still wasn’t enough

to afford a quality lifestyle or afford their children a place in schools like St John’s College. The situation worsened when African immigrants began to be preferred by employers in the north. “The anger that the whites have taken everything away from us and are exploiting our African brothers against us is what is causing the protest. It is not right, but it is what many of our people have been taught by apartheid,” Vuyo said. African migrants from different countries including Nigeria, Zimbabwe, Tanzania, Kenya, Sudan, Congo etc, all come to South Africa to search for greener pastures. When they arrive from countries where the currencies are relatively weaker than the rand, these migrant workers usually will work for less than what South Africans would be willing to accept as living wage. He had stopped in front of a road sign with the inscription ‘Welcome to Soweto’. Fight for the narrative Abena - not real first name - our second tour guide who had stayed silent almost the entire journey chipped in. She says politicians are perhaps the biggest contributors to the escalating xenophobic attacks. Those who control the narrative of apartheid are the leaders in various political capacities. For different reasons they stand to benefit from propagating anti-foreigners’ rhetorics. “We don’t hate our African brothers, it is anger at our leaders and how they have failed our people,” Abena said. We were now standing within the premises of the Apartheid Museum starring at the statue of Hector Pietersen, a South African boy who was shot and killed during the Soweto uprising, when police opened fire on students protesting the enforcement of teaching of Afrikaans.

Thursday 12 September 2019

BUSINESS DAY

Investor

In association with

Helping you to build wealth & make wise decisions Market capitalisation

NSE All Share Index

NSE Premium Index

N11.721 trillion

Week open (30– 08–19)

31,924.51 27,525.81

N13.391 trillion

2,313.67

Week close (06– 09–19)

27,146.57

N13.207 trillion

2,271.82

Year Open

Percentage change (WoW) Percentage change (YTD)

-1.38 -13.63

2,241.37

-1.81 3.50

The NSE-Main Board

1,456.29 1,095.92 1,086.38

-0.87 -24.55

NSE ASeM Index

NSE 30 Index

NSE Banking Index

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

130.95

723.46

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

291.84

2,272.45

1,254.54

1,212.79

801.09

1,438.19

426.64

778.95

1,087.68 1,073.09

321.18

106.85

526.11

198.41

1,736.83

1,091.19

925.65

321.83

107.74

519.05

198.38

1,720.31

1,097.67

933.45

778.95

0.00 -1.87

-1.34 -24.28

0.20 -19.33

0.83

-1.34

-0.02

-14.82

-30.69

-34.36

-0.95 -22.99

0.59

0.83

-11.33

-14.82

Investors in International Breweries, UPDC, PZ, GSK, Total stocks worst hit in August Iheanyi Nwachukwu

nvestors at the Nigerian Bourse who held their stocks till August 30, 2019 (the last trading day of that month) recorded approximately N116billion loss. The stock market which remains pressured into September had opened the month of August with value at N13.507trillion but decreased remarkably to N13.391trillion at the end of the review month. While the Niger ian Stock Exchange (NSE) All Share Index (ASI) closed lower from August open level of 27,718.26 points to 27,525.81 points, down by 0.7percent, investors that were worst hit are those holding shares of International Breweries Plc which decreased by 68percent, UACN Property Development Company (UPDC) (-53.9percent), PZ Cussons Plc (-51.2percent), G l a xo S m i t h K l i n e C o n su m e r Nigeria (-50.3percent), and Total Nigeria Plc (-50.7percent). Market heavyweights had dictated the movement of the overall index as witnessed in the later part of the review month. This came despite improvement in market breadth and more advances than declines especially in the third trading week in August. Others stocks that failed to impress investors last month with over 40pecent value

d e c l i n e a re : T h o m a s W y a t t Nig er ia Plc (-90.16p ercent), UACN (-48.7percent), Okomu Oil Palm Plc (-45.5percent), Nigerian Breweries Plc (-40.1percent), Guinness Nigeria Plc (-42.5percent), Forte Oil Plc (-42.7percent), Flour Mills Nigeria Plc (-41.6percent), FBN Holdings (-40.3percent), ETI Plc (-48.2percent), Eterna Plc (-40.4percent) and Dangote Sugar Refinery Plc (-41percent). Despite the current bearish trend in the market, FSDH Research

www.businessday.ng

analysts still see opportunities in the equity market. Their stock picks are those that have history of good performance and good dividend payment. The analysts believe such stocks’ short-to-medium term outlook are good. Amid the record negatives in August, some other investors gained as some shares recorded remarkable appreciation. With this development, more investors should position in dividend paying stocks whose share prices have recently dropped significantly.

https://www.facebook.com/businessdayng

Those that have reasons to smile because of August performance are equity investors in C&I Leasing Plc which recorded 310percent increase in its share price. Others are BOC Gases Nigeria Plc, Dangote Flourmills (+205.1percent), MTNN (+56.7percent), and Sterling Bank (+31.6percent). Other stocks that rallied in August are: Caverton (+9.9percent), Chams (+30percent), John Holt (+25percent), Union Bank (+22.3percent), and Lafarge (+14.5percent).

@Businessdayng

“We reiterate our view that the blend of a compelling valuation story and positive macroeconomic environment should propel the market in the medium term,” said Cordros Research analysts in their August 30 note. They advised investors to tread the cautious trading path in the short term. The last trading week in August closed in the red as sell pressure dominated most trading sessions on the back of capital appreciation that was recorded in the preceding week to August 23. Other stocks that underperformed the NSE ASI having recorded remarkable dip of over 20 percent are: University Press Plc (-37.2percent), Unity Bank (-34.6perent), Zenith Bank (-25.4percent), Unilever (-23percent), United Capital (-29.1percent), UBA (-24percent), Transcorp (-22.7percent), and Stanbic (-20.8percent). Also on the losers league last month include Seplat (-37.9percent), Presco (-30percent), Oando (-22percent), NPF Microfinance Bank (-31.5percent), NEM Insurance (-29.6percent), Neimeth (-35.9percent), Nascon (-27.8percent), NAHCo (-32.9percent), MRS (-26.8percent), Linkage Assurance (-33.3percent), Jaiz Bank (-20percent), Honeywell (-21.9percent), GTBank ( - 2 0 . 6 p e rc e n t ) , C o n t i n e n t a l Rei nsura nc e (- 24. 1p erc ent ), Conoil (-27.7percent), Champion Breweries (-23.1percent), and CAP Plc (-29percent).

Thursday 12 September 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

United Capital Investment Views

Investor’s Square

NSE-ASI down 1.4% as selling interest concentrates on large-cap stocks

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

n the prior week, there was a mix bout of buying and selling interest in the equity market space. However, most of the buying interest were titled towards the less weighted stocks – UACN (+21percent), International Breweries (+23.1percent), and Cornerstone (+28.6percent, driven by corporate actions. Accordingly, given that the strength of the selling interest was concentrated on the large-cap stocks – MTNN ( - 2 . 1 p e rc e n t ) , D a n g o t e Cement (-3.9percent), and GTBank (-4.4percent), the overall market declined by 1.4percent week-on-week ( w / w ) a n d Y T D re t u r n worsened to -13.6percent to close at 27,146.6points. Investors lost N184.5billion w/w as market capitalisation closed at N13.2trillion. Activity levels improved, as average value and volume traded rose to 28.5percent w/w and 54.4percent w/w respectively. Performance across the s e ctors was mixe d,

as the Insurance sector (+0.8percent) led the gainers camp, follow ed by Industrial goods (+0.6percent) and Banking (+0.2percent) indices, thanks to buying interest in Continental Reinsurance (+12.4percent), Linkage Assurance (+8.3percent), CCNN (9.8percent), Lafarge (+1.8percent), Access Bank (+6.2percent) and UBA (+ 4.3percent). On the flipside, the Consumer index trended southwards (-1.3perrcent) owing to price declines in Nigerian Breweries (-1.3percent), Dangote Sugar (-2.8percent), and Nestle (-3.2percent). In the Telcos space, MTNN reversed recent gains, down 2.1percent w/w while Airtel Africa traded flat for third consecutive week. Investors sentiments was underwhelming as market breadth closed the week at

0.8x (previously 1.2x); 25 stocks advanced, while 31 stocks declined. We expect the market to stay tepid for the week amid faltering momentum in the economy. Money Market: Bullish sentiments continue to dominate, CBN clings to OMO stop rate Overall liquidity position stayed buoyant in the prior week as naira inflows outweighed overall outflows. The major inflow for the week was in the form of an OMO maturity, worth N735.7billion that hit the system on Thursday. Accordingly, the Central Bank of Nigeria (CBN) floated a N400billion OMO auction. How ever, demand at the auction was largely underwhelming as total bid-tocover ratio stood at 0.8x, largely skewed to the 364-day bills which had a bid-to-cover ratio of 1.6x. As such, this reflected in the volume of successful sales made by the CBN. In aggregate, the Apex bank sold 80.7percent (N322.6billion) of the N400billion it initially planned

to raise with the 364-day bill accounting for 99.7percent of the total successful sales. In terms of rates, despite investors’ appetite for higher rates, as reflected in the range of bids during the auction (average of 12.3percent to 13.5percent), the CBN held rates at the previous level across the board (91day: 11.59percent, 189-day: 11.79percent and 364-day: 13.5percent). In all, average interbank funding rates Open Buy Back (OBB) and Over Night (OVN) traded largely in the single-digit region, down by 3.8points (ppts) w/w to 7percent. Furthermore, the CBN released Q4-19 NTB calendar. According to the calendar, the FG plans to raise N1.0tn via NTB over Q4-19 (91-day: N90.6bn, 182-day: N90.2bn and 364-day: N821.8bn) to match maturities of the corresponding amount.

www.businessday.ng

Elsewhere, at the secondary market, the buoyant system liquidity gave the bulls some leg to run as average yields declined 52basis points (bps) w/w to 13.3percent. We exp e ct buying interest to continue this week as N347.7billion and N158.7billion worth of OMO and NTB maturities respectively are expected as inflows. As such, along with a corresponding NTB auction, the CBN should maintain its liquidity tightening stance via OMO issuance. The Apex bank may also notch stop rates higher at the primary market amid pressure for more by the market. Bond Market : Mixed sentiment in the bond space Despite buoyant liquidity in the system, sentiments at the secondary bond market were mostly tepid as investors digested the reports of slow growth in the overall economy as released by the NBS. Although there were strands of bullish sentiments on FGN 2019, 2020 and 2022 notes, average yield rose marginally by 3bps w/w to 14.2percent. Elsewhere, we saw increased demand for FGN dollar notes as Brent prices traded above the budget benchmark of $60per barrel (/b). As such, yields moderated across the curve and shed 30bps w/w to 6.3percent. Similarly, we observed some buying interests at the corporate segment as average yields dipped across the outstanding issues save for SEPLAT 2023, which saw a 16bps w/w uptick. Accordingly, average corporate Eurobond yields declined 32bps w/w to 5.5percent. Notably, Zenith bank announced plans to exercise the call option on its only outstanding 2022 Eurobond, worth $500million by 16th of September 2019. This is as it released its tender offer memorandum to the public. If successful, this will bring the total number of corporate d o l l a r- n o t e s t h a t h av e been recalled since Jun-19 to four (ACCESS, FBN, and ECOBANK). Looking ahead, in the face of the burgeoning maturities in the money market space, we expect yields to remain mostly stable at the bond market as investors get busy at the money market space. However, this does not exclude intermittent bargain hunting across the curve.

Economy & markets

Guinness Nigeria: Full year scorecard shows negative top-to-bottom line figures … Diageo to earn over 50% of proposed dividend Iheanyi Nwachukwu

ate last month, Guinness Nigeria Plc released it full year results for the period ended June 30, 2019. The brewer’s results released to the investing public at the Nigeria Stock Exchange (NSE) show negatives across its top-to-bottom line figures. The results The financials highlights indicated revenue declined by 8percent to N131.49billion as against N142.97billion in the preceding year. The company reported Gross Income of N40.12billion against N48.62billion in 2018, which represents a decline of 17.5percent. Guinness Nigeria also re c o rd e d P ro f i t B e f o re Ta x ( P B T ) d e c l i n e b y 28.6percent to N7.10billion against N9.94billion in 2018, while its Profit After Tax (PAT) at N5.48billion against N6.71billion in 2018 re p re s e nt s 1 8 . 4 p e rc e nt d e c re a s e. D e s p i t e t h i s disappointing scorecard, t h e b o a rd o f d i re c t o r s recommended dividend payout of N3.329billion compared to N4.031billion the company paid in 2018. Shareholding and substantial shareholder The issued and fully paid-up share capital of the company is 2.190billion ordinary shares of 50kobo each. The Register of members shows that only one company –Guinness Overseas Limited (a subsidiary of Diageo Plc) with N1.09 billion ordinary shares constituting 50.18percent shareholding held more than 10 percent interest in the company. Diageo Plc also owns another shareholder of the company, Atalantaf L i m i t e d w i t h o rd i n a r y 171.712million shares constituting 7.84percent of the company’s shareholding. The total shareholding of Diageo Plc in Guinness Nigeria Plc as at June 30, 2019 remains 58.02percent. At N37.30 per share as at Monday September

https://www.facebook.com/businessdayng

9, Guinness Nigeria Plc trades at its 52-week low compared to a record 52-week high of N88. The current market capitalization of the company is slightly above N81.7billion. About the company Guinness Nigeria Plc was established in 1950 and listed on the Nigerian Stock Exchange in 1965. It has a shareholders base of over 68,000. The company which built its first brewery in Ikeja in 1962 currently has facilities in Ogba and Benin City. Guinness Nigeria is part of the world’s largest drinks company, Diageo Plc. Some of its brands include: Malta Guinness, Guinness Foreign Extra Stout, Guinness Gold, Orijin Bitters, Orijin Zero, Dubic Malt, Harp, Satzenbrau Dark Ale, Mr. Dowell, Snapp, Gordons Moringa, Smirnoff Ice, Smirnoff Vodka, Johnnie Walker, Baileys Delight and Ciroc. Stakeholders’ comments In a statement following the results, Baker Magunda, Managing Director, Guinness Nigeria Plc stated that the company will continue to work on all operating indices while expecting that the micro and macroeconomic parameters improve. “Revenue for the year declined 8percent compared to same period last year on the backdrop of an extremely challenging macroeconomic and competitive environment. The cost of the @Businessdayng

increase in excise duty at a time of stagnant consumer disposable income had to be absorbed by industry players,” Magunda stated. “Despite the tough competitive lands cape, we continue to see good growth performance from Guinness, Spirits and the ma l t d r i n k s,” Ma g u n d a further informed. A combination of factors, inflation plus prior year royalties and accruals not approved by NOTAP, led to a 17 percent decline in Gross profit for the organisation. “Marketing spend reduction by 16percent and distribution costs initiatives partly mitigated the gross profit decline, thus leading to a fall in operating profit by N4.4billion. Profit before tax decreased by N2.8billion as a 46percent reduction in net finance costs further helped to cushion the decline in operating profit,” Magunda explained. Also commenting on the results, Babatunde Savage, Chairman of the Board of Guinness Nigeria Plc, said “As a Board, we are confident that our strategy is sound, and that we are making the right investments in the company to ensure our long-term competitiveness. The Board will continue to support the management in its efforts to build a business that aims to consistently deliver growth for stakeholders”.

Thursday 12 September 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

‘Investment would be easier with converged FX rates’ Temitope Popoola is the chief executive officer, Nigeria/West Africa at Renaissance Capital. Here are his responses to questions on Nigeria’s multiple exchange rate regime and possible benefits of its convergence. Iheanyi Nwachukwu brings you the excerpts Africa’s biggest economy (Nigeria) has at least six exchange rates. How can Foreign Exchange convergence work to prevent inflation and provide added benefits to an emerging market like Nigeria? ultiple exchange rates have been used as an implicit method to impose taxes and tariffs on imported goods during periods of economic stress, to alleviate excess pressure on foreign reserves. However, this tool has now served its purpose and overusing it could in fact be detrimental to the Nigerian economy. Firstly, converging Nigeria’s exchange rates would support inflation targeting and ease the inflation rate, if they converged at a reasonable range. Secondly, multiple exchange rates tend to, over time, lead to a misallocation of resources and over-invoicing of imports due to arbitrage opportunities. In this context, specific sectors of the economy are likely to enjoy benefits over others, leading to distortions and a price rise in certain sectors that fundamentally need better foreign exchange (FX) rates. Finally, multiple exchange rates can further exacerbate structural problems of corruption, rent seeking and cronyism. The initial gains of the dual exchange rate system have long been felt, but the costs are beginning to rise. Do you support the possibility of an exchange rate convergence? Practically, we have gone from a situation where we had over five exchange rates to two. However, Nigeria needs to go one step further and finally eliminate multiple exchange rates for reasons mentioned above. Investment would be easier with converged FX rates and based on the trend of current rates, and the success of the Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX) window, this possibility is not that far-fetched. What is your assessment of the efforts by the Central Bank of Nigeria (CBN) and other regulators to converge the exchange rates? With the benefit of hindsight, the introduction of the Importer and Exporters’ Window (I&E) in 2016 was a great idea from the CBN and has been an important part of the recovery story. This market-led window has helped create a trans-

Temitope Popoola

parent market for FX transactions which has led to increased liquidity and convergence. Additionally, the liquidity management efforts of the CBN, by keeping Cash Reserve Ratio (CRR) at 22.5percent, has helped keep rates relatively stable by reducing naira liquidity. Part of which could otherwise have pressured FX rates. Rates are converging and the difference between the different bands has tapered, partly due to efforts by the CBN but admittedly there is more they could do. Though, there are hard choices ahead of us and a significant fiscal element related to any attempt to further converge FX rates. Nigeria’s fuel subsidy is directly tied to the multiple exchange rates, which means that if this is not addressed then the multiple exchange rate system may be socially difficult to remove. What effect does the current multiple exchange rate regime have on foreign direct investment (FDI)? Foreign investors who want to invest directly in Nigeria are diswww.businessday.ng

“

Foreign investors who want to invest directly in Nigeria are discouraged by the multiple exchange rate system, because it creates a significant administrative instrument with excessive bank and bureaucratic red tape

https://www.facebook.com/businessdayng

couraged by the multiple exchange rate system, because it creates a significant administrative instrument with excessive bank and bureaucratic red tape. It is generally negative for Foreign Direct Investment (FDI) and reduces the ease-of-doing business. Notably, FDI inflows rebounded strongly in 2017 after the CBN introduced the flexible market exchange rate. Despite the potential in Nigeria, there is a plethora of obstacles when investing here and the fact that there are multiple exchange rates only makes it more difficult to navigate. Some investors think they will come to Nigeria and obtain FX at N305 or 330/$ only to learn later that the materials they deal in have been added to the FX restricted list, forcing them to obtain FX from a different market. Some investors feel subsequently cheated and this uncertainty deters further investment. For example, the recent ban on FX for dairy products will cause a disruption to players in that sector; the rebalancing of their books and contracts will not be easy. How does the multiple exchange rate regime impact on the money and capital market? Similar to FDI, multiple exchange rates increase the risk and difficulty for Foreign Portfolio Investment (FPI) investors because sourcing FX at the different markets is challenging and discouraging to investors. FPI investors are used to steering through complicated exchange rate, tax and commercial regimes but it has been noticeably harder to attract them since the 2015/2016 FX shortages and compounding multiple exchange rate issue. Therefore, in order to increase transparency and investor confidence in the markets, unifying rates around the market-based Investors and Exporters Foreign Exchange (IEFX) rate would be positive. A convergence of rates will also support diversification as the reduced distortion in private and public sector decisionmaking will lead to inclusive and more sustainable economic growth. How does the Nigerian economy compare, in terms of GDP growth, inflation, discount rates etc., with other emerging market economies that do have multiple exchange rates? Angola, Guinea-Bissau, Iraq, @Businessdayng

Mongolia, Myanmar, Nigeria, Sudan, Trinidad and Tobago, and Ukraine are the only countries, based on IMF data that have multiple exchange rate systems. Venezuela had a multiple system but switched to dual rates in early 2018 to alleviate its severe economic difficulties. However, they currently have the highest misery index, are suffering from hyperinflation and have been in a recession since 2014. Further unification is no doubt needed. In our view, Nigeria is the largest country in terms of GDP amongst these frontier and underdeveloped markets, so it is an unenviable group to be associated with. The important thing in terms of the metrics, however, is that Nigeria is still in recovery mode, with the growth rate and inflation levels arguably edging towards favourable levels. This means there is a real window of opportunity for the Nigerian economy. What effects could exchange rate convergence have on the Nigerian economy? A unified market-bas ed exchange rate would remove economic distortions, facilitate diversification and reduce arbitrage activities which will ultimately enhance investor confidence thus increasing trade and investment flows. Regarding benefits to the stock market, Egypt is a credible example of the positive effects of unified rates. Following the transition to a managed-float unified regime in December 2004, the Egyptian Exchange 30 (EGX 30) rose by more than 140percent in a year and 422percent YTD. The International Monetary Fund (IMF) in its 2019 Article IV Consultation on Nigeria urged the authorities to remove restrictions and multiple currency practices. What is your opinion on this? As expected, the IMF recommends unifying the multiple currency rates around the Investors and Exporters FX Rate (I&E). They have been recommending the unification of multiple rates as far back as 1947 and today nearly all countries have a unitary system. Even though multiple rates can be helpful in the short-term, to smooth the impact of commodity shocks, in the long run, problems build up.

Thursday 12 September 2019

BUSINESS DAY

cityfile FG to restore power to Ondo communities

Accident involving at Ogba, Lagos State On Tuesday

RAZAQ AYINLA

Why I threw my baby into river - Father confesses

he Nigeria Security and Civil Defence Corp (NSCDC), Niger State command, has arrested a 20-year-old Okada rider, Mustapha Aliyu, who confessed to have thrown his four- month son into a river because his mother and his girl friend’s mother disliked the baby. The state commandant of the corps, George Edem, told newsmen that the suspect committed the act at Tamanine village in Borgu local government area of

the state. Edem said that the suspect would be handed over to the police for further investigation and prosecution. “He is a suspect of culpable homicide because he threw his four month old son alive into River Oti and was subsequently arrested by our men. “We want to hand him over to the Nigeria Police Force because of the synergy we have with them and other security agencies,” he said He admonished par-

ents to keep a close eye on their children and know what they are doing. Aliyu, the suspect, who confessed to the crime, said that he threw the baby into the river out of frustration as his mother and the mother of his girl friend, who bore the child for him, never liked the baby. He said his mother gets mad at him any time she thinks of the baby and even threatened to lay a curse on him if he ever brought the baby to their house. “My girlfriend is always

crying that her mother doesn’t like the baby and that the mother said she would stop taking care of the baby until we get married. My own mum also doesn’t like the baby and keeps saying she would curse me if I bring the child home,” “This was what made me to take the baby in my arms one day, cried for 30 minutes and threw him into River Oti,” he added According to him, he regrets what he did and is prepared to face the consequences of his action.

Ikorodu residents want Sanwo-Olul to fix roads

esidents of Ijede community in Ikorodu have appealed to Governor Babajide Sanwo-Olu of Lagos State, to repair bad roads in the area. They said that good road network would attract investors to Ikorodu community and improve economic activities. Aliu Musediku, the regent of Ijede, who spoke in his palace, Tuesday, said that the deplorable conditions of the roads had contributed immensely to low commercial activities in the area. He also said that lack of good road network had discouraged investors from engaging in businesses and the industrialisation of the area. “We thank the Lagos State government for its support in the development of Ikorodu community but I am appealing

to them to give us good roads to aid commercial activities. “There are investors who are interested in coming to establish industries in Ikorodu but the deplorable state of the roads has been discouraging them. “Our roads are plagued with potholes that are getting worse, especially, during the rainy season. If the roads are good, that will encourage investors because Ikorodu division can boast of a large expanse of land, especially, Ijede community,” he said. According to him, the state of the road has also led to the rising rate of auto-crashes experienced by commuters coming and going out of the community. “We want the state government to help us repair our bad roads. www.businessday.ng

“If you want to travel from here to the metropolis, you will spend no less than four hours on the road due to its deplorable conditions.’’ Musediku also called on the state lawmakers to run an all inclusive representation, adding that they should shun the idea of sentiments in the discharge of their duties. He advised them to utilise their constituency allowances for the purposes they were meant for instead of converting such into personal use. “I am calling on all the elected lawmakers to let their people feel their presence in their various constituencies. “They should embark on projects that will benefit everybody not just for their party supporters alone,” the regent said. Also, Toba Ibrahim, a member of Ijede commu-

nity youths, said that the only accessible road to Ijede from Ikorodu was in a deplorable state. The youth leader appealed to the LASG to roll out a palliative measure to alleviate the sufferings of the people in Ikorodu, especially, those from Ijede axis. Ibrahim said that the issue of bad road was discussed at the last town hall meeting with the previous administration. He said that it did nothing until it handed over to the current administration. “I do not believe that the people living in this axis of Ikorodu deserve the kind of hardships they are facing. “During the previous administration, I raised the issue of the bad state of the roads and how the masses were facing hardships along the road before getting to their destinations during a town hall meeting.

https://www.facebook.com/businessdayng

ome communities in Ondo State not connected to the national grid have cause to smile, as the Federal Government is concluding arrangements to have them connected and lit up weeks from now. Among the communities are Ajagba, Igbokoda, Okitipupa and Igodan Lisa. Ifeoluwa Oyedele, executive director, Niger Delta Power Holding Company (NDPHC), who stated this in Akure, while briefing newsmen, said it was part of the efforts of the Federal Government to drive development into the rural areas. The executive director said that the company had completed several projects to ensure restoration of

electricity to the affected communities. According to Oyedele, the projects will be inaugurated by Vice President Yemi Osinbajo in few weeks time. He further said that the projects already completed in Ondo South would restore electricity supply to Ajagba, Igbokoda, Okitipupa and Igodan Lisa, among others. Oyedele said that with the completed projects, people of Ondo South would soon enjoy robust electricity supply. He said NDPHC’s mandate was to restore electricity supply to any part of the country that had been off the national grid. Many communities in six local government areas of the Ondo South senatorial district had been without power supply for several years.

800 women die of malnutrition, pregnancy complications daily - Expert A senior lecturer with Nasarawa State University, Keffi, Mercy Asso has revealed that about eight hundred and thirty woman die daily of pregnancy and nutritional related issues globally. Asso who is also a nutritionist with the Health Services Department of the university, said that the death ratio is 1in every 30 women, while the death ratio for children is 1 in every 15 as result of poor nutrition. Asso stated this at the one-week intensive mandatory continuing professional development program, wtih the theme maternal nutrition and contraceptive technology in lafia. She said: “There are actually women who are suffering from malnutrition as result of poor funding, lack of care and attention to their well being. “And statistic has revealed that on a daily basis, eight hundred and thirty

women die of pregnancy and nutritional related issues globally. “And out of this figure, 99% are from the subsahara region, which we are part of ”, she explained. According to Asso, with the high data of malnurished women, “it calls for our attention, it calls for refocus and it calls for a redirection of our resources”, see added. She stressed the need for the state government to Meetup with the SDGs so as not to be left behind in this regard. Asso who described nutrition as the foundation for good health and life, called on the state government to prioritise nutrition and increase funding as other components in the health sector. “What is needed is to look at how government can direct budgetary allocation to nutrition by increasing the percentage of funding for the wellbeing of women and children”.

NAFDAC goes after substandard table water producers

ojisola Adeyeye, Director-General, National Agency for Food and Drug Administration and Control (NAFDAC), has said that the agency would soon commence a nationwide monitoring of packaged water factories. Adeyeye stated this in Jos at a workshop organised for water-based product manufacturers in Plateau. Represented by Abayomi Bolaji, director, north central zone of the agency, Ad@Businessdayng

eyeye said that the monitoring exercise was to ensure compliance in the Group Manufacturing Practice (GMP) and batch coding machines. “I wish to remind you that batch coding of any regulated product is a key requirement for GMP, hence the need to put necessary measures in place for the batch coding of your products to avoid being embarrassed by our officers,” she said.

Thursday 12 September 2019

BUSINESS DAY

Advertise Here Establishment of Cattle Ranches in Western Nigeria: An Immediate Imperative 22

Major world economies are becoming increasingly isolationist; except those in Africa 23

Partner with us in Empowering African Entrepreneurs, Elumelu Challenges Japan 24

Rising rice consumption in Nigeria: Farming and the value of a value chain Insights from Daniel Murphy, Written by Maggie Morse The Social Challenge Economic Development ice consumption in Nigeria has been rising steadily — about 5.6 million metric tons in 2011 and 6.9 million tons presently — but market, production and policy limitations mean domestic production often fails to meet demand, and the increase is largely made up for with costly imports. Between 2012 and 2015, Nigeria imported $4 billion worth of rice in order to meet expanding consumption. Yet Nigeria actually has the capacity to be a net exporter of rice. A space for stakeholders to engage with each other about the commodity value chain was needed and did not exist.

The Partnership The Value Chain Development Program The Partners • Benue State Ministry of Agriculture • Federal Ministry of Agriculture and Rural Development, Nigeria • Olam Nigeria Limited, a subsidiary of Olam International • Smallholder farmer organizations • United Nations International Fund for Agricultural Development (IFAD) The Idea and the Action The Value Chain Development Program (VCDP) partnership, established in 2015 by the Nigerian government, IFAD and Olam, is designed to improve the livelihoods of economically disadvantaged farmers by giving them a stake in a major, fast-growing agricultural value chain. A six-year initiative, VCDP aims to improve both cassava and rice value chains for smallholders, reducing rural poverty, increasing food security, creating jobs and accelerating economic growth on an inclusive and sustainable basis. To those ends, VCDP established an innovative Commodity Alliance Forum (CAF), which comprises the government, buyers, financial institutions, suppliers and smallholder farmers. This forum allows farmers to engage with

the private sector on issues relating to marketing, credit access and availability, as well as to consult with the government regarding policy and infrastructure support on a sustainable basis. Through the program, Olam, a food and agribusiness that connects customers to farmers, agreed to invest in increasing the productive capacity of participating rice farmers and to purchase the rice. With previous experience in establishing commercial relationships with smallholder farmers, the company offers smallholders digital credit, co-financing for extension services, and the creation of collection centers within 15 kilometers of production clusters. Meanwhile, the company benefits from consistent and high-quality supplies of rice. The Impact The partnership leverages Olam’s financial and technical capacity, the government of Nigeria’s outreach, and IFAD’s brokering, finance and monitoring capacity. It is one of the first publicprivate-partnerships in the agriculture sector in Nigeria and has had transformative impact, especially in terms of youth involvement in agriculture and the market participation of female farmers. Not only has VCDP introduced a model for job creation for youth in agriculture

through the creation of youth group agribusiness, but also 48 percent of the more than 2,200 hectares of land it has developed is allocated to previously landless women and youth. Of the 45,000 smallholders, processors and marketers participating in VCDP, about 70 percent have doubled their agricultural income. In the case of farmers, the increase was from $611 to $1,375 per hectare. In three years, roughly $137.5 million from sales was deposited in the bank accounts of participating farmers. Record keeping, business planning and connection to financial institutions have been strengthened for 3,500 farming organizations. To date, 3,292 purchase agreements have been signed between individual farmers’ organizations and major buyers. Additional produce aggregation centers, or storage facilities, have been either constructed or rehabilitated, which has reduced post-harvest losses by 70 percent. Since VCDP’s inception, farmers produced and marketed over 450,000 metric tons of rice — a significant contribution to national and local food security. The Faculty Insight In a country in which 70 percent of the population lives in rural areas, the agriculture sector is a major part of economic activity. And when

Advertise here

rice is a staple and amounts to an important portion of household food budgets, a symbiotic relationship between domestic production and consumption would seem natural. Yet domestic production has failed to meet domestic demand, and the hole has been filled by other countries. Through its commitment to provide rice farmers with access to a reliable, profitable market, VCDP enables and encourages local production. Providing important tangible resources like seeds, fertilizers and agrochemicals — as well as the extension of credit and guarantee to buy the product at a fair price at the end of the season — the partnership alleviates risk that might dissuade smallholders from investing in productivity enhancements. And such enhancements, like increased mechanization on farms, not only increase scale for farmers, they create services and jobs for local service providers in support of mechanics. Additionally, this P3 assists in technology and training that improve efficiency and quality in the product. For example, Nigerian producers have struggled with competition from the long-grain, parboiled rice imported from Thai-

Continues on page 24

Thursday 12 September 2019

BUSINESS DAY

Establishment of Cattle Ranches in Western Nigeria: An Immediate Imperative OLUSEYE OYELEYE

Background he Nigerian livestock industry constitutes an important sector of the Nigerian economy, though marked with poor productivity as a result of crude and traditional method of her pastoral system. Of the estimated 20 million population of cattle in Nigeria, 70% of this population is located in the northern part of the country while the remaining 30% are found in other parts of the country. Open grazing is the predominant practice of cattle rearing in Nigeria and it is mostly practiced by Fulani herders who move for days on foot with their herds from the north to the more rain-fed southern parts of the country. Nigeria with an estimated 20 million heads of cattle occupies the 14th position in the world compared to Brazil, India and China with 212,189 and 114 million heads of cattle, respectively being the top three nations with the highest heads of cattle. Prior to now, the open grazing system was practically appropriate when there was less competition between man and livestock for land. However, due to recent changes in prevailing climatic condition; drought; increased pressure on the use of land by humans for other purposes; and the growing population of cattle heads, the scarce abundance of pasture in most part of the north could no longer cope with the forage requirements of these cattle and as such pastoralists opted for more sustaining nomadic approach to raising their herds by migrating to the more humid southern parts of Nigeria where there is abundant vegetation to comfortably cater for their needs. Concerns on the nomadic approach to cattle rearing • The migratory nature of rearing cattle in Nigeria would not encourage cattle to gain body weight as most of the nutrients obtained in transit are used up while covering long distances thus the animals are often emaciated resulting in low carcass yield • Most of the cattle reared in Nigeria are illegally brought into the country from neighboring countries through porous borders without records • There is increased risk of disease and parasite transmission from one location to another (Trans-border and within Nigeria) thus endangering the local cattle population as well as predisposing humans to zoonotic diseases Aside from the above, along

Idris

the migratory routes arises indiscriminate ways of grazing and which has resulted in issues relating to cattle rustling, destruction and damage of cultivated farmlands, communal clashes between herders and farmers with consequent losses of lives and properties. Though, this has perpetually been an issue of concern to the nation for decades but in recent time it has become a more prominent threat to national security. The Nigerian Government in her quest to address this issue came up with several programmes; grazing reserves, cattle ranches which have hitherto failed while there have been recent attempts to introduce cattle colony and RUGA settlement.

RUGA Settlement according to the federal government seeks to assist pastoral families; animal farmers, not just cattle herders, to settle in an organized place with provision of necessary and adequate basic amenities such as schools, hospitals, road networks, veterinary clinics, markets and manufacturing entities that will process and add value to meats and animal products. This initiative however has received several backlashes from the people especially in the southern part of the country with the claim that the idea is marred with political/religious undertone. From the foregoing, it would be appropriate to make some remarks about ranching as it is

of more importance to cattle production in Southwest Nigeria. Ranching involves the demarcation of an area of land, including various structures, given primarily to the practice of raising grazing livestock such as cattle or sheep for meat, milk or wool. The practice exposes cattle to paddock grazing with improved varieties of forages and fodders all year round and modern livestock management practices such as feedlot fattening, artificial insemination and others. This practice is an improvement over the traditional livestock management system and it is not new to us in Southwest Nigeria. The incidence of cattle ranching in SW Nigeria could be dated back to the colonial era when farms and a couple of ranches were established by the colonial masters across different locations in Nigeria. As part of measures to further promote the practice of sustainable agriculture in Western Nigeria, in the 1960’s the leadership of the then western leader (Chief Obafemi Awolowo) invested in agriculture. Prominent among this development was Fashola stock farm in Oyo state which was equipped with cattle breeding and multiplication facilities while the progenies were further distributed to other ranches (Imeko, Akunnu, Odeda cattle ranch etc.) within the western region for commercial cattle production. The era of military administration following the first coup suffocated and frustrated all efforts to make the enterprise functional thus it became a failed project. However, amidst recent concerns by the populace of southwest Nigeria, DAWN commission proposes the revisit of the abandoned ranching project. Case for the establishment of ranches • Nigeria is a major producer of livestock (cattle and

goats) in Sub-Saharan Africa and it is the largest importer of milk in the region, with an annual importation bill of $1.3bn. The country’s cattle population is estimated at 20 million. However, only 2.3 million cattle (11.5%) are utilized for dairy production • Clashes between nomadic herders and farmers have claimed roughly 7,000 lives over the past five years and cost the Nigerian economy $13 billion (11.57 billion Euros) annually, according to a report in May by the NGO Mercy Corps. • Per capital consumption of beef in the world is presently estimated at 26.1kg/person. Nigeria however is still struggling to meet up with the minimum daily requirement of animal protein put at 35g daily by the FAO, thus emphasizing that Nigerians are deficient of the needed animal protein which could only be increased through intensive livestock production. • With over 200 million people and an emerging middle class, Nigeria is witnessing a boom in demand for meat. According to government estimates, Nigeria, consumes 360,000 tonnes of beef each year, accounting for half of all consumption in West Africa. • Also, a larger percentage of beef produced in Nigeria are consumed by people in the southwestern part of Nigeria. The population of southwest Nigeria is presently estimated at 40 million and has the tendency to grow to over 60 million in 10years, thus emphasizing that there is a ready market for beef and dairy products in the region. • Over 8,000 cattle heads slaughtered in Lagos daily, at an average of N150, 000 per cow (that is N1.2 billion daily in Lagos alone). • There are already existing ranching structures in the southwest that have not been put to use in a long while. It is expected that the cost of investing in ranching would be relatively low. • The abundance of vegetation in the southwestern part of Nigeria, coupled with determination of the federal government to increase agricultural production plus the zeal and vested interests of the present southwest government to prioritize agriculture, it may be necessary to revisit the abandoned cattle ranching programs of the past. Oluseye Oyeleye is Director General, DAWN Commission Read the rest of the story in: http://www.realsectornow. com/2019/09/establishment-ofcattle-ranches-in-western-nigeria-an-immediate-imperative/

Thursday 12 September 2019

BUSINESS DAY

Major world economies are becoming increasingly isolationist; except those in Africa FAREED ZAKARIA

o describe the mood of the global economy these days is gloomy. The pessimism is closely tied to the loss of faith in free markets and free trade, the two forces that propelled the world economy for the past seven decades. The United States, long the staunchest supporter of these ideas, has moved into full-scale mercantilist mode. Britain, the original free trade superpower, is pulling out of the European Union, its largest free-trade relationship. China is striving to become less reliant on foreign firms and global supply chains. Everywhere the trend seems the same. Except in Africa. China’s push for self-reliance meets reality of global trade networks Chinese President Xi Jinping’s push for home-grown innovation underlines the urgency of core technology developm... Last month, unnoticed by much of the media, Africa’s leaders announced the creation of a continent-wide free-trade area that will potentially bring together 1.3 billion people in a $3.4 trillion economic zone. The success of this project hinges on whether nations actually do reduce tariffs and other trade barriers, but if they do, trade could rise by as much as 50 percent in the next few decades, according to the International Monetary Fund. As the IMF put it, “This could be an economic game changer for the continent.” Africa has six of the world’s 10 fastest-growing economies. By 2050, a new African middle and upper class of 250 million people could stimulate a five-fold rise in demand for goods and services. The World Bank found that a

third of all business-regulation reforms from 2017-2018 took place in sub-Saharan Africa, and the continent boasted five of the 10 most-improved economies in the institution’s annual Doing Business Index. More than 400 African companies already take in at least $1 billion in annual revenue. These data points come from a recent Brookings Institution op-ed, “The high growth promise of an integrated Africa,” by Landry Signé and Ameenah Gurib-Fakim. The high growth promise of an integrated Africa Landry Signé and Ameenah Gurib-Fakim Integrated economies, powered by innovative and high-growth businesses and strong private investment, are the ke... Doing Business 2019: A Year of Record Reforms, Rising Influence Between June 2, 2017, and May 1 this year, 128 governments introduced a record 314 reforms benefitting small and... One country that has bet big on Africa is China. In 2000, trade between China and the entire African continent was $10 billion. Today it’s $200 billion, making China its largest trading partner. Beijing has invested heavily in

aid and loans for the region. President Xi Jinping hosted an African summit in Beijing last year and announced that China planned to spend $60 billion in credit, investment and development projects for the continent for the next three years. China remains Africa’s largest trading partner for 9 consecutive years .. China has remained Africa’s largest trading partner for 9 consecutive years as major cooperation p Of course, there are many caveats to the rosy picture of Africa. It’s easier to announce the intention to reduce trade barriers than to actually enact such laws. Africa continues to face massive problems in the form of corruption and mismanagement, not to mention conflict. Some of the continent’s promising growth statistics reflect the simple fact that Africa is rich in natural resources, and a growing world economy has created high demand for these products... Source: The Washington Post Read the rest of the story in: http://www.realsectornow. com/2019/08/major-worldeconomies-are-becoming-increasingly-isolationist-exceptthose-in-africa/

Editor’s Note

he Value Chain Development Program (VCDP) partnership, established in 2015 by the Nigerian government, IFAD and Olam, is designed to improve the livelihoods of economically disadvantaged farmers by giving them a stake in a major, fast-growing agricultural value chain. The partnership leverages Olam’s financial and technical capacity, the government of Nigeria’s outreach, and IFAD’s brokering, finance and monitoring capacity. It is one of the first public-private-partnerships in the agriculture sector in Nigeria and has had transformative impact, especially in terms of youth involvement in agriculture and the market participation of female farmers. Not only has VCDP introduced a model for job creation for youth in agriculture through the creation of youth group agribusiness, but also 48 percent of the more than 2,200 hectares of land it has developed is allocated to previously landless women and youth. This our robustly revealing cover piece, written by Maggie Morse, with insights from Daniel Murphy, an expert in Economics and Public Policy, who researches the nature of consumer demand and its implications for market outcomes, will satisfy your hunger for high value knowledge resource. Fareed Zakaria, you will agree, is a well known name. You need not be reminded is of the CNN family. In his piece on Africa and trade issue, etc, published in this edition, he wrote in part: “ Last month, unnoticed by much of the media, Africa’s leaders announced the creation of a continent-wide free-trade area that will potentially bring together 1.3 billion people in a $3.4 trillion economic zone. The success of this project hinges on whether nations actually do reduce tariffs and other trade barriers, but if

Siaka Momoh

they do, trade could rise by as much as 50 percent in the next few decades, according to the International Monetary Fund. As the IMF put it, “This could be an economic game changer for the continent.” Go for the rest of the story. Oluseye Oyeleye is Director General, DAWN Commission recommends cattle ranching programme for South West Nigeria. He recalled that in the 1960s, as part of measures to further promote the practice of sustainable agriculture in Western Nigeria, the leader of the then Western Region (Chief Obafemi Awolowo) invested in agriculture. He said prominent among these developments was Fashola stock farm in Oyo state which was equipped with cattle breeding and multiplication facilities while the progenies were further distributed to other ranches (Imeko, Akunnu, Odeda cattle ranches etc.) within the western region for commercial cattle production. Read all these and more in our edition for this month. For advert placements, reactions or contributions, call Siaka on 08061396410; email: siakamomoh@yahoo.com.

AfCFTA Cushioning: Afreximbank to support Nigerian manufacturers with $500m

‘T

hough the terms of the offer is yet to be made known, but going by Ahmed’s immediate reaction and mood, and put against MAN’s as well as the entire Organised Private Sector’s traditional protest against unbearable commercial bank’s lending rates in Nigeria, the Afreximbank offer is good relief for manufacturers.’ SIAKA MOMOH The Afreximbank has reserved $500 million for lending to Nigerian manufacturers through the Manufacturers Association of Nigeria (MAN), Prof Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank said in Lagos Tuesday. This, according to the Afreximbank chief, is part of the bank’s drive to support industrialisation across Africa, principally as AfCFTA Adjustment Facility to enable countries adjust in an orderly manner to sudden significant tariff revenue losses as a result of the implementa-

tion of the agreement. The fund is part of the $1 billion Afreximbank African Continental Free Trade Area (AfCFTA) Adjustment Facility instituted for Africa. Oramah, who was Guest Speaker at MAN’s Expo Exhibition 2019, said Afreximbank team would, in the course of the event which is running from Monday through Wednesday at Oriental Hotel, VI, Lagos, and sit with MAN executives to discuss the lending modalities. Reacting to the robust offer, an elated President of MAN, Mansur Ahmed, said an Afreximbank/MAN Committee would be set up on Wednesday this week to discuss the offer. Though the terms of the offer is yet to be made known, but going by Ahmed’s immediate reaction and mood, and put against MAN’s as well as the entire Organised Private Sector’s traditional protest against unbearable commercial bank’s lend-

ing rates in Nigeria, the Afreximbank offer is good relief for manufacturers. MAN’s CEO Confidence Index Quarter 2019 for instance says majority of respondents, 76 percent, disagree that the rates at which commercial banks lend to manufacturers encourage productivity in the sector. This, it says, is evident in the double-digit cost of borrowing from the commercial banks, which obviously discourages investment. It notes that “it is therefore imperative that the Association sustains the advocacy for policy measures that will lower the cost of borrowing and increase productivity in the manufacturing sector”. On size of Loan to the manufacturing sector, the index shows that 66 percent of CEOs of manufacturing companies disagree that the volume of Commercial Banks loan to the sector encourages productivity in the sector. Prof. Benedict Oramah, had earlier in July in Niamey, addressed the

12th Extraordinary Summit of African Union (AU) Heads of State, announcing a series of initiatives to support the implementation of the Agreement for the African Continental Free Trade Area (AfCFTA). Prof. Oramah told the heads of state, who were gathered to mark the start of the operational phase of the AfCFTA, that Afreximbank was instituting a $1-billion AfCFTA Adjustment Facility to enable countries adjust in an orderly manner to sudden significant tariff revenue losses as a result of the implementation of the agreement. “This facility will help countries to accelerate the ratification of the AfCFTA,” he said, telling the heads of state that, by starting the operational phase of the AfCFTA, “you have started a movement.” “You must not look back,” continued the President. “This movement is now unstoppable.” He added that, as part of its support for the implementation of the

AfCFTA, the Bank had provided support to aid the work being done by the African Regional Standards Organisation and the AU in implementing the Agreement. Professor Oramah also informed the Summit of the launch the PanAfrican Payment and Settlement System (PAPSS), the first continentwide payment digital system focused on facilitating payments for goods and services in intra-African trade in African currencies. In his opening remarks at the event, MAN President Mansur Ahmed, commended Mr President for the several policies introduced to grow the economy. Said he: “Mr President, your government’s emphasis on economic diversification and a steady focus on agric transformation, and pursuit of food security, cannot be faulted. MAN therefore commends you for the policies which helped our country to exit recession even though fragile.

Thursday 12 September 2019

BUSINESS DAY

Partner with us in Empowering African Entrepreneurs, Elumelu Challenges Japan Highlights • Achim Steiner, UNDP Administrator Praises Tony Elumelu’s Private-Sector Led Approach to African Development • President of South Africa, H.E. Cyril Ramaphosa: “If you want really good returns, as Tony Elumelu said, come to Africa” • Elumelu Champions Job Creation in Africa at Breakfast Meeting with President of Rwanda and UNICEF Executive Director

SIAKA MOMOH

Recalling Ambode’s 181 local government roads…

n an impassioned keynote speech, delivered before global leaders, at the 7th Tokyo International Conference on African Development (TICAD) in Yokohama, Japan, African investor and philanthropist Tony O. Elumelu CON, challenged the Government of Japan to invest 5% of its $50billion commitment to Africa, in empowering African entrepreneurs. “At TICAD 2016 in Kenya, Japan pledged $30billion for Africa. This year you have generously increased this to $50 billion. If we invested just 5% in Africa’s new generation of entrepreneurs, following my Foundation’s robust, proven model of getting capital directly to those best placed to catalyze growth and create real impact, we could touch 500,000 lives, across the 54 African countries, broadening markets, facilitating job creation, improving income per capita, and laying the key foundation for political and economic stability”, said Mr. Elumelu. Mr. Elumelu’s statement captured his vision of a relationship between Japan and Africa, which prioritizes economic and shared prosperity. He outlined the three key pillars of a bold and transformative structure: investment in infrastructure, partnership with the African private sector, and investment in Africa’s youth. He urged Japan to learn from the example of the Tony Elumelu Foundation, which champions empowering African entrepre-

I neurs, as the most sustainable means of accelerating the development of Africa. The Tony Elumelu Foundation, in just five years has assisted over 7,500 African entrepreneurs across every African country, with seed capital, capacity building, mentorship and networking opportunities through its $100 million Entrepreneurship Programme. Elumelu’s advice carried the weight of his track record of business success, founding Africa’s global bank, United Bank for Africa (UBA), which has grown its presence to 20 African countries, as well as in the United Kingdom, France, and the USA; and Heirs Holdings, Africa’s private investment company which actively invests in key sectors of Africa’s economy and controls millions of dollars in its investment portfolio. Together, they employ over 30,000 people and transform the communities they operate in. “Africa is one of the world’s viable destinations for investment. Our huge population, of nearly 1.3 billion people, creates one of the most attractive mar-

kets anywhere in the world. The world is paying close attention to Africa, but is Japan at the centre of this conversation or is it on the sidelines?” he queried. Mr. Elumelu’s philosophy has become increasingly popular on the African continent, where he is acknowledged as the pioneer of a private-sector-led approach to accelerating development. He repeated the message at the Generation Unlimited breakfast meeting with H.E. Paul Kagame, President of Rwanda and UNICEF Executive Director, Henrietta Fore, with its focus on job creation in Africa, where he emphasised the role the African youth plays in this narrative.

Read the rest of the story in: http://www.realsectornow. com/2019/08/%ef%bb%bfpartnerwith-us-in-empowering-africanentrepreneurs-elumelu-challengesjapan/

Rising rice consumption in Nigeria... Continued from page 21 land. In training rice processors in parboiling technology, which keeps the rice from direct contact with the vat in order to avoid burning when boiled, VCDP helps them both lower the cost of production and improve the appeal of the product with local consumers. By increasing both the quantity and quality of the product, the partnership increases incomes for Nigerian farmers and increases the amount of local rice available to Nigerian households. The Darden School of Business’ Institute for Business in Society partners with Concordia and the U.S. Department of State Secretary’s Office of Global Partnerships to present the annual P3 Impact Award, which recognizes leading public-private partnerships that improve communities around the world. This year’s award will be presented at the Concordia Annual Summit 22–24 September 2019. The five finalists will be highlighted on Darden Ideas to Action on Fridays leading up to the event.

P3 Impact Award | Concordia Concordia promotes effective publicprivate collaboration to create a more prosperous and sustainable future. Vi... Concordia | Partnerships for Social Impact Concordia is a nonprofit, nonpartisan organization that facilitates meaningful partnerships for positive social ... The P3 Impact Award The P3 Impact Award was created by Concordia, the University of Virginia Darden School Institute for Business in Society, and the U.S. Department of State’s Office of Global Partnerships to recognize and honor leading public-private partnerships (P3s) that improve communities and the world. Inaugurated in 2014, the P3 Impact Award is presented each fall at the Concordia Summit in New York, New York. The award seeks to highlight leading practices and actionable insights in the P3 arena. For this award, a P3 refers to

any cross-sector collaboration that features public, private, nonprofit, or non-governmental organizations and addresses societal problems. About the Expert Daniel Murphy Daniel Murphy | Darden Ideas to Action Assistant Professor of Business Administration An expert in economics and public policy, Murphy researches the nature of consumer demand and its implications for market outcomes. His work addresses international issues and macroeconomics, including the determinants of cross-country price differences, the causes of fluctuations in the price of crude oil and the consequences of asymmetric economic growth. Prior to joining Darden’s Global Economies and Markets area in 2013, Murphy was a National Hunger Fellow and research associate at the Urban Institute. B.S., University of Notre Dame; M.A., Ph.D., University of Michigan.

f there is one thing a government can do to make the governed throw its weight behind it, it is giving the ruled good network of roads. The reason is obvious to us all – good roads ensure ease of doing business, just to mention one reason. This is why I am passionate about this subject of good roads. I have written severally on sustainable roads for the country and will continue to do so for as long as our roads remain in tatters. You would recall that in my first piece on roads, I advised the use of cement pavements for our roads. My argument: Constructing a road with cement is between 25 and 50 per cent cheaper than making it with asphalt, a method that is currently popularly with Nigeria... when you take the life cycle of the road into consideration. But the concrete road is 10 per cent more expensive to construct than asphalt road, which is the initial capital cost when you are constructing it. The point I made very clear was that the life cycle of the road “is what matters”.Once you have completed the road, take the life cycle of the road over 20- 30 years and more, the concrete becomes extremely much cheaper because less maintenance is required. And in a country like Nigeria where we know we have poor maintenance culture, it makes sense then that the choice should be concrete road. My submission was based on the outcome of a September 2012 BusinessDay/Cement Manufacturers Association of Nigeria’s conference with the theme ‘Exploring Cement Based Option for Sustainable Road Construction in Nigeria’ held at Eko Hotel & Suites Victoria Island, Lagos. It was a great conference which laid bare very convincing facts – facts that tell you it is economically wise( on the long run) for Nigeria to go concrete roads. The facts among others: • There is enormous deficit in transportation infrastructure which is an important requirement for economic development. • The technology being used for road construction across the world has attracted a lot of inputs from cementbased materials as against the use of asphalt, adding that Nigeria needs to imbibe this new technology. • Asphalt is in great use for local production for Nigeria, yet across the world concrete is used for road pavements • Concrete roads facilitate accessibility and movement; there is need for us to adopt this road construction option. • Use of cement for road construction is cost-effective, long lasting, requires less maintenance and is more environmental-friendly, relative to Asphalt. • Over 99.9 percent of road construction today in Nigeria involves the use of Asphalt. While about 40 percent of the roads in developed countries are made of cement, less than 0.1 percent is used in Nigeria. Cement which is readily available in the country today can be utilized in constructing longerlasting, more cost-efficient roads.

• On the issue of the suitability of concrete-based pavement to the different soil-types in the country, it was emphasized that with proper design, analysis and construction, concretebased solutions can still be effectively utilized. • The conference also noted that asphalt does not work well under heavy rain, and is susceptible to oil spillage. • Cement: Catalyst of growth of manufacturing sector in the country. • There are a number of financing options for road construction prominent among which is the public-private partnership (PPP), which has made limited progress. I do not know what option the Lagos State Government has for its 181 Local Government Area (LGAs)/ Local Council Development Areas (LCDAs) inner roads it plans to commence rehabilitating in September, but I advise it should go for cement concrete option. This is not only cost-effective like has been proven here but appropriate for the nature of Lagos land - coastal land that traditionally comes with flooding. Oriade LCDAs It is noteworthy that Governor Ambode said the need to scale up the road improvement efforts arose from the fact that he had received many requests on rehabilitation of roads from residents, adding that many of the roads captured for 2017 were key roads that would have positive economic impact on the people. The governor should please treat Oriade LCDA’s case as a special one. Why? One, residents of this area are accusing the APC government of Lagos State of deliberately neglecting them because they largely vote for the opposition party. Ambode needs to prove them wrong by rehabilitating Oriade’s key roads and by so doing win them over. This is a right way of doing it. After all, His Excellency did it with Okota after the resident there cried foul. Two, the Navy barracks is in Oriade. It is a shame that the road leading to the prestigious barracks is falling to pieces Three, a multibillion naira fuel depot is located in Oriade. This should attract a superb network of roads if we do not want another Apapa/Tin Can Island mess in our hands. In fact, there should be a replication of the Dangote Industries/Flour Mills of Nigeria/ Federal Government PPP arrangement here. The fuel companies wouldn’t object, I believe. The points highlighted here, taken along with the case of the litany of small businesses that are doing business in Oriade, make Oriade qualify for special consideration. Post Script: The piece here was published on this page during Akinwunmi Ambode’s regime. I need to comment here that the local government inner roads are currently being worked on. Some of Oriade LCDA roads are, as I write, being re-surfaced with concrete pavements; and serious work is going on Oshodi-Apapa Motorway – and it is concrete pavement! Accept my commendation.

Thursday 12 September 2019

Retail &

BUSINESS DAY

consumer business Luxury

Malls

Companies

Deals

Spending Trends

CONSUMER SPENDING

Consumers shift to low-budget clothes on shrinking wallet OLUFIKAYO OWOEYE

aba market, one of the most popular markets in Lagos, was thronged w ith shoppers who were bargaining with retailers, as commercial activities intensified. The night air that sent a predawn chill and the current post-recession sluggish growth couldn’t hold back Nigerians from participating actively in the cash economy. Interestingly, many local cloth sellers have embraced street trading mostly at nights to display their wares for buyers. A fashion survey by Ajua, a customer experience company, show that 70.4percent of respondents bought their clothes from a retail store while 15.0percent made use of both the online and retail platforms, with online platform lagging behind at a meager 10 percent. Result from the survey

shows 79.3 percent of respondents majorly in their 20s bought new clothes, with 20.7 percent not buying in the last 12months. The effect of a shrinking wallet has seen consumers adjust their spending, while smaller brands continue to cannibalise sales of the big players. Price continues to play a key role among consumers with the lowest price points prospering. Result from the survey shows that 52.2 percent of respondents spent between N5,000 to N10,000, 17.4 percent spent between N10,000-N20,000, 8.4 percent spent N25,000 and above within the last 12 months. According to the survey, despite the government’s increasing awareness on the need to patronize local materials, Nigerians still have a burning appetite for foreign branded clothes. Results from the survey show that 57.1 percent purchased foreign designers, with 28.6percent purchasing local de-

signers while 14.3 percent bought both foreign and local designers within the last 12 months. Within this period, 53.3 percent of the clothes bought were ready-made, while 26.7 are sown, with 20percent been both ready-made and sewn. 46.7percent of the clothes bought were casual wears, with 26.7 percent formal clothes. In a recent consumer

report by Coronation Merchant Bank, there is an ongoing intense battle between smaller& unlisted brands and big listed brands in the consumer goods sector. According to the report titled ‘Power to the Price Points,’ the last recession almost certainly left many people poorer than before. And the current economic recovery is so slow that doubt that incomes, in inflation-ad-

justed terms, are rebounding, although the upcoming implementation of the N30,000 per month ($83) minimum wage at the national level is likely to have a positive effect. “Nigeria is generating more people, more households and more consumers, on the other hand, it does not look like they are getting any richer,” the report said. Inflation pressure, devaluation of the currency,

and hike in fuel price has subdued consumer spending, while over 50 percent of a population of 200 million live on less than $1.98 a day. Little wonder unemployment rate is at an all-time high of 23 percent. Nigeria’s economy has been growing sluggishly since the country exited a recession in 2016, but analysts see an improvement in economic activities if the government implement structural reforms. According to a recent report by the National Bureau of Statistics (NBS), Nigeria’s gross domestic product (GDP) expanded by 1.94 percent in the second quarter of (Q2-2019), from the revised first quarter (Q1-2019) print of 2.10 percent. The trade sector which comprises of whole and retail trade contracted by 0.25 percent in the second quarter (Q2) of 2019, after recording three positive growth rates since the third quarter of (Q3 2018).

RETAIL

How Nigerian manufacturers, retailers can beat odds in evolving consumer landscape BALA AUGIE

he Nigerian retail environment has been tough and scotching the expectations of manufacturers as they grapple with stiff competition, currency devaluation, hike in fuel price, decrepit infrastructure, and inflationary pressures. To overcome these challenges Nielsen Nigeria, a subsidiary of the British information, data and measurement firm that studies consumers in more than 100 countries, identified in a recent report ways retailers and manufacturers can beat the odds as Nigeria’s landscape is set for multiple shifts. “Everyone is fighting for growth and competition for consumers’ wallets has never been tougher. In a challenging environment, finding opportunities with the right insights become key to help beat the odds,” said Ged Nooy, managing director and CEO of Nielsen Nigeria.

Nielsen reckons marketers need to cater to the demands of those who want value and at the same time those who are aspirational and want quality, premium products. According to them, Nigeria is a complex market characterised by consumers who are upbeat and confident, with 81 percent feeling good or excellent about the state of their financials, while at the same time 60 percent say they can only afford the basics. Nielsen argues that it is paramount for operators to understand consumer attitudes and perceptions and how they make choices, as 88 percent of consumers across Africa and the Middle East are ready to defect from a current brand choice and 45 percent consumers say they love to try new things. “Opportunities are about understanding and delivering what consumers need and want. Times are changing. There are more products on the shelf today than ever before, from new and exist-

ing brands, and a plethora of information points, advocates and advertising telling consumers about them,” said Nooy. The retail and manufacturing industries have not recovered from the recession of 2016 that stoked severe dollar scarcity and paralysed business activities. Inflation pressure, devaluation of the currency, and hike in fuel price has subdued consumer spending, while over 50 perceent of a population of 200 million live on less than $1.98 a day.

www.businessday.ng

Little wonder unemployment rate is at an all-time high of 23 percent. According to a recent report by the National Bureau of Statistics (NBS), Nigeria’s gross domestic product (GDP) expanded by 1.94 percent in the second quarter of (Q2-2019), from the revised first quarter (Q1-2019) print of 2.10 percent. The trade sector which comprises of whole and retail trade contracted by 0.25 percent in the second quarter (Q2) of 2019, after recording three positive growth rates

https://www.facebook.com/businessdayng

since the third quarter of (Q3 2018). “Companies have not been able to make money in the past five years because consumer wallets are pressured, as the inability to hike the price of key products is undermining sales,” said Abiola Abimbola, analyst with Chapel Hill Denham Limited. The low cost and low price competitions are cannibalising the sales of established players as a harsh and unpredictable macroeconomic environment have forced consumers to downgrade to cheap and affordable brands. In just 10 years, Nigeria’s brick-and-mortar fast-moving consumer goods (FMCG) universe has nearly doubled in size. There are more than 1 million outlets selling FMCG products, increasing in size by 500,000 outlets in less than 10 years, the Nielsen Shopper Trends report notes “It is also interesting to note that 50 percent of FMCG sales come from 60 LGAs @Businessdayng

(local government areas) in Nigeria. Given this retail landscape, the need is for precise and efficient distribution and trade strategies,” said the report. New and existing unlisted companies have access to equity capital, as they continue to pursue an aggressive expansion plan with a view to increasing their share of the market. Analysts at Nielsen say the future of retail is not limited to physical stores or virtual channels and that streamlined services, digital experiences and frictionless commerce are converging with the brick-and-mortar and e-commerce worlds set to shape new shopping experiences. According to Nielsen Shopper Trends syndicated study, Nigerians shop 30 times per month and they want value and assortment when they shop. “They are also price-conscious, with more than 70 percent aware of prices and 95 percent noticing price changes,” Nielsen notes.

Thursday 12 September 2019

BUSINESS DAY

Retail &

consumer business COMPANY

Mr Bigg’s remodels restaurant raises ante in customers’ lifestyle experience BUNMI BAILEY

r Bigg’s, the Quick Service Restaurants (QSR) arm of UACN of Nigeria being run by its subsidiary, UAC Restaurants Limited, has begun the remodelling of its restaurants in a new initiative aimed at positively redefining the lifestyle of its numerous customers. The new business initiative centred on a remodelled restaurant structure is principally aimed at sustaining the heritage and leadership of the 33 years old outfit by raising customer service to a new level. The foremost indigenous and largest fast-growing QSR business in West Africa, with over 100 restaurants in Nigeria. On inception, the business operated a fully owned restaurant operations model before it transformed in partial franchise, and later into full franchise restaurant operations model.

The new initiative according to Ethel Mba, Marketing Manager, UACN Restaurants, will remodel the restaurants into a scintillating centre of high value having a 21st century ambience. Speaking at the pioneer model restaurant located at Northwest Filling Station by the Victoria Garden City, VGC, Lekki, Lagos, during a media tour of some restaurants on Wednesday, Mba added that the new approach promises to sustain excellence in wide variety of dishes, Patries and Confectionaries to the delight of its teeming consumers, which is the heritage of Mr Bigg’s. She explained that VGC outlet which was opened on the July 9, 2019 will remain the ‘signature poster’ for all the other restaurants in the new concept, aimed at bringing world class service and ambience to satisfy the taste of Nigerians in terms of meals. The VGC restaurants boosts of cozy ambience, call centers and kiddies corner backed up by excellent service

delivery professionals to give customers un-parallel experience in a friendly and family setting. The conveniences, the eating area and the lobby are world-class, coupled with a play area for the kids. Mba assured that apart from the VGC center, two more restaurants will spring up at Amuwo Odofin in Festac town and Abule Egba along Lagos Abeokuta Express Way very soon.

“The new restaurants will be patterned after the structure of the Lekki restaurant to deliver high-quality food and good ambience as the basic standard. Aside this, the menu range will be equal and well-balanced in terms of meal choices depending on customers’ tastes or new trends,” she said. Not a few customers agree that no restaurant can survive without offering quality food

and service aimed at giving patrons a satisfying experience. For example, Bunmi Olanrewaju who came to the VGC restaurant with her kids asserts that a good family restaurant is the one that offers comfort food that reminds people of the favourite meals their mothers cooked when they were kids. She recalled with excitement that products like the Mr

Bigg’s Meat Pie, Chicken Pie, and Scotch Eggs are legendary and still remains the best. Other patrons averred that in terms of comfort, the new outlet is well cut out with space wide enough to avoid congestion and movement interruptions. Mr Bigg’s history began with the coffee shops inside Kingsway Department Stores in the 1960s. In 1973, these shops were rebranded as Kingsway Rendezvous, which became Mr Bigg’s in 1986. The chain saw rapid expansion after becoming one of the first Nigerian companies to sell franchises to investors. In 2012, UAC Restaurants adopted a full franchising business model making it the first to establish company owned restaurants in other to grow the brand footprint and equity UAC Restaurants Ltd has since then owned and operated quick service restaurants with a range of products including her signature Meat pie, Chicken pie & Beef roll, Rice and Peppered Chicken, Ice cream, Pizza, and locals meals.

ECONOMY

Unfavourable tariff, forex policies pushes trade to negative growth territory …breaks positive growth trend in three quarters BUNMI BAILEY

he customs duty tariff hike combined with Central Bank of Nigeria (CBN)’s Foreign Exchange (FX) restriction on some items and the continuous weak purchasing power might have pushed the wholesale and retail trade sector to a negative growth territory in the second quarter of 2019, analysts say. The sector had remained on a positive trend over the past three quarters since Q3 2018. According to recently released National Bureau of Statistics (NBS) GDP report, it contracted marginally by 0.25 percent after recording positive growth of 0.85 percent, 1.02 percent and 0.98 percent in Q1 2019, Q4 2018 and Q3 2018 respectively.

“Growth in the trade sector has remained on a downtrend over the past three quarters after rebounding from a recession. However, looking at Q2 numbers, trade declined to - 0.25 percent can be attributed to the trade policies particularly regarding tariffs which have not been favourable. A key one is the adjustment of excise exchange rate from N305/$ to N326/$,” Ayorinde Akinloye, a consumer analyst at CSL Stockbrokers said. “And furthermore, domestic consumption still remains weak. Consumer income has virtually being stagnant in nominal terms while inflation remains in double digit territory. Thus once demand remains poor, trade would definitely weak,” Akinloye further said. Between the end of the first

quarter (January-March) and second quarter (April-June) of 2019, the CBN with immediate effect added textiles and oil palm effective to the 41 items that have remained ineligible for forex sale in the interbank market since June 2015. And in the third quarter (July-September), the bank further added milk and food items to it. In June, the Federal government increased the exchange rate for customs duty by 6.5 percent to N326/$ from N306/$ with immediate effect with the aim to generate more revenue. This recent development implies that importers and exporters whose products are valued and transacted in dollars will now have to pay additional N20 per dollar worth of goods. Johnson Chukwu, CEO,

Cowry Asset Management Limited said, “Consumer spending and disposal income is still low. People are only spending money on necessities. There is minimal discretionary spending going on in the country and this will continue to happen in the third quarter.” Data from the NBS on Gross Domestic Product (GDP) by Income and Expenditure approach at 2010 purchaser’s values show that consumption expenditure of households has been declining at varying pace since it rose by 1.5 per cent in 2015. Also, the country’s per capita income declined to $2,049 in 2018 from $3,268 in 2014, according to the International Monetary Fund (IMF). Ayo Akinwunmi at FSDH Merchant Bank said that people still don’t have money

to spend and that the trade sector is very important to the economy. “The trade sector corresponds to the manufacturing sector. What you are producing is not really being traded.” From the report, the manufacturing sector recorded a negative growth of -0.18 percent in Q2 2019 for the first time since q4 2017. Food, Beverage and Tobacco under manufacturing sector fell marginally 0.54 percentage points to 1.22 percent in Q2 2019 from 1.76 percent in Q1 2019. Some consumer companies or manufacturers like PZ Cussons, Unilever Guinness Plc and Nigerian Breweries Plc, have started to trade cash for credit in a bid to stimulate revenue by extending friendly credit conditions to distributors given their weaker sales

Team Lead: Bala Augie, Olufikayo Owoeye; Analyst: Bunmi Bailey; Graphics: Fifen Eyemisanre Famous www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

and lower margin. “They are doing this to make distributors take enough goods from them,” said Abiola Gbemisola, research analyst at Lagos-based Chapel Hill Denham. “People don’t have money to spend and the companies are producing, so they have high inventory and a way of reducing their high inventory is to give their goods on credit,” Gbemisola posited. The sector exited recession for the first time in 2018 after recording two negative growth rates. It grew by 0.98 percent in Q3 2018 after contracting by -2.14 percent and -2.57 percent in Q2 and Q1 respectively. Then, analysts attributed it to the CBN intervention of improving the supply of dollars in the FX market for businesses generally.

Thursday 12 September 2019

BUSINESS DAY

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

Nigeria loses N6.6bn monthly to crude oil theft ...as shell raises alarm Stories by OLUSOLA BELLO

igeria is bleeding as shell Petroleum Development Company has continued to cry out that it is losing 10,000 barrels of crude oil every day. It means that the country is losing about 300,000 barrels of crude oil in a month. This when translated to monetary value comes it comes to about N6.6billion($18.6million) Apart from the monetary loss recorded from this crime it also has the environmental impact on both aquatic and human lives. Just recently that Nigerian National Petroleum Corporation stated in its financial statement that it records 77 per cent Increase in Pipeline Vandalism in its network of pipeline infrastructure across the country in June 2019. The corporation’s Monthly Financial and Operations Report (MFOR) for the month said 106 pipeline points were breached, representing an increase from the 60 points vandalized in May 2019. It explained that the AbaEnugu axis in the system 2E pipeline corridor accounted for 25 per cent of the total pulverized points, while the Lagos Atlas Cove-Mosimi axis of the system 2B had 23 per cent of the compromised pipeline points. While the Ibadan-Ilorin leg of the System 2B pipeline accounted for 18 per cent of affected lines, followed by the PHCAba section of the system 2E which was responsible for 13 per cent of the affected pipe-

Timipre Sylva, minister of State for Petroleum Resources

line, adding that other areas accounted for the remaining 21 per cent of cumulative line breaks. Confronted by this enormous lose of resource, Shell Petroleum Development Company of Nigeria Limited (SPDC) has therefore cried out for help from government, communities and other stakeholders to stem the incessant attack on oil assets in the Niger Delta. “These are critical national assets with 55 percent government interest and they produce the crude oil that accounts for over 90% of Nigeria’s foreign exchange and the bulk of government revenue. Hurting these assets means hurting the nation’s revenue, the economy of the states, the health of the people and the environment,” SPDC’s general manager external relations, Igo Weli, said. “Crude oil theft on the pipeline network resulted in a loss of around 11,000 barrels of oil a day in 2018,

which is more than the approximate 9,000 bbl/d in 2017, Weli said, adding that since 2012, SPDC had removed more than 1,160 illegal theft points on its joint venture pipelines in the Niger Delta. SPDC said it was concerned about the lives and safety of those involved in pipeline vandalism and crude theft just as the company was concerned about the environment. “As a responsible organisation, we put safety first and have constantly made this appeal to those involved in crude theft in the Niger Delta to stop destroying their land and heritage from the spill and pollution arising from their activities.” The crude oil theft and artisanal refining of stolen crude are criminal acts that are not only against the law but are also capable of mortgaging the future of the community. Recently NNPC and the Nigerian Navy pledged to deepen collaboration to

tackle the menace of crude oil theft and attacks on oil and gas facilities. Mele Kyari NNPC boss and Vice Admiral, Ibok Ekwe, Chief of Naval Staff, came to the resolution when the NNPC officials paid a courtesy visit to the Naval Chief. But the challenge here is how the Navy is going to help in tackling this menace remains to be seen. The popular opinion in the industry is that if the task force comprising the Army , Navy, and other security outfits has not been able to checkmate the rising profile of vandalism of crude oil and products pipelines all these while one wonders what it would do now. Corruption is making those that should protect the pipelines look the other way while bunkering thrives. This situation may remain with us for a long time except the government has the political will to stamp out corruption.

METKA restates commitment to Nigeria on power

ETKA Power West Africa, has assured that it will continue to partner with Nigerian government so as to find a lasting solution to the problems of electricity in the country. Evangelos Kamaris, managing director of METKA Power West Africa, gave the assurance recently during commissioning of the 7.1MW solar hybrid power plant in Bayero University Kano (BUK). He said METKA ver y much believes in Nigeria and the vision of its leadership in the power sector, and it appreciate the opportunity to be part of the project. METKA he assured will strive for constant business excellence - balancing economic growth and sustainable development - and will continue to support the efforts of government in the development of the Nigerian electricity market until the nation achieves stable and reliable power supply. “The commitment of the company to the country goes beyond installations alone: We are also focused on transferring knowledge and building local capacity. To this end, METKA organizes periodic technical training workshops, providing opportunities for professionals in Nigeria to enhance their skills, enabling them to support the installation and operation of systems utilizing the award-winning EXERON technology. The next training is scheduled to hold in Abuja later this September.” On the impact of the firm’s operations, the METKA boss said besides improving learning conditions at the university, the state-of-the-art solar hybrid power plant will result in carbon dioxide savings of 108,875,120Ibs, a feat we as green contractors are proud of. In addition, the Energizing Education Programme will also generate jobs for the host

communities. At the moment, over 100 skilled Nigerians are employed across all four (4) projects sites. Under the implementation of the Rural Electrification Agency (REA), the BUK power project is part of the Energizing Education Programme (EEP) - a federal government intervention focused on developing offgrid dedicated independent power plants and rehabilitating existing distribution infrastructure to supply clean, safe and reliable power to thirtyseven (37) federal universities and seven (7) affiliated university teaching hospitals. METKA is to do similar projects in three other universities in the first phase of the programme. These are Nnamdi Azikiwe University,Awka; Federal University of Petroleum Resources Effurun; and Usmanu Danfodiyo University, Sokoto. While speaking at the BUK launch, Vice President Yemi Osinbajo commended METKA for its strategic partnership and professional execution. He noted that the project would benefit thousands of students and other members of the university community, enhancing the quality of teaching, research and learning while also empowering the girl child and providing job opportunities for many, in line with the Next Level agenda of the Buhari administration. Mamman Salleh, the Honourable Minister, Federal Ministry of Power, stressed the government’s commitment to enabling the development of the educational sector – given its importance in catalysing economic growth - by lighting up institutions of learning. “The Ministry’s power policy specifically targets education to ensure that all federal universities, to begin with, have access to reliable electricity”, he said.

‘Steady electricity supply cannot be guaranteed without appropriate tariff’

he regime of inappropriate electricity tariff in Nigeria will likely continue to deny electricity consumers satisfactory service from discos. “This is because if all the electricity value chain is not adequately covered with appropriate tariff there would always be hiccups in the supply chain which will have consequences on the economy” Ola Alokolaro, a partner at ADVOCAAT LAW PRACTICE said this while speaking on Olusola Bello, Team lead,

the current electricity situation and benefits associated with having appropriate tariff in the electricity sector. He said for the industry to work, electricity supply must be duly paid for stating that the real price of electricity is not what we have at the moment in the country. According to him, what is operational is a subsidised price adding that he is not too sure how long we would continue to subsidise the entire energy industry.”

Graphics: Joel Samson.

He believes there should be enlightenment of the people about the power sector on the need for consumers to pay appropriate tariff. “We can begin to educate people at the bottom of the chain that electricity is not free, and then we would be getting people ready to pay the true price of electricity.” Another reason for appropriate billing, he said is the fact that the cost of gas production is settled in dollars while electricity tariff is paid in naira. He said consumer should have ability to

www.businessday.ng

pay for the electricity if the true price is passed down. “It is important that we have gas in abundance, it is important that gas is priced properly and it is also important that the power supplied is paid for appropriately,” he said. Subsidies, he stated, ultimately affects the bottom-line of governance and the ability of government to invest in other sectors such as schools and hospitals. Expressing his views on Eligible Demand and Embedded

Power policies, he said: “Let’s see the two policies that were introduced. You see we have the generation, transmission and have you have distribution. In terms of generation we have generating capacity of about 7000 megawatts (MW) and of this what we are able to wheel is about 3,000mw. For a population almost 200million, if you do the mathematics this is not good enough for a nation that wants to industrialise”. “You have the discos that are having challenges in terms

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

https://www.facebook.com/businessdayng

@Businessdayng

of being able to get revenue. You have the interlink between the generators and the distribution companies which is the transmission where you have old and worn out wires that needs to be repaired and replaced. Now you can imagine the huge distances the transmission lines pass through across the country and it is through this line that electricity has to be transported through. You can even see with the frequent system collapse and total blackout we have in the country”.

Thursday 12 September 2019

BUSINESS DAY

TECHTALK Innovation

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

Broadband Infrastructure

Microsoft seeks regulatory partners in Africa to police escalating cyber crimes FRANK ELEANYA

lthough less than half, about 39.5 percent of Africa’s 1.3 billion people are on the internet, it is proving a very difficult task to keep them safe and out of the reach of criminals who roam the cyberspace on a daily basis. It is not just in Africa, to be fair, the rest of the world are having to stumble along as cyber criminals get more sophisticated and exploit every little vulnerability. Oftentimes all it takes to wreak major havoc in an organisation could come from these small loopholes which could be from any member of the company. In a recent report, 87 percent of senior managers admitted to technically leaking business data. The difference between Africa and the rest of the world is in response. While a few African countries have managed to come up with a legal framework, the documents are accumulating dust from lack of enforcement thereby enabling criminals to prowl with little fear of any official deterrents. The health and financial sectors have been the most targeted as half of cyberattacks perpetrated in 2018 came from there. In stealing data from these sectors, including passwords, the attackers are enabled to launch further strikes and multiply the return. David ‘Dwizzle’ Weston, Partner Director of Enter-

prise and OS Security at Microsoft told BusinessDay on the sidelines of a security meeting in Johannesburg that the bread and butter of cyber security is intelligence. Threat intelligence for instance, provides actionable early warnings about the bad things that are out there. That’s typically for larger companies that have a security operation that will know what to do with the information Weston leads an army of cyber hackers saddled with the responsibility of finding every form of vulnerability in Windows products and create the most potent defense for them. “We basically hack the hackers,” he said. His team of ethical hackers are divided into the Red Team and the Blue Team with the former being the

antagonists and the latter making up the defense line. Being a global tech business with growing focus on cloud, the Redteam whose job requires identifying the vulnerabilities are a prized asset to Microsoft. There are 6.5 trillion threat signals that go through the Microsoft cloud every day. In 2018 attackers used a variety of tricks both new (coin-mining) and old (phishing), on their ongoing quest to steal data and resources from customers and organisations. The Red Team’s work with intelligence from multiple data sources to stay ahead of the criminal competition. “What we found is that attackers are constantly shifting their techniques,” Weston said. That attacks may not be

making the news regularly in Africa like as it’s the case in other continents, does not mean it is reduced. According to Microsoft Security Intelligence Report, the five locations with the highest average monthly ransomware encounter rates in 2018 were Ethiopia (0.77 percent), Mongolia (0.46), Cameroon (0.41), Myanmar (0.33), and Venezuela (0.31). This was not the case a few years back when ransomware encounters used to cluster in wealthy countries and regions in Europe and North America. Theo Watson, commercial lawyer for Microsoft Africa said during a presentation that a weak regulatory environment on the continent has ensured enforcement is far below expectations, hence companies don’t take transparency

seriously. “The drive from Microsoft is to inspire trust in the cloud and we do this through providing transparency across compliance, control and protection,” Watson said. Lack of enforcement of cyber security laws is largely behind the rise of brazen characters like Obinwanne ‘Invictus’ Obi and some 80 Nigerians the FBI said were behind attacks that targeted families in the US and defrauding them up to $1.1 billion. Deloitte noted earlier in the year that use of phishing emails to trick Nigerians into divulging sensitive information increased in 2018. They expected the attacks to grow even more in 2019. Although financial institutions have put in place effective systems to check this trend, other sectors in the economy have become targets. (e.g. Maritime, Consumer Goods, Energy, Telecommunications, etc). “We are constantly engaging governments across Africa,” Watson said. Government’s participation and collaboration with private sectors is critical to efficiently policing the internet and keeping citizens away from the reach of criminals. Watson sees government attention growing in the years to come. At the moment it is slow as politics often overrides genuine intentions to protect people. “It takes a lot of patience,” he told BusinessDay.

3yrs after, dysfunctional government websites leave information seekers at a loss ... EFCC, Finance, Health, NBS lead users to misleading web addresses, security threats CALEB OJEWALE

any Nigerians still think “234 or 23401” is the postal code for Nigeria, but sadly, this is very wrong. There is a website individuals can get postal codes for almost any address in Nigeria, but the laxity in its management by the Nigerian Postal Service (NIPOST), the government agency responsible for managing that website is where the story begins. The website http://nigeriapostcodes.com/ was first registered on December 4, 2009 before it expired on December 4, 2016, and was not renewed again, at least not by NIPOST. A BusinessDay article at the

time, chronicling dysfunctional websites by government agencies, tried to draw attention to this. Today, an unknown entity has resurrected the website, which is now far from offering accurate information, and since whichever private entity that owns it is not obligated to run it as a charity, adverts have been generously embedded all over it for revenue. On July 11, 2017, more than seven months after the original website expired, NIPOST registered another website, this time; www. nigeriapostcode.com.ng. Making an internet search for ‘Nigeria Postal Code’ still favours the old website that has now been taken over by someone else, as the new website by NIPOST hardly

shows up on the first page. While the postal code website may have been lucky to somewhat get resurrected, others have not. Three years ago in 2016, it was observed on the website of the National Bureau of Statistics (NBS), that some ‘important links’ were listed in the footer area. Among these are Federal Ministry of Health, hyperlinked to the address; www.fmh.gov.ng, and the Federal Ministry of Finance, hyperlinked to the address; www.fmf.gov.ng. Both addresses showed a ‘suspended page’, an indication that the hosting account for each of the websites was no longer active. Both ministries operate accessible web addresses at www.health.gov.ng and

www.finance.gov.ng whereas three years later (in 2019), they are still referenced on other official portals such as the NBS as fmh.gov.ng and fmf.gov.ng respectively; web addresses that still do not function. As noted in the BusinessDay report, the conflicting addresses, though showing government domain extensions, are capable of causing either mistrust or confusion for people who may have official business to transact with the ministries, departments, and agencies of government. Also, the website of the Economic and Financial Crimes Commission (EFCC) when previously visited, prompted an antivirus alert (at least by Bitdefender) stat-

ing the website is unsafe and it has detected elements that may harm the computer. On Tuesday, even after three years, the security prompt indicated “Fraudulent page blocked for your protection”. It further noted that; Fraudulent pages usually attempt to trick you into sending money with the intent of obtaining unlawful gain. Ignoring the security warning and accepting the risks, another surprise awaits a visitor to the website. Three years later, the EFCC’s media and public affairs page is still showing a “page cannot be found” notice when visited to reach out to the unit for response as to why the anti-fraud agency’s website is itself being considered a fraud threat to PCs.

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

https://www.facebook.com/businessdayng

@Businessdayng

Bank IT Security

Studio 24 unveils ‘first of its kind Robotic Photographer’ in Nigeria GBEMI FAMINU

he use of Robotics and Artificial Intelligence (AI) was on creative display this week, when Studio 24 one of the leading digital photography companies in Nigeria launched a Robotic photographer named Grace, in a bid to disrupt the photography industry. Ifeanyi Oputa CEO of Studio 24 noted at the launch, that digitalization and artificial intelligence are the future and have to be embraced, thus, informing the company’s decision to acquire the new pricey robots, even though actual costs were not disclosed. “Although it has been launched in other countries, this is the first of its kind in Africa and Studio 24 is changing the narrative in the industry,” he said. Built with a canon digital 1300D which is a standard digital SLR, “Grace” has the ability to take thousands of photographs within its operational hours, and is also able to either print or send pictures taken. With an attached printer, “Grace” can produce 1000 pictures in 4 hours and has the ability to use more than one printer whenever it is necessary. Speaking on the challenges involved in the innovation, Oputa described meeting market demand as one of the major challenges because the robot is hand built and customized, adding that each component unit of the robot takes 8-12 weeks to be coupled. Five units of the robot are said to be available in Nigeria and will be in different parts of the county including Lagos, Abuja, and Port Harcourt. While other robots are being built, Grace will be available to the public on rental conditions with a minder. It was also revealed that the robot was named Grace after the first pioneer manager of Studio 24 in Kaduna, Grace Ufot who died in 2015. The company’s CEO explained that the use of a female for the robot is part of Studio 24’s efforts in encouraging female photographers, also adding that the robot will be the brand ambassador for the female photographers’ team. He stressed, however, that while the robot will complement the services of a photographer, it will not take over the role of photographers because it is a robot and does not have a human angle to it especially in client relationships.

Thursday 12 September 2019

BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

GREYMATTER

Importation of NAFDAC-regulated products into Nigeria to be processed on Nigeria Trade Portal with e-Permits & Licenses

n what appears to be a coordinated regulatory action, the National Agency for Food and Drug Administration and Control (“NAFDAC”) and the Central Bank of Nigeria (“CBN”) both issued separate notifications recently, stating that with effect from Monday, September 9, 2019, non-digital licenses, certificates or permits issued by NAFDAC will no longer be acceptable for the processing on the Nigeria Single Window Trade Portal of the importation of products regulated by NAFDAC. NAFDAC regulated products include foods, drugs, cosmetics, medical devices, packaged water, chemicals and detergents. The notification by the CBN, a circular titled “Integration of NAFDAC e-Permit with e-Form

INSIDE ǼLEX’S Funke Adekoya SAN, wins partner of the year at the African legal awards 2019

Blogs, Websites and Social Media Posts: a legal Perspective 31

Bullying and harassment take front burner, as Bar Council offers free app to report 33

‘M’ on the Nigerian Trade Portal”, was issued on Friday, August 30, 2019, through its Trade and Exchange Department. It notified all Authorized Dealers, Nigeria Customs Service (“NCS”) and the general public that e-Permit issued by NAFDAC, in respect of regulated products intended for importation into the country, has been integrated with the

e-Form ‘M’ used for processing imports on the Nigeria Single Window Trade Portal. Further to this development, only digital forms of Import Permits issued by NAFDAC shall be used for the processing of import transactions in respect of regulated products. Accordingly, the integrated e-Permits and e-Form ‘M’ shall thenceforth be required

for import processing on the Nigeria Trade Portal. Please note that the relevant NAFDAC regulated products are those with non-overlapping Harmonized System (HS) codes with the Standards Organization of Nigeria (SON). Similarly, in a Public Announcement titled “NAFDAC eLicense Go-Live on National

Single Window for Trade” and published on NAFDAC’s website on Sunday, September 1, 2019, NAFDAC notified importers, freight forwarders, customs licensed agents, port stakeholders, banks and the general public of the pending commencement of the integrated NAFDAC ePermits and e-Form “M’ on the Nigeria Single Window Trade Portal. The Public Announcement corroborates the CBN circular, that with effect from September 9, 2019, scanned copies of NAFDAC licenses will no longer be accepted for the processing of Form M on the Nigeria Single Window for Trade Portal. In order to utilize the electronic licenses for the processing of Continues on page 30

FCCPC, SEC sign MoU on Regulatory Collaboration

ursuant to Section 105 of the Federal Competition and Consumer Protection Act (FCCPA), the Federal Competition and Consumer Protection Commission (FCCPC) and the Securities and Exchange Commission (SEC) have signed a Memorandum of Understanding (MoU) to foster a mutually beneficial engagement and seamless operation of the mandates of both organisations. This is also in compliance with Section 105 of the Federal Competition and Consumer Protection Act (FCCPA) 2018, signed into law by President Muhammadu Buhari on January 30th, 2019, which requires FCCPC to negotiate MoUs with relevant regulators. A key role of FCCPC is merger review, which was, prior to signing the FCCPA, a statutory role of the Securities and Exchange Commission (SEC). On May 3rd, 2019, FCCPC and SEC established a joint merger review desk as an interim measure to ensure continuing processing of pending and emerging transactions. In furtherance of this and a more structured collaborative www.businessday.ng

working framework for a coordinated and efficient execution of their roles and responsibilities to ensure a complete, vibrant and robust implementation of their statutes, both agencies negotiated and only just concluded an MoU. At the MoU signing ceremony, Babatunde Irukera, the Chief Executive Officer of FC-

https://www.facebook.com/businessdayng

CPC, remarked that the interim arrangement between FCCPC and SEC had been acclaimed in industry as exemplary of how to proffer solutions, promote confidence in the regulatory ecosystem and enable business. Mary Uduk, the Acting Director General of SEC, said the MoU will lead to a stronger col@Businessdayng

laboration and better economy for the country. The parties agreed to cooperate and collaborate in performing their individual duties, particularly information sharing, consumer complaints in the capital market, investigation, enforcement and compliance, including capacity building.

Thursday 12 September 2019

BUSINESS DAY

INDUSTRYFILE

ǼLEX’S Funke Adekoya SAN, wins partner of the year at the African legal awards 2019

LEX is delighted to announce that Funke Adekoya, SAN, was crowned winner of the Partner of the Year Award at the African Legal Awards 2019. The African Legal Awards recognises exceptional achievement in Africa’s legal services industry. The scoring criteria include the contestant’s track record of exemplary leadership, strong legal skills, resourcefulness which has led to successes, upright client management practices, and measurable contributions to the wider community. Funke in over 40 years’ of practice has received considerable recognition and numerous awards for excellence in the commercial litigation and corporate dispute resolution areas. She leads a team at ǼLEX that represents businesses in various sectors. The awards ceremony took place in Johannesburg on Friday, 6th of September 2019.

Importation of NAFDAC-regulated products into Nigeria to be processed... Continued from page 29

Form ‘M’ for NAFDAC regulated p roducts, applicants would be

required to input the Approval Reference Code stated on their NAFDAC e-licenses. This would then be auto-verified and accepted by the e-Form ‘M’ platform. NAFDAC, in the Public Announcement, also advised holders of valid NAFDAC Registration Certificates and other import documents that are not in electronic formats, to visit its website and follow a designated procedure for the digitization of such documents. It would be recalled that earlier on November 16, 2018, NAFDAC had issued a Public Notice on digitization of documents through which it directed all marketing authorization holders and applicants to enroll and digitize all registration and listing certificates and notifications on the National Single Window for Trade, before such are presented in trade for Pre-Arrival Assessment Report (PAAR), Form ‘M’, Customs Clearance and other trade-related transactions.

Funke Adekoya, SAN

Communication Expert calls on lawyers to hone their public speaking skills ertified Public Speaking Professional, Ubong Essien, has urged legal practitioners to learn the art of effective speaking in public places, if they wish to gain recognition and attention in courtrooms and boardrooms. Essien, who is a public speaking professional from the National Speakers Association, USA and Dean of the School of Eloquence, gave the advice while addressing legal practitioners at the just concluded Nigerian Bar Association (NBA) annual general conference in Lagos. He stated that it was imperative for lawyers to have confidence and speak with authority in public places, including courtrooms and boardrooms. According to Essien, the most important skill required for success by a legal practitioner, is oral communication. “Other skills needed for success in the legal profession include, teamwork, organisation, time management, knowledge of substantive law, technology, legal research, analytical and logical reasoning, client service and written communication,” he said. Essien explained that, although it is possible to outsource or delegate every other skill, ef-

LegalBusiness

fective oral communication cannot be outsourced or delegated. He added that, Lawyers who wish for progress in their career, must be able to speak publicly and for themselves. He noted that, Lawyers must also recognise their role as mouthpiece for their clients, and as such, nurture effective and strong public speaking skills to advocating the causes of their clients. He further explained that, a speech is always designed to be delivered and not to be read, emphasizing that, even if someone writes a speech for his superior, the superior should make efforts to read and digest the speech in order to be able to deliver it effectively. The CSP explained that, public speaking is the raw art of speaker to audience oral communication, without any accompaniment. Adding that most leaders in business and corporate worlds like to read their speeches instead of delivering them, thus, making it boring for their audiences. “You don’t read a speech, but you deliver it to make it look convincing, and you must learn how to speak and make remarks”, Essien explained. He stressed that, effective public speaking is “an obligatory www.businessday.ng

skill, a superior skill, universal skill, an eternal skill and there is need to abolish all misconceptions, agitation, but devote time, attention, to master the art of public speaking.” The School of Eloquence is a public speaking and presentation skills training school, for business executives, policy makers and professionals. It provides leaders with key training, tools and programmes for effective communication.

https://www.facebook.com/businessdayng

Comments Integration of the systems and processes of critical government agencies was one of the reform initiatives driven by the PEBEC/ EBES, over the last two to three years, under the variously implemented National Action Plans on the Ease of Doing Business in Nigeria. One main purpose of the integration is the emplacement of a seamless framework for business, devoid of multiple and overlapping regulations. Accordingly, the Federal Government of Nigeria (“FGN”) established the Nigeria Single Window Trade Portal (“Nigeria Trade Portal”), a cross-government website that opens a new era for trade facilitation by offering a single portal for trade actors (both Nigerian and international) to access a full range of resources and standardized services from different Nigerian government agencies. The Nige-

@Businessdayng

ria Trade Portal provides a single digital platform where electronic formats of the documents required by the various participating government agencies or regulators, in a business transaction, can be uploaded seamlessly and at once. In furtherance of the integration/collaboration goal of the FGN, major Ministries, Departments and Agencies of Government (“MDAs”) have digitalized, or are digitizing, their processes. For instance, the Corporate Affairs Commission (CAC) has digitalized the processes and documents required for filing by customers and licensed professionals. Similarly, the Federal Inland Revenue Service (FIRS) and other tax authorities have digitalized their processes for the payment of taxes by taxpayers and tax consultants. Same holds for other MDAs, including the Nigeria Immigration Service (NIS), Nigerian Ports Authority (NPA), and the NCS. In support of this reform, the CBN, in Memorandum 9 of its Revised Foreign Exchange Manual, effective August 1, 2018, finally replaced the Form “M” (Application to import physical goods/ capital goods, otherwise known as visible trade transactions) with the digitized e-Form ‘M’. With the integration on the Nigeria Trade Portal, of NAFDAC ePermits/Licenses and the e-Form ‘M’, Trading Across Borders; an important reform agenda in the drive to make Nigeria a progressively easier place to do business, is expected to improve, particularly for NAFDAC regulated products. The Grey Matter Concept is an initiative of the law firm, Banwo & Ighodalo DISCLAIMER: This article is only intended to provide general information on the subject matter and does not by itself create a client/attorney relationship between readers and our Law Firm or serve as legal advice. Specialist legal advice should be sought about the readers’ specific circumstances when they arise.

Thursday 12 September 2019

BUSINESS DAY

ICTLAW

LegalBusiness

Blogs, Websites and Social Media Posts: a legal Perspective OLUSOLA GEORGE-TAYLOR

his is the digital age and there’s no escaping it. You either own a business website, run a blog as a hobby, have multiple social media accounts or in the very least, have apps downloaded on your mobile phone. Some of us fit into several if not all of these categories. One way or the other, we’re all either creators or consumers of digital content or both. This article seeks to outline and address key legal aspects and issues associated with the digital world - the legal implications of our digital engagement, legal risks involved in content creation and dissemination and how these risks can be mitigated. Copyright Infringements on online platforms These can occur in various forms. The most common forms of copyright infringements in the social media space have to do with posting of copyrighted content such as music, pictures and videos. Most social media sites such as Instagram and Facebook advise that to avoid posting copyrighted material, you post only content which you have created yourself. These sites however acknowledge two situations where you may post copyrighted material. The first of these is to seek a consent or license from the original copyright holder/content owner to post the material. The second exception to posting copyrighted content is a legal principle, which under American law is known as “Fair Use” while it is known as “Fair Dealing” under other jurisdictions including Nigerian Copyright Law. Fair Use or Fair Dealing refers to the exceptions, which allow for use of copyrighted material without the need to obtain prior permission or license. Fair Use under American law is a little more open-ended than Fair Dealing. Fair Use considers the following four factors; The purpose and character of the use including whether such use is of a commercial nature or for non profit educational purposes, the nature of the copyrighted work, the amount and substantiality of the portion used in relation to the copyrighted work as a whole and finally the effect of the use upon the potential market for or value of the copyrighted work. As can be seen from the language in the points above, fair use is very open-ended and subject to interpretation whereas fair dealing is more specific in nature. Under the Nigerian Copyright Law, fair dealing provides for use of copyrighted materials for purposes of research, private

use, criticism, review or the reporting of current events subject to the condition that if the use is public, it shall be accompanied by an acknowledgement of the title of the work and its authorship. Fair dealing under the Nigerian Copyright Law also allows for use of copyrighted material as long as the copyrighted material is recreated in the form of a parody or caricature. It is thus quite important to use the above as a litmus test before posting copyrighted content online so as to avoid legal liability. Consequence of Copyright Infringement in digital space: Where Copyrighted material is infringed upon in online platforms, more often than not, a notice/warning is sent to the infringing party to take down the copyrighted material and to desist from posting same. Sometimes, this is sent by the copyright owner and other times, by the online platform itself (where a complaint has been made by the copyright owner). In such a case, the infringer is not liable to pay any penalties for use. However, there are cases where the copyright owner may sue for costs or damages. This is usually in cases where the infringer has benefitted commercially from the use of the copyright material or where the use of the copyrighted content has negatively impacted the copyright owner in one way or the other. In such cases, the copyright infringer may be liable to pay costs or damages for the infringement as the case may be. It is thus very important to be cautious when making use of copyrighted material even under the Fair Dealing exceptions. Plagiarism in online platforms It is common to copy and www.businessday.ng

paste in digital space, however copying and pasting and taking credit for the pasted work amounts to plagiarism. Plagiarism although wrong is not in itself a crime. Where plagiarism is committed regarding material that is not copyrighted, it is simply unethical. However, where the material, which has been plagiarized, is a copyrighted work such as a poem or article (literary works), the guilty party will be liable for copyright infringement. When a person creates original literary work, such work is automatically protected by copyright – there is no requirement that the work be registered or even marked “copyright” or “©”, although this is often done in practice. Where such literary work has been copied without the permission of the copyright owner and such copying is “substantial”, the copyright is said to have been infringed. There is no clear definition as to what amounts to “substantial” and the Courts decide cases on a case by case basis. In some cases the reproduction of small amounts of a piece of work has been held by the Courts to be “substantial” and it is not necessary for the copying to be exact. So it is important to be careful when duplicating literary works online. To be on the safe side, it is much better to give credit to the original author than to pose as the owner of the literary work. Website Terms and Conditions For website owners, it is vital to have Terms of Use which govern the use of your site by users/visitors and conversely, it is important for users to go through those terms of use to know their rights concerning the use of the site. More often

https://www.facebook.com/businessdayng

than not however, we find users simply clicking the “I ACCEPT” button when prompted, without actually reading the terms. This is known as a Clickwrap Agreement. Clicking that button or ticking that box is equivalent to signing a digital contract and could absolve the proprietor of the website from any legal liability that it may have incurred otherwise. This is especially important on e-commerce sites where there is some form of exchange of services, products or money. The terms and conditions usually detail important clauses such as refund processes, which may not necessarily be in the favour of the user. It is thus very important to go through the terms before agreeing to them and using the service. Most websites however which are less exposed to legal risk usually have what is called a “Browsewrap Agreement”. Unlike a Clickwrap Agreement, a user does not need to take action to affirm his consent to be bound. Instead, the agreement typically states that the use of the website is deemed acceptance of the agreement. However, courts are more likely to enforce clickwrap agreements than browsewrap agreements. Browsewrap Agreements for them to be more enforceable should be placed somewhere on the homepage of the site, where it is quite visible and prominent. It is also imperative that websites which require password input and/or personal data of users should have a Privacy Policy which clearly outlines how the data will be used and to guarantee users that such information will not be shared or tampered with. Software End User License @Businessdayng

Agreements (EULA) This is an agreement between the software proprietor and the purchaser (or free downloader in most cases), establishing the purchaser’s rights to use the software. The software proprietor as the licensor grants the user the license or right to use the software and lays out the terms and conditions governing such use. More often than not, such terms normally include provisions against duplicating or sharing the software but more importantly, such license agreements usually seek to protect the software proprietors from legal exposure by providing terms which hold harmless the software proprietors in cases where the download or use of the software were to result in damage to the user’s computer or data. Some EULAS go further to protect the software proprietor from third party damages, which may occur from improper or illegal use of the software. For these reasons, it is crucial for software developers/proprietors to seek apt legal counsel before publishing their digital products for public use and in the same vein, it is important for end users of software to go through EULAs to know their rights of use, especially users of technical software such as accounting and medical software. The digital world is fast paced and traditional laws are slowly evolving to catch up with digital trends. For stakeholders in the digital space, it is important to seek sound legal counsel to ensure that you and your business are well protected from legal exposure in the digital and real world.

• Olusola George-Taylor is a Partner in the Law firm of AlliBalogun, Okeke and Taylor - otaylor@alli-balogunandokeke.com

Thursday 12 September 2019

BUSINESS DAY

THEBAR

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

LegalBusiness

Thursday 12 September 2019

GLOBALREPORT Bullying and harassment take front burner, as Bar Council offers free app to report

he UK Bar Council has turned to artificial intelligence to help barristers report bullying and harassment quickly and anonymously. Talk to Spot, a smatphone app developed by Spot, a US tech company, will enable barristers to talk through and record contemporaneously inappropriate behaviour at work. Barristers can choose to save the report for their own records, or print the report and sent it to their chambers, employer, other bodies or the Bar Council. The Bar Council says no human, nor the Spot team, will see

what a barrister discusses with Spot unless they decide to submit a report, which they can do anonymously. A global study led by the International Bar Association, published earlier this year, showed that bullying and harassment is endemic in the law. Spot’s website states that its tool is ‘an anonymous bot that uses AI to help employees remember and document the details of what happened’, which is ‘available to listen 24/7’. Once a report is submitted, the company says employers can ask follow-up questions and let the employee know they’ve taken action.

Richard Atkins QC, Bar Council chair, said the free app was another innovative use of technology. He said: ‘Although barristers wear wigs and gowns in court, it should not for a moment be thought that the bar does not embrace technology. Paper is disappearing from our courts, with most members of the bar using laptops rather than carrying large paper bundles wrapped in pink ribbon.’ Talk to Spot will be available for barristers this month, the regulator said.

Deloitte muscles into legal education with first trainee solicitors

business can outdo law firm rivals by offering new recruits a more rounded experience of work in professional services. ‘Deloitte Legal is in the fortunate position of being able to immediately adopt the new Solicitors Qualifying Exam, allowing us to be at the forefront of what is undoubtedly an exciting new era in legal education and training,’ he said. ‘We want to broaden access to the profession and make it as inclusive as possible. This is a fantastic opportunity for aspiring solicitors to earn while they learn, while also encountering the wealth of expertise beyond legal work that Deloitte Legal can offer as a multidisciplinary firm.’ The new SQE training contracts enable law students to take up their place straight out of university, www.businessday.ng

LegalBusiness

Lawyer reprimanded for discriminatory statements about Chinese optometrist

New Jersey lawyer was reprimanded Friday for demeaning and discriminatory statements about the Chinese culture in a letter to a medical malpractice defendant. The New Jersey Supreme Court reprimanded George Farmer of

person on the street, and am wise to his nonsense, trickery and chicanery.” During the ethics hearing, Farmer had contended that he was merely citing the opinions of experts. He also relied on testimony from the client, his girlfriend, his ex-wife and two friends, who

Northfield for violating a disciplinary rule banning discriminatory conduct undertaken in a professional capacity, report Law360 and the Legal Profession Blog. The blog linked to the court’s Sept. 6 order and the Jan. 15 decision of the New Jersey Supreme Court Disciplinary Review Board. Farmer had sued the defendant, an optometrist, on behalf of a client who had eye surgery. Farmer contended that the optometrist had lied and tried to cover up wrongdoing by altering records, according to the decision by the review board. In a July 2013 email to the defendant, Farmer wrote, “I have read your letter. The only thing I can suggest is that you are either: delusional, a pathological liar, in denial, a psychopath, or all of the above.” In an October 2013 letter to the optometrist’s lawyer, Farmer said he had no doubt that the optometrist was a pathological liar. He went on to make this assertion: “I am/was not a student of Chinese culture. So I did a little research and found that ‘In fact, lying to achieve some business or social aim, and getting away with it, is considered to be a sign of intelligence and social skill among many Chinese.’ See/25/ http://thelinguafranca.wordpress. com/2008/03do-the-chinese-liethat-depends/. Also, in the Chinese culture, ‘lying has become a means to an end.’ See http:// EzineArticles.com/1435598. “Having read those articles as well as other related articles, it is starting to make sense to me. Your client’s only problem is that even though he is a doctor, and he thinks that he can lie his way through this matter, he is not going to get away with it. I am someone who is smarter than the average

said they had never seen Farmer exhibit discriminatory or racist behavior. A district ethics committee had found that the statements were discriminatory in nature and directed at the defendant in a derogatory manner based on his national origin. In mitigation, the committee said Farmer’s conduct “was an isolated incident and not repeated or recurring behavior.” The review board affirmed, finding a violation of New Jersey Rule 8.4(g) of the Rules of Professional Conduct. The rule states that “it is professional misconduct for a lawyer to: engage, in a professional capacity, in conduct involving discrimination … because of race, color, religion, age, sex, sexual orientation, national origin, language, marital status, socio-economic status, or handicap where the conduct is intended or likely to cause harm.” A comment to the rule says the word discrimination is to be “construed broadly,” and it includes “derogatory and demeaning language.” The review board said Farmer’s statements are “discriminatory and demeaning on their face.” In addition, the board said, Farmer’s contentions that he was not a racist and was merely relying on expert opinions were “wholly specious and unworthy of serious consideration.” The review board noted this comment of the district ethics committee: “The mere existence of an opinion online does not establish its author as an expert. If it did, every post on Facebook or Twitter could constitute expert opinion.” Farmer told the ABA Journal that he is working on a statement about the reprimand and would forward it when it was ready.

-LAW SOCIETY GAZETTE

L-R: Chair, NBAAGC 2019 Programmes Sub-committee, Mfon Usoro; President, International Bar Association (IBA), Horacio Bernardes Neto and BusinessDay Law Editor, Theodora Kio-Lawson, during the 2019, Annual General Conference of the NBA, where the IBA President, launched the IBA Report on Bullying and Sexual Harassment in the Legal profession.

ig Four accountant subsidiary Deloitte Legal today continued its assault on the legal profession by announcing plans to recruit its own trainee solicitors. The firm has opened applications for its graduate training contract programme, which will incorporate the new Solicitors Qualifying Examination. The first intake will be around 10 but this is expected to grow with the expansion of the business. The three-year training programme will begin in September 2020 and has been developed alongside the University of Law to prepare students for the new exam. Deloitte Legal has already built a team of more than 200 people and this is its first foray into training solicitors. The graduate programme will be seen as further evidence that the big four accountancy firms – all of which now have legal services divisions – are mounting a sustained charge on the established legal profession. Michael Castle, UK managing partner for Deloitte Legal, said the

BUSINESS DAY

allowing them to start earning immediately while gaining qualifying legal work experience before sitting their SQE 1 and 2. This differs from the current arrangements where trainees do not take up their place until after they have completed an additional year studying the Legal Practice Course (LPC). Deloitte Legal says successful applicants to its programme will be client-facing during their training periods and experience areas of practice including tax litigation, employment and corporate and commercial law. Professor Andrea Nollent, vicechancellor and chief executive of ULaw, said: ‘It has always been hugely important for us to nurture the next generation of legal talent. With the new SQE training contracts allowing students to experience the real legal world earlier in their career and education, we are now able to team with leading organisations such as Deloitte to continue our aim of providing a more practical and hands-on legal education.’ -LAW SOCIETY GAZETTE

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 12 September 2019

BUSINESS DAY

BD LegalBusiness YOUNG BUSINESSLAWYER Xenophobia- what can young lawyers do?

he events of the past few days in Lagos and Pretor ia have been nothing less than heart-breaking. More alarming is the right to retribution that seems to be latent in the hearts of totally disconnected avengers. Businessmen, all Nigerian, and maybe South African, suffered severely from havoc wrought by strangers who sought to assume position for “brothers” who they did not know nor honour in death or loss. Social media and the tabloids have analysed and condemned and so have all parties involved but no condemnation results in change. Change occurs as an outcome of tangible remediating acts and that is the critical gap that needs to be filled. While this is no class in philosophy or history, as I think on all these happenings, I cannot but throwback at history for some inspiration. One of the most fascinating stories I have kept from my learning is that of the French Revolution and the part of it where the bourgeoisie (for the purpose of this article, I will use the preferred definition of “the educated mass”) reportedly took over the revolution and saw to the final resolution of prolonged mayhem. Forgive my summary if you are not too familiar with the story. You as reader, may be wondering the relevance of this introduction to your profession or your identity as a young lawyer. Let me share the connec-

tion. Jurisprudence teaches us that lawyers play a significant role in entrenching the rule of law in society and a society that functions properly must have the rule of law as one of its fundamental benchmarks. This is not the state we are in as a country and while I agree that Nigeria does need a revolution, the revolution is not one of guns and war and or political might

but one of the re-education of its citizens on the inviolable nature of the law and the sacrosanct nature of human rights. The rule of law does not exist in vacuum, societal norms and the society form the base against which it is referenced. If you like me, are a lawyer reading this, I assume you felt a sense of helplessness or disconnect with the situation, but

I will like to with this article pose a challenge to young lawyers and any professional who is like me displeased with the replete stories of dysfunction in our communities. I know the dysfunction has been attributed to the “They” that includes government, its aids and numerous undefined personalities, but while government is getting its act together, I believe that positive action by units does affect the whole if collected across different pockets, as such, you as a unit, can create channels for impact. I suggest some options that are to be considered below: Quietness does not always pay: The adage that evil thrives when good men are silent is one too common, but in many ways, we enable wrong-doing in our communities by staying quiet. The more we collectively reprove wrongdoing, the less confidence perpetrators have. In those moments where we see wrong perpetrated, as it is practical to do so, we should speak up and ensure that we h a n d ov e r t h e s i t u a t i o n t o law enforcers and or prevent continued wrongdoing. Selfprotection is critical but the dysfunction around you if not curtailed, will one day become a personalised experience. So, we must speak and reprove, report and make it difficult for wrong to be perpetrated in our communities. Seek to enlighten your community: “Do not wait until the deeds of greatness you may do, brighten the corner where you

are”. We often forget that the families and local communities are the subset of the nation. We seek nationally relevant reforms without reckoning same for our local communities. The essence of the organisation of society in pockets is to enable effectiveness and impact, so the change in the small community repeated and shared will lead to holistic change. Social media posts, community engagement, written content (especially when they are customised to suit locally understood languages) on constitutional rights, obligations of citizens, rights and privileges provided by the law would go a long way to influence the lot. Also, as a professional community, law firms and organisations within the legal services sector should begin to create systems through which lawyers can re-educate, teach, engage in community service which seeks to enlighten recipients about the provisions of the law, what constitutes proper conduct and strategic means of enforcement of the law. A lot of the persons who are equipped to do this are probably at some table considering the opportunities for exiting Nigeria, but I believe that we all must ir respective of the personal decisions we make for our benefit, ensure that our motherland remains whole. The project Nigeria is not one to be abandoned or neglected and one person re-educated is one more chance at its success.

RIGHTSWATCH Xenophobia: African commission to ‘take appropriate action’ on SERAP’s request to sue South Africa for $10bn

ollowing a request by rights organisation, Socio-Economic Rights and Accountability Project (SERAP), asking the African Commission on Human and Peoples’ Rights, to “submit a case on the escalating xenophobic attacks against Nigerians and other African citizens in South Africa, there are now indications that Nigerian victims may soon get some justice. This was disclosed by Soyata Maiga, Chairperson, African Commission on Human and Peoples’ Rights, who revealed that the commission has agreed to “take appropriate action to seek an effective remedy and reparation for Nigerian victims.” SERAP had in its letter to Ms Maiga last Friday stated that “these xenophobic attacks constitute serious violations of the human rights of Nigerians and other African citizens in South Africa.” The organization also urged the commission to “seek in the case to the African Court, punitive damages and adequate

compensation of $10 billion (USD) on behalf of hundreds of Nigerian victims and their families. This amount will sufficiently take into account individual harm suffered by victims.” In a n e ma i l re s p o n s e t o SERAP on Monday September 9, 2019, Maiga said: “Thank you for your open letter requesting our commission to take action to the court. I have just shared the letter with Ms Jamesina Essie King, the Chair of the Working Group on Economic, Social and Cultural Rights, for follow-up and appropriate action.” Responding to Maiga’s email, SERAP deputy director Kolawole Oluwadare, said: “Thank you very much for your email and quick response to our request. We really appreciate your commitment to human rights in Africa, and the indication and assurance that the commission will take action on this very important matter, and to address the grave human rights violations of Nigerians in South Africa. Please let us know if you www.businessday.ng

have any questions or need any further information.” Oluwadare also said: “The fact that a preeminent African human rights body has decided to take action on the matter shows the commission’s willingness to stand up for the human rights of Nigerians and other foreign nationals in South Africa, and to become more responsive to rights holders and victims.” “This will put massive pressure on the South African authorities and pollical leaders to uphold the highest standards in the protection of human rights of Nigerians and end their political rhetoric and incitement to hatred, violence and discrimination.” It would be called that SERAP had in its letter to the commission dated 6 September 2019 said: “This is a key moment for the commission to push to protect the human rights of the victims. The commission ought to make it clear to the South African authorities that the victims of the heinous crimes have a right to

https://www.facebook.com/businessdayng

an effective remedy and reparation, which includes restitution, compensation, rehabilitation, satisfaction and guarantees of non-repetition.” The organization also said: “For the sake of the victims, the commission should move swiftly on the matter to prevent further harm to Nigerians and other foreign nationals in the country. Unlike for individuals and NGOs, the African Court Protocol does not require Nigeria to have made the declaration under Article 34(6) for the commission to submit a case on behalf of the Nigerian victims before the Court.” The open letter read in part: “If the victims see that a process for ensuring adequate compensation for the crimes committed against them in South Africa is underway, it will also discourage revenge violence and killings and help break the cycle of violence that is now spiralling beyond control in the country.” “Over 200 Nigerians have been reportedly killed since 2008, several more have been @Businessdayng

displaced from their homes while more than 300 Nigerians have registered for evacuation from South Africa. Shops and businesses by Nigerians have been looted or destroyed, and high-ranking political leaders have deliberately fuelled the attacks and violence.” “The impact of the violence and attacks on Nigerian women and children has been devastating, as children have been unable to attend school due to fear of attacks. Many Nigerians are now relocating their wives and children to Nigeria while they stay back to work in South Africa.” “In February 2017, parents reported that xenophobic prejudice was being extended to local schools. For example, the Eastleigh Primary School in Edenvale, Gauteng threatened to refuse the children of foreign nationals access to education. In May 2008, more than 60 people were killed, more than 600 injured and over 20,000 people were displaced in the Gauteng and Western Cape Provinces.”

Thursday 12 September 2019

BUSINESS DAY

Corporate Social Impact

The new South African ‘pass laws’ require robust corporate response Stories by ONUWA LUCKY JOSEPH

ack when folks were fighting for the independence of the different splinter countries that had been carved out of Africa primarily by the Otto Von Bismarck convoked Berlin Conference of 1884, Africans saw Africa as the continent of good people who had been done in by colonialists. The people needed to take back what was theirs which had been despoiled by the marauding activities of colonialists. A lot of truth to that, yes. Every people should have control of their lives, their land and their destiny. Before independence, cooperation amongst the oppressed people of Africa was pan African, literally from Cape to Cairo. Gamal Abdel Nasser of Egypt was as prominent in the movement as was Kwame Nkrumah of Ghana, as was Ahmed Sekou Toure of Guinea, as was Patrice Lumumba of Congo, as was Ahmed Ben Bella of Algeria, as were Daniel Arap Moi of Kenya and Kenneth Kaunda of Zambia. Not only were they action oriented, but they were larger than life characters whose reflective philosophies and broad minded take on African liberation underpinned the struggle. Long after the independence of most African nations, however, Namibia (then known as South West Africa), Zimbabwe and South Africa in the southern part of the continent were still in the vise grip of colonialists. In all three cases, however, it was not just outside forces, but internal ones, foreigners who had settled in both countries declaring independence and staving off majority black rule. In Namibia’s case, it had been handed over to South Africa by the League of Nations in 1915 and they held on until SWAPO led by Sam Nujoma was able to wrest their country from RSA in 1990. Ten years before Namibia’s independence, (the recently deceased) Robert Gabriel Mugabe, alongside Joshua Nkomo and others had finally, after years of guerilla warfare, secured independence for Zimbabwe, then known as Rhodesia. Everyone recalls with some measure of nostalgia Bob Marley’s hit track ‘Zimbabwe’ that was performed at that grand euphoric independence ceremony. The affirmative and declarative lyrics remain the country’s soundtrack in the minds of freedom cherishing Africans: Every man got the right to decide his own destiny And in this judgment there is no partiality So arm in arm, with arms We’ll fight this little struggle Cause that’s the only way we can Overcome our little trouble Brother, you’re right, you’re right You’re right, you’re right, you’re so right We go fight, We’ll have to fight We gonna fight Fight for our rights Fight over, Zimbabwe was declared winner. Namibia was next in 1990. The only holdover was South Africa which was still under white minority rule. The white settlers had gotten independence from Britain in 1934, but this government was in no

Cyril Ramaphosa SA President

way representative of the make-up of the country. In fact, in 1958, a year after Ghana’s independence was when Prime Minister Hendrik Verwoerd introduced the Grand Apartheid policy which effectively made Blacks in South Africa the hewers of wood and drawers of water. This, in their own native land. Initially, in view of countries all fighting their own independence, not many had the time to spearhead

Paschal Dozie to help coordinate Corporate Africa’s response

South Africa’s position. But after the countries began achieving self-rule, the focus turned full blast on the beautiful country of South Africa. Some countries bordering or quite close to the country formed a loose but effective alliance known as the Frontline States. It was made up of Angola, Botswana, Mozambique, Tanzania, Zambia, and Zimbabwe. To this distinguished list was added the name of Nigeria, for its financial, moral and material support for the cause even though it’s a long way away from the actual theatre of struggle. Africans supported South Africa, through the Sharpeville Massacre of 1961 where 69 people were killed at a police station who went to protest against the pass laws enacted to restrict the flow of Black South Africans to urban areas. Why were the blacks making their move to the towns? For the proverbial greener pastures that were hardly accessible in the rural areas. Not that they were in abundance in the townships. But more, at least. That’s the African story today. By a vicious combination of bad leadership, colonial overhang, and a wandering mindset occasioned by instability, Africans are looking for greener pastures. Everywhere. Despite being one of the richest continents by virtue of natural resources, unending kleptomania from without and within has kept the continent perennially impoverished. That is www.businessday.ng

why Africans run. By the African extended family system, we help our own, knowing that seasons shift. One day, we who help might need to be helped. And the ones we helped might be the ones to plug the gap. That is where South Africa is right now. The guys who spearheaded the fight for freedom were all in exile in some of these frontline countries at some point or the other. African countries gave them buffer for the time when they needed to be away from the heat so they could launch proper projectiles, metaphorically, against the white minority rule. But let’s not forget that while African countries did their bit, with Nelson Mandela and Walter Sisulu in the trenches and eventually in the gulag, while Archbishop Desmond Tutu and co and all those heroes from the Africa National Congress, ANC fought from their different podiums, it was the economic squeeze (or is it sneeze) from big western corporates that ensured apartheid caught the fatal cold. But it was not something that happened in one day. The West was stridently opposed to sanctions and to disinvestment in South Africa. That, of course, for its own reasons. But the liberal voices kept shouting and making sure that their voices resonated. The system eventually shifted because the economic arguments were unassailable. It was clear that apartheid was unsustain-

ing of individual businesses and institutional investors to end their involvement with or investments in the apartheid state as a matter of corporate social responsibility. This campaign was coordinated by several faith-based institutional investors eventually leading to the creation of the Interfaith Center on Corporate Responsibility. An array of celebrities, including singer Paul Simon, also participated. “The key instrument of this campaign was the so-called Sullivan Principles, authored by and named after the Rev. Dr. Leon Sullivan. Leon Sullivan was an African-American preacher in Philadelphia who, in 1977, was also a board member of the corporate giant General Motors. At that time, General Motors was the largest employer of blacks in South Africa. The principles required that the corporation ensure that all employees are treated equally and in an integrated environment, both in and outside the workplace, and regardless of race, as a condition of doing business. These principles directly conflicted with the mandated racial discrimination and segregation policies of apartheid-era South Africa, thus making it impossible for businesses adopting the Sullivan Principles to continue doing business there. While the anti-Apartheid movement lobbied individual businesses to adopt and comply with the Sullivan Principles, the movement opened an additional front with the institutional investors. Besides advocating that institutional investors withdraw any direct investments in South African-based companies, anti-Apartheid activists also lobbied for the divestment from all U.S.-based companies having South African interests who had not yet themselves adopted the Sullivan Principles. The institutional investors such as public pension funds were the most susceptible to these types of lobbying efforts. Public companies with South Africa interests were thus confronted on two levels: First, shareholder resolutions were submitted by concerned stockholders who, admitted,

Xenophobic Attacks

able. And so gradually, they started disinvesting. “Richard Wright, quoted in Wikipedia, writes that anti-apartheid movement in the U.S. found that Washington was unwilling to get involved in economically isolating South Africa. The movement responded by organized lobby-

https://www.facebook.com/businessdayng

posed more of a threat to the oftencherished corporate reputations than to the stock price. Second, the companies were presented with the significant financial threat whereby one or more of their major institutional investors decides to withdraw their investments” The above scenario was one of the @Businessdayng

highest displays of corporate social responsibility on record: the private sector forcing the state to do right. The giant corporate organisations of the day all voted with their feet: Coca Cola, IMB, Eastman Kodak, General Electric, General Motors, Barclays, etc. And while the rest of Africa does not have the critical mass with regards to investments in South Africa, South Africa is heavily invested on the continent and thus pressure can be brought to bear on the country using the vehicles of the Organised Private Sector, AU, ECOWAS and other regional bodies to advocate and effect compliance with policies so formulated. The call for nationalization of South African assets is an antediluvian response, clearly. That it is coming from Adams Oshiomhole, a dyed in the wool unionist whose time in government has helped his true leanings, mean we should not

Julius Malema

be up for consideration by considerate economies not suffering from myopia. With 2017 GDP figures of $376.284bn and $349.299bn respectively, Nigeria and South Africa are the two biggest economies on the continent. Efforts should be made to increase rather than constrict the economic growth which Africa so sorely needs. One expects African captains of industry to take this all the way to the United Nations should South Africa remain recalcitrant in its wanton killing of fellow Africans seeking refuge or engaged in economic activities in RSA. As Julius Malema has said time and again, let the law take its course against proven criminals, But self-hate hideously and barbarically executed by Blacks on Blacks should be condemned by all. The days of pass laws are long over. The African Charter on Human and People’s Rights Article 12 outlines various forms of movementrelated freedoms. It asserts: Every individual shall have the right to freedom of movement and residence within the borders of a State provided he abides by the law. That is all the South African State needs to prove and apply. Let this law apply so that we can sing in harmony with Bob Marley Africa unite, Cos we’re moving right out of Babylon And we’re going to our father’s land South Africa is Africa. All Africans should feel at home there as they should anywhere else on the continent, as long as they abide by the law.

Thursday 12 September 2019

BUSINESS DAY

Corporate Social Impact

Onuwa Lucky Joseph (08023314782) Editor.

Jack Ma Leaves Ali Baba to Focus on Philanthropy and Education Stories by ONUWA LUCKY JOSEPH

libaba chairman Jack Ma stepped down from the e-commerce giant on Tuesday, marking the end of an era for

the firm. He co-founded Alibaba in 1999 and it has become one of the world’s biggest internet firms. Mr. Ma’s success and colourful style has made him one of China’s most recognisable businessmen. Daniel Zhang, currently Alibaba’s chief executive, will replace him as executive chairman. The company is now valued at $480bn (£389bn) and Mr Ma is China’s richest man, with a net worth of $38.6bn according to Forbes. He is also the first founder among a generation of prominent Chinese internet entrepreneurs to step down from his company. “I think it will be very hard to replace somebody like Jack Ma,” said Rebecca Fannin, author of a book on China’s technology titans. “He is one of a kind. He is the Steve Jobs of China.” Who is Jack Ma? Born to a poor family in the eastern Chinese city of Hangzhou, Mr Ma began his career as a teacher. He bought his first computer at the age of 33 and was surprised when no Chinese beers turned up in his first online search for “beer”. With no background in computing, Mr Ma co-founded Alibaba in his apartment, having convinced a group of friends to invest in his online marketplace. It was not the first time he had tried to get a start-up off the

Jack Ma

ground. “Alibaba was his third attempt at a company, he had two trials before,” said Duncan Clark who has written a book about Mr Ma and is also chairman of investment consultancy BDA China. “He saw the promise of the internet quite early on, but it took a while for him to have a vehicle.” Over the years, Alibaba has grown from an online marketplace into an e-commerce giant with interests ranging from financial services to artificial intelligence. It was originally set up as a trading platform for businesses, before expanding into consumer e-commerce in 2003 and later launching digital payment plat-

form Alipay. Lacking a background in technology and with no particular strength in finance, Mr Clark said charisma and strategic vision have been Mr Ma’s biggest assets. “His charm is a big part of his leadership, his ability to convince people whether it’s customers, employees or critically shareholders.” The author first met Mr Ma two decades ago and the entrepreneur spoke of making Alibaba one of the top 10 internet companies in the world within a decade. “[It was] a sort of impossible ambition in a way but somehow he made people believe it,” Mr Clark said.

Mr Ma did turn his firm into an international heavyweight and its listing in New York set a record as the world’s biggest public stock offering. Earlier this year, he argued in favour of the “996 system” where workers are expected to work 12 hour days, and a six-day week - a hotly debated topic in Chinese media. The flamboyant businessman is also known for enjoying the limelight and featured at an Alibaba event in 2017 wearing a Michael Jackson-themed outfit. What’s next for Mr Ma? The 55-year-old is expected to focus on philanthropy and education after he steps down.

Mr Clark said he has gradually brought technology and finance experts into Alibaba and more recently, Mr Ma has been “consciously edging himself out”. Those moves are expected to ensure a more seamless transition for Alibaba to a future without its co-founder. Quiet, unassuming and known to shy away from the spotlight, Mr Zhang is nothing like his predecessor. Inside Alibaba Mr Zhang is reportedly known as Xiaoyaozi, the name of a character in a Chinese martial arts novel. It means the “unfettered one”- someone who stays out of battles but is great at training others. (Adapted from BBC) That reputation will come in handy as he steers Alibaba through arguably some of its most challenging times. The Chinese market, where it makes two thirds of its revenue, is slowing down. At the same time, attempts to expand internationally have struggled. US scrutiny of Chinese firms is blocking its growth in the West. In parts of South East Asia and India, analysts say understanding how to work in local markets and with local people is proving to be a challenge for the Chinese company. Then there’s the delayed multibillion dollar public offering in Hong Kong, reportedly due to prodemocracy protests there. Yet Mr Zhang’s greatest challenge may be living up to the image of Mr Ma himself, a man who enjoyed the respect and affection of his staff as well as the international community.

The Gateses partner with the Zuckerbergs for solutions in maths and executive function

n 2018, the Chan Zuckerberg Initiative (CZI) and the Bill & Melinda Gates Foundation (BMGF) began jointly exploring whether breakthrough education solutions can be developed through an accelerated discovery and development effort. It began with a Request for Information. We received 465 responses from 37 states as well as internationally. Twenty percent (20%) of the responses came from organizations that are owned or led by Bill and Melinda Gates

Mark-Zuckerberg and Priscilla Chan

people of color. Concepts were bold, inspirational and inclusive. These ideas prompted both philanthropies to imagine the potential of using an inclusive discovery and development approach that places educators at the center. What if educators, researchers and developers could co-design and then rapidly iterate on solutions together? We then asked nearly 1,000 educators what they need to be www.businessday.ng

successful. We heard that they are eager to play a role in designing solutions that work for students across many classroom contexts. The educators proposed working in teams that would produce models, practices, tools and other resources designed to achieve specific, measurable, and equitable improvements in student outcomes (both academic and non-academic) across a range of education contexts. This work culminated in a total commitment of $50 million over five years, funded in equal parts by both philanthropies, to support the EF+Math Program. The EF+Math Program is a bold initiative to fund approaches through inclusive discovery and development that will dramatically increase positive math outcomes for students in grades 3-8, with a particular focus on students who have been traditionally underserved. This program is equity-focused, research-informed and designed with educators at the center.

https://www.facebook.com/businessdayng

Angelique Kidjo helps secure $251m funding for African female entrepreneurs

ngelique Kidjo, the world acclaimed songstress from the Republic of Benin has helped secure the sum of $251 million for budding female entrepreneurs in Africa. It was at the G7 Summit in the French resort of Biarritz, where she convinced leaders of Canada, France, Germany, Italy, Japan and the UK to part with the sum. According to her, the funding is about helping women into business and then helping them grow their businesses. Kidjo, who is the ambassador of the Affirmative Finance Action for Women in Africa, an agency of the African Development Bank said the priority is for small-scale entrepreneurs in Africa to get ac@Businessdayng

cess to the funds. “My primary focus is women in the rural areas”, she said,” the women of the market and the women who are not easy to reach out to”. She is of the opinion that this set of “women… don’t trust banks because they are not welcome in any banks.” According to a report by the Global Entrepreneurship Monitor (GEM) 2016/17 Women’s Report, Africa has the highest percentage of female entrepreneurs in the world, meaning one in four women start or manage their own business at a point in time.

(For feedback, contact us at csr momentum@gmail.com/ 08023314782)

Thursday 12 September 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 12 September 2019

BUSINESS DAY

RESEARCH&INSIGHT

In association with

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

briu@businessday.ng

08098710024

States where telecoms firms gained voice subscribers in second quarter 2019 TELIAT SULE

he latest data on voice subscription indicates that the number of voice subscribers increased by 0.19 percent between the first and second quarters of 2019. At the end of March 2019, the total number of voice subscribers stood at 173.7 million. With additional 336,713 new callers, Nigeria’s voice subscribers rose to 174 million in June 2019. Airtel Nigeria and Globacom Nigeria were the clear winners during the quarter. The former added 691,660 voice subscribers while the latter added 391, 278 voice subscribers to their networks during the period. Telecoms industry’s market leader, MTN Nigeria, gained 107,551 new subscribers. On the flip side, 9Mobile network lost 873,153 voice subscribers during the second quarter of 2019. Why are we interested in this subject? In 2012, Deloitte, GSMA and CISCO investigated the impact of mobile telephony on economy growth. According to the findings of their scholars-Chris Williams (Deloitte), Gabriel Solomon (GSMA) and Robert Pepper (Cisco), “a 10 percent increase in mobile penetration increases total factor productivity (TFP) in the long run by 4.2 percent percentage points. TFP is a measure of economic productivity that often reflects an economy’s long-term technological dynamism”, they said. It is interesting to know that some years back, as the number of voice subscribers rose

Source: NBS, BRIU

increased by 1.53 percent from 45.2 million in first quarter to 45.9 million at the end of the second quarter. That means Airtel Nigeria was able to add 691,660 voice subscribers, implying that averagely, it added 230,553 voice subscribers on a monthly basis during the second quarter. Globacom Nigeria’s voice subscribers grew by 0.85 percent from 46.2 million to 46.6 million subscribers which means it added 391,278 subscribers, and the market leader, MTN Nigeria, increased its voice subscriber base by 0.17 percent with additional 107,551 new clients to have 65.14 million subscribers in first quarter which increased to 65.1 million voice subscribers in June 2019. Voice subscribers who are neither on MTN, Globacom nor Airtel,

in voice subscribers was 0.19 percent at the end of the second quarter. Imo State recorded the highest growth rate while Bauchi State witnessed the least growth rate in voice subscribers during the period. With 7.86 percent growth rate in Imo State, voice subscribers rose from 3.59 million to 3.87 million subscribers. That was the highest growth in voice subscribers across the federation. However, the growth in voice subscribers was significant in just a network-Globacom Nigeria. The strong preference for Globacom resulted in a 29.48 percent rise in its voice subscribers, which translated to additional 198, 642 voice subscribers during the period. MTN grew

money as it recorded the highest growth in voice subscribers. Overall, voice subscribers in Anambra State increased by 5.54 percent, and that growth makes it the state with the second highest growth rate in voice subscription at the end of the second quarter. When appraised by networks, Globacom voice subscribers rose by 18.06 percent as against MTN Nigeria’s 3.84 percent; Airtel Nigeria’s 3.92 percent while 9Mobile’s voice subscribers fell by 4.98 percent. New 60, 140 voice subscribers were added to the nation’s telecoms networks in Bayelsa State during the quarter, indicating that voice subscriptions in the state increased by 5.02 percent. Again, most of the growth was recorded in Globacom which added 56,963 new subscribers to its network representing an increase of 16.11 percent. Airtel Nigeria also grew its voice subscriber base by 1.82 percent. Voice subscription grew by 4.99 percent in Edo State, the fourth highest in the country during the quarter, which amounted to 269,832 new voice subscribers. Globacom Nigeria gained the most with 325,979 new voice subscribers. Airtel Nigeria witnessed marginal growth to the tune of 0.25 percent while others recorded a decline in the number of callers. Airtel Nigeria’s highest growth in voice subscription was in Sokoto State where it grew its callers’ base by 14.01 percent, translating to 63,890 new subscribers. In Kano State, a 3.80 percent increase in Airtel Nigeria’s callers’ base resulting in 131,973 new callers during the period. The bottom five states during the period

Source: NBS, BRIU

Source: NBS

rose by 5.20 percent from 372,347 to 391,724 during the quarter. In terms of market share, MTN Nigeria controlled 37 percent of the market share, Globacom, 27 percent, Airtel Nigeria, 26 percent while 9Mobile was at the fringes with 9 percent market share. States where growth in voice subscribers took place Growth in voice subscribers took place in 19 states while 18 states witnessed declines in voice subscribers as the national growth rate

its voice subscribers by 4.41 percent implying that it added 80,820 new voice subscribers to its network in the state. Airtel Nigeria gained 18,969 new subscribers while 9Mobile lost 16,229 existing subscribers. Regardless, MTN Nigeria controls the largest market share in Imo State with 1.91 million subscribers as at the second quarter. MTN and Airtel are the leading telecoms operators in Anambra State when measured by market share. But during the second quarter of this year, Globacom gave them a run for their

are Adamawa, Plateau, Gombe, Taraba and Niger. Voice subscription fell by 2.97 percent in Adamawa State, and the worst hit networks were Globacom, 9Mobile and Airtel Nigeria. MTN Nigeria recorded 0.17 percent growth in its callers’ base. Plateau State recorded 3.43 percent decline in voice subscription and Globacom and Airtel Nigeria were the two most affected during the quarter. Voice subscription fell by 3.68 percent in Gombe State; it further fell by 3.97 percent in Taraba; 5.25 percent in Niger State.

12734BDN

geometrically in Ogun State, simultaneously, not only did it emerge as the nation’s manufacturing base, additionally when measured by internally generated revenue(IGR), Ogun State is now the third most productive state in Nigeria after Lagos and Rivers states. In other words, increase in voice subscriptions should be interpreted to mean salient economic transformations which might not have been noticed by investors. In effect, the majority of the growth came from Airtel Nigeria, whose voice subscribers

WIDE OPEN MINDED RMB Nigeria. Solutionist Thinking.

www.businessday.ng

Rand Merchant Bank Nigeria Limited is an Authorised Financial Services Provider

https://www.facebook.com/businessdayng

We believe in stretching ourselves. In broadening our horizons and embracing the unconventional to consider every possibility. Solutionist Thinking means deliberating together and collaborating with our clients to unlock exceptional prospects for the future. It’s the magic that inspires everything we do.

www.rmb.com.ng

@Businessdayng

Thursday 12 September 2019

BUSINESS DAY

news Victory for Buhari, APC as tribunal dismisses... Continued from page 1

its presidential candidate, Atiku Abubakar, against the re-election of President Muhammadu Buhari at the February 23, 2019 presidential poll.

The tribunal said the petitioners failed to prove in their evidence that the 2019 general election was not in compliance with the Electoral Act. In dismissing the petition, the five-man tribunal in a unanimous judgment held that the petitioners failed to prove allegations of electoral malpractices, violence, amongst other claims contained in their petition. “Like I had mentioned, there is no admissible evidences to link the witnesses with the allegations of noncompliance to the electoral act or of corruption,” said Muhammad Garba, the presiding judge. The petition was premised on five grounds, among which was that Buhari lied about his academic qualification as well as schools attended in his form 001 submitted to INEC for the purpose of contesting the 2019 presidential election. Reacting to judgment, President Buhari said the ruling of the Presidential Election Petition Tribunal was a victory for Nigerians who trooped out to overwhelmingly elect him for a second term in office. In a statement by his special adviser on media and publicity, Femi Adesina, President Buhari said the ruling has “vindicated him”. “Good conscience fears no evil report. I was unperturbed all along, because I knew Nigerians freely gave us the mandate. We are now vindicated,” he said. But the Coalition of United Political Parties (CUPP) condemned the decision of the Presidential Election Tribunal, describing it as “ratification of electoral fraud”. The CUPP said the verdict indicated that the law is simply turned upside down to provoke all Nigerians. “By their judgment today [yesterday], majority of Nigerians who had believed, though erroneously, that the judiciary was indeed independent have been brazenly awakened to the fact and correct belief that the Presidency had successfully hijacked the judiciary and Nigerians can only expect judgments and not justice,” CUPP said in a statement by its spokesperson, Ikenga Imo Ugochinyere, in Abuja. “The Court of Appeal wasted the opportunity and has by so doing endorsed the insecurity in the land, mismanagement of national resources, electoral fraud, forgery of documents and certificates submitted to INEC and indeed threatened the very foundations of our democracy,” the statement said. On its part, the PDP said it was taking the matter to

Supreme Court immediately to acquire justice. The party, through Kola Ologbondiyan, its national publicity secretary, in a statement in Abuja said the party is particularly shocked that the tribunal failed to point to justice despite the flawless evidence laid before it. It noted that President Buhari was not only unqualified to contest the election, but did not score the majority of valid votes in the 2019 presidential election. “The PDP finds as bewildering that a court of law could validate a clear case of perjury and declaration of false information in a sworn affidavit, as firmly established against President Muhammadu Buhari, even in the face of incontrovertible evidence,” Ologbondiyan said. “The party is also rudely shocked that the Court took over the roles of the Respondents’ lawyers who clearly abandoned their pleadings by refusing to call evidence in defence of the petition. The court raked up all manner of excuses to make up for the yawning gaps occasioned by the total absence of any evidence from the Respondents,” he stated. According to him, Nigerians and the international community watched in utter disbelief when the tribunal ruled that one need not provide a copy or certified true copy of educational certificate such individual claimed to possess, contrary to established proof of claims of certification. Atiku and PDP had on March 18, 2019 specifically asked the tribunal to disqualify Buhari on the grounds that he (Buhari) did not possess the requisite academic qualification to contest for the office of President. However, the chairman of the tribunal held that the petitioners did not discharge the burden of proof and as such dismissed the petition. The tribunal said the fact that Buhari did not attach copies of his certificate to his form 001 submitted to INEC was not enough proof that he was not educated up to secondary school level, adding there is no law that requires a candidate seeking election into office to attach his certificate to his form 001. The petitioners had also raised issues of deployment of electronic voting, overvoting, substantial noncompliance with the electoral law as well as use of security agencies to rig the election in favour of Buhari. However, the tribunal in the unanimous decision held that despite the 62 witnesses called by the petitioners, they were unable to prove their allegations against the conduct of the February 23 presidential poll that it was marred by irregularities.

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

L-R: Simon Aranonu, executive director, large enterprises, Bank of Industry (BOI); Olukayode Pitan, managing director, BOI; Peter Maurer, president, International Committee of the Red Cross; Mohammed Bintube, board director, BOI; Toyin Adeniji, executive director, BOI, and Omar Shekarau, executive director, small and medium enterprises, at the roundtable organised by the BOI and the ECC on investing in conflict-ridden communities, in Abuja.

Concerns as FIRS shifts Abba Kyari’s pressure... Continued from page 1

Federal Government is hoping tax revenues can help soften the blow. That has seen the government go after companies it claims have defaulted in their tax payment.

Fowler responded to Kyari on Monday, August 19, over the said N3.9 trillion unmet tax revenue target for a four-year period. Meanwhile, in an August 7 “letter of substitution” to banks directing them to release statements and other financial records of companies, FIRS justified an inkling of government pressure that led to the query. The letter to banks, available to BusinessDay, appointed the banks as “Collecting Agent for the full recovery of the amount displayed on the attached schedule payable to the Federal Inland Revenue Service”. The letters “kindly required” the banks “to set aside the aforesaid sum and pay same to the credit of these attached companies in full or partial amortisation of its aforesaid tax debt” and to do this “prior to execution of all or any related transactions involving these companies or any of its subsidiaries”. “I further request that the Federal Inland Revenue Service be informed of any transactions prior to execution on the accounts, especially transfer of funds to or from offshore or local accounts of these companies or any of its subsidiaries. Only on my authority should such transactions be exited,” the letter read. Banks were also to provide records of all principal officers related to any of the said companies. “The statement should cover the period from the date the accounts were opened to the date of receipt of this notice,” the letter said. The negative aspect of this renewed pursuit of taxes is

the government’s approach, according to a tax consultant who did not want to be named for fear of being targeted by the government. “It’s illegal to ask banks to deduct money from corporate accounts without the permission of the companies and when a proper and independent audit has not been conducted. It seems like the government is trying so hard to ruin businesses along with recouping taxes,” the source said. “One of the firms we consult for told the FIRS that they paid all they think they owe but they can come for negotiations if FIRS thinks they owe more. They received no response, only a threat to put lien on accounts in one week. That is scary and I hear it has sent panic across several corporate boardrooms,” he said. Analysts fear that the government’s stern approach will hurt the economy and scare investments away in a country that could do with private investments to boost economic growth and create jobs for its teeming youth population. Interestingly, one of the firms identified in the letter did not have any actual inflows into the alleged account in the past three years, thereby raising questions over FIRS audit competence and legal stance. Sources tell BusinessDay that this attitude is creating additional costs to companies targeted in the FIRS tax lien as they have to hire tax consultants and lawyers even as they record disruptions to their operations while valuable manhour is lost trying to resolve the issues. Ademola Idowu-led team of tax experts at KPMG in Nigeria believe that FIRS would have done well to painstakingly review and establish that a tax liability is final and conclusive as provided in law, “and that the taxpayer has failed to pay the amount due within the statutory timeline before invoking its power of substitution”. “Anything outside of this would deviate from the inten-

https://www.facebook.com/businessdayng

tion of the law. The manner in which the FIRS exercised its power of substitution certainly generated many concerns. For instance, the FIRS’ directive to ‘freeze’ taxpayers’ accounts without recourse to the taxpayers, and without establishing that the alleged liabilities are indeed final and conclusive, constitutes a breach of the taxpayers’ right to fair-hearing as guaranteed by the tax legislation and the Constitution of the Federal Republic of Nigeria,” according to the KPMG experts. “Similarly, the FIRS allowed the banks only seven days to comply with its directives failing which the banks would be penalised. This is contrary to the provisions of the tax legislation that typically allow taxpayers 30 days to review and respond to tax assessments. Also, the FIRS’ directive could expose the banks to risks where it is later established that the taxpayer has no liability, or less liability than demanded,” the experts said. “Such mandate could also cause the banks to be in breach of their fiduciary obligations to their customers. It is, therefore, no surprise that the FIRS had to suspend its wide-spread ‘freeze order’ following several commentaries by stakeholders, even though some taxpayers have continued to experience restrictions on their accounts,” they further said. Eben Joels, partner at international accounting and tax firm, Stransact, said though the FIRS claims that its directives to the banks are based on its powers to appoint agents for collection and recovery of outstanding taxes, it has, however, illegally and crudely extended this power to place liens on bank accounts even where a taxpayer has no notice of any outstanding taxes. Joels, who spoke to BusinessDay from Boston USA, expressed disappointment on the harm the revenue agency does to businesses especially those that are at the point of closing deals with foreign investors. “The actions of the FIRS are dangerous and have the @Businessdayng

tendency to further depress the already low levels of foreign investments in Nigeria. The actions will also stifle small businesses as they may lose their trust and confidence in the banking system and resort to holding cash,” Joels said. He noted that the power to appoint collecting agents that the FIRS claims is not the same as the power to put a lien on assets which is what the FIRS is doing currently. “A lien is a legal restriction on the ownership rights of an asset,” he said. “Note that before a tax can be said to be outstanding, it means that both the FIRS and the taxpayer are in agreement that the particular amount is owed as tax. In this case, the FIRS instructs banks to put a hold on a taxpayers bank accounts even when the taxpayer is still disputing the validity of a tax assessment and in some cases even when the taxpayer has no notice that any tax is owed. It is very sad that an agency of government will apply extortionate methods to levy legitimate businesses.” These developments are raising further questions on the legal legs FIRS stands on. For instance, FIRS said it is targeting over 200 companies as tax debtors in just one bank. “Does it have the capacity to audit these many firms at such short notice?” an informed source asked. To worsen the woes, there are indications that some of the companies being targeted are those even being owed by the Federal Government. Some are contractors to government who have not been paid for contracts or partially paid. “The FIRS is imposing an illegal lien on the assets of legitimate businesses without following legal due process. Even for a genuine debtor, the creditor will need a court order to impose a lien on the debtor’s assets. Banks should seek proper legal counsel before agreeing to impose what is in effect an illegal lien. They may be opening themselves up for very serious legal action by discerning taxpayers,” Joels said.

Thursday 12 September 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 12 September 2019

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Wednesday 11 September 2019 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. 248,816.58 7.00 0.72 520 29,948,020 UNITED BANK FOR AFRICA PLC 212,036.41 6.20 0.81 167 12,467,772 ZENITH BANK PLC 572,986.01 18.25 0.27 258 11,303,263 945 53,719,055 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 179,476.46 5.00 -1.00 172 4,197,403 172 4,197,403 1,117 57,916,458 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,819,100.06 138.50 - 57 586,559 57 586,559 57 586,559 BUILDING MATERIALS DANGOTE CEMENT PLC 2,641,278.65 155.00 -0.65 43 283,612 LAFARGE AFRICA PLC. 231,952.26 14.40 -0.69 51 1,614,421 94 1,898,033 94 1,898,033 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 264,800.05 450.00 5.63 6 328,462 6 328,462 6 328,462 1,274 60,729,512 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 13,074.52 4.90 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 0 0 0 0 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 3,312.39 103.20 - 0 0 VALUEALLIANCE VALUE FUND 0 0 0 0 0 0 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 42,115.13 44.15 - 27 20,510 PRESCO PLC 44,800.00 44.80 - 1 100 28 20,610 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,080.00 0.36 -7.69 13 380,311 13 380,311 41 400,921 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 688.30 0.26 - 1 1,739 JOHN HOLT PLC. 237.38 0.61 - 0 0 S C O A NIG. PLC. 1,903.99 2.93 - 1 100 41,054.47 1.01 1.98 64 15,849,138 TRANSNATIONAL CORPORATION OF NIGERIA PLC U A C N PLC. 17,431.84 6.05 -2.42 126 9,194,835 192 25,045,812 192 25,045,812 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 24,486.00 18.55 - 8 37,125 ROADS NIG PLC. 165.00 6.60 - 0 0 8 37,125 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 3,247.99 1.25 5.93 56 1,908,854 56 1,908,854 64 1,945,979 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 10,804.71 1.38 - 5 2,652 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 81,044.16 37.00 -0.80 28 134,202 INTERNATIONAL BREWERIES PLC. 103,150.34 12.00 - 5 11,375 NIGERIAN BREW. PLC. 405,842.78 50.75 0.10 64 501,459 102 649,688 FOOD PRODUCTS 110,500.00 22.10 -0.67 74 1,355,841 DANGOTE FLOUR MILLS PLC 102,000.00 8.50 1.18 112 1,982,411 DANGOTE SUGAR REFINERY PLC 54,330.03 13.25 -1.85 59 2,161,884 FLOUR MILLS NIG. PLC. 7,692.29 0.97 - 10 91,528 HONEYWELL FLOUR MILL PLC 1,340.10 0.36 - 0 0 MULTI-TREX INTEGRATED FOODS PLC 766.26 4.30 - 1 20 N NIG. FLOUR MILLS PLC. 34,442.70 13.00 - 3 2,551,000 NASCON ALLIED INDUSTRIES PLC 3,321.07 12.15 - 0 0 UNION DICON SALT PLC. 259 8,142,684 FOOD PRODUCTS--DIVERSIFIED 18,594.20 9.90 - 23 57,951 CADBURY NIGERIA PLC. 887,775.00 1,120.00 3.70 43 131,541 NESTLE NIGERIA PLC. 66 189,492 HOUSEHOLD DURABLES 1,680.31 22.10 - 0 0 NIGERIAN ENAMELWARE PLC. 5,366.12 4.29 - 6 97,000 VITAFOAM NIG PLC. 6 97,000 PERSONAL/HOUSEHOLD PRODUCTS 23,425.81 5.90 - 24 146,258 P Z CUSSONS NIGERIA PLC. 168,328.66 29.30 - 14 11,051 UNILEVER NIGERIA PLC. 38 157,309 471 9,236,173 BANKING 133,951.72 7.30 -0.68 24 231,921 ECOBANK TRANSNATIONAL INCORPORATED 45,490.43 1.57 1.29 40 1,505,030 FIDELITY BANK PLC 791,698.72 26.90 0.19 150 4,547,068 GUARANTY TRUST BANK PLC. 11,785.70 0.40 5.26 7 1,341,000 JAIZ BANK PLC 67,657.48 2.35 1.29 1,395 34,693,778 STERLING BANK PLC. 203,845.27 7.00 - 42 553,735 UNION BANK NIG.PLC. 8,182.54 0.70 -1.43 13 558,827 22,758.93 0.59 1.72 41 1,577,930 UNITY BANK PLC WEMA BANK PLC. 1,712 45,009,289 INSURANCE CARRIERS, BROKERS AND SERVICES 4,117.00 0.20 - 1 1,000 AFRICAN ALLIANCE INSURANCE PLC 4,227.42 0.61 -4.69 56 5,439,553 AIICO INSURANCE PLC. 18,375.00 1.75 -2.78 11 193,116 2,439.00 0.30 -6.67 6 1,981,130 AXAMANSARD INSURANCE PLC CONSOLIDATED HALLMARK INSURANCE PLC 15,559.12 1.50 -0.66 2 134,400 CONTINENTAL REINSURANCE PLC 4,124.26 0.28 3.70 25 6,622,939 CORNERSTONE INSURANCE PLC 909.99 0.20 - 0 0 GOLDLINK INSURANCE PLC 1,228.00 0.20 - 0 0 GUINEA INSURANCE PLC. 487.95 0.38 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 2,123.80 0.29 3.57 7 762,050 LASACO ASSURANCE PLC. 1,675.57 0.39 - 0 0 LAW UNION AND ROCK INS. PLC. 3,920.00 0.49 -5.77 4 306,000 LINKAGE ASSURANCE PLC 2,234.55 0.20 - 13 6,580,000 MUTUAL BENEFITS ASSURANCE PLC. 9,399.30 1.78 0.56 12 236,000 NEM INSURANCE PLC 1,547.90 0.20 - 0 0 NIGER INSURANCE PLC 2,637.45 0.49 - 1 11,817 PRESTIGE ASSURANCE PLC 1,333.75 0.20 - 0 0 REGENCY ASSURANCE PLC 1,668.16 0.20 - 0 0 SOVEREIGN TRUST INSURANCE PLC 4,483.72 0.48 - 0 0 STACO INSURANCE PLC 2,582.21 0.20 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,800.00 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 516.46 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 3,200.00 0.20 - 0 0 UNIVERSAL INSURANCE PLC 2,773.33 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 5,219.27 0.39 - 15 386,673 WAPIC INSURANCE PLC 153 22,654,678

www.businessday.ng

MICRO-FINANCE BANKS 2,652.50 1.16 - 10 38,050 NPF MICROFINANCE BANK PLC 10 38,050 MORTGAGE CARRIERS, BROKERS AND SERVICES 4,158.00 0.99 - 0 0 ABBEY MORTGAGE BANK PLC 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC 5,796.93 1.39 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 2,265.95 0.20 - 0 0 RESORT SAVINGS & LOANS PLC 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0 0 OTHER FINANCIAL INSTITUTIONS 7,760.00 3.88 - 27 214,948 AFRICA PRUDENTIAL PLC 37,055.74 6.30 - 6 78,342 CUSTODIAN INVESTMENT PLC 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC 32,476.45 1.64 5.81 42 2,318,202 FCMB GROUP PLC. 1,029.07 0.20 - 0 0 ROYAL EXCHANGE PLC. 366,099.77 35.75 -0.69 16 751,986 STANBIC IBTC HOLDINGS PLC 12,300.00 2.05 0.49 39 1,308,175 UNITED CAPITAL PLC 130 4,671,653 2,005 72,373,670 HEALTHCARE PROVIDERS 1,680.29 3.37 - 0 0 EKOCORP PLC. 888.28 0.25 8.70 2 186,240 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 2 186,240 MEDICAL SUPPLIES 494.58 0.50 - 0 0 MORISON INDUSTRIES PLC. 0 0 PHARMACEUTICALS 366.17 0.50 - 0 0 EVANS MEDICAL PLC. 9,388.62 4.50 - 1 100 FIDSON HEALTHCARE PLC 8,550.52 7.15 - 11 107,347 GLAXO SMITHKLINE CONSUMER NIG. PLC. 3,605.74 2.09 10.00 17 825,042 MAY & BAKER NIGERIA PLC. 854.62 0.45 - 0 0 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 556.71 3.62 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. 325.23 1.50 - 0 0 PHARMA-DEKO PLC. 29 932,489 31 1,118,729 COMPUTER BASED SYSTEMS 781.44 0.22 -4.55 11 35,204,300 COURTEVILLE BUSINESS SOLUTIONS PLC 11 35,204,300 COMPUTERS AND PERIPHERALS 1,470.89 0.50 - 0 0 OMATEK VENTURES PLC 0 0 IT SERVICES 6,413.06 2.54 - 1 100 CWG PLC 534.60 4.95 - 0 0 NCR (NIGERIA) PLC. 282.12 0.57 - 3 5,000 TRIPPLE GEE AND COMPANY PLC. 4 5,100 PROCESSING SYSTEMS 1,127.05 0.24 -7.69 9 1,938,000 CHAMS PLC 9,996.00 2.38 - 3 16,844 E-TRANZACT INTERNATIONAL PLC 12 1,954,844 TELECOMMUNICATIONS SERVICES 1,215,762.01 323.50 - 0 0 AIRTEL AFRICA PLC 0 0 27 37,164,244 BUILDING MATERIALS 2,173.68 7.50 - 9 29,242 BERGER PAINTS PLC 17,325.00 24.75 - 20 54,119 CAP PLC 216,867.77 16.50 1.54 21 195,166 CEMENT CO. OF NORTH.NIG. PLC 313.43 0.59 - 0 0 MEYER PLC. 1,959.74 2.47 - 1 50 1,156.20 9.40 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 51 278,577 ELECTRONIC AND ELECTRICAL PRODUCTS 2,256.91 2.09 - 0 0 AUSTIN LAZ & COMPANY PLC 2,465.85 1.40 - 8 42,150 CUTIX PLC. 8 42,150 PACKAGING/CONTAINERS 29,873.33 59.75 - 1 5 BETA GLASS PLC. 388.02 9.10 - 0 0 GREIF NIGERIA PLC 1 5 AGRO-ALLIED & CHEMICALS 100,754.14 62.50 - 0 0 NOTORE CHEMICAL IND PLC 0 0 60 320,732 CHEMICALS 2,547.42 6.12 - 2 1,000 B.O.C. GASES PLC. 2 1,000 METALS 1,781.64 8.10 - 0 0 ALUMINIUM EXTRUSION IND. PLC. 0 0 MINING SERVICES 852.39 0.20 - 0 0 MULTIVERSE MINING AND EXPLORATION PLC 0 0 PAPER/FOREST PRODUCTS 83.60 0.38 - 0 0 THOMAS WYATT NIG. PLC. 0 0 2 1,000 ENERGY EQUIPMENT AND SERVICES 1,252.54 0.20 - 2 1,004,600 JAPAUL OIL & MARITIME SERVICES PLC 2 1,004,600 INTEGRATED OIL AND GAS SERVICES 48,606.82 3.91 - 24 211,910 24 211,910 OANDO PLC PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 56,974.05 158.00 - 9 3,833 11 PLC 11,658.40 16.80 - 13 11,835 CONOIL PLC 3,521.19 2.70 - 11 30,897 ETERNA PLC. 18,234.74 14.00 - 26 64,367 FORTE OIL PLC. 5,729.98 18.80 - 1 500 MRS OIL NIGERIA PLC. 33,952.18 100.00 - 38 17,070 TOTAL NIGERIA PLC. 98 128,502 124 1,345,012 ADVERTISING 1,820.01 0.41 - 1 100 AFROMEDIA PLC 1 100 AIRLINES 17,551.17 1.80 - 1 500 MEDVIEW AIRLINE PLC 1 500 AUTOMOBILE/AUTO PART RETAILERS 341.14 0.29 - 0 0 R T BRISCOE PLC. 0 0 COURIER/FREIGHT/DELIVERY 2,387.46 4.05 - 3 7,125 RED STAR EXPRESS PLC 328.19 0.70 - 2 200,900 TRANS-NATIONWIDE EXPRESS PLC. 5 208,025 HOSPITALITY 642.33 0.20 - 0 0 TANTALIZERS PLC 0 0 HOTELS/LODGING 4,723.78 3.05 - 0 0 CAPITAL HOTEL PLC 2,432.19 1.17 - 2 5,500 7,862.53 3.50 - 1 280 IKEJA HOTEL PLC TOURIST COMPANY OF NIGERIA PLC. 41,042.18 5.40 - 1 48,000 TRANSCORP HOTELS PLC 4 53,780 MEDIA/ENTERTAINMENT 4,800.00 0.40 - 0 0 DAAR COMMUNICATIONS PLC 0 0 PRINTING/PUBLISHING 211.68 0.35 - 0 0 ACADEMY PRESS PLC. 1,072.32 1.39 - 10 124,101 LEARN AFRICA PLC 1,183.82 1.99 - 1 10 STUDIO PRESS (NIG) PLC. 452.98 1.05 - 3 18,157 UNIVERSITY PRESS PLC. 14 142,268 ROAD TRANSPORTATION 596.77 0.36 -2.78 5 1,088,266

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 12 September 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Wednesday 11 Sept. 2019

Top Gainers/Losers as at Wednesday 11 September 2019 LOSERS

GAINERS Company NESTLE

Opening

Closing

Change

Company

Opening

Closing

Change

N1080

N1120

GUINNESS

N37.3

N37

-0.3

FLOURMILL

N13.5

N13.25

-0.25

N36

N35.75

-0.25

N22.25

N22.1

-0.15

N6.2

N6.05

-0.15

SEPLAT

N426

N450

CCNN

N16.25

N16.5

0.25

STANBIC

N1.9

N2.09

0.19

DANGFLOUR

N1.55

N1.64

0.09

UACN

MAYBAKER FCMB

ASI (Points) DEALS (Numbers) VOLUME (Numbers) VALUE (N billion) MARKET CAP (N Trn)

27,153.53 4,365.00 211,522,299.00 1.449

...investors gain N52billion

he Nigerian stock market closed in the green zone on Wednesday September 11 as bargain investors moved to take positions in value counters like Nestle Nigeria Plc and Seplat Petroleum Development Company Plc (SEPLAT). Stocks investors gained approximately N52billion at the sound of closing gong. Nineteen stocks gained against 13 losers. The Nigerian Stock Exchange (NSE) All Share Index (ASI) increased by 0.39percent while the Year-to-Date (YtD) return stood at -13.61percent. The All Share Index closed at 27,153.53 points as against the preceding day close of 27,047.58 points while Market Capitalisation closed at N13.210 trillion as against preceding day close of N13.158 trillion. Nestle Nigeria Plc re-

corded the highest gain, from N1080 to N1120, adding N40 or 3.70percent, followed by SEPLAT which advanced from N426 to N450, adding N24 or 5.63percent. On the losers table, Guinness Nigeria Plc declined most, from N37.3

to N37, after losing 30kobo or 0.80percent, followed by Flour Mills Plc which dipped from N13.5 to N13.25, after losing 25kobo or 1.85percent. Courtville, Sterling Bank, Access Bank, Transcorp, and UBA were actively traded stocks on the Nigerian

Bourse on Wednesday. The volume of stocks traded decreased by 41.92percent, from 364.21million to 211.52million, while the total value of stocks traded decreased by 70.18percent from N4.86billion to N1.45billion in 4,365 deals.

L – R: Olumide Bolumole, divisional head, Listing Business, The Nigerian Stock Exchange (NSE); Aderemi Atanda, executive director, Corporate Strategy SystemSpecs; Oscar N. Onyema, chief executive officer, NSE; Mary Akinyemi, lecturer, department of Mathematics, University of Lagos and Jude Chiemeka, divisional head, Trading Business, NSE during The Nigerian Stock Exchange Market Data Workshop 2019 theme: Partnerships, Products and the Customer at Harbour Point, Victoria Island, Lagos.

NSE links low retail investment appetite to inadequate knowledge of products, benefits

he Nigerian Stock Exchange (NSE) has said that a major reason for record low retail investment appetite is the inadequate knowledge of investment products and the associated benefits for retail investors. Oscar Onyema, Chief Executive Officer, Nigerian Stock Exchange who noted this at the 4th NSE Market Data Workshop held in Lagos on Wednesday September 11 said this observation underscores the importance of creating product offerings that promote diversity in investment, manage risk and make the information readily available to consumers. “Exchanges and Data

vendors are already responding to this increasing demand using new tools for market data products”, the NSE CEO said at the workshop themed “Partnerships, Products and the Customer’’ which shined the spotlight on the need for a more inclusive collaboration among Capital market players. Over the past editions of this workshop, the NSE has seen a heightened propensity for market information across a variety of users especially the investors. “This is partly as a result of a growing awareness of the role of market data in investment decisionmaking. There is a growing interest in market informawww.businessday.ng

tion as it positions itself as a fundamental part of the larger value chain in Disruptive technologies for managing risk and creating new strategies”, Onyema said. Globally, there has been an increase in the general consumption and spending on Financial Market Data and Market data analytics, which stretches beyond the market data typically provided by stock exchanges for equity trading. Also, market commentators have estimated the value of total spending on all financial market data, analysis and news at about $ 28.5 billion while the potential market size of finan-

cial information is valued at $50 billion, according to McKinsey estimates. , Despite the evolving needs of consumers demanding for financial information globally, Nigeria still has low inclination towards investments, according to Lagos-based FSDH research, which reported the savings ratio in Nigeria as one of the lowest among selected countries including China, India, Kenya, Malaysia, South Africa, United Kingdom, and USA. The ratio of mutual fund assets to Nigeria’s GDP is also very low at less than 1percent, despite the growth of mutual funds in the country in recent times.

https://www.facebook.com/businessdayng

FTSE 100 Index 7,338.03GBP +70.08+0.96%

Nikkei 225 21,597.76JPY +205.66+0.96%

Generic 1st ‘DM’ Future 27,018.00USD +124.00+0.46%

Deutsche Boerse AG German Stock Index DAX 12,359.07EUR +90.36+0.74%

S&P 500 Index 2,993.44USD +14.05+0.47%

Shanghai Stock Exchange Composite Index 3,008.81CNY -12.39-0.41%

13.209

Bargain hunting in Nestle, Seplat stocks seen lift NSE Stories by Iheanyi Nwachukwu

Global market indicators

SEC says Master Plan initiatives already contributing to Nigeria’s growth

he Securities and Exchange Commission (SEC) has disclosed that the implementation of its 10-year capital market Master Plan is already contributing to the growth and development of the Nigerian capital market, and by extension, the economy. This was disclosed by Mary Uduk, Acting Director General of the SEC during the opening ceremony of a Two-day international capital market conference held in Lagos, Wednesday by the SEC, in collaboration with the University of Lagos. Uduk described the theme of the Conference, “Leveraging the Capital Market for Economic Growth and Development” as apt and timely, given the pressing needs to grow the nation’s economy and achieve sustainable development. According to her, “There is no doubt that the capital market can serve as a key catalyst for Nigeria’s economic growth and development, as it offers a credible platform for obtaining longterm financing. As we all know, long-term and affordable funds are required for businesses to thrive and in turn contribute to employment, growth and development. “Beyond capital market’s contribution to economic growth, we aim at the larger goal of economic development. Added to increased production, the latter entails advancement in the quality of life and living standards of citizens in areas such as improvements in literacy, health and life expectancy, better savings/ investment culture, financial inclusion, as well as improved wealth distribution, housing and environment”. The acting DG stated further that Capital markets across the world have products and mechanisms to stimulate economic growth and development. She said although many of such products are available in Nigeria, there are aspects that are still untapped, thereby limiting the realisation of the nation’s potentials. “One major initiative to tap this potential was the development of a ten-year Capital Market Master Plan (CMMP), launched by the Commission in 2014. The Plan has over 100 initiatives to spring–board the Nigerian capital market as one of

@Businessdayng

the world’s deepest and most liquid, as well as the largest in Africa by 2025. “It is also aimed at ensuring that the market contributes much more to the socioeconomic development of the nation, particularly in facilitating capital-raising for sustainable development and transformation of key sectors” she said. She said the successes recorded from these initiatives notwithstanding, the SEC recognises that much more still needs to be done for the Nigerian capital market to contribute its desired quota and take its rightful place in issues and discussions of Nigeria’s economic growth and development. “As we move into the future, we need to continuously embrace innovation in the way we carry out our market operations and regulation. Financial innovation is germane for the conception and delivery of a dynamic industrial society. Market participants and regulators have to continually familiarize themselves with the rapid ever-changing economic, regulatory and business environment. “Beyond the conventional capital market products of equities and bonds as well as manual regulatory processes, the players and regulators in the Nigerian capital market are introducing new and innovative processes and products”. Uduk noted that some of the SEC’s processes that were previously manual and inefficient are being automated. For instance, with the dematerialization process completed, investors no longer need to not worry about the loss or damage to their physical share certificates as they are now electronically stored. Furthermore, she said the current e-Dividend system enables shareholders’ dividend to be paid directly into their bank account without the stress of dealing with physical dividend warrants. Also, the Direct Cash Settlement protects investors from funds mismanagement by ensuring that the proceeds of their shares sales are credited directly into their own account as against.

Thursday 12 September 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

VICTOR MALLET IN PARIS, JAMES SHOTTER IN WARSAW AND MICHAEL PEEL IN BRUSSELS

burst of diplomatic activity by French president Emmanuel Macron to repair the EU’s frayed relations with Moscow has triggered alarm in other European capitals, where suspicion of Russian leader Vladimir Putin runs deep. Mr Macron’s immediate aim has been to broker talks between Mr Putin and Volodymyr Zelensky, the new Ukrainian president, to try to end the Russian-backed separatist war in eastern Ukraine. A peace summit, the first in three years, is expected in Paris this month following last week’s exchange of prisoners by Kiev and Moscow. But the French leader has a broader ambition — to strengthen European ties to Russia to secure Moscow’s co-operation in other international crises, in particular the dangerous dispute over Iran’s nuclear ambitions. “Pushing Russia away from Europe is a profound strategic error, because we will push Russia either into an isolation that increases tensions orintoallianceswithothergreat powers such as China,” the French leadertoldagatheringofhiscountry’s ambassadors in August. “[T]he European continent will never be stable or secure if we don’t pacify and clarify our relations with Russia.” Like US leader Donald Trump, Mr Macron — who hosted Mr Putin at the French presidential retreat of the Fort de Brégançon

Emmanuel Macron’s pivot to Russia sparks EU unease

French president accused of hubris over bid to repair Europe’s relations with Moscow

Emmanuel Macron (right) with Russian leader Vladimir Putin at the French presidential retreat of the Fort de Brégançon. The French leader says pushing Russia away is a ‘profound strategic error’ © AP

ahead of last month’s G7 summit — envisages the eventual return of Russia to the group of leading industrialised economies, from which it was excluded after its annexation of Crimea in 2014. His diplomatic outreach is

based on the conclusion that “it’s absurd to have relations with Moscow that are worse than they were during the Cold war”, said Thomas Gomart, director of the French Institute of International Relations. But some of France’s allies

— notably Germany, the Netherlands, Poland and the Baltic states — are wary, and several want to maintain or reinforce EU sanctions against Russia imposed over Crimea. Norbert Röttgen, head of the

Bundestag’s foreign affairs committee, accused Paris of failing to co-ordinate with Berlin or other EU capitals. “The problem is that you’re rewarding Putin even though he hasn’t moved an inch on anything,” he said. “There has been no change in Russian policy. It’s a real validation for Putin. He does nothing and still there’s this rapprochement from Europe.” But Nils Schmid, foreign affairs spokesman for the SPD, the junior partner in Ms Merkel’s coalition, said: “This is part of a co-ordinated approach . . . Germany and France are definitely pulling in the same direction on this, although France does it more bombastically.” Poland, where historical suspicion of Russia has been exacerbated by Moscow’s meddling in Ukraine, has also criticised the French strategy. “Many countries, especially those that are not Russia’s closest neighbours, are keen to ignore the fact that Russia has not really changed its ways in the Ukrainian conflict,” said Pawel Jablonski, an adviser to Polish prime minister Mateusz Morawiecki. “We have no illusions about [Russia].”

California passes labour bill in blow to Uber and Lyft Hong Kong exchange proposes Law would make it harder to prove workers are contractors not employees PATRICK MCGEE IN SAN FRANCISCO

he California Senate has passed a bill that threatens the gig economy model, making it tougher for the likes of ride-hailing companies Uber and Lyft to classify their drivers as independent contractors. Assembly Bill 5 will head to the assembly floor on Wednesday, where it is expected to pass and be signed by California governor Gavin Newsom. If it becomes law, it will take effect on January 1, 2020. The new law would pose a challenge for ride-hailing and food delivery companies, which classify drivers as independent contractors rather than employees. That has allowed them to avoid paying a certain level of wages, as well as health benefits and paid vacation. “This is a huge win for workers across the nation!” said the California Labor Federation in a tweet. “It’s time to rebuild the middle class and ensure ALL workers have the basic protections they deserve.” Bob Schoonover, president of SEIU California, a coalition of over 700,000 workers, said the Senate’s passage “has set the stage for a major breakthrough for workers

that are excluded from basic pay and protections no matter how hard they work”. The law will not automatically turn contractors into employees but will make it more difficult for gig economy companies to prove that workers are not staff. Still, the uncertainty around the bill ahead of Tuesday’s vote was enough for investors to send Uber and Lyft shares to record lows last week as it became clear the bill could prompt other states to follow suit. Uber declined to comment but said it would respond if the bill passed the assembly floor on Wednesday. Lyft could not be immediately reached for comment. The ride-hailing groups say they are not opposed to giving their drivers benefits but the “flexibility” of how, when and where they work is central to their asset-light business models. Together with DoorDash, a food delivery service, Uber and Lyft have pledged $90m on a ballot initiative to seek an exemption from the law. They are looking for “a third way” to maintain flexibility but agreeing to support things such as a “minimum earnings floor”, sick leave and paid time off. www.businessday.ng

to buy LSE for £32bn

Move comes at critical time for industry as operators make inroads into data supply PHILIP STAFFORD AND OWEN WALKER IN LONDON AND HUDSON LOCKETT IN HONG KONG

ong Kong Exchanges and Clearing has made a £32bn bid to buy the London Stock Exchange Group, in a move that threatens to upend the UK operator’s own blockbuster takeover and comes at a time of political turmoil in Hong Kong. The operator of the Hong Kong exchange stunned investors with its proposal, which values LSE shares at £83.61 and is designed at “bringing together the largest and most significant financial centres in Asia and Europe”, it said in a statement on Wednesday. The bid comes at a critical juncture for the global exchange industry as well as for Hong Kong and the UK politically. Exchange operators are increasingly shifting away from the bread and butter of trading into the business of supplying and monetising the data that is at the heart of markets. In late July, the LSE agreed to buy the

https://www.facebook.com/businessdayng

data and trading group Refinitiv for $27bn in an effort to take on global heavyweights such as Intercontinental Exchange. HKEX, which counts the Hong Kong government as its largest shareholder, is offering £20.45 in cash and 2.495 newly issued HKEX shares for each LSE share. LSE shares, which have already had a blistering run this year, jumped as high as 16 per cent before settling down to £72.14, up 6 per cent on the day. Analysts cautioned that the political opposition that had historically derailed tie-ups between national exchanges was likely to be particularly acute in this case. A deal would see “a Chinese company acquire the primary equity markets of both the UK and Italy, as well as key infrastructure for European debt markets”, noted analysts at Berenberg. “We believe this transaction would face elevated political risks as a result.” Andrea Leadsom, the UK business secretary, told Bloomberg TV that the UK would “look very carefully at anything that had security @Businessdayng

implications for the UK”. The UK Treasury and the business department declined to comment. Setting out the strategic rationale for the deal, the HKEX said it would allow the LSE to apply its ability to monetise market data in China and give London a greater chance to benefit as more securities are sold in renminbi outside mainland China. The deal would also give the Hong Kong group control of clearing house LCH. One top 10 LSE shareholder said HKEX was “trying to diversify away from their Chinese exposure, which is why they are bidding now and not nine months ago”. “Shareholders won’t be rushed to make a decision as we like the Refinitiv deal,” the shareholder added. “If this is an opening gambit by HKEX and they go 10 per cent higher, then it will be a case of what might happen in the short term to the LSE share price versus a five-year view on where the share price can go on a successful Refinitiv integration.”

Thursday 12 September 2019

BUSINESS DAY

NATIONAL NEWS

Scotland’s highest court rules prorogation of UK parliament unlawful Court of Session will not look to recall MPs before UK Supreme Court has final say MURE DICKIE IN EDINBURGH AND JANE CROFT IN LONDON

cotland’s highest court on Wednesday ruled that Boris Johnson’s suspension of parliament was unlawful, but stopped short of ordering the recall of MPs ahead of a UK Supreme Court hearing on the issue next week. In a ruling that sent shockwaves through political and legal circles, Edinburgh’s Court of Session said Mr Johnson’s decision to prorogue parliament ahead of Brexit was “motivated by the improper purpose of stymying parliament”. The Scottish ruling contrasted with a decision by London’s High Court last week, which was released in full on Wednesday, that the suspension of parliament was “inherently political” and so could not be reviewed by the courts. Both Scottish and English rulings and another case brought in Belfast will be considered by the Supreme Court for three days next week. Anti-Brexit campaigners had hoped the Scottish court might order an immediate recall of parliament, but Lord Carloway, its top judge, said it would not make any “ancillary orders” before the Supreme Court hears the case. Downing Street said the government was “disappointed” by the decision and would appeal. Mr Johnson has insisted that parliament is being suspended as a routine matter ahead of setting out its plans for a new session. “The UK government needs to bring forward a strong domestic legislative agenda. Proroguing parliament is the legal and necessary way of delivering this,” Downing Street added. But in a draft ruling on a legal challenge brought by more than 70 parliamentarians, the Scottish judges made clear they believed Mr Johnson’s real intention was to undermine parliamentary scrutiny in the run-up to the UK’s exit from the EU. Lord Carloway said that the Queen’s decision to order the suspension of parliament, on advice from the prime minister, would not normally be subject to judicial review, but could be unlawful if its purpose was to stymie scrutiny of the executive. “The circumstances in which the advice was proffered and the content of the documents produced [by the UK government] demonstrated that this was the true reason for the prorogation,” a draft summary of the decision quoted him as saying. Lord Brodie, another member of the three-judge panel, said the prorogation was “an egregious case of a clear failure to comply with generally accepted standards of behaviour of public authorities”.

The ruling prompted immediate calls for parliament to be recalled ahead of the Supreme Court hearing due to start next Tuesday. “The highest court in the British Isles that has ruled on this matter says that the prorogation was unlawful, the majority of MPs want to be in the house scrutinising and debating Brexit . . . therefore parliament should return,” said Joanna Cherry, the SNP MP, who headed list of parliamentarians who brought the Scottish case. Ms Cherry said parliamentary time was being lost and she expected a “sympathetic hearing” from House of Commons speaker John Bercow, whose concerns about the circumstances around prorogation had been “vindicated”. Jo Maugham, a lawyer who was also one of the petitioners behind the case, described the judgment as a historic triumph that showed the UK was not a “dictatorship” where the prime minister could suspend parliament at will. “I have never been able to contemplate the possibility that the law of this United Kingdom might be that the prime minister could treat parliament as an inconvenience and I am very very pleased that Scotland’s highest court agrees,” Mr Maugham said. Keir Starmer, Labour’s Brexit spokesman, said it was obvious that shutting parliament at a crucial time was wrong and that the prime minister was not telling the truth about why he was doing it. “What we need to do is get back to parliament and see if we can reopen up those doors and get Boris Johnson back in parliament and hold him properly to account,” Sir Keir said. But in its strongly worded written ruling on a legal challenge to prorogation by anti-Brexit campaigner Gina Miller, London’s High Court said the prime minister’s decisions to prorogue parliament and his advice to the Queen were “inherently political in nature and there are no legal standards against which to judge their legitimacy”. “It is not a matter for the courts,” their ruling adds. Ms Miller’s case, along with the Scottish case, will be heard by the Supreme Court along with a case on the prorogation before Belfast’s High Court, which claims the government is breaching the Good Friday Agreement. Scotland has its own separate legal system dating back centuries, which predates the 1707 Treaty of Union that brought Scotland and England together. Northern Ireland has its own devolved legal system, which like England and Wales largely follows common law. The Supreme Court rules on legal matters for all three jurisdictions. Additional reporting by Jim Pickard, Sebastian Payne and Robert Wright in Brighton www.businessday.ng

Rwanda President Paul Kagame’s government has been accused of using violence to intimidate opponents at home and abroad © Reuters

South Africa issues warrants for Rwanda spy chief murder Kagame’s government implicated in killing of former intelligence head TOM WILSON IN LONDON AND JOSEPH COTTERILL IN JOHANNESBURG

outh Africa has issued arrest warrants for two Rwandans accused of assassinating a former Rwandan intelligence chief in Johannesburg, which is likely to bring further scrutiny to allegations that President Paul Kagame’s government has used violence to intimidate opponents at home and abroad. Partick Karegeya, a childhood friend of Mr Kagame who rose to lead Rwanda’s external intelligence service, sought exile in South Africa in 2010 before he was found strangled in a hotel room on January 1 2014. South Africa expelled three Rwandan diplomats in response to the killing but has never brought charges for his mur-

der despite a lengthy investigation. Members of Karegeya’s family have accused the South African government of failing to prosecute for political reasons. However, an inquest in April breathed life into the case, ruling that a crime had been committed and that South Africa’s National Prosecuting Authority needed to decide whether to bring charges. Following that instruction, the NPA has issued warrants of arrest for two people implicated in the murder, according to Karegeya’s lawyers working with the advocacy group Afriforum. “It is a fantastic sign,” David Batenga, Karegeya’s nephew and a spokesperson for the family, told the Financial Times. “When the diplomats in question were expelled it was rewarding in a way, but it was shortlived because we expected after that there should

be some action.” The NPA is now applying for the extradition of the two men, who are both believed to be in Rwanda, and will ask Interpol, the international police organisation, to issue “red notices” against the suspects, Afriforum said. Red notices are a request to law enforcement worldwide to locate and arrest a person pending extradition. Gerrie Nels, head of the private prosecution unit at Afriforum, had promised to bring a case if South Africa’s government failed to act following the inquest. The decision to issue arrest warrants without the need for further investigation showed that the authorities had been sitting on evidence, according to Mr Nel. “The only feasible conclusion is that the NPA wanted to avoid a prosecution,” he said.

Hungary draws up plans to upgrade diplomatic ties with Syria Proposal by Budapest to post official in Damascus would anger European partners CHLOE CORNISH IN BEIRUT, MICHAEL PEEL IN BRUSSELS AND VALERIE HOPKINS IN BUDAPEST

ungary is drawing up plans to upgrade diplomatic relations with Syria, a move that will anger influential EU members who have sought to keep their distance from the Damascus regime. Budapest has for months been working on a proposal to send a chargé d’affaires back to Syria, according to diplomats in Brussels and Beirut, which would be a precursor to reopening its closed embassy eventually. While a few European capitals kept up diplomatic ties during the seven-year conflict, this would be the first time an EU member state has moved towards reopening a shuttered embassy in Syria. Many EU members strongly oppose normalising relations with

https://www.facebook.com/businessdayng

the Bashar al-Assad’s authoritarian regime by dispatching envoys to Syria. One European diplomat in Beirut called Hungary’s proposed move “very annoying”. While influential EU member states have officially upheld their longstanding stance of denying the Assad regime reconstruction funding and diplomatic relations without an agreed political transition, a few states are breaking away. “Ultimately it is for individual countries to decide their representation,” said an official from an EU country that has sought to maintain a tough line. “But we do not think the climate is right.” The Hungarian foreign affairs ministry and a government spokesperson did not respond to requests for comment. Administration representatives in Brussels referred questions to Budapest. Hungary’s far-right prime minister Viktor Orban has sought to @Businessdayng

portray himself as a defender of Christianity, and has met senior representatives from Syria’s various Christian communities. According to European diplomats, Hungary insists that it is motivated to strengthen its presence in Damascus as part of its aid efforts, although it is a minor contributor to the multibillion-dollar humanitarian effort in Syria and mainly funnels support towards Christian communities. A European diplomat remarked: “In Budapest, it is a national sport to annoy Brussels.” Emile Hokayem, senior fellow at the International Institute for Strategic Studies think-tank, called Hungary’s potential move “a stunt based on ideology”. He said it would “further erode the EU consensus, but that is in large part because [Germany, France and the UK] are not making [Syria] a priority any more”.

Thursday 12 September 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Hundreds of migrants to be evacuated from Libya to Rwanda Emergency plan agreed between Kigali,with international humanitarian agencies and the African Union MICHAEL PEEL IN BRUSSELS

undreds of migrants trapped in Libyan detention centres where many inmates have been subjected to abuse will be evacuated to Rwanda under an emergency plan agreed with international humanitarian agencies and the African Union. The plan to move an initial 500 people is part of an effort to relocate thousands of migrants from Libya after an air strike by forces opposed to the internationally recognised government in Tripoli killed dozens in a detention centre in the capital in July. The announcement on Tuesday follows an offer by Rwandan president Paul Kagame in 2017 to accept up to 30,000 African migrants trapped in Libya over several years as concern for their safety in the wartorn country grows. The evacuation would be voluntary, predominantly made up of people from the Horn of Africa and would include children and youths, according to a joint statement published on Tuesday by Rwanda’s government, the UNHCR — the UN’s refugee agency — and the African Union. “While some may benefit from resettlement to third countries, others will be helped to return to countries where asylum had previously been granted, or to return to their home countries if it is safe to do so,” the statement said. “Some may be given permission to remain in Rwanda subject to agreement by the competent authorities.” UNHCR has evacuated more than 4,400 refugees and asylum seekers out of Libya since 2017, but some 4,700 people are estimated to remain in the country in “dire conditions inside detention centres”, the statement said. The EU has faced criticism over

the plight of migrants stuck in Libya because the country’s coastguard, which it trains, has been instrumental in stopping people making the journey across the Mediterranean to Europe. Human rights groups have documented multiple cases of rape, torture and other crimes that have taken place in the Libyan detention facilities, some of which are run by militias. EU diplomats have defended the bloc’s record, saying Europe is still taking in refugees and doing its best to improve conditions in detention centres. On Tuesday Brussels welcomed the “excellent initiative” of the Rwanda evacuation, adding that the EU would help “provide durable solutions to those in need in Libya. [The] EU stands ready to consider supporting it.” The proposal to send migrants voluntarily to Rwanda would help deal with the “pervasively inhumane detention policy facing those disembarked in Libya”, according to a letter sent in July by the UN’s International Organisation for Migration and High Commissioner for Refugees. It was addressed to Federica Mogherini, the EU’s top diplomat, and Moussa Faki Mahamat, chair of the African Union Commission. The Rwandan offer is consistent with Mr Kagame’s record during nearly two decades in power of cultivating the goodwill of western donors. Despite evidence of increasing authoritarianism, Mr Kagame was re-elected in 2017 with 99 per cent of the vote, foreign donors continue to contribute about 35 per cent of Rwanda’s budget. Sceptics warn that although evacuating migrants from Libya to Rwanda might improve their living conditions, it would not necessarily change their prospects. They may still be unable to go home or to travel onwards.

Apple doubles down on services as iPhone prices hit ceiling Company launches new $4.99 streaming platform that undercuts Netflix PATRICK MCGEE IN CUPERTINO

pple is the margin-leading premium operator when it comes to smartphones. But at its annual hardware launch event, the iPhone maker unveiled an aggressive pitch to expand its user base with new pricing options for the latest smartphones, iPads and Apple Watches. The cost of buying a new iPhone has been climbing consistently — Apple unveiled the first $999 smartphone in 2017 followed by a $1,099 version last year — as the market has matured, and the company had to find another way of making up for the gap left by fewer consumers upgrading or replacing their devices. But on Tuesday, Apple’s shift in strategy was palpable, even as the technology improvements were modest. The company has made a

concerted effort to boost its offering in services, from music and gaming to movies and streaming TV, in a bid to ensure existing customers stick with the iPhone and to better lure potential customers into its widening ecosystem. More than 420m people now subscribe to a range of its offerings, with Apple Music having overtaken Spotify in the US for paid music streaming services. “For rivals the only big margin they get is when they sell hardware,” said Ben Wood, chief of research at CCS Insight. “But even if you’re using a three or four-yearold iPhone, Apple is still getting money from you whether it’s the iCloud service, or Apple Arcade on games or Apple TV on content. That’s a pretty unique position.” The new products announced, however, were criticised for only featuring iterative improvements, and the company failed to launch a 5G-capable smartphone. www.businessday.ng

During her time as Federal Reserve chair, Janet Yellen warned the US Congress of the dangers of bumping up against debt limits

Cameroon separatist crisis prompts call for ‘national dialogue’ President Biya intervenes in bloody linguistic conflict — but is criticised for speaking only in French NEIL MUNSHI IN LAGOS

ameroon president Paul Biya, in a rare public address, has called for a “grand national dialogue” to resolve a separatist crisis that has left thousands dead and hundreds of thousands displaced in the west African nation. The conflict has seen the largely francophone country’s two English-speaking regions agitate first for greater autonomy and, after a brutal crackdown on peaceful protests in 2016, independence. Mr Biya’s francophone government has responded by locking up opposition figures, blocking internet access in anglophone regions and engaging in extrajudicial killings and the arbitrary arrest and torture of journalists and civilians, according to human rights groups. But on Tuesday night, Mr Biya said he would at the end of the month convene a “national dialogue . . . to examine ways and

means to respond to the deeply held aspirations of the populations in the northwest and southwest [anglophone regions], but also in all the other component parts of our great nation”. The speech, in which he reiterated his pledge to pardon any separatist who lays down their arms, was his most direct response to the crisis since his election to a seventh term last October. But observers noted that in his speech to a country that is ostensibly bilingual, on the subject of the nation’s bloody linguistic divide, the president did not speak any English. “An entire speech on the #AnglophoneCrisis without uttering a single word in English, without ever directly addressing anglophones,” Cameroonian tech entrepreneur Rebecca Enonchong wrote on Twitter. “He either doesn’t understand or he refuses to understand. This speech will just add fuel to fire.” Observers have warned that the crisis could tip the nation, once a model of stability in the region,

into civil war. The separatists calling for an independent anglophone country called Ambazonia — made up of about 5m of Cameroon’s 24m people — represent the greatest threat to Mr Biya’s leadership in his 37 years in power. He has long ruled by decree, and spends months at a time at the Intercontinental Hotel in Geneva. In January, authorities arrested dozens of opposition politicians, including opposition leader Maurice Kamto, who faces the death penalty on accusations of “insurrection” in a trial that has been attacked by international rights groups. Western governments have largely been silent about the anglophone crisis, in part, critics charge, because of Cameroon’s importance in the fight against the jihadist Boko Haram insurgency. Both Cameroonian security forces and armed separatist groups, which are largely directed by exiled Cameroonians in Europe and the US, have been accused of human rights violations.

Credit Suisse poaches top Deutsche Bank analyst to lead strategy Kinner Lakhani latest high-profile figure to leave German lender amid radical revamp STEPHEN MORRIS IN FRANKFURT

redit Suisse has hired Deutsche Bank’s top European company analyst and adviser in the latest high-profile departure from the German lender as it undergoes a radical retrenchment. Kinner Lakhani, who also ran European financials research for Deutsche, will join the Swiss lender in Zurich this month as head of strategy and development. He will report directly to chief executive Tidjane Thiam. “Kinner . . . is among the most respected voices in the industry,”

https://www.facebook.com/businessdayng

Mr Thiam said on Wednesday. He “will work closely with our divisions and corporate functions as we drive incremental growth and assess opportunities to further expand our leading global footprint.” Under Mr Thiam, Credit Suisse has been shrinking its investment bank and expanding in wealth management, particularly targeting ultra-wealthy entrepreneurs in Asia, as part of a strategy to improve the stability of its earnings. Mr Lakhani’s departure is another blow for Deutsche, which has suffered an exodus of its top people over the past few years as its investment bank struggled to make @Businessdayng

a consistent profit and defend its market position against increasingly dominant US rivals. In July the lender announced it was closing its entire lossmaking equity sales and trading operation but decided to retain its company research arm to support its capital markets businesses. Mr Lakhani became Deutsche’s head of European research a year ago, succeeding Paul Reynolds who left for BNP Paribas. Other significant departures include Deutsche’s top financial institutions advisory banker, Tadhg Flood, who quit to join Centerview Partners around the same time in 2018.

Thursday 12 September 2019

BUSINESS DAY

ANALYSIS

John Bolton wore out his welcome at Trump’s White House Foreign policy hawk clashed with president on Iran, North Korea, Russia and Afghanistan DEMETRI SEVASTOPULO AND AIME WILLIAMS IN WASHINGTON

ohn Bolton was seen as an odd choice when Donald Trump chose the foreign policy hawk to succeed HR McMaster as the White House national security adviser in March 2018. Aside from his trademark moustache, which Mr Trump hated, he was a proponent of employing American power overseas in the kind of muscular way that Mr Trump had rejected during his 2016 campaign. Eighteen months later, Mr Bolton met the same fate as Mr McMaster — fired by a president who had grown frustrated at his efforts to thwart his foreign policy on everything from Iran and North Korea to Russia and, just last weekend, Afghanistan. When Mr Bolton entered the West Wing — after being passed over for Mr McMaster the previous year — there was no mystery about his views. In newspaper articles and appearances on Fox News, the unrepentant supporter of the Iraq war had argued that the US should push for regime change in Iran and strike North Korea. In his new role, Mr Bolton argued that his job was to advocate for the policies of Mr Trump. But unlike Mike Pompeo, the equally hawkish secretary of state, the former Bush administration official failed to leave his own views at the White House doorstep and continued to push Mr Trump in directions that matched his world view.

“Bolton made a cardinal mistake. He would get ahead of the president and almost try to box him in — including on North Korea,” said one former senior official. One White House official said Mr Trump had grown increasingly angry with Mr Bolton in recent months, chafing at his hardline views and his reluctance to defend the president. Mr Bolton was conspicuously absent from TV talk shows, particularly when Mr Trump had pushed policies that he opposed, such as his suggestion at the G7 in France that Russia should be invited back into the club. The official said Mr Trump decided to fire Mr Bolton over the past 48 hours after deciding that “enough was enough”. The move came just days after Mr Bolton strenuously opposed a plan by Mr Trump to bring members of the Taliban to Camp David, the presidential retreat, to sign a peace accord to end the conflict in Afghanistan. While the Afghanistan dispute was the final straw, there were already clear signs that Mr Bolton was under pressure. He did not attend some of Mr Trump’s meetings with North Korean dictator Kim Jong Un, including an important session in Hanoi in February and when the two leaders met in June in the demilitarised zone. There were other signs of conflict. Shortly after Mr Bolton said in May that North Korean missile tests had violated UN sanctions, Mr Trump contradicted him at a press conference by saying: “I view it differently.”

LSE/HKEX: bid rings wrong bells Unrest means Hong Kong bourse looks more like a refugee than a gatekeeper to Asia

ondon investors sent a message to Hong Kong Exchanges & Clearing on Wednesday: “Pull the other one – it’s got bells on”. That old British expression of disbelief was apparent in the feeble 5 per cent jump in the London Stock Exchange’s shares. HKEX hopes to buy LSE for an enterprise value of £31.6bn. If this was likely to succeed, shares should have jumped by the 23 per cent premium offered. The world’s great bourses are national institutions, or at least civic ones. Takeovers and mergers typically fail for this reason. The bosses of exchange groups – whose real businesses these days are data, clearing and derivatives – should not fool themselves otherwise. Thanks to Brexit, the UK government is in chaos. Even so, it cannot meekly nod this takeover through. HKEX is both too close to China and too divorced from it. As a big business based in a troubled autonomous territory, HKEX is more exposed to the hostility of the Chinese government than to its lucrative favour. The US may object

to the deal on security grounds, even if the UK does not. The attractions for HKEX boss Charles Li are clear. The takeover would create a new conduit for east and west to exchange capital, information and securities. It would dilute Chinese political risks borne by his business. Returns would surely beat those achieved by HKEX on its overpriced £1.4bn acquisition of the London Metal Exchange in 2012. HKEX is offering £83.6 per share, a steep 26 times forward multiple of enterprise value to ebitda. But that is more affordable than it looks. First, sterling is weak. Second, HKEX could save hefty costs. Cash intended to cover an overhaul of creaky trading systems would instead help pay for a target with superior IT. But cash constitutes less than quarter of the price. The rest is in HKEX’s volatile stock. This has been buoyed by fees from a slew of big floats that civil unrest imperils. Meanwhile, LSE shares have surged in response to its $27bn agreed bid for data and trading group Refinitiv. HKEX would only bid for LSE if this popular deal was dropped. www.businessday.ng

Brazil: can technology help save the Amazon? While deforestation has surged under Bolsonaro, scientists are racing to find ways to conserve the rainforest BRYAN HARRIS IN BOA VISTA, RORAIMA, ANDRES SCHIPANI IN ALTAMIRA, PARÁ, AND ANNA GROSS IN TAILÂNDIA, PARÁ

moke still billowed above the Amazonian canopy as Jaime Sales clambered atop a 3-metre-high stack of razed trees. “Victory,” he exclaimed, letting his shotgun drop loose and surveying the battered forest around him. At the vanguard of a small team of armed environmental enforcers, the corporal with Pará’s environmental military police unit had ventured deep into the jungle near Altamira in the northern Brazilian state, which has been the site of persistent conflict over deforestation. His reward was the seizure of the massive illegal timber bounty — a haul he estimated to be worth “millions” of dollars on the black market, most likely in China, the US or Europe, say experts. “Today was a good day, but these environmental crimes never stop. There is a lot of deforestation,” he says, adding that “the pressure is now on” from loggers, crooked ranchers and wildcat gold miners. Such successes for Brazil’s environmental authorities have been few and far between. Since the election last year of the far-right President Jair Bolsonaro, who is a keen advocate of opening up the Amazon to commercial interests, these groups have been chopping downandsettingfiretotreeswithgusto. Although far from a record, the trends this year have been alarming: figures released this week showed that the rate of deforestation last month was 222 per cent higher than the same month last year. By some estimates, a football field worth of forest is razed every minute. “There has been no enforcement since the election of Bolsonaro, and now the forest is paying the price,” says one ranger with Brazil’s national park service in the western state of Acre.“Some people are burning the forest because they know no one is going to fight them.” History of forest fires in the Amazon region, 2003 to 2019 Mr Bolsonaro and many of his allies see the rainforest as a natural resource that should be exploited —

https://www.facebook.com/businessdayng

especially in a country which still has so many people living in or near poverty. They view international concern about the Amazon as an ill-disguised effort to hold back Brazil’s development by rich countries which have already trashed much of their own natural habitats. But the global furore over Mr Bolsonaro’s approach to the Amazon has also given oxygen to a very different view of how to manage the rainforest. It has focused attention on the disparate community of scientists, businesspeople and activists who believe that technological advances could be the key to promoting sustainable development and tackling deforestation. For them, the key to sidelining the Amazon’s more nefarious actors is to show that the conservation of land can be both economically profitable and environmentally valuable. They see the Amazon as the world’s largest repository of biodiversity and the potential foundation of a multitrillion dollar bio-economy, if scientists have the chance to map and harness the genetic codes of its diverse wildlife. The argument about sustainability has been running for the three decades since the fate of the Amazon last became a global issue, in the late 1980s and early 1990s. But for many of these scientists, there is a new generation of tools, from genomic sequencing to satellite-tracked reforestation, that can be harnessed to help save the Amazon, an ecosystem that underpins weather patterns across the continent. “What if we can map and sequence 100 per cent of complex life on the planet? We will unlock a gigantic amount of new innovations and new industries that we can’t even dream of imagining,” says Juan Carlos Castilla-Rubio, chairman of Brazil-based Space Time Ventures, a technology company that works on biomass, energy and water risks. “This is what we call a new bio-economy.” The stakes are much higher now. Some scientists fear the world’s largest rainforest, which plays a vital role in absorbing carbon dioxide emissions and keeping a lid on rising global temperatures, could be approaching a “tipping point”, past which it will not have enough trees to maintain its water-recycling ecosystem. @Businessdayng

So far, some 17 per cent of the rainforest has been razed. Until recently, scientists believed that the tipping point would arrive when 40 per cent of the Amazon had been destroyed. But Tom Lovejoy of George Mason University and Carlos Nobre at World Resources Institute-Brazil now believe the scales could start to tip when just 20-25 per cent of the rainforest has disappeared. In an airy, open-plan office in a quiet suburb of São Paulo, Mr Castilla-Rubio has assembled some of Brazil’s brightest minds, including AI researchers, big data experts and biochemists. They are motivated by the same concern — applying new technological advances to the defence of the rainforest and other threatened areas of Brazil. “Given the physics involved and what we see in terms of action around the world, I’m afraid there will be runaway climate change leading to catastrophes like major crop failures, water scarcity and social unrest,” says Mr Castilla-Rubio. “You can’t predict when or where it will hit the worst, but the signs are all in the same direction, which is irreversibility.” Central to his group’s activities is the use of big data and satellites to help farmers improve the output of their land and reduce the need to expand their boundaries into protected rainforest. One such project involves using satellites to pinpoint and classify particular types of weeds, which can then be targeted in surgical strikes by herbicide-wielding autonomous drones. “If you know precisely where and what the weeds are, you can use one 30th the input of herbicides. That means you pollute just one 30th of what you would have before,” he says. Similar technologies are now being adapted across Brazil by farmers who are conscious both of environmental sensitivities and the importance of making farms more efficient and resilient to increasingly extreme weather. “The point is we know we have to preserve. Everyone knows this. Farmers know this. We know we don’t have more earth to open,” says Edwin Montengro, a macadamia nut farmer, who is using bio-fertilisation techniques to improve the quality of his soil and crops.

A1 BUSINESS DAY

Thursday 12 September 2019

news DFID’s funded Mafita initiates ‘Crowdfunding’ China holds key lessons for Nigerian, FG initiates move for Nigeria to access African economic development - experts oil spill funds for polluted communities window for northern youths the Communist Party of China, Adeola Ajakaiye, Kano

anagement of Mafita has i n i t i at e d a multi-million naira funding window tagged ‘crowdfunding,’ as a way of sustaining the youth empowerment programmes it is implementation in Northern Nigeria. Under the crowdfunding scheme, the beneficiaries of the Mafita programme, which is currently being funded by the British`s Department for International Development (DFID), to assist marginalized youths in the states where the project are being implemented gain skills, as well as employment. The Mafia’s crowdfunding, which was designed to be an innovative social lending scheme, is to be finance by both Sterling Bank Plc, and the Bank of Agriculture (BoA), and implemented by a Kano based Grassroot MFB Microfinance Bank. Providing facts about the scheme, Tajudeen Dantata, chairman of board of trustees of Mafita, disclosed that the crowdfunding was patterned to provide, direct funds, and operational tools to the ben-

eficiaries of the various trainings. According to Dantata, since inception, the crowdfunding scheme has attracted approximately N17 million, which has been successfully disbursed in form of tools and equipment to over 100 beneficiaries of Mafita trainings. The chairman of the board of trustees, who spoke on the sidelines of the inauguration of the trustees, revealed that funding window initiated by the management of the notfor-profit organization, will make Mafita to be generate it funding locally, in order to reduce it dependent on DFID, which is on the verge of scaling-down it funding in few year time. “The Mafita crowdfunding initiative was developed to initially target particular, categories of beneficiaries that face additional obstacles in setting up their businesses or accessing loans. The selected categories of beneficiaries are Person with Disabilities (PwDs), women working in male-dominated trades (such as carpenters and mechanics and female divorcees. In time the initiative will be rolled out to include other categories of marginalised youths as well. www.businessday.ng

Innocent Odoh, Abuja

he political and economic trajectories of the People’s Republic of China and its transformation into a global economic power today have been identified as key lessons Nigeria and other African countries should learn in order to transform the fortunes of the continent. This was the crux of the dialogue organized by the Centre for China Studies, an Abujabased intellectual Think tank, which assembled seasoned intellectuals to mark the 70th Independence Anniversary of the People’s Republic of China, held in Abuja on Tuesday. In his remarks, the Director of the Centre for China Studies, Charles Onunaiju, noted that “China is the veritable mirror through which Nigeria and Africa should see themselves within the context of transforming their potentials for the needed economic development.” He said China rose from the ashes of humiliation and foreign domination and stood up on October 1, 1949. “This year marks the 70th Independence anniversary of China. What is so instructive is that China organized itself by pulling its resources together and finding her feet and at the centre of this is

the largest single in the world,” he said. He noted that more importantly, China has through painstaking efforts, pulled a record 840 million people out of poverty in 40 years even as he charged the Nigerian leaders to emulate this feat especially now that Nigeria is in dire need to take at least 100 million people out of poverty as pronounced by President Muhammadu Buhari. He averred that China is redefining the international system where international conflicts and wars will be replaced by cooperation, peace and security for everyone. He added that China does not seek allies but partnership, which has seen it churn out important programmes for Africa such as the now burgeoning Forum for China Africa Cooperation (FOCAC), which has benefited African countries immensely as China has committed nearly 200 billion dollars for African development in the last 18 years. He also pointed out that China has offered the latest framework of international cooperation in the Belt and Roads Initiative, another important framework of international connectivity, which has linked Africa and the rest of the world in varied capacities.

https://www.facebook.com/businessdayng

AMAKA ANAGOR-EWUZIE

orried by the inability of Nigeria to have access to global funds for cleaning polluted communities in the country, the Federal Government has initiated move aimed at ensuring that victims of oil spill and polluted communities in Nigeria will begin to access the International Oil Pollution Compensation (IOPC) fund of the International Maritime Organisation (IMO). Speaking in Lagos on Tuesday at a three-day workshop jointly organised by the Nigerian Oil Spill Detention and Response Agency (NOSDRA) and the Nigerian Maritime Administration and Safety Agency (NIMASA) in partnership with the Global Initiative for West, Central and Southern Africa (GIWACAF), Mohammad Mahmood Abubakar, minister of environment, said the objective of the workshop was to draw Nigeria’s attention to the scope and implementation of the IOPC fund, focusing on the procedure related to liability and compensation in an event of an oil spill. Abubakar, who was represented by the director-general @Businessdayng

of NOSDRA, Idris Musa, said consideration should also be given to the damaging effects oil spill had on the ecosystem. “The devastating impacts of oil spills on the environment, health and livelihoods of our rural and urban communities have led to land degradation, loss of lives, destruction of habitats, loss of bio-diversity, incidence of diseases, poor sanitation, loss of livelihoods as well as the depletion of national revenue base,” he said. According to him, the need to work out modalities on how to adequately and fairly compensate both victims of oil spill pollution and the environment is the reason we are here today. “Our peculiar circumstances in Nigeria demand for a Convention that will give attention to liability and compensation regime for oil spills which occur from Floating Production Storage and Offtake (FPSO), which is also a loading point for crude oil tankers,” he said. Abubakar however said consideration should not only be given to socio-economic losses suffered by individual or communities, but also to ecological damage by way of effective restoration of the damaged ecosystem.

Thursday 12 September 2019

BUSINESS DAY

BUSINESS TRAVEL Trade war impacting global air freight demand – IATA Stories by IFEOMA OKEKE

he International Air Transport Association (IATA) has released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), contracted by 3.2 percent in July 2019, compared to the same period in 2018. This marks the ninth consecutive month of year-onyear decline in freight volumes. Air cargo continues to suffer from weak global trade and the intensifying trade dispute between the US and China. Global trade volumes are 1.4 percent lower than a year ago and trade volumes between the US and China have fallen by 14 percent year-to-date compared to the same period in 2018. The global Purchasing Managers Index (PMI) does not indicate an uptick. Its tracking of new manufacturing export orders has pointed to falling orders since September 2018. And for the first time since February 2009 all major trading nations reported falling orders. Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 2.6 percent yearon-year in July 2019. Capacity growth has now outstripped demand growth for the 9th consecutive month. “Trade tensions are weighing

heavily on the entire air cargo industry. Higher tariffs are disrupting not only transpacific supply chains but also worldwide trade lanes. “While current tensions might yield short-term political gains, they could lead to long-term negative changes for consumers and the global economy. Trade generates prosperity. It is critical that the US and China work quickly to resolve their differences,” Alexandre de Juniac, IATA’s Director General and CEO said. Regional Performance Airlines in Asia-Pacific and the Middle East suffered sharp declines in year-on-year growth in total air freight volumes in July 2019, while

North America and Europe experienced more moderate declines. Africa and Latin America both recorded growth in air freight demand compared to July last year. African carriers posted the fastest growth of any region in July 2019, with an increase in demand of 10.9 percent compared to the same period a year earlier. This continues the upwards trend in FTKs that has been evident since mid-2018 and makes Africa the strongest performer for the sixth consecutive month. Capacity grew 17 percent year-on-year. Strong trade and investment linkages with Asia have underpinned a double-digit increase in air freight volumes between the two regions

over the past year. Asia-Pacific airlines saw demand for air freight contract by 4.9 percent in July 2019, compared to the same period in 2018. The US-China trade war and weaker manufacturing conditions for exporters in the region have significantly impacted the market. With the region accounting for more than 35 percent of total FTKs, this performance is the major contributor to the weak industry-wide outcome. Air freight capacity increased by 2.5 percent over the past year. North American airlines saw demand decrease by 2.1 percent in July 2019, compared to the same period a year earlier. Capacity increased by 1.6 percent over the past year.

Despite a sound economic backdrop supporting consumer spending, the US-China trade tensions continue to weigh on the region’s carriers. Freight demand between Asia and North America has fallen by almost five percent in year-on-year terms. European airlines posted a 2.0 percent decrease in freight demand in July 2019 compared to the same period a year earlier. Weaker manufacturing conditions for exporters in Germany, heightened recession fears, and ongoing uncertainty over Brexit, have impacted the recent performance. Capacity increased by 4.2 percent year-on-year. Middle Eastern airlines’ freight volumes decreased 5.5 percent in July 2019 compared to the year-ago period. This was the sharpest drop in freight demand of any region. Capacity increased by 0.2 percent. Escalating trade tensions, the slowing in global trade and airline restructuring have impacted the recent performance. Latin American airlines experienced an increase in freight demand growth in July 2019 of 3.0 percent compared to the same period last year and capacity increased by 2.7 percent. The recovery of the Brazilian economy, to avoid a recession, was a positive development; however, concerns regarding the outlook for some key Latin American countries including Argentina remain.

FAAN improves safety, security at airports, graduates 727 AVSEC, fire officers

he Minister of Aviation, Hadi Sirika has said that the Federal Government of Nigeria will continue to improve on safety and security at the nation’s airports through training and capacity development of staff, in line with the provisions of the International Civil Aviation Organization. Sirika made this disclosure at the passing out parade for 727 Aviation Security and Aerodrome Rescue and Fire fighting Services personnel held in Service Development Centre, Afaka, Kaduna State on Saturday, September 7, 2019. The minister, while admonishing the graduates to put service before everything else, advised that the ability to set priorities will determine the quality of their stewardship. He said, “In accepting to be trained as AVSEC and ARFFS cadets, you must realize that it is a privilege for you to serve your country at this level as the aviation industry is one place where adherence and commitment to rules and standards are applied strictly to the latter”. Rabiu Hamisu Yadudu , the Managing Director of the Authority, in his goodwill message, advised graduates

that as security and firemen in the airports, their commitment to honour, respect and devotion to duty must be second to none, as the career is much more than a job, but a calling. In his words, “There is no doubt that the period you have spent during your training has considerably prepared you both in learning and char-

acter to become ambassadors of not only your service and authority, but also that of the country, in the eye of all airport users, both local and foreign.” The event climaxed with the presentation of awards of excellence to those who distinguished themselves in the programme. The awards are in three different categories, for Aviation

Security officers, Fire Officers and Parade Commanders. In his closing remarks, the MD, while re-assuring that FAAN will continue to invest in its human resources, charged the graduates to be committed, dedicated and approach duties assigned them with high sense of responsibility.

L-R: Olusegun Kafaru, immediate past chairman, NCRIB-LAC; Olubukola Ifemade, chairman, NCRIB-LAC; Hon Treasurer, lead facilitator; NCRIB-LAC; Femi Oduwole & Elder Omotayo of the LAC www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Arik Air resumes flights to Warri

n a bid to meet increasing demand of passengers, Arik Air, one of Nigeria’s leading carrier has resumed flights to Osubi Airport, Warri on Friday, September 6, 2019. The airline will be operating flights to Warri from both Lagos and Abuja every day of the week. Arik Air suspended operations to Osubi Airport, Warri earlier in the year because of its Bombardier Q400 aircraft that went for maintenance abroad. Roy Ilegbodu, Arik Air’s Chief Executive Officer, said: “We are pleased to announce the return of flight services to Warri. We missed our highly esteemed customers during the period of our absence. We assure our customers of high standards of service and travel experience which is the hallmark of the airline.”

Thursday 12 September 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 12 September 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 12 September 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 12 September 2019

BUSINESS DAY

Garden City Business Digest Attention returns to N16bn NDDC permanent hqr as Akwagaga vows action Ignatius Chukwu

he longest on-going project in the Niger Delta, the 13-storey permanent headquarters of the Niger Delta Development Commission (NDDC), is full of action again. This is because the interim CEO of the Commission, Akwagaga Lelegima Enyia, who has been described as a woman full of fury, has expressed anger that the builder has failed to build his own house. Her anger is enough to have made her vow to move her table to the uncompleted N15.222Bn building located at the Marine Base area of Port Harcourt. Already, the project which was inherited as assets from the Oil Minerals Producing Areas Development Commission (OMPADEC), is said to be at 50 per cent completion with about N8Bn paid, but it looks obvious that substantive CEOs of the NDDC hardly intended to complete it. Many have wondered why it seemed to be in-

terim MDs that often see reason to pump action into it. Akwagaga (Dr Enyia) started her career in ONPADEC as an assistant director and must be hurting every year as she sees the building that may be as old as her stint in the Commission standing still while the NDDC went about building other parts of the oil region. A source in the Commission described the imposing builder as a familiar feature on the Marine Base skyline. A media guru, publisher and now media aide to the new boss, Bekee Anyalewechi, posted on his facebook wall thus; “Those who weave a narration of absolute failure and ignoble history around the Commission pitch their background on this building. They say it is a due but sad memoir on NDDC’s “failure”. They have argued that it is a fair interpretation of the sad rhythm emanating from a broken drum of erstwhile hope. What’s the jinx behind this behemoth of regional confluence? Would it ever be broken?” He went ahead to announce that the new boss has declared her determination to use every minute available in her expectedly short term (waiting for the board to be screened by Senate) to push the complex nearer to completion. The Ag MD, he wrote, is bent on expediting action to achieve this seemingly elusive project. “Life has returned to site and contractor’s equipment have zoomed into action. We shall be telling the story henceforth as God gives her grace to serve.” This revelation has attracted instant attention and ovation. The contractors seem the most excited, recalling how neglect and non-payment had caused setback and dejection as bills remain unattended to. Many have recalled that most of the substantive CEOs rather execute their political ambitions (often to fight to become governor in some state) than put any zeal into the project. Others suggest that most MDs ignored projects where they would not have huge sums to extract but would prefer new projects where they could build the cost themselves. A source said: “It takes

Akwagaga, Lelegima Enyia

a disciplined and contented person to put all energy into a project that does not promise huge kickback. Only few CEOs of the Commission fall into this category”. Thus, the newly appointed Ag Managing Director has vowed to give full attention to completing this headquarters project. She has thus charged the contractor handling it to work expeditiously towards completing the project. The new CEO expressed dissatisfaction with the pace of work at the main office building and the ancillary structure. She said: “I am not impressed with what I saw today. I am not happy that after all these years; this is the level of work done. I will be here to work if need be to ensure that by December the work will at least get up to 80 per cent. “From time to time, I will be here to do my work. If necessary, I will bring my table and my chair here to work because we must get value for money. “I will be happy if when paid the progress

made will be exactly the work done. I can assure you that the government is ready to release fund to ensure that the project will be completed as soon as possible.” The NDDC boss said that the contractor had assured her that the project would be ready by June next year. “I will hold the contractor to his words,” she said. The Project Manager, an architect, Clement Udie, said that the headquarters complex, which was initiated by the defunct Oil Minerals Producing Areas Development Commission (OMPADEC) has so far got to 50 per cent completion. He explained that the complex would include ancillary facilities such as a medical centre, car park, restaurant, bank, among others. He assured the NDDC that they were working according to set standards, stating that the contractors involved in the project were determined to complete the multi-storey building by June 2020.

Rivers governor’s wife and 30-Books Challenge • Illiterate literates have invaded the work place and this has affected productivity and the economy Port Harcourt by Boat

IGNATIUS CHUKWU

he initiative in Nigeria called 30-Books Challenge has come to an end and outstanding children that participated in it have won awards, but the motivator, Suzette Chidiebere Wike, wife of Governor Nyesom Wike of Rivers State, wants the scheme expanded to accommodate public schools. The Challenge is a partnership with the British Council and an NGO, the Young Readers Library. Speaking at the award ceremony to mark the end o the holiday season, the governor wife said she would want the organizers to carry the larger society along in the initiative by working with the Ministry of Education in the state. She said the Ministry could make it a bigger event and more impacting. “The Ministry can do an aptitude test to select those who can participate”. Wike, who was represented by Inime Aguma, the former Commissioner for Social Welfare, said the state Government would get to hear about the initiative though she was there as a friend to the wife of the governor, not as a government official. She commended

the parents for standing by their children all through the 30 days Challenge. On her own, Aguma said: “The governor’s wife loves reading even more than some of us. She sends her congratulations and goodwill to all the children that participated in the 30-books challenge and those that won. It is not easy to read one book a day. Mrs Wike is in the middle of releasing a book on ‘Rights of a Child’. She is a reader and researcher. She distributes books at every event that involves children.” Explaining the concept of the scheme, representatives of the British Council said the the 30-Books Challenge is an initiative of the Young Readers Library in partnership with the British Council. “The Challenge commenced in 2018 in Abuja and Lagos. In 2019,

Winner of 30-Book Challenge in PH, Vernessa Valynton (R)

www.businessday.ng

the Challenge grew into five cities including Port Harcourt. “The aim of 30-Books Challenge is to spur children to read for pleasure and purpose during the summer holidays. The Challenge is also designed to encourage children to read indigenous books including those in local languages. “The 30-Books Challenge engages children from age 40 to 16 in reading 30 books in 30 days. This year, the 30-Challenge commenced on July 22 and ended on August 20, 2019. The theme for the year is Space Chase, and it was selected to celebrate 50 years since the first man walked on the moon. During the contest, the children were required to read at least five non-fiction books, five indigenous books (this included books in Nigerian languages) and Space-themed books. The children were also given a journal in which they had to log the books they read. “Today, we will be celebrating all the participants who completed the exercise and prizes would be given to participants who submitted outstanding journal entries as well as those who demonstrated of vocabulary development.” Tolupe Habid of the Young Readers Library said the British Council is ever interested in education and opportunities to learn, and that they are proud to be part of the programme. She said the children were made to learn 30 words per day for one month, making 900 words. Testimonies came from a six-year-old child, Kelechi Raphael Onyemachi, who said he enjoyed his books and learnt a lot from them. He said he was touched by Amazing Aircraft, one of the books he read, and urged other children

https://www.facebook.com/businessdayng

to keep reading their books. His mother, Onyemachi Chinwe, said the Challenge exposed the processes of bringing up a child. She said it was fun sometimes but fight at other points. She said the books in local languages helped the children to pick some names in Igbo. Chioma Muanya, mother of three participants, said it exposed the children; “Some like to read but weak in writing, some are strong in writing but weak in reading. It was good interaction. It was a learning curve.” A panel moderated by Adata Odumo showed that parents hardly read books and that their children seem to follow suit. Susan Charles said: “Some children are challenged and have special needs”. Ini Ajah said: “Not reading creates illiterate literates and the economy is being affected by an army of bad workforce that does not have the appetite to read and desire to research.” A child, Vernesa Valynton, said: “Some parents do not encourage their children to read. Some times there are no libraries to read.” Chioma Muanya said: “Give incentives to stir kids. Give them books they love to read, not what you want them to read.” Benson Valynton said: “Parents do not read but watch television, so the children follow suit.” Some participants however told BusinessDay that motivation for reading is important. They said people read because of hunger to learn and look different, but now, such motivation seems gone. Source of privilege was only through veracious reading, but now, many sources of knowledge abound. They said in the past, only the zealous went to school, but now, everybody must go to school, including those without any zeal.

@Businessdayng

Thursday 12 September 2019

BUSINESS DAY

Investing in Rivers State NLNG soon to join PHCCIMA as business linkages top agenda • Upcoming Train-7 project needs training for Rivers youths • $1bn local vendor financing scheme unveiled Ignatius Chukwu

he Nigerian Liquefied Natural Gas Company (NLNG) may soon become a member of the third largest city chamber, the Port Harcourt Chamber of Commerce, Industries, Mines and Agriculture (PHCCIMA). This is as the training of Rivers youths ready to work in the Tranin-7 project is now a top agenda for both bodies. Already, a delegation from the NLNG has already formally collected a membership form even as the team has got full briefing on the highly commended business linkages programme of the PHCCIMA introduced by the president, Nabil Saleh, a chief. All these came as a follow up to the ‘Business Linkages Workshop’ held on the 22nd of Aug 2019 at the Port Harcourt Chamber of Commerce Council Hall. The high profile delegation from the NLNG comprised the manager of the Nigerian Local Content Development division of the corporation, Charles Epelle, and manager, Government Relations of NLNG, Micheal Igoni. Epelle said: “As part of the capacity development policy of NLNG, the company partners with strategic entities along the requisite value chain to provide services to the oil and gas sector. Presently, there is a $1Bn local vendor financing to aid local contractors and to build their capacities to align with demand. Furthermore, he said the role of a PHCCIMA, NLNG and RIVLED partnership to add more imperative for job creation and stimulation of the state economy cannot be overemphasized with PHCCIMA as the driver. “We believe as Train 7 starts, businesses will grow and there will be a lot in the kitty. It is for this reason that we must help build capacities jointly to position our people with the needs of existing jobs”, he said, He assured that NLNG would not only partner with PHCCIMA and RIVLED for this project but would

Nabil Saleh, PHCCIMA president

join the membership of the chamber. Welcoming the delegation, President of Port Harcourt Chamber of Commerce, the chief, Nabil Saleh, commended them for moving their headquarters to Port Harcourt. He said PHCCIMA is the voice of the organized private sector and has as part of its objective the task of ensuring that businesses thrive. “As a chamber, we have prioritized job creation and capacity development of our youths, hence the various collaboration with RIVLED, GWEP, RIVJOB, Ministry of Employment, among others, to ensure we create jobs. Beyond jobs, PHCCIMA is also involved with business linkages, networking, SME mentorship, advocacy and advisory for business growth and to facilitate ease of doing business in the state, etc.”, he explained. According to him, it is unthinkable that NLNG whose headquarters is in the state has not interfaced with PHCCIMA ,the head of the OPS, especially in the effort regarding job creation,

capacity building, and various other synergies. Saleh noted that it has become imperative to work in synergy as members of the organized private sector to achieve this objective. PHCCIMA according to him, as the voice of the organized private sector is poised to drive this process in collaboration with RIVLED and NLNG. In his remark, the Nigerian Local Content Development unit boss apologized for their absence at the business linkages forum on behalf of the management. He said this is what necessitated the need to visit the chambers to discuss the issues surrounding the focus of the workshop. He appreciated the leadership for hosting them in spite of the short notice, adding that NLNG and PHCCIMA shared a similar objective. “We have an overarching and never-ending mission to help build a better Rivers State and Nigeria as demonstrated in our resolve to undertake one of the

biggest corporate social responsibility projects in the country; to construct a 34-kilometer road that is presently 24 per cent completion, to link Bonny with the upland Port Harcourt. Epelle, who had earlier seen a presentation on the objective of the Business Linkages Forum by RIVLED, said capacity development and economic empowerment for the people of Rivers State is paramount for both government and the organized private sector. In his power point presentation, the managing partner of Entrepreneurship and Innovation Centre, Chika Chinwah, said the Rivers State Local Enterprise Development (RIVLED) is in partnership with the chamber and hoped to have a tripartite relationship that would bring in NLNG and other stakeholders. He said the focus is on capacity development and economic empowerment for the people of Rivers State, especially with the upcoming Train 7 project in view through business linkages for local enterprises operating in the state and job linkages for youths that could be employed as artisans in the project with the support of the NLNG to play their part in making it possible. Chinwah in his presentation harped on the need for an innovative demand-led construction skills training and certification to prepare Rivers youths for the upcoming NLNG Train 7 and others based on identified opportunities in Rivers State which he said cannot be over-emphasized. He said business linkage facilitation for Rivers local enterprises and Rivers local contractors/Suppliers cannot be over-emphasised. “With the Train 7 project almost at our doorstep, we need to know the NLNG demand in terms of skills set so that we can train people in line with the scope to prepare our youths for the future and help them identify opportunities.” He said RIVLED and PHCCIMA need to work with NLNG to identify the demand and also the supply and

help the youth key into opportunities. This he said will reduce labor cost, security cost and comes with the goodwill of the local community and will provide lasting peace and sustainable solution in Rivers state. The immediate past Rivers State Commissioner for Employment Generation and Empowerment, Leloonu Nwibubasa, said RIVLED was adopted as a PHCCIMA baby and product of the vision to solve the problem of dysfunctional youth. He said the body has a lot to do and that they cannot leave it for government alone. According to him, the OPS has a role to play and the value of the training is monumental, with the benefit replete with spiral effect. According to him, the Train 7 opportunity is the biggest chance and the stakeholders need to create opportunities. “We cannot achieve this without collaboration; and that is why we want the chamber to drive this.” Mike Elechi, PHCCIMA’s 1st Deputy President, in his remark said the training and capacity building objective of the meeting is not just laudable but very critical to help reposition the youth and build their capacities. He urged NLNG to support the quest in collaboration with PHCCIMA and RIVLED. He also demanded that NLNG support the upcoming Port Harcourt International Trade Fair organized by PHCCIMA. Chinyere Nwoga (PhD), PHCCIMA’s 2nd Deputy President, said there was the need for constant communication and sensitization to achieving whatever objective set for the project. She harped on apathy among the youth but said there were some good ones PHCCIMA can focus on to change the narrative especially the women. She used the occasion to urge NLNG to join the membership of the chamber and followed up by presenting the membership form to the NLNG delegation, as she took them through some of PHCCIMA’s services and foreign trade mission.

Chairman, Professionals and Consultants Trade Group, Clement Akanibo, said the gathering demonstrated a strong desire by PHCCIMA to build bridges across the business community. He added that irrespective of how small a business was, that there was a desire to see it grow and ensure that businesses thrive. He said that presently, there are millions of micro business entrepreneurs in Nigeria contributing almost half of the nation’s GDP to the tune of 47.8 per cent and 7.2 per cent in terms of export. He said this underscored their importance to the nation’s economy. “No wonder they are creating room for growth and economic prosperity in Nigeria today. We believe that together, we shall change the economy of Nigeria to be stronger and bigger. Earlier in her address, Edughom Hanson, Managing Director, Wider

Perspectives, said the idea to organize a business linkages forum was informed by the need to promote SME Development by connecting SMEs to large buyers thereby facilitating business linkages. She added that the objectives of the forum include access to finance, wealth and job creation, market linkages, export opportunities and networking through interactions. In his special remark, Kalada Apiafi, chairman of Wider Perspectives Ltd, said: “One of the ways we can solve our problems in Nigeria is for each individual to make his life a mission, not an intervention,” adding that they are not daunted by the SME challenges they are facing. There was an exhibition of SMEs and their products and services. The programme also featured a technical session that included a panel discussion.

Networking, the backbone for SMEs

s globalization continues to open up more opportunities for business expansion all over the world, business owners in Niger Delta have been advised to take advantage of networking and digital marketing to grow their businesses and make more money. The advice was given at the 4th Business Linkages Forum with the theme: Linking SMEs to Global Value Chains, organized by Wider Perspectives Limited in collaboration with the Port Harcourt Chamber of Commerce, Industry, Mines and Agriculture (PHCCIMA) at Azny Place, GRA Phase III, Port Harcourt. The programme, which featured entrepreneurship experts, digital/ online business gurus, captains of industries and officials of Nigeria Export Promotion Council (NEPC), National Food, Drug Adminis-

tration and Control (NAFDAC), Standards Organization of Nigeria (SON), Bank of Industry (BOI), Nigeria Export Import (NEXIM) bank, Foundation for Partnership Initiatives in the Niger Delta (PIND) and SMEDAN as resource persons, had a lot of participants from Rivers State in particular and other parts of the Niger Delta Region in attendance. During the programme, participants were told how to link their businesses to global value chains that would enable them explore the benefits such networking offers as well as the risks involved when due processes were not followed. Sharing their experience, the resource persons explained the nitty-gritty of their fields of business specialization ranging from digital/ online services to manufacturing, marketing, export, processing and mentoring. www.businessday.ng

In his presentation, Tuoyo Blessing, who represented the Foundation for Partnership Initiatives in the Niger Delta (PIND), said the group, which was set up in 2010 by Chevron Corporation for conflict resolution and partnership in the Niger Delta, has been assisting farmers in the region while partnering with SMEDANs to achieve its goals. The President of Port Harcourt Chamber Of Commerce, the chief, Nabil Saleh, represented by the

https://www.facebook.com/businessdayng

@Businessdayng

industry Insight

BUSINESS DAY Thursday 12 September 2019 www.businessday.ng

Making trade work for Nigeria ODINAKA ANUDU, MICHAEL ANI & GBEMI FAMINU

n his seminal work entitled ‘Principles of Economics’, Havard professor Gregory Mankiw established 10 principles guiding economic decisions. The fifth of the 10 principles, which is of interest in this piece, is that trade can make everyone better off. In simple terms, it means that a country stands to gain when there is an exchange of goods and services with other nations. If Nigeria cuts itself off from importing food, it must grow its own food to feed the citizens. Nigeria is a country that is blessed with enormous human and natural resources. From Limestone to timbers and cash crops such as cocoa, Africa’s most populous country has comparative advantages in several commodities which previously earned her huge foreign exchange and boosted non-oil revenue. But how is the country faring in terms of trade? Nigeria exported goods worth N8.85 trillion in 2015, but imported products valued at N10.09 trillion, according to the Central Bank of Nigeria (CBN)’s trade data. In 2016, imports were N8.74 trillion while exports amounted to N8.83 trillion. In 2017, imports and exports were N9.97 trillion and N13.99 trillion respectively. In 2018, exports rose to N19.3 trillion while imports were N12.45 trillion, according to the CBN data. It must be stressed that oil and minerals often dominate Nigeria’s exports to up to 85 to 95 percent. So, the export numbers mostly do not tell the whole story and does not mean that the country is doing well in international trade. Nigeria’s total non-oil export earnings from more than 25 commodities in 2018 were $3.3 billion (N1.19 trillion), according to the National Bureau of Statistics (NBS), but Bangladesh, once one of the poorest countries on earth, earned almost ten times as much as that from exporting one product —textiles. Nigeria’s non-oil export figure is just 6.2 percent of the CBN’s export numbers in 2018—an indication that Nigeria is not getting much value from non-oil exports. One major reason is that the country’s exporters ship out mainly raw products and get little in return. “The Nigerian farmer produces cocoa and sells it abroad, but we find is that at the end of the day, the guy who converts the cocoa into chocolate makes 90 per cent or more of the total value while the guy that produced the cocoa makes 10 per cent or less,” Mansur Ahmed, president of the Manufacturers Association of Nigeria. (MAN), said at an annual general meeting (AGM) recently. For many years now, cocoa has become Nigeria’s flagship export product, occupying 20 to 30 percent of the total non-oil export value. Nigeria’s manufacturing outputs by over 2,000 members of MAN were N9.98 trillion ($27.7 billion) in 2018,

Source: CBN, BusinessDay

N9.79 trillion ($27.2 billion) in 2017 and N8.78 trillion ($24.4 billion ) in 2016. China’s annual industrial output exceeded 30 trillion yuan ($4.4 trillion) for the first time last year. Bangladesh and India alone produced exportable fabrics valued at $32.92 billion and $37.4 billion respectively. This does not include other products. Manufacturers in Nigeria provide virtually everything on their own. Cost of production is high, making their products expensive in the global market, according to Ede Dafinone, chairman of MAN Export Group. Forty percent of manufacturing expenditure goes to alternative energy. Manufacturers spent N262.77 billion on alternative energy sources between the second half of 2016 and the second half of 2018, according to data from the Manufacturers Association of Nigeria (MAN). This is over 100 percent higher than what was incurred in the previous four halves. Manufacturers told BusinessDay that logistics costs have risen by 50 to 100 percent in the last two years, owing to poor state of roads and lack of good transport system. Exporting goods across West Africa is hampered by road blocks, which the African Continental Free Trade Area (AfCFTA) will hopefully address. Firms bringing in raw materials into Apapa ports and those exporting commodities abroad have seen their costs swell on rising dwell time, which results in high demurrage charges. The borders are currently closed, which, though checks smuggling of petrol and rice, hurts import of raw materials. “I understand that the government has closed the borders in order to catch those who are smuggling various goods into Nigeria,” Dafinone, earlier cited, said. “It is unimaginable that a solution could not be found to this problem that did not penalise all genuine traders (importers and exporters alike) for the sake of catching those smugglers operating through the land borders,” he said. “Who will be responsible for the

additional demurrage to be paid or on the perishables that have now spoilt? The government would not be closing all banks because of the discovery of bank fraud and similarly should not close all land borders to catch those that are smuggling,” he reasoned. Funding is also a crucial issue. Nigeria’s benchmark interest rate is among the highest in Africa at 13.5 percent. Ethiopia’s is 7 percent; Kenya is 9 percent; South Africa is 6.75 percent; Zambia is 10.25 percent, and Cameroon is 4.25 percent. Similarly, Rwanda is 5 percent; Mauritius, 3.5 percent; Algeria is 8 percent, and Senegal is 4.5 percent. Manufacturers are asking the Federal Government to recapitalise especially the Bank of Industry, which provides single-digit funding to them. Doing this, they say, will increase lending to the real sector. Today, product packaging among SME exporters is relatively average, say experts. According to the World Bank Doing Business 2019 report, Nigeria ranked 146th, underperforming countries like Rwanda, Seychelles, Kenya, Mauritania, Ghana and South Africa with better operating environments.

”

It is unfortunate that crude oil has benefitted from the AGOA initiative most, which is against the original intent of the act

Among methodology considered were starting a business, dealing with construction permits, getting electricity, registering properties, which formed the core of the analyses for Nigeria. One of the major challenges Nigeria will have to deal with is that of retaining and attracting more foreign direct investments into the country. Analysts fear that foreign direct investors may be drawn to other African countries with better ease of doing business compared to Nigeria with free trade knocking. AfCFTA. The truth is that Nigeria has a number of trade agreements that it is not benefitting from. The Common External Tariff (CET) in West Africa has failed Nigeria, with a number of companies biting their fingers. After 19 yrs of African Growth and Opportunities Act (AGOA), which allows 6,000 products to be exported to the US duty-free till 2025, Nigeria is yet to raise its export substantially to the world’s biggest economy. In 2014, Africa’s biggest economy exported goods worth $2.6 million to the US, while South Africa exported in excess of $1.2 billion dollars. Export from Nigeria to the U.S. is even lower today owing to issues around standards, quality and poor organisation. Brent Omdahl, commercial Counsellor, US Consulate, Lagos, told BusinessDay in an exclusive interview that participating countries, including Nigeria, need to understand the concept of AGOA, saying that, being a participating country does not mean not following due processes. Omdahl said products exported to the U.S. would still undergo and pass through necessary regulatory tests, among which are phytosanitary regulations. “There are some minimum standards that countries have to adhere,” he said. “Zero duty access does not mean you have to just start exporting. You have to organise yourself. “In exporting agricultural products, for example, such products would have to be subjected to all of the Food and Drug Administration (FDA) regulations and comply with

sanitary and phytosanitary regulations.” Omdahl said the U.S. government, through the US Agency for International Development, has some small resources available to help companies locally to develop their expertise in order to take the advantage of AGOA. Omdahl said it is unfortunate that crude oil has benefitted from the AGOA initiative most, which is against the original intent of the act. He said the intention of AGOA is to create the pathway for a country like Nigeria to move up the value chain. “It is the Nigerian industry that needs to organise itself,” he said. Recounting lessons US-Vietnamese bilateral agreement, which is similar to AGOA, Omdahl said Vietnam does a very good job by adding value to their products in order to meet up with the U.S. standards. In doing this, Vietnam attracted investments from Taiwan in the textile sector in order to develop their textile industry and take advantage of export opportunity to the U.S., he explained. The country equally developed its furniture sector and even started importing some hard woods from the U.S. to augment existing local woods, turning them into furniture and sending them to the U.S. to sell in big outlets, he added. “With this arrangement, Vietnam created wealth and employment,” he said. Omdahl said Nigeria has a lot of products that can make it to the U.S. markets if properly harnessed and improved upon. “Nigeria needs to look inwards to find those products, develop them, increase their value addition, export them, and through that, create wealth and employment for the country.” “So, the question for Nigeria is, what are the products that are going to do that? I can think of some. Talk about the shoes. There is a history of making shoes here. The sky is really the limit,” he concluded. Today, Nigeria has bilateral trade agreements with China, India, the Netherlands, Italy, the U.S and many others, but they export more to the country than they import. In fact, they export mainly finished products usually obtained from Nigeria’s raw materials. More so, products and commodities from Nigeria are rejected because of issues around quality and non-adherence to standards. Experts envisage that with AfCFTA imminent, the country could be pushed to gain more from trade by specialising in areas of comparative and competitive advantages such as palm oil milling, cocoa processing, and rubber processing, among others. “For Nigeria to benefit from the deal, the country needs to tackle the electricity challenge that is weighing down on firms’ capacity to produce,” Gbolahan Ologunro, an Equity research analyst at Lagos-based CSL Stockbrokers, said.

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Advert Hotline: 08034743892. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Patrick Atuanya. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.